Document:

Form of Stock Option Agreement

 

EXHIBIT 10.4

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (this “Agreement”), is made and effective as of this
5th day of August, 2004 (the “Grant Date”), by and between Sunair Electronics, Inc., a
Florida corporation (“Sunair”), and each person set forth on Schedule 1 hereto (each an “Optionee”).

W I T N E S S E T H:

     WHEREAS, Sunair wishes to provide the Optionee the opportunity to purchase shares of common
stock of Sunair;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, Sunair hereby grants the Optionee options to purchase shares of common stock of
Sunair, upon the following terms and conditions:

1. GRANT OF OPTION

     Subject to the terms and conditions of this Agreement, Sunair hereby grants to the Optionee an
option (the “Option”) to purchase an aggregate of Twenty Thousand (20,000) shares (the “Option
Shares”) of Sunair’s common stock, $.10 par value per share (“Common Stock”). This Option is a
non-qualified stock option which is not intended to meet the requirements of an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”). The grant of this Option is subject to and shall not be of any legal force or effect
until the approval of such grant by the shareholders of Sunair at Sunair’s next annual meeting of
shareholders.

2. EXERCISE PRICE

     The exercise price (“Option Price”) of this Option shall be $4.79 per Option Share. The
Option Price of this Option shall be subject to adjustment in the event of changes in the
capitalization of the Company, as set forth in Section 8 hereto.

3. TERM AND VESTING OF OPTION

     (a) Option Period. Subject to the provisions of this Section 3 and Section 6 hereof,
this Option shall terminate and all rights to purchase shares hereunder shall cease on August 5,
2009 (such date being five (5) years from Grant Date).

     (b) Vesting and Exercisability. Subject to the provisions of Sections 1 and 6 hereof,
this Option shall become vested on the date hereof (the “Vesting Date”).

 

 

4. MANNER OF EXERCISE AND PAYMENT

     (a) Exercise. This Option may be exercised to the extent vested as provided in
Section 3 by delivery to Sunair on any business day, at its principal office, addressed to the
attention of the Stock Option Administrator, of written notice of exercise, which notice shall
specify the number of shares with respect to which this Option is being exercised, and shall be
accompanied by payment in full of the Option Price of the shares for which this Option is being
exercised, in accordance with Section 4(b) below. The minimum number of shares of Common Stock
with respect to which this Option may be exercised, in whole or in part, at any time shall be the
lesser of one hundred (100) shares or the maximum number of shares available for purchase under
this Option at the time of exercise.

     (b) Payment. Payment of the Option Price for the shares of Common Stock purchased
pursuant to the exercise of this Option shall be made in cash or in cash equivalents. An attempt
to exercise any Option granted hereunder other than as set forth above shall be invalid and of no
force and effect.

     (c) Issuance of Certificates. Promptly after the exercise of this Option, Optionee
shall be entitled to the issuance of a certificate or certificates evidencing his ownership of such
shares of Common Stock. An individual holding or exercising an Option shall have none of the
rights of a stockholder until the shares of Common Stock covered thereby are fully paid and issued
to him and, except as provided in Section 8 below, no adjustment shall be made for dividends or
other rights for which the record date is prior to the date of such issuance.

5. TRANSFERABILITY OF OPTION

     Unless otherwise permitted by the Board in its sole and absolute discretion, this Option shall
not be assignable or transferable by the Optionee, other than by will or the laws of descent and
distribution.

