DDS TECHNOLOGIES USA, INC.
Exhibit
10.2
DDS
TECHNOLOGIES USA, INC.
2003
STOCK OPTION PLAN
THIS
STOCK OPTION AGREEMENT, dated
as of March 29, 2005 (the “Agreement”), is made by and between DDS Technologies
USA, Inc., a Nevada corporation (the “Company”) and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, an
employee of the Company (the “Optionee”).
WHEREAS, the
Company has adopted the DDS Technologies USA, Inc. 2003 Stock Option Plan (the
“Plan”), providing for the grant to certain key employees, advisors, or
directors of the Company or a Subsidiary of the Company, of options to purchase
shares of common stock of the Company; and
WHEREAS, the
Board has determined that it would be to the advantage and best interest of the
Company and its shareholders to grant the option provided for herein to the
Optionee as an inducement to remain in the service of the Company or its
Subsidiaries and as an incentive for increased efforts during such service, and
has instructed the undersigned officer to execute and deliver this Agreement to
the Optionee.
NOW,
THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
agree as follows:
SECTION
1. GRANT
OF OPTION.
(a) Option. On the
terms and conditions set forth in this Agreement and the Plan, the Company
grants to the Optionee, on the Date of Grant, the option to purchase at the
Exercise Price the number of Shares set forth below. This option will be a
Non-Qualified Stock Option and not an Incentive Stock Option.
Number of
Shares Subject to Option: 400,000
Date of
Grant: March 29, 2005
Exercise
Price: $1.00
Type of
Option: x NQSO
(b) Stock
Plan. This
option is granted pursuant to the Plan, a copy of which the Optionee
acknowledges having received. The provisions of the Plan are incorporated into
this Agreement by this reference.
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SECTION
2. DEFINITIONS.
(a) “Board”
means the Board of Directors of the Company, as constituted from time to time,
or if a Committee has been appointed under Section 3(a) of the Plan, the
Committee.
(b) “Cause”
means “Cause” as defined in the Employment Agreement as of the Date of
Grant.
(c) “Change
in Control” means:
(i) the sale,
exchange, transfer or other disposition of 50% or more in value of the assets of
the Company to another Person or entity, except to an entity controlled directly
or indirectly by the Company; or
(ii) the
merger, consolidation or other reorganization of the Company in which the
Company is not the surviving entity and in which the historic shareholders of
the Company continue to own less than 50% of the outstanding securities of the
acquiror immediately following the transaction, or a plan of liquidation or
dissolution of the Company other than pursuant to bankruptcy or insolvency laws
is adopted.
Notwithstanding
the foregoing, a Change in Control will not be deemed to have occurred for
purposes of this Plan (1) in the event of a sale, exchange, transfer or other
disposition of substantially all of the assets of the Company to, or a merger,
consolidation or other reorganization involving the Company and the Optionee,
alone or with other officers of the Company, or any entity in which the Optionee
(alone or with other officers) has, directly or indirectly, at least a 25%
equity or ownership interest; or (2) in a transaction otherwise commonly
referred to as a “management leveraged buy-out.”
(d) “Code”
means the Internal Revenue Code of 1986, as amended.
(e) “Consultant”
means a person who performs bona fide services for the Company or a Subsidiary
as a consultant or advisor, excluding Employees and Directors.
(f) “Date of
Grant” means the date of grant of this option as specified in Section 1 of this
Agreement.
(g) “Director”
means a member of the Board.
(h) “Employee”
means any individual who is a common-law employee of the Company or a
Subsidiary.
(i) “Employment
Agreement” means, for any Optionee, an employment agreement between the Optionee
and the Company or any Subsidiary in effect at the time of the grant of an
Option under the Plan.
(j) “Exercise
Price” means the amount for which one Share may be purchased upon exercise of
this option, as specified in Section 1 of this Agreement.
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(k) “Good
Reason” means Good Reason as defined in the Employment Agreement as of the Date
of Grant.
(l) “ISO”
means an employee incentive stock option described in Section 422(b) of the
Code.
(m) “NQSO”
means a stock option not described in Section 422(b) of the Code.
