EXHIBIT 10.28
BAYCORP HOLDINGS, LTD.
NON-STATUTORY STOCK OPTION AGREEMENT
1. GRANT OF OPTION. BayCorp Holdings, Ltd. , a Delaware corporation (the
"Company"), hereby grants to Xxxxx X. Xxxxxx (the "Optionee") an option,
pursuant to the Company's 2001 Non-Statutory Stock Option Plan (the "Plan"), to
purchase an aggregate of 50,000 shares of Common Stock ("Common Stock") of the
Company at a price of $9.05 per share, purchasable as set forth in and subject
to the terms and conditions of this option and the Plan. Except where the
context otherwise requires, the term "Company" shall include the parent and all
present and future subsidiaries of the Company as defined in Sections 424(e) and
424(f) of the Internal Revenue Code of 1986, as amended or replaced from time to
time (the "Code").
2. NON-STATUTORY STOCK OPTION. This option is not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
3. EXERCISE OF OPTION AND PROVISIONS FOR TERMINATION.
(a) EXERCISE PERIOD. Except as otherwise provided in this Agreement, this
option will become exercisable in full upon the sale by the Company of its
entire right, title and interest in the capital stock of Great Bay Power
Corporation and Little Bay Power Corporation, or the sale by those corporations
of their entire right, title and interest in the Seabrook Nuclear Power Plant in
Seabrook, New Hampshire, but in no event will this option be exercisable on or
after the seventh (7th) anniversary of the date of grant (the "Expiration Date")
except as otherwise provided in Section 3(e) below.
(b) EXERCISE PROCEDURE. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee's delivery of written
notice of exercise to the Treasurer of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 4. Such exercise shall
be effective upon receipt by the Treasurer of the Company of such written notice
together with the required payment. The Optionee may purchase less than the
number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than ten whole shares.
(c) CONTINUOUS RELATIONSHIP WITH THE COMPANY REQUIRED. Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Optionee, at the time he or she exercises this option, is, and has been at all
times since the date of grant of this option, an employee, officer or director
of, or consultant or advisor to, the Company (an "Eligible Optionee").
(d) TERMINATION OF RELATIONSHIP WITH THE COMPANY. If the Optionee ceases to
be an Eligible Optionee for any reason, then, except as provided in paragraphs
(e) and (f) below, the right to exercise this option shall terminate 12 months
after such cessation (but in no event after the Expiration Date), PROVIDED that
this option shall be exercisable only to the extent that the Optionee was
entitled to exercise this option on the date of such cessation. Notwithstanding
the
foregoing, if the Optionee, prior to the Expiration Date, materially violates
the non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the
Optionee and the Company, the right to exercise this option shall terminate
immediately upon written notice to the Optionee from the Company describing such
violation.
(e) EXERCISE PERIOD UPON DEATH OR DISABILITY. If the Optionee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Expiration Date while he or she is an Eligible Optionee, or if the Optionee
dies within three months after the Optionee ceases to be an Eligible Optionee
(other than as the result of a termination of such relationship by the Company
for "cause" as specified in paragraph (f) below), this option shall be
exercisable, within the period of 12 months following the date of death or
disability of the Optionee (whether or not such exercise occurs before the
Expiration Date), by the Optionee or by the person to whom this option is
transferred by will or the laws of descent and distribution, PROVIDE that this
option shall be exercisable only to the extent that this option was exercisable
by the Optionee on the date of his or her death or disability. Except as
otherwise indicated by the context, the term "Optionee", as used in this option,
shall be deemed to include the estate of the Optionee or any person who acquires
the right to exercise this option by bequest or inheritance or otherwise by
reason of the death of the Optionee.
(f) DISCHARGE FOR CAUSE. If the Optionee, prior to the Expiration Date, is
discharged by the Company for "cause" (as defined below), the right to exercise
this option shall terminate immediately upon such cessation of employment.
"Cause" shall mean willful misconduct by the Optionee or willful failure to
perform his or her responsibilities in the best interests of the Company
(including, without limitation, breach by the Optionee of any provision of any
employment, consulting, advisory, nondisclosure, non-competition or other
similar agreement between the Optionee and the Company), as determined by the
Company, which determination shall be conclusive. The Optionee shall be
considered to have been discharged "for cause" if the Company determines, within
30 days after the Optionee's resignation, that discharge for cause was
warranted.
