Exhibit 10.10

 

**THOMAS J.SHAW**

**NONQUALIFIEDSTOCK OPTION AGREEMENT**

**ISSUEDOUTSIDE OF ANY PLAN**

 

ThisRetractable Technologies, Inc. NonQualified Stock Option Agreement (the“Agreement”) is made and entered into by and between RETRACTABLE TECHNOLOGIES,INC. (the “Company”) and Thomas J. Shaw (the “Optionee”). The Company and theOptionee are sometimes hereinafter collectively referred to as the “Parties.”

 

(1)                                  The option granted hereunder is grantedoutside the Company’s 2008 Stock Option Plan or any other stock option plan.

 

(2)                                  OPTION. The Company hereby confirms the grant by theCompensation and Benefits Committee of the Board of Directors as of July 15,2009 (subject to approval by a vote of the Common Shareholders) to the Optioneeof the right and option to purchase three million (3,000,000) shares of theCommon Stock of the Company on the terms set forth in this Agreement (the“Option”). The Option granted is designated as a nonqualified stock option(“NQSO”). The Option is not vested until July 15, 2010.  An Option that is exercisable may be forfeitedpursuant to Section (3) of this Agreement.  The Option must be exercised within theperiod specified in this Agreement.  TheOption may not be exercised for a fractional share of Stock (defined to mean CommonStock of the Company). The Option, if exercised in part, shall remainexercisable as to the remaining part in accordance with its terms. Nothingcontained in this Agreement shall be deemed to give the Optionee the right tobe retained in the service of the Company.

 

(3)                                  TERMINATION OF OPTION.

 

(A)                              MAXIMUM OPTION TERM. The unexercised portion of this Option which has become exercisableshall automatically and without notice terminate and become null and void afterJuly 15, 2019.

 

(B)                                DEATH OF OPTIONEE.

 

(i)                                     Notwithstanding Section 3(C) ofthis Agreement, upon the death of the Optionee, any Option exercisable on thedate of death may be exercised by the Optionee’s estate or by a person whoacquires the right to exercise such Option by bequest or inheritance orotherwise by reason of the death of the Optionee, provided that such exerciseoccurs within both the remaining term of the Option and within one (1) yearafter the Optionee’s death. Any Option not then exercisable shall be forfeitedat the death of Optionee.

 

(ii)                                  The provisions of this subsection (3)(B) shallapply notwithstanding the fact that the Optionee’s relationship with theCompany may have terminated prior to death, and if the Option remainsexercisable but only to the extent of any Option exercisable on the date ofdeath.

 

(C)                                DISABILITY.  Subject to Section 3(B) ofthis Agreement, upon the termination of the Optionee’s relationship with theCompany by reason of permanent disability (as determined by the Board), theOptionee may, within one (1) year from the date of such termination ofrelationship with the Company, exercise any Option to the extent such Optionwas exercisable at the date of such termination of relationship with theCompany due to disability.  Any Optionnot then exercisable is forfeited upon termination of relationship with theCompany due to disability.

 

(D)                               TERMINATION FOR OTHER REASONS. Except as provided in Sections (3)(B) and (3)(C), the Option shallautomatically terminate upon the termination of the Optionee’s relationshipwith the Company for cause.  Otherwise,subject to Sections 3(B) and 3(C) the vested portion of the Optionshall expire upon the expiration of its term set forth in Section 3(A).  Any Option not then exercisable is forfeitedupon termination of the relationship with the Company, with or without cause.

 

(4)                                  EXERCISE OF OPTION. This Option shall be exercised by theOptionee (or by his representatives, as provided in Section (3) ofthis Agreement) as to all or part of the shares covered hereby, by the givingof written notice of such exercise substantially in the form attached hereto asExhibit A, to the Company 

 

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specifying the number ofshares to be purchased and specifying how the withholding tax obligation (ifany) shall be satisfied. The giving of such written notice to the Company shallconstitute an irrevocable election to purchase the number of shares specifiedin the notice and to exercise the right on the date specified in the notice(the “Exercise Date”). Upon payment of all amounts due from the Optionee,including any tax withholding due upon exercise of this Option, the Companyshall cause Documents Indicating Ownership (defined to include a stockcertificate or any and all documents provided by the Company and its agentsevidencing ownership of an uncertificated share of stock) to be delivered tothe Optionee (or the person exercising the Optionee’s option) at the addressset forth herein within ten (10) business days after the Exercise Date.

