SOLAR THIN FILMS, INC. EMPLOYEE NONSTATUTORY STOCK OPTION AGREEMENT
This
Stock Option Agreement ("Agreement")
is
made and entered into as of the date set forth below, by and between
SOLAR
THIN FILMS, INC.,
a
Delaware corporation (the "Company"),
and
Xxxxx Xxxx ("Optionee")
In
consideration of the covenants herein set forth, the parties hereto agree as
follows:
1.
Option
Information.
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(a)
|
Date
of Option:
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October
31, 2006
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|
(b)
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Optionee:
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Xxxxx
Xxxx
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|
(c)
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Number
of Shares:
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3,000,000
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(d)
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Exercise
Price:
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$1.36
per share
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2.
Acknowledgements.
The
Board has authorized the granting to Optionee of a stock option ("Option")
to
purchase shares of common stock of the Company ("Stock")
upon
the terms and conditions hereinafter stated and pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "Securities
Act")
provided by Section 4(2) thereunder.
3.
Shares;
Price.
Company
hereby grants to Optionee the right to purchase, upon and subject to the terms
and conditions herein stated, the number of shares of Stock set forth in Section
1(c) above (the "Shares")
for
cash (or on a cashless basis) at the price per Share set forth in Section 1(d)
above (the "Exercise
Price");
provided,
however,
the
Optionee shall only be permitted to sell 83,334 shares (the “Earned
Option Shares”)
of
common stock of the Company, on a public or private basis, that have been issued
upon exercise of the Option per month. Such sales shall be cumulative. For
example, upon the completion of three (3) months of employment with the Company,
the Optionee will be permitted to sell 250,002 shares of common stock of the
Company that have been issued upon exercise of the Option. In the event that
the
Optionee is terminated for Cause, upon death or disability as set forth in
Section 4.2 of Employment
Agreement entered by and between the Company and Optionee dated September 15,
2006 (the “Employment
Agreement”)
or
the
Optionee terminates the Agreement pursuant to Section 4.4 of the Employment
Agreement, then the Option shall terminate and all shares of common stock that
are not considered Earned Option Shares shall be immediately cancelled without
any further action of the Company. All shares issued upon exercise of the Option
shall be affixed with a legend stating that they are restricted
4.
Term
of Option; Continuation of Service.
This
Option shall expire, and all rights hereunder to purchase the Shares shall
terminate, ten (10) years from the date hereof unless the Optionee is terminated
for Cause pursuant to Section 4 of the Employment Agreement entered by and
between the Company and Optionee dated September 15, 2006.
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5.
Exercise.
This
Option shall be exercised by delivery to the Company of (a) written notice
of
exercise stating the number of Shares being purchased (in whole shares only)
and
such other information set forth on the form of Notice of Exercise attached
hereto as Appendix
A,
(b) a
check or cash in the amount of the Exercise Price of the Shares covered by
the
notice (or such other consideration as has been approved by the Board of
Directors) and (c) a written investment representation as provided for in
Section 9 hereof. This Option shall not be assignable or transferable and shall
be exercisable only by Optionee during his or her lifetime.
At
any
time, the Optionee may, in his sole discretion, exercise this Option in whole
or
in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Exercise Price, elect
instead to receive upon such exercise the "Net Number" of shares of Common
Stock
determined according to the following formula:
Net
Number = (A
x
B) - (A x C)
B
For
purposes of the foregoing formula:
A=
the
total number of shares with respect to which this Warrant is then being
exercised.
B=
the
closing sale price of the shares of common stock (as reported by Bloomberg)
on
the date immediately preceding the date of Notice of Exercise.
C=
the
Exercise Price then in effect at the time of such exercise.
6.
No
Rights as Shareholder.
Optionee
shall have no rights as a shareholder with respect to the Shares covered by
any
installment of this Option until the effective date of issuance of the Shares
following exercise of this Option, and no adjustment will be made for dividends
or other rights for which the record date is prior to the date such stock
certificate or certificates are issued.
7.
Recapitalization.
Subject
to any required action by the shareholders of the Company, the number of Shares
covered by this Option, and the Exercise Price thereof, shall be proportionately
adjusted for any increase or decrease in the number of issued shares resulting
from a subdivision or consolidation of shares.
Subject
to any required action by the shareholders of the Company, if the Company shall
be the surviving entity in any merger or consolidation, this Option thereafter
shall pertain to and apply to the securities to which a holder of Shares equal
to the Shares subject to this Option would have been entitled by reason of
such
merger or consolidation, and the installment provisions of Section 5 shall
continue to apply.
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In
the
event of a change in the shares of the Company as presently constituted, which
is limited to a change of all of its authorized Stock without par value into
the
same number of shares of Stock with a par value, the shares resulting from
any
such change shall be deemed to be the Shares within the meaning of this
Option.