4. PAYMENT OF PURCHASE PRICE.
(a) METHOD OF PAYMENT. Payment of the purchase price for shares purchased
upon exercise of this option shall be made (i) by delivery to the Company of
cash or a check to the order of the Company in an amount equal to the purchase
price of such shares, (ii) subject to the consent of the Company, by delivery to
the Company of shares of Common Stock of the Company then owned by the Optionee
having a fair market value equal in amount to the purchase price of such shares,
(iii) by any other means which the Board of Directors determines are consistent
with the purpose of the Plan and with applicable laws and regulations
(including, without limitation, the provisions of Rule 16b-3 under the
Securities Exchange Act of 1934 and Regulation T promulgated by the Federal
Reserve Board), or (iv) by any combination of such methods of payment.
(b) VALUATION OF SHARES OR OTHER NON-CASH CONSIDERATION TENDERED IN PAYMENT
OF PURCHASE PRICE. For the purposes hereof, the fair market value of any share
of the Company's
Common Stock or other non-cash consideration which may be delivered to the
Company in exercise of this option shall be determined in good faith by the
Board of Directors of the Company.
(c) DELIVERY OF SHARES TENDERED IN PAYMENT OF PURCHASE PRICE. If the
Optionee exercises this option by delivery of shares of Common Stock of the
Company, the certificate or certificates representing the shares of Common Stock
of the Company to be delivered shall be duly executed in blank by the Optionee
or shall be accompanied by a stock power duly executed in blank suitable for
purposes of transferring such shares to the Company. Fractional shares of Common
Stock of the Company will not be accepted in payment of the purchase price of
shares acquired upon exercise of this option.
(d) RESTRICTIONS ON USE OF OPTION STOCK. Notwithstanding the foregoing, no
shares of Common Stock of the Company may be tendered in payment of the purchase
price of shares purchased upon exercise of this option if the shares to be so
tendered were acquired within twelve (12) months before the date of such tender,
through the exercise of an option granted under the Plan or any other stock
option or restricted stock plan of the Company.
5. DELIVERY OF SHARES; COMPLIANCE WITH SECURITIES LAWS, ETC.
(a) GENERAL. The Company shall, upon payment of the option price for the
number of shares purchased and paid for, make prompt delivery of such shares to
the Optionee, provided that if any law or regulation requires the Company to
take any action with respect to such shares before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to complete such action.
(b) LISTING, QUALIFICATION, ETC. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification or disclosure, or to satisfy such other condition.
6. NONTRANSFERABILITY OF OPTION. This option is personal and no rights granted
hereunder may be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) nor shall any such rights be subject
to execution, attachment or similar process, except that this option may be
transferred (i) by will or the laws of descent and distribution or (ii) pursuant
to a qualified domestic relations order as defined in Section 414(p) of the
Code. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of this option or of such rights contrary to the provisions hereof, or
upon the levy of any attachment or similar process
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upon this option or such rights, this option and such rights shall, at the
election of the Company, become null and void.
7. NO SPECIAL EMPLOYMENT OR SIMILAR RIGHTS. Nothing contained in the Plan or
this option shall be construed or deemed by any person under any circumstances
to bind the Company to continue the employment or other relationship of the
Optionee with the Company for the period within which this option may be
exercised.
8. RIGHTS AS A SHAREHOLDER. The Optionee shall have no rights as a shareholder
with respect to any shares which may be purchased by exercise of this option
(including, without limitation, any rights to receive dividends or non-cash
distributions with respect to such shares) unless and until a certificate
representing such shares is duly issued and delivered to the Optionee. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
9. ADJUSTMENT PROVISIONS.
(a) GENERAL. If, through or as a result of any merger, consolidation, sale
of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased or decreased or are exchanged for a different number or kind of
shares or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, the
Optionee shall, with respect to this option or any unexercised portion hereof,
be entitled to the rights and benefits, and be subject to the limitations, set
forth in Section 14(a) of the Plan.
(b) BOARD AUTHORITY TO MAKE ADJUSTMENTS. Any adjustments under this Section
9 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued pursuant to this option on
account of any such adjustments.
