Exhibit 10.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is made as of this 22nd day
of March, 2005, by and between ARCADIA RESOURCES, INC., a Nevada corporation
(the "Company") and XXXX X. XXXXXXXX, a Florida resident ("Optionee").
RECITALS
A. The Optionee is a member of the Board of Directors and Audit Committee
Chairman of the Company.
B. The Company desires that the Optionee, in such capacities, exert his
utmost efforts to improve the business and increase the assets of the Company.
NOW, THEREFORE, in consideration of the Optionee's service to the Company
as a director and Audit Committee Chairman, the Company agrees to compensate the
Optionee and hereby agrees to grant the Optionee options to purchase shares of
the Company's common stock (the "Common Stock"), upon the following terms and
conditions:
1. OPTIONS.
(a) The Company hereby grants to the Optionee, on an annual basis
and as long as he is a member of the Company's Board of Directors,
non-qualified stock options (the "Options") not intended to qualify under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
to purchase, unless earlier terminated hereunder ("Termination Date"), the
Company's Common Stock, the value of which Options, on an annual basis and
utilizing acceptable modeling techniques mutually agreeable by the Company
and the Optionee, shall equal $25,000.
(b) The Company hereby grants to the Optionee, on an annual basis
and so long as he is the Company's Audit Committee Chairman, additional of
such Options to purchase, unless earlier terminated hereunder (Termination
Date), the Company's Common Stock, the value of which Options, on an
annual basis and utilizing acceptable modeling techniques mutually
agreeable by the Company and the Optionee, shall equal $3,000.
(c) The Options awarded shall be exercisable at the closing price on
the award date (the "Purchase Price"), shall be issued in advance on July
1 of each year, and shall cover the subsequent period from July 1 to June
30 of each year.
(d) The Optionee's service as a member of the Company's Board of
Directors and Audit Committee Chairman in June, 2004 shall be included as
part of the July 1, 2004 - June 30, 2005 annual time period for the
initial year of this Agreement only.
(e) The Options shall be exercisable for a period of seven (7) years
from the date of each annual grant. The grant of Options hereunder shall
be evidenced by a written instrument signed by the Company's Chairman and
CEO or one or more directors or other officers of the Company as the Board
of Directors may designate from time to time.
2. TAXES AND FEES. The Company shall pay all original issue or transfer
taxes on the exercise of the Options and all other fees and expenses necessarily
incurred by the Company in connection therewith.
3. EXERCISE OF OPTIONS/ REGISTRATION.
(a) The Optionee shall notify the Company by hand delivery or by
registered or certified mail, return receipt requested, addressed to its
principal office (Attn: Chief Executive Officer), as to the number of
shares of Common Stock which the Optionee desires to purchase pursuant to
the exercise of any of the Options herein granted, which notice shall be
accompanied by (i) a certified or bank check payable to the order of the
Company in an amount equal to the Purchase Price multiplied by the number
of shares of Company's Common Stock for which the Options are being
exercised, or (ii) the delivery of shares of Company's Common Stock having
a fair market value equal to the Purchase Price multiplied by the number
of shares of Company's Common Stock for which the Options are being
exercised.
(b) If the shares of Common Stock issuable upon exercise of the
Options are registered under the Securities Act of 1933, as amended, the
Optionee may, in his discretion, elect to exercise the Options in whole or
in part and at any time or from time to time on a cashless basis by
surrendering the Options with the exercise form appended hereto duly
executed by or on behalf of the Optionee, at the principal office of the
Company, or at such other office or agency as the Company may designate,
by canceling a portion of the Options in payment of the Purchase Price
payable in respect of the number of shares purchased upon such exercise.
