1
Exhibit 10.10
INCENTIVE STOCK OPTION AGREEMENT PURSUANT TO
THE 1999 EQUITY INCENTIVE PLAN
This INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made as of the
19-Aug-96, by and between Unitrend Inc., (the "Corporation"), and Xxxxxxx X.
Xxxxxxxxx ("Employee").
WITNESSETH:
The Corporation has determined that it is in the best interests of the
Corporation and its shareholders to encourage ownership in the Corporation by
qualified employees, officers, and members of the Board of Directors of the
Corporation or individuals as may be determined, thereby providing additional
incentive for them to continue in the employ of the Corporation or its
affiliates. To that end, an incentive stock option is granted by the Board to
Employee pursuant, and subject to, the 1999 Equity Incentive Plan (the "Plan")
on the following terms and conditions:
SECTION I
DEFINED TERMS
Unless otherwise defined herein or, unless the context requires a different
definition, capitalized terms used herein shall have the meanings assigned to
them in the Plan.
SECTION II
SHARES OPTIONED, OPTION PRICE, AND TIME OF EXERCISE
Effective as of 19-Aug-96, the Corporation grants to Employee, subject to the
terms and provisions set forth hereinafter and in the Plan, the right and option
to purchase all or any part of the number of shares set forth in Exhibit A of
the presently authorized but unissued common stock ("Common Stock") of the
Corporation at the purchase price per share set forth as the Option Price in
Exhibit A (the option hereby granted being hereinafter referred to as the
"Option").
The Option shall not be considered granted (as of the effective date described
above) or become exercisable unless and until Employee delivers to the
Corporation a fully executed counterpart hereof. Thereafter, the Option shall be
exercisable in accordance with the Exercise Schedule set forth on Exhibit A,
subject to any termination, acceleration or change in such Exercise Schedule set
forth in this Agreement apart from Exhibit A.
The Option granted under this Agreement shall not be exercisable after the
Expiration of ten (10) years from the date such option is granted ("the
Expiration Date" set forth on Exhibit A and, before that time, the Option may be
terminated as hereinafter provided. If Employee does not purchase the full
number of shares to which he is entitled in any one year, he may purchase such
shares in the next year specified in the Exercise Schedule hereto, in addition
to the shares which he is otherwise entitled to purchase in the next year.
SECTION III
EXERCISE PROCEDURE
Employee shall exercise the Option by notifying the Corporation of the number of
shares that he desires to purchase and by delivering with such notice the full
payment for the purchase price of the shares being purchased. Such purchase
price shall be payable in cash, in Common Stock or in a combination of cash and
Common Stock. For purposes of determining the amount, if any, of the purchase
price satisfied by payment in Common Stock, such
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Common Stock shall be valued at its Fair Market Value on the date of exercise,
as determined by the Board at the time of exercise. In no event shall the
purchase price be less than one hundred percent (100%) of the Fair Market Value
of such stock at the time the Option is granted; except that the purchase price
shall be one hundred ten percent (110%) of the fair value in the case of any
person who owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation. Any Common
Stock delivered in satisfaction of all or a portion of the purchase price shall
be appropriately endorsed for transfer and assignment to the Corporation.
SECTION IV
TERMINATION OF EMPLOYMENT
If an Optionee's employment (or other service) with the Company terminates
either (i) for Cause or (ii) voluntary on the part of the Optionee and without
Good Reason (as determined by the Board, in its sole discretion), the options,
to the extent not previously exercised, will terminate on the date of such
termination of employment (or service). If an Optionee's employment or other
service with the Company terminates for reasons other than (a) termination that
is either (i) for Cause, (ii) voluntary on the part of the Optionee and without
Good Reason, (b) termination by reason of disability and (c) death, options
under the Plan may be exercised not later than three (3) months after such
termination, but may be exercised only to the extent the options were
exercisable on the date of termination, and in no event after ten (10) years
from the date of granting thereof. Except as may be otherwise provided in this
Agreement, the Option granted hereunder shall not be affected by any change of
employment so long as Employee continues to be employed by the Corporation, a
Parent Corporation or a Subsidiary.
"Cause" shall mean, as determined by the Board, in its absolute discretion, (i)
the continued failure of the Employee to substantially perform his duties to the
Corporation, a Parent Corporation or a Subsidiary (other than any such failure
resulting from disability as defined above), (ii) the engaging by the Employee
in willful, reckless or grossly negligent misconduct which is determined by the
Board to be materially injurious to the Corporation or any of its affiliates,
monetarily or otherwise, or (iii) the Employee's pleading guilty to or
conviction of a felony.
"Good Reason" shall mean, as determined by the Board, in its absolute
discretion, the occurrence of any of the following events without Employee's
express written consent:
(i) a substantial and adverse change in the Employee's duties, control,
authority or status or position, or the assignment to the Employee or any
duties or responsibilities which are inconsistent with such status or
position, or a reduction in the duties and responsibilities previously
exercised by the Employee, or a loss of title, loss of office, loss of
significant authority, power or control, or any removal of him or her from
or any failure to reappoint or reelect him to such positions, except in
connection with the termination of his employment for Cause or disability
(as defined above), or as a result of his death;
(ii) a reduction in the Employee's base salary or a material reduction in the
Employee's total compensation (i.e., a reduction in such total
compensation of ten (10) percent or more); or
(iii) any material breach by the Corporation of any provisions of any agreement
with the Employee.
SECTION V
ACCELERATION OF EXERCISE
(a) Retirement and Total and Permanent Disability. If an Optionee should
become permanently and totally disabled while an employee, or officer of
the Company, options shall become fully exercisable as to all shares
subject to them and may be exercised at any time within one (1) year
following the date of disability, but in no event after the Expiration
Date set forth on Exhibit A. If an Optionee should retire with the written
consent of the Company, options shall become fully exercisable as to all
shares subject to them and may be exercised at any time within three (3)
months of such retirement, but in no event after the Expiration Date set
forth on Exhibit A. If such option is exercised within three months prior
to the
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Expiration Date set forth in Exhibit A, such Option shall not receive
favorable tax treatment under Code Section 421(a).
(b) Death. If an Optionee should die while an employee, options may be
exercised at any time within one (1) year following the date of death, but
in no event after the earlier of (i) the date one year following the
Employee's date of death, or (ii) the Expiration Date set forth on Exhibit
A hereto. Such Option may be exercised by the beneficiary designated by
the Employee on Exhibit B hereto, in accordance with Section X hereto, or,
if no beneficiary is designated on Exhibit B, by the executor or
administrator of the Employee's estate.
(c) Corporate Change. Upon the occurrence of a Corporate Change, the Option
(to the extent not previously terminated or forfeited) may, at the
discretion of the Board, become fully exercisable as to all shares subject
to it.
SECTION VI
NON-ASSIGNABILITY AND TERM OF OPTION
The Option shall not be transferable or assignable by the Employee, otherwise
than by will or the laws of descent and distribution and the Option shall be
exercisable, during the Employee's lifetime, only by him. No Option shall be
subject to execution, attachment or similar process.
In no event may the Option be exercisable to any extent by anyone after the
Expiration Date specified in Exhibit A. It is expressly agreed that, anything
contained herein to the contrary notwithstanding, this Agreement shall not
constitute, or be evidence of, any agreement or understanding, express or
implied, that the Corporation, a Parent Corporation or a Subsidiary will employ
Employee for any period of time or in any position or for any particular
compensation.
SECTION VII
RIGHTS OF EMPLOYEE IN STOCK
Neither Employee, nor his successor in interest, shall have any of the rights of
a shareholder of the Corporation with respect to the shares for which the Option
is exercised until such shares are issued by the Corporation.
