Unassociated Document


    

      Exhibit
        10.1

      


      Non-Qualified
        Stock Option Agreement 

      


      SmartVideo
        Technologies, Inc., a Delaware corporation (the “Company”), hereby grants this
18
        day of
July
        18,
        2005,
        2005
        to
Justin
        A. Stanley,
        Jr. (“Director”),
        an option to purchase a maximum of 250,000
        (Two Hundred Fifty Thousand)
        shares
        of the Company’s common stock, par value $.001 per share,
        at the
        price of $0.90
        per
        share (“Option Price”), on the following terms and conditions:

      


      1.    Grant
        Under 2004 Equity Incentive Plan.
        This
        option is granted pursuant to and is governed by the
        Company’s 2004 Equity Incentive Plan (the “Plan”), as amended, and, unless the
        context otherwise requires, terms used herein shall have the same meaning
        as in
        the Plan. Determinations made in connection with this option pursuant to
        the
        Plan shall be governed by the
        Plan
        as it exists on this date.

      


      2.    Grant
        as Non-Qualified Stock Option; Other Options.
        This
        option is a non-statutory stock option and is not intended to qualify as
        an
        Incentive Stock Option under Section 422A of the Internal Revenue Code of
        1986
        (the “Code”). This option is in addition to any other options heretofore or
        hereafter granted to the Director by the
        Company, but a duplicate original of this instrument shall not effect the
        grant
        of another option.

      


      3.    Extent
        of Option if Employment Continues.
        Unless
        the vesting of the option accelerates as provided below in this Section 3,
        if
        the Director has continued to be employed by the Company on the following
        dates,
        the Director may exercise this option for the number of shares set opposite
        the
        applicable date:

      


      Vesting
        Schedule: 

      


      Options
        vest over two (2) years at 12.5% or 31,250
        Option
        Shares per Quarter for an aggregate amount of 50% or 125,00
        Option
        Shares Annually. A detailed Vesting Schedule is attached as Exhibit
        A.

      


      Upon
        a
        Change in Control (as such term is defined in the Plan), all of the unvested
        option will accelerate and be exercisable for a period of twenty (20) days
        immediately prior to the scheduled consummation of a Change in Control;
        provided, however, that any such acceleration and any exercise of the option
        during such five (5) day period shall be (i) conditioned on the consummation
        of
        the Change in Control and (ii) effective only immediately before the
        consummation of the Change in Control. 

      


      Upon
        consummation of any Change in Control, the Plan and any outstanding portion
        of
        the option that remains unexercised shall terminate. Notwithstanding the
        foregoing, to the extent provision is made in writing in connection with
        such
        Change in Control for the continuation of the Plan and the assumption of
        options
        under the Plan theretofore granted, or for the substitution for such options
        of
        new options covering the stock of a successor company, or a parent or a
        subsidiary thereof, with appropriate adjustments as to the number and kinds
        of
        shares or units and exercise prices, then the Plan and the option granted
        hereunder shall continue in the manner and under the terms so provided, and
        the
        acceleration and termination provisions set forth in this Section 3 shall
        be of
        no effect. The Company will send written notice of a Change in Control to
        the
        Director not later than a time at which the Company gives notice thereof
        to its
        stockholders. 

      


      The
        foregoing rights are cumulative and, while the Director continues to be employed
        by the Company, may be exercised up to and including the date which is
10th
        years
        from the date this option is granted. All of the foregoing rights are subject
        to
        Sections 4 and 5, as appropriate, if the Director ceases to be employed by
        the
        Company or dies or suffers a Total Disability while in the employ of the
        Company.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      4.    Termination
        of Employment.
        If the
        Director ceases to be employed by the Company, other than by reason of death
        or
        Total Disability as defined in Section 5, no further installments of this
        option
        shall become exercisable and this option shall terminate after the passage
        of
        ninety (90) days from the date employment ceases, but in no event later than
        the
        scheduled expiration date. In such a case, the Director’s only rights hereunder
        shall be those which are properly exercised before the termination of this
        option.

