1
Date of Grant: __________
ONSITE ENERGY CORPORATION
dba ONSITE SYCOM Energy Corporation
NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Qualified Stock Option Agreement (this "Agreement") is made and
effective as of __________, by and between Onsite Energy Corporation dba ONSITE
SYCOM Energy Corporation, a Delaware corporation (the "Company"), and
_______________ ("Optionee").
In consideration of the mutual covenants contained herein and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Grant of Option. The Company hereby grants to Optionee, in the manner and
subject to the conditions hereinafter provided, the right, privilege and option
to purchase (the "Option") an aggregate of ____________________ (__________)
shares of the Company's Class A Common Stock, par value $0.001, (the "Shares").
This Option and the Shares underlying this Option are not, and shall not be
deemed to be, issued under the Company's 1993 Stock Option Plan (as amended) or
any other stock option plan administered by the Company.
2. Term of Option. Subject to the terms, conditions and restrictions set forth
herein, the term of this Option shall be five (5) years from the date of grant
(the "Expiration Date"). Any portion of this Option not exercised prior to the
Expiration Date shall thereupon become null and void.
3. Exercise of Option.
3.1 Vesting of Option. This Option shall become exercisable as follows:
Number of Shares Vesting Date
__________ Date of Grant
Each of the foregoing dates shall be referred to as a "Vesting Date" for that
portion of this Option vested on such date ("Vested Portion").
All or any portion of the Shares underlying a Vested Portion of this Option may
be purchased during the term of this Option, but not as to less than one hundred
(100) shares (unless the remaining shares then constituting the Vested Portion
of this Option is less than one hundred (100) shares) at any time.
2
3.2 Manner of Exercise. The Vested Portion of this Option may be exercised
from time to time, in whole or in part, by presentation of a Request to Exercise
Form, substantially in the form attached hereto, to the Company at its principal
office, which form must be duly executed by Optionee and accompanied by payment,
in cash, cash equivalent or form of obligation acceptable to the Company, in the
aggregate amount of the Exercise Price (as defined below), multiplied by the
number of Shares Optionee is purchasing at such time, subject to reduction for
withholding for tax obligations as provided in Section 13.
Upon receipt and acceptance by the Company of such form accompanied by the
payment specified, Optionee shall be deemed to be the record owner of the Shares
purchased, notwithstanding that the stock transfer books of the Company may then
be closed or that certificates representing the Shares purchased under this
Option may not then be actually delivered to Optionee.
3.3. Exercise Price. The exercise price (the "Exercise Price") payable upon
exercise of this Option shall be $_____ per share.
4. Exercise After Certain Events.
4.1 Termination of Employment. If for any reason other than permanent and
total disability (as defined below) or death Optionee ceases to be employed by,
or to be a consultant or director of SYCOM Corporation (or any of its affiliated
entities) (collectively, the "SYCOM Entities") or, if applicable, the Company
(or any of its affiliates or subsidiaries), this Option (to the extent
exercisable) may be exercised, in whole or in part, at any time within three (3)
months after the date of such termination (but in no event after the expiration
date of this Option as set forth in this Agreement).
4.2 Permanent Disability and Death. If an Optionee becomes permanently and
totally disabled (within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended), or dies while employed by the SYCOM Entities (or, if
applicable, the Company or any of its affiliates or subsidiaries), or while
acting as an officer, consultant or director of the SYCOM Entities (or, if
applicable, the Company or any of its affiliates or subsidiaries) (or if
Optionee dies within the period that the Option remains exercisable after
termination of employment or affiliation), Options then held (to the extent then
exercisable) may be exercised by Optionee, Optionee's personal representative,
or by the person to whom the Option is transferred by will or the laws of
descent and distribution, in whole or in part, at any time within one (1) year
after the disability or death (but in no event after the expiration date of the
Option).
5. Restrictions on Transfer of Option. This Option is not transferable by
Optionee other than by will or the laws of descent and distribution and is
exercisable only by Optionee during his/her lifetime except as provided in
Section 4.2. above.
6. Adjustment for Changes in Capitalization. The existence of this Option shall
not affect the Company's right to effect adjustments, recapitalizations,
reorganizations or other changes in its or any other corporation's capital
structure or business, any merger or consolidation, any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the
Shares, the dissolution or liquidation of the Company's or any other
corporation's assets or business or any other corporate act whether similar to
the events described above or otherwise. If the outstanding shares of the
Company's Common Stock are increased or decreased in number or changed into or
3
exchanged for a different number or kind of securities of the Company or any
other corporation by reason of a recapitalization, reclassification, stock
split, reverse stock split, combination of shares, stock dividend or other
similar event, an appropriate adjustment of the number and kind of securities
with respect to which this Option may be exercised and the exercise price at
which this Option may be exercised will be made.
