EXHIBIT 10.9
STOCK OPTION GRANT NOTICE AND
STOCK OPTION AGREEMENT
Environmental Service Professionals, Inc., a Nevada corporation (the
"Company"), grants to the holder listed below ("Participant") an option to
purchase the number of shares of the Company's common stock, par value $0.001
("Shares") set forth below (the "Option") under its 2008 ESP Stock and Incentive
Plan (the "Plan"). The Option is subject to all of the terms and conditions set
forth in this Notice and in the Stock Option Agreement attached as Exhibit A
(the "Stock Option Agreement") and the Plan, which are incorporated herein by
reference. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Grant Notice and the Stock Option
Agreement.
Participant: ________________________________
Grant Date: ________________________________
Total Number of Shares
Subject to the Option: ________________________________
Exercise Price per Share: ________________________________
Total Exercise Price: ________________________________
Expiration Date: ________________________________
Type of Option: Incentive Stock Option /
Non-Qualified Stock Option
Vesting Schedule: ________________________________
________________________________
________________________________
By signing below, Participant agrees to be bound by the terms and
conditions of the Plan, the Stock Option Agreement and this Grant Notice.
Participant has reviewed the Stock Option Agreement, the Plan and this Grant
Notice in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Grant Notice and fully understands all provisions of
this Grant Notice, the Stock Option Agreement and the Plan. Participant hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Administrator of the Plan upon any questions arising
under the Plan or relating to the Option.
Environmental Service Professionals, Inc.
By:
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Name/Title: Participant
EXHIBIT A
To Stock Option Grant Notice
To
Stock Option Agreement
The Company has granted to Participant an option under the Company's
2008 ESP Stock and Incentive Plan (the "Plan") to purchase the number of Shares
indicated in the attached Stock Option Grant Notice (the "Grant Notice").
ARTICLE 1
General
1.1 DEFINED TERMS. Capitalized terms not specifically defined herein
shall have the meanings specified in the Plan and the Grant Notice.
1.2 INCORPORATION OF TERMS OF PLAN. The Option is subject to the terms
and conditions of the Plan which are incorporated herein by reference.
ARTICLE 2
GRANT OF OPTION
2.1 GRANT OF OPTION. In consideration of Participant's past and/or
continued employment with or service to the Company or an Affiliate and for
other good and valuable consideration, effective as of the Grant Date set forth
in the Grant Notice (the "Grant Date"), the Company irrevocably grants to
Participant the Option to purchase any part or all of an aggregate of the number
of Shares set forth in the Grant Notice, upon the terms and conditions set forth
in the Plan and this Agreement. Unless designated as a Non-Qualified Stock
Option in the Grant Notice, the Option shall be an Incentive Stock Option to the
maximum extent permitted by law.
2.2 EXERCISE PRICE. The exercise price of the Shares subject to the
Option shall be as set forth in the Grant Notice, without commission or other
charge; provided, however, that the price per share of the Shares subject to the
Option shall not be less than 100% of the Fair Market Value of a Share on the
Grant Date. Notwithstanding the foregoing, if this Option is designated as an
Incentive Stock Option and Participant owns (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any "subsidiary corporation" of the Company
or any "parent corporation" of the Company (each within the meaning of Section
424 of the Code), the price per share of the Shares subject to the Option shall
not be less than 110% of the Fair Market Value of a Share on the Grant Date.
2.3 CONSIDERATION TO THE COMPANY. In consideration of the grant of the
Option by the Company, Participant agrees to render faithful and efficient
services to the Company and its Affiliates. Nothing in the Plan or this
Agreement shall confer upon Participant any right to continue in the employ or
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service of the Company or any Affiliate or shall interfere with or restrict in
any way the rights of the Company and its Affiliates, which rights are hereby
expressly reserved, to discharge or terminate the services of Participant at any
time for any reason whatsoever, with or without Cause (as defined in the Plan),
except to the extent expressly provided otherwise in a written agreement between
the Company or its Affiliates and a Participant.
ARTICLE 3
PERIOD OF EXERCISABILITY
3.1 COMMENCEMENT OF EXERCISABILITY.
(a) Subject to Sections 3.3, 5.7, 5.9, and 5.14, the Option
shall become vested and exercisable in such amounts and at such times
as are set forth in the Grant Notice.