(n) “Person”
means any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, or governmental body.
(o) “Purchase
Price” means the Exercise Price multiplied by the number of Shares with respect
to which this option is being exercised.
(p) “Securities
Act” means the Securities Act of 1933, as amended.
(q) “Service”
means service as an Employee, Consultant or Director.
(r) “Share”
means one share of Stock, issuable when this Option is exercised, as adjusted in
accordance with Section 8 of the Plan (if applicable).
(s) “Stock”
means the common stock of the Company.
(t) “Subsidiary”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain owns shares possessing 50% or more of
the total combined voting power of all classes of shares in one of the other
corporations in the chain. A corporation that attains the status of a Subsidiary
on a date after the adoption of the Plan will be considered a Subsidiary
commencing as of that date.
SECTION
3. RIGHT
TO EXERCISE.
(a) Exercisability. Subject
to subsection (b) below and the other conditions set forth in this Agreement and
Plan, the option may be exercised prior to its expiration in accordance with the
schedule set forth below.
(i) This
option may be exercised with respect to the fraction of the Shares subject to
this option, as set follows: options with respect to 100,000 shares shall be
exercisable immediately. Thereafter, options with respect to an additional
100,000 shares shall become exercisable on each of the first, second and third
anniversaries of the Date of Grant, provided that the Optionee is in Service on
each of those dates.
(ii) This
option shall become immediately fully exercisable in the event that the
Opitonee’s Service with the Company and its Subsidiaries is terminated by the
Company or a Subsidiary without Cause or by the Optionee for Good
Reason.
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(b) Shareholder
Approval. Any
other provision of this Agreement notwithstanding, no portion of this option
constituting an ISO is exercisable at any time prior to the approval of the Plan
by the shareholders of the Company.
(c) Partial
Exercise. At any
time before any exercisable portion of the option becomes unexercisable under
this Agreement, that portion may be exercised in whole or in part, except that
the Company is not required to issue fractional shares and the option may not be
exercised for less than 100 Shares unless the exercise is the full exercise of
the exercisable portion of the option.
SECTION
4. NO
TRANSFER OR ASSIGNMENT OF OPTION.
Except as
otherwise provided in this Agreement with respect to NQSOs only, this option and
the rights and privileges conferred by this Agreement may not be sold, pledged
or otherwise transferred (whether by operation of law or otherwise) and are not
subject to sale under execution, attachment, levy or similar process. The terms
of the Plan and this Agreement are binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
SECTION
5. EXERCISE
PROCEDURES.
(a) Notice
of Exercise. The
Optionee or the Optionee’s representative may exercise this option by giving
written notice to the Company in a form acceptable to the Company. The notice
must specify the election to exercise this option, the number of Shares for
which it is being exercised and the form and amount of payment. The notice must
be signed by the person exercising this option. If this option is exercised by
the representative of the Optionee, the notice must be accompanied by proof
(satisfactory to the Company) of the representative’s right to exercise this
option. The Optionee or the Optionee’s representative must deliver to the
Company, at the time of giving the notice, payment in a form permissible under
Section 6 for the full amount of the Purchase Price.
(b) Issuance
of Shares. After
receiving a proper notice of exercise and payment for the Shares, the Company
will issue a certificate or certificates for the Shares as to which this option
has been exercised.
(c) Withholding
Taxes. If the
Company determines that it is required to withhold any tax as a result of the
exercise of this option, the Optionee, as a condition to the exercise of this
option, must make arrangements satisfactory to the Company to enable it to
satisfy all withholding requirements. The Optionee must also make arrangements
satisfactory to the Company to enable it to satisfy any withholding requirements
that may arise in connection with the vesting or disposition of Shares purchased
by exercising this option.
SECTION
6. PAYMENT
FOR STOCK.
(a) Cash. All or
part of the Purchase Price may be paid in cash or cash equivalents.
