Document:

Exhibit 10.7

 

 

 

SMITH ELECTRIC VEHICLES CORP.

 

2012 INCENTIVE PLAN

 

 

 

 

TABLE OF CONTENTS

 

	
ARTICLE 1 . INTRODUCTION
    	
1
    
	
 
    	
 
    
	
1.1.
    	
Purpose of the Plan
    	
1
    
	
1.2.
    	
Nature of Awards
    	
1
    
	
1.3.
    	
Effective Date and Term of Plan
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 . DEFINITIONS AND   CONSTRUCTION
    	
2
    
	
 
    	
 
    
	
2.1.
    	
Definitions
    	
2
    
	
2.2.
    	
Construction
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 . ELIGIBILITY
    	
6
    
	
 
    	
 
    
	
3.1.
    	
In General
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 . ADMINISTRATION   OF THE PLAN
    	
7
    
	
 
    	
 
    	
 
    
	
4.1.
    	
In General
    	
7
    
	
4.2.
    	
Delegation to Committees and Officers
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 . STOCK SUBJECT TO   THE PLAN
    	
8
    
	
 
    	
 
    	
 
    
	
5.1.
    	
Number of Shares
    	
8
    
	
5.2.
    	
Substitute Awards
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE 6 . TYPES OF AWARDS
    	
9
    
	
 
    	
 
    	
 
    
	
6.1.
    	
Stock Options
    	
9
    
	
6.2.
    	
Stock Appreciation Rights
    	
11
    
	
6.3.
    	
Restricted Stock
    	
12
    
	
6.4.
    	
Restricted Stock Units
    	
13
    
	
6.5.
    	
Other Stock-Based Awards
    	
13
    
	
6.6.
    	
Cash Awards
    	
13
    
	
6.7.
    	
Performance-Based Awards
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 . ADJUSTMENTS
    	
17
    
	
 
    	
 
    	
 
    
	
7.1.
    	
Changes in Capitalization
    	
17
    
	
7.2.
    	
Change in Control
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 8 . GENERAL PROVISIONS   APPLICABLE TO ALL AWARDS
    	
19
    
	
 
    	
 
    	
 
    
	
8.1.
    	
Transferability of Awards
    	
19
    
	
8.2.
    	
Termination of Status
    	
19
    
	
8.3.
    	
Withholding
    	
19
    
	
8.4.
    	
Conditions on Delivery of Stock
    	
20
    
	
8.5.
    	
Acceleration
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE 9 . MISCELLANEOUS
    	
21
    
	
 
    	
 
    	
 
    
	
9.1.
    	
No Right to Employment or Other Status
    	
21
    
	
9.2.
    	
No Rights as Stockholder
    	
21
    

 

 

	
9.3.
    	
Amendment
    	
21
    
	
9.4.
    	
Compliance with Code Section 409A
    	
22
    
	
9.5.
    	
Governing Law
    	
22
    

 

 

ARTICLE 1.  INTRODUCTION

 

1.1.         Purpose of the Plan.

The Plan is intended to enhance the Company’s ability to attract, retain and motivate the employees, officers, directors, consultants, and advisors of the Company, and to provide them with equity ownership opportunities and performance-based incentives that are intended to align their interests with those of the Company’s stockholders.

 

1.2.         Nature of Awards.

The Plan is intended to permit the grant of Stock Options, Stock Appreciation Rights, shares of Restricted Stock, Restricted Stock Units, and any other form of award based on the value (or the increase in value) of shares of the common stock of the Company.  The Plan is also intended to permit cash incentive awards.  Subject to Section 8.5, Participants shall vest in their Awards granted under the Plan to the extent certain conditions set forth in their Award Certificate are met.  Vesting criteria shall include the passage of time or the attainment of individual and/or Company performance objectives, or a combination of both.  Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award.  The terms of each Award need not be identical, and Participants need not be treated uniformly.

 

1.3.         Effective Date and Term of Plan.

The Plan is effective as of the date that the initial public offering of the Company’s Shares closes.  No Awards shall be granted under the Plan after the tenth anniversary of the Effective Date (or such earlier date as may apply under section 422 of the Code), but Awards previously granted may extend beyond that date.