      


      5.    Death;
        Total Disability.
        If the
        Director dies while in the employ of the Company, this option may be exercised,
        to the extent of the number of shares with respect to which the Director
        could
        have exercised it on the date of his death, by his estate, personal
        representative or beneficiary to whom this option has been assigned pursuant
        to
        Section 10, at any time within one year after the date of death, but not
        later
        than the scheduled expiration date. If the Director suffers a Total Disability
        (as defined in the Plan), this option may be exercised, to the extent of
        the
        number of shares with respect to which he could have exercised it on the
        date of
        the Director’s Total Disability, at any time within one year after the date of
        the Director’s Total Disability, but not later than the scheduled expiration
        date. At the expiration date of such one year period or the scheduled expiration
        date, whichever is the earlier, this option shall terminate and the only
        rights
        hereunder shall be those as to which the option was properly exercised before
        such termination.

      


      6.    Partial
        Exercise.
        Exercise of this option up to the extent above stated may be made in part
        at any
        time and from time to time within the above limits.

      


      7.    Payment
        of Option Price.
        Payment
        of the purchase price for options exercised by the Director shall be made:
        (i) in United States dollars in cash or by check, (ii) with the consent
        of
        the Company, through delivery of shares of Common Stock having a fair
        market value as of the date of the exercise equal to the cash exercise price
        of
        the options, (iii) any other form of payment acceptable to the Company,
        or
        (iv) any combination of subparagraphs 7(i), 7(ii) and 7(iii). 

      


      8.    Agreement
        to Purchase for Investment.
        By
        acceptance of this option, the Director agrees that a purchase of shares
        under
        this option will not be made with a view to their distribution, as that term
        is
        used in the Securities Act of 1933, as amended, unless in the opinion of
        counsel
        to the Company such distribution is in compliance with or exempt from the
        registration and prospectus requirements of that Act, and the Director agrees
        to
        sign a certificate to such effect at the time of exercising this option and
        agrees that the certificate for the shares so purchased may be inscribed
        with a
        legend to ensure compliance with the Securities Act of 1933.

      


      9.    Method
        of Exercising Option.
        Subject
        to the terms and conditions of this Agreement, this option may be exercised
        by
        prior written notice to the Company, at the principal executive office of
        the
        Company, or to such transfer agent as the Company shall designate. Such notice
        shall state the election to exercise this option and the number of shares
        in
        respect of which it is being exercised and shall be signed by the person
        or
        persons so exercising this option. Such notice shall be accompanied by payment
        of the full purchase price of such shares, and the Company shall deliver
        a
        certificate or certificates representing such shares as soon as practicable
        after the notice shall be received. The certificate or certificates for the
        shares as to which this option shall have been so exercised shall be registered
        in the name of the person or persons so exercising this option (or, if this
        option shall be exercised by the Director and if the Director shall so request
        in the notice exercising this option, shall be registered in the name of
        the
        Director and another person jointly, with right of survivorship) and shall
        be
        delivered as provided above to or upon the written order of the person or
        persons exercising this option. In the event this option shall be exercised,
        pursuant to Section 5 hereof, by any person or persons other than the Director,
        such notice shall be accompanied by appropriate proof of the right of such
        person or persons to exercise this option. All shares that shall be purchased
        upon the exercise of this option as provided herein shall be fully paid and
        non-assessable.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      10.    Option
        Not Transferable.
        This
        option is not transferable or assignable except by will or by the laws of
        descent and distribution. During the Director’s lifetime only the Director can
        exercise this option.

      


      11.    No
        Obligation to Exercise Option.
        The
        grant and acceptance of this option imposes no obligation on the Director
        to
        exercise it.

      


      12.    No
        Rights as Stockholder until Exercise.
        The
        Director shall have no rights as a stockholder with respect to shares subject
        to
        this Agreement until a stock certificate therefor has been issued to the
        Director and is fully paid for. Except as is expressly provided in the Plan
        with
        respect to certain changes in the capitalization of the Company, no adjustment
        shall be made for dividends or similar rights for which the record date is
        prior
        to the date such stock certificate is issued.

