Exhibit 10.3
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NONQUALIFIED STOCK OPTION AGREEMENT
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THIS AGREEMENT made and entered into as of the 12th day of January,
2001 (the "Grant Date"), by and between CyPost Corporation, a Delaware
corporation (the "Company"), and Xxxx Xxxxx, an employee of the Company (the
"Participant").
R E C I T A L S
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WHEREAS, the Company believes it to be in the best interests of the
Company and its stockholders for employees to obtain or increase their stock
ownership interest in the Company in order that they will have a greater
incentive to work for and manage the Company's affairs.
WHEREAS, the Participant is an employee of the Company and has been
selected by the Board of Directors of the Company (the "Board") to receive an
option to buy shares of the Company's Common Stock, par value $.001 per share
("Stock").
A G R E E M E N T
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NOW, THEREFORE, in consideration of the promises and of the covenants
and agreements herein set forth, the parties hereby mutually covenant and agree
as follows:
1. Grant. Subject to the terms and conditions of this Agreement, the
Company hereby grants to the Participant an option to purchase from the Company
all or any part of an aggregate number of 125,000 shares of Stock (hereinafter
such shares of Stock are referred to as the "Option Shares", and the option to
purchase the Option Shares is referred to as the "Option").
2. Vesting. The Option shall vest and become exercisable by the
Participant, as to the number of Optioned Shares set forth, as follows: -
(a) 25,000 vest immediately;
(b) 25,000 vest on January 25, 2001; and
(c) 25,000 vest at the end of each six (6) month period commencing
January 25, 2001.
3. Price. The price to be paid for the Option Shares shall be ten
cents ($0.10) per share, which price represents the average closing price of the
Stock for the five trading days prior to, and including, the date of this
Agreement, as listed in the "Pink Sheets" (the "Option Price"), rounded to the
nearest whole cent.
4. Term. This Option shall expire on, and may not be exercised after,
January 12, 2011 (the "Expiration Date").
5. Method of Exercise.
(a) The Option may be exercised only by written notice, delivered or
mailed by postpaid registered or certified mail, addressed to the Treasurer
of the Company at the Company's principal executive offices specifying the
number of Option Shares being purchased. Such notice shall be accompanied
by payment of the entire Option Price for the number of Option Shares being
purchased:
i. in cash or its equivalent;
ii. in shares of Stock whose fair market value is at least equal
to the aggregate Option Price payable for the Option Shares, which
shares of Stock have been held by the Participant for at least six (6)
months prior to the date of exercise of the Option;
iii. through a special sale and remittance procedure pursuant to
which the Participant (or any other person or persons exercising the
option) shall concurrently provide irrevocable instructions (A) to a
Company-designated brokerage firm to effect the immediate sale of the
Option Shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Option Price payable for the Option Shares plus all
applicable Federal, provincial, state and local income and employment
taxes required to be withheld by the Company by reason of such
exercise and, (B) to the Company to deliver certificates for the
Option Shares directly to such brokerage firm in order to complete the
sale;
iv. such other consideration as the Board may approve, so long as
the fair market value of such consideration, as determined by the
Board in its reasonable discretion, is no less than the aggregate
Option Price payable for the Option Shares; or
v. any combination of such items.
(b) Option Shares of Stock tendered shall be duly endorsed in blank or
accompanied by stock powers duly endorsed in blank. Upon receipt of the
payment of the entire purchase price of the Option Shares so purchased,
certificates for such Option Shares shall be issued to the Participant. The
Option Shares so purchased shall be fully paid and nonassessable.
6. Termination of Employment.
(a) Except as otherwise provided by the Board, if the Participant
ceases to be an employee of the Company for any reason other than death,
disability or cause (as
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defined below), then the Participant may exercise the Option, if vested and
exercisable as of the date of the Participant's termination, for a period
of twelve (12) months after such termination of employment, but in no event
beyond the Expiration Date of the Option.
(b) If the Participant ceases to be an employee of the Company by
reason of death or disability (as defined below), then the Participant (or
the Participant's beneficiary or estate in the event of the Participant's
death) may exercise the Option, if vested and exercisable as of the date of
the Participant's death or disability, for a period of twenty-four (24)
months following the date of death or disability, but in no event beyond
the Expiration Date. For the purposes of this Agreement "disability" shall
mean physical or mental disability or infirmity that prevents Participant
from performing substantially the duties assigned to him/her (based upon
such competent medical evidence as shall be presented to the Company by any
physician or group of physicians or other competent medical experts
employed by the Company) for a continuous period of more than 180 days.
Participant shall cooperate fully with the Company in providing all medical
information reasonably requested by such medical experts and shall provide
such medical experts with the medical records of Participant's personal
physician which relate to the disability, provided that such medical
experts give adequate assurances of protecting the confidentiality of such
records if requested by Participant. If reasonably requested by the
Company, the Participant will submit to an examination by a physician
designated by the Company, which examination shall be at the Company's
expense.
(c) If the Participant ceases to be an employee of the Company for
cause (as defined below), the Option (whether or not vested) shall
immediately terminate upon such termination of employment. For the purposes
of this Agreement, Participant shall be considered terminated for "cause"
if Participant:
i. Is convicted of, or enters a plea of nolo contendere to, a
felony (other than a traffic related offense) under any Federal,
state, provincial or local law or any felony involving the Company.
