STOCK OPTION AWARD AGREEMENT
THIS AWARD AGREEMENT is dated as of the 22nd day of December, 1998, by and
between THE TRACKER CORPORATION OF AMERICA, a Delaware corporation ("Tracker"),
and XXX X. XXXXXXXX, a citizen of the Province of Ontario, Canada (the
"Participant"). Unless otherwise expressly provided herein, capitalized terms
used herein have the same meanings assigned to them in the Amended and Restated
1994 Stock Incentive Plan (the "Plan").
W I T N E S S E T H:
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WHEREAS, Participant, in accordance with the Plan has been granted as of
the date hereof (the "Award Date") an incentive stock option (as defined in
Section 422 of the Internal Revenue Code of 1986, as amended, ("Option" or
"Award") to purchase all or any part of the total number of shares of Common
Stock of Tracker set forth on Schedule I upon the terms and conditions
hereinafter set forth; and
WHEREAS, the Participant and Tracker desire to enter into a written
agreement in accordance with the Plan;
NOW THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties hereto agree
as follows;
1. GRANT OF OPTION. Tracker has granted to the Participant as a matter
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of separate inducement and agreement in connection with his employment by
Tracker or any of its existing or future subsidiaries, and not in lieu of any
salary or other compensation for his services, the right and option to purchase,
in accordance with the Plan and on the terms and conditions of the Plan and
those hereinafter set forth, all or any part of the total number of shares of
Common Stock set forth on Schedule I at the exercise price per share set forth
on Schedule I attached hereto and incorporated herein by reference (the
"Price"), exercisable from time to time subject to the provisions of this Award
Agreement prior to the close of business on December 21, 2003 (the "Expiration
Date"). Such Price has been determined by the Committee in accordance with
Section 3.2 of the Plan.
2. EXERCISABILITY OF OPTION. Except as otherwise provided in this
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Award Agreement, the Option may be exercised in accordance with the vesting
schedule set forth on Schedule II attached hereto and incorporated herein by
reference and the Option may only be exercised at any given time to the extent
the Option has vested in accordance with Schedule II; provided, however, that
the Option may not be exercised as to less than 1,000 shares at any one time
unless the number of shares purchased is the total number at the time available
for purchase under the Option. The Option may be exercised only as to whole
shares; fractional share interests shall be disregarded except that they may be
accumulated.
3. METHOD OF EXERCISE AND PAYMENT. Each exercise of any part of the
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Option shall be by means of written notice of exercise duly delivered to
Tracker, specifying the number of whole shares with respect to which the Option
is being exercised, together with any written statements required pursuant to
Section 10 below and payment of the Price in full (i) in cash or by certified or
cashier's check payable to the order of Tracker, (ii) by a promissory note made
by the Participant in favor of Tracker, upon the terms and conditions determined
by the Committee, and secured by the Common Stock issuable upon exercise in
compliance with applicable law (including, without limitation, state corporate
law and federal margin requirements), (iii) by shares of Common Stock of Tracker
already owned by the Participant, or (iv) by application of the then market
value of vested Options of the Company (net of the Option price); provided,
however, the Committee may in its absolute discretion limit the Participant's
ability to exercise the Option by delivering shares, and any shares delivered
which were initially acquired upon exercise of a stock option must have been
owned by the Participant at least six months as of the date of delivery.
4. CONTINUANCE OF EMPLOYMENT. Nothing contained in this Award
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Agreement or in the Plan shall confer upon the Participant any right to continue
in the employ of Tracker or constitute any contract or agreement of employment.
Nothing contained in this Award Agreement or in the Plan shall interfere in any
way with the right of Tracker to (i) terminate the employment of the
Participant, or (ii) reduce the compensation received by the Participant from
the rate in existence on the Award Date provided that nothing herein shall
modify any written employment agreement as may now exist or hereinafter be
entered into between Participant and Tracker.
5. EFFECT OF TERMINATION OF RELATIONSHIP.
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(a) If the Participant ceases to be employed by Tracker for any
reason other than breach by Tracker of any written employment agreement in
effect between the Participant and Tracker, the Option shall terminate to the
extent not vested. Notwithstanding the vesting schedule in Schedule II, if
Tracker has breached any written employment agreement with the Participant, and
as a result Participant's employment is terminated, the Option shall become
fully vested upon such termination of employment. In no event may any Option be
exercised by any person after the Expiration Date.
(b) Except as may be otherwise provided in Section 422 of the
Internal Revenue Code of 1986, as amended, or in the Plan, upon termination of
Participant's employment by reason of retirement, disability or death, the
Option, to the extent vested, may be exercised by the Participant or his
executor or administrator, as the case may be, at any time during the Option
period.