(b) No portion of the Option that has not become vested and
exercisable at the date of Participant's Termination of Service shall
thereafter become vested and exercisable, except as may be otherwise
provided by the Administrator or as set forth in a written agreement
between the Company and Participant.
3.2 DURATION OF EXERCISABILITY. The installments provided for in the
vesting schedule set forth in the Grant Notice are cumulative. Each such
installment which becomes vested and exercisable pursuant to the vesting
schedule set forth in the Grant Notice shall remain vested and exercisable until
it becomes unexercisable under Section 3.3.
3.3 EXPIRATION OF OPTION. The Option may not be exercised to any extent
by anyone after the first to occur of the following events:
(a) The expiration of ten years from the Grant Date;
(b) If this Option is designated as an Incentive Stock Option
and Participant owned (within the meaning of Section 424(d) of the
Code), at the time the Option was granted, more than 10% of the total
combined voting power of all classes of stock of the Company or any
"subsidiary corporation" of the Company or any "parent corporation" of
the Company (each within the meaning of Section 424 of the Code), the
expiration of five years from the Grant Date;
(c) The expiration of three months from the date of
Participant's Termination of Service, unless such termination occurs by
reason of Participant's death, Disability or Participant's discharge
for Cause;
(d) The expiration of one year from the date of Participant's
Termination of Service by reason of Participant's death or Disability;
or
(e) The date of Participant's Termination of Service by the
Company or any of its Affiliates by reason of Participant's discharge
for Cause.
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Participant acknowledges that an Incentive Stock Option exercised more
than three months after Participant's Termination of Employment, other than by
reason of death or Disability, will be taxed as a Non-Qualified Stock Option.
3.4 SPECIAL TAX CONSEQUENCES. Participant acknowledges that, to the
extent that the aggregate Fair Market Value (determined as of the time the
Option is granted) of all Shares with respect to which Incentive Stock Options,
including the Option, are exercisable for the first time by Participant in any
calendar year exceeds $100,000, the Option and such other options shall be
Non-Qualified Stock Options to the extent necessary to comply with the
limitations imposed by Section 422(d) of the Code. Participant further
acknowledges that the rule set forth in the preceding sentence shall be applied
by taking the Option and other Incentive Stock Options into account in the order
in which they were granted, as determined under Section 422(d) of the Code and
the Treasury Regulations thereunder.
ARTICLE 4
EXERCISE OF OPTION
4.1 PERSON ELIGIBLE TO EXERCISE. Except as provided in Sections 5.2(b)
and 5.2(c), during the lifetime of Participant, only Participant may exercise
the Option or any portion thereof. After the death of Participant, any
exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by Participant's personal
representative or by any person empowered to do so under the deceased
Participant's will or under the then applicable laws of descent and
distribution.
4.2 PARTIAL EXERCISE. Any exercisable portion of the Option or the
entire Option, if then wholly exercisable, may be exercised in whole or in part
at any time prior to the time when the Option or portion thereof becomes
unexercisable under Section 3.3.
4.3 MANNER OF EXERCISE. The Option, or any exercisable portion thereof,
may be exercised solely by delivery to the Secretary of the Company or the
Secretary's office of all of the following prior to the time when the Option or
such portion thereof becomes unexercisable under Section 3.3:
(a) An Exercise Notice electronically or in writing signed by
Participant or any other person then entitled to exercise the Option or
portion thereof, stating that the Option or portion thereof is thereby
exercised, such notice complying with all applicable rules established
by the Administrator. Such notice shall be substantially in the form
attached as Exhibit B to the Grant Notice (or such other form as is
prescribed by the Administrator);
(b) The receipt by the Company of full payment for the Shares
with respect to which the Option or portion thereof is exercised,
including payment of any applicable withholding tax, which may be in
one or more of the forms of consideration permitted under Section 4.4;
(c) A bona fide written representation and agreement, in such
form as is prescribed by the Administrator, signed by Participant or
the other person then entitled to exercise such Option or portion
thereof, stating that the Shares are being acquired for Participant's
own account, for investment and without any present intention of
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distributing or reselling said Shares or any of them except as may be
permitted under the Securities Act of 1933 (the "Securities Act") and
then applicable rules and regulations thereunder and any other
applicable law, and that Participant or other person then entitled to
exercise such Option or portion thereof will indemnify the Company
against and hold it free and harmless from any loss, damage, expense or
liability resulting to the Company if any sale or distribution of the
Shares by such person is contrary to the representation and agreement
referred to above. The Administrator may, in its absolute discretion,
take whatever additional actions it deems appropriate to ensure the
observance and performance of such representation and agreement and to
effect compliance with the Securities Act and any other federal or
state securities laws or regulations and any other applicable law.