Conviction includes any final disposition of the charge which does not
result in the charges being completely dismissed or Participant being
completely acquitted;
ii. Engages in willful or gross misconduct or gross negligence in
performing his/her duties and such conduct is not cured within thirty
days of the date written notice of such conduct is received by
Participant from the Board; or
iii. engages in fraud, misappropriation or embezzlement.
7. No Rights as a Stockholder.
(a) The Participant shall not be deemed for any purposes to be a
stockholder of the Company with respect to any shares which may be acquired
hereunder except to
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the extent that the Option shall have been exercised with respect thereto
and a stock certificate issued therefor.
(b) Neither the Participant nor his/her beneficiary or estate shall
be, or have any of the rights of, a stockholder of the Company unless and
until the shares of Stock being exercised have been paid for in full and
the certificates representing such shares shall have been issued and
delivered to him/her.
8. Nontransferability; Collateral. The Option shall not be
transferable by the Participant otherwise than by will or the laws of descent
and distribution, and may be exercised during the life of the Participant only
by the Participant. The Option may not be assigned, mortgaged or pledged as any
type of security or collateral.
9. Restrictions on Transfers of Stock. The Participant agrees for
himself/herself and his/her heirs, legatees and legal representatives, with
respect to all shares of Stock acquired pursuant to the terms and conditions of
this Agreement (or any shares of Stock issued pursuant to a stock dividend or
stock split thereon or any securities issued in lieu thereof or in substitution
or exchange therefor), that he/she and his/her heirs, legatees and legal
representatives will not sell or otherwise dispose of such shares except
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Act"), or except in a transaction which, in the opinion
of counsel for the Company, is exempt from registration under the Act. As
further conditions to the issuance of the Option Shares, the Participant agrees
for himself/herself, and his/her heirs, legatees and legal representatives,
prior to such issuance, to execute and deliver to the Company such investment
representations and warranties, and to take such other actions, as counsel for
the Company determines may be necessary or appropriate for compliance with the
Act and any applicable securities laws. Unless otherwise determined by the
Board, the Participant agrees that any certificate representing shares of Stock
acquired upon exercise of the Option shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
THE ACT, PURSUANT TO RULE 144 OR PURSUANT TO AN OPINION OF
COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT, AND SUCH
QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE STATE
SECURITIES LAWS.
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10. Removal of Restrictions of Transfer. The Company covenants and
agrees that if the Company shall register the Option Shares on a Registration
Statement on Form S-8, or any successor forms, the Company shall cause the
restrictive legends referred to in Paragraph 9 hereof to be removed from the
certificates representing the Option Shares.
11. Adjustments. If the Company shall at any time change the number of
shares of its Stock without new consideration to the Company (such as by stock
dividend, stock split or similar transaction), the total number of shares then
remaining subject to purchase hereunder shall be changed in proportion to the
change in issued shares, and the Option Price per share shall be adjusted so
that the total consideration payable to the Company upon the purchase of all
shares not theretofore purchased shall not be changed. In the event there shall
be any change, other than as specified above, in the number or kind of
outstanding shares of Stock or of any stock or other securities into which such
Stock shall have been changed or for which it shall have been exchanged, then if
the Board shall in its sole discretion determine that such change equitably
requires an adjustment in the number or kind of shares subject to the Option,
such adjustment shall be made by the Board. The Option Price for each share of
Stock or other securities substituted or adjusted as provided in this paragraph
shall be determined by dividing the Option Price for each share prior to such
substitution or adjustment by the number of shares or the fraction of a share
substituted for such share or to which such share shall have been adjusted. No
adjustment or substitution provided for in this paragraph shall require the
Company to sell a fractional share.
12. Powers of Company Not Affected. The existence of the Option herein
granted shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
bonds, debentures, preferred, or prior preference stock ahead of or affecting
the Stock or the rights thereof, or dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise
13. No Right to Employment. Neither the granting of this Option nor
its exercise shall be construed as granting to the Participant any right with
respect to continued employment by the Company.
14. Interpretation. As a condition of the granting of the Option, the
Participant agrees for himself/herself and his/her legal representatives, that
any dispute or disagreement which may arise under or as a result of or pursuant
to this Agreement shall be determined by the Board in its sole discretion, and
any interpretation by the Board of the terms of this Agreement shall be final,
binding and conclusive.
15. Amendment or Modification. No term or provision of this Agreement
may be amended, modified or supplemented orally, but only by an instrument in
writing signed by the party against whom or which the enforcement of the
amendment, modification or supplement is sought.
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16. Governing Law. This Agreement shall be governed by the internal
laws of the State of Delaware as to all matters, including, but not limited to,
matters of validity, construction, effect, performance and remedies.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officers and its corporate seal hereunto
affixed, and the Participant has hereunto affixed his/her hand the day and year
first above written.
"COMPANY"
CYPOST CORPORATION
By: /s/ Xxxxxx Xxxxx
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Its: President
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"PARTICIPANT"
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
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