(b) Surrender
of Stock. All or
any part of the Purchase Price may be paid by surrendering, or attesting to the
ownership of, Shares that are already owned by the Optionee. Those Shares must
be surrendered to the Company in good form for transfer and will be valued at
their Fair Market Value on the date when this option is exercised. The Optionee
may not surrender, or attest to the ownership of, Shares in payment of the
Purchase Price if that action would cause the Company to recognize compensation
expense (or additional compensation expense) with respect to this option for
financial reporting purposes.
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(c) Exercise/Sale
or Exercise/Pledge. If and
to the extent permitted by law and approved by the Committee, in the event that
generally accepted accounting principles require the Company to record the grant
of options as an expense, and if the Stock is publicly traded, all or part of
the Purchase Price and any withholding taxes may be paid as
follows:
(i) by the
delivery (on a form prescribed by the Company) of an irrevocable direction to a
securities broker approved by the Company to sell Shares and to deliver all or
part of the sales proceeds to the Company; or
(ii) by the
delivery (on a form prescribed by the Company) of an irrevocable direction to
pledge Shares to a securities broker or lender approved by the Company, as
security for a loan, and to deliver all or part of the loan proceeds to the
Company.
SECTION
7. TERM
AND EXPIRATION.
(a) Basic
Term. This
option will expire on the date that is 10 years after the Date of Grant (five
years after the Date of Grant if this option is designated as an ISO in this
Agreement and Section 4(b) of the Plan applies).
(b) Termination
of Service. If the
Optionee’s Service terminates then this option will expire in accordance with
the provisions contained in the Plan.
(c) Notice
Concerning ISO Treatment. If this
option is designated as an ISO in this Agreement, it ceases to qualify for
favorable tax treatment as an ISO to the extent it is exercised after the
Optionee has been on a leave of absence for more than 90 days, unless the
Optionee’s reemployment rights are guaranteed by statute or by
contract.
SECTION
8. LEGALITY
OF INITIAL ISSUANCE.
No Shares
will be issued upon the exercise of this option unless and until the Company has
determined that:
(a) It and
the Optionee have taken any actions required to register the Shares under the
Securities Act or to perfect an exemption from the registration requirements
thereof,
(b) Any
applicable listing requirement of any stock exchange or other securities market
on which Stock is listed has been satisfied; and
(c) Any other
applicable provision of state or federal law has been satisfied.
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SECTION
9. NO
REGISTRATION RIGHTS.
The
Company may, but is not obligated to, register or qualify the sale of Shares
under the Securities Act or any other applicable law. The Company is not
obligated to take any affirmative action to cause the sale of Shares under this
Agreement to comply with any law.
SECTION
10. RESTRICTIONS
ON TRANSFER.
(a) Securities
Law Restrictions.
Regardless of whether the offering and sale of Shares under this Agreement have
been registered under the Securities Act or have been registered or qualified
under the securities laws of any state, the Company at its discretion may impose
restrictions on the sale, pledge or other transfer of the Shares (including the
placement of appropriate legends on stock certificates or the imposition of
stop-transfer instructions) if, in the judgment of the Company, those
restrictions are necessary or desirable to achieve compliance with the
Securities Act, the securities laws of any state or any other law. Any
determination by the Company and its counsel in connection with any of the
matters set forth in this Section 10 is conclusive and binding on the Optionee
and all other persons.
(b) Investment
Intent at Agreement. The
Optionee represents and agrees that the Shares to be acquired upon exercising
this option will be acquired for investment, and not with a view to the sale or
distribution thereof.
(c) Investment
Intent at Exercise. If the
sale of Shares under this Agreement is not registered under the Securities Act
but an exemption is available that requires an investment representation or
other representation, the Optionee will represent and agree at the time of
exercise that the Shares being acquired upon exercising this option are being
acquired for investment, and not with a view to their sale or distribution, and
will make any other representations that are deemed necessary or appropriate by
the Company and its counsel.
(d) Legends. All
certificates evidencing Shares purchased under this Agreement in an unregistered
transaction will bear the following legend (and such other restrictive legends
as are required or deemed advisable under the provisions of any applicable
law):
THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
(e) Removal
of Legends. If, in
the opinion of the Company and its counsel, any legend placed on a stock
certificate representing Shares sold under this agreement is no longer required,
the holder of the certificate will be entitled to exchange the certificate for a
certificate representing the same number of Shares but without the
legend.