SECTION VIII
NOTICES
Any notice to be given hereunder shall be in writing and shall be addressed to
the Corporation, in care of the Director of Administration, at 0000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000, and any notice to be given to Employee
shall be addressed to the address designated below the signature appearing
hereinafter, or at such other address as either party may hereafter designate in
writing to the other. Any such notice shall have been deemed duly given upon
three (3) days of sending such notice enclosed in a properly sealed envelope,
addressed as aforesaid, registered or certified and deposited (with the proper
postage and registration or certificate fee prepaid) in the United States mail.
SECTION IX
SUCCESSORS OR ASSIGNS OF THE CORPORATION
The Option shall be binding upon and shall inure to the benefit of any successor
of the Corporation.
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SECTION X
MISCELLANEOUS
(a) Designation of Beneficiary. The Employee shall have the right to appoint
any individual or legal entity in writing, on Exhibit B hereto, as his
beneficiary to receive any Option (to the extent not previously exercised
or forfeited) under this Agreement upon the Employee's death. Such
designation under this Agreement may be revoked by the Employee at any
time and a new beneficiary may be appointed by the Employee by execution
and submission to the Board of a revised Exhibit B to this Agreement. In
order to be effective, a designation of beneficiary must be completed by
the Employee on Exhibit B and received by the Board, or its designee,
prior to the date of the Employee's death. In the absence of such
designation, the Employee's beneficiary shall be the person designated
under the Employee's will or as defined by the applicable state laws of
the decedent's distribution.
(b) Incapacity of Employee or Beneficiary. If any person entitled to a
distribution under this Agreement is deemed by the Board to be incapable
of making an election hereunder or of personally receiving and giving a
valid receipt for such distribution hereunder, then, unless and until an
election or claim therefore shall have been made by a duly appointed
guardian or other legal representative of such person, the Board may
provide for such election or distribution or any part thereof to be made
to any other person or institution then contributing toward or providing
for the care and maintenance of such person. Any such distribution shall
be a distribution for the account of such person and a complete discharge
of any liability of the Board, the Corporation and the Plan therefore.
(c) Cancellation of Verbal Options. This contact cancels and supercedes any
oral grant of options. The Employee agrees to waive rights to oral options
and consents that this written contact represents and encompasses any
verbal options that may have been granted to the Optionee.
(d) Incorporation of the Plan. The terms and provisions of the Plan are hereby
incorporated in this Agreement. Unless otherwise specifically stated
herein, such terms and provisions shall control in the event of any
inconsistency between the Plan and this Agreement.
(e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF OHIO AND ALL APPLICABLE FEDERAL LAWS. THE SECURITIES ISSUED HEREUNDER
SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE CORPORATE SECURITY LAWS OF
THE STATE OF OHIO.
(f) Gender. Reference to the masculine herein shall be deemed to include the
feminine, wherever appropriate.
(g) Counterparts. This Agreement may be executed in one or more counterparts,
which shall together constitute a valid and binding agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Corporation and the
Employee as of the date and year first written above.
Employee /s/Xxxxxxx X. Xxxxxxxxx Unitrend Inc., a Nevada Corporation
Address: [omitted] By: /s/Xxxxxx X.X. Jelinger
Title: President and CEO
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EXHIBIT A
INCENTIVE STOCK OPTION AGREEMENT PURSUANT TO THE 1999 EQUITY INCENTIVE PLAN
1. Date of Grant: 19-Aug-96
2. Employee: Xxxxxxx X. Xxxxxxxxx
3. Number of Shares: 500,000 shares of Common Stock
4. Option Price per Share: $0.50 a share
5. Exercise Schedule: 33% of the Options subject to this Agreement
shall first be exercisable one (1) year
after the Date of Grant specified above.
33% of the Options subject to this Agreement
shall thereafter be exercisable on each
anniversary date of the Date of Grant
specified above until the Options are fully
exercisable.
6. Expiration Date: Date of grant, 2006 (not more than ten (10)
years from Date of Grant; (5) years from
Date of Grant for 10 percent or more
shareholders).
TO QUALIFY FOR INCENTIVE STOCK OPTION TAX TREATMENT, THE EMPLOYEE MUST NOT
DISPOSE OF SHARES OBTAINED ON EXERCISE OF AN OPTION UNTIL AT LEAST TWO YEARS
AFTER THE DATE OF GRANT AND ONE YEAR AFTER THE DATE OF EXERCISE OF THE OPTION.
IF THESE HOLDING PERIODS ARE NOT MET, THE SALE OR OTHER DISPOSITION OF SHARES
WILL BE A DISQUALIFYING DISPOSITION PURSUANT TO CODE.
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INCENTIVE STOCK OPTION AGREEMENT PURSUANT TO
THE 1999 EQUITY INCENTIVE PLAN
This INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made as of the
15-Jan-97, by and between Unitrend Inc., (the "Corporation"), and Xxxxxxx X.
Xxxxxxxxx ("Employee").
WITNESSETH:
The Corporation has determined that it is in the best interests of the
Corporation and its shareholders to encourage ownership in the Corporation by
qualified employees, officers, and members of the Board of Directors of the
Corporation or individuals as may be determined, thereby providing additional
incentive for them to continue in the employ of the Corporation or its
affiliates. To that end, an incentive stock option is granted by the Board to
Employee pursuant, and subject to, the 1999 Equity Incentive Plan (the "Plan")
on the following terms and conditions:
SECTION I
DEFINED TERMS
Unless otherwise defined herein or, unless the context requires a different
definition, capitalized terms used herein shall have the meanings assigned to
them in the Plan.
SECTION II
SHARES OPTIONED, OPTION PRICE, AND TIME OF EXERCISE
Effective as of 15-Jan-97, the Corporation grants to Employee, subject to the
terms and provisions set forth hereinafter and in the Plan, the right and option
to purchase all or any part of the number of shares set forth in Exhibit A of
the presently authorized but unissued common stock ("Common Stock") of the
Corporation at the purchase price per share set forth as the Option Price in
Exhibit A (the option hereby granted being hereinafter referred to as the
"Option").
The Option shall not be considered granted (as of the effective date described
above) or become exercisable unless and until Employee delivers to the
Corporation a fully executed counterpart hereof. Thereafter, the Option shall be
exercisable in accordance with the Exercise Schedule set forth on Exhibit A,
subject to any termination, acceleration or change in such Exercise Schedule set
forth in this Agreement apart from Exhibit A.
The Option granted under this Agreement shall not be exercisable after the
Expiration of ten (10) years from the date such option is granted ("the
Expiration Date" set forth on Exhibit A and, before that time, the Option may be
terminated as hereinafter provided. If Employee does not purchase the full
number of shares to which he is entitled in any one year, he may purchase such
shares in the next year specified in the Exercise Schedule hereto, in addition
to the shares which he is otherwise entitled to purchase in the next year.
SECTION III
EXERCISE PROCEDURE
Employee shall exercise the Option by notifying the Corporation of the number of
shares that he desires to purchase and by delivering with such notice the full
payment for the purchase price of the shares being purchased. Such purchase
price shall be payable in cash, in Common Stock or in a combination of cash and
Common Stock. For purposes of determining the amount, if any, of the purchase
price satisfied by payment in Common Stock, such
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Common Stock shall be valued at its Fair Market Value on the date of exercise,
as determined by the Board at the time of exercise. In no event shall the
purchase price be less than one hundred percent (100%) of the Fair Market Value
of such stock at the time the Option is granted; except that the purchase price
shall be one hundred ten percent (110%) of the fair value in the case of any
person who owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation. Any Common
Stock delivered in satisfaction of all or a portion of the purchase price shall
be appropriately endorsed for transfer and assignment to the Corporation.