(c) Any transfer of Participant's employment between Tracker and
any of its existing or future subsidiaries or between any two subsidiaries shall
not be deemed to be a termination of Participant's employment for purposes of
implementation of the Plan.
6. NON-ASSIGNABILITY OF OPTION.
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(a) Interests in the Option shall not be subject to sale,
transfer, pledge, assignment or alienation other than by will or the laws of
descent and distribution regardless of any interest therein of the Participant's
spouse or such spouse's successor in interest.
(b) Notwithstanding Section 6(a) above, Participant shall have the
right to sell, pledge, assign or alienate the Option, provided that Participant
foregoes treatment of the Option as an incentive stock option, in which event
the Option shall be treated as a non -qualified stock option.
7. ADJUSTMENTS UPON SPECIFIED CHANGES. As set forth in Section 4.2 of
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the Plan, upon the occurrence of specified events relating to Tracker's stock,
adjustments will be made in the number and kind of shares that may be issuable
under an Option. In addition, upon the occurrence of specified events relating
to Tracker, such as its dissolution or liquidation, a reorganization, merger or
consolidation in which it is not the surviving corporation, or upon sale of all
or substantially all of Tracker's property, unless provision is otherwise made
and subject to the provisions of Section 4.4 of the Plan, the Plan and any
outstanding Options will terminate.
8. ACCELERATION. Upon the occurrence of an Event, the Option shall
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become immediately vested to the full extent theretofore not exercisable unless
prior to an Event the Board determines otherwise pursuant to Section 4.4 of the
Plan. However, no Option shall be accelerated to a date less than six months
after the Award Date.
9. PARTICIPANT NOT A SHAREHOLDER. Neither the Participant nor any
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other person entitled to exercise the Option shall have any of the rights or
privileges of a shareholder of Tracker as to any shares of Common Stock not
actually issued and delivered to him. No adjustment will be made for dividends
or other rights for which the record date is prior to the date on which such
stock certificate or certificates are issued even if such record date is
subsequent to the date upon which notice of exercise was delivered and the
tender of payment was accepted.
10. APPLICATION OF SECURITIES LAWS.
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(a) No shares of Common Stock may be purchased pursuant to the
Option unless and until any then applicable requirements of the Securities and
Exchange Commission and any other regulatory agencies, including any other state
securities law commissioners having jurisdiction over Tracker or such issuance,
and any exchanges upon which the Common Stock may be listed, shall have been
fully satisfied. The Participant represents, agrees and certifies that if the
Participant exercises the Option in whole or in part, the Participant will
acquire the Common Stock issuable upon such exercise for the purpose of
investment and not with a view to resale or distribution and that, as a
condition to each such exercise, he will furnish to Tracker a written statement
to such effect, satisfactory in form and substance to Tracker.
(b) The Participant understands that the certificate or
certificates representing the Common Stock acquired pursuant to the Option may
bear a legend referring to the fact that the Common Stock has not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and has not been qualified under any state securities laws and any limitations
under the Securities Act and state securities laws with respect to the transfer
of such Common Stock, and Tracker may impose stop transfer instructions to
implement such limitations, if applicable. Any person or persons entitled to
exercise the Option under the provisions of Section 5 above shall be bound by
and obligated under the provisions of this Section 10 to the same extent as is
the Participant.
(c) The Committee may impose such conditions on an Option or on
its exercise or acceleration or on the payment of any withholding obligation
(including without limitation restricting the time of exercise to specified
periods) as may be required to satisfy applicable regulatory requirements.
(d) If at any time prior to the Expiration Date, the Company
causes a registration statement ("Registration") under the Securities Act to
become effective with respect to any shares of its Common Stock, the Company
shall, within sixty (60) calendar days of the effective date of the Registration
prepare and file with the Securities and Exchange Commission a registration
statement on Form S-8 or any successor or similar forms with respect to the
shares of its Common Stock reserved for issuance pursuant to the Plan and use
its reasonable commercial efforts to cause such registration statement to become
effective, and prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective.
11. NOTICES. Any requests or notices to be given hereunder shall be
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deemed given, and any elections or exercises to be made or accomplished shall be
deemed made or accomplished, upon actual delivery thereof to the designated
recipient, or three (3) days after deposit thereof in the United States mail,
registered, return receipt requested, and postage prepaid, addressed, if to the
Participant, at the address given beneath the Participant's signature set forth
below, and if to Tracker, at the executive offices of Tracker.
12. EFFECT OF AWARD AGREEMENT. The Award Agreement shall be assumed
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by, be binding upon and inure to the benefit of (i) any successor or successors
of Tracker to the extent provided in Section 4.2(b) of the Plan and (ii) any
Beneficiary or Personal Representative of the Participant as provided in Section
4.3 of the Plan.
