Exhibit 10.08
The stock Options represented hereby and the Common Stock underlying such
Options have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), nor under any other state securities law or regulation
and are subject to substantial restrictions on transferability by operation of
the Securities Act and other applicable state securities laws and regulations.
MID-POWER SERVICE CORPORATION
NOTICE OF GRANT
MID-POWER SERVICE CORPORATION, a Nevada corporation (the "Company"), is
pleased to grant to the Optionee named below, the following Options to purchase
Shares of its common stock, par value $0.001 per Share ("Common Stock"), under
its 2002 Stock Option and Purchase Rights Plan (the "Plan") and subject to the
provisions of the Plan and the Stock Option Agreement:
Name of Optionee: ____________________________________
Address: ____________________________________
Type of Option: [ ] Incentive Stock Option
[ ] Nonstatutory Option (not an ISO)
Date of Grant: ____________________________________
Number of Shares of Common Stock
Purchasable under this Option:
Exercise Price: $_____ per Share
Expiration Date: ____________________________________
Vesting Schedule: One half of the shares granted in
this Option shall vest upon
execution of the Stock Option
Agreement. The remaining half shall
vest and be fully exercisable on
January 1, 2003.
The Plan may be inspected at the offices of the Secretary of the
Company. A copy of the Plan will be provided to the Optionee upon request.
STOCK OPTION AGREEMENT
Unless otherwise defined herein, capitalized terms shall have the
meanings given in the Plan. References herein to "you" or "your" shall refer to
Optionee.
1. Options. The Company hereby grants to Optionee the right and option
to purchase up to the number of Shares of Common Stock specified above, at the
Exercise Price specified above, subject to the conditions and limitations set
forth herein (the "Options").
2. Vesting Dates. The Options shall not be exercisable until on or
after their respective Vesting Dates. The Options shall partially vest in
periodic installments on the Vesting Dates; provided, as a condition of vesting,
that the Optionee shall have been in the Continuous Service of the Company at
all times after the Date of Grant through and including each such Vesting Date.
If this is an Incentive Stock Option, the exercise price times the number of
Shares exercisable for the first time by Optionee in any calendar year as
Incentive Stock Options shall not exceed $100,000, and any Options first
becoming exercisable in any calendar year in excess of such amount shall not be
treated as Incentive Stock Options but as Nonstatutory Options.
3. Number of Shares and Exercise Price. The number of Shares that
Optionee may purchase upon exercise of the Option (the "Option Shares") and the
Exercise Price may be adjusted from time to time for Capitalization Adjustments,
as provided in the Plan.
4. Method of Payment. Payment of the Exercise Price is due in full upon
exercise of all or any part of the Options. Optionee may elect to make payment
of the Exercise Price in cash or by check or in any other manner permitted by
the Administrator under the Plan. As soon as practicable after receipt by the
Company of such notice and of payment in full of the Option price of all the
Shares of Common Stock with respect to which the Option has been exercised, a
certificate or certificates representing such Shares of Common Stock having been
paid for shall be issued in the name of the Optionee, or, if the Optionee shall
so request in the notice exercising the Option, in the name of the Optionee and
another person jointly, with right of survivorship, and shall be delivered to
the Optionee. If this Option is not exercised with respect to all Shares of
Common Stock subject hereto, Optionee shall be entitled to receive a similar
Option of like tenor covering the number of Shares of Common Stock with respect
to which this Option shall not have been exercised.
5. Whole Shares. The Options may only be exercised for whole Shares of
Common Stock. Fractional Shares of Common Stock shall not be issued.