To
the
extent that the foregoing adjustments relate to shares or securities of the
Company, such adjustments shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as hereinbefore
expressly provided, Optionee shall have no rights by reason of any subdivision
or consolidation of shares of Stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock
of
any class, and the number and price of Shares subject to this Option shall
not
be affected by, and no adjustments shall be made by reason of, any dissolution,
liquidation, merger, consolidation or sale of assets or capital stock, or any
issue by the Company of shares of stock of any class or securities convertible
into shares of stock of any class.
The
grant
of this Option shall not affect in any way the right or power of the Company
to
make adjustments, reclassifications, reorganizations or changes in its capital
or business structure or to merge, consolidate, dissolve or liquidate or to
sell
or transfer all or any part of its business or assets.
8.
Investment
Intent; Restrictions on Transfer.
(a)
Optionee represents and agrees that if Optionee exercises this Option in whole
or in part, Optionee will in each case acquire the Shares upon such exercise
for
the purpose of investment and not with a view to, or for resale in connection
with, any distribution thereof; and that upon such exercise of this Option
in
whole or in part, Optionee shall furnish to the Company a written statement
to
such effect, satisfactory to the Company in form and substance.
(b)
Optionee further represents that Optionee has had access to the financial
statements or books and records of the Company, has had the opportunity to
ask
questions of the Company concerning its business, operations and financial
condition, and to obtain additional information reasonably necessary to verify
the accuracy of such information
(c)
Unless and until the Shares represented by this Option are registered under
the
Securities Act, all certificates representing the Shares and any certificates
subsequently issued in substitution therefor and any certificate for any
securities issued pursuant to any stock split, share reclassification, stock
dividend or other similar capital event shall bear legends in substantially
the
following form:
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THESE
SECURITIES HAVE NOT BEEN REGISTERED OR OTHERWISE QUALIFIED UNDER
THE
SECURITIES ACT OF 1933 (THE 'SECURITIES ACT') OR UNDER THE APPLICABLE
OR
SECURITIES LAWS OF ANY STATE. NEITHER THESE SECURITIES NOR ANY INTEREST
THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
IN THE
ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE
SECURITIES LAWS OF ANY STATE, UNLESS PURSUANT TO EXEMPTIONS
THEREFROM.
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3
THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS SET FORTH IN THE EMPLOYMENT AGREEMENT
ENTERED BY AND BETWEEN THE COMPANY AND THE HOLDER DATED SEPTEMBER 15, 2006
AND
THEREFORE MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN
THE
ABSENCE OF A LEGAL OPINION STATING THAT SUCH RESTRICTIONS SET FORTH IN SUCH
EMPLOYMENT AGREEMENT ENTERED BY AND BETWEEN THE COMPANY AND THE HOLDER DO NOT
PREVENT THE HOLDER FROM SELLING DISPOSING OF SUCH SECURITIES.
and/or
such other legend or legends as the Company and its counsel deem necessary
or
appropriate. Appropriate stop transfer instructions with respect to the Shares
have been placed with the Company's transfer agent.
9.
Notices.
Any
notice required to be given pursuant to this Option shall be in writing and
shall be deemed to be delivered upon receipt or, in the case of notices by
the
Company, five (5) days after deposit in the U.S. mail, postage prepaid,
addressed to Optionee at the address last provided by Optionee.
10.
Applicable
Law.
This
Option has been granted, executed and delivered in the State of New York, and
the interpretation and enforcement shall be governed by the laws thereof and
subject to the exclusive jurisdiction of the courts therein.
In
Witness Whereof,
the
parties hereto have executed this Option as of the date first above
written.
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COMPANY:
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a
Delaware corporation
By:
/s/Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title: CEO
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|
OPTIONEE:
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By:
/s/Xxxxx
Xxxx
(signature)
Name:
Xxxxx
Xxxx
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4
Appendix
A
NOTICE
OF EXERCISE
______________________
______________________
Re:
Stock
Option
Notice
is
hereby given pursuant to Section 5 of my Stock Option Agreement that I elect
to
purchase the number of shares set forth below at the exercise price set forth
in
my option agreement:
Stock
Option Agreement dated: ____________
| __ |
a
"Cash
Exercise"
with respect to _________________ Option Shares;
and/or
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a
"Cashless
Exercise"
with respect to _______________ Option
Shares.
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In
the
event of a Cash Exercise, a check in the amount of the aggregate price of the
shares being purchased is attached.
I
hereby
confirm that such shares are being acquired by me for my own account for
investment purposes, and not with a view to, or for resale in connection with,
any distribution thereof. I will not sell or dispose of my Shares in violation
of the Securities Act of 1933, as amended, or any applicable federal or state
securities laws. Further, I understand that the exemption from taxable income
at
the time of exercise is dependent upon my holding such stock for a period of
at
least one year from the date of exercise and two years from the date of grant
of
the Option.
I
understand that the certificate representing the Option Shares will bear a
restrictive legend within the contemplation of the Securities Act and as
required by such other state or federal law or regulation applicable to the
issuance or delivery of the Option Shares.
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By:
____________________________
(signature)
Name:
__________________________
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