Contract
AGREEMENT
made as of October 10, 2006 between GENERAL DATACOMM INDUSTRIES,
INC., a Delaware corporation having offices at 0 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 06770("Grantor") and Xxxxxx X. Xxxxxx
("Optionee").
WITNESSETH:
WHEREAS,
Grantor is desirous of inducing Optionee to continue as a director of the
Grantor,
NOW
THEREFORE, in consideration of the promise of the Optionee to remain as a
director of the Grantor at the pleasure of the stockholders of Grantor, and
for
other good and valuable consideration, the Grantor hereby grants the Optionee
Stock Options to purchase common stock of the Grantor on the following terms
and
conditions:
l. OPTION.
The Grantor hereby grants to the Optionee the option to purchase up to 551,121
shares of common stock, par value .01 cent per share, of the Grantor to be
issued upon the exercise hereof, fully paid and non-assessable, during the
following periods.
(a) No
shares may be purchased prior to the expiration of twelve (12) months from
the
date of this option (unless otherwise authorized by the Stock Option Committee
of the Board of Directors) or after ten (10) years from the date
thereof.
(b) All
or any part of 110,224 shares may be purchased during the period commencing
October 10, 2007 and terminating at 5:00 p.m. on October 9,
2016.
(c) All
or any part of 110,224 shares may be purchased during the period
commencing
October 10, 2008 and terminating at 5:00 p.m. on October 9,
2016.
(d) All
or any part of 110,224 shares may be purchased during the period
commencing
October 10,2009 and terminating at 5:00 p.m. on October 9,
2016.
(e) All
or any part of 110,224 shares may be purchased during the period commencing
October 10, 2010 and terminating at 5:00 p.m. on October 9,
2016.
(f) All
or any part of 110,225 shares may be purchased during the period commencing
October 10, 2011 and terminating at 5:00 p.m. on October 9,
2016.
2. PURCHASE
PRICE. The purchase price shall be twenty cents ($.20) per share, payable in
cash or by check (subject to collection) to the Grantor. The Grantor shall
pay
all original issue or transfer taxes on the exercise of this option and all
other fees and expenses necessarily incurred by the Grantor in connection
therewith.
3. EXERCISE
OF OPTION. The Optionee shall notify the Grantor by certified or registered
mail
addressed to its principal offices as to the number of shares which Optionee
desires to purchase under the options herein granted, which notice shall be
accompanied by payment by cash or check of the option price therefore as
specified in paragraph 2 above. As soon as possible thereafter the Grantor
shall, at its principal office, tender to Optionee certificates issued in the
Optionee's name evidencing the shares purchased by the
Optionee.
4.
OPTION
CONDITIONED ON CONTINUANCE AS A DIRECTOR.
(a) Each
of the aforesaid options shall terminate and be void if the Optionee is not
a
director of the Grantor on the date in which such option is first
exercisable.
(b) The
Optionee shall have the right to purchase the shares as to which the options
shall become exercisable only while Optionee is a director of the Grantor,
except the options may be exercised to the extent that they are exercisable
upon
the effective date the Optionee ceases to be a director, at any time within
three (3) months after the date of termination but in no event after the
expiration of the last option herein contained.
5. DIVISIBILITY
AND NON-ASSIGNABILITY OF THE OPTIONS.
(a) The
Optionee may exercise the options herein granted from time to time during the
periods of their respective effectiveness with respect to any whole number
of
shares included therein.
(b) Except
as provided in the Grantor’s 2005 Stock and Bonus Plan for options granted under
such Plan as if this Option was granted thereunder, the Optionee may not give,
grant, sell, exchange, transfer legal title, pledge, assign or otherwise
encumber or dispose of the options herein granted or any interest therein,
otherwise than by will or the laws of descent and distribution, and these
options, or any of them, shall be exercisable during Optionee's lifetime only
by
the Optionee.
(c) In
the event of the Optionee's death (i) while a director of the Grantor or (ii)
within three (3) months after the effective date that the Optionee ceases to
be
a director, or (iii) after the effective date that the Optionee ceases to be
a
director by reason of permanent and total disability, then (x) under (i), (ii)
and (iii) above, all of the unexercised outstanding options granted under this
Agreement shall automatically be accelerated and become fully vested and
exercisable and (y) Optionee's estate, or any person who acquired the right
to
exercise such option by bequest or inheritance or by reason of the death of
the
Optionee, shall have the right at any time, but not after October 9, 2016,
to
exercise this option in full notwithstanding the vesting schedule in paragraph
1.
(d) In
the event Optionee ceases to be a director by reason of the Optionee's permanent
and total disability while a director of the Grantor, all of the unexercised
outstanding options granted under this Agreement shall automatically be
accelerated and become fully vested and exercisable and the Optionee shall
have
the right at any time after Optionee ceases to be a director, but not after
October 9, 2016, to exercise this option in full notwithstanding the vesting
schedule in paragraph 1.