6. Securities Law Compliance; Limitation of Exercise; Extension of
Exercise Period. If the Board of Directors of the Company, in its sole
discretion, shall determine that it is necessary or desirable to list, register
or qualify the Option Shares under any state or federal law, these Options may
not be exercised, in whole or part, until such listing, registration or
qualification shall have been obtained free of any conditions not acceptable to
the Board of Directors. If no registration statement is effective on the date of
exercise of these Options, the Option Shares will not be issued unless and until
there is evidence available to the Company, including representations from the
Optionee that such Shares are being acquired for investment and not for resale,
on which the Company may reasonably rely as to the availability of an exemption
from registration in issuing such Shares. The Company shall utilize its best
efforts to comply with the requirements of each regulatory commission or agency
having jurisdiction in order to issue and sell the Shares to satisfy these
Options. Such compliance will be a condition precedent to the right to exercise
these Options. The inability of the Company to effect such compliance with any
such regulatory commission or agency that counsel for the Company deems
necessary for the lawful issuance and sale of the Shares to satisfy these
Options shall relieve the Company from any liability for failure to issue and
sell the Shares to satisfy these Options for such time as such compliance is not
effectuated.
If at any time Optionee delivers a Notice of Exercise in accordance
with paragraph 8 below and the Options are not exercisable solely because of the
condition set forth in this paragraph 6, the Exercise Period (as defined in
paragraph 7) shall be correspondingly extended until the Company determines that
the Options can be exercised in compliance with this paragraph 6, at which point
the Optionee shall have the remainder of the applicable Exercise Period, as
delineated in paragraph 7, within which to exercise such Options.
If the issuance of the Option Shares is not covered by an effective
registration statement under the Securities Act, in order to enforce the
restrictions imposed upon the Option Shares, the Company shall cause a legend or
legends to be placed upon any certificates representing such Option Shares,
which legend or legends shall be substantially as follows:
The shares represented hereby have not been registered under the
Securities Act of 1933, as amended (the "Act"), nor under any
applicable state securities laws and may not be transferred without
registration under the Act and under such state securities laws, or
pursuant to an available exemption from the Act and such laws.
7. Exercise Period. The vested portions of Options shall be exercisable
during the period (the "Exercise Period") commencing upon their respective
Vesting Dates and terminating upon the earliest of the following dates:
(a) on the date of the termination of your Continuous Service
at any time "for cause," as defined in your separate written employment
agreement, if any, or in the absence of a written employment agreement,
by a good faith determination by the Board of Directors that you (i)
have been grossly negligent in the performance of your duties; (ii)
have engaged in material willful or gross misconduct in the performance
of your duties; (iii) have committed an act of personal dishonesty or
breach of fiduciary duty involving personal profit in connection with
your employment by the Company; or (iv) have committed, as determined
by the Board of Directors of the Company, or have been convicted of
fraud, embezzlement, theft or dishonesty or other criminal conduct,
unless the Board of Directors waives the provisions of this
subparagraph;
(b) three months after the termination of your Continuous
Service for any other reason;
(c) twelve months after the termination of your Continuous
Service due to Disability;
(d) in the event of your death either during your Continuous
Service or within three months after your Continuous Service
terminates, six months after the issuance of letters testamentary or
letters of administration or the appointment of an administrator,
executor or personal representative but not later than 12 months after
termination of your Continuous Service; or
(e) the Expiration Date.
If this is an Incentive Stock Option, to obtain the federal income tax
advantages associated with such options, the Internal Revenue Code requires that
at all times beginning on the Date of Grant of the Option and ending on the day
three months before the date of the Option's exercise, you must be an Employee
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of the Company or an affiliate, except in the event of your death or your
Disability. The Company has provided for extended exercisability of the Options
under certain circumstances for your benefit, but cannot guarantee that the
Options will necessarily be treated as "Incentive Stock Options" under the
Internal Revenue Code if you exercise the Option more than three months after
the date your employment with the Company or an Affiliate terminates.
8. Exercise.
(a) You may exercise the vested portion of the Options during
their Exercise Period by delivering a Notice of Exercise (in a form
designated by the Company), together with the Exercise Price to the
Secretary of the Company, or to such other person as the Company may
designate, during regular business hours, together with such additional
documents as the Company may then require.