 

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ARTICLE 2.  DEFINITIONS AND CONSTRUCTION

 

2.1.         Definitions.

 

When used in this 2012 Incentive Plan, the following terms shall have the meanings set forth below, unless the context clearly requires a different meaning:

 

(a)                                  “Article” means an article of the Plan.

 

(b)                                 “Award” means an award granted under the Plan.

 

(c)                                  “Award Certificate” means the agreement, certificate or other document evidencing an Award, which shall be in such form (written, electronic or otherwise) as the Committee shall determine.

 

(d)                                 “Board” means the Board of Directors of the Company.

 

(e)                                  “Change in Control” shall mean that any one of the following apply:

 

(1)                                  the acquisition by any individual, entity or group (within the meaning of section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (A) the then-outstanding shares of the Company’s common stock (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”).  For purposes of this paragraph (1), the following acquisitions by a Person will not constitute a Change in Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company; or (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company;

 

(2)                                  the individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board.  Any individual becoming a director subsequent to the Effective Date whose election (or nomination for election) by the Company’s stockholders is approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered a member of the Incumbent Board as of the Effective Date, but any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest

 

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with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Incumbent Board will not be deemed a member of the Incumbent Board as of the Effective Date;

 

(3)                                  the consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless following such Business Combination: (A) the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination (including, without limitation, a corporation that as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions to one another as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 40% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the Board of Directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

 

(4)                                  the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, the Company’s initial public offering of its securities shall not constitute a Change in Control.  In addition, the

 

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Committee, in any Award Certificate, may use a narrower alternative definition of Change in Control that results in certain events not constituting a Change in Control with respect to a particular Award Certificate even though such event would have constituted a Change in Control under the definition set forth in this Section 2.1(e).  To the extent necessary to comply with section 409A of the Code, no Award that is subject to section 409A shall be payable on a Change in Control if the event constituting a Change in Control is not a “change in the ownership or effective control of” the Company or a change “in the ownership of a substantial portion of the assets of” the Company within the meaning of section 409A.

 

(f)                                    “Code” means the Internal Revenue Code of 1986, as amended.

 

(g)                                 “Committee” shall mean the Compensation Committee of the Board or any committee or officer to whom the Compensation Committee delegates authority pursuant to Section 4.2.

 

(h)                                 “Company” means Smith Electric Vehicles Corp.

 

(i)                                     “Disability” shall mean a disability within the meaning of the federal Social Security Act or such other definition as the Committee may include in an Award Certificate.  To the extent necessary to comply with section 409A of the Code, no Award that is subject to section 409A shall be payable on a Disability if the Participant is not “disabled” within the meaning of section 409A.

 

(j)                                     “Effective Date” means the first date set forth in Section 1.3.

 

(k)                                  “Fair Market Value” means the closing sales price (for the primary trading session) of a Share on the relevant date.  For any date that is not a trading day, the Fair Market Value for such date will be determined by using the closing sale price for the immediately preceding trading day.  The Committee can substitute a particular time of day or other measure of “closing sale price” if appropriate because of unusual circumstances or can use weighted averages either on a daily basis or such longer period to the extent permitted under section 409A of the Code.

 

(l)                                     “Plan” means this 2012 Incentive Plan.

 

(m)                               “Restricted Stock” means an Award granted pursuant to Section 6.3.

 

(n)                                 “Restricted Stock Unit” or “RSU” means an Award granted pursuant to Section 6.4.

 

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(o)                                 “Section” means a section of the Plan.

 

(p)                                 “Share” means a share of common stock of the Company, $0.001 per share par value.

 

(q)                                 “Stock Appreciation Right” or “SAR” means an Award granted pursuant to Section 6.2.

 

(r)                                    “Stock Option” means an Award granted pursuant to Section 6.1; a Stock Option can be either an “Incentive Stock Option” (if it complies with the requirements of Section 6.1(b)) or a “Nonqualified Stock Option” or “Nonstatutory Stock Option” (if it does not comply with the requirements of Section 6.1(b)).

 

(s)                                  “Ten Percent Stockholder” means a Participant who on the date of grant is treated under section 424(d) of the Code as owning stock (not including stock purchasable under outstanding options) possessing more than 10% of the total combined voting power of all classes of the stock of the Company or any parent or subsidiary of the Company as defined in section 424(e) or (f) of the Code.

 

2.2.         Construction.

 

When used in the Plan, (a) the terms “include” and “including” shall be deemed to include the phrase “but not limited to” and (b) masculine pronouns shall include the feminine.

