Exhibit 10.2
Award No. 1 Attachment I
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HQ SUSTAINABLE MARITIME INDUSTRIES, INC.
2004 STOCK OPTION PLAN
OPTION AGREEMENT
(INCENTIVE AND NON-QUALIFIED STOCK OPTIONS)
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Pursuant to your Option Grant Notice ("Grant Notice") and this Option
Agreement ("Agreement"), HQ Sustainable Maritime Industries, Inc. (the
"Company") has granted you an option ("Option") under its 2004 Stock Option Plan
(the "Plan") to purchase the number of shares of Stock ("Shares") indicated in
your Grant Notice at the Exercise Price indicated in your Grant Notice. Defined
terms not explicitly defined in this Agreement but defined in the Plan shall
have the same definitions as in the Plan.
The details of your Option are as follows:
1. GRANT OF OPTION
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(a) Type of Option. The type of Option that you have been awarded is
referenced in your Grant Notice.
(b) Incentive Stock Option $100,000 Limitation. To the extent that the
aggregate value (determined as of the time the Option is granted) of the Shares
with respect to which ISOs granted under the Plan become exercisable for the
first time by any Participant in any calendar year exceeds $100,000, such
Options or portions thereof which exceed such limit (according to the order in
which they are granted) shall be treated as NQSO.
(c) Number of Shares and Exercise Price. The number of Shares subject
to your Option and your Exercise Price per share referenced in your Grant Notice
may be adjusted from time to time for capitalization adjustments, as provided in
Section 17.4 of the Plan.
2. VESTING
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(a) Upon Termination. Subject to the limitations contained herein, your
Option will vest as provided in your Grant Notice, provided that vesting will
cease upon the termination of your Continuous Service (as defined below) except
as otherwise provided in your Grant Notice or the Plan. The unvested portion of
your Option, after giving effect to the vesting schedule provided in your Grant
Notice, will terminate immediately upon the termination of your Continuous
Service.
(b) Continuous Service. For purposes of this Agreement, "Continuous
Service" means the period of time in which you rendered service to the Company,
whether as an employee, officer, director, adviser or consultant, and during
which you did not have a Termination. Your Continuous Service shall not be
deemed to have terminated merely because of a change in the capacity in which
you render service to the Company as an employee, officer, consultant, adviser
or director or a change in the entity for which you render such service,
provided that there is no interruption or termination of your Continuous
Service. For example, a change in status from an employee of the Company to a
consultant or a director will not constitute an interruption of Continuous
Service. The Committee, in its sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence
approved by the Committee, including sick leave, military leave or any other
personal leave.
3. EXERCISE OF OPTIONS
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Except as otherwise provided herein, and subject to the provisions of
the Plan, the Option granted pursuant to this Agreement shall be subject to
exercise as follows:
(a) You may exercise the vested portion of your Option during its term
by delivering a Exercise Agreement (in a form designated by the Company)
together with the Exercise Price to the Committee, or to such other person as
the Committee may designate, during regular business hours, together with such
additional documents as the Company may then require.
(b) By exercising your Option, you agree that, as a condition to any
exercise of a Option, the Company may require you to enter into an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (1) the exercise of your Option,
(2) the lapse of any substantial risk of forfeiture to which the Shares are
subject at the time of exercise, or (3) the disposition of Shares acquired upon
such exercise.
(c) If your Option is an Incentive Stock Option, by exercising your
Option, you agree to notify the Company in writing within fifteen (15) days
after the date of any disposition of any of the Shares issued upon exercise of
your Option that occurs within two (2) years after the Date of Grant or within
one (1) year after such Shares are issued upon exercise of your Option.
4. METHOD OF PAYMENT
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Payment of the exercise price is due in full upon exercise of all or
any part of the Option. You may elect to make payment of the exercise price in
any manner permitted by the Grant Notice, which may include, in the Committee's
sole discretion at the time your Option is exercised and provided that at the
time of exercise the Shares are publicly traded and quoted regularly in The Wall
Street Journal, pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which, prior to the issuance of Shares,
results in either the receipt of cash (or check) by the Company or the receipt
of irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds attributable to such Shares.
5. WHOLE SHARES
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You may exercise your Option only for whole Shares.
6. TERM OF OPTION
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(a) Commencement. The term of your Option commences on the Date of
Grant, which is set forth in the Grant Notice. Your Option may not be exercised
prior to the approval of the Plan by the Company's stockholders. Notwithstanding
anything to the contrary in Section 6(b) below, if the Company's stockholders do
not approve the Plan within twelve (12) months after the date it is adopted by
the Board, then your Option may never be exercised and it shall terminate on the
first anniversary of the date the Plan is adopted by the Board.