(b) By exercising the Options you agree that, as a condition
to any exercise of the Options, the Company may require you to enter an
arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of: (i) the
exercise of the Options; (ii) the lapse of any substantial risk of
forfeiture to which the Option Shares are subject at the time of
exercise; or (iii) the disposition of Option Shares acquired upon such
exercise.
(c) If these Options are intended to qualify as "Incentive
Stock Options" under the provisions of the Internal Revenue Code, you
acknowledge that in order to be entitled to receive treatment as an
Incentive Stock Option, the holding and exercise of these Options and
the Common Stock acquired pursuant to these Options are subject to
certain limitations and restrictions, including a requirement that any
Common Stock acquired hereunder be held by you until after the date
that is both two years subsequent to the date of this Option and one
year subsequent to the date the Common Stock is acquired pursuant to
these Options. Failure to hold the Shares of Common Stock for the above
period will cause a "disqualifying disposition" of the Common Stock
resulting in the loss of Incentive Stock Option treatment and the
associated favorable tax benefits. As a result of the disqualifying
disposition, the Company may also be subject to certain disclosure
requirements, and, therefore, you agree to notify the Company, in
writing, 30 days prior to any disqualifying disposition.
(d) By exercising the Options you (and any other person or
entity to which any Option Shares are transferred or assigned) agree
that the Company (or a representative of the underwriters) may, in
connection with the first underwritten registration of the offering of
any securities of the Company under the Securities Act, require that
you not sell, dispose of, transfer, make any short sale of, grant any
option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any Shares of
Common Stock or other securities of the Company, including Option
Shares or other securities held by you, for a period of time specified
by the underwriter(s) (not to exceed 180 days) following the effective
date of the registration statement of the Company filed under the
Securities Act. The Option Shares shall be subject to the foregoing
restrictions and any assignee, transferee or other holder of the Option
Shares shall be bound by the foregoing provisions. You further agree to
execute and deliver such other agreements as may be reasonably
requested by the Company and/or the underwriter(s) that are consistent
with the foregoing or that are necessary to give further effect
thereto. In order to enforce the foregoing covenant, the Company may
impose stop transfer instructions with respect to your Option Shares or
other securities until the end of such period. Further, you hereby
constitute and appoint the Company and any of its Officers as your
agent and attorney-in-fact with full power of substitution to act in
your place and in your stead, and to make, execute and deliver any
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agreements or instruments consistent with the foregoing. The foregoing
power of attorney is and shall be irrevocable, and you agree that the
foregoing power of attorney is coupled with the Company's interest in
and to the Option Shares.
(e) The Option Shares may not be sold, transferred or
assigned, pledged or otherwise alienated or hypothecated, except in
compliance with the Plan and this Agreement, including paragraph 10
below.
(f) In order to enforce the restrictions imposed upon the
Option Shares, the Company shall cause a legend or legends to be placed
upon any certificates representing such Option Shares, which legend or
legends shall be substantially as follows:
The shares represented hereby are subject to restrictions on
transferability and related repurchase rights under the
Company's 2002 Stock Option and Purchase Rights Plan and
applicable Stock Option Agreements or other agreements
executed in connection therewith, copies of which are
available at the principal business offices of the Company.
(g) Upon issuance, the Option Shares shall be considered to be
fully-paid, nonassessable, issued and outstanding Shares of the
Company, and Optionee shall be entitled to vote the Option Shares and
receive all cash dividends and other distributions with respect
thereto.
9. Transferability. The Options are not transferable and are
exercisable only by you during your life or by the executors, administrators or
beneficiaries of your estate. In the event of any alienation, assignment,
pledge, hypothecation or other transfer of this Option or any right hereunder in
violation of the terms hereof or in the event of any levy, attachment, execution
or similar process, this Option and all rights granted hereunder shall be
immediately null and void.