For
this purpose, the Optionee shall be considered permanently and totally disabled
if Optionee is unable to engage in any substantial gainful activity by reason
of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. The Optionee shall not
be
considered permanently and totally disabled unless Optionee furnishes proof
of
the existence thereof in such form and manner and at such times as the Stock
Option Committee of the Board of Directors administering the Plan may
require.
The
Optionee agrees that said committee's determination as to whether the Optionee
is permanently and totally disabled shall be final and absolute, and not subject
to question by the Optionee, a representative of the Optionee, or the
Grantor.
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6 STOCK
AS INVESTMENT. By accepting this option the Optionee agrees for the Optionee,
Optionee's heirs and legatees that, unless the shares have been registered
under
the Securities Act of 1933, as amended, any and all shares purchased hereunder
shall be acquired for investment and not for distribution, and upon the issuance
of any or all of the shares subject to the option granted hereunder, the
Optionee, or Optionee's heirs or legatees receiving such shares, shall deliver
to the Grantor a representation in writing that such shares are being acquired
in good faith for investment and not for distribution. Grantor may place a
"stop
transfer" order with respect to such shares with its transfer agent and place
an
appropriate restrictive legend on the stock certificate unless such shares
are
registered.
7. RESTRICTION
ON ISSUANCE OF SHARES. The Grantor shall not be required to issue or deliver
any
certificate for shares of its capital stock purchased upon the exercise of
this
option:
(a) prior
to the admission of such shares to listing on any stock market or exchange
on
which the stock may at that time be listed and, in the event of the exercise
of
this option with respect to any shares of stock subject hereto, the Grantor
shall make prompt application for such listing;
(b) unless
the prior approval of such sale or issuance has been obtained from any state
regulatory body having jurisdiction; or
(c) unless
the shares with respect to which the option is being exercised have been
registered under the Securities Act of 1933, as amended, or are exempt from
registration.
8.
ADJUSTMENT
OF SHARES.
(a)
If
additional shares of common stock are issued by the Grantor pursuant to a stock
split or stock dividend or distribution in excess of 5% in the aggregate in
any
one fiscal year of the Grantor, the number of shares of common stock then
covered by each option granted herein shall be increased proportionately with
no
increase in the total purchase price of the shares then so covered. In the
event
that the shares of common stock of the Grantor are reduced at any time by a
combination of shares, the number of shares of common stock then covered by
each
option granted herein shall be reduced proportionately with no reduction in
the
total price of the shares then so covered. If the Grantor shall be reorganized,
consolidated or merged with another corporation, or if all or substantially
all
of the assets of the Grantor shall be sold or exchanged, the Optionee shall,
at
the time of issuance of the stock under such a corporate event, be entitled
to
receive upon the exercise of his option, the same number and kind of shares
of
stock or the same amount of property, cash or securities as he would have been
entitled to receive upon the happening of any such corporate event as if he
had
been, immediately prior to such event, the holder of the number of shares
covered by this option. No option adjustment shall be made for stock dividends,
stock distributions or stock splits which are not in excess of 5% in any one
fiscal year in the aggregate (even though the cumulated total of such stock
dividends, distributions or splits over the life of an option may be in excess
of 5% in the aggregate), cash dividends or the issuance to stockholders of
the
Company of rights to subscribe for additional common stock or other
securities.
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(b) Any
adjustment in the number of shares shall apply proportionately to only the
unexercised portion of an option granted hereunder. If fractions of a share
would result from any such adjustment, the adjustment shall be revised to the
next higher whole number of shares.
9. NO
RIGHTS IN OPTION STOCK. Optionee shall have no rights as a stockholder in
respect of shares as to which the option shall not have been exercised and
payment made as herein provided and shall have no rights with respect to such
shares not herein provided.
10. NO
CONTRACT TO BE A DIRECTOR. Optionee further represents, covenants and warrants
this Agreement does not constitute a contract to be a director of the Grantor
or
any of its subsidiaries or affiliates, nor does it give the Optionee any right
to be a director of the Grantor, and Optionee’s continuance as a director is
terminable as provided in the Grantor’s Certificate of Incorporation and
by-laws.
11. BINDING
EFFECT. Except as herein otherwise expressly provided, this Agreement shall
be
binding upon and inure to the benefit of the parties hereto, their legal
representatives and assigns.
12. JURISDICTION
OF DISPUTES. The appropriate Federal or State Courts of or located in the State
in which the Grantor has its principal executive offices shall have exclusive
jurisdiction of all disputes arising under this Agreement.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
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GENERAL
DATACOMM INDUSTRIES, INC. (Grantor)
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By:
____________________________
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Xxxxxxx
X. Xxxxx, Vice President
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_______________________________
First/Middle/Last
Name (Optionee)
Xxxxxx
X.
Xxxxxx
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