6. TERMINATION OF EMPLOYMENT, DEATH OR DISABILITY

     General. Upon the termination of the employment or other service of the Optionee with
Sunair or any subsidiary (“Subsidiary”) of Sunair (Sunair and Subsidiary are collectively referred
to herein as the “Company”), including by reason of death or “permanent and total disability”
(within the meaning of Section 22(e)(3) of the Code) of the Optionee, this Option shall expire two
(2) years following the last day of the Optionee’s employment or service with the Company, or, if
earlier, prior to the termination of this Option pursuant to Section 3(a) above. Options will be
exercisable only to the extent they are exercisable on the date the Optionee’s employment or
service terminates. Notwithstanding the foregoing provisions of this Section 6, the Board may
provide, in its discretion, that following the termination of employment or service of Optionee
with the Company, Optionee may exercise this Option, in whole or in part, at any time subsequent to
such termination of employment or service and prior to termination of this Option pursuant to
Section 3(a) above, either

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subject to or without regard to any vesting or other limitation on exercise imposed pursuant
to Section 3(b) above. Temporary absence from employment or service because of illness, vacation,
approved leaves of absence, military service and transfer of employment shall not constitute a
termination of employment or service with the Company.

7. INVESTMENT INTENT, REGISTRATION

     (a) Investment Intent, Registration. The Optionee represents and warrants that the
shares of Common Stock being acquired by him upon exercise of the Option are being acquired and
will be acquired for his own account, and will not be sold or otherwise disposed of, except
pursuant to (a) an exemption from the registration requirements under the Securities Act of 1933,
as amended (the “Securities Act”), which does not require the filing by Sunair with the Securities
and Exchange Commission (“SEC”) of any registration statement, offering circular or other document,
in which case, the Optionee shall first supply to an opinion of counsel (which counsel and opinion
shall be satisfactory to Sunair) that such exemption is available, or (b) an effective registration
statement filed by Sunair with the SEC under the Securities Act.

     (b) Legend. Until registered for resale in accordance with Section 7(d) hereof, the
certificates representing the Common Stock shall bear substantially the following legend:

	   	THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF
ANY STATE WITH RESPECT THERETO, OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

Sunair may place stop transfer orders with its transfer agents with respect to such certificates in
accordance with federal securities laws.

     (c) Registration Rights for Common Stock; Filing of Registration Statement. Sunair
will utilize reasonable best efforts to cause, prior to June 30, 2005 a registration statement to
be filed under the Securities Act for the purpose of registering the Common Stock for resale by the
Optionee thereof (the “Registration Statement”). Sunair will use reasonable efforts to have the
Registration Statement become effective and cause the Common Stock to be registered under the
Securities Act, as soon as is reasonably practicable following the filing.

     (d) Further information. If the Common Stock owned by the Optionee is included in any
registration, such Optionee shall furnish Sunair such information regarding itself as Sunair may
reasonably request and as shall be required in connection with any registration, qualification or
compliance referred to in this Agreement.

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8. EFFECT OF CHANGES IN CAPITALIZATION

     (a) Recapitalization. If the outstanding shares of Common Stock of Sunair are
increased or decreased or changed into or exchanged for a different number or kind of shares or
other securities of Sunair by reason of any recapitalization, reclassification, reorganization
(other than as described in 8(b) below), stock split, reverse split, combination of shares,
exchange of shares, stock dividend or other distribution payable in capital stock of Sunair, or
other increase or decrease in such shares effected without receipt of consideration by Sunair, an
appropriate and proportionate adjustment shall be made by the Board in the number and kind of
shares of Common Stock issuable upon exercise of this Option, and in the Option Price per share of
this Option.

     (b) Reorganization. In the event of a Reorganization (as defined below) of Sunair,
the Board may in its sole and absolute discretion, provide that (i) this Option is immediately
exercisable or vested, without regard to any limitation imposed pursuant to this Agreement and/or
(ii) that this Option terminates, provided however, that Optionee shall have the right, immediately
prior to the occurrence of such Reorganization and during such reasonable period as the Board in
its sole discretion shall determine and designate, to exercise any vested portion of this Option in
whole or in part. In the event that the Board does not terminate this Option upon a Reorganization
of Sunair then this Option shall upon exercise thereafter entitle the Optionee to such number of
shares of Common Stock or other securities or property to which a holder of shares of Common Stock
would have been entitled to upon such Reorganization. For purposes of this Agreement a
“Reorganization” of an entity shall be deemed to occur if such entity is a party to a merger,
consolidation, reorganization, or other business combination with one or more entities in which
said entity is not the surviving entity, if such entity disposes of substantially all of its
assets, or if such entity is a party to a spin-off, split-off, split-up or similar transaction;
provided, however, that the transaction shall not be a Reorganization if Sunair, any Parent or any
Subsidiary is the surviving entity.

