EXHIBIT 10.13
STOCK OPTION AGREEMENT
(NONQUALIFIED STOCK OPTION)
OPTIONEE: Primoris Group Inc., an Ontario corporation
NUMBER OF SHARES: 400,000
OPTION EXERCISE PRICE: $2.00 per Share
DATE OF GRANT: August 1, 2002
EXERCISE TERM: Two Years from the Date of Grant
VESTING SCHEDULE: Immediate
THIS OPTION AGREEMENT (the "AGREEMENT") is entered into effective as of the
1st day of August, 2002 by and between HIENERGY TECHNOLOGIES, INC. (formerly SLW
Enterprises Inc.) (the "Company"), a Washington corporation, and the individual
designated above (the "Optionee").
RECITALS
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WHEREAS, a consulting agreement (the "Consulting Agreement") was executed
between the Optionee and the Company on August 1, 2002, wherein the Optionee has
agreed to perform valuable services for the Company; and
WHEREAS, pursuant to Section 6.5 of the Consulting Agreement, the Company
agreed to issue the Optionee an option to purchase 400,000 shares of the
Company's common stock at an exercise price of $2.00 per share with a term of
two years;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
1. GRANT OF OPTION.
1.1 Option. An option to purchase shares of the Company's Common Stock, par
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value $0.0001 per share, (the "Shares") is hereby granted to the Optionee
(the "Option").
1.2 Number of Shares. The number of Shares that the Optionee can purchase
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upon exercise of the Option is set forth above.
1.3 Option Exercise Price. The price the Optionee must pay to exercise the
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Option (the "Option Exercise Price") is set forth above.
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1.4 Date of Grant. The date the Option is granted (the "Date of Grant") is
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set forth above.
1.5 Type of Option. The Option is intended to be a Nonqualified Stock
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Option. It is not intended to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended from
time to time, or any successor provision thereto.
1.6 Condition. The Option is conditioned on the Optionee's execution of
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this Agreement. If this Agreement is not executed by the Optionee, it may be
canceled by the Board.
2. DURATION.
The Option shall be exercisable to the extent and in the manner provided
herein during the Exercise Term, which is set forth above; provided, however,
that the Option may be earlier terminated as provided herein or in the
Consulting Agreement. The Exercise Term shall be extended by such period that
the Optionee is restricted by an underwritten public offering from selling its
Shares.
3. VESTING.
The Option is fully vested.
4. MANNER OF EXERCISE AND PAYMENT.
4.1 To exercise the Option, the Optionee must deliver a completed copy of
the Option Exercise Form, attached hereto as Exhibit A, to the address indicated
on such Form or such other address designated by the Company from time to time.
Contemporaneously with the delivery of the Option Exercise Form, the Optionee
shall tender the Option Exercise Price to the Company, by cash or certified
funds at the time of each exercise of the Option. All checks shall be drawn to
the order of the Company. The Option may be exercised in whole at any time or in
part in multiples of 100 Shares as specified in the Option Exercise Form. Within
five (5) business days of delivery of the Option Exercise Form and tender of the
Option Exercise Price, the Company shall deliver certificates evidencing the
Shares to the Optionee, duly endorsed for transfer to the Optionee, free and
clear of all liens, security interests, pledges or other claims or charges.
4.2 The Optionee shall not be deemed to be the holder of, or to have any of
the rights of a holder with respect to any Shares subject to the Option until
(i) the Option shall have been exercised pursuant to the terms of this Agreement
and the Optionee shall have paid the full purchase price for the number of
Shares in respect of which the Option was exercised, (ii) the Company shall have
issued and delivered the Shares to the Optionee, and (iii) the Optionee's name
shall have been entered as a stockholder of record on the books of the Company,
whereupon the Optionee shall have full voting and other ownership rights with
respect to such Shares.
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5. TERMINATION.
If the Optionee's status as a Consultant terminates at any time after the
grant of the Option for any reason except pursuant to Section 7.2 of the
Consulting Agreement, then any vested options shall terminate on the expiration
date otherwise provided in this Agreement. Any nonvested options shall terminate
immediately upon termination of the Consulting Agreement. If the Optionee's
status as a Consultant is terminated pursuant to Section 7.2 of the Consulting
Agreement, then any options that have been granted to the Optionee shall
terminate on the date of termination of the Consulting Agreement.
6. TRANSFERABILITY.
The Optionee is expressly prohibited from transferring this Option.