 

(5)                                  OPTION PRICE. The purchase price of the shares whichmay be purchased pursuant to this Option shall be eighty-one cents ($0.81) pershare (the “Option Price”), being 100% of the fair market value of a CommonShare of the Company on July 15, 2009 as determined by the Compensationand Benefits Committee of the Board of Directors of the Company. The OptionPrice and any other amounts payable upon exercise shall be paid in full at thetime the Option is exercised. Otherwise, an exercise of the Option shall beinvalid and of no effect.

 

(6)                                  TAX WITHHOLDING. Exercise of the Option in whole or inpart hereunder is conditioned upon the Optionee remitting to the Company, inaddition to the Option Price, the amount of employment taxes, if any, requiredto be withheld upon exercise of this Option. The Optionee may satisfy thisobligation by a direct payment of a cashier’s check to the Company or, ifpre-approved by the Company (in its sole discretion), increased withholding onhis cash compensation payable on the Exercise Date.

 

(7)                                  NO RIGHTS PRIOR TO ISSUANCE OF DOCUMENTSINDICATING OWNERSHIP.Neither the Optionee nor his representatives shall have any of the rights of ashareholder of the Company with respect to the shares subject to this Optionuntil Documents Indicating Ownership shall have been issued upon the exerciseof this Option. No adjustment will be made for dividends or other rights forwhich the record date is prior to the date the Documents Indicating Ownershipare issued.

 

(8)                                  NONASSIGNABILITY. This Option shall not be assignable ortransferable by the Optionee other than by will or by the laws of descent anddistribution, and during the Optionee’s lifetime shall be exercisable only byhim (or his legal guardian or representative).

 

(9)                                  ADJUSTMENT FOR CORPORATE EVENTS. In the event of any Stock split, Stockdividend, reclassification or recapitalization which changes the character oramount of the Company’s outstanding Common Stock while any portion of thisOption is outstanding but unexercised, or if the Company participates in anytransaction resulting in a corporate merger, consolidation, acquisition ofproperty or stock, separation, reorganization (where the Company is thesurviving entity) or liquidation, the Company or any surviving corporationshall take reasonable steps to prevent dilution of the Option.

 

Notwithstandinganything to the contrary herein, in the event of 1) dissolution or liquidationof the Company, 2) a merger or consolidation in which the Company is not thesurviving corporation (other than a merger or consolidation with a wholly-ownedsubsidiary, a reincorporation of the Company in a different jurisdiction, orother transaction in which there is no substantial change in the stockholdersof the Company or their relative stock holdings and the Option grantedhereunder is assumed, converted or replaced by the successor corporation, whichassumption, conversion or replacement will be binding on the Optionee), 3) amerger or consolidation in which the Company is the surviving corporation butafter which the stockholders of the Company (other than any stockholder whichmerges [or which owns or controls another corporation which merges] with theCompany in such merger) cease to own their shares or other equity interests inthe Company, 4) the sale of substantially all of the assets of the Company, or5) the acquisition, sale or transfer of more than 50% of the outstanding sharesof Common Stock of the Company by tender offer or similar transaction(otherwise than by will or by the laws of descent and distribution), the Optionshall terminate after a period of three months from the completion of suchtrigger event; provided, however, that the Optionee shall have the right,immediately upon announcement of such event to exercise his Option in whole orin part, for a period of three months from the completion of such triggerevent, but only to the extent that such Option has not been previouslyterminated.

 

(10)                            REPRESENTATIONS AND WARRANTIES OF THEOPTIONEE: LEGEND.The Optionee, by his acceptance hereof, represents and warrants to the Companythat his purchase of shares of Common Stock upon 

 

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AGREEMENTISSUED OUTSIDE OF ANY PLAN — Page 2 of 6

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the exercise hereof shallbe for investment and not with a view to distribution or sale, provided thatthis representation and warranty shall be inoperative if, in the opinion ofcounsel to the Company, a proposed sale or distribution of such shares ispursuant to an applicable effective registration statement under the SecuritiesAct of 1933, as amended (the “Act”), or without such representation andwarranty is exempt from registration under the Act. The Optionee agrees thatthe obligation of the Company to issue shares upon the exercise of an Optionshall also be subject, as conditions precedent, to compliance with applicableprovisions of the Act, the Securities Exchange Act of 1934, state securitieslaws, rules and regulations under any of the foregoing and applicablerequirements of any securities exchange and/or securities market upon which theCompany’s securities shall be listed and/or quoted. The Company may endorse anappropriate legend referring to the foregoing restriction upon the certificateor certificates representing any shares issued or transferred to the Optioneeupon the exercise of this Option.

 

(11)                            NO OBLIGATION TO EXERCISE STOCK OPTION. The granting of the Option under thisAgreement shall impose no obligation upon the Optionee to exercise that Option.