13. TAX WITHHOLDING. The provisions of Section 4.6 of the Plan are
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hereby incorporated and shall govern any withholding that Tracker employing the
Participant is required to make with respect to an exercise of the Option, as
well as Tracker's right to condition a transfer of Common Stock upon compliance
with the applicable withholding requirements of federal, state and local
authorities.
14. TERMS OF PLAN GOVERN. The Option and this Award Agreement are
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subject to, and Tracker and the Participant agree to be bound by, all of the
terms and conditions of the Plan. The Participant acknowledges receipt of a
copy of the Plan, which is made a part hereof by this reference. The rights of
the Participant are subject to limitations, adjustments, modifications,
suspension and termination in certain circumstances and upon the occurrence of
certain conditions as set forth in the Plan.
15. LAWS APPLICABLE TO CONSTRUCTION. The Option has been granted,
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executed and delivered as of the day and year first above written. This Award
Agreement and all amendments, modifications, alterations or supplements hereto
shall be deemed to have been executed in the State of Delaware, and shall be
governed and construed as to both substantive and procedural matters in
accordance with the laws of the State of Delaware, but excepting any rule which
would result in the application of the law of a jurisdiction other than the
State of Delaware. Tracker and Participant hereby irrevocably waive any
objection which it may now or hereafter have to the laying of venue of the
proceedings under this provision in the federal or state courts of the State of
Delaware as well as any claim that any such proceedings are in an inconvenient
forum and hereby release the other party from the requirement of posting any
bond in connection with the pursuit of temporary or interlocutory injunctive
relief or specific performance, to the extent permitted by law.
16. NOTICE OF DISPOSITION. The Participant agrees to notify Tracker of
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any sale or other disposition of any shares of Common Stock received upon
exercise of the Option if such sale or disposition occurs within two years after
the Award Date or within one year after the date of exercise of the Option.
17. WAIVER. The waiver by any party hereto of a breach of or a default
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under any provision of this Award Agreement by another party hereto shall not be
effective unless in writing and shall not be construed as a waiver of any
succeeding breach of or default under the same or any other provision, nor shall
any delay or omission on the part of any party hereto to exercise or avail
itself of any right, power or privilege of such party hereto be construed as a
waiver of such right, power or privilege. Any right, power or remedy provided
under this Award Agreement to any party hereto shall be cumulative and in
addition to any other right, power or remedy provided under this Award Agreement
or existing in law or in equity (including, without limitation, the remedies of
injunctive relief and specific performance).
18. COUNTERPARTS. This Award Agreement may be executed in any number
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of counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument. A facsimile copy of any such
counterpart or of the original execution of any such counterpart shall be fully
as effective as the original executed copy.
19. BINDING EFFECT. Except as otherwise set forth herein to the
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contrary, all of the terms, covenants, agreements and conditions herein
contained shall be binding upon and shall inure to the benefit of all of the
parties hereto, and their respective successors and permitted assigns.
20. SEVERABILITY. In the event that any one or more of the provisions,
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or parts of any provisions, contained in this Award Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect by a court
of competent jurisdiction, the same shall not invalidate or otherwise affect any
other provisions hereof, and this Award Agreement shall be construed as if such
invalid, illegal or unenforceable provision or part of any provision had never
been contained herein.
21. CAPTIONS. Section headings, titles or captions contained herein
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are inserted only as a matter of convenience and for reference and in no way
define, limit, extend or describe the scope of the Agreement or the intent of
any provision hereof.
22. IDENTIFICATION. Whenever the singular number is used in this Award
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Agreement and when required by the context, the same shall include the plural,
and the masculine gender shall include the feminine and neuter genders.
23. FURTHER ASSURANCES. The parties hereto shall sign such other
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instruments, cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perform and cause to be done
and performed such further and other acts and things as may be necessary or
desirable in order to give full effect to this Agreement.
24. ENTIRE AGREEMENT. This Award Agreement supersedes all prior
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discussions and agreements among the parties hereto with respect to the subject
matter contained herein, and, together with the Plan, contains the sole and
entire agreement between the parties hereto with respect to the transactions
contemplated herein. This Award Agreement may be amended only by an instrument
in writing signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed his Award Agreement as
of the date first above written.
THE TRACKER CORPORATION OF AMERICA,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Chief Executive Officer
[CORPORATE SEAL]
PARTICIPANT:
/s/ Xxx X. Xxxxxxxx
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XXX X. XXXXXXXX
SCHEDULE I
NUMBER OF SHARES AND EXERCISE PRICE
Number of Option Shares Exercise Price Per Share
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2,488,578 $.075
SCHEDULE II
VESTING OF OPTIONS
Award Date to
December 31, 1999 January 1, 2000 January 1, 2001
0 shares 1,244,289 shares 1,244,289 shares
0% 50% 50%