(b) Expiration. The term of your Option expires upon the earliest of
the following:
(i) immediately upon the termination of your Continuous
Service for "cause" (as such term is defined below);
(ii) three (3) months after the termination of your Continuous
Service for any reason other than death, Disability, Retirement or
Voluntary Termination provided that if during any part of such three
(3) month period your Option is not exercisable solely because of the
conditions set forth in Section 9 below relating to "Other Legal
Requirements", your Option shall not expire until the earlier of the
expiration date indicated in your Grant Notice or until it shall have
been exercisable for an aggregate period of three (3) months after the
termination of your Continuous Service;
(iii) twelve (12) months after the termination of your
Continuous Service due to death or disability;
(iv) the expiration date indicated in your Grant Notice; or
(v) the tenth (10th) anniversary of the Date of Xxxxx, or the
fifth (5th) anniversary of the Date of Xxxxx with respect to any Ten
Percent Shareholder.
7. CAUSE.
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For purposes of this Agreement, the termination of your Continuous
Service for "cause" shall mean termination for "cause" as provided for in your
Grant Notice.
8. INCENTIVE STOCK OPTION EMPLOYEE RULE
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If your Option is an Incentive Stock Option, note that to obtain the
federal income tax advantages associated with an "Incentive Stock Option," the
Code requires that at all times beginning on the Date of Grant of your Option
and ending on the day three (3) months before the date of your Option's
exercise, you must be an employee of the Company, except in the event of your
death or disability. The Company has provided for extended exercisability of
your Option under certain circumstances for your benefit but cannot guarantee
that your Option will necessarily be treated as an "Incentive Stock Option" if
you continue to provide services to the Company as a consultant, adviser or
director after your employment terminates or if you otherwise exercise your
Option more than three (3) months after the date your employment terminates.
9. OTHER LEGAL REQUIREMENTS.
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Notwithstanding anything to the contrary contained herein, the exercise
of your Option must also comply with other applicable laws and regulations
governing your Option, and you may not exercise your Option if the Company
determines that such exercise would not be in material compliance with such laws
and regulations.
10. NO RIGHT TO CONTINUE EMPLOYMENT OR SERVICE
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Nothing in this Agreement, the Plan, your Grant Notice or your Exercise
Agreement shall confer upon you any right to continue to serve the Company in
the capacity in effect at the time the Option was granted or shall affect the
right of the Company to terminate (i) your employment, if you are an employee,
with or without notice and with or without cause, (ii) your service as a
consultant or adviser, if you are a consultant or adviser, pursuant to the terms
of your agreement with the Company or (iii) your service as a director, if you
are a director, pursuant to the Bylaws of the Company and any applicable
provisions of the corporate law of the state in which the Company is
incorporated, as the case may be.
11. WITHHOLDING OF TAXES
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(a) At the time you exercise your Option, in whole or in part, or at
any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise
agree to make adequate provision for (including by means of a "cashless
exercise" pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company, if any, which arise in connection with your Option.
(b) You may not exercise your Option unless the tax withholding
obligations of the Company are satisfied. Accordingly, you may not be able to
exercise your Option when desired even though your Option is vested, and the
Company shall have no obligation to issue a certificate for such Shares or
release such Shares from any escrow provided for herein or under the Plan.
12. NON-ASSIGNABILITY
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Your Option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you.
13. DISCRETIONARY NATURE OF THE PLAN
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The Plan is discretionary in nature and limited in duration, and may be
amended, cancelled, or terminated by the Company, in its sole discretion, at any
time. The grant of any Option under the Plan is a one-time benefit and does not
create any contractual or other right to receive a grant of Options or benefits
in lieu of Options in the future. Future grants, if any, will be at the sole
discretion of the Company, including, but not limited to, the timing of any
grant, the number and type of Options, vesting provisions, and the Exercise
Price. Any Options or benefits granted under the Plan will not be considered to
be part of your salary for any reason, including, but not limited to, the
determination of any severance, redundancy or resignation payments or benefits.
14. NOTICE
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Any notice hereunder by you to the Company shall be in writing and
shall be delivered in accordance with the Plan requirements.
15. GOVERNING PLAN DOCUMENT
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Your Option granted pursuant to this Agreement is subject to the terms
and conditions set forth in the Plan, a copy of which is attached to this
Agreement. All the terms and conditions of the Plan, as may be amended from time
to time, and any rules, guidelines and procedures which may from time to time be
promulgated and adopted pursuant to the Plan, are hereby incorporated into this
Agreement, without regard to whether such terms and conditions (including, for
example, provisions relating to certain changes in capitalization of the
Company) are not otherwise set forth in this Agreement. In the event of any
conflict between the provisions of this Agreement and of the Plan, the
provisions of the Plan shall govern.
Executed as of the day and year first written above.
HQ SUSTAINABLE MARITIME INDUSTRIES, INC.
By:_____________________________________
Name:
Title:
PARTICIPANT
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