10. Right of First Refusal. Prior to the date the Company's Common
Stock is first listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or the Nasdaq
Smallcap Market of the Nasdaq National Market, or is regularly quoted by a
recognized securities dealer, as determined by the Administrator, the Company
shall have a "Right of First Refusal" as to all or any part of the Option Shares
on the following terms and conditions:
(a) Should you propose to sell or transfer any Option Shares
in one or more related transactions, you shall promptly deliver a
written notice (the "Transfer Notice") to the Company prior to the
closing of such sale or transfer. The Transfer Notice shall describe in
reasonable detail the proposed sale or transfer including, without
limitation, the number of Shares to be sold or transferred, the nature
of such sale or transfer, the consideration to be paid, and the name
and address of each prospective purchaser or transferee. Upon the
request of the Company, you shall promptly furnish to the Company such
other information as may be reasonably requested to establish that the
offer and prospective purchaser or transferee is bona fide.
(b) For 30 days following the receipt of the Transfer Notice,
the Company shall have the option to purchase all or any portion of the
Shares specified in the Transfer Notice upon the terms set forth in the
Transfer Notice and at a price that is the lesser of the price set
forth in the Transfer Notice or the Exercise Price plus interest at the
rate of ten percent (10%) per year from the date of the exercise of the
Options to the date the Company exercises its right of first refusal.
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In the event the Company does not elect to acquire the Shares proposed
for sale in the Transfer Notice, the Secretary of the Company shall
give written notice thereof to you (the "Refusal Notice"). If the
Company fails or refuses to furnish a Refusal Notice within such 30-day
period, the Company shall be deemed to have refused its right and
option to purchase the Shares specified in the Transfer Notice.
(c) In the event the Company elects to acquire the Shares as
specified in the Transfer Notice, the Secretary of the Company shall so
notify you (the "Acceptance Notice"), and settlement thereof shall be
made in cash within 30 days from the date of the Acceptance Notice. At
such time, you shall deliver to the Company the certificates
representing the Shares to be purchased, each certificate to be
properly endorsed for transfer.
(d) Should the purchase price specified in the Transfer Notice
be payable in property other than cash or evidence of indebtedness, the
Company shall have the right to pay the purchase price in the form of
cash equal in amount to the value of such property. If you and the
Company cannot agree on such cash value within 10 days after your
receipt of the Acceptance Notice, the valuation shall be made by an
appraiser of recognized standing selected by you and the Company (or
its assignees) or, if you cannot agree on an appraiser within 20 days
after your receipt of the Acceptance Notice, each shall select an
appraiser of recognized standing and the two appraisers shall designate
a third appraiser of recognized standing, whose appraisal shall be
determinative of such value. You and the Company shall equally share
the cost of such appraisal. The closing shall then be held on the fifth
business day after such cash valuation has been made.
(e) The exercise or nonexercise of the rights of the Company
hereunder to elect to exercise the Right of First Refusal in one or
more sales or transfers of the Shares shall not adversely affect the
Company's rights to exercise the Right of First Refusal in subsequent
sales or transfers of Option Shares.
(f) The Company's Right of First Refusal shall terminate upon
the effective date of a registration statement pertaining to the
Company's initial registered firm commitment underwritten public
offering.
(g) If, from time to time, there is any change in the
character or amount of any of the outstanding Shares of the Common
Stock of the Company, then in such event any and all new, substituted
or additional Shares to which you are entitled by reason of your
ownership of the Option Shares shall be immediately subject to the
Right of First Refusal with the same force and effect as the Option
Shares subject to the Right of First Refusal immediately before such
event.
11. Right of Repurchase. To the extent provided in the Company's
bylaws, as amended from time to time, or as noted in paragraph 10 above, the
Company shall have the right to repurchase all or any part of the Option Shares.