SECTION IV
TERMINATION OF EMPLOYMENT
If an Optionee's employment (or other service) with the Company terminates
either (i) for Cause or (ii) voluntary on the part of the Optionee and without
Good Reason (as determined by the Board, in its sole discretion), the options,
to the extent not previously exercised, will terminate on the date of such
termination of employment (or service). If an Optionee's employment or other
service with the Company terminates for reasons other than (a) termination that
is either (i) for Cause, (ii) voluntary on the part of the Optionee and without
Good Reason, (b) termination by reason of disability and (c) death, options
under the Plan may be exercised not later than three (3) months after such
termination, but may be exercised only to the extent the options were
exercisable on the date of termination, and in no event after ten (10) years
from the date of granting thereof. Except as may be otherwise provided in this
Agreement, the Option granted hereunder shall not be affected by any change of
employment so long as Employee continues to be employed by the Corporation, a
Parent Corporation or a Subsidiary.
"Cause" shall mean, as determined by the Board, in its absolute discretion, (i)
the continued failure of the Employee to substantially perform his duties to the
Corporation, a Parent Corporation or a Subsidiary (other than any such failure
resulting from disability as defined above), (ii) the engaging by the Employee
in willful, reckless or grossly negligent misconduct which is determined by the
Board to be materially injurious to the Corporation or any of its affiliates,
monetarily or otherwise, or (iii) the Employee's pleading guilty to or
conviction of a felony.
"Good Reason" shall mean, as determined by the Board, in its absolute
discretion, the occurrence of any of the following events without Employee's
express written consent:
(i) a substantial and adverse change in the Employee's duties, control,
authority or status or position, or the assignment to the Employee or
any duties or responsibilities which are inconsistent with such status
or position, or a reduction in the duties and responsibilities
previously exercised by the Employee, or a loss of title, loss of
office, loss of significant authority, power or control, or any removal
of him or her from or any failure to reappoint or reelect him to such
positions, except in connection with the termination of his employment
for Cause or disability (as defined above), or as a result of his
death;
(ii) a reduction in the Employee's base salary or a material reduction in
the Employee's total compensation (i.e., a reduction in such total
compensation of ten (10) percent or more); or
(iii) any material breach by the Corporation of any provisions of any
agreement with the Employee.
SECTION V
ACCELERATION OF EXERCISE
(a) Retirement and Total and Permanent Disability. If an Optionee should
become permanently and totally disabled while an employee, or officer
of the Company, options shall become fully exercisable as to all shares
subject to them and may be exercised at any time within one (1) year
following the date of disability, but in no event after the Expiration
Date set forth on Exhibit A. If an Optionee should retire with the
written consent of the Company, options shall become fully exercisable
as to all shares subject to them and may be exercised at any time
within three (3) months of such retirement, but in no event after the
Expiration Date set forth on Exhibit A. If such option is exercised
within three months prior to the
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Expiration Date set forth in Exhibit A, such Option shall not receive
favorable tax treatment under Code Section 421(a).
(b) Death. If an Optionee should die while an employee, options may be
exercised at any time within one (1) year following the date of death,
but in no event after the earlier of (i) the date one year following
the Employee's date of death, or (ii) the Expiration Date set forth on
Exhibit A hereto. Such Option may be exercised by the beneficiary
designated by the Employee on Exhibit B hereto, in accordance with
Section X hereto, or, if no beneficiary is designated on Exhibit B, by
the executor or administrator of the Employee's estate.
(c) Corporate Change. Upon the occurrence of a Corporate Change, the Option
(to the extent not previously terminated or forfeited) may, at the
discretion of the Board, become fully exercisable as to all shares
subject to it.
SECTION VI
NON-ASSIGNABILITY AND TERM OF OPTION
The Option shall not be transferable or assignable by the Employee, otherwise
than by will or the laws of descent and distribution and the Option shall be
exercisable, during the Employee's lifetime, only by him. No Option shall be
subject to execution, attachment or similar process.
In no event may the Option be exercisable to any extent by anyone after the
Expiration Date specified in Exhibit A. It is expressly agreed that, anything
contained herein to the contrary notwithstanding, this Agreement shall not
constitute, or be evidence of, any agreement or understanding, express or
implied, that the Corporation, a Parent Corporation or a Subsidiary will employ
Employee for any period of time or in any position or for any particular
compensation.
SECTION VII
RIGHTS OF EMPLOYEE IN STOCK
Neither Employee, nor his successor in interest, shall have any of the rights of
a shareholder of the Corporation with respect to the shares for which the Option
is exercised until such shares are issued by the Corporation.
SECTION VIII
NOTICES
Any notice to be given hereunder shall be in writing and shall be addressed to
the Corporation, in care of the Director of Administration, at 0000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000, and any notice to be given to Employee
shall be addressed to the address designated below the signature appearing
hereinafter, or at such other address as either party may hereafter designate in
writing to the other. Any such notice shall have been deemed duly given upon
three (3) days of sending such notice enclosed in a properly sealed envelope,
addressed as aforesaid, registered or certified and deposited (with the proper
postage and registration or certificate fee prepaid) in the United States mail.
SECTION IX
SUCCESSORS OR ASSIGNS OF THE CORPORATION
The Option shall be binding upon and shall inure to the benefit of any successor
of the Corporation.
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SECTION X
MISCELLANEOUS
(a) Designation of Beneficiary. The Employee shall have the right to
appoint any individual or legal entity in writing, on Exhibit B hereto,
as his beneficiary to receive any Option (to the extent not previously
exercised or forfeited) under this Agreement upon the Employee's death.
Such designation under this Agreement may be revoked by the Employee at
any time and a new beneficiary may be appointed by the Employee by
execution and submission to the Board of a revised Exhibit B to this
Agreement. In order to be effective, a designation of beneficiary must
be completed by the Employee on Exhibit B and received by the Board, or
its designee, prior to the date of the Employee's death. In the absence
of such designation, the Employee's beneficiary shall be the person
designated under the Employee's will or as defined by the applicable
state laws of the decedent's distribution.
(b) Incapacity of Employee or Beneficiary. If any person entitled to a
distribution under this Agreement is deemed by the Board to be
incapable of making an election hereunder or of personally receiving
and giving a valid receipt for such distribution hereunder, then,
unless and until an election or claim therefore shall have been made by
a duly appointed guardian or other legal representative of such person,
the Board may provide for such election or distribution or any part
thereof to be made to any other person or institution then contributing
toward or providing for the care and maintenance of such person. Any
such distribution shall be a distribution for the account of such
person and a complete discharge of any liability of the Board, the
Corporation and the Plan therefore.
(c) Cancellation of Verbal Options. This contact cancels and supercedes any
oral grant of options. The Employee agrees to waive rights to oral
options and consents that this written contact represents and
encompasses any verbal options that may have been granted to the
Optionee.
(d) Incorporation of the Plan. The terms and provisions of the Plan are
hereby incorporated in this Agreement. Unless otherwise specifically
stated herein, such terms and provisions shall control in the event of
any inconsistency between the Plan and this Agreement.
(e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF OHIO AND ALL APPLICABLE FEDERAL LAWS. THE SECURITIES ISSUED
HEREUNDER SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE CORPORATE
SECURITY LAWS OF THE STATE OF OHIO.
(f) Gender. Reference to the masculine herein shall be deemed to include
the feminine, wherever appropriate.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, which shall together constitute a valid and binding
agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Corporation and the
Employee as of the date and year first written above.
Employee /s/Xxxxxxx X. Xxxxxxxxx Unitrend Inc., a Nevada Corporation
Address: [omitted] By: /s/Xxxxxx X.X. Jelinger
Title: President and CEO
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EXHIBIT A
INCENTIVE STOCK OPTION AGREEMENT PURSUANT TO THE 1999 EQUITY INCENTIVE PLAN
1. Date of Grant: 15-Jan-97
2. Employee: Xxxxxxx X. Xxxxxxxxx
3. Number of Shares: 233,334 shares of Common Stock
4. Option Price per Share: $0.50 a share
5. Exercise Schedule: 33% of the Options subject to this Agreement
shall first be exercisable one (1) year
after the Date of Grant specified above.
