EXHIBIT 10.16

 

NONSTATUTORY STOCK OPTION AGREEMENT

 

CEMTREX Inc.

 

Cemtrex Inc. (the “ Corporation”) and, Saagar Govil (the “ Optionee “) an
employee of the Corporation, in consideration of the covenants and agreements
herein contained and intending to be legally bound hereby, agree as follows:

SECTION I: Grant

 

1.1 Grant of Option. Subject to the terms and conditions set forth in this
Nonstatutory Stock Option Agreement (this “Agreement”) the Corporation hereby
grants to the Optionee a stock option (the “Option” ) to purchase 200,000 (Two
Hundred Thousand) shares of the Corporation’s common stock, par value $0.001,
(the “Common Stock”) from the Corporation at a price of $2.64 (Two Dollars and
sixty four cents) per share (the “Option Price”), which is the Fair Market Value
of the shares of Common Stock covered by the Option on December 18, 2016 (the
“Grant Date”).

 

1 .2 Acceptance. The Optionee accepts the grant of the Option confirmed hereby,
and agrees to be bound by the terms and provisions of this Agreement, as the
Agreement may be amended from time to time; provided, however, that no
alteration, amendment, revocation or termination of the Agreement shall, without
the written consent of the Optionee, adversely affect the rights of the Optionee
with respect to the Option.

 

SECTION 2: Vesting, Exercise and Expiration

 

2.1 Vesting. Subject to Sections 3 and 4.8 of this Agreement, the Option will
vest and become exercisable in annual installments over a two-year vesting
period according to the following vesting schedule:

 

1/2 of the Option will vest upon the 1st anniversary of the Grant Date;

 

and the balance, 1/2 of the Option, will vest upon the 2nd anniversary of the
Grant Date;

 

provided that the Optionee is employed by the Corporation on such anniversary,
with all fractional shares, if any, rounded up and vesting as whole shares upon
the earlier vesting date(s). “Corporation,” when used herein with reference to
employment of the Optionee, shall include any Affiliate or subsidiary of the
Corporation. To the extent vested, the Option may be exercised in whole or in
part from the date of vesting through and including the Option Expiration Date,
as defined in Section 2.3 here of, subject to any limits provided in Section 3.

 

2.2 Exercise. This Option shall be exercised by the Optionee by delivering to
the Corporation ‘ s office at 19 Engineers Lane , Farmingdale , NY I 1 735, USA,
Attention: Company Secretary (i) this Agreement signed by the Optionee , (ii) a
written (including electronic) notification specifying the number of shares
which the Optionee then desires to purchase , (iii) a check payable to the order
of the Corporation, which may include cash forwarded through the broker or other
agent-sponsored exercise or financing program approved by the Corporation, equal
in value to the aggregate Option Price of such shares. As soon as practicable
after each exercise of this Option and compliance by the Optionee with all
applicable conditions, the Corporation will issue the number of shares of Common
Stock, which the Optionee is entitled to receive upon such exercise under the
provisions of this Agreement.

 

2.3 Expiration. The Option shall expire and cease to be exercisable on the
earlier of (a) either (i) the last trading day immediately preceding the
six-year anniversary of the Grant Date or, if earlier, (ii) the date of
cancellation provided for in Section 4.6 (the earlier of (i) and (ii) referred
to as the “Option Expiration Date”) or (b) the expiration date provided for in
Section

 

 

 

 

SECTION 3: Termination of Employment and Disability

 

3.1Termination of Employment.

 

(a) General. If the Optionee’s employment with the Corporation is terminated for
whatever reasons then the vested portion of the Option will not be impacted by
such event and shall remain valid until the term outlined in section 2.3. In the
event the Optionee is disabled or dies then his authorized representative or
rightful successor shall have full right over the vested portion of the option
until the term outlined in section 2.3

 

3.2Specified Terminations of Employment.

 

(a)If the Optionee ‘ s employment is terminated by the Corporation or if the
Optionee terminates his employment with the Corporation, the unvested portion of
the Option will expire on the Termination Date.

 

SECTION 4: Miscellaneous

 

4.1 No Right to Employment. Neither the grant of the Option nor anything else
contained in this Agreement shall be deemed to limit or restrict the right of
the Corporation to terminate the Optionee’ s employment at any time, for any
reason, with or without cause.

 

4.2 Nontransferable. This Option may not be transferred except by the Optionee
upon his or her death or disability. No other assignment or transfer of this
Option, or of the rights represented thereby, whether voluntary or involuntary,
by operation of law or otherwise shall be permitted, but immediately upon any
such assignment or transfer this Option shall terminate and become of no further
effect. During the Optionee’s life this Option shall be exercisable only by the
Optionee, and after the Optionee ‘s death the Option shall remain subject to any
restrictions on exercise and otherwise as if held by the Optionee. Whenever the
word “ Optionee” is used in any provision of this Option under circumstances
where the provision should logically be construed to apply to the executors, the
administrators or other persons to whom this Option ma y be transferred, the
word “Optionee “ shall be deemed to include such person or persons.

 

4.3 Compliance with Laws. Notwithstanding any other provision hereof, the
Optionee hereby agrees that he or she will not exercise the Option, and that the
Corporation will not be obligated to issue any shares to the Optionee hereunder,
if the exercise thereof or the issuance of such shares shall constitute a
violation by the Optionee or the Corporation of any provision of law or
regulation of any governmental authority. Any determination in this connection
by the Corporation shall be final, binding and conclusive. The Corporation shall
in no event be obliged to register any securities pursuant to the Securities Act
of 1933 (as the same shall be in effect from time to time) or to take any other
affirmative action in order to cause the exercise of the Option or the issuance
of shares pursuant thereto to comply with any law or regulation of any
governmental authority.

 

4.4 Nonstatutory Stock Option. The parties hereto agree that the Option granted
hereby is not, and should not be construed to be, an incentive stock option
under Section 422 of the Code.

 

4.5 Tax Consequences. In each case where the Optionee exercises this Option in
whole or in part, the Optionee shall be responsible for the amount of income
tax, if any, required under federal and, where applicable, state and local law,
and the Optionee shall, pay such taxes and shall provide a copy of such
remittance to the Corporation. The Corporation shall have no liability
whatsoever for the Optionee’s tax obligations.

 

4.6Forfeiture and Repayment. If:

 

(a) during the course of the Optionee ‘ s employment with the Corporation or, if
longer, the period during which this Option is outstanding, the Optionee engages
in conduct or it is discovered that the Optionee engaged in conduct that is
materially averse to the interests of the Corporation, including failures to
comply with the Corporation ‘ s rules or regulations, fraud, or conduct
contributing to any financial restatements or irregularities;

 

 

 

 

[(c)/(d)] following termination of the Optionee ‘ s employment with the
Corporation for any reason, with or without cause, the Optionee violates any
post-termination obligations or duties owed to the Corporation or its Affiliates
or any agreement with the Corporation or its Affiliates, including without
limitation, any employment agreement, confidentiality agreement or other
agreement restricting post-employment conduct; the Corporation ma y cancel all
or any portion of this Option with respect to the shares not yet exercised and/
or require repayment of any shares (or the value thereof) or amounts which were
acquired from exercise of the Option. The Corporation shall have sole discretion
to determine what constitutes such conduct.

 

4.7 Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware, in USA other than any choice of law
rules calling for the application of laws of another jurisdiction.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Grant Date.

 

  CEMTREX Inc.       /s/ Renato Dela Rama.   Renato Dela Rama   Vice President
of Finance   and Principal Financial Officer       OPTIONEE:       /s/ Saagar
Govil.   Saagar Govil   Chief Executive Officer