If the Optionee wishes to exercise the Options pursuant to this method of
payment, then the number of shares so purchasable shall be equal to the
total number of shares for which the Options are being exercised
(including both the shares issued to the Optionee and the shares subject
to the portion of the Options being cancelled in payment of the Purchase
Price), multiplied by a fraction (A) the numerator of which shall be the
excess of the Fair Market Value per share as of the exercise date over the
Purchase Price per share and (B) the denominator of which shall be the
Fair Market Value per share. The Fair Market Value per share shall be
deemed to be the aggregate Market Price (as defined herein) of the Common
Stock on the exercise date. For the purposes of the Options, "Market
Price" means as to the Common Stock, the average of the closing sales
prices of the Common Stock on all national securities exchanges on which
the Common
Stock may at the time be listed or quoted, including for this purpose The
NASDAQ Stock Market, or, if there have been no sales on any such exchange
on any day, or, if on any day the Common Stock is not so listed or quoted,
the average of the highest bid and lowest asked prices on such day in the
domestic over-the-counter market as reported by the National Quotation
Bureau, Incorporated, or any similar successor organization.
(c) If, at any time following the filing of a registration statement
(including any amendments thereto) by the Company with the U.S. Securities
and Exchange Commission, the Company proposes to register any of its
securities under the Securities Act in connection with the offering of
such securities by the Company or holders of such securities (except
pursuant to a registration statement filed on Form S-4 or on Form S-8 or
such other forms as shall be prescribed under the Securities Act for the
same purposes or for any exchange offer) (a "Piggyback Registration"), the
Company shall at such time promptly provide the Optionee written notice of
its intention so to do. Upon the written request of the Optionee given
within ten (10) days after providing of any such notice by the Company,
the Company shall use reasonable efforts to cause to be registered under
the Securities Act all of the Common Stock currently held or potentially
held following the exercise of the Options by the Optionee. If the Company
in its sole discretion decides a Piggyback Registration shall be
underwritten, the Company shall have sole discretion in the selection of
any underwriter or underwriters to manage such Piggyback Registration. If
the managing underwriter or underwriters of a Piggyback Registration
advise the Company in writing that in its or their opinion the number of
registrable securities proposed to be sold in such Piggyback Registration
exceeds the number which can be sold, or adversely affects the price at
which the registrable securities are to be sold in such offering, the
Company will include in such registration only the securities, if any,
which, in the opinion of such underwriter or underwriters, can be sold in
such offering or which will not materially adversely affect the price
thereof. In the event that the contemplated distribution does not involve
an underwritten offering, the determination that the inclusion of such
registrable securities shall adversely affect the price or the number of
securities which may be sold in such offering shall be made by the Company
in its reasonable judgment upon advice and consultation with a nationally
recognized investment banker. The securities so included in such Piggyback
Registration shall be apportioned pro rata among the securities that the
Company and any holder proposes to sell, according to the total number of
securities requested for inclusion by all such parties, or in such other
proportions as shall mutually be agreed to among the Company and such
holders. It shall be a condition precedent to the obligations of the
Company and any underwriter or underwriters to take any action pursuant to
this Paragraph 3, that the Optionee participating in any Piggyback
Registration shall furnish to the Company such information regarding him,
the Common Stock held by him, the intended method of disposition of such
Common Stock, and such agreements regarding indemnification, disposition
of such securities and the other matters referred to in this Paragraph 3,
as the Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company.
(d) The Options granted hereunder shall vest immediately upon
issuance, but subject to the provisions of Paragraph 4 below.
4. OPTIONS CONDITIONED ON CONTINUED SERVICE.
(a) If the Optionee shall be removed as a director and/or the Audit
Committee Chairman for cause, or if the Optionee resigns either or both
positions voluntarily, the pro rata portion of the applicable Options
granted to the Optionee hereunder as compensation for such position(s)
shall expire immediately upon termination for the uncompleted portion of
the annual term. If the Optionee shall be removed as a director and/or
Audit Committee Chairman without cause, the applicable Options granted to
the Optionee hereunder as compensation for such position(s) shall remain
exercisable until the end of the term hereof.
(b) If the Optionee dies (i) while serving as a director and/or
Audit Committee Chairman for the Company, or (ii) within three (3) months
of termination of service other than for cause or voluntarily by the
Optionee, the applicable Options may be exercised by a legatee or legatees
of such Optionee under such Optionee's Last Will or by his personal
representatives or distributees at any time within one year after his
death, subject to the provisions of subparagraph (d) of this Paragraph 4.