33% of the Options subject to this Agreement
shall thereafter be exercisable on each
anniversary date of the Date of Grant
specified above until the Options are fully
exercisable.
6. Expiration Date: Date of grant, 2007 (not more than ten (10)
years from Date of Grant; (5) years from
Date of Grant for 10 percent or more
shareholders).
TO QUALIFY FOR INCENTIVE STOCK OPTION TAX TREATMENT, THE EMPLOYEE MUST NOT
DISPOSE OF SHARES OBTAINED ON EXERCISE OF AN OPTION UNTIL AT LEAST TWO YEARS
AFTER THE DATE OF GRANT AND ONE YEAR AFTER THE DATE OF EXERCISE OF THE OPTION.
IF THESE HOLDING PERIODS ARE NOT MET, THE SALE OR OTHER DISPOSITION OF SHARES
WILL BE A DISQUALIFYING DISPOSITION PURSUANT TO CODE.
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INCENTIVE STOCK OPTION AGREEMENT PURSUANT TO
THE 1999 EQUITY INCENTIVE PLAN
This INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made as of the
16-Jan-98, by and between Unitrend Inc., (the "Corporation"), and Xxxxxxx X.
Xxxxxxxxx ("Employee").
WITNESSETH:
The Corporation has determined that it is in the best interests of the
Corporation and its shareholders to encourage ownership in the Corporation by
qualified employees, officers, and members of the Board of Directors of the
Corporation or individuals as may be determined, thereby providing additional
incentive for them to continue in the employ of the Corporation or its
affiliates. To that end, an incentive stock option is granted by the Board to
Employee pursuant, and subject to, the 1999 Equity Incentive Plan (the "Plan")
on the following terms and conditions:
SECTION I
DEFINED TERMS
Unless otherwise defined herein or, unless the context requires a different
definition, capitalized terms used herein shall have the meanings assigned to
them in the Plan.
SECTION II
SHARES OPTIONED, OPTION PRICE, AND TIME OF EXERCISE
Effective as of 16-Jan-98, the Corporation grants to Employee, subject to the
terms and provisions set forth hereinafter and in the Plan, the right and option
to purchase all or any part of the number of shares set forth in Exhibit A of
the presently authorized but unissued common stock ("Common Stock") of the
Corporation at the purchase price per share set forth as the Option Price in
Exhibit A (the option hereby granted being hereinafter referred to as the
"Option").
The Option shall not be considered granted (as of the effective date described
above) or become exercisable unless and until Employee delivers to the
Corporation a fully executed counterpart hereof. Thereafter, the Option shall be
exercisable in accordance with the Exercise Schedule set forth on Exhibit A,
subject to any termination, acceleration or change in such Exercise Schedule set
forth in this Agreement apart from Exhibit A.
The Option granted under this Agreement shall not be exercisable after the
Expiration of ten (10) years from the date such option is granted ("the
Expiration Date" set forth on Exhibit A and, before that time, the Option may be
terminated as hereinafter provided. If Employee does not purchase the full
number of shares to which he is entitled in any one year, he may purchase such
shares in the next year specified in the Exercise Schedule hereto, in addition
to the shares which he is otherwise entitled to purchase in the next year.
SECTION III
EXERCISE PROCEDURE
Employee shall exercise the Option by notifying the Corporation of the number of
shares that he desires to purchase and by delivering with such notice the full
payment for the purchase price of the shares being purchased. Such purchase
price shall be payable in cash, in Common Stock or in a combination of cash and
Common Stock. For purposes of determining the amount, if any, of the purchase
price satisfied by payment in Common Stock, such Common Stock shall be valued at
its Fair Market Value on the date of exercise, as determined by the Board at the
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time of exercise. In no event shall the purchase price be less than one hundred
percent (100%) of the Fair Market Value of such stock at the time the Option is
granted; except that the purchase price shall be one hundred ten percent (110%)
of the fair value in the case of any person who owns stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Corporation. Any Common Stock delivered in satisfaction of all or a portion
of the purchase price shall be appropriately endorsed for transfer and
assignment to the Corporation.
SECTION IV
TERMINATION OF EMPLOYMENT
If an Optionee's employment (or other service) with the Company terminates
either (i) for Cause or (ii) voluntary on the part of the Optionee and without
Good Reason (as determined by the Board, in its sole discretion), the options,
to the extent not previously exercised, will terminate on the date of such
termination of employment (or service). If an Optionee's employment or other
service with the Company terminates for reasons other than (a) termination that
is either (i) for Cause, (ii) voluntary on the part of the Optionee and without
Good Reason, (b) termination by reason of disability and (c) death, options
under the Plan may be exercised not later than three (3) months after such
termination, but may be exercised only to the extent the options were
exercisable on the date of termination, and in no event after ten (10) years
from the date of granting thereof. Except as may be otherwise provided in this
Agreement, the Option granted hereunder shall not be affected by any change of
employment so long as Employee continues to be employed by the Corporation, a
Parent Corporation or a Subsidiary.
"Cause" shall mean, as determined by the Board, in its absolute discretion, (i)
the continued failure of the Employee to substantially perform his duties to the
Corporation, a Parent Corporation or a Subsidiary (other than any such failure
resulting from disability as defined above), (ii) the engaging by the Employee
in willful, reckless or grossly negligent misconduct which is determined by the
Board to be materially injurious to the Corporation or any of its affiliates,
monetarily or otherwise, or (iii) the Employee's pleading guilty to or
conviction of a felony.
"Good Reason" shall mean, as determined by the Board, in its absolute
discretion, the occurrence of any of the following events without Employee's
express written consent:
(i) a substantial and adverse change in the Employee's duties, control,
authority or status or position, or the assignment to the Employee or
any duties or responsibilities which are inconsistent with such status
or position, or a reduction in the duties and responsibilities
previously exercised by the Employee, or a loss of title, loss of
office, loss of significant authority, power or control, or any removal
of him or her from or any failure to reappoint or reelect him to such
positions, except in connection with the termination of his employment
for Cause or disability (as defined above), or as a result of his
death;
(ii) a reduction in the Employee's base salary or a material reduction in
the Employee's total compensation (i.e., a reduction in such total
compensation of ten (10) percent or more); or
(iii) any material breach by the Corporation of any provisions of any
agreement with the Employee.
SECTION V
ACCELERATION OF EXERCISE
(a) Retirement and Total and Permanent Disability. If an Optionee should
become permanently and totally disabled while an employee, or officer
of the Company, options shall become fully exercisable as to all shares
subject to them and may be exercised at any time within one (1) year
following the date of disability, but in no event after the Expiration
Date set forth on Exhibit A. If an Optionee should retire with the
written consent of the Company, options shall become fully exercisable
as to all shares subject to them and may be exercised at any time
within three (3) months of such retirement, but in no event after the
Expiration Date set forth on Exhibit A. If such option is exercised
within three months prior to the Expiration Date set forth in Exhibit
A, such Option shall not receive favorable tax treatment under Code
Section 421(a).
C-2
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(b) Death. If an Optionee should die while an employee, options may be
exercised at any time within one (1) year following the date of death,
but in no event after the earlier of (i) the date one year following
the Employee's date of death, or (ii) the Expiration Date set forth on
Exhibit A hereto. Such Option may be exercised by the beneficiary
designated by the Employee on Exhibit B hereto, in accordance with
Section X hereto, or, if no beneficiary is designated on Exhibit B, by
the executor or administrator of the Employee's estate.
(c) Corporate Change. Upon the occurrence of a Corporate Change, the Option
(to the extent not previously terminated or forfeited) may, at the
discretion of the Board, become fully exercisable as to all shares
subject to it.
SECTION VI
NON-ASSIGNABILITY AND TERM OF OPTION
The Option shall not be transferable or assignable by the Employee, otherwise
than by will or the laws of descent and distribution and the Option shall be
exercisable, during the Employee's lifetime, only by him. No Option shall be
subject to execution, attachment or similar process.
