EXHIBIT 10.11
INCENTIVE STOCK OPTION
GRANTED BY
DYNAGEN, INC.
(hereinafter called the "Company")
TO
X. Xxxxxx Xxxxxxxxx
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(hereinafter called the "Holder")
UNDER THE
1998 STOCK OPTION PLAN
For valuable consideration, the receipt of which is hereby
acknowledged, the Company hereby grants to the Holder the following option:
FIRST: Subject to the terms and conditions hereinafter set forth, the
Holder is hereby given the right and option to purchase from the Company shares
of the common stock, $.01 par value per share, ("Common Stock"), of the Company.
Schedule A hereto, the provisions of which are incorporated by reference herein,
sets forth (a) the maximum number of shares that the Holder may purchase upon
exercise of this Option, (b) the exercise price per share of Common Stock
purchasable hereunder, (c) the expiration date of this Option, (d) the vesting
rate and (e) certain other terms and conditions applicable to this Option.
This Option is and shall be subject in every respect to the provisions
of the Company's 1998 Stock Option Plan, as the same may be amended from time to
time (the "Plan"). A copy of the Plan is being delivered herewith, and the Plan
is hereby incorporated herein by reference and made a part hereof. In the event
of any conflict or inconsistency between the terms of this Option and those of
the Plan, the terms of the Plan shall govern.
This Option shall be exercised in whole or in part by the Holder's
delivery to the Company of written notice (the "Notice of Exercise") setting
forth the number of shares with respect to which this Option is to be exercised,
together with (a) cash in an amount, or a check, bank draft or postal or express
money order payable in an amount, equal to the aggregate exercise price for the
shares being purchased, (b) with the consent of the Board (which term shall
herein include the "Committee," as that term is defined in the Plan), shares of
Common Stock having a fair market value equal to such aggregate exercise price;
(c) with the consent of the Board, a personal recourse note issued by the Holder
to the Company in a principal amount equal to such
aggregate exercise price and with such other terms, including interest rate and
maturity, as the Board may determine in its discretion, provided that the
interest rate borne by such note shall not be less than the lowest applicable
federal rate, as defined in Section 1274(d) of the Internal Revenue Code of
1986, as amended; (d) with the consent of the Board, such other consideration
that is acceptable to the Board and that has a fair market value, as determined
by the Board, equal to such aggregate exercise price; or (e) with the consent of
the Board, any combination of the foregoing. The "fair market value" of the
Common Stock shall equal (i) the closing price per share on the date of grant of
the Option as reported by the National Market System or another automated
quotation system of the National Association of Securities Dealers, Inc.,
including the OTC Bulletin Board, (ii) if the Common Stock is not quoted on any
such system, as reported by a national stock exchange or (iii) if the Common
Stock is not listed on such an exchange, the fair market value as determined by
the Board.
SECOND: The Company, in its discretion, may file a registration
statement on Form S- 8 under the Securities Act of 1933, as amended, to register
shares of Common Stock reserved for issuance under the Plan. At any time at
which such a registration statement is not in effect, it shall be a condition
precedent to any exercise of this Option that the Holder shall deliver to the
Company a customary "investment letter" satisfactory to the Company and its
counsel in which, among other things, the Holder shall (a) state that he or she
is acquiring shares of Common Stock subject to the Option for his or her own
account for investment and not with a view to the resale or distribution thereof
and (b) acknowledge that those shares are not freely transferable except in
compliance with federal and state securities laws.
THIRD: In order to exercise this option in whole or in part, the Holder
shall deliver to the Company the Notice of Exercise and related investment
letter, payment of exercise price pursuant to Paragraphs First and Second hereof
and any agreement not inconsistent with the provisions of Section 7 of the Plan
that may then be required by the Company in its sole discretion, including
without limitation an executed counterpart of the Stockholder Agreement entered
into by and among certain stockholders of the Company, or any amendment thereto,
or successor agreement. As promptly as practicable after receipt by the Company,
such materials, the Company shall deliver to the Holder (or if any other
individual or individuals are exercising this Option, to such individual or
individuals) a certificate registered in the name of the Holder (or the names of
the other individual or individuals exercising this Option) and representing the
number of shares with respect to which this Option is then being exercised;
provided, however, that if any law or regulation or order of the Securities and
Exchange Commission or any other body having jurisdiction in the premises shall
require the Company or the Holder (or the individual or individuals exercising
this Option) to take any action in connection with the shares then being
purchased, the date for the delivery of the certificate for such shares shall be
extended for the period necessary to take and complete such action. The Company
may imprint upon said certificate the legend contemplated by Section 9.2 of the
Plan and such other legends as counsel for the Company may consider appropriate.
