Exhibit 12(j)
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (" Agreement"), dated the 7th day of
September, 2005, is entered into by and between DuraVest, Inc., a Florida
corporation ("Company") and Xx. Xxxx Gurel ("the Optionee").
The Company desires, by affording the Optionee an opportunity for
investment in shares of its Common Stock, to further the objectives of the
Company by providing special incentives to the Optionee to continue his service
with the Company and to increase his efforts on behalf of the Company.
The parties, in consideration of the mutual covenants forth herein, agree
as follows:
1. Option Grant. Subject to the provisions set forth herein the Company
hereby grants to the Optionee, as a matter of separate agreement and not in lieu
of compensation for services rendered to the Company, the right and option to
purchase up to an aggregate of 250,000 shares of its Common Stock (the
"Option"). The Option is intended to be a Non-Statutory Stock Option that does
not qualify as an Incentive Stock Option under Section 422 of the Internal
Revenue Code of 1986, as amended.
2. Grant Date and Stock Option Plan. The date of action by the Company in
granting this Option is September 7, 2005. The purchase price of each optioned
share of Common Stock ("Optioned Shares") is $0.88 per share (the "Stock Option
Price").
3. Vesting and Manner of Exercise. The Option shall vest and may be
exercised in accordance with the following:
(a) Vesting of the Option. The right of the Optionee to exercise the
Option shall vest in the Optionee on September 1, 2006 provided that the
Optionee, who was elected as a director of the Company on September 6, 2005
continues to so serve as a director through August 31, 2006. If the Optionee
ceases to serve as a director of the Company prior to September 31, 2006 by
virtue of his resignation without Good Reason as defined in the Employment
Agreement dated as of September 1, 2005 between the Optionee and the Company,
the Option shall terminate as of the date of the cessation.
(b) Time of Exercise of Option. The Option may be exercised in whole
and in part at any time after August 31, 2006 from time to time in lots of no
less than 500 shares (or, in the event any ba1ance as to which the Option
remains unexercised is less than 500 shares, in a lot equal to such balance) and
on or before August 31, 2010 (the "Option Period").
(c) Notice of Exercise. Unless sooner terminated, after September 31,
2006, the Option may be exercised by the Optionee by providing written notice to
the Company, which notice (i) shall state the election to exercise the Option
and the number of shares as to which the Option is then being exercised; (ii)
shall be accompanied by payment in full of the Stock Option Price of said
shares; (iii) shall be signed by the person so exercising the Option; and (iv)
in the event that the Option is being exercised by any person other than the
Optionee, will be accompanied by appropriate proof of the right of such person
to exercise the Option.
(d) Payment of the Stock Option Price. The Stock Option Price may be
paid. to the extent permitted by applicable statutes and regulations: (i) in
cash (including check, bank draft or money order); (ii) by delivery of.
promissory note (containing such terms and conditions as the Committee may in
its discretion determine); (iii) whole shares of the Company's Common Stock,
(iv) the withholding of shares of Common Stock. issuable upon such exercise of
the Option (in which case the Stock Option Price will be credited with an amount
equal to the number of shares withheld from issuance under the Option times the
mean of the bid and ask prices of the Common Stock on the day of the exercise of
the Option); or (v) any combination of the foregoing methods of payment
acceptable to the Committee.
(e) Withholding. The: Company is entitled to (i) withhold and deduct
from future payments of compensation to the Optionee (or from other amounts
which may be due and owing from the Optionee to the Company), or make other
arrangements for the collection of all legally required amounts necessary to
satisfy any and all federal, state and local withholding and employment-related
tax requirements (a) attributable to the grant or exercise of the Option or (b)
otherwise incurred with respect to the Option; or (ii) require the Optionee
promptly to remit the amount of such tax requirement to the Company before
taking any action with respect to the Option.
(f) Subsequent Tax Liability. Federal, state, local and any other
income tax liability resulting from the ultimate disposition of the Common Stock
purchased pursuant to the Option will be the sole responsibility of the
Optionee.
(g) Issuance of Stock. Within a reasonable time from the date of
receipt by the Company of the foregoing notice and all required payments and
other documentation, a certificate or certificates for the shares of Common
Stock as to which Option will have been so exercised, registered in the name of
the person so exercising the Option and, if deemed necessary by counsel to the
Company will be issued by the Company and delivered to such person. All shares
issued as provided herein will be fully paid and non-assessable. Certificates
for all shares of Common Stock issued upon exercise of the Option shall bear a
legend reading substantially as follows:
"The Shares represented by this certificate are restricted securities
which have not been registered under the Securities Act of 1933 (the
"Act") of the securities laws of any state and such shares may not be
sold or transferred except upon registration under the Act and
applicable state laws or upon delivery of an opinion of counsel
acceptable to the Corporation that registration is not required for
such sale or transfer."
4. Rights of Optionee. The Optionee shall have no rights as a stockholder
with respect to any shares of Common Stock covered by an Option until the
Optionee shall have become the holder of record of such shares and no
adjustments shall be made for dividends or other distributions or other rights
as to which there is a record date preceding the date the Optionee becomes the
holder of record of such shares.