In no event may the Option be exercisable to any extent by anyone after the
Expiration Date specified in Exhibit A. It is expressly agreed that, anything
contained herein to the contrary notwithstanding, this Agreement shall not
constitute, or be evidence of, any agreement or understanding, express or
implied, that the Corporation, a Parent Corporation or a Subsidiary will employ
Employee for any period of time or in any position or for any particular
compensation.
SECTION VII
RIGHTS OF EMPLOYEE IN STOCK
Neither Employee, nor his successor in interest, shall have any of the rights of
a shareholder of the Corporation with respect to the shares for which the Option
is exercised until such shares are issued by the Corporation.
SECTION VIII
NOTICES
Any notice to be given hereunder shall be in writing and shall be addressed to
the Corporation, in care of the Director of Administration, at 0000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxx 00000, and any notice to be given to Employee
shall be addressed to the address designated below the signature appearing
hereinafter, or at such other address as either party may hereafter designate in
writing to the other. Any such notice shall have been deemed duly given upon
three (3) days of sending such notice enclosed in a properly sealed envelope,
addressed as aforesaid, registered or certified and deposited (with the proper
postage and registration or certificate fee prepaid) in the United States mail.
SECTION IX
SUCCESSORS OR ASSIGNS OF THE CORPORATION
The Option shall be binding upon and shall inure to the benefit of any successor
of the Corporation.
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SECTION X
MISCELLANEOUS
(a) Designation of Beneficiary. The Employee shall have the right to
appoint any individual or legal entity in writing, on Exhibit B hereto,
as his beneficiary to receive any Option (to the extent not previously
exercised or forfeited) under this Agreement upon the Employee's death.
Such designation under this Agreement may be revoked by the Employee at
any time and a new beneficiary may be appointed by the Employee by
execution and submission to the Board of a revised Exhibit B to this
Agreement. In order to be effective, a designation of beneficiary must
be completed by the Employee on Exhibit B and received by the Board, or
its designee, prior to the date of the Employee's death. In the absence
of such designation, the Employee's beneficiary shall be the person
designated under the Employee's will or as defined by the applicable
state laws of the decedent's distribution.
(b) Incapacity of Employee or Beneficiary. If any person entitled to a
distribution under this Agreement is deemed by the Board to be
incapable of making an election hereunder or of personally receiving
and giving a valid receipt for such distribution hereunder, then,
unless and until an election or claim therefore shall have been made by
a duly appointed guardian or other legal representative of such person,
the Board may provide for such election or distribution or any part
thereof to be made to any other person or institution then contributing
toward or providing for the care and maintenance of such person. Any
such distribution shall be a distribution for the account of such
person and a complete discharge of any liability of the Board, the
Corporation and the Plan therefore.
(c) Cancellation of Verbal Options. This contact cancels and supercedes any
oral grant of options. The Employee agrees to waive rights to oral
options and consents that this written contact represents and
encompasses any verbal options that may have been granted to the
Optionee.
(d) Incorporation of the Plan. The terms and provisions of the Plan are
hereby incorporated in this Agreement. Unless otherwise specifically
stated herein, such terms and provisions shall control in the event of
any inconsistency between the Plan and this Agreement.
(e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF OHIO AND ALL APPLICABLE FEDERAL LAWS. THE SECURITIES ISSUED
HEREUNDER SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE CORPORATE
SECURITY LAWS OF THE STATE OF OHIO.
(f) Gender. Reference to the masculine herein shall be deemed to include
the feminine, wherever appropriate.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, which shall together constitute a valid and binding
agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Corporation and the
Employee as of the date and year first written above.
Employee /s/Xxxxxxx X. Xxxxxxxxx Unitrend Inc., a Nevada Corporation
Address: [omitted] By: /s/Xxxxxx X.X. Jelinger
Title: President and CEO
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EXHIBIT A
INCENTIVE STOCK OPTION AGREEMENT PURSUANT TO THE 1999 EQUITY INCENTIVE PLAN
1. Date of Grant: 16-Jan-98
2. Employee: Xxxxxxx X. Xxxxxxxxx
3. Number of Shares: 233,333 shares of Common Stock
4. Option Price per Share: $0.50 a share
5. Exercise Schedule: 100% vests upon grant (Employee B)
6. Expiration Date: Date of grant, 2008 (not more than ten (10)
years from Date of Grant; (5) years from
Date of Grant for 10 percent or more
shareholders).
TO QUALIFY FOR INCENTIVE STOCK OPTION TAX TREATMENT, THE EMPLOYEE MUST NOT
DISPOSE OF SHARES OBTAINED ON EXERCISE OF AN OPTION UNTIL AT LEAST TWO YEARS
AFTER THE DATE OF GRANT AND ONE YEAR AFTER THE DATE OF EXERCISE OF THE OPTION.
IF THESE HOLDING PERIODS ARE NOT MET, THE SALE OR OTHER DISPOSITION OF SHARES
WILL BE A DISQUALIFYING DISPOSITION PURSUANT TO CODE.
C-5
16
NON-QUALIFIED STOCK OPTION AGREEMENT PURSUANT
TO THE 1999 EQUITY INCENTIVE PLAN
This NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made as of the
15-Jan-97, by Unitrend Inc, a Nevada corporation (the "Corporation"), and
Xxxxxxx X. Xxxxxxxxx ("Holder").
WITNESSETH:
The Corporation has determined that it is in the best interests of the
Corporation and its shareholders to encourage ownership in the Corporation by
qualified employees, officers, and members of the Board of Directors of the
Corporation or individuals as may be determined, thereby providing additional
incentive for them to continue in the employ of or provide services to the
Corporation or its affiliates. To that end, a non-qualified stock option is
granted by the Board to Holder pursuant, and subject to, the 1999 Equity
Incentive Plan (the "Plan") on the following terms and conditions:
SECTION I
DEFINED TERMS
Unless otherwise defined herein or, unless the context requires a different
definition, capitalized terms used herein shall have the meanings assigned to
them in the Plan.
SECTION II
OPTIONED SHARES, OPTION PRICE AND TIME OF EXERCISE
Effective as of 15-Jan-97, the Corporation grants to Holder, subject to the
terms and provisions set forth hereinafter and in the Plan, the right and option
to purchase all or any part of the number of shares set forth in Exhibit A of
the presently authorized but unissued common stock ("Common Stock"), of the
Corporation at the purchase price per share set forth as the Option Price in
Exhibit A (the option hereby granted being hereinafter referred to as the
"Option"). This Option shall not be treated as an Incentive Stock Option.
The Option shall not be considered granted (as of the effective date described
above) or become exercisable unless and until Holder delivers to the Corporation
a fully executed counterpart hereof. Thereafter, the Option shall be exercisable
in accordance with the Exercise Schedule set forth on Exhibit A, subject to any
termination, acceleration or change in such Exercise Schedule set forth in this
Agreement apart from Exhibit A.
The Option granted under this Agreement shall not be exercisable after the
Expiration of ten (10) years from the date such option is granted ("the
Expiration Date" set forth on Exhibit A) and, before that time, the Option may
be terminated as hereinafter provided. If Employee does not purchase the full
number of shares to which he is entitled in any one year, he may purchase such
shares in the next year specified in the Exercise Schedule hereto, in addition
to the shares which he is otherwise entitled to purchase in the next year.
SECTION III
EXERCISE PROCEDURE AND WITHHOLDING
Holder shall exercise the Option by notifying the Corporation of the number of
shares that he desires to purchase and by delivering with such notice the full
payment for the purchase price of the shares being purchased. Such purchase
price shall be payable in cash or other means as may be determined by the Board.
For purposes of determining the amount, if any, of the purchase price satisfied
by payment in Common Stock, such Common Stock shall be valued at its Fair Market
Value on the date of exercise, as determined by the Board at the time of
exercise.