Delivery by the Company of the certificates for such shares shall be deemed
effected for all purposes when the Company or a stock transfer agent of the
Company shall have deposited such certificates in the United States mail,
addressed to the Holder, at the address specified in the Notice. The Company
will pay all fees or expenses necessarily incurred by the Company in connection
with the issuance and delivery of shares pursuant to the exercise of this
Option.
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The Company will, at all times while any portion of this Option is
outstanding, reserve and keep available, out of shares of its authorized and
unissued Common Stock or shares of Common Stock held in treasury, a sufficient
number of shares of its Common Stock to satisfy the requirements of this Option.
FOURTH: If the Company shall effect any subdivision or consolidation of
shares of its stock or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares outstanding, in
any such case without receiving compensation therefor in money, services or
property, then the number, class and per share price of shares of stock subject
to this Option shall be appropriately adjusted in such a manner as to entitle
the Holder to receive upon exercise of this Option, for the same aggregate cash
consideration, the same total number and class of shares as he or she would have
received as a result of the event requiring the adjustment had he or she
exercised this Option in full immediately prior to such event.
If the Company shall be a party to a reorganization or merger with one
or more other corporations (whether or not the Company is the surviving or
resulting corporation), shall consolidate with or into one or more other
corporations, shall be liquidated, or shall sell or otherwise dispose of
substantially all of its assets to another corporation (each a "Transaction"),
then:
(a) subject to the provisions of clauses (b) and (c) below,
after the effective date of the Transaction, the Holder of this Option
shall be entitled, upon exercise hereof and at no additional cost, to
receive shares of Common Stock or, if applicable, shares of such other
stock or other securities, cash or property as the holders of shares of
Common Stock received pursuant to the terms of the Transaction;
(b) the Board may accelerate the time for exercise of this
Option to a date prior to the effective date of the Transaction, as
specified by the Board; or
(c) this Option may be canceled by the Board as of the
effective date of the Transaction, provided that (i) notice of such
cancellation shall have been given to the Holder and (ii) the Holder
shall have the right to exercise this Option to the extent the same is
then exercisable or, if the Board shall have accelerated the time for
exercise of this Option, in full during the thirty-day period preceding
the effective date of the Transaction.
Except as hereinbefore expressly provided, the issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services, either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock then
subject to this Option.
FIFTH: Neither the Holder nor any other person shall, by virtue of the
granting of this Option, be deemed for any purpose to be the owner of any shares
of Common Stock subject to
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this Option or to be entitled to the rights or privileges of a holder of such
shares unless and until this Option has been exercised pursuant to the terms
hereof with respect to such shares and the Company has issued and delivered the
shares to the Holder.
SIXTH: This Option is not transferable by the Holder or by operation of
law, otherwise than by will or under the laws of descent and distribution. This
Option is exercisable, during the Holder's lifetime, only by the Holder.
In the event that the Holder's employment with the Company or any
subsidiary is terminated by the Company without "Cause" (as defined
hereinafter), the Holder shall have the right to exercise this Option within
thirty days after the latest date on which the Holder so ceases to be an
employee of the Company or any subsidiary or parent (but not later than the
expiration date of this Option) with respect to the shares which were
purchasable by the Holder by exercise of this Option on such date.
In the event that the Holder's employment is terminated by the Holder
for any reason or by the Company for Cause, this Option shall terminate
immediately. As used in this Option, "Cause" shall mean a determination by the
Company (including the Board) or a subsidiary or parent that the Holder's
employment with the Company or such subsidiary or parent should be terminated as
a result of (i) a material breach by the Holder of any agreement to which the
Holder and the Company (or such subsidiary or parent) are both parties, (ii) any
act (other than retirement) by the Holder that may have a material and adverse
effect on the business of the Company or any subsidiary or on the ability to
perform services for the Company or such subsidiary, including the proven or
admitted commission of any crime (other than an ordinary traffic violation), or
(iii) any material misconduct or material neglect of duties by the Holder in
connection with the business or affairs of the Company or such subsidiary or
parent.