 

(12)                            USE OF PROCEEDS. Proceeds from the sale of sharespursuant to the Option granted under this Agreement shall constitute generalfunds of the Company.

 

(13)                            RESERVATION OF SHARES OF STOCK. The Company, during the term of thisAgreement, will at all times reserve and keep available the number of shares ofStock that shall be sufficient to satisfy the requirements of this Agreement.

 

(14)                            LEGAL CONSTRUCTION. In the event that any one or more ofthe terms, provisions or agreements that are contained in this Agreement shallbe held by a Court of competent jurisdiction to be invalid, illegal orunenforceable in any respect for any reason, the invalid, illegal orunenforceable term, provision or agreement shall not affect any other term,provision or agreement that is contained in this Agreement and this Agreementshall be construed in all respects as if the invalid, illegal or unenforceableterm, provision or agreement had never been contained herein.

 

(15)                            COVENANTS AND AGREEMENTS AS INDEPENDENTAGREEMENTS. Eachof the covenants and agreements that is set forth in this Agreement shall beconstrued as a covenant and agreement independent of any other provision ofthis Agreement. The existence of any claim or cause of action of the Optioneeagainst the Company, whether predicated on this Agreement or otherwise, shallnot constitute a defense to the enforcement by the Company of the covenants andagreements that are set forth in this Agreement.

 

(16)                            ADMINISTRATION. This Agreement shall be administered bythe Compensation and Benefits Committee of the Board of Directors of theCompany (such body hereafter referred to as the “Administrator”). TheAdministrator shall make determinations with respect to the terms, limitations,restrictions, conditions and extent of that participation. Any interpretationand construction of any provision of this Agreement by the Compensation andBenefits Committee of the Board of Directors shall be final. The Administrator,including any of its individual members, shall not be liable for any action ordetermination made by any of them in good faith relating to this Agreement. TheOptionee hereby agrees to accept as binding, conclusive and final all decisionsor interpretations of the Administrator upon any questions arising under thisAgreement.

 

(17)                            ENTIRE AGREEMENT. This Agreement and the Exhibit A,which is attached hereto and incorporated herein for all purposes, togethersupersede any and all other prior understandings and agreements, either oral orin writing, between the Parties with respect to the subject matter hereof and constitutethe sole and only agreement between the Parties with respect to the saidsubject matter. All prior negotiations and agreements between the Parties withrespect to the subject matter hereof are merged into this Agreement. Each Partyto this Agreement acknowledges that no representations, inducements, promisesor agreements, orally or otherwise, have been made by any Party or by anyoneacting on behalf of any Party, which are not embodied in this Agreement andthat any agreement, statement or promise that is not contained in thisAgreement or the Exhibit A shall not be valid or binding or of any forceor effect.

 

THOMASJ. SHAW NONQAULIFEID STOCK OPTION

AGREEMENTISSUED OUTSIDE OF ANY PLAN — Page 3 of 6

 

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(18)                            PARTIES BOUND. The terms, provisions, representations,warranties, covenants and agreements that are contained in this Agreement shallapply to, bind upon and inure to the benefit of the Parties and theirrespective heirs, executors, administrators, legal representatives andpermitted successors and assigns.

 

(19)                            TEXAS LAW TO APPLY. THIS AGREEMENT SHALL BE GOVERNED BY,CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS(EXCLUDING ANY CONFLICTS-OF-LAW RULE OR PRINCIPLE OF TEXAS LAW THAT MIGHT REFERTHE GOVERNANCE, CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT TO THE LAWS OFANOTHER STATE).

 

(20)                            MODIFICATION. No change or modification of thisAgreement shall be valid or binding upon the Parties unless the change ormodification is in writing and signed by the Parties.  Notwithstanding the preceding sentence, theCompany may revoke this Option to the extent permitted in Section 21 ofthis Agreement.

 

(21)                            AMENDMENT. The Administrator may discontinue or amend thisAgreement from time to time, but no material amendment shall be made withoutthe approval of the common stockholders.

 

Exceptas provided in Section (9) of this Agreement, neither shall anyamendment impair the rights of Optionee theretofore granted without his consent;provided, however, that if the Administrator, after consulting with Managementof the Company, determines that the application of an accounting standard incompliance with any statement issued by the Financial Accounting StandardsBoard or any other entity that reviews accounting disclosures of (or setsaccounting standards for) public companies concerning the treatment of employeestock options would have a significant adverse effect on the Company’sfinancial statements because of the fact that this Option was granted beforethe issuance of such statement and it is then outstanding, then theAdministrator in its absolute discretion may cancel and revoke the Option andthe Optionee shall have no further rights in respect thereof. Such cancellationand revocation shall be effective upon written notice by the Administrator tothe Optionee.