     (c) Dissolution or Liquidation. Upon the dissolution or liquidation of Sunair, this
Option shall terminate. In the event of any termination of this Option under this Section 8(c),
Optionee shall have the right, immediately prior to the occurrence of such termination and during
such reasonable period as the Board in its sole discretion shall determine and designate, to
exercise this Option in whole or in part, whether or not this Option was otherwise exercisable at
the time such termination occurs and without regard to any vesting or other limitation on exercise
imposed pursuant to Section 3 above.

     (d) Adjustments. Adjustments under this Section 8 related to stock or securities of
Sunair shall be made by the Board, whose determination in that respect shall be final, binding, and
conclusive. No fractional shares of Common Stock or units of other securities shall be issued
pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share or unit.

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     (e) No Limitations. The grant of this Option hereunder shall not affect or limit in
any way the right or power of Sunair to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, consolidate, dissolve or liquidate, or to
sell or transfer all or any part of its business or assets.

9. DISCLAIMER OF RIGHTS

     No provision of this Agreement shall be construed to confer upon any individual, including
Optionee, the right to remain in the employ of or to continue in any other contractual relationship
with Sunair or to interfere in any way with the right and authority of Sunair either to increase or
decrease the compensation of any individual, including Optionee, at any time, or to terminate any
employment or other relationship between any individual, including Optionee, and Sunair.

10. NONEXCLUSIVITY OF THIS AGREEMENT

     This Agreement shall not be construed as creating any limitations upon the right and authority
of the Board to adopt such other incentive compensation arrangements (which arrangements may be
applicable either generally to a class or classes of individuals or specifically to a particular
individual or individuals) as the Board in its discretion determines desirable, including, without
limitation, the granting of stock options or stock appreciation rights.

11. MISCELLANEOUS

     (a) Indulgences, Etc. Neither the failure nor any delay on the part of either party
to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

     (b) Controlling Law. This Agreement and all questions relating to its validity,
interpretation, performance and enforcement (including, without limitation, provisions concerning
limitations of actions), shall be governed by and construed in accordance with the laws of the
State of Florida, without application to the principles of conflict of laws.

     (c) Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given,
made and received only when personally delivered, one day following the day when deposited with an
overnight courier service for overnight priority service, such as Federal Express, for delivery to
the intended addressee or three days following the day when deposited in the United States mails,
first class postage prepaid, certified or registered mail, and addressed, in the case of Sunair,
its

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principal place of business, and, in the case of Optionee, as set forth below Optionee’s
signature on the last page hereof. Any person may alter the address to which communications or
copies are to be sent by giving notice of such change of address in conformity with the provisions
of this Section for the giving of notice.

     (d) Binding Nature of Agreement; Transferability. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns. This Agreement shall not be assignable or transferable by
the Optionee other than by will or the laws of descent and distribution.

     (e) Severability. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.

     (f) Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its interpretation.

     (g) Number of Days. In computing the number of days for purposes of this Agreement,
all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if
the final day of any time period falls on a Saturday, Sunday or holiday on which federal banks are
or may elect to be closed, then the final day shall be deemed to be the next day which is not a
Saturday, Sunday or such holiday.

     (h) No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the parties and their respective successors and permitted
assigns.

     (i) Entire Agreement; Amendments. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the parties and supersedes any prior understandings,
agreements, or representations by or among the parties, written or oral, that may have related in
any way to the subject matter hereof. This Agreement may not be amended, supplemented or modified
in whole or in part except by an instrument in writing signed by the party or parties against whom
enforcement of any such amendment, supplement or modification is sought.