In the event of the death or permanent and total disability of the
Holder prior to termination of the Holder's employment with the Company and all
subsidiaries or parents and prior to the date of expiration of this Option, this
Option shall terminate on the earlier of the expiration date of this Option or
one year following the date of such death or disability.
In the event of the death of the Holder prior to termination of the
Holder's employment with the Company and all subsidiaries or parents and prior
to the date of expiration of this Option, the Holder's executors, administrators
or any individual or individuals to whom this Option is transferred by will or
under the laws of descent and distribution, as the case may be, shall have the
right to exercise this Option with respect to the number of shares purchasable
by the Holder at the date of death.
SEVENTH: The Holder agrees that, during the 180-day period commencing
with the closing date of any public offering by the Company of shares of Common
Stock pursuant to a registration statement filed under the Securities Act of
1933, as amended, or any successor act, the Holder will not, without the prior
written consent of the representative or representatives of the underwriters of
such offering, directly or indirectly, sell, offer to sell, contract to sell,
grant any option for the sale of, assign, transfer, pledge, hypothecate or
otherwise dispose of or encumber any shares of Common Stock acquired upon
exercise of this Option, other than such
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shares, if any, as shall be covered by such registration statement or as shall
be consented to by the Company and such representative or representatives. The
Holder further agrees that, in order to facilitate any such public offering, (a)
the agreements in this Paragraph Seventh shall be for the benefit of such
underwriters as well as the Company and (b) upon request of such representative
or representatives, the Holder will execute a separate written instrument to the
effect set forth in the preceding sentence, with such changes therein as such
representative or representatives may request, provided that such changes are
not materially adverse to the interest of the Holder.
EIGHTH: If the Company in its discretion determines that it is
obligated to withhold tax with respect to shares of Common Stock received on
exercise of this Option, the Holder agrees that the Company may withhold from
the Holder's wages the appropriate amount of federal, state or local withholding
taxes attributable to the Holder's exercise of such Option. At the Company's
discretion, the amount required to be withheld may be withheld in cash from such
wages or (with respect to compensation income attributable to the exercise of
this Option) in kind from the Common Stock otherwise deliverable to the Holder
on exercise of this Option. The Holder further agrees that, if the Company does
not withhold an amount from the Holder's wages sufficient to satisfy the
Company's withholding obligation, the Holder will remit to the Company on
demand, in cash, the amount estimated by the Company to be underwithheld.
NINTH: Any notice to be given to the Company hereunder shall be deemed
sufficient if addressed to the Company and delivered at the office of the Chief
Financial Officer of the Company, or to such other officer or at such other
address as the Company may hereafter designate, or when deposited in the mail,
postage prepaid, addressed to the attention of the Chief Financial Officer of
the Company at such office or other address.
Any notice to be given to the Holder hereunder shall be deemed
sufficient if addressed to and delivered in person to the Holder at his address
furnished to the Company or when deposited in the mail, postage prepaid,
addressed to the Holder at such address.
TENTH: This Option is subject to all laws, regulations and orders of
any governmental authority which may be applicable thereto and, notwithstanding
any of the provisions hereof, the Holder agrees that he will not exercise the
Option granted hereby nor will the Company be obligated to issue any shares of
stock hereunder if the exercise thereof or the issuance of such shares, as the
case may be, would constitute a violation by the Holder or the Company of any
such law, regulation or order or any provision thereof.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed in its name and on its behalf as of the effective date.
DYNAGEN, INC.
By:___________________________________________
Name:
Title:
Acknowledgment
The undersigned Holder acknowledges receipt of this Stock Option
Agreement, including Schedule A hereto, and a copy of the 1998 Stock Option
Plan, and agrees to be bound by all obligations of the Holder as set forth in
such Stock Option Agreement.
HOLDER
______________________________________________
Name
SCHEDULE A
DYNAGEN, INC.
INCENTIVE STOCK OPTION
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Date of Grant: November 19, 1998
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Name of Holder: X. Xxxxxx Xxxxxxxxx
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Address: 00 Xxxx Xxxx
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Yarmouthport, MA 02675
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Social Security Number: ###-##-####
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Maximum number of shares for which
this Option is exercisable: 100,000
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Exercise (purchase) price per share: $0.125
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Expiration date of this Option: November 19, 2005
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Vesting rate: Four equal quarterly installments
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Other terms and conditions: ---------------------