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(f) Administration. Any
good faith determination by the Company and its counsel in connection with any
of the matters set forth in this Section 10 is conclusive and binding on the
Optionee and all other persons.
SECTION
11. CHANGE
OF CONTROL.
Notwithstanding
Section 6(g) of the Plan, the exercisability of the option granted pursuant to
this Agreement shall not accelerate as a result of a Change in
Control.
SECTION
12. ADJUSTMENT
OF SHARES.
In the
event of any transaction described in Section 8(a) of the Plan, the terms of
this option (including, without limitation, the number and kind of Shares
subject to this option and the Exercise Price) will be adjusted or exchanged as
set forth in Section 8(a) of the Plan. In the event that the Company is a party
to a merger, consolidation or other reorganization, this option will be subject
to the agreement of merger, consolidation or other reorganization, as provided
in Section 8(b) of the Plan.
SECTION
13. MISCELLANEOUS
PROVISIONS.
(a) Income
Tax Consequences. The
Optionee acknowledges that the Company has advised him or her that there are
income tax consequences related to the purchase of Shares by the Optionee and
that the Company has recommended that he or she obtain independent advice on the
tax consequences of the purchase of the Shares. The Optionee hereby releases and
discharges the Company and its affiliates, directors, officers and agents from
any and all responsibility or liability with respect to any tax consequences to
the Optionee of his or her purchase or sale of the Shares of the Company
purchased by the Optionee under the Plan or otherwise.
(b) Rights
as a Shareholder. Neither
the Optionee nor the Optionee’s representative has any rights as a shareholder
with respect to any Shares subject to this option prior to the date of issuance
to the Optionee or the Optionee’s representative of a certificate or
certificates for the Shares.
(c) No
Retention Rights. Nothing
in this Agreement or in the Plan confers upon the Optionee any right to continue
in Service for any period of time or interferes with or otherwise restricts in
any way the rights of the Company (or any Subsidiary) or of the Optionee, which
rights are hereby expressly reserved by each, to terminate his or her Service at
any time and for any reason.
(d) Notice. Any
notice required by the terms of this Agreement must be given in writing and will
be deemed effective upon personal delivery, upon deposit (with fees prepaid)
with nationally recognized overnight delivery service, or on the fifth business
day following deposit (with first class postage and fees prepaid) with the
United States Postal Service. Notice must be addressed to the Company at its
principal executive office and to the Optionee at the address that he or she
most recently provided to the Company.
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(e) Entire
Agreement. This
Agreement and the Plan constitute the entire contract between the parties hereto
with regard to the grant and exercise of the option. They supersede any other
agreements, representations or understandings (whether oral or written and
whether express or implied) that relate to the option.
(f) Choice
of Law. This
Agreement is governed by, and construed in accordance with, the laws in force in
the State of Nevada.
IN
WITNESS WHEREOF, the
parties have executed this Agreement.
|
OPTIONEE:
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Signature
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Name
of Optionee |
COMPANY:
DDS
TECHNOLOGIES USA, INC.
By: /s/
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Chairman
Compensation Committee |
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APPENDIX
A
DDS
TECHNOLOGIES USA, INC. 2003 STOCK OPTION PLAN
NOTICE
OF STOCK OPTION EXERCISE
OPTIONEE
INFORMATION:
Name:
Social
Security Number:
Address:
OPTION
INFORMATION
Date of
Grant: March 29,
2005 Type of
Option: x NQSO
__ NQSO
Exercise
Price per Share: $1.00
Total
number of common shares of DDS Technologies USA, Inc. (the “Company”) covered by
option: 400,000
Shares
EXERCISE
INFORMATION:
Number of
common shares of the Company for which option is being exercised
now: _
. (These
shares are referred to below as the “Purchased Shares.”)
Total
Exercise Price for the Purchased Shares: $
Form of
payment enclosed:
Check for
$____________, made payable to “DDS Technologies USA, Inc.”
Other:
The
certificate for the Purchased Shares should be sent to the following
address:
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Optionee’s
signature:
____________________________
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