Exhibit 10.2
TRI-ISTHMUS GROUP, INC.
OPTION GRANT
AGREEMENT
This Option Grant Agreement (this
“ Option Agreement ”) is entered into as
of October 10, 2007 (the “ Date of Grant
”), by and between Dennis M. Smith (“
Optionee ”) and Tri-Isthmus Group, Inc. (the
“ Company ”). Capitalized terms not
otherwise defined herein shall have the meanings assigned to such
terms in Section 13 of this Option Agreement.
1. Grant of Option . The
Company hereby grants to Optionee an option (the “
Option ”) to purchase the number of shares of
the Company’s Common Stock set forth below (the “
Option Shares ”), at the exercise price set
forth below, subject to the terms and conditions of the Plan and
this Option Agreement, and upon the occurrence of certain specified
events, as follows:
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Exercise Price Per
Share
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0.3125 |
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Total Number of
Option Shares Granted
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600,000 |
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Total Exercise
Price
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$ |
187,500 |
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Type of
Option:
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Incentive Stock Option |
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Term/Expiration
Date:
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7 years from Date of Grant |
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This Option is intended to qualify as
an Incentive Stock Option as defined in Section 422(b) of the Code;
provided, however, the Company has not made, and will not be deemed
to make hereby, any representations or warranties to Optionee with
respect to such qualification.
2. Vesting Schedule .
Optionee’s Option to purchase up to six hundred thousand
(600,000) Option Shares shall vest incrementally as follows:
(1) the option to purchase up to one hundred fifty thousand
(150,000) Option Shares shall vest immediately on the Date of
Grant; (2) the option to purchase up to one hundred fifty
thousand (150,000) Option Shares shall vest on the first
anniversary of the Date of Grant; and (3) the option to
purchase the remaining three hundred thousand (300,000) Option
Shares shall vest on the second anniversary of the Date of
Grant.
3. Exercise of Option
.
(a) Right to Exercise; Term of
Option . Generally, this Option shall be exercisable by
Optionee with respect to any or all vested Option Shares from the
time such Option Shares vest (in accordance with the vesting
schedule in Section 2 ) until the seventh anniversary
of the Date of Grant (the “ Term ”),
subject to the terms and conditions set forth in the Plan and this
Option Agreement.
(b) Method of Exercise . This
Option shall be exercisable by written notice (in substantially the
form attached hereto as Exhibit A ) which shall state
the election to exercise the Option, the number of Option Shares in
respect of which the Option is being exercised, and such other
representations and agreements as to the Optionee’s
investment intent with respect to the Option Shares. Such written
notice shall be signed by the Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the aggregate
exercise price for the Option Shares in respect of which the Option
is being exercised, payable in the manner set forth in
Section 4 .
(c) Date of Exercise, Transfer
. This Option shall be deemed to be exercised upon receipt by the
Company of such written notice accompanied by the aggregate
exercise price of the
Option Shares
in respect of which the Option is being exercised. Assuming
compliance with all other provisions of this Option Agreement, for
income tax purposes the Option Shares shall be considered
transferred to the Optionee on the date on which the Option is
exercised with respect to such Option Shares.
4. Payment of Aggregate
Exercise Price.
(a) Method of Payment .
Payment of the aggregate exercise price for the Option Shares in
respect of which the Option is being exercised shall become
immediately due upon exercise of this Option and shall be
payable:
(i) in cash or check made payable to
the Company;
(ii) in shares of Common Stock held
for the requisite period necessary to avoid a charge to the
Company’s earnings for financial reporting purposes and
valued at Fair Market Value on the date in which this Option is
exercised; or
(iii) through a special sale and
remittance procedure pursuant to which the Optionee shall
concurrently provide irrevocable instructions (i) to a
Company-designated brokerage firm to effect the immediate sale of
the purchased shares and remit to the Company, out of the sale
proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased shares
plus all applicable federal, state and local income and employment
taxes required to be withheld by the Company by reason of such
exercise and (ii) to the Company to deliver the certificates
for the purchased shares directly to such brokerage firm in order
to complete the sale.
(b) Taxes . The Optionee
shall, upon notification of the amount due (if any) as a result of
the exercise of the Option and prior to or concurrent with delivery
of the certificate representing the Option Shares, pay to the
Company the amounts necessary to satisfy applicable federal, state
and local tax withholding requirements.
5. Restrictions on
Exercise . This Option may not be exercised if the issuance of
such Option Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation,
including any rule under Part 207 of Title 12 of the Code of
Federal Regulations as promulgated by the Federal Reserve
Board.
6. Limited Transferability
of Option . This Option shall be exercisable only by the
Optionee during his lifetime and shall not be assignable or
transferable, other than by will or by the applicable laws of
inheritance and as permitted under the Code following the
Optionee’s death. The terms and conditions of this Option
Agreement, including (without limitation) the limited time period
during which this Option may be exercised following the
Optionee’s death, shall be binding upon the executors,
administrators, heirs, successors and permitted assigns of the
Optionee.
7. Effect of Termination or
Death . The following provisions shall govern the exercise of
this Option at or after the time of cessation of Service or death
of the Optionee:
(a) Should the Optionee cease to
remain in Service for any reason other than death, Disability or
Misconduct, then the Optionee shall have a period of three
(3) months following the date of such cessation of Service
during which to exercise this Option as to shares that vested on or
prior to the date of cessation. Upon such cessation of Service,
this Option shall immediately
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terminate and
cease to be outstanding with respect to any and all Option Shares
which are not, at the time, vested.
(b) Should Optionee’s Service
terminate by reason of Disability while holding this Option, the
vesting of this Option will thereupon accelerate and all of the
unvested Option Shares subject thereto will immediately vest and
become exercisable. The Optionee shall have a period of twelve
(12) months following the date of such termination of Service
during which to exercise this Option.
(c) If the Optionee dies while
holding this Option, the vesting set forth in Section 2
will thereupon accelerate and all of the unvested Option Shares
subject thereto will immediately vest and become exercisable. The
personal representative of the Optionee’s estate or the
person or persons to whom this Option is transferred pursuant to
the Optionee’s will or the applicable laws of inheritance
shall have a period of twelve (12) months following the date of the
Optionee’s death to exercise this Option.
(d) Under no circumstances, however,
shall this Option be exercisable after the expiration of the
Term.
(e) Upon the expiration of the
applicable exercise period or (if earlier) upon the expiration of
the Term, this Option shall terminate and cease to be outstanding
for any vested Option Shares for which this Option has not been
exercised.
(f) Should Optionee’s Service
be terminated for Misconduct or should the Optionee otherwise
engage in Misconduct while holding this Option Agreement, then the
Option and this Option Agreement (whether any or all Option Shares
are vested or not) shall terminate immediately and cease to remain
outstanding.
8. Changes in Capital
Structure . The Optionee agrees and acknowledges that the
Company shall have the right at any time and from time to time
after the date of this Option Agreement to authorize additional
classes or series of capital stock, some of which may enti
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