 

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ARTICLE 3.  ELIGIBILITY

 

3.1.         In General.

 

Any natural person or entity is eligible to be granted an Award if such individual or entity is a current employee, officer, director, consultant, or advisor of the Company or any of the Company’s present or future parent or subsidiary corporations as defined in sections 424(e) or (f) of the Code or any other business venture (including, without limitation, a joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Committee.

 

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ARTICLE 4.  ADMINISTRATION OF THE PLAN

 

4.1.         In General.

 

(a)                                  The Plan will be administered by the Committee.  The Committee shall have authority to grant Awards and determine recipients and terms of any Awards, and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable.

 

(b)                                 The Committee shall have full discretionary authority to construe and interpret the terms of the Plan and any Award Certificate, and to determine all facts necessary to administer the Plan and any Award Certificate.  The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Certificate in the manner and to the extent it shall deem necessary or advisable.

 

(c)                                  All decisions by the Committee shall be made in its sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award.  No director or person acting pursuant to the authority delegated by the Committee shall be liable for any action or determination relating to or under the Plan made in good faith.

 

(d)                                 With respect to Awards made to directors, the Board shall also have the authority described in this Section 4.1 and Section 8.5.

 

4.2.         Delegation to Committees and Officers.

 

To the extent permitted by applicable law (including applicable stock exchange listing and independence standards) and subject to any limitations under the Plan:

 

(a)                                  the Committee may delegate any or all of its powers under the Plan to one or more committees or subcommittees of members of the Board or of Company management.

 

(b)                                 the Committee may delegate to one or more officers of the Company the power (1) to grant Awards to any individual eligible under Section 3.1 other than a director or executive officer and (2) to exercise such other powers under the Plan as the Committee may determine; however, no officer shall be authorized to grant Awards to himself or herself.

 

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ARTICLE 5.  STOCK SUBJECT TO THE PLAN

 

5.1.         Number of Shares.

 

(a)                                  Subject to adjustment under Article 7, Awards may be made under the Plan for up to 3,000,000 Shares, of which 300,000 shares can be issued as Incentive Stock Options.

 

(b)                                 If any Award expires or is terminated, surrendered or canceled without having been fully exercised, is forfeited in whole or in part, or results in any Shares not being issued, the unused Shares covered by such Award shall again be available for the grant of Awards under the Plan.  However, in the case of Incentive Stock Options, the foregoing provisions shall be subject to any limitations under the Code.  Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

 

5.2.         Substitute Awards.

 

(a)                                  In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Committee may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof.  Substitute Awards may be granted on such terms as the Committee deems appropriate in the circumstances.

 

(b)                                 Substitute Awards shall not count against the overall share limit set forth in Section 5.1, except as may be required by reason of section 422 and related provisions of the Code.

 

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ARTICLE 6.  TYPES OF AWARDS

 

6.1.         Stock Options.

 

(a)                                  In General.  The Committee may grant options to purchase Shares and determine the number of Shares to be covered by each option, the exercise price of each option and the conditions and limitations applicable to the exercise of each option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable.  A Stock Option that is not intended to be an Incentive Stock Option shall be designated as a “Nonstatutory Stock Option” or a “Nonqualified Stock Option.”

 

(b)                                 Incentive Stock Options.

 

(1)                                  A Stock Option that the Committee intends to be an Incentive Stock Option shall only be granted to employees of the Company or any of the Company’s present or future parent or  subsidiary corporations as defined in sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and construed consistently with the requirements of section 422 of the Code.

 

(2)                                  A Stock Option that is intended to be an Incentive Stock Option shall be treated as a Nonqualified Stock Option to the extent that, in the calendar year in which the Award is first exercisable, the aggregate Fair Market Value of the Shares subject to the Award (when added to other awards granted to the same individual that are intended to be Incentive Stock Options under the Plan or any other plan maintained by the Company and certain related corporations) exceeds $100,000 or such other limitation as might apply under section 422 of the Code.

 

(3)                                  The Company shall have no liability to a Participant, or any other party, if a Stock Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option, or for any action taken by the Committee, including without limitation the conversion of an Incentive Stock Option to a Nonstatutory Stock Option.

 

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(c)                                  Exercise Price.