(c) If the Optionee becomes disabled within the definition of
Section 22(e)(3) of the Code while serving as a director and/or Audit
Committee Chairman, such applicable Options may, subject to the provisions
of subparagraph (d) of this Paragraph 4, be exercised at any time within
one year after Optionee's termination of service due to the disability.
(d) The Options may not be exercised pursuant to this Paragraph 4
except to the extent that the Optionee was entitled to exercise the
Options at the time of termination of service, disability or death, and in
any event may not be exercised after the original expiration date of the
applicable Options.
5. DIVISIBILITY AND ASSIGNABILITY OF THE OPTIONS.
(a) The Optionee may exercise the Options herein granted from time
to time, subject to the provisions above, with respect to any whole number
of shares included therein, but in no event may any of the Options be
exercised as to less than one hundred (100) shares at any one time, or the
remaining shares covered by any of the Options if less than one hundred
(100).
(b) Except as specifically provided herein, the Optionee may not
give, grant, sell, exchange, transfer legal title, pledge, assign or
otherwise encumber or dispose of the Options herein granted or any
interest therein, otherwise than by will or the laws of descent and
distribution, and the Options herein granted, or any of them, shall be
exercisable during the Optionee's lifetime only by the Optionee.
6. STOCK AS INVESTMENT. By accepting the Options herein granted, the
Optionee agrees for himself, his heirs and legatees that any and all shares of
Common Stock received upon exercise of such Options hereunder shall be acquired
for investment purposes only and not for sale or distribution, and upon the
issuance of any or all of the shares of Common Stock issuable under the Options,
the Optionee, or his heirs or legatees receiving such shares of Common Stock,
shall deliver to the Company a representation in writing, that such shares of
Common Stock are being acquired in good faith for investment purposes only and
not for sale or distribution. Company may place a "stop transfer" order with
respect to such shares of Common Stock with its transfer agent and place an
appropriate restrictive legend on the stock certificate evidencing such shares
of Common Stock.
7. RESTRICTION ON ISSUANCE OF SHARES. The Company shall not be required to
issue or deliver any certificate for shares of its Common Stock purchased upon
the exercise of any of the Options unless (a) the issuance of such shares has
been registered with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, or counsel to the Company shall have given an opinion
that such registration is not required; (b) approval, to the extent required,
shall have been obtained from any state regulatory body having jurisdiction
thereover, and (c) permission for the listing of such shares shall have been
given by any national securities exchange on which the Common Stock of the
Company is at the time of issuance listed. Common Stock issued to the Optionee
pursuant to this Agreement will be subject to the Company's xxxxxxx xxxxxxx
policy in effect from time to time.
8. ADJUSTMENT ON CHANGES IN CAPITALIZATION.
(a) In the event of changes in the outstanding Common Stock of the
Company by reason of stock dividends, stock splits, recapitalizations,
reclassifications, combinations and exchanges of shares, the number of
shares of Common Stock as to which the Options may be exercised, shall be
correspondingly adjusted by the Company, and the Purchase Price shall be
adjusted so that the product of the Purchase Price immediately after such
event multiplied by the number of Options subject to this Agreement
immediately after such event shall be equal to the product of the Purchase
Price multiplied by the number of shares subject to this Agreement
immediately prior to the occurrence of such event. No adjustment shall be
made with respect to stock dividends or splits which do not exceed 5% in
any fiscal year, cash dividends or the issuance to stockholders of the
Company of rights to subscribe for additional shares of Common Stock or
other securities. Anything to the contrary contained herein
notwithstanding, the Board of Directors of the Company shall have the
discretionary power to take any action necessary or appropriate to prevent
the Options from being disqualified by virtue of not being "Non-Qualified
Stock Options" under the United States income tax laws then in effect.
