STOCK OPTION AGREEMENT
Exhibit 10.12
This
STOCK OPTION AGREEMENT (the "Agreement") is effective this __th day of _________
2007, between DEER VALLEY CORPORATION, a Florida corporation, (the "Company")
and _______________ (the "Director").
BACKGROUND
INFORMATION
The
Company desires to promote the long-term interests of the Company by attracting
and retaining qualified and experienced persons for service as directors of
the
Company and by providing an additional incentive for such directors to work
for
the success and growth of the Company through continuing ownership of the
Company’s common stock and encouraging them to remain directors of the
Company. In order to achieve such goals, the Company has determined
to provide certain individuals with compensation opportunities based on the
performance of the Company's common stock. To that end, the Company
adopted a 2007 Long Term Incentive Plan effective as of July 1, 2007 (the
"Plan"), a copy of which is available at the Company’s executive offices, and
has decided to grant the Director an option under such Plan. Director
acknowledges and represents that he has reviewed the terms of this Agreement,
has received a copy of the Plan and has been advised of his right to consult
with a tax advisor, financial consultant or legal counsel to obtain legal or
financial advice regarding this Agreement. Accordingly, in
consideration of the mutual covenants hereinafter set forth and for other good
and valuable consideration, the parties hereto agree as follows:
OPERATIVE
PROVISIONS
1. Grant
of Option. Subject to the terms of the Plan, the Company hereby
irrevocably grants to the Director the right and option (the "Option"), to
purchase all or any part of an aggregate of ______ shares (such number being
subject to adjustment as provided in paragraph 9 hereof) of the Company’ s
common stock (the "Share" or "Option Shares") on the terms and conditions herein
set forth. The Option granted under this Agreement is not intended to
qualify as an Incentive Stock Option within the meaning of §422 of the Internal
Revenue Code of 1986, as amended, and regulations promulgated
thereunder.
2. Purchase
Price. Subject to the adjustments provided for by paragraph 9 of
this Agreement, the purchase price of each Share covered by the Option shall
be
$______ per share.
3. Term
of the Option. The maximum term of the Option shall be for a
period of ten (10) years after the date the Option is granted.
4.
Immediate Vesting; Exercise of Option. The Option is fully
vested and may be exercised in accordance with the terms and conditions of
the
Plan and this Agreement, subject to paragraphs 6 through 9 hereof.
The
Director shall be entitled to exercise any portion of the Option in accordance
with the provisions of paragraph 5. hereof, either in whole or in part, by
delivering written notice of such exercise
to the office of the Secretary of the Company or to such other location as
may
be designated by the Company, specifying therein the number of Option Shares
with respect to which the Option is being exercised, which notice shall be
accompanied by payment in full of the purchase price of the Shares being
acquired.
5. Payment
of Exercise Price. Payment shall be made in
cash. Subject to the Director's compliance with Section 16(b) of the
Securities Exchange Act of 1934 (the "Exchange Act"), as determined by the
Company, the Company may also permit the Director to simultaneously exercise
the
Option and sell the Shares thereby acquired pursuant to a "cashless exercise"
arrangement and accept payment from a broker-dealer selected by and approved
of
in all respects by the Company and use the proceeds from such sale as payment
of
the exercise price of such Shares. No Shares shall be issued until
full payment therefore has been made in the manner set forth above.
6. Director
Status. In the event that the term of the Director is terminated
"For Cause" by the Company, the Option shall expire immediately and any Options
that have not been exercised shall be forfeited as of such date. In the event
that the Company terminates the Director other than "For Cause" during his
term
or the Directors fails to stand for reelection, the Director shall be given
ninety (90) days after the date of such termination to exercise the Option
with
respect to any Option Shares, or any portion thereof that was exercisable as
of
the date of termination. The Options shall not be affected by any
change of duties or position of the Director.
For
purposes of this Agreement, the
phrase "For Cause" shall mean termination based upon (a) conviction
of the Director for any crime involving moral turpitude (whether or not a
felony) or any other criminal act against the Company involving dishonesty
or
willful misconduct intending to injure the Company; (b) the failure or the
refusal of the Director to follow lawful and proper directives of the Company's
full Board of Directors; (c) malfeasance or misconduct by the Director
which discredits or damages the Company; (d) the indictment of the Director
for a felony violation of federal or state laws; or (e) failure of the Director
to perform his duties in a manner commensurate with the standards established
from time to time by the Board of Directors of the Company or which may be
reasonably expected by a Board of Directors of a comparable
company.