 

(1)                                  The Committee shall establish the exercise price of each Stock Option and specify the exercise price in the applicable Award Certificate.

 

(2)                                  The exercise price of a Stock Option intended to be an Incentive Stock Option shall not be less than 100% of the Fair Market Value on the date the Stock Option is granted, except that, if any Incentive Stock Option is granted to a Ten Percent Stockholder, the exercise price shall not be less than 110% of the Fair Market Value of the Shares on the date such Incentive Stock Option is granted.  The 100% and 110% limitation in this Section 6.1(c)(2) shall automatically adjust to the extent required by section 422 of the Code.

 

(3)                                  No Stock Option shall have an exercise price that is less than the Fair Market Value of a Share on the date the Stock Option is granted, unless the Committee determines that such Stock Option shall be subject to section 409A of the Code or that the Award is a substitute Award that is not required to be granted at Fair Market Value.

 

(d)                                 Term of Stock Options.

 

(1)                                  Each Stock Option shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the applicable Award Certificate; except that no Stock Option shall be granted for a term of more than 10 years.  Incentive Stock Options issued to a Ten Percent Stockholder shall not have a term of more than 5 years.

 

(2)                                  No Stock Option shall permit the Participant to defer receipt of compensation on the Stock Option beyond the date of exercise, unless the Committee determines that such Stock Option shall be subject to section 409A of the Code.

 

(e)                                  Exercise of Stock Option.

 

Stock Options may be exercised by any form of notice (including electronic notice) approved by the Committee, together with payment in full for the number of shares for which the Stock Option is exercised.  Shares subject to the Stock Option will be delivered by the Company as soon as practicable following exercise.

 

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(f)                                    Payment Upon Exercise.

 

Shares purchased upon the exercise of a Stock Option granted under the Plan shall be paid for as follows:

 

(1)                                  in cash or by check, payable to the order of the Company;

 

(2)                                  to the extent permitted by law and either provided for in the applicable Award Certificate or approved by the Committee:

 

(A)                              by requesting that the Company withhold the number of Shares necessary to pay the exercise price and any required tax withholding;

 

(B)                                by (1) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (2) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

 

(C)                                by delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value, if (1) this method of payment is then permitted under applicable law, (2) the Shares, if acquired directly from the Company, were owned by the Participant for the minimum period of time, if any, as may be established by the Committee, and (3) the Shares are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

 

(D)                               by (1) delivery of a promissory note of a Participant who is not an executive officer to the Company on terms determined by the Committee, or (2) payment of such other lawful consideration as the Committee may determine; or

 

(3)                                  by any combination of the above permitted forms of payment.

 

6.2.         Stock Appreciation Rights.

 

(a)                                  In General.  A Stock Appreciation Right (or SAR) is an Award in the form of a right to receive cash or a Share, upon surrender of the SAR,

 

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in an amount equal to the appreciation in the value of the Share over a base price established in the Award.  The Committee may grant SARs either independently of Stock Options, or in tandem with Stock Options such that the exercise of the Stock Option or SAR cancels the tandem SAR or Stock Option.

 

(b)                                 Exercise Price.  The minimum base price of a SAR granted under the Plan shall be the price set forth in the applicable Award Certificate, or, in the case of a SAR related to a Stock Option (whether already outstanding or concurrently granted), the exercise price of the related Stock Option.

 

(c)                                  Term, Exercise, and Payment.  The provisions of Sections 6.1(d), (e), and (f) shall generally apply to SARs, as applicable.

 

(d)                                 Section 409A.  The compensation payable under a SAR shall not be greater than the amount by which the Fair Market Value of a Share on the exercise date exceeds the Fair Market Value of a Share on the grant date, unless the Committee determines that such SAR shall be subject to section 409A of the Code.

 

6.3.         Restricted Stock.

 

(a)                                  In General.  The Committee may grant Awards of Restricted Stock.  The Committee shall determine the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture), the issue price (if any) and whether the Shares shall be entitled to exercise voting or other rights associated with ownership of a Share.

 

(b)                                 Dividends.  Unless otherwise provided by the Committee, Participants holding Restricted Stock will be eligible to receive all dividends paid with respect to such Shares.  If any dividends or distributions are paid in shares, or consist of a dividend or distribution to holders of Shares other than an ordinary cash dividend, the shares or other property will be subject to the same restrictions on transferability and forfeitability as the Restricted Stock with respect to which they were paid.  Each dividend payment will be made no later than the end of the calendar year in which the Restricted Stock on which such dividends are paid vests or, if later, the 15th day of the third month following the date on which the Restricted Stock on which such dividends are paid vests.