7. Dissolution, Liquidation, Merger.
7.1 Company Not The Survivor. In the event of a dissolution or liquidation
of the Company, a merger, consolidation, combination or reorganization in which
the Company is not the surviving corporation, or a sale of substantially all of
the assets of the Company (as determined in the sole discretion of the Board of
Directors), the Company, in its absolute discretion, may cancel each outstanding
Option upon payment in cash to Optionee of the amount by which any cash and the
fair market value of any other property which Optionee would have received as
consideration for the shares of Stock covered by the Option if the Option had
been exercised before such liquidation, dissolution, merger, consolidation or
sale exceeds the exercise price of the Option. In addition to the foregoing, in
the event of a dissolution or liquidation of the Company, or a merger
consolidation, combination or reorganization, in which the Company is not the
surviving corporation, the Company, in its absolute discretion, may accelerate
the time within which each outstanding Option may be exercised.
7.2 Company is the Survivor. In the event of a merger, consolidation,
combination or reorganization in which the Company is the surviving corporation,
the Board of Directors shall determine the appropriate adjustment of the number
and kind of securities with respect to which outstanding Options may be
exercised, and the exercise price at which outstanding Options may be exercised.
The Board of Directors shall determine, in its sole and absolute discretion,
when the Company shall be deemed to survive for purposes of this Plan.
8. Reservation of Shares. The Company agrees that prior to the earlier of the
expiration of this Option or the exercise and purchase of the total number of
Shares represented by this Option, there shall be reserved for issuance and
delivery upon exercise of this Option such number of the Company's authorized
and unissued Shares as shall be necessary to satisfy the terms and conditions of
this Agreement; subject, however, to the Company's obligation to comply with the
securities laws as set forth in Section 15.
9. No Rights as Shareholder. Optionee shall have no rights as a shareholder with
respect to any Shares covered by this Option unless Optionee shall have
exercised this Option, and then only with respect to the shares underlying the
portion of the Option exercised. Optionee shall have no right to vote any
Shares, or to receive distributions of dividends or any assets or proceeds from
the sale of Company assets upon liquidation until Optionee has effectively
exercised this Option and fully paid for such Shares. Subject to Section 6, no
adjustment shall be made for dividends or other rights for which the record date
is prior to the date title to the Shares has been acquired by Optionee.
10. No Rights to Employment or Continued Employment. The grant of this Option
shall in no way be construed so as to confer on Optionee the rights to
employment or continued employment.
4
11. Suspension and Termination. In the event the Company reasonably believes
that Optionee has committed an act of misconduct specified below, the Company
may suspend Optionee's right to exercise any Option pending final determination
by the Company, which final determination shall be made within ten (10) business
days of such suspension. If the Company determines that Optionee has committed
an act of embezzlement, fraud, breach of fiduciary duty or deliberate disregard
of the Company rules resulting in loss, damage or injury to the Company, or if
Optionee makes an unauthorized disclosure of any Company trade secret or
confidential information, engages in any conduct constituting unfair
competition, induces any Company customer to breach a contract with the Company
or induces any principal for whom the Company acts as agent to terminate such
agency relationship, neither Optionee nor his/her estate shall be entitled to
exercise any Option hereunder. In making such determination, the Company shall
act fairly and in good faith and shall give Optionee an opportunity to appear
and present evidence on his/her behalf.
12. Participation in Option Plans. The grant of this Option shall not prevent
Optionee from participating or being granted options in the Company's stock
option plan or being granted other non-qualified non-stock option plan options;
provided, however, that Optionee meets the eligibility requirements, and such
participation or grant does not prevent the other plan from meeting the
requirements of the Internal Revenue Code of 1986, as amended.
13. Payment of Taxes. Optionee shall pay the Company in cash all local, state
and federal withholding taxes applicable, as determined by the Company in its
absolute discretion, to the grant or exercise of this Option, or the transfer or
other disposition of Shares acquired upon exercise of this Option. Any such
payment must be made promptly when the amount of such obligation becomes
determinable.
14. Issue and Transfer Tax. The Company will pay all issuance taxes, if any,
attributable to the initial issuance of Shares upon the exercise of the Option;
provided, however, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the issue or
delivery of any certificates for Shares in a name other than that of Optionee.
15. Compliance with Securities Laws. The Company shall not be obligated to issue
any Shares upon exercise of this Option unless such Shares are at that time
effectively registered or exempt from registration under the federal securities
laws and the offer and sale of the Shares are otherwise in compliance with all
applicable securities laws. Upon exercising all or any portion of this Option,
Optionee may be required to furnish representations or undertakings deemed
appropriate by the Company to enable the offer and sale of the Shares or
subsequent transfers of any interest in such Shares to comply with applicable
securities laws. Evidences of ownership of Shares acquired upon exercise of this
Option shall bear any legend required by, or useful for purposes of compliance
with, applicable securities laws or this Agreement.
16. Arbitration. Any controversy, dispute or claim arising out of or relating to
this Option that cannot be amicably settled including, but not limited to, the
suspension or termination of Optionee's right in accordance with Section 11
above, shall be settled by arbitration conducted in the County of San Diego,
California, or such other mutually agreed upon location. Said arbitration shall
be conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association at a time and place within the above-referenced location
as selected by the arbitrator(s).