 

(22)                            TIME. Time is of the essence in the performance of thisAgreement.

 

(23)                            HEADINGS. The headings that are used in this Agreement areused for reference and convenience purposes only and do not constitutesubstantive matters to be considered in construing the terms and provisions ofthis Agreement.

 

(24)                            GENDER AND NUMBER. Words of any gender used in thisAgreement shall be held and construed to include any other gender, and words inthe singular number shall be held to include the plural, and vice versa, unlessthe context requires otherwise.

 

(25)                            NOTICE. Any notice required or permitted to be deliveredhereunder shall be deemed to be delivered upon the earlier of the expiration ofthree days after deposit in the U.S. mail or actual receipt at the addressesset forth below, or at such other addresses as they have theretofore specifiedby written notice delivered in accordance herewith:

 

(A)                              Notice to the Company shall be addressedand delivered as follows:

 

RETRACTABLETECHNOLOGIES, INC.

P. O.BOX 9

511LOBO LANE

LITTLEELM, TEXAS 75068-0009

ATTENTION:                                 MICHELE M. LARIOS

VICE PRESIDENT AND SECRETARY

 

(B)                                Notice to the Optionee shall be addressedand delivered as follows:

 

THOMAS J. SHAW

_________________

_________________

 

THOMASJ. SHAW NONQAULIFEID STOCK OPTION

AGREEMENTISSUED OUTSIDE OF ANY PLAN — Page 4 of 6

 

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INWITNESS WHEREOF, the Company, RETRACTABLE TECHNOLOGIES, INC., has caused thesepresents to be signed on this the 11th day of December, 2009 effective as of July 15,2009 by Steven R. Wisner, its duly authorized Executive Vice President,Engineering and Production.

 
|                          |   | RETRACTABLE  TECHNOLOGIES, INC. |
|-------------------------------|--------|---------------------------------|
|                          |   |                            |
|                          |   |                            |
|                          |   | BY:                             | s/ Steven R. Wisner |   |
|                          |   |                            | STEVEN R. WISNER |   |
|                          |   |                            | EXECUTIVE VICE  PRESIDENT, |
|                          |   |                            | ENGINEERING  AND PRODUCTION |
|                          |   |                            |
|                          |   |                            |
| ATTEST:                       |   |                            |
| s/ Michele M. Larios          |   |                            |   |
| MICHELE M. LARIOS,  SECRETARY |   |                            |   |
|                          |   |                            |
|                          |   | ACCEPTED AND AGREED TO:         |
|                          |   |                            |
|                          |   |                            |
|                          |   | s/ Thomas J. Shaw               |   |
|                          |   | THOMAS J. SHAW                  |   |
|                               |        |                                 |  |  |  |  |

 

THOMASJ. SHAW NONQAULIFEID STOCK OPTION

AGREEMENTISSUED OUTSIDE OF ANY PLAN — Page 5 of 6

 

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**EXHIBIT A**

**NOTICE OF EXERCISE**

**OF**

**NONQUALIFIEDSTOCK OPTION**

 

To:                              Retractable Technologies, Inc.

 

I hereby exercise (all/aportion of) my NonQualified Stock Option granted by RETRACTABLE TECHNOLOGIES,INC., in the Thomas J. Shaw NonQualified Stock Option Agreement Issued Outsideof any Plan dated effective as of July 15, 2009 (the “Agreement”) andnotify you of my desire to purchase ______________ shares of Common Stock ofthe Company which were offered to me pursuant to said Option.

 

TheOption Price due for this purchase is $______________________ in cash.

 

**Pleasechoose one:**

 

___                           I have no withholding obligation.

 

___                           I am satisfying my withholding obligationby making a direct payment by cashier’s check to the Company.

 

___                           I am satisfying my withholding obligationby hereby authorizing increased withholding on my cash compensation payable onthe Exercise Date.

 
|          |   |                   |           |   |
|---------------|--------|------------------------|----------------|--------|
| EXERCISE DATE |   |                   | THOMAS J. SHAW |   |
|          |   |                   |
|          |   |                   |           |
|          |   | SOCIAL SECURITY NUMBER |           |
|               |        |                        |                |        |  |

 

**COMPANYAUTHORIZATION OF WITHHOLDING SELECTION**

 

Retractable Technologies, Inc.hereby accepts and authorizes the choice of satisfaction of the Optionee’swithholding obligation as indicated above.

 
|   |        |
|--------|-------------|
|   | PRINT NAME: |   |
|   | TITLE:      |   |
|        |             |  |  |

 

THOMASJ. SHAW NONQAULIFEID STOCK OPTION

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