 

(c)                                  Stock Certificates.  To the extent that the Company issues stock certificates for shares of Restricted Stock, the Company may require that the stock certificates be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or

 

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its designee).  At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant.  If the Participant has died before the certificates are delivered, the certificates shall be delivered to the beneficiary designated by the Participant under the Plan and on file with the Company (or its designee) before the Participant’s death.  If there is no such valid beneficiary designation, the Participant’s estate shall be the beneficiary.

 

6.4.         Restricted Stock Units.

 

The Committee may grant Restricted Stock Units (or RSUs) to any participant subject to the same conditions and restrictions as the Committee would have imposed in connection with any Award of Restricted Stock.  Each RSU shall have a value equal to the Fair Market Value of one Share.  RSUs may be paid at such time as the Committee may determine and payments may be made in a lump sum or in installments, in cash, Shares, or any combination thereof, as determined by the Committee.

 

6.5.         Other Stock-Based Awards

 

Other Awards that are valued in whole or in part by reference to, or are otherwise based on, Shares or other property, may be granted under the Plan to Participants.  To the extent permitted by law, such other Share Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled.  Other Share Awards may be paid in Shares or cash, as the Committee shall determine.  Subject to the provisions of the Plan, the Committee shall determine the terms and conditions of each other Share Award.

 

6.6.         Cash Awards.

 

Cash Awards are Awards that provide participants with the opportunity to earn a cash payment based upon the achievement of one or more performance goals for a performance period determined by the Committee.  For each performance period, the Committee shall determine the relevant performance criteria, the performance goal for each performance criterion, the level or levels of achievement necessary for Awards to be paid, the weighting of the performance goals if more than one performance goal is applicable, and the size of the Awards.

 

6.7.         Performance-Based Awards.

 

(a)                                  In General.  Any of the Awards listed in this ARTICLE 6 may be granted as Awards that satisfy the requirements for “performance-based compensation” within the meaning of section 162(m) of the Code.  The performance goals must be established by the Committee and may

 

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be for the Company, or a Company subsidiary, affiliate or other Company operating unit or department, or a combination of such units or departments.  The performance goal shall be based on one or more performance criteria selected by the Committee.  With the exception of any Stock Option or Stock Appreciation Right, an Award that is intended to satisfy the requirements of a performance-based Award shall be so designated at the time of grant.

 

(b)                                 Limits.  The maximum aggregate number of shares of Stock (including SARs) for which performance-based Awards may be issued under this Section 6.7 in any calendar year to an individual Participant shall not exceed 1,000,000, the maximum amount that may be earned as a Cash Award for a performance period for a single calendar year by any individual Participant is $2,000,000, and the maximum amount that may be earned as a Cash Award for a performance period of greater than a single calendar year by any individual Participant is $6,000,000.

 

(c)                                  Performance Criteria.  In the case of Awards intended to qualify as performance-based Awards, the performance criteria shall be selected only from among the following: production growth; reserve growth; reserve replacement; lease operating expense; revenue growth; finding/development costs; net sales; operating income; pre- or after-tax income; operating profit minus capital charges; cash flow, including operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment; net income; earnings per share; earnings before interest and taxes; earnings before interest, taxes, depreciation and/or amortization; return on equity; return on invested capital; return on assets; economic value added (or an equivalent measure); share price performance; total stockholder return; improvement in or achievement of expense levels; improvement in or achievement of working capital levels; innovation as measured by a percentage of sales of new products; market share; productivity ratios; completion and/or integration of acquisitions of businesses or companies; completion of divestitures and asset sales; and any combination of any of the foregoing business criteria.  Any of the performance criteria may be used to measure the performance of the Company, a subsidiary, and/or affiliate as a whole or any business unit of the Company, a subsidiary, and/or affiliate or any combination thereof, as the Committee may deem appropriate, or any of the above performance criteria as compared to the performance of a group of comparator companies, or published or special index that the Committee deems appropriate.  The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of the performance criteria specified in this Section 6.7.