7. Death
or Disability of the Director. If membership of the Director
terminates due to death or disability, the Option shall expire at the end of
the
twelve month period following such termination of membership or the date the
Option expires in accordance with its terms, whichever occurs
first. The Option may be exercised by the Director, or if deceased,
by the Director’s successor(s) in interest, whom shall include, but not be
limited to, the Director’s devisee(s), legatee(s), trustee(s) or personal
representative(s) or executor(s) of his estate, with respect to the same number
of Shares and in the same manner, and to the same extent as if the Director
had
continued his membership during such period and the Option shall be canceled
with respect to all remaining Shares otherwise subject to the
Option.
8. Transferability
of Option. The Option may be transferred in accordance with
Section 4.6 of the Plan.
9.
Stock Certificates. Upon exercise of the Option and payment of
the exercise price, the Company shall deliver a certificate or certificates
representing such Shares as soon as practicable after the notice shall be
received; or (b) fix a date (not less than five (5) nor more than ten (10)
business days from the date such notice shall be received by the Company) for
the payment of the full purchase price of such Shares with the Secretary of
the
Company, against delivery of a certificate or certificates representing such
shares. The certificate or certificates for the Shares as to which
the Option shall have been so exercised shall be registered in the name of
the
person or persons so exercising the Option (or, if the Option shall be exercised
by the Director and if the Director shall so request in the notice exercising
the Option, shall be registered in the name of the Director and another person
jointly, with right of survivorship) and shall be delivered upon the written
order of the person or persons exercising the Option. In the event
the Option shall be exercised pursuant to Section 8. hereof by any person or
persons other than the Director, such notice shall be accompanied by appropriate
proof of the right of such person or persons to exercise the
Option. All shares that shall be purchased upon the exercise of the
Option as provided herein shall be fully paid and non-assessable.
10. No
Additional Rights. The Director shall have no right to be
employed by the Company under the terms of this Agreement or
interfere in any way with the right of the Company to terminate any employment
of the Director at any time. Neither the Director nor any other
person entitled to exercise the Option under the terms hereof shall be, or
have
any of the rights or privileges of, a shareholder of the Company with respect
to
any of the shares of common stock issuable upon exercise of the Option, unless
and until the purchase price for such shares shall have been paid in
full.
11. Notices. All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been given on the day delivered if delivered
personally, within three (3) Business Days (as defined below) after being sent
if sent by registered or certified mail (postage prepaid, return receipt
requested), the next day after being sent if sent by overnight courier (prepaid)
or the next day after being sent if sent by telecopier to either party at the
following address:
If
to the
Company:
Deer
Valley
Corporation
0000
Xxxx Xxxxxxxxx
Xxxxxx
Xxxxx,
Xxxxxxx 00000
Attention:
Xxxxxxx X.
Xxxxxxx, C.E.O.
Telephone:
(000)
000-0000
Telecopier:
(000)
000-0000
E-Mail:
xxxxxxxx@xxxxxxxx.xx.xxx
With
a Copy
to:
Xxxx
Xxxx, P.A.
Attn:
Xxxxx Xxxxx, Esq.
000
Xxxxx
Xxxxxxxx Xxxxxx
Xxxxx,
Xxxxxxx 00000
Attention:
Xxxxx Xxxxx, Esq.
Telephone:
(000) 000-0000
Telecopier:
(000) 000-0000
E-mail: xxxxxx@xxxxxxxx.xxx
If
to the
Director:
Deer
Valley Homebuilders, Inc.
Attn:
Xxxx Xxxxxx Xxxxxx
000
Xxxxxxxx Xxxxxx
Xxxx,
Xxxxxxx 00000
Telephone:
(000) 000-0000
Telecopier:
(000) 000-0000
E-Mail:
xxxxxxx@xxxxxxxxxxxx.xxx
or
to
such other address as either party shall have specified for itself or himself
from time to time to the other party in writing. For purposes of this Agreement,
the term "Business Day" shall mean any day other than a
Saturday, a Sunday or any day on which commercial banks in Tampa, Florida
are
authorized or required by law to close.
12. Investment
Purpose. The Option is granted on the express condition that the
purchase of shares upon an exercise hereof shall be made for investment purposes
only and not with a view to their resale or further distribution unless such
shares, at the time of their issuance and delivery, are registered under the
Securities Act of 1933, as amended, or, alternatively, at some time following
such issuance their resale is determined by counsel for the Company to be exempt
from the registration requirements of the Act and of any other applicable law,
regulation or ruling.