Without limiting the generality of the foregoing, the Administrator may
require an opinion of counsel acceptable to it to the effect that any
subsequent transfer of Shares acquired on an Option exercise does not
violate the Securities Act, and may issue stop-transfer orders covering
such Shares. Share certificates evidencing Shares issued on exercise of
the Option shall bear an appropriate legend referring to the provisions
of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the Shares to be
issued pursuant to such exercise have been registered under the
Securities Act, and such registration is then effective in respect of
such Shares; and
(d) In the event the Option or portion thereof shall be
exercised under Section 4.1 by any person or persons other than
Participant, appropriate proof of the right of such person or persons
to exercise the Option.
4.4 METHOD OF PAYMENT. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Participant:
(a) by cash, check, or other cash equivalent approved by the
Administrator;
(b) by the tendering of other Shares to the Company or the
attestation to the ownership of the Shares that otherwise would be
tendered to the Company in exchange for the Company's reducing the
number of Shares issuable upon the exercise of the Option. Shares
tendered or attested to in exchange for Shares issued under the Plan
must be held by the Service Provider for at least six months prior to
their tender or their attestation to the Company and may not be shares
of Restricted Stock at the time they are tendered or attested to. The
Administrator shall determine acceptable methods for tendering or
attesting to Shares to exercise an Option under the Plan and may impose
such limitations and prohibitions on the use of Shares to exercise
Options as it deems appropriate. For purposes of determining the amount
of the Option price satisfied by tendering or attesting to Shares, such
Shares shall be valued at their Fair Market Value on the date of tender
or attestation, as applicable;
(c) in a broker-assisted cashless exercise by delivering
irrevocable instructions to the Company to deliver the Shares issuable
upon exercise of the Option promptly to a broker (acceptable to the
Company) for the Participant's account, and by delivering to the broker
irrevocable instructions to sell Shares sufficient to pay the exercise
price and upon such sale to deliver the exercise price to the Company.
The Participant may use this form of exercise only if the exercise
would not subject the Participant to liability under Section 16(b) of
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the Exchange Act or would be exempt pursuant to Rule 16b-3 promulgated
under the Exchange Act or any other exemption from such liability. The
Company shall deliver an acknowledgement to the broker upon receipt of
instructions to deliver the Shares, and the Company shall deliver the
Shares to such broker upon the settlement date. Upon receipt of the
Shares from the Company, the broker shall deliver to the Company cash
sale proceeds sufficient to cover the exercise price and any applicable
withholding taxes due. Shares acquired by a cashless exercise shall be
deemed to have a Fair Market Value on the Option exercise date equal to
the gross sales price at which the broker sold the Shares to pay the
exercise price; or
(d) by using such other methods of payment that the
Administrator, at its discretion, deems appropriate from time to time.
4.5 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES. The Shares
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued Shares or issued Shares which have
then been reacquired by the Company. Such Shares shall be fully paid and
nonassessable. The Company shall not be required to issue or deliver any Shares
purchased upon the exercise of the Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such Shares to listing on all stock
exchanges on which such Shares are then listed;
(b) The completion of any registration or other qualification
of such Shares under any state or federal law or under rulings or
regulations of the Securities and Exchange Commission or of any other
governmental regulatory body, which the Administrator shall, in its
absolute discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its absolute discretion,
determine to be necessary or advisable;
(d) The receipt by the Company of full payment for such
Shares, including payment of any applicable withholding tax, which may
be in one or more of the forms of consideration permitted under Section
4.4; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator may from time to time
establish for reasons of administrative convenience.
4.6 RIGHTS AS STOCKHOLDER. The holder of the Option shall not be, nor
have any of the rights or privileges of, a stockholder of the Company in respect
of any Shares purchasable upon the exercise of any part of the Option unless and
until such Shares shall have been issued by the Company to such holder (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 2.3 of the Plan.