       

      13.    Withholding
        Taxes.
        The
        Director hereby agrees that the Company may withhold from the Director’s wages
        the appropriate amount of federal, state and local withholding taxes
        attributable to the Director’s exercise of this Non-Qualified Stock Option. At
        the Company’s discretion, the amount required to be withheld may be withheld in
        cash from such wages, or (with respect to compensation income attributable
        to
        the exercise of this option) in kind from the Common Shares otherwise
        deliverable to the optionee on exercise of this option. The Director further
        agrees that, if the Company does not withhold an amount from the Director’s
        wages sufficient to satisfy the Company’s withholding obligation, the Director
        will reimburse the Company on demand, in cash, for the amount under
        withheld.

      


      14.    Lock-up
        Agreement.
        The
        Director agrees that the Director will not, for a period of at least ninety
        (90)
        days following the effective date of the Company’s distribution of securities in
        an underwritten public offering to the general public pursuant to a registration
        statement filed with the Securities and Exchange Commission, directly or
        indirectly, sell, offer to sell or otherwise dispose of the shares purchased
        upon the exercise of the options granted hereunder other than any such shares
        which are included in such public offering.

      


      15.    Provision
        of Documentation to Director.
        By
        signing this Agreement the Director acknowledges receipt of a copy of this
        Agreement and a copy of the Plan.

      


      16.    Governing
        Law.
        This
        Agreement shall be governed by and interpreted in accordance with the internal
        laws of the State of Delaware.

       

      IN
        WITNESS WHEREOF, the Company and the Director have caused this instrument
        to be
        executed as of the day and year first above written, and the Director whose
        signature appears below acknowledges receipt of a copy of the Plan and
        acceptance of an original copy of this Agreement.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	 	 
	 	OPTIONEE:
	 
 	 
 	 
 
	 	By:  	/s/ Justin
                  A. Stanley,
                  Jr.
	 	
                  

                  Name:    Justin
                    A. Stanley,
                    Jr.

                  Address:  115
                    Fuller Lane

                   

                    
                    Winnetka,
                    IL 60093,
                    U.S.A.

                
	 	 


        

         

        
          	 	 	 
	 	SMARTVIDEO
                  TECHNOLOGIES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Richard
                  E. Bennett, Jr.
	 	
                  

                  Name: Richard
                    E. Bennett, Jr.

                  Title: President
                    & CEO

                
	 	 


        

      

       

      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXHIBIT
        A

      


      
        	
                Name
                  of Director (the “Director”):

              	
                Justin
                  A. Stanley,
                  Jr.

              
	
                Date
                  of this option grant:

              	
                July
                  18, 2005

              
	
                Number
                  of shares of the Company’s Common Stock subject to this option
                  (“Option
                  Shares”):

              	
                250,000
                  (Two Hundred Fifty Thousand)

              
	
                Option
                  exercise price per share: $0.90

              	
                Vesting
                  Start Date: July
                  18, 2005

              
	
                Percent
                  of Shares Vesting Annually: 50
                  %

              	
                Number
                  of Shares Vesting Annually: 125,00

              


      

      


      Vesting
        Schedule

        

      
        
          	Vesting
                  Date	Shares
                  Vested    Percent
                  Vested


        

        
          	
                  July
                    18, 2005

                	
                  31,250            12.5
                    %

                
	
                  October
                    18, 2005

                	
                  31,250            12.5
                    %

                
	
                  January
                    18, 2006

                	
                  31,250            12.5
                    %

                
	
                  April
                    18, 2006

                	
                  31,250            12.5
                    %

                
	
                  July
                    18, 2006

                	
                  31,250            12.5
                    %

                
	
                  October
                    18, 2006

                	
                  31,250            12.5
                    %

                
	
                  January
                    18, 2007

                	
                  31,250            12.5
                    %

                
	
                  April
                    18, 2007

                	
                  31,250            12.5
                    %