Within
five (5) business days after the exercise date, the Company shall, subject
to
the receipt of withholding tax, if any, issue to the Director the number of
shares with respect to which such Option shall be so exercised, and shall
deliver to the Director a certificate (or certificates) therefor. The
certificate shall bear the following legends, if applicable:
"THIS
COMMON STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE ACT), OR APPLICABLE STATE SECURITIES LAW AND MAY BE OFFERED, SOLD,
OR TRANSFERRED ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THE ACT OR
APPLICABLE STATE SECURITIES LAW OR IF THE PROVISIONS OF RULE 144(K) UNDER THE
ACT ARE APPLICABLE OR IF IN THE OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
"THE
COMMON STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS
ON TRANSFER AND RIGHTS OF PURCHASE AND CERTAIN OTHER REQUIREMENTS THAT ARE
FULLY
SET FORTH IN THIS AGREEMENT. ANY SUCH TRANSFER OR ACQUISITION IN
VIOLATION OF SUCH AGREEMENT(S) IS NULL AND VOID, AND SUCH LATTER AGREEMENT
IS
AUTOMATICALLY BINDING ON ANY PERSON WHO ACQUIRES THE SHARES. COPIES
OF THE AGREEMENTS ARE ON FILE AND MAY BE INSPECTED AT THE PRINCIPAL BUSINESS
OFFICE OF DEER VALLEY CORPORATION"
13. Tax
Withholding. The Company shall have the right to deduct from any
payment or settlement upon the exercise of any stock option, or the delivery
of
any Shares, any federal, state, local or other taxes of any kind which the
Company, in its sole discretion, deems necessary to be withheld to comply with
the Internal Revenue Code and/or any other applicable law, rule or
regulation. In addition, in the event that the Director disposes of
any Shares, the Company shall have the right to require the Director to remit
to
the Company an amount sufficient to satisfy all federal, state, and local
withholding tax requirements as a condition to registering the transfer of
such
Shares on its books. If the Company, in its sole discretion, permits
Shares of the Company’s common stock to be used to satisfy any such tax
withholding, such shares shall be valued based on the fair market value of
such
shares as of the date the tax withholding is required to be made, on the same
basis as set forth in paragraph 5 above.
14. General. The
Company shall at all times during the term of the Option reserve and keep
available such number of shares of its common stock as will be sufficient to
satisfy the requirements of this Agreement, shall pay all original issue and
transfer taxes with respect to the issue and transfer of shares pursuant hereto
and all other fees and expenses necessarily incurred by the Company in
connection therewith, and will from time to time use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the
Company, shall be applicable thereto. The Option shall be
exercised in accordance with such administrative regulations as the Company
shall from time to time adopt and may be amended from time to time by the
Company in its sole and absolute discretion.
15. Acceptance
by Director. The exercise of the Option is conditioned upon the
acceptance of Director of the terms hereof as evidenced by his execution of
this
Agreement. Because the terms of this Agreement contain specific terms
and conditions that may not be addressed in the Plan, Director agrees that
the
terms of this Agreement will be binding and control in the event that any
discrepancy arises between the terms of the Plan and this
Agreement. Director acknowledges and represents that he has reviewed
the terms of this Agreement, has received a copy of the Plan and has been
advised of his right to consult with a tax advisor, financial consultant or
legal counsel to obtain legal or financial advice regarding this
Agreement.
16. Application
of Florida Law. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of Florida. Venue for all purposes shall be deemed
to lie within Tampa of Hillsborough County, Florida.
17. Remedies
for Breach of Agreement. The breach of any confidentiality,
non-disclosure or non-competition covenants by Director under any applicable
agreement entered into by and between the Company and Director or the breach
by
Director of the terms of this Agreement is acknowledged by the parties hereto
to
constitute harm to the Company of an extraordinary character which could cause
the Company to suffer irreparable damages which could not readily be compensated
by a monetary judgment. Director agrees that the Company shall be
entitled, in addition to all other remedies available to it upon a breach by
Director of his obligations hereunder, to such equitable relief, whether by
way
of injunction or action for specific performance, or otherwise as a court might
impose, without the necessity of proving actual monetary damage for any breach
by Director of this Agreement or of any undertaking herein
contained.
The
Director and the Company have executed this Agreement on the day and year
first written above.
Deer
Valley Corporation
By:
Xxxxxxx
X. Xxxxxxx, Chief Executive Officer
DIRECTOR:
