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EXHIBIT 10.1
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EXHIBIT 10.2
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This Stock
Option Agreement (this "Agreement") is entered into as of
"Company"), and Herman Rappaport (the
"Option Holder").
A. The
Company has adopted the 2004 Equity Compensation Plan (the "Plan").
The Option Holder has had an
opportunity to review the Plan.
B. The
Option Holder is a director and the President of the Company and is
eligible to receive option grants under the
Plan. This Agreement is intended by the parties to
evidence the Company’s grant to the Option Holder of an
option to purchase
shares of its common stock.
NOW,
THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the
Company and the Option Holder hereby agree as
follows:
1. Option Grant and Exercise
Price.
(a) Effective
as of October 26, 2006 the Company hereby grants to the Option
Holder the right and option (the
"Option") to purchase, on the terms and conditions
set forth in this Agreement and in the Plan, Eight hundred and
fifty thousand
(850,000) shares of its common stock, par value
$0.01 per share ("Common Stock"), at an exercise price of $0.15 per
share. The
Option exercise price was determined in accordance
with Section 2(p) of the Plan.
(b) The
Option is a non-qualified stock option, and is not intended by the
Company and the Option Holder to be an
incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended.
2. Vesting and Term of the
Option.
(a) Option
Vesting. The Option is fully vested and is exercisable on October
26, 2006.
(b) Option
Term. The Option shall be exercisable in whole or in part prior to
October 26, 2016. The Option shall
terminate on October 26, 2016, and no portion of the
Option may be exercised on or after that date. The exercisability
of the
Option is not contingent on the termination of the
Option Holder’s employment or directorship with the Company,
it being
understood that the Option Holder shall retain the
right to exercise the Option until October 26, 2016 even after the
termination of
his employment or directorship with the
Company.
3. Manner of Exercising the Option. The
Option Holder may exercise the vested portion of the Option in
whole or in part prior to
the Option’s termination, provided that a
partial exercise of the Option may not be for fewer than one
hundred (100) shares of
Common Stock unless fewer than one hundred (100)
shares subject to the vested portion of the Option remain
unexercised, in
which event the entire remaining vested portion of
the Option must be exercised at one time.
The Option shall not be exercisable with respect to
a fraction of a share of Common Stock. The Option Holder may
exercise the
vested portion of the Option, in whole or in part,
by delivering to the Company’s General Counsel written notice
of exercise in
the form of the notice attached to this Agreement as
Exhibit A. Such notice shall specify the number of shares of Common
Stock
to be purchased and shall be accompanied by payment
of the purchase price of the shares. No shares shall be issued by
the
Company until full payment of the purchase price has
been made.
4. Payment of the Option Exercise Price.
Payment of the exercise price of the shares of Common Stock subject
to the exercised
portion of the Option shall be made in accordance
with Section 6(c) of the Plan.
5. Transferability of the Option.
(a) Except
as provided in this Section 5, the Option Holder may not assign or
otherwise transfer the Option, either
voluntarily or by operation of law, other than by
will or the laws of descent and distribution, and the Option shall
be exercisable
during the Option Holder’s lifetime only by
the Option Holder or by the Option Holder’s legal
representative. Following the
death of the Option Holder, the Option shall be
exercisable by the Option Holder’s legal representative,
executor and
beneficiaries.
(b) The
Option Holder may assign and transfer part or all of the Option to
a family member or family trust during the
Option Holder’s lifetime but only if: (i) the
transfer is made by a gift and not for consideration; (ii) the
transferee is a "family
member" (including, without limitation, a family
trust) as defined in General Instruction A.1(a)(5) of Form S-8
under the
Securities Act of 1933, as amended (the "Securities
Act"); (iii) the Option Holder gives the Company at least ten
days’ prior
written notice of the proposed transfer; and (iv)
the transferee executes and delivers to the Company any documents
requested by
the Company (including, without limitation, a
counterpart of this Agreement) in order to document the transfer.
Any such
transferee of all or part of the Option shall be
bound by all of the terms and conditions of the Plan and this
Agreement, and the
Option Holder shall be personally liable to the
Company for any breach by the transferee of any of the terms of the
Plan or this
Agreement.
6. Securities Law Compliance. No shares
of Common Stock shall be issued or delivered upon exercise of the
Option unless and
until the Board determines that the exercise of the
Option and the issuance and delivery of such shares pursuant
thereto will
comply with all relevant provisions of law,
including, without limitation, the Securities Act, applicable state
and foreign
securities laws and the requirements of any stock
exchange or over-the-counter trading system upon which the Common
Stock
may be listed.
7. Incorporation by Reference of the
Plan. The Plan and all of its terms and conditions, as amended from
time to time, are
incorporated by reference into this Agreement. The
Option Holder a
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