7. RESTRICTIONS ON THE OPTIONS; RESTRICTIONS ON THE SHARES.
The Option may not be exercised at any time unless, in the opinion of
counsel for the Company, the issuance and sale of the Shares issued upon such
exercise is exempt from registration under the Securities Act of 1933, as
amended, or any other applicable federal or state securities law, rule or
regulation, or the Shares have been duly registered under such laws. The
Company shall not be required to register the Shares issuable upon the exercise
of the Option under any such laws. Unless the Shares have been registered under
all applicable laws, the Optionee shall represent, warrant and agree, as a
condition to the exercise of the Option, that the Shares are being purchased for
investment only and without a view to any sale or distribution of such Shares
and that such Shares shall not be transferred or disposed of in any manner
without registration under such laws, unless it is the opinion of counsel for
the Company that such a disposition is exempt from such registration. The
Optionee acknowledges that an appropriate legend, in such form as the Company
shall determine, giving notice of the foregoing restrictions shall appear
conspicuously on all certificates evidencing the Shares issued upon the exercise
of the Option. The Company may, in its sole discretion, place a "Blue Sky"
legend on the certificates in accordance with U.S. state securities laws or as
required by applicable securities laws.
The Optionee also acknowledges and agrees that, in connection with any
underwritten public offering of the Company's stock during the Exercise Term of
the Option, upon request of the underwriters managing any underwritten public
offering of the Company's stock and making such request with the approval of the
Company's Board of Directors, not to sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of any of its Shares
without the prior written consent of such underwriters from the effective date
of such registration for so long as the underwriters may specify, but in any
event not to exceed 180 days. The Exercise Term shall be extended by such period
that the Optionee is restricted by an underwritten public offering from selling
its Shares.
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8. PIGGYBACK REGISTRATION RIGHTS.
The Optionee shall have such registration rights as are provided in the
Registration Rights Agreement, the form of which is attached hereto as Exhibit
B, subject to the execution of this Agreement and the issuance of the Option to
the Optionee.
9. NO RIGHT TO CONTINUED STATUS AS CONSULTANT.
Nothing in this Agreement shall be interpreted or construed to confer upon
the Optionee any right with respect to continuance as a Consultant for the
Company or any Parent or Subsidiary, nor shall this Agreement interfere in any
way with the right of the Company or a Parent or Subsidiary to terminate the
Optionee's status as a Consultant at any time.
10. ADJUSTMENTS UPON CERTAIN EVENTS.
10.1. Adjustments Upon Changes in Capitalization. Subject to any required
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action by the shareholders of the Company, the event of a change in
capitalization, such as a stock split or other subdivision or consolidation of
Shares or the payment of any stock dividend consisting of Shares or any other
increase or decrease in the number of Shares effected without receipt of
consideration by the Company, the Company shall make appropriate and
proportionate adjustments to the number and class of Shares subject to the
Option and the purchase price for such Shares or other stock or securities;
provided, however, that conversion of the Option will not be deemed to have been
"effected without receipt of consideration". Any adjustments as a result of a
change in the Company's capitalization will be made by the Board of Directors,
whose determination in that respect is final, binding and conclusive. Except as
otherwise expressly provided in this Section 10.1, any issue by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall not affect the number of Shares or the exercise price of the
Shares subject to the Option, and no adjustments in the Option shall be made by
reason thereof. The grant of this Option does not in any way affect the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure.
10.2. Liquidation or Dissolution. In the event of a liquidation or
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dissolution, any unexercised options will terminate. The Optionee will have the
right to exercise any vested portion of the Option prior to the consummation of
the liquidation or dissolution. The Company will provide the Optionee with
notice of the Board of Directors' decision to liquidate or dissolve as soon as
practicable after such a decision has been made.
10.3. Change of Control, Merger, Sale of Assets, Etc. In the event of the
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sale or other transfer of the outstanding shares of stock of the Company in one
transaction or a series of related transactions or a merger or reorganization of
the Company with or into any other corporation, where immediately following the
transaction, those persons who were shareholders of the Company immediately
before the transaction control less than 50% of the
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voting power of the surviving organization (a "change of control event") or in
the event of a proposed sale of substantially all of the assets of the Company
(collectively, "sale transaction"), the Option shall be assumed or replaced with
a substitute equivalent option.
11. WITHHOLDINGS TAXES.
The Company shall have the right to deduct from any distribution of cash to
the Optionee an amount equal to the federal, state and local income taxes and
other amounts as may be required by law to be withheld (the "Withholdings
Taxes") with respect to the Option. If the Optionee is entitled to receive
Shares upon exercise of the Option, the Optionee shall pay the Withholdings
Taxes (if any) to the Company in cash prior to the issuance of such Shares. In
satisfaction of the Withholdings Taxes, the Optionee may make a written election
(the "Tax Election"), which may be accepted or rejected in the discretion of the
Company, to have withheld a portion of the Shares issuable to it upon exercise
of the Option, having an aggregate Fair Market Value equal to the Withholdings
Taxes, provided that, if the Optionee may be subject to liability under Section
16(b) of the Exchange Act, the election must comply with the requirements
applicable to Share transactions by such Optionees.
12. MODIFICATION OF AGREEMENT.
This Agreement may be modified, amended, suspended or terminated, and any
terms or conditions may be waived, only by a written instrument executed by the
parties hereto.