     (j) Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and therefore strict construction
shall be applied against any party. Any reference to any federal, state, local or foreign statute
or law shall be deemed also to refer to the rules and regulations promulgated thereunder, unless
the context requires otherwise. The parties intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any party has breached any
representation, warranty, or covenant contained herein in any respect, the fact that there exists
another representation, warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which

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the party has not breached shall not detract from or mitigate the fact that the party is in
breach of the first representation, warranty or covenant.

     (k) Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed an original and all of which together will constitute one and the same
instrument.

     (l) Pronouns. The use of any gender in this Agreement shall be deemed to include all
genders, and the use of the singular shall be deemed to include the plural and vice versa, wherever
it appears appropriate from the context.

[SIGNATURES ON FOLLOWING PAGE]

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	SUNAIR ELECTRONICS, INC., a Florida corporation

 	 
	 	By:  	/s/ James Laurent
 	 
	 	 	James Laurent, President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	OPTIONEE:

Name:

___________________________________________

Address:

___________________________________________

___________________________________________

 	 
	 	 	 
	 	 	 
	 	 	 
	 

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SCHEDULE I

 

 

 

Arnold Heggestad, Ph.D.

Gerard P. Laheney

Steven P. Oppenheim

 

 

 

 

 

 

 

9Form of Stock Option Agreement

 

EXHIBIT 10.5

NON-QUALIFIED STOCK OPTION AGREEMENT

     THIS NON-QUALIFIED STOCK OPTION AGREEMENT (“Agreement”), is made and effective as of
_____________________________ (the “Grant Date”), by and between Sunair Electronics, Inc., a Florida
corporation (“Sunair”), and
________________________ (“Participant”).

W I T N E S S E T H:

     WHEREAS, Sunair is desirous of increasing the incentive of Participant whose contributions are
important to the continued success of Sunair;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, Sunair hereby grants Participant options to purchase shares of Common Stock of
Sunair pursuant to the Sunair Electronics, Inc. 2004 Stock Incentive Plan (“Plan”), upon
the following terms and conditions. Capitalized terms not defined herein shall have the meaning
ascribed thereto in the Plan. A copy of the Plan will be provided to Participant upon request.

1. GRANT OF OPTION

     Subject to the terms and conditions of this Agreement and the Plan, Sunair hereby grants to
Participant an option (“Option”) to purchase
an aggregate of _____________ ( ____________ ) shares
(“Option Shares”) of Sunair’s Common Stock. This Option is a non-qualified stock option
and is not intended to qualify as an “incentive stock option” under Code Section 422.

2. EXERCISE PRICE

     The
Exercise Price of this Option shall be $______ per Option Share.

3. TERM AND VESTING OF OPTION

     (a) Option Period. Subject to the provisions of this Section 3 hereof and the
Plan, this Option shall terminate and all rights to purchase shares hereunder shall cease on the
___ anniversary of the Grant Date.

     (b) Vesting and Exercisability. Subject to the provisions of Section 5
hereof, this Option shall become vested and exercisable as follows:
____________________ .

4. MANNER OF EXERCISE AND PAYMENT

     This Option may be exercised to the extent vested as provided in Section 3, and in
accordance with Section 6(g) of the Plan.

 

 

5. TERMINATION OF EMPLOYMENT

     (a) General. Except as otherwise set forth in this Section 5, and Section
6(i) of the Plan, upon Participant’s termination of employment or other service with the
Company, other than by reason of Cause or Participant’s Disability, Death or Retirement, this
Option shall expire ____ days following the last day of Participant’s employment or service
with the Company.

     (b) Cause. In the event Participant’s employment or service with the Company is
terminated for Cause, this Option shall be deemed to have terminated and expired upon occurrence of
the event which would be grounds for termination of employment by the Company for Cause.