 

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(d)                                 Application to Stock Options and Stock Appreciation Rights.  Notwithstanding anything contained in this Section 6.7 to the contrary, Stock Options and Stock Appreciation Rights need not satisfy the specific performance criteria described in this Section 6.7 in order to qualify as performance-based Awards under this section 162(m) of the Code.

 

(e)                                  Time for Establishing Performance Goals.  The specific performance goal(s) and the applicable performance criteria must be established by the Committee in advance of the deadlines applicable under section 162(m) of the Code and while the achievement of the performance goal(s) remains substantially uncertain.

 

(f)                                    Committee Certification and Payment of Awards.  Before any performance-based Award (other than Stock Options and Stock Appreciation Rights) is paid, the Committee must certify in writing (by resolution or otherwise) that the applicable performance goal(s) and any other material terms of the Award have been satisfied.  Unless otherwise provided by the Committee, performance-based Awards shall be paid as soon as practicable after the Committee has certified that the applicable goals and terms of such awards have been satisfied, but in no event before the end of the year in which the performance period ends or later than the fifteenth (15th) day of the third month following the end of the year in which the performance period ends (absent a timely deferral such Award).  Notwithstanding the foregoing, to the extent an amount was intended to be paid so as to qualify as a short-term deferral under section 409A of the Code and the applicable regulations, then such payment may be delayed if the requirements of Treas. Reg. 1.409A-1(b)(4)(ii) are met.  In such case, payment of such deferred amounts must be made as soon as reasonably practicable following the first date on which the Company anticipates or reasonably should anticipate that, if the payments were made on such date, the Company’s deduction with respect to such payment would no longer be restricted due to the applicability of section 162(m) of the Code.

 

(g)                                 Terms and Conditions of Awards; Committee Discretion to Reduce Performance Awards.  The Committee shall have discretion to determine the conditions, restrictions or other limitations, in accordance with, and subject to, the terms of the Plan and section 162(m) of the Code, on the payment of individual Awards under this Section 6.7.  To the extent set forth in an Award Certificate, the Committee may reserve the right to adjust the amount payable in accordance with any standards or on any other basis as the Committee may determine; however, in the case of Awards intended to qualify as

 

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performance-based Awards, such adjustments shall be prescribed in a form that meets the requirements of section 162(m) of the Code.

 

(h)                                 Adjustments for Material Changes.   To the extent the Committee makes adjustments in accordance with Article 7 that affect Awards intended to be performance-based Awards under this Section 6.7, such adjustments shall be prescribed in a form that meets the requirements of section 162(m) of the Code.

 

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ARTICLE 7.  ADJUSTMENTS

 

7.1.         Changes in Capitalization.

 

If there is a stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Shares other than an ordinary cash dividend, (1) the number and class of securities available under this Plan, (2) the number and class of securities and exercise price per Share of each outstanding Stock Option or SAR, (3) the number of Shares subject to each outstanding Restricted Stock Award, RSU or other stock-based Award and (4) the terms of each other outstanding Award shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Committee.

 

7.2.         Change in Control.

 

(a)                                  Consequences of a Change in Control on Awards.  In connection with a Change in Control, the Committee shall take any one or more of the following actions as to all or any (or any portion of) outstanding Awards on such terms as the Committee determines: (1) provide that Awards shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding entity (or an affiliate thereof), (2) upon written notice to a Participant, provide that the Participant’s unexercised Awards will terminate immediately prior to the consummation of the Change in Control unless exercised by the Participant within a specified, reasonable period following the date of such notice, (3) provide that outstanding Awards shall become exercisable, realizable, or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part before or upon the Change in Control, (4) if holders of Shares will receive upon consummation of the Change in Control a cash payment for each Share surrendered in the Change in Control, make or provide for a cash payment to a Participant equal to the excess, if any, of (A) the consideration received by stockholders generally with respect to the Change in Control (the “Change in Control Price”) times the number of Shares subject to the Participant’s Awards (to the extent the exercise price does not exceed the Change in Control Price) over (B) the aggregate exercise price of all such outstanding Awards and any applicable tax withholdings, in exchange for the termination of such Awards, (5) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise price thereof and any applicable tax withholdings) and (6) any combination of the foregoing.  In taking any of the actions permitted under this Section 7.2(a), the Committee shall

 

17

 

not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.

