STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into
effective as of October 10, 2000 (the "Grant Date"), by Volu-Sol, Inc., a Utah
corporation (the "Company") and David G. Derrick (the "Holder").
RECITALS
A. The Company has adopted the Volu-Sol, Inc. 1997 Transition Plan (the
"Plan"), a copy of which has been provided to the Holder (capitalized terms that
are used but not defined in this Agreement will have the meanings given those
terms in the Plan).
B. The Holder is an employee of the Company or one of its Affiliates (as
defined in the Plan), and has been designated by the Administrative Committee to
receive a stock option under the Plan.
NOW, THEREFORE, the Company and the Holder covenant and agree as follows:
1. GRANT OF THE OPTION. The Company hereby grants to the Holder a stock
option (the "Option") to acquire from the Company Five Hundred Thousand
(500,000) shares of the Common Stock, par value $.0001, of the Company (the
"Common Stock"), at the price of $1.00 per share (the "Option Price"). The
Option is not intended to qualify as an "incentive stock option", as that term
is defined in Section 422 of the Internal Revenue Code of 1986, as amended.
2. TERM OF THE OPTION. Unless earlier terminated in accordance with the
provisions of the Plan, the Option will terminate on the earliest to occur of
(a) the expiration of Ten (10) years from the Grant Date; (b) the expiration of
ninety (90) days following termination of the Holder's employment with the
Company for any reason other than death, disability or cause; (c) the expiration
of one (1) year following termination of the Holder's employment with the
Company on account of death or disability; and (d) the date of termination of
the Holder's employment with the Company for cause.
3. VESTING. This Option may be exercised at any time and from time to time
in accordance with its terms beginning on the date of grant and ending at
midnight (Salt Lake City, Utah time) on October 9, 2005.
4. OTHER LIMITATIONS OF THE OPTION. The Option is subject to all of the
provisions of the Plan, which permits adjustments to the Option upon the
occurrence of certain corporate events such as stock dividends, extraordinary
cash dividends, reclassifications, recapitalizations, reorganizations,
split-ups, spin-offs, combinations, exchanges of shares, and warrants or rights
offerings and which applies in the event of an Approved Transaction or Control
Purchase.
5. EXERCISE OF THE OPTION. To exercise the Option, the Holder must do the
following:
(a) deliver to the Company a written notice, in the form
attached to this Agreement as Exhibit A, specifying the number of
shares of Common Stock for which the Option is being exercised;
(b) surrender this Agreement to the Company;
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(c) tender payment of the aggregate Option Price for the
shares for which the Option is being exercised, which payment may be
made (i) in cash or by check; or (ii) by such other means as the
Administrative Committee, in its sole discretion, shall permit at the
time of exercise;
(d) pay, or make arrangements satisfactory to the
Administrative Committee for payment to the Company of all federal,
state and local taxes, if any, required to be withheld by the Company
in connections with the exercise of the Option; and
(e) execute and deliver to the Company the documents required
by the Plan and any other documents required from time to time by the
Administrative Committee in order to promote compliance with applicable
laws, rules and regulations.
6. DELIVERY OF SHARE CERTIFICATE. As soon as practicable after the Option
has been duly exercised, the Company will deliver to the Holder a certificate
for the shares of Common Stock for which the Option was exercised. Unless the
Option has expired or been exercised in full, the Company and the Holder agree
to execute a new Stock Option Agreement, covering the remaining shares of Common
Stock that may be acquired upon exercise of the Option, which will be identical
to this Agreement except as to the number of shares of Common Stock subject
thereto. In lieu of replacing this Agreement in such manner, the Company may
affix to this Agreement an appropriate notation indicating the number of shares
for which the Option was exercised and return this Agreement to the Holder.
7. NONTRANSFERABILITY. The Option is not transferable other than by will or
the laws of descent and distribution, and the Option may be exercised during the
lifetime of the Holder only by the Holder or the Holder's court appointed legal
representative.
8. WARRANTIES AND REPRESENTATIONS OF THE HOLDER. By executing this
Agreement, the Holder accepts the Option, acknowledges receipt of a copy of the
Plan and the Prospectus, and agrees to comply with all of the provisions of this
Agreement and the Plan.
9. RIGHTS OF THE SHAREHOLDER. The Holder will have no rights as a
shareholder of the Company on account of the Option or on account of shares of
Common Stock that will be acquired upon exercise of the Option (but with respect
to which no certificates have been issued).
10. TAX WITHHOLDING. The Holder agrees to pay, or to make arrangements
satisfactory to the Administrative Committee for payment to the Company of, all
federal, state and local income and employment taxes, if any, required to be
withheld by the Company in connection with the exercise of the Option or any
sale, transfer or other disposition of any shares of Common Stock acquired upon
exercise of the Option. If the Holder fails to do so, then the Holder hereby
authorizes the Company to deduct all or any portion of such taxes from any
payment of any kind otherwise due to the Holder.
11. FURTHER ASSURANCES. The Holder agrees from time to time to execute such
additional documents as the Company may reasonably require to effectuate the
purposes of the Plan and this Agreement.
12. BINDING EFFECT. This Agreement shall be binding upon the Holder and the
Holder's heirs, successors and assigns.
13. ENTIRE AGREEMENT; MODIFICATIONS. This agreement, together with the
Plan and agreements referenced in this Agreement and/or the Plan, constitutes
the entire agreement and understanding between the Company and the Holder
regarding the subject matter hereof. Except as otherwise provided in the Plan,
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no modification of the Option or this Agreement, or waiver of any provision of
this Agreement or the Plan, shall be valid unless in writing and duly executed
by the Company and the Holder. The failure of any party to enforce any of that
party's rights against the other party for breach of any of the terms of this
Agreement shall not be construed as a waiver of such rights as to any continued
or subsequent breach.
14. COST OF LITIGATION. In any action at law or in equity to enforce any of
the provisions or rights under this Agreement, the unsuccessful party to such
litigation, as determined by the court in a final judgment or decree, pay the
successful party or parties all costs, expenses and reasonable attorneys' fees
incurred by the successful party or parties (including without limitation costs,
expenses and fees in any appellate proceedings), and if the successful party
recovers judgment in any such action or proceeding, such costs, expenses and
attorney's fees shall be included as part of the judgment.
15. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Utah.
DATED:
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VOLU-SOL, INC.
By:
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Its:
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FORM OF EXERCISE OF OPTION
To: Volu-Sol, Inc.
5094 West 2100 South
Salt Lake City, UT 84120
The undersigned holds Option Number NQ-___ (the "Option"), represented by a
Stock Option Agreement dated effective as of ____________ (the "Agreement"),
granted to the undersigned pursuant to the Volu-Sol, Inc. 1997 Transition Plan
(the "Plan"). The undersigned hereby exercises the Option and elects to purchase
______________ shares (the "Shares") of Common Stock of Volu-Sol, Inc. (the
"Company") pursuant to the Option. This notice is accompanied by full payment of
the Option Price of $______ per share for the Shares in cash or by check or in
another manner permitted by Section 5(c) of the Agreement. The undersigned has
also paid, or made arrangements satisfactory to the Administrative Committee
administering the Plan for payment of, all federal, state and local taxes, if
any, required to be withheld by the Company in connection with the exercise of
the Option.
Date: _____________________
SIGNATURE OF HOLDER
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