12. Options not a Service Contract. Optionee acknowledges and agrees
that the vesting of Shares pursuant to the vesting schedule hereof is earned
only by continuing as a Service Provider at the will of the Company (and not
through the act of being hired, being granted an Option, or purchasing Shares
hereunder). Optionee further acknowledges and agrees that this agreement, the
transactions contemplated hereunder, and the vesting schedule set forth herein
do not constitute an express or implied promise of continued engagement as a
Service Provider for the vesting period, for any period, or at all, and shall
not interfere with Optionee's right or the Company's right to terminate
Optionee's relationship as a Service Provider under Optionee's written
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employment agreement with the Company or, in the absence of a written employment
agreement, Optionee's right or the Company's right to terminate Optionee's
relationship as a Service Provider at any time, with or without cause.
13. Withholding Obligations.
(a) At the time the Options are exercised, in whole or in
part, or at any time thereafter as requested by the Company, you hereby
authorize withholding from payroll and any other amounts payable to
you, and otherwise agree to make adequate provision for (including by
means of a "cashless exercise" pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board to the extent
permitted by the Company), any sums required to satisfy the federal,
state, local and foreign tax withholding obligations of the Company or
an affiliate, if any, which arise in connection with the Options.
(b) Upon your request and subject to approval by the Company,
in its sole discretion, and compliance with any applicable conditions
or restrictions of law, the Company may withhold from fully-vested
Shares of Common Stock otherwise issuable to you upon the exercise of
the Options a number of whole Shares having a Fair Market Value,
determined by the Company as of the date of exercise, not in excess of
the minimum amount of tax required to be withheld by law. If the date
of determination of any tax withholding obligation is deferred to a
date later than the date of exercise of the Options, Share withholding
pursuant to the preceding sentence shall not be permitted unless you
make a proper and timely election under Section 83(b) of the Internal
Revenue Code covering the aggregate number of Shares of Common Stock
acquired upon such exercise with respect to which such determination is
otherwise deferred, to accelerate the determination of such tax
withholding obligation to the date of exercise of the Options.
Notwithstanding the filing of such election, Shares shall be withheld
solely from fully-vested Shares of Common Stock determined as of the
date of exercise of the Options that are otherwise issuable to you upon
such exercise. Any adverse consequences to you arising in connection
with such Share withholding procedure shall be your sole
responsibility.
(c) The Options are not exercisable unless the tax withholding
obligations of the Company and/or any affiliate are satisfied.
Accordingly, you may not be able to exercise the Options when desired
even though the Options are vested, and the Company shall have no
obligation to issue a certificate for such Shares or release such
Shares from any escrow provided for herein.
14. Governing Plan Document. The Options are subject to all of the
provisions of the Plan, the provisions of which are hereby made a part of the
Options, and are further subject to all interpretations, amendments, rules and
regulations that may, from time to time, be promulgated and adopted pursuant to
the Plan. In the event of any conflict between the provisions of the Options and
those of the Plan, the provisions of the Plan shall control. Additionally, if
this is an Incentive Stock Option, all Options granted hereunder shall be deemed
to contain such other limitations and restrictions as are necessary to conform
the Options to the requirements for "Incentive Stock Options" as defined in
Section 422 of the Internal Revenue Code or any amendment or successor statute
of like tenor.
15. Notices. Any notices provided for in the Options or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.
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By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: MID-POWER SERVICE CORPORATION
____________________________________
Signature By ____________________________
____________________________________ _______________________________
Print Name Title
____________________________________
____________________________________
Residence Address
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MID-POWER SERVICE CORPORATION
STOCK OPTION
NOTICE OF EXERCISE
Mid-Power Service Corporation Date of Exercise: _______________
3800 Howard Hughes Parkway, Suite 860
Las Vegas, Nevada 89109
Ladies and Gentlemen:
This constitutes notice under my Stock Option Agreement that I elect to
purchase the number of shares for the price set forth below.
