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EXHIBIT 10.2
VENTURI TECHNOLOGY ENTERPRISES, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
This Non-Statutory Stock Option Agreement (the "Agreement")
made and entered into as of the 1st day of July, 1997, by and between Venturi
Technology Enterprises, Inc., a Nevada corporation with its principal place of
business in Utah (the "Company"), and Xxxxxx Xxxxxxxxxx (the "Optionee"),
pursuant to the Consultant Program of the Dual Stock Option Plan of the Company
(the "Plan") which reserves for issuance to persons serving the Company and its
subsidiaries as directors and consultants certain shares of the Company's no par
value common stock (the "Capital Stock"). As used herein, the term "subsidiary"
shall mean any present or future corporation which would be a "subsidiary
corporation" of the Company, as that term is defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended.
WHEREAS, the Company desires to carry out the purposes of the
Plan by affording the Optionee, who is a for the company, an
opportunity to purchase shares of Capital Stock by means of a grant of a
non-statutory stock option, as hereinafter provided;
NOW, THEREFORE, based upon the mutual covenants and conditions
contained herein, the parties hereto have agreed to and do hereby agree as
follows:
1. Grant of Option. The Company hereby grants to the Optionee
the right and option (the "Option") to purchase all or any part of an aggregate
of shares of the Capital Stock (such number being subject to
adjustment as provided in Paragraph 6 hereof and hereinafter called the "Option
Shares") on the terms and conditions herein set forth.
2. Purchase Price. The purchase price of the Option Shares
shall be $ per share.
3. Terms of Option. The Option shall automatically terminate
upon the date years subsequent to the Effective Date, subject to
earlier termination as provided in Paragraph 5 hereof. The Board of Directors of
the Company in its sole discretion deems there to be satisfactory and sufficient
consideration for the grant of this Option taking into account, among other
factors, . The Option
may be exercised as to any or all of the available Option Shares. The purchase
price of the shares as to which the Option shall be exercised shall be paid in
full at the time of exercise either in cash, or, subject to the approval of the
Board, by promissory note, in shares of the Company's stock, or a combination of
cash, promissory note and/or shares of the Company's stock. The Optionee shall
not have any of the rights of a shareholder with respect to the shares covered
by the Option as to which there has been no exercise of the Option.
4. Nontransferability. The Option shall not be transferable
otherwise than by will or the laws of descent and distribution, and the Option
may be exercised, during the lifetime of the Optionee, only by the Optionee.
More particularly (but without limiting the generality of
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the foregoing), the Option may not be assigned, transferred (except as provided
above), pledged or hypothecated in any way, shall not be assignable by operation
of law and shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall be null and void and
without effect.
5. Death or Disability of Optionee. If the Optionee shall die,
the Option may be exercised (to the extent that the Optionee shall have been
entitled to do so at the date of the Optionee's death) by the Optionee's
personal representatives, or appropriate heirs or legatees, at any time before
the date on which the Option automatically expires pursuant to Section 3 above,
at the expiration of which time the Option shall terminate.
6. Adjustments Upon Changes in Capital Structure. In the event
of changes in the outstanding capital stock of the Company by reason of any
stock dividend, stock split or reverse split, reclassification,
recapitalization, merger, consolidation, reorganization or liquidation, the
Board may make such adjustments in (a) the aggregate number and class of shares
available under the Plan; (b) the number and class of shares to which optionees
will thereafter be entitled upon exercise of their options; and (c) the price
which optionees shall be required to pay upon such exercise; as it deems
appropriate, and such determination shall be final, binding and conclusive.
In the event of any merger of the Company (except with a
subsidiary) or any acquisition of 80 percent or more of its gross assets or
stock, or any reorganization or liquidation of the Company (an "Event"), the
Board shall make arrangements (the "Arrangements") which shall be binding upon
the holders of unexpired options then outstanding under this Plan (d) for the
substitution of new options for any portion of such unexpired options; (e) for
the assumption of any portion of such unexpired options by any successor to the
Company; (f) for the acceleration of the expiration date of any portion of such
unexpired options to a date not earlier than thirty (30) days after notice to
the optionee; or (g) for the cancellation of such portion of unexpired options
in exchange for the payment by any successor to the Company of deferred
compensation to the optionee in an amount equal to the difference between the
fair market value of the Shares subject to such unexpired portion and the
aggregate exercise price of the Shares under the terms of such unexpired portion
on the date of the Event, in installments which correspond to the vesting
schedule of the unexpired option.
Notwithstanding the foregoing, if an Event should occur, the
Arrangements which the Board shall make to each portion of all outstanding
unexercised options shall be limited to either (h) providing for the
substitution of new options for such portion; (i) providing the holder of such
portion with no less than thirty (30) days to exercise such portion in full; (j)
causing any successor corporation to assume such portion in full; or (k)
canceling such portion and causing any successor corporation to pay deferred
compensation to the holder of such portion at the time such portion would have
become exercisable, in an amount equal to the difference between the fair market
value of the Shares subject to the portion and the aggregate exercise price of
the portion on the date of the Event.
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7. Method of Exercising Option. Subject to the terms and
conditions of this Agreement, the Option may be exercised by written notice to
the Company at its main office. Such notice shall state the election to exercise
the Option and the number of shares in respect of which it is being exercised
and shall be signed by the person or persons so exercising the Option. Such
notice shall be accompanied by payment of the full purchase price of such
shares, and the Company shall deliver a certificate or certificates representing
such shares as soon as practicable after the notice shall be received. In the
event the Option shall be exercised pursuant to Paragraph 5 hereof, such notice
shall be accompanied by appropriate proof of the right of such person or persons
to exercise the Option. 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 Optionee and shall be delivered as provided above to or upon the written
order of the person or persons exercising the Option. All shares that shall be
purchased upon the exercise of the Option as provided herein shall be fully paid
and nonassessable.
The shares to be issued upon the exercise of options granted
under the Plan have not been registered with the Securities and Exchange
Commission, nor have they been registered or qualified under the laws of any
state. The notice exercising the Option shall be in a form satisfactory to the
Company, and shall affirm that the purchaser is acquiring the shares for the
purchaser's own account for investment and not for the purposes of resale or
distribution. The certificates for the shares shall be subject to any legend
condition imposed under the laws of any state. In addition, the certificate
representing the shares shall be subject to the following restrictions and all
certificates representing said shares shall bear a conspicuous legend containing
said restrictions:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") OR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE (THE "LAW"). SUCH
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
NEITHER SAID SHARES NOR ANY INTEREST THEREIN MAY BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER
THE ACT AND QUALIFICATION UNDER THE LAW OR AN OPINION
OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED AS TO
SAID SALE OR OFFER.
9. Income Tax. It is understood that the exercise of this
Option will be taxed as a non-statutory option. In particular, the Optionee will
realize ordinary income at the time of exercise equal to the difference between
the then fair market value of the shares purchased and the exercise price, and
the Company will be entitled to a compensation expense deduction in the same
amount.
10. Right of First Refusal.
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A. Initiation of Right of First Refusal. Each time the
Optionee exercises the Option and acquires Option Shares until the initial
public offering of the Corporation's Capital Stock, the Optionee (which for
purposes of this Section 10 shall include the Optionee's heirs, executors,
administrators and transferees, and shall be referred to as the "Shareholder")
shall not sell, pledge, assign, or otherwise transfer such Option Shares without
first offering to the Corporation or its designees the right and option to
purchase said shares as provided hereinafter in this Section 10 (the "Right of
First Refusal"). Notwithstanding the above, the Optionee may sell or transfer
said Option Shares to the Optionee's spouse or children, or to a trustee or
custodian for the benefit of the Optionee or Optionee's spouse or children
without first offering said Option Shares to the Corporation or its designees,
provided such buyer or transferee agrees in writing to be bound by the
restrictions set forth in this Section 10 and Section 8 of this Agreement. In
the event of a pledge or other hypothecation of the Option Shares, then the
Right of First Refusal shall come into existence at the time of any sale or
transfer of ownership of the Option Shares pursuant to the foreclosure under
such pledge or hypothecation, provides, however, that Optionee may not pledge
the Option Shares unless the pledge holder agrees in writing at the time of the
pledge to be bound by the Right of First Refusal as contained in this Section 10
and to cause any proposed assignee or transferee of such pledge to execute and
deliver to the Corporation a similar writing prior to such assignment or
transfer.