13. SEVERABILITY.
Should any provision of this Agreement be held by a court of competent
jurisdiction to be unenforceable or invalid for any reason, the remaining
provisions of this Agreement shall not be affected by such holdings and shall
continue in full force in accordance with their terms.
14. NOTICES.
Any notice required or permitted to be given hereunder shall be given by
hand delivery, facsimile transmission or by registered mail, postage prepaid,
addressed to the parties at their respective addresses as set forth below. Any
such notices given by hand delivery or by facsimile transmission shall be deemed
to have been received on the date of delivery or transmission and if given by
prepaid registered mail, shall be deemed to have been received on the third
(3rd) business day immediately following the date of mailing. The parties shall
be entitled to give notice of changes of addresses from time to time in the
manner hereinbefore provided for the giving of notice.
If for the Company: HiEnergy Technologies, Inc.
10 Mauchly Drive
5
Irvine, CA 92618
Attn: President
Tel: 949.727.3389
Fax: 949.727.3288
If for the Optionee: Primoris Group Inc.
44 Victoria Street, Suite 1417
Toronto, ON M5C 1Y2
Tel: 416.489.0092
Fax: 416.544.9259
Such address may be changed from time to time by either party by providing
written notice to the other in the manner set forth above.
15. GOVERNING LAW.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California without
giving effect to the conflicts of laws principles thereof.
16. SUCCESSORS IN INTEREST.
This Agreement shall be binding upon, and inure to the benefit of, the
Company and its successors and assigns, and the Optionee and its successors and
permitted assigns, and upon any person acquiring, whether by merger,
consolidation, reorganization, purchase of stock or assets, or otherwise, all or
substantially all of the Company's and/or the Optionee's assets and business.
This Agreement shall inure to the benefit of the Optionee's heirs and legal
representatives. All obligations imposed upon the Optionee and all rights
granted to the Company under this Agreement shall be final, binding and
conclusive upon the Optionee's successors.
17. RESOLUTION OF DISPUTES.
Any dispute or disagreement which may arise under, or as a result of, or in
any way relate to, the interpretation, construction or application of this
Agreement shall be determined by the Board of Directors of the Company. Any
determination made hereunder shall be final, binding and conclusive on the
Optionee and the Company for all purposes.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first above written.
THE COMPANY:
HIENERGY TECHNOLOGIES, INC.
By: /s/ Barry Alter
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Barry Alter, President and CEO
THE OPTIONEE:
PRIMORIS GROUP INC.
By: /s/ Joseph Carusone
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Joseph Carusone, President
[EXHIBIT FOLLOWS]
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EXHIBIT A
OPTION EXERCISE FORM
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To: HiEnergy Technologies, Inc.
(1) The undersigned hereby elects to purchase the number of shares of
common stock of HiEnergy Technologies, Inc. (the "Company") set forth
below, pursuant to the terms of the Stock Option Agreement executed on
August 1, 2002, tendering simultaneous full payment of the Total
Option Exercise Price for such shares.
Number of Shares: ________________ Shares
Option Exercise Price Per Share: x $____________ per Share
Total Option Exercise Price: = $____________
(2) In exercising this Option, the undersigned hereby confirms and
acknowledges that:
a) the shares of Common Stock to be issued upon exercise are being
acquired solely for the account of the undersigned and not as a
nominee for any other party; and
b) the shares of Common Stock to be issued upon exercise are not acquired
with a view toward distribution; and
c) the undersigned is an "accredited investor" as that term is defined in
Rule 501 of Regulation D under the Securities Act of 1933, as amended,
or is a non-United States' citizen or entity residing outside the
United States; and
d) the undersigned will not offer, sell or otherwise dispose of any such
shares of Common Stock except pursuant to an effective registration,
or an exemption therefrom, under the Securities Act of 1933, as
amended, together with a similar exemption under the securities laws
of all applicable jurisdictions; and
e) the undersigned otherwise reaffirms all representations, warranties,
and indemnifications contained in the Stock Option Agreement; and
f) the undersigned has reviewed all of the Company's public filings with
the Securities and Exchange Commission; and
g) the undersigned consents to delay the exercise of the Option until, in
the Company's judgment, the Company has disclosed any additional
material information that needs to be disclosed to the undersigned,
beyond those contained in the public filings with the Securities and
Exchange Commission.
(3) Subject to Section (2), please issue a certificate or certificates
representing said shares of Common Stock in the name of the undersigned as
instructed.
(4) Please issue a new Option for the unexercised portion of the attached
Option in the name of the undersigned.
This _____ day of __________________, _____:
PRIMORIS GROUP INC.
By: _______________________________________________
Signature
____________________________________________________
Print Name of Signatory
____________________________________________________
Title or Position of Signatory
Send or deliver this Form with an original signature to:
HiEnergy Technologies, Inc.
Attn: President
10 Mauchly Drive
Irvine, CA 92618
USA
Fax: 949.727.3288