5
16.1 Initiation of Arbitration. After seven (7) days prior written notice
to the other, either party hereto may formally initiate arbitration under this
Agreement by filing a written request therefor, and paying the appropriate
filing fees, if any.
16.2 Hearing and Determination Dates. The hearing before the arbitrator
shall occur within thirty (30) days from the date the matter is submitted to
arbitration. Further, a determination by the arbitrator shall be made within
forty-five (45) days from the date the matter is submitted to arbitration.
Thereafter, the arbitrator shall have fifteen (15) days to provide the parties
with his or her decision in writing. However, any failure to meet the deadlines
in this section will not affect the validity of any decision or award.
16.3 Binding Nature of Decision. The decision of the arbitrator shall be
binding on the parties. Judgment thereon shall be entered in a court of
competent jurisdiction.
16.4 Injunctive Actions. Nothing herein contained shall bar the right of
either party to seek to obtain injunctive relief or other provisional remedies
against threatened or actual conduct that will cause loss or damages under the
usual equity rules including the applicable rules for obtaining preliminary
injunctions and other provisional remedies.
16.5 Costs. The cost of arbitration, including the fees of the arbitrator,
shall initially be borne equally by the parties; provided, the prevailing party
(as determined by the arbitrator in accordance with California Code of Civil
Procedure Section 1032) shall be entitled to recover such costs, in addition to
attorneys' fees and other costs, in accordance with Section 19 of this
Agreement.
17. Notices. All notices to be given by either party to the other shall be in
writing and may be transmitted by personal delivery, facsimile transmission,
overnight courier or mail, registered or certified, postage prepaid with return
receipt requested; provided, however, that notices of change of address or telex
or facsimile number shall be effective only upon actual receipt by the other
party. Notices shall be delivered at the following addresses, unless changed as
provided for herein.
To Optionee:
-------------------
-------------------
To the Company:
Onsite Energy Corporation
dba ONSITE SYCOM Energy Corporation
000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile: 760/931-2405
6
With a copy to:
Xxxxx X. Xxxxxx, Esq.
XXXXXX ENG LINN & XXXXXXXX
000 Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsimile: 916/442-3442
18. Applicable Law. This Option and the relationship of the parties in
connection with its subject matter shall be governed by, and construed under,
the laws of the State of California.
19. Attorneys Fees. In the event of any litigation, arbitration or other
proceeding arising out of this Option, the prevailing party shall be entitled to
an award of costs, including an award of reasonable attorneys' fees, costs and
expenses. Any judgment, order or award entered in any such proceeding shall
designate a specific sum as such an award of attorney's fees, costs and expenses
incurred. This attorneys' fee provision is intended to be severable from the
other provisions of this Agreement, shall survive any judgment or order entered
in any proceeding and shall not be deemed merged into any such judgment or
order, so that such further fees, costs and expenses as may be incurred in the
enforcement of an award or judgment or in defending it on appeal shall likewise
be recoverable by further order of a court or panel or in a separate action as
may be appropriate.
20. Binding Effect. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective heirs, executors, and successors.
21. Counterparts. This Option may be executed in one or more counterparts
(including by facsimile), each of which when taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first set
forth above at Carlsbad, California.
COMPANY: OPTIONEE:
ONSITE ENERGY CORPORATION
dba ONSITE SYCOM Energy Corporation
-------------------------------
By:
---------------------------------
Xxxxxxx X. Xxxxxxxx, CEO
REQUEST TO EXERCISE FORM
Dated:____________
The undersigned hereby irrevocably elects to exercise all or part, as specified
below, of the Vested Portion of the Option granted to him/her pursuant to a
certain Non-Qualified Stock Option Agreement dated __________ (the "Agreement")
(capitalized terms used herein shall have the meanings ascribed thereto in the
Agreement), between the undersigned and Onsite Energy Corporation dba ONSITE
SYCOM Energy Corporation (the "Company") to purchase an aggregate of __________
shares of the Company's Class A Common Stock, par value $0.001 (the "Shares").
The undersigned hereby tenders cash, cash equivalent or a promissory note in a
form acceptable by the Company in the amount of $_____ per share multiplied by
__________, the number of Shares he/she is purchasing at this time, for a total
of $_____________, which constitutes full payment of the total Exercise Price
thereof.
INSTRUCTIONS FOR REGISTRATION OF SHARES
IN THE COMPANY'S TRANSFER BOOKS
Name:
-----------------------------------------
Address:
-----------------------------------------
-----------------------------------------
Signature:
-----------------------------------------
Social Security No.:
------------------------------------
Accepted by the Company:
ONSITE ENERGY CORPORATION
dba ONSITE SYCOM Energy Corporation
By:
---------------------------------
Xxxxxxx X. Xxxxxxxx, CEO