10. MERGERS, CONSOLIDATION, DISTRIBUTIONS, LIQUIDATIONS ETC. In the event of a
merger or consolidation or sale of all or substantially all of the assets of the
Company in which outstanding shares of Common Stock are exchanged for
securities, cash or other property of any other corporation or business entity,
or in the event of a liquidation of the Company, prior to the Expiration Date or
termination of this option, the Optionee shall, with respect to this option or
any unexercised portion hereof, be entitled to the rights and benefits, and be
subject to the limitations, set forth in Section 15(a) of the Plan.
11. WITHHOLDING TAXES. The Company's obligation to deliver shares upon the
exercise of this option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local income and employment tax withholding
requirements.
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12. INVESTMENT REPRESENTATIONS; LEGENDS.
(a) REPRESENTATIONS. The Optionee represents, warrants and covenants that:
(i) Any shares purchased upon exercise of this option shall be
acquired for the Optionee's account for investment only, and not with a
view to, or for sale in connection with, any distribution of the shares in
violation of the Securities Act of 1933 (the "Securities Act"), or any rule
or regulation under the Securities Act.
(ii) The Optionee has had such opportunity as he or she has deemed
adequate to obtain from representatives of the Company such information as
is necessary to permit the Optionee to evaluate the merits and risks of his
or her investment in the Company.
(iii) The Optionee is able to bear the economic risk of holding such
shares acquired pursuant to the exercise of this option for an indefinite
period.
(iv) The Optionee understands that (A) the shares acquired pursuant to
the exercise of this option will not be registered under the Securities Act
and are "restricted securities" within the meaning of Rule 144 under the
Securities Act; (B) such shares cannot be sold, transferred or otherwise
disposed of unless they are subsequently registered under the Securities
Act or an exemption from registration is then available; (C) in any event,
an exemption from registration under Rule 144 or otherwise under the
Securities Act not be available for at least two years and even then will
not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the
public, and other terms and conditions of Rule 144 are complied with; and
(D) there is now no registration statement on file with the Securities and
Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register any shares
acquired pursuant to the exercise of this option under the Securities Act.
(v) The Optionee agrees that, if the Company offers any of its Common
Stock for sale pursuant to a registration statement under the Securities
Act, the Optionee will not, without the prior written consent of the
Company, offer, sell, contract to sell or otherwise dispose of, directly or
indirectly (a "Disposition"), any shares purchased upon exercise of this
option for a period of 90 days after the effective date of such
registration statement.
By making payment upon exercise of this option, the Optionee shall be deemed to
have reaffirmed, as of the date of such payment, the representations made in
this Section 12.
(b) LEGENDS ON STOCK CERTIFICATE. All stock certificates representing
shares of Common Stock issued to the Optionee upon exercise of this option shall
have affixed thereto legends substantially in the following forms, in addition
to any other legends required by applicable state law;
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"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 and may not; be
transferred, sold or otherwise disposed of in the absence of an
effective registration statement with respect to the shares evidenced
by this certificate, filed and made effective under the Securities Act
of 1933, or an opinion of counsel satisfactory to the Company to the
effect that registration under such Act is not required."
"The shares of stock represented by this certificate are subject to
certain restrictions on transfer contained in an Option Agreement, a
copy of which will be furnished upon request by the issuer."
13. MISCELLANEOUS.
(a) Except as provided herein, this option may not be amended or otherwise
modified unless evidenced in writing and signed by the Company and the Optionee.
(b) All notices under this option shall be mailed or delivered by hand to
the parties at their respective addresses set forth beneath their names below or
at such other address as may be designated in -writing by either of the parties
to one another.
(c) This option shall be governed by and construed in accordance with the
laws of the State of New Hampshire.
Date of Grant:
BAYCORP HOLDINGS, LTD.
October 22, 2001
By: /s/ Xxxxx X. Xxxxxx Xx.
-------------------------------
Name: Xxxxx X. Xxxxxx Xx.
Title: President
Address: 00 Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
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OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy of
the Company's 2001 Non-Statutory Stock Option Plan.
OPTIONEE
/s/ Xxxxx X. Xxxxxx Xx.
-----------------------------------
NAME: Xxxxx X. Xxxxxx Xx.
ADDRESS: 000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
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