 

(b)                                 For purposes of clause (a) above, a Stock Option or SAR shall be considered assumed if, following consummation of the Change in Control, the Stock Option or SAR confers the right to purchase, for each Share subject to the Stock Option or SAR immediately prior to the consummation of the Change in Control, the consideration (whether cash, securities or other property) received as a result of the Change in Control by holders of Shares for each Share held immediately prior to the consummation of the Change in Control (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); however, if the consideration received as a result of the Change in Control is not solely common stock of the acquiring or succeeding entity(or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding entity, provide for the consideration to be received upon the exercise of Stock Options or SARs to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in value (as determined by the Committee) to the per share consideration received by holders of outstanding Shares as a result of the Change in Control.

 

(c)                                  To the extent a Participant’s Stock Option or SAR has an Exercise Price that is greater than, or equal to, the Change in Control Price (defined in Section 7.2(a) above), the Company may, upon a Change in Control, cancel the Participant’s Award without payment of consideration.

 

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ARTICLE 8.  GENERAL PROVISIONS APPLICABLE TO ALL AWARDS.

 

8.1.         Transferability of Awards.

 

Except as the Committee may otherwise determine or provide in an Award Certificate, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant.  References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.

 

8.2.         Termination of Status.

 

Except to the extent provided in an Award Certificate, the Committee shall determine the effect on an Award of the disability, death, termination or other cessation of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Beneficiary, may exercise rights under the Award.

 

8.3.         Withholding.

 

The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Shares under an Award.  The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages.  If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding.  Payment of withholding obligations is due before the Company will issue any Shares on exercise or release from forfeiture of an Award or, if the Company so requires, at the same time as is payment of the exercise price unless the Company determines otherwise.  To the extent provided for in an Award Certificate or approved by the Committee, a Participant may satisfy such tax obligations in whole or in part by delivery of a portion of the Award creating the tax obligation, valued at Fair Market Value; however, except as otherwise provided by the Committee, the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income).  Shares surrendered to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

 

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8.4.         Conditions on Delivery of Stock.

 

The Company will not be obligated to deliver any Shares pursuant to the Plan or to remove restrictions from Shares previously delivered under the Plan until (a) all conditions of the Award have been met or removed to the satisfaction of the Company, (b) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (c) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

 

8.5.         Acceleration.

 

The Committee or its delegee may at any time provide that any Award shall become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.

 

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ARTICLE 9.  MISCELLANEOUS

 

9.1.         No Right to Employment or Other Status.

 

No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company.  The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award Certificate.

 

9.2.         No Rights as Stockholder.

 

Subject to the provisions of the applicable Award Certificate and except as provided in Section 6.3, no Participant or beneficiary shall have any rights as a stockholder with respect to any Shares to be distributed with respect to an Award until becoming the record holder of such shares.

 

9.3.         Amendment.

 

(a)                                  Amendment of the Plan.  The Committee may amend, suspend or terminate the Plan or any portion of the Plan at any time.  However, if, when the approval of the Company’s stockholders is required under the Code, the applicable stock exchange listing requirements or otherwise, the Committee may not amend, suspend or terminate the Plan without such approval.  Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 9.3 shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, unless the Committee determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of Participants under the Plan.

 

(b)                                 Amendment of Award.  The Committee may amend, modify or terminate any outstanding Award, including substituting another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option.  The Participant’s consent to such action shall be required unless the Committee determines that the action, taking into account any related action, would not materially and adversely affect the Participant’s rights under the Plan.  Notwithstanding the foregoing, without the approval of a majority of the outstanding Shares of common stock present or represented by proxy and entitled to vote at a meeting of the Company’s stockholders, the Committee may not amend any Award (1) to reduce the exercise price of an outstanding Stock Option or SAR or (2) cancel or amend an

 

21

 

outstanding Stock Option or SAR for the purpose of repricing, replacing or regranting such Stock Option or SAR with an exercise price that is less than the exercise price of the original Stock Option or SAR.