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5. Transferability. No right or interest of any Optionee in an Option prior
to its exercise shall be assignable or transferable or subjected to any lien,
during the lifetime of the Optionee, either voluntarily or involuntarily,
directly or indirectly, by operation of law or otherwise, including, without
limitation, execution, levy, garnishment, attachment, pledge, divorce or
bankruptcy. Any attempted assignment, transfer, pledge or hypothecation or other
disposition of the Option, other than in accordance with the terms set forth
herein, shall be null and void and of no force or effect. Notwithstanding the
foregoing, in the event of an Optionee's death, an Optionee's right and interest
in Options shall be transferable by testamentary will or the laws of decent and
distribution, any payment of any amounts due hereunder shall be made to, and
exercise of any Options (to the extent permitted under this Agreement) may be
made by, the Optionee's legal representatives, heirs or legatees. Such assignee
shall be subject to all of the terms and provisions of this Agreement. If, in
the opinion of the Committee, a person entitled to payments or to exercise
rights with respect to this Agreement is unable to care for his or her affairs
because of mental condition or physical conditions, payment due such person may
be made to, and such rights shall be exercised by, such person's guardian,
conservator or other legal representative upon furnishing the Committee with
evidence satisfactory to the Committee of such status.
6. Exercise After Termination of Service. Termination of Service Due to
Death, Disability or Retirement. . In the event an Optionee's services with the
Company are terminated by reason of the Optionee's death, disability or
retirement, all outstanding Options then held by the Optionee to the extent that
they have vested on the date of termination shall continue to be or shall become
immediately exercisable in full and remain exercisable for the Option Period.
7. Limitations Upon Issuance of Stock.Anything contained herein to the
contrary notwithstanding, the Company shall not be required to issue or deliver
any certificate for shares of Common Stock under this Agreement (and an Option
shall not be considered to be exercised, notwithstanding the tender by the
Optionee of any consideration therefor), unless and until each of the following
conditions set forth below has been fulfilled.
(a) There shall be in effect with respect to such shares a registration
statement under the Securities Act and any applicable state securities laws if
the Board, in its sole discretion, shall have determined to file, cause to
become effective and maintain the effectiveness of such registration statement;
or (b) if the Board has determined not to so register the shares of Common Stock
to be issued under the Agreement: (i) an exemption from registration under the
Securities Act and applicable state securities laws shall be available for such
issuance (as determined by counsel to the Company); and (ii) there shall have
been received from the Optionee [or, in the event of death or disability, the
Optionee's heir(s) or legal representative(s)] any representations or agreements
requested by the Company in order to permit such issuance to be made pursuant to
such exemption.
(b) There shall have been obtained any other consent, approval or
permit from any state or federal governmental agency which the Board shall, in
its sole discretion, upon the advice of counsel, deem necessary or advisable.
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8. Limitation or Transfer After Issuance of Stock. Shares of Common Stock
issued upon exercise of an Option may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, whether voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise, except
pursuant to registration under the Securities Act and applicable state
securities laws or pursuant to exemptions from such registrations. The Company
may condition the sale, assignment, transfer, pledge, hypothecation or other
disposition of such shares not issued pursuant to an effective and current
registration statement under the Securities Act and all applicable state
securities laws on the receipt from the party to whom the shares of Common Stock
are to be so transferred of any representations or agreements requested by the
Company to permit such transfer to be made pursuant to exemptions from
registration under the Securities Act and applicable state securities laws.
9. Registration Right. The Optionee shall have the right to have any shares
of Common Stock acquired on exercise of the Option "piggy-backed" or included in
any Registration Statement filed by the Company under the Act for the sale of
Common Stock as set out below.
(a) This "piggy-back" right shall exist and be effective for the
two-year period following the acquisition of the Common Stock by exercise of the
Option and for so long thereafter as the Holder is deemed to be an "affiliate"
of the Company for purposes of Rule 144 adopted under the Act.
(b) If the Registration Statement is being filed for a distribution of
Common Stock which is being underwritten by a securities broker-dealer, the
Holder's "piggy-back" right to have shares of Common Stock included therein will
be subject to willingness of the underwriter to have the shares included or to
any reasonable limitations which the underwriter may impose on the Holder's
piggy-back" rights.
10. No Right of Continued Service. Nothing herein shall expressly or
impliedly interfere with or limit in any way the right of the Company to
terminate the services of Optionee at any time, nor confer upon the Optionee any
right to continue in the services of the Company for any particular period of
time, in any particular capacity or at any particular level of compensation.
11. Surrender of Agreement. In the event the Option shall be exercised in
whole, this Agreement shall be surrendered to the Company for cancellation. In
the event the Option shall be exercised in part, or a change in the number of
designation of the Common Stock shall be made, this Agreement shall be delivered
by the Optionee to the Company for the purpose of making appropriate notation
thereon, or of otherwise reflecting, in such manner as the Company shall
determine, the partial exercise or the change in the number of designation of
the Common Stock.
12. Counsel. Each party has had the opportunity to obtain separate counsel
of choice. The Company expressly disclaims that it is giving any tax advice to
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the Optionee with respect to the grant and exercise of the Option or to any
disposition of the Optioned Shares. The Optionee acknowledges and accepts this
disclaimer.
13. Indemnification. Each party hereby indemnifies and agrees to hold
harmless the other party from any liability, cost or expense arising from or
related to any act or failure to act of such party which is in violation of this
Agreement.
14. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida.
15. No Waiver. No waiver of any default under this Agreement shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent default of the same or similar nature.
16. Amendment. This Agreement may be amended only by a written instrument
signed by both parties to this Agreement.
17. Binding Effect. This Agreement is binding upon, and shall inure to the
benefit of, the parties and their respective personal representatives and
permitted successors and assigns.
IN WITNESS WHEREOF, the Company and the Optionee have duly executed this
Stock Option Agreement effective as of the day and year first above written.
COMPANY:
DuraVest, Inc.
By: /s/ Xxxxxxxxx X. Xxxxxx
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Name: Xxxxxxxxx X. Xxxxxx
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Title: Director
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OPTIONEE:
/s/ Xxxx Gurel
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Xx. Xxxx Gurel
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