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ARTICLE 5
OTHER PROVISIONS
5.1 ADMINISTRATION. The Administrator shall have the power to interpret
the Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to
interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Administrator in good faith shall
be final and binding upon Participant, the Company and all other interested
persons. No member of the Administrator shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan, this Agreement or the Option.
5.2 OPTION NOT TRANSFERABLE.
(a) Subject to Section 5.2(b), the Option may not be sold,
pledged, assigned or transferred in any manner other than by will or
the laws of descent and distribution, unless and until the Shares
underlying the Option have been issued, and all restrictions applicable
to such Shares have lapsed. Neither the Option nor any interest or
right therein shall be liable for the debts, contracts or engagements
of Participant or his or her successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy,
attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be
null and void and of no effect, except to the extent that such
disposition is permitted by the preceding sentence.
(b) Notwithstanding any other provision in this Agreement,
with the consent of the Administrator and to the extent the Option is
not intended to qualify as an Incentive Stock Option, the Option may be
transferred to one or more members of the Participant's immediate
family, to trusts for the benefit of such family members, or to
partnerships in which such family members are the only partners, or to
limited liability companies in which such family members are the only
members (each a "Permitted Transferee"), provided that the Permitted
Transferee agrees in writing with the Company to be bound by all of the
terms and conditions of the Plan and this Option Agreement.
(c) Unless transferred to a Permitted Transferee in accordance
with Section 5.2(b), during the lifetime of Participant, only the
Participant may exercise the Option or any portion thereof. Subject to
such conditions and procedures as the Administrator may require, a
Permitted Transferee may exercise the Option or any portion thereof
during Participant's lifetime. After the death of Participant, any
exercisable portion of the Option may, prior to the time when the
Option becomes unexercisable under Section 3.3, be exercised by
Participant's personal representative or by any person empowered to do
so under the deceased Participant's will or under the then applicable
laws of descent and distribution.
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5.3 RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) The share certificate or certificates evidencing the
Shares purchased hereunder shall be endorsed with any legends that may
be required by state or federal securities laws.
(b) Participant agrees that, in order to ensure compliance
with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
(c) Company shall not be required: (i) to transfer on its
books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement, or (ii) to treat
as owner of such Shares or to accord the right to vote or pay dividends
to any purchaser or other transferee to whom such Shares shall have
been so transferred.
5.4 SHARES TO BE RESERVED. The Company shall at all times during the
term of the Option reserve and keep available such number of Shares as will be
sufficient to satisfy the requirements of this Agreement.
5.5 NOTICES. Any notice to be given under the terms of this Agreement
to the Company shall be addressed to the Company in care of the Secretary of the
Company at the address given beneath the signature of the Company's authorized
officer on the Grant Notice, and any notice to be given to Participant shall be
addressed to Participant at the address given beneath Participant's signature on
the Grant Notice. By a notice given pursuant to this Section 5.5, either party
may hereafter designate a different address for notices to be given to that
party.
5.6 TITLES. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.
5.7 STOCKHOLDER APPROVAL. The Plan will be submitted for approval by
the Company's stockholders within twelve months after the date the Plan was
initially adopted by the Board. The Option may not be exercised to any extent by
anyone prior to the time when the Plan is approved by the stockholders, and if
such approval has not been obtained by the end of said twelve month period, the
Option shall thereupon be canceled and become null and void.
5.8 GOVERNING LAW; SEVERABILITY. This Agreement shall be administered,
interpreted and enforced under the laws of the State of Nevada, without regard
to the conflicts of law principles thereof. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
5.9 CONFORMITY TO SECURITIES LAWS. Participant acknowledges that the
Plan is intended to conform to the extent necessary with all provisions of the
Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, and state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Option is granted and may be
exercised, only in such a manner as to conform to such laws, rules and
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regulations. To the extent permitted by applicable law, the Plan and this
Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
5.10 AMENDMENTS. This Agreement may not be modified, amended or
terminated except by an instrument in writing, signed by Participant or such
other person as may be permitted to exercise the Option pursuant to Section 4.1
and by a duly authorized representative of the Company.
5.11 SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth in Section 5.2, this Agreement
shall be binding upon Participant and his or her heirs, executors,
administrators, successors and assigns.
