NON-QUALIFIED STOCK OPTION AWARD AGREEMENT Pursuant to the NaturalNano, Inc.
Exhibit
4.2
Pursuant
to the
NaturalNano,
Inc.
2005
Stock Option Plan
Name
of
Option Holder:
Date
of
Grant:
Number
of
Shares:
Exercise
Price per Share:
Expiration
Date:
This
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (the “Award Agreement”) is made as of
____________, 2005 between NaturalNano, Inc., a Delaware corporation (the
“Company”), and the above-named individual, an employee of the Company or one of
its Subsidiaries (the “Option Holder”), to record the granting of a
non-qualified stock option pursuant to the Company’s 2005 Stock Option Plan (the
“Plan”). 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 Award Agreement and the terms of the Plan, the Plan’s terms shall supersede
and replace the conflicting terms herein.
|
1.
|
Grant
of Option.
The Company hereby grants to the Option Holder, subject to and
pursuant to
the terms and conditions of the Plan and this Award Agreement,
the option
to purchase from the Company an aggregate number of shares of common
stock
of the Company, no par value per share, (the “Shares”) set forth above at
an exercise price per share set forth above. 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 the expiration date set forth above
(the
“Expiration Date”) unless this Option expires earlier as provided in
Sections 5, 6 or 7 of this Award
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 half of the Shares that may be purchased
under this
Option shall vest on the first anniversary date after the Date
of Grant
and the right to purchase the remaining Shares that may be purchased
under
this Option shall vest on the second anniversary date after 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 Award 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
allowed pursuant to the Plan, 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.
|
|
1.
|
Upon
the exercise of the Option Holder’s right to purchase Shares under this
Option, the number of Shares subject to the Option shall be reduced
on a
one-for-one basis.
|
|
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
upon
termination of the Option Holder’s employment with the Company or any of
its Subsidiaries for any reason. Any portion of the Option vested
at the
time of termination may only 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 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).
|
-
2
-
|
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 6 months after 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 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 him or
her.
|
|
10.
|
Discretionary
Plan; Employment. The Plan is discretionary in nature and may be
suspended or terminated by the Company at any time. With respect
to the
Plan, (a) each grant of an Option is a one-time benefit which does
not
create any contractual or other right to receive future grants
of Options,
or benefits in lieu of Options; (b) all determinations with respect
to any
such future grants, including, but not limited to, the times when
the
Option shall be granted, the number of Shares subject to each Option,
the
Option Price, and the times when each Option shall be exercisable,
will be
at the sole discretion of the Company; (c) if the Option Holder
is an
Employee, the Option Holder’s participation in the Plan shall not create a
right to further or continued employment with the Option Holder’s employer
and shall not interfere with the ability of the Option Holder’s employer
to terminate the Option Holder’s employment relationship at any time with
or without cause; (d) the Option Holder’s participation in the Plan is
voluntary; (e) 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; (f) the future value of the Shares
underlying the Options is unknown and cannot be predicted with
certainty;
(g) if the underlying Shares do not increase in value, the Option
will
have no value; and (h) the ability of the Option Holder to sell
Shares
acquired pursuant to this Option may be limited by applicable securities
laws.
|
-
3
-
|
11.
|
Effect
of Plan. The Plan is hereby incorporated by reference into this Award
Agreement, and this Award Agreement is subject in all respects
to the
provisions of the Plan, including without limitation the authority
of the
Committee to adjust awards and to make interpretations and other
determinations with respect to all matters relating to this Award
Agreement and the Plan.
|
|
12.
|
CMI
Merger. Notwithstanding the language of Section 11 of this Agreement,
or the provisions of Section 4.2 of the Plan, each
holder of an option (a “Company Option”) to purchase Company Common Stock
granted prior to the Effective Time of the Merger pursuant to the
Plan or
otherwise will receive at the Closing, in exchange for a written
instrument executed by such holder canceling by its terms all of
the
Company Options, a duly executed Option Agreement (a “CMI Option
Agreement”) evidencing the grant to said holder, pursuant to the CMI Stock
Incentive Plan (as defined herein), of an option (each, a “CMI Option”) to
acquire one (1) share of CMI Common Stock for every one (1) share
of
Company Common Stock for which the Company Option is exercisable,
on
economic and contractual terms substantially and materially similar
to the
terms and conditions of said Company Option prior to such
conversion.
|
|
13.
|
Notice.
Notices hereunder shall be in writing and if to the Company shall
be
addressed to the Secretary of the Company at NaturalNano, Inc.,
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and if
to the
Option Holder shall be addressed to the Option Holder at his or
her
address as it appears on the Company’s
records.
|
|
14.
|
Successors
and Assigns. This Award 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.
|
|
15.
|
Grant/Exercise
Subject to Applicable Regulatory Approvals. Any grant of Options under
the Plan is specifically conditioned on, and subject to, any required
regulatory approvals. If necessary approvals for the grant or exercise
are
not obtained, the Options may be cancelled or rescinded, or they
may
expire, as determined by the Company in its sole and absolute discretion.
The Company may restrict the exercise of any Option if the Shares
issuable
pursuant to the Option have not yet been registered pursuant to
the
Securities Act of 1933, as amended; provided, however, this limitation
shall not apply during the six (6) months immediately prior to
the
Expiration Date or if the Option Holder agrees in writing that
the Shares
issuable upon the exercise will be restricted securities and bear
a
restrictive legend.
|
-
4
-
|
16.
|
Applicable
Laws and Consent to Jurisdiction. The validity, construction,
interpretation and enforceability of this Award 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 Award 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 Award 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:
|
___________________
|
NaturalNano,
Inc.
|
|
By:
____________________________
|
||
|
Chief
Executive Officer
|
||
|
Dated:
|
___________________
|
Option
Holder
|
|
|
_____________________________ |
-
5
-