C-6
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In no event, shall the purchase price be less than eighty-five percent
(85%) of the fair value of such stock at the time the Option is granted; except
that the purchase price shall be one hundred ten percent (110%) of the fair
value in the case of any person who owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation. Any Common Stock delivered in satisfaction of all or a portion of
the purchase price shall be appropriately endorsed for transfer and assignment
to the Corporation.
The Corporation will, as soon as is reasonably possible, notify the Holder of
the amount of withholding tax, if any, that must be paid under federal, state
and local law due to exercise of the Option. The Corporation shall have no
obligation to deliver certificates for the shares purchased until Holder pays to
the Corporation the amount of withholding specified in the Corporation's notice
in cash or in Common Stock. Alternatively, Holder may direct the Corporation to
withhold that number of shares of Common Stock (valued according to the
procedures set forth in this section on the date of withholding) sufficient to
satisfy such obligation, subject to such restrictions or procedures as the Board
deems necessary.
SECTION IV
TERMINATION OF EMPLOYMENT/SERVICE
If an Optionee's employment (or other service) with the Company terminates
either (i) for Cause or (ii) voluntary on the part of the Optionee and without
Good Reason (as determined by the Board, in its sole discretion), the options,
to the extent not previously exercised, will terminate on the date of such
termination of employment (or service) unless otherwise indicated by the Board.
If an Optionee's employment or other service with the Company terminates for
reasons other than (a) termination that is either (i) for Cause, (ii) voluntary
on the part of the Optionee and without Good Reason, (b) termination by reason
of disability and (c) death, options under the Plan may be exercised not later
than three (3) months after such termination, but may be exercised only to the
extent the options were exercisable on the date of termination, and in no event
after ten (10) years from the date of granting thereof. Except as may be
otherwise provided in this Agreement, the Option granted hereunder shall not be
affected by any change of employment so long as Employee continues to be
employed by the Corporation, a Parent Corporation, or a Subsidiary. Options
granted for past employees at the time the Plan was adopted, shall have a three
(3) year period after the date that a registration statement for a public
offering of the Corporation's stock becomes effective with the Securities and
Exchange Commission. If such Options are not exercised within the time period
allotted above, the Options will be terminated, cancelled and void.
"Cause" shall mean, as determined by the Board, in its absolute discretion, (i)
the continued failure of the Holder to substantially perform his duties to the
Corporation, a Parent Corporation or a Subsidiary (other than any such failure
resulting from disability as defined above), (ii) the engaging by the Holder in
willful, reckless or grossly negligent misconduct which is determined by the
Board to be materially injurious to the Corporation or any of its affiliates,
monetarily or otherwise, or (iii) the Holder's pleading guilty to or conviction
of a felony.
"Good Reason" shall mean, as determined by the Board, in its absolute
discretion, the occurrence of any of the following events without Holder's
express written consent:
(i) a substantial and adverse change in the Holder's duties, control,
authority or status or position, or the assignment to the Holder or any
duties or responsibilities which are inconsistent with such status or
position, or a reduction in the duties and responsibilities previously
exercised by the Holder, or a loss of title, loss of office, loss of
significant authority, power or control, or any removal of him or her
from or any failure to reappoint or reelect him to such positions,
except in connection with the termination of his employment for Cause
or disability (as defined above), or as a result of his death;
(ii) a reduction in the Holder's base salary or a material reduction in the
Holder's total compensation (i.e., a reduction in such total
compensation of ten (10) percent or more); or
(iii) any material breach by the Corporation of any provisions of any
agreement with the Holder.
C-7
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SECTION V
ACCELERATION OF EXERCISE
(a) RETIREMENT AND TOTAL AND PERMANENT DISABILITY. If an Optionee should
become permanently and totally disabled while an employee, non-employee
director or officer of the Company, options shall become fully
exercisable as to all shares subject to them and may be exercised at
any time within one (1) year following the date of disability, but in
no event after the Expiration Date set forth on Exhibit A. If an
Optionee should retire with the written consent of the Company, options
shall become fully exercisable as to all shares subject to them and may
be exercised at any time within three (3) months of such retirement,
but in no event after the Expiration Date set forth on Exhibit A.
(b) DEATH. If an Optionee should die while an employee, options may be
exercised at any time within one (1) year following the date of death,
but in no event after the earlier of (i) the date one year following
the Employee's date of death, or (ii) the Expiration Date set forth on
Exhibit A hereto. Such Option may be exercised by the beneficiary
designated by the Employee on Exhibit B hereto, in accordance with
Section X hereto, or, if no beneficiary is designated on Exhibit B, by
the executor or administrator of the Employee's estate.
(c) CORPORATE CHANGE. Upon the occurrence of a Corporate Change, the Option
(to the extent not previously terminated or forfeited) may, at the
discretion of the Board, become fully exercisable as to all shares
subject to it.
SECTION VI
NON-ASSIGNABILITY AND TERM OF OPTION
The Option shall not be transferable or assignable by the Holder, otherwise than
by will or the laws of descent and distribution and the Option shall be
exercisable, during the Holder's lifetime, only by him or, during periods of
legal disability, by his legal representative. No Option shall be subject to
execution, attachment, or similar process.
In no event may the Option be exercisable to any extent by anyone after the
Expiration Date specified in Exhibit A. It is expressly agreed that, anything
contained herein to the contrary notwithstanding, this Agreement shall not
constitute, or be evidence of, any agreement or understanding, express or
implied, that the Corporation, a Parent Corporation or a Subsidiary will employ
Holder for any period of time or in any position or for any particular
compensation.
SECTION VII
RIGHTS OF HOLDER IN STOCK
Neither Holder, nor his successor in interest, shall have any of the rights of a
shareholder of the Corporation with respect to the shares for which the Option
is issued until such shares are exercised by the Corporation.
SECTION VIII
NOTICES
Any notice to be given hereunder shall be in writing and shall be addressed to
the Corporation, in care of the Director of Administration at 0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxx, 00000 and any notice to be given to the Holder shall be
addressed to the address designated below the signature appearing hereinafter,
or at such other address as either party may hereafter designate in writing to
the other. Any such notice shall have been deemed duly given upon three (3) days
of sending such notice enclosed in a properly sealed envelope, addressed as
aforesaid, registered or certified and deposited (with the proper postage and
registration or certificate fee prepaid) in the United States mail.
C-8
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SECTION IX
SUCCESSORS OR ASSIGNS OF THE CORPORATION
The Option shall be binding upon and shall inure to the benefit of any successor
of the Corporation.
SECTION X
MISCELLANEOUS
(a) Designation of Beneficiary. The Holder shall have the right to appoint
any individual or legal entity in writing, on Exhibit B hereto, as his
beneficiary to receive any Option (to the extent not previously
exercised, terminated or forfeited) under this Agreement upon the
Holder's death. Such designation under this Agreement may be revoked by
the Holder at any time and a new beneficiary may be appointed by the
Holder by execution and submission to the Board of a revised Exhibit B
to this Agreement. In order to be effective, a designation of
beneficiary must be completed by the Holder on Exhibit B and received
by the Board, or its designee, prior to the date of the Holder's death.
In the absence of such designation, the Holder's beneficiary shall be
the person designated under the Employee's will or as defined by the
applicable state laws of the decedent's distribution.
(b) Incapacity of Holder or Beneficiary. If any person entitled to a
distribution under this Agreement is deemed by the Board to be
incapable of making an election hereunder or of personally receiving
and giving a valid receipt for such distribution hereunder, then,
unless and until an election or claim therefore shall have been made by
a duly appointed guardian or other legal representative of such person,
the Board may provide for such election or distribution or any part
thereof to be made to any other person or institution then contributing
toward or providing for the care and maintenance of such person. Any
such distribution shall be a distribution for the account of such
person and a complete discharge of any liability of the Board, the
Corporation and the Plan therefore.
(c) Cancellation of Verbal Options. This contact cancels and supercedes any
oral grant of options. The Employee agrees to waive rights to oral
options and consents that this written contact represents and
encompasses any verbal options that may have been granted to the
Optionee.
(d) Incorporation of the Plan. The terms and provisions of the Plan are
hereby incorporated in this Agreement. Unless otherwise specifically
stated herein, such terms and provisions shall control in the event of
any inconsistency between the Plan and this Agreement.
(e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF OHIO AND ALL APPLICABLE FEDERAL LAWS. THE SECURITIES ISSUED
HEREUNDER SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE CORPORATE
SECURITIES LAWS OF THE STATE OF OHIO.
(f) Gender. Reference to the masculine herein shall be deemed to include
the feminine, wherever appropriate.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, which shall together constitute a valid and binding
agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Corporation and the
Holder as of the date and year first written above.
Holder: /s/Xxxxxxx X. Xxxxxxxxx Unitrend Inc., a Nevada Corporation
Address: [omitted] By: /s/Xxxxxx X.X. Jelinger
Title: President and CEO
C-9
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EXHIBIT A
NON-QUALIFIED STOCK OPTION AGREEMENT PURSUANT TO THE 1999 EQUITY INCENTIVE PLAN
1. Date of Grant: 15-Jan-97
2. Holder: Xxxxxxx X. Xxxxxxxxx
3. Number of Shares: 266,666 shares of Common Stock
4. Option Price Per Share: $0.50 per share
5. Exercise Schedule: 33% of the Options subject to this Agreement
shall first be exercisable one (1) year
after the Date of Grant specified above.
33% of the Options subject to this Agreement
shall thereafter be exercisable on each
anniversary date of the Date of Grant
specified above until the Options are fully
exercisable.
6. Expiration Date: Date of grant, 2007 (not more than ten (10)
years from Date of Grant).
THIS OPTION IS NOT AN INCENTIVE STOCK OPTION. NOTWITHSTANDING ANY OF THE
PROVISIONS OF THIS EXHIBIT A, OPTIONS GRANTED FOR PAST EMPLOYEES AT THE TIME THE
PLAN WAS ADOPTED, SHALL HAVE A THREE (3) YEAR PERIOD AFTER THE DATE THAT A
REGISTRATION STATEMENT FOR A PUBLIC OFFERING OF THE CORPORATION'S STOCK BECOMES
EFFECTIVE WITH THE SECURITIES AND EXCHANGE COMMISSION. IF SUCH OPTIONS ARE NOT
EXERCISED WITHIN THE TIME PERIOD ALLOTTED ABOVE, THE OPTIONS WILL BE TERMINATED,
CANCELLED AND VOID.
C-10
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NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE 1999 EQUITY INCENTIVE PLAN
This NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made as of the
16-Jan-98, by Unitrend Inc, a Nevada corporation (the "Corporation"), and
Xxxxxxx X. Xxxxxxxxx ("Holder").
WITNESSETH:
The Corporation has determined that it is in the best interests of the
Corporation and its shareholders to encourage ownership in the Corporation by
qualified employees, officers, and members of the Board of Directors of the
Corporation or individuals as may be determined, thereby providing additional
incentive for them to continue in the employ of or provide services to the
Corporation or its affiliates. To that end, a non-qualified stock option is
granted by the Board to Holder pursuant, and subject to, the 1999 Equity
Incentive Plan (the "Plan") on the following terms and conditions:
SECTION I
DEFINED TERMS
Unless otherwise defined herein or, unless the context requires a different
definition, capitalized terms used herein shall have the meanings assigned to
them in the Plan.
SECTION II
OPTIONED SHARES, OPTION PRICE AND TIME OF EXERCISE
Effective as of 16-Jan-98, the Corporation grants to Holder, subject to the
terms and provisions set forth hereinafter and in the Plan, the right and option
to purchase all or any part of the number of shares set forth in Exhibit A of
the presently authorized but unissued common stock ("Common Stock"), of the
Corporation at the purchase price per share set forth as the Option Price in
Exhibit A (the option hereby granted being hereinafter referred to as the
"Option"). This Option shall not be treated as an Incentive Stock Option.
The Option shall not be considered granted (as of the effective date described
above) or become exercisable unless and until Holder delivers to the Corporation
a fully executed counterpart hereof. Thereafter, the Option shall be exercisable
in accordance with the Exercise Schedule set forth on Exhibit A, subject to any
termination, acceleration or change in such Exercise Schedule set forth in this
Agreement apart from Exhibit A.
The Option granted under this Agreement shall not be exercisable after the
Expiration of ten (10) years from the date such option is granted ("the
Expiration Date" set forth on Exhibit A) and, before that time, the Option may
be terminated as hereinafter provided. If Employee does not purchase the full
number of shares to which he is entitled in any one year, he may purchase such
shares in the next year specified in the Exercise Schedule hereto, in addition
to the shares which he is otherwise entitled to purchase in the next year.
SECTION III
EXERCISE PROCEDURE AND WITHHOLDING
C-11
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Holder shall exercise the Option by notifying the Corporation of the number of
shares that he desires to purchase and by delivering with such notice the full
payment for the purchase price of the shares being purchased. Such purchase
price shall be payable in cash or other means as may be determined by the Board.
For purposes of determining the amount, if any, of the purchase price satisfied
by payment in Common Stock, such Common Stock shall be valued at its Fair Market
Value on the date of exercise, as determined by the Board at the time of
exercise. In no event, shall the purchase price be less than eighty-five percent
(85%) of the fair value of such stock at the time the Option is granted; except
that the purchase price shall be one hundred ten percent (110%) of the fair
value in the case of any person who owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Corporation. Any Common Stock delivered in satisfaction of all or a portion of
the purchase price shall be appropriately endorsed for transfer and assignment
to the Corporation.
The Corporation will, as soon as is reasonably possible, notify the Holder of
the amount of withholding tax, if any, that must be paid under federal, state
and local law due to exercise of the Option. The Corporation shall have no
obligation to deliver certificates for the shares purchased until Holder pays to
the Corporation the amount of withholding specified in the Corporation's notice
in cash or in Common Stock. Alternatively, Holder may direct the Corporation to
withhold that number of shares of Common Stock (valued according to the
procedures set forth in this section on the date of withholding) sufficient to
satisfy such obligation, subject to such restrictions or procedures as the Board
deems necessary.
SECTION IV
TERMINATION OF EMPLOYMENT/SERVICE
If an Optionee's employment (or other service) with the Company terminates
either (i) for Cause or (ii) voluntary on the part of the Optionee and without
Good Reason (as determined by the Board, in its sole discretion), the options,
to the extent not previously exercised, will terminate on the date of such
termination of employment (or service) unless otherwise indicated by the Board.
If an Optionee's employment or other service with the Company terminates for
reasons other than (a) termination that is either (i) for Cause, (ii) voluntary
on the part of the Optionee and without Good Reason, (b) termination by reason
of disability and (c) death, options under the Plan may be exercised not later
than three (3) months after such termination, but may be exercised only to the
extent the options were exercisable on the date of termination, and in no event
after ten (10) years from the date of granting thereof. Except as may be
otherwise provided in this Agreement, the Option granted hereunder shall not be
affected by any change of employment so long as Employee continues to be
employed by the Corporation, a Parent Corporation, or a Subsidiary. Options
granted for past employees at the time the Plan was adopted, shall have a three
(3) year period after the date that a registration statement for a public
offering of the Corporation's stock becomes effective with the Securities and
Exchange Commission. If such Options are not exercised within the time period
allotted above, the Options will be terminated, cancelled and void.
"Cause" shall mean, as determined by the Board, in its absolute discretion, (i)
the continued failure of the Holder to substantially perform his duties to the
Corporation, a Parent Corporation or a Subsidiary (other than any such failure
resulting from disability as defined above), (ii) the engaging by the Holder in
willful, reckless or grossly negligent misconduct which is determined by the
Board to be materially injurious to the Corporation or any of its affiliates,
monetarily or otherwise, or (iii) the Holder's pleading guilty to or conviction
of a felony.
"Good Reason" shall mean, as determined by the Board, in its absolute
discretion, the occurrence of any of the following events without Holder's
express written consent:
(i) a substantial and adverse change in the Holder's duties, control,
authority or status or position, or the assignment to the Holder or any
duties or responsibilities which are inconsistent with such status or
position, or a reduction in the duties and responsibilities previously
exercised by the Holder, or a loss of title, loss of office, loss of
significant authority, power or control, or any removal of him or her
from or any failure to reappoint or reelect him to such positions,
except in
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connection with the termination of his employment for Cause or
disability (as defined above), or as a result of his death;
(ii) a reduction in the Holder's base salary or a material reduction in the
Holder's total compensation (i.e., a reduction in such total
compensation of ten (10) percent or more); or
(iii) any material breach by the Corporation of any provisions of any
agreement with the Holder.
SECTION V
ACCELERATION OF EXERCISE
(a) RETIREMENT AND TOTAL AND PERMANENT DISABILITY. If an Optionee should
become permanently and totally disabled while an employee, non-employee
director or officer of the Company, options shall become fully
exercisable as to all shares subject to them and may be exercised at
any time within one (1) year following the date of disability, but in
no event after the Expiration Date set forth on Exhibit A. If an
Optionee should retire with the written consent of the Company, options
shall become fully exercisable as to all shares subject to them and may
be exercised at any time within three (3) months of such retirement,
but in no event after the Expiration Date set forth on Exhibit A.
(b) DEATH. If an Optionee should die while an employee, options may be
exercised at any time within one (1) year following the date of death,
but in no event after the earlier of (i) the date one year following
the Employee's date of death, or (ii) the Expiration Date set forth on
Exhibit A hereto. Such Option may be exercised by the beneficiary
designated by the Employee on Exhibit B hereto, in accordance with
Section X hereto, or, if no beneficiary is designated on Exhibit B, by
the executor or administrator of the Employee's estate.
(c) CORPORATE CHANGE. Upon the occurrence of a Corporate Change, the Option
(to the extent not previously terminated or forfeited) may, at the
discretion of the Board, become fully exercisable as to all shares
subject to it.
SECTION VI
NON-ASSIGNABILITY AND TERM OF OPTION
The Option shall not be transferable or assignable by the Holder, otherwise than
by will or the laws of descent and distribution and the Option shall be
exercisable, during the Holder's lifetime, only by him or, during periods of
legal disability, by his legal representative. No Option shall be subject to
execution, attachment, or similar process.
In no event may the Option be exercisable to any extent by anyone after the
Expiration Date specified in Exhibit A. It is expressly agreed that, anything
contained herein to the contrary notwithstanding, this Agreement shall not
constitute, or be evidence of, any agreement or understanding, express or
implied, that the Corporation, a Parent Corporation or a Subsidiary will employ
Holder for any period of time or in any position or for any particular
compensation.
SECTION VII
RIGHTS OF HOLDER IN STOCK
Neither Holder, nor his successor in interest, shall have any of the rights of a
shareholder of the Corporation with respect to the shares for which the Option
is issued until such shares are exercised by the Corporation.
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SECTION VIII
NOTICES
Any notice to be given hereunder shall be in writing and shall be addressed to
the Corporation, in care of the Director of Administration at 0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxx, 00000 and any notice to be given to the Holder shall be
addressed to the address designated below the signature appearing hereinafter,
or at such other address as either party may hereafter designate in writing to
the other. Any such notice shall have been deemed duly given upon three (3) days
of sending such notice enclosed in a properly sealed envelope, addressed as
aforesaid, registered or certified and deposited (with the proper postage and
registration or certificate fee prepaid) in the United States mail.
SECTION IX
SUCCESSORS OR ASSIGNS OF THE CORPORATION
The Option shall be binding upon and shall inure to the benefit of any successor
of the Corporation.
SECTION X
MISCELLANEOUS
(a) Designation of Beneficiary. The Holder shall have the right to appoint
any individual or legal entity in writing, on Exhibit B hereto, as his
beneficiary to receive any Option (to the extent not previously
exercised, terminated or forfeited) under this Agreement upon the
Holder's death. Such designation under this Agreement may be revoked by
the Holder at any time and a new beneficiary may be appointed by the
Holder by execution and submission to the Board of a revised Exhibit B
to this Agreement. In order to be effective, a designation of
beneficiary must be completed by the Holder on Exhibit B and received
by the Board, or its designee, prior to the date of the Holder's death.
In the absence of such designation, the Holder's beneficiary shall be
the person designated under the Employee's will or as defined by the
applicable state laws of the decedent's distribution.
(b) Incapacity of Holder or Beneficiary. If any person entitled to a
distribution under this Agreement is deemed by the Board to be
incapable of making an election hereunder or of personally receiving
and giving a valid receipt for such distribution hereunder, then,
unless and until an election or claim therefore shall have been made by
a duly appointed guardian or other legal representative of such person,
the Board may provide for such election or distribution or any part
thereof to be made to any other person or institution then contributing
toward or providing for the care and maintenance of such person. Any
such distribution shall be a distribution for the account of such
person and a complete discharge of any liability of the Board, the
Corporation and the Plan therefore.
(c) Cancellation of Verbal Options. This contact cancels and supercedes any
oral grant of options. The Employee agrees to waive rights to oral
options and consents that this written contact represents and
encompasses any verbal options that may have been granted to the
Optionee.
(d) Incorporation of the Plan. The terms and provisions of the Plan are
hereby incorporated in this Agreement. Unless otherwise specifically
stated herein, such terms and provisions shall control in the event of
any inconsistency between the Plan and this Agreement.
(e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF OHIO AND ALL APPLICABLE FEDERAL LAWS. THE SECURITIES ISSUED
HEREUNDER SHALL BE GOVERNED BY AND IN ACCORDANCE WITH THE CORPORATE
SECURITIES LAWS OF THE STATE OF OHIO.
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(f) Gender. Reference to the masculine herein shall be deemed to include
the feminine, wherever appropriate.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, which shall together constitute a valid and binding
agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Corporation and the
Holder as of the date and year first written above.
Holder: /s/Xxxxxxx X. Xxxxxxxxx Unitrend Inc., a Nevada Corporation
Address: [omitted] By: /s/Xxxxxx X.X. Jelinger
Title: President and CEO
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EXHIBIT A
NON-QUALIFIED STOCK OPTION AGREEMENT PURSUANT TO THE 1999 EQUITY INCENTIVE PLAN
1. Date of Grant: 16-Jan-98
2. Holder: Xxxxxxx X. Xxxxxxxxx
3. Number of Shares: 766,667 shares of Common Stock
4. Option Price Per Share: $0.50 per share
5. Exercise Schedule: 100% vests upon grant (Employee B)
6. Expiration Date: Date of grant, 2008 (not more than ten (10)
years from Date of Grant).
THIS OPTION IS NOT AN INCENTIVE STOCK OPTION. NOTWITHSTANDING ANY OF THE
PROVISIONS OF THIS EXHIBIT A, OPTIONS GRANTED FOR PAST EMPLOYEES AT THE TIME THE
PLAN WAS ADOPTED, SHALL HAVE A THREE (3) YEAR PERIOD AFTER THE DATE THAT A
REGISTRATION STATEMENT FOR A PUBLIC OFFERING OF THE CORPORATION'S STOCK BECOMES
EFFECTIVE WITH THE SECURITIES AND EXCHANGE COMMISSION. IF SUCH OPTIONS ARE NOT
EXERCISED WITHIN THE TIME PERIOD ALLOTTED ABOVE, THE OPTIONS WILL BE TERMINATED,
CANCELLED AND VOID.
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