5.12 NOTIFICATION OF DISPOSITION. If this Option is designated as an
Incentive Stock Option, Participant shall give prompt notice to the Company of
any disposition or other transfer of any Shares acquired under this Agreement if
such disposition or transfer is made (a) within two years from the Grant Date
with respect to such Shares or (b) within one year after the transfer of such
Shares to him. Such notice shall specify the date of such disposition or other
transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by Participant in such disposition or other
transfer.
5.13 LIMITATIONS APPLICABLE TO SECTION 16 PERSONS. Notwithstanding any
other provision of the Plan or this Agreement, if Participant is subject to
Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, this Agreement shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.
5.14 CHANGE OF CONTROL. In the event of a Change of Control (as defined
in the Plan), the Company, the Board, or the board of directors of any
corporation assuming the obligations of the Company may, in its discretion, take
any one or more of the following actions:
(a) accelerate the vesting of all or part of the Option;
(b) provide that the Option shall be assumed, or an equivalent
option shall be substituted, by the acquiring or succeeding corporation
(or its Affiliate);
(c) upon written notice to the Participant, provide that any
unexercised portion of the Option will terminate immediately prior to
the consummation of the Change of Control, unless exercised by the
Participant within a specified period following the date of such
notice;
(d) terminate the Option in exchange for a cash payment equal
to the excess of the Fair Market Value of the Shares subject to the
Option (to the extent then exercisable) over the exercise price
thereof;
(e) terminate the Option in exchange for the right to
participate in any stock option or other employee benefit plan of any
successor corporation (giving proper credit for the portion of the
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Option, which has otherwise vested and become exercisable prior to any
such Change of Control; or
(f) in the event of a merger under the terms of which holders
of Shares will receive upon consummation thereof a cash payment for
each Share surrendered in the merger (the "Merger Price"), make or
provide for a cash payment to the Participant equal to the difference
between (x) the Merger Price times the number of Shares subject to the
Option (to the extent then exercisable at prices not in excess of the
Merger Price) and (y) the aggregate exercise price of the Option in
exchange for the termination of the Option.
5.15 ENTIRE AGREEMENT. The Plan and this Agreement (including all
Exhibits hereto) constitute the entire agreement of the parties and supersede in
their entirety all prior undertakings and agreements of the Company and
Participant with respect to the subject matter hereof.
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EXHIBIT B
To Stock Option Grant Notice
Form of Exercise Notice
Effective as of today, _____________, 2008, the undersigned
("Participant") hereby elects to exercise Participant's option to purchase the
number of shares of common stock specified below (the "Shares") of Environmental
Service Professionals, Inc., a Nevada corporation (the "Company"), under and
pursuant to the 2008 ESP Stock and Incentive Plan (the "Plan") and the Stock
Option Grant Notice and Stock Option Agreement dated as of (the "Option
Agreement"). Capitalized terms used herein without definition shall have the
meanings given in the Plan and, if not defined in the Plan, the Option
Agreement.
Grant Date:
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Number of Shares as to which Option is Exercised:
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Exercise Price per Share:
------------------
Total Exercise Price:
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Certificate to be issued in name of:
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Payment delivered: $
------------------
(Representing herewith: the full exercise price for
the Shares, as well as any applicable withholding tax)
Form of Payment:
------------------
(Please Specify)
Type of Option: [ ] Incentive Stock Option [ ] Non-Qualified Stock Option
Participant acknowledges that Participant has received, read and
understood the Plan and the Option Agreement. Participant agrees to abide by and
be bound by their terms and conditions. Participant understands that Participant
may suffer adverse tax consequences as a result of Participant's purchase or
disposition of the Shares. Participant represents that Participant has consulted
with any tax consultants Participant deems advisable in connection with the
purchase or disposition of the Shares and that Participant is not relying on the
Company for any tax advice. The Plan and Option Agreement are incorporated
herein by reference. This Agreement, the Plan and the Option Agreement
constitute the entire agreement of the parties and supersede in their entirety
all prior undertakings and agreements of the Company and Participant with
respect to the subject matter hereof.
Participant Accepted by
Environmental Service Professionals, Inc.
Sign: __________________________ By: _____________________________
Print: __________________________ Name/Title: