NON-QUALIFIED STOCK OPTION AGREEMENT
Exhibit
4.1
This
Non-Qualified Stock Option Agreement (the “Agreement”) is made as of July 24,
2006 (the “Date of Grant”) between NaturalNano, Inc., a Nevada corporation (the
“Company”), and Xxxxx X. Xxxxxxxxx, an employee of the Company or one of its
Subsidiaries (the “Option Holder”), to record the granting of a non-qualified
stock option. This Agreement and the option granted hereby are not being made
pursuant to the Company’s 2005 Stock Option Plan (the “Plan”); however, to the
extent not inconsistent with the terms of this Agreement, the Plan’s terms are
hereby incorporated in this Agreement by reference. Terms used herein that
are
defined in the Plan shall have the meanings ascribed to them in the Plan. If
there is any inconsistency between the terms of this Agreement and the terms
of
the Plan, the terms of this Agreement shall, for purposes of this Agreement,
supersede and replace the conflicting terms in the Plan.
|
|
1.
|
Grant
of Option.
The Company hereby grants to the Option Holder, subject to and pursuant
to
the terms and conditions of this Agreement, the option to purchase
from
the Company an aggregate of 40,000 shares of common stock of the
Company
(the “Shares”) at an exercise price of $0.10 per Share. The parties intend
this Option to be treated as a non-qualified stock option under the
Code.
|
|
|
2.
|
Expiration
Date.
This Option shall expire on July 24, 2016 (the “Expiration Date”) unless
this Option expires earlier as provided in Sections 5, 6 or 7 of
this
Agreement.
|
|
|
3.
|
Exercisability.
No Shares may be purchased under this Option and this Option shall
not be
exercisable until the Option has vested pursuant to the vesting schedule.
Under the vesting schedule, a portion of this Option representing
the
right to purchase one third of the Shares shall vest on the first
anniversary of the Date of Grant, the right to purchase an additional
one-third of the Shares shall vest on the second anniversary of the
Date
of Grant, and the right to purchase the remaining Shares shall vest
on the
third anniversary of the Date of Grant, provided that the Option
Holder
remains in continuous employment with the Company or its Subsidiaries
until such anniversary dates. If the Option Holder’s employment is
terminated, Section 5 shall govern the Option Holder’s rights under
this Option. Notwithstanding the foregoing or any other provision
of the
Plan or this Agreement, this Option may not be exercised after the
Expiration Date.
|
|
|
4.
|
Method
of Exercising Options.
The Option may be exercised from time to time by written or electronic
notice (in the form prescribed by the Company) delivered to and received
by the Company, which notice shall be signed or electronically confirmed
by the Option Holder and shall state the election to exercise the
Option
and the number of whole Shares with respect to which the Option is
being
exercised. Such notice must be accompanied by a check payable to
the
Company or, subject to the Committee’s approval, such other consideration
as the Committee may determine (including cashless exercise), in
payment
of the full Option Price for the number of Shares purchased. As soon
as
practicable after it receives such notice and payment, as applicable,
and
following receipt from the Option Holder of payment for any taxes
which
the Company is required by law to withhold by reason of such exercise,
the
Company will deliver to the Option Holder a certificate or certificates
for the Shares so purchased. The Committee, in its sole discretion,
may
permit an Option Holder to exercise the Option pursuant to a “cashless
exercise” procedure (subject to securities law restrictions), or by any
other means the Committee determines is consistent with the Plan’s purpose
and applicable law.
|
|
5.
|
Cancellation
of Options.
|
|
|
(a)
|
Expiration
of Term.
On the Expiration Date, the unexercised Options shall be cancelled
automatically.
|
|
|
(b)
|
Termination
of Employment.
Except as provided in Sections 6 and 7 below, any unvested portion
of the
Option shall automatically be cancelled in the event the Option Holder’s
employment with the Company or any of its Subsidiaries is terminated
for
any reason. Any portion of the Option vested at the time of termination
may be exercised by the Option Holder at any time on or prior to
the
earlier of the Expiration Date or the expiration of three (3) months
after
the date of termination. Any vested portion of the Option that is
not
exercised within such time period shall be automatically cancelled.
A
“termination” includes any event which would causes the Option Holder to
lose his or her eligibility to participate in the Plan (e.g., an
individual is employed by a company that ceases to be a Subsidiary
of the
Company).
|
|
|
6.
|
Death
of Option Holder.
Upon the death of the Option Holder while the Option Holder is an
employee
of the Company or a Subsidiary, any unvested portion of the Option
shall
fully vest. The Option may be exercised by the Option Holder’s estate, or
by a person who acquires the right to exercise the Option by bequest
or
inheritance or by reason of the death of the Option Holder, provided
that
such exercise occurs both before the Expiration Date and within six
(6)
months after the date of the Option Holder’s death. Any portion of the
Option not exercised within such time period will be
cancelled.
|
|
|
7.
|
Disability.
Upon termination of the Option Holder’s employment by reason of the Option
Holder’s Disability, any unvested portion of the Option shall fully vest.
The Option may be exercised by the Option Holder, provided that such
exercise occurs both before the Expiration Date and within 6 months
after
the Option Holder’s termination due to a Disability. Any portion of the
Option not exercised within such time period will be cancelled.
“Disability” shall mean a condition whereby the Option Holder is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical impairment which can be expected to result
in death
or which is or can be expected to last for a continuous period of
not less
than thirty-six (36) months, all as verified by a physician acceptable
to,
or selected by, the Company.
|
|
|
8.
|
Non-Assignability.
The Option shall not be assignable or transferable by the Option
Holder,
except by will or by the laws of descent and distribution. During
the life
of the Option Holder, the Option shall be exercisable only by the
Option
Holder.
|
|
|
9.
|
Rights
as a Shareholder.
The Option Holder shall have no rights as a shareholder by reason
of the
Option unless and until certificates for shares of Common Stock are
issued
to her.
|
|
|
10.
|
Employment.
This Agreement shall not create in the Option Holder a right to further
or
continued employment with the Company or any Subsidiary and shall
not
interfere with the ability of the Company to terminate the Option
Holder’s
employment relationship at any time with or without cause; the Option
is
not part of normal and expected compensation for purposes of calculating
any severance, resignation, redundancy, end of service payment, bonuses,
long-service awards, pension or retirement benefits, or similar
payments.
|
|
|
11.
|
Notice.
Notices hereunder shall be in writing and if to the Company shall
be
addressed to the Secretary of the Company at NaturalNano, Inc., 000
Xxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxxxxx, Xxx Xxxx 00000 and if to
the
Option Holder shall be addressed to the Option Holder at her address
as it
appears on the Company’s records.
|
|
|
12.
|
Successors
and Assigns.
This Agreement shall be binding upon and inure to the benefit of
the
successors and assigns of the Company and, to the extent provided
in
Section 6 hereof, to the heirs or legatees of the Option
Holder.
|
|
|
13.
|
Applicable
Laws and Consent to Jurisdiction.
The validity, construction, interpretation and enforceability of
this
Agreement shall be determined and governed by the laws of the New
York
without giving effect to the principles of conflicts of law. For
the
purpose of litigating any dispute that arises under this Agreement,
the
parties hereby consent to exclusive jurisdiction in New York and
agree
that such litigation shall be conducted in the federal or state courts
located in Rochester, New York.
|
IN
WITNESS WHEREOF,
the
Company and the Option Holder have caused this Agreement to be executed on
the
date set forth opposite their respective signatures, it being further understood
that the date of grant may differ from the date of signature.
|
Dated:
|
July
24, 2006
|
NaturalNano,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
By:
/s/
Xxxxxxx X.
Xxxxxxxxxx
|
|
|
|
Xxxxxxx
X. Xxxxxxxxxx, President
|
|
|
|
|
|
Dated:
|
July
24, 2006
|
Option
Holder
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Xxxxx X.
Xxxxxxxxx
|
|
Xxxxx
X. Xxxxxxxxx
|