(b) In the event of any consolidation or merger of the Company with
or into another company, or the conveyance of all or substantially all of
the assets of the Company to another company for solely stock and/or
securities, each of the
then unexercised Options granted hereunder shall upon exercise thereafter
entitle the holder thereof to such number of shares of Common Stock or
other securities or property to which a holder of shares of Common Stock
of the Company would have been entitled to upon such consolidation, merger
or conveyance; and in any such case appropriate adjustment, as determined
by the Board of Directors of the Company (or successor entity) shall be
made as set forth above with respect to any future changes in the
capitalization of the Company or its successor entity. In the event of the
proposed dissolution or liquidation of the Company, or, except as provided
in (d) below, the sale of substantially all the assets of the Company for
other than stock/and or securities, all unexercised Options granted
hereunder will automatically terminate, unless otherwise provided by the
Board of Directors of the Company or any authorized committee thereof.
(c) Any adjustment in the number of shares of Common Stock shall
apply proportionately to the unexercised portion of the Options granted
hereunder. If fractions of a share of Common Stock would result from any
such adjustment, the adjustment shall be revised to the next higher whole
number of shares of Common Stock so long as such increase does not result
in the Optionee being deemed to own more than 3% of the total combined
voting power or value of all classes of shares of capital stock of the
Company or subsidiaries.
(d) If any of the unexercised Options are not terminated pursuant to
subparagraph (b) above, any Options granted under the Plan may, at the
discretion of the Board of Directors of the Company and said other
corporation, be exchanged for options to purchase shares of capital stock
of another corporation which the Company and/or a subsidiary thereof is
merged into, consolidated with, or all or a substantial portion of the
property or stock of which is acquired by or separated or reorganized
into. The terms, provisions and benefits to the Optionee of such
substitute options shall in all respects be identical to the terms,
provisions and benefits to the Optionee under the Options prior to said
substitution. To the extent the above may be inconsistent with Sections
424(a)(1) and (2) of the Code, the above shall be deemed interpreted so as
to comply therewith.
9. NO RIGHTS IN OPTION STOCK. The Optionee shall have no rights as a
shareholder in respect of shares of Common Stock as to which the Options granted
hereunder shall not have been exercised and payment made as herein provided.
10. BINDING EFFECT. Except as herein otherwise expressly provided, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
their successors, legal representatives and assigns.
11. WITHHOLDING. The Optionee agrees to cooperate with the Company to take
all steps necessary as appropriate for the withholding of taxes by the Company
if required under law or regulation in connection therewith. In the event the
Optionee does not make the required withholding payment at the time of exercise,
the Company may make such provisions and take such steps as it, in its sole
discretion, may deem necessary or appropriate for the withholding of any taxes
that the Company is required by any law
or regulation of any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with the exercise of the Options,
including, but not limited to, (i) the withholding of payment of all or any
portion of such Options or compensation until the Optionee reimburses the
Company for the amount the Company is required to withhold with respect to such
taxes, or (ii) the canceling of any number of shares of Common Stock issuable
upon exercise of such Options or compensation in an amount sufficient to
reimburse the Company for the amount it is required to so withhold, (iii) the
selling of any property contingently credited by the Company for the purpose of
exercising such Options or compensation, in order to withhold or reimburse the
Company for the amount it is required to so withhold, and/or (iv) withholding
the amount due from the Optionee's wages if he is employed by the Company or any
subsidiary thereof.
12. MISCELLANEOUS. This Agreement shall be construed under the laws of the
State of Michigan, without application to the principles of conflicts of laws.
Headings have been included herein for convenience of reference only, and shall
not be deemed a part of the Agreement. References in this Agreement to the
pronouns "him," "he" and "his" are not intended to convey the masculine gender
alone and are employed in a generic sense and apply equally to the feminine
gender or to an entity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ARCADIA RESOURCES, INC.
By: /s/ XXXX X. XXXXXXX, XX
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Xxxx X. Xxxxxxx, XX
Its: Chairman and CEO
ACCEPTED AND AGREED TO:
By: /s/ XXXX X. XXXXXXXX
--------------------------
Xxxx X. Xxxxxxxx