 

9.4.         Compliance with Code Section 409A.

 

No Award shall provide for a deferral of compensation within the meaning of section 409A of the Code, unless the Committee specifically provides that the Award is intended to be subject to section 409A of the Code.  If an Award is intended to be subject to section 409A, the following provisions shall apply except to the extent that a contrary provision is included in the Award Certificate: (a) such Award shall be payable on the earlier of a “change in control” or the Participant’s “separation from service” with the Company and (2) any payment made to a Participant who is a “specified employee” of the Company shall not be made before such date as is six months after the Participant’s “separation from service” to the extent required to avoid the adverse consequences of section 409A of the Code.  For purposes of this Section 9.4, the terms “change in control,” “separation from service” and “specified employee” shall have the meanings set forth in section 409A and the applicable Treasury regulations.  The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or to comply with, section 409A is not so exempt or compliant or for any action taken by the Committee.

 

9.5.         Governing Law.

 

The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

 

22Exhibit 10.8

 

Smith Electric Vehicles Corp.

Incentive Stock Option Agreement
  Granted Under 2012 Incentive Plan

 

1.                                      Participant and Award Information

 

Participant Name:  [                                ]

 

Grant Date:  [                                ], 201[  ]

 

Number of Shares Subject to Award: [          ] Shares

 

Exercise Price: $[                          ]

 

Final Exercise Date: [                                ], 201[  ]

 

2.                                      Grant of Option

 

The Company hereby grants to the Participant an option to purchase Shares of the Company’s common stock pursuant to the terms of this Agreement and the Smith Electric Vehicles Corp. 2012 Incentive Plan (the “Plan”).  The Plan is incorporated into this Agreement by reference, and any capitalized terms that are used in this Agreement that are not defined in this Agreement shall have the meaning set forth in the Plan.  Except as otherwise indicated by the context, the term “Participant” will include any person who acquires the right to exercise this Option validly under its terms.  To the extent allowed by law, this Option is intended to be an Incentive Stock Option as defined in Section 422 of the Internal Revenue Code of 1986, as amended.  To the extent the aggregate Fair Market Value of an award exercised under this agreement exceeds $100,000 (One Hundred Thousand Dollars) in any calendar year, in the manner provided in Section 422 of the Code, the portion of the award that exceeds such amount shall be treated as a Nonqualified Stock Option and not as an Incentive Stock Option.

 

No Option granted under this Agreement will be treated as an Incentive Stock Option under Section 422 of the Code if its Grant Date is more than 10 years after the Plan’s Effective Date, but will instead be treated as a Nonqualified Option under the Plan.

 

To the extent any Award under this Agreement fails to meet the requirements under this Agreement, or Section 422 of the Code, but would otherwise be a permitted Award, such Option shall be treated as a Nonqualified Stock Option, (defined in Section 6 of the Plan) rather than an Incentive Stock Option.

 

 

3.                                      Vesting Schedule

 

This Option will become exercisable as to 25% of the original number of shares of Common Stock set forth in Section 1 on the first anniversary of the Grant Date, and as to an additional 25% of the original number of shares of Common Stock on each of the following three anniversaries of the Grant Date.  The Option will be fully vested and fully exercisable on and after the fourth anniversary of the Grant Date.

 

4.                                      Exercise/Termination of Option

 

(a)                                  Form of Exercise.  Each election to exercise this Option shall be made pursuant to a written notice of exercise (“Option Exercise Notice”) substantially in the form attached hereto as Appendix B, signed by the Participant, and received by the Company at its principal office, accompanied by this Agreement, and payment in full in the manner provided in Section 5.  The Participant may purchase fewer shares than the number of shares of Common Stock covered by this Agreement; however, no partial exercise of this Option may be for any fractional share or for fewer than 10 whole shares.

 

(b)                                 Continuous Relationship with the Company Required.  A Participant who receives an Option under this Agreement, to the extent it is an Incentive Stock Option, must be, as of the Grant Date, an employee of the Company or a related corporation, as defined by Sections 424(e) or (f) of the Code (“Eligible Participant”).  Except as otherwise provided in this Section 4, an Option, to the extent it is an Incentive Stock Option, may not be exercised unless the Participant, at the time he or she exercises the Option, is, and has been at all times since the Grant Date, an Eligible Participant.  An Award that does not meet the requirements for Incentive Stock Option under this Agreement, or Section 422 of the Code, but would otherwise be a permissible Option under the Plan, will be a Nonqualified Stock Option under the Plan

 

(c)                                  Termination of Relationship with the Company.  If the Participant involuntarily ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this Option shall terminate  three months after the Participant ceases to be an Eligible Participant (but in no event after