B. Mechanics. Any Shareholder desiring to sell any or
all of the Option Shares during such time period shall give written notice to
the Secretary of the Corporation of the Shareholder's bona fide intention to
sell the Option Shares pursuant to a bona fide written offer of a third party
other than the Corporation (the "Proposed Purchaser"). The notice shall include
a photocopy of such written offer which shall specify the identity of the
Proposed Purchaser, the number of such Option Shares proposed to be sold
(hereinafter the "Offered Shares"), and the price and payment terms of the
proposed offer to buy the Offered Shares. The payment terms of the Proposed
Purchaser to the Shareholder (and of the Shareholder to the Corporation) must be
cash, cash equivalent (a certificate of deposit, shares of stock in a publicly
traded company, and the like), or a promissory note of the Proposed Purchaser
payable on date(s) specified by passage of time. The Corporation or its
designees shall have the right and option to purchase any and all of the Offered
Shares, at the price and on the payment terms specified in the Shareholder's
notice, for a period of sixty (60) days from receipt of said notice from the
Shareholder. That is, such notice by the Shareholder constitutes an irrevocable
offer by the Shareholder to sell any or all of the Offered Shares to the
Corporation or its designees at the price and payment terms specified in such
notice for sixty days from the Corporation's receipt of such notice.
The Corporation shall exercise its option by giving written
notice (the "Original Notice") stating the number of Offered Shares for which it
is exercising its option either by delivering such notice personally to the
Shareholder, or by depositing such notice in the United States Mail, postage
prepaid, and addressed to the Shareholder at the Shareholder's address appearing
in the Corporation's records. The Shareholder shall deliver certificates
representing the number of Offered Shares purchased by the Corporation or its
designees against payment for the account of the Shareholder of the purchase
price in compliance with the terms of the bona fide offer within thirty (30)
days of the option exercise notice.
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Any offered Shares for which both the Corporation and its
designees fail to exercise their option as provided in this section, may be sold
by the Shareholder to the proposed Purchase within a period of ninety (90) days
following the end of the Corporation's sixty (60)-day option period specified
above, provided that (1) such sale is made at a price and on terms no more
favorable to the proposed Purchaser than those made available to the Corporation
and its designees under this section, (2) the Proposed Purchaser delivers a
written undertaking to the Secretary of the Corporation to be bound by the
restrictions on the Option Shares set forth in this Section 10 and Section 8 of
this Agreement, and (3) the Corporation receives an opinion of counsel
reasonably satisfactory to it that the sale to the Proposed Purchaser complies
with applicable federal and state corporate securities laws.
Upon receipt of a writing from Shareholder and Proposed
Purchaser that the foregoing conditions have been satisfied and the purchase
price paid to the Shareholder by the proposed Purchasers, the Corporation shall
transfer the ownership of record to the Proposed Purchaser (and reissue the
certificate).
If within this ninety (90)-day period the Shareholder does not
enter into an agreement for such a sale of Offered Shares to the Proposed
Purchaser which is consummated within thirty (30) days of the execution thereof,
the Right of First Refusal shall be revived as to the Offered Shares which shall
not be sold or transferred unless the Shareholder first offers the Corporation
the right and option to repurchase any and all such Option Shares in accordance
with this section.
Any transfer or purported transfer of the Option Shares or any
interest therein shall be null and void unless the terms and conditions of this
Section 10 are strictly observed and followed, or such terms and conditions are
waived by the Corporation's Board of Directors.
In addition to the legend described in Section 8 of this
Agreement, the Corporation is authorized to place the following conspicuous
legend on all certificates representing Option Shares:
THESE SHARES ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS,
INCLUDING A RIGHT OF FIRST REFUSAL, AS SET FORTH IN A
NON-STATUTORY STOCK OPTION AGREEMENT DATED JULY 1, 1997 ON
FILE WITH THE SECRETARY.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date written above, to be effective as of the Effective Date
written above.
OPTIONOR:
VENTURI TECHNOLOGY ENTERPRISES, INC.
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By:
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Its:
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OPTIONEE:
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[Optionee]
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