Type of Option (check one): [ ] Incentive [ ] Nonstatutory
Stock Option Dated: ________________________________
Number of Shares as to
which Option Is Exercised: ________________________________
Certificates To Be Issued
in Name Of: ________________________________
Total Exercise Price: $_______________________________
Cash payment delivered
Herewith: $_______________________________
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the 2002 Stock Option and Purchase
Rights Plan (the "Plan") or the Stock Option Agreement, (ii) to provide for the
payment by me to you (in the manner designated by you) of your withholding
obligation, if any, relating to the exercise of this option, and (iii) if this
exercise relates to an incentive stock option, to notify you in writing 30 days
before the date of any disposition of any shares of common stock issued upon
exercise of this option that will occur within two years after the date of grant
of this option or within one year after such shares of common stock are issued
upon exercise of this option.
I hereby make the following certifications and representations with
respect to the number of shares of common stock of the company listed above (the
"Shares"), which are being acquired by me for my own account upon exercise of my
stock option as set forth above:
I acknowledge that I have read and understood the Plan and the Stock
Option Agreement, that both the Plan and the Stock Option Agreement are
incorporated herein by reference, and I agree to abide by and be bound by their
terms and conditions.
I further acknowledge that until the issuance (as evidenced by the
appropriate entry on the books of the company or of a duly authorized transfer
agent of the company) of the Shares, no right to vote or receive dividends or
any other right of a stockholder shall exist with regard to the optioned stock,
notwithstanding the exercise of the option.
I further acknowledge that I may suffer adverse tax consequences as a
result of my purchase or disposition of the shares, and I represent that I have
consulted with any tax consultants I deem advisable in connection with the
purchase or disposition of the Shares and that I am not relying on the company
for any tax advice.
I further acknowledge that the Shares have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and are deemed to
constitute "restricted securities" under Rule 144 promulgated under the
Securities Act. I warrant and represent to the company that I have no present
intention of distributing or selling said Shares, except as permitted under the
Securities Act and any applicable state securities laws.
I further acknowledge that I will not be able to resell the Shares for
least 90 days after the stock of the company becomes publicly traded (i.e.,
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934) under Rule 701 and that more restrictive conditions apply
to affiliates of the company under Rule 144.
I further acknowledge that all certificates representing any of the
Shares subject to the provisions of the option shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any legends
reflecting restrictions pursuant to the company's Certificate of Incorporation,
Bylaws, and/or applicable securities laws.
I further agree that, if required by the company (or a representative
of the underwriters) in connection with the first underwritten registration of
the offering of securities of the company under the Securities Act, I will not
sell or otherwise transfer or dispose of any Shares or other securities of the
company held by me as provided by the terms of the Plan and my Stock Option
Agreement.
I further acknowledge that this agreement, the Plan and the Stock
Option Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof, supersede in their entirety any and all prior
agreements with regard to the subject matter hereof, and that this agreement may
not be amended except by a writing signed by both parties.
Submitted by: Accepted by:
PURCHASER: MID-POWER SERVICE CORPORATION
__________________________________ By _________________________________
(signature)
__________________________________ ____________________________________
(print name) Its
Address: Address:
__________________________________ 3800 Howard Hughes Parkway, Suite 860
__________________________________ Las Vegas, Nevada 89109
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SCHEDULE OF STOCK OPTION AND BONUS GRANTS
Name No. of Options Exercise Price No. of Shares Issuance Date
- ---- -------------- -------------- ------------- -------------
Mark T. Davis 40,000 $1.50 20,000 06/25/02
Kenneth M. Emter 40,000 1.50 -- 06/25/02
Rod Lighthipe 20,000 1.50 10,000 06/25/02
Susan Trimboli 20,000 1.50 10,000 06/25/02
Michael T. Maloney 10,000 1.50 --
The options granted to Michael T. Maloney vested upon execution of the Stock
Option Agreement. The options granted to the remaining recipients vest in equal
amounts upon execution of the Stock Option Agreement and January 1, 2003. All
options expire one year from the grant date.