     (c) Death. If Participant dies while in the employment or service of the Company, or
if Participant dies within ____ of a termination of Participant’s employment or service
with the Company for reason other than Cause, the Participant’s estate or the devisee named in
Participant’s valid last will and testament or Participant’s heir at law who inherits this Option
(whichever is applicable) has the right, at any time within a period
not to exceed ____ after the date of Participant’s death and prior to termination of this Option pursuant to its
terms, to exercise, in whole or in part, any vested portion of this Option held by Participant at
the date of Participant’s death.

     (d) Disability. If Participant’s termination of employment or service with the
Company is by reason of a Disability of Participant, Participant shall have the right at any time
within a period not to exceed ____ after such termination and prior to termination of this
Option pursuant to its terms, to exercise, in whole or in part, any vested portion of this Option
held by Participant at the date of such termination; provided, however, that if Participant dies
within such period, any vested portion of this Option held by Participant upon death shall be
exercisable by Participant’s estate, devisee or heir at law (whichever is applicable) for a period
not to exceed ____ after Participant’s death and prior to the termination of this Option
pursuant to its terms.

     (e) Retirement. If Participant’s termination of employment or service is by reason of
Retirement, Participant shall have the right at any time within a
period not to exceed ____ from the date of such termination, and prior to the termination of this Option pursuant to its
terms to exercise, in whole or in part, any vested portion of this Option held by Participant at
the date of such termination; provided, however, that, if Participant dies within such exercise
period, any vested portion of this Option held by Participant upon death shall be exercisable by
Participant’s estate, devisee or heir at law (whichever is applicable) for a period not to exceed
____ after Participant’s death and prior to the termination of the Option pursuant to its
terms.

     (f) Without Cause. In the event Participant’s employment or service with the Company
is terminated without Cause, this Option shall be deemed to be fully vested and shall become
exercisable on the last day of Participant’s employment or service with the Company, and
Participant shall have the right at any time within a period not to
exceed ____ after such
termination without Cause and prior to termination of this Option pursuant to its terms, to
exercise, in whole or in part, the remaining Option Shares.

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6. MISCELLANEOUS

     (a) Indulgences, Etc. Neither the failure nor any delay on the part of either party
to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

     (b) Controlling Law. This Agreement and all questions relating to its validity,
interpretation, performance and enforcement (including, without limitation, provisions concerning
limitations of actions), shall be governed by and construed in accordance with the laws of the
State of Florida, without application to the principles of conflict of laws.

     (c) Binding Nature of Agreement; Transferability. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns. This Agreement shall not be assignable or transferable by
Participant other than by will or the laws of descent and distribution.

     (d) Severability. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.

     (e) Section Headings. The section headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its interpretation.

     (f) Number of Days. In computing the number of days for purposes of this Agreement,
all days shall be counted, including Saturdays, Sundays and holidays; provided,
however that if the final day of any time period falls on a Saturday, Sunday or holiday on
which federal banks are or may elect to be closed, then the final day shall be deemed to be the
next day which is not a Saturday, Sunday or such holiday.

     (g) No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the parties and their respective successors and permitted
assigns.

     (h) Entire Agreement; Amendments. This Agreement, including the Plan and any other
documents and exhibits referred to herein, constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements, or representations by or among the parties,
written or oral, that may have related in any way to the subject matter hereof. This Agreement may
not be amended, supplemented or modified in whole or in part except by an instrument in writing
signed by the party or parties against whom enforcement of any such amendment, supplement or
modification is sought.

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     (i) Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and thereof strict construction
shall be applied against any party. Any reference to any federal, state, local or foreign statute
or law shall be deemed also to refer to the rules and regulations promulgated thereunder, unless
the context requires otherwise. If any provision of this Agreement conflicts with the terms of the
Plan, the Plan shall govern.

     (j) Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed an original and all of which together will constitute one and the same
instrument.

(Signature Page Follows)

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	SUNAIR ELECTRONICS, INC.

 	 
	 	By:  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	PARTICIPANT:

Name:

________________________________________________

Address:

________________________________________________

________________________________________________

 	 
	 	 	 
	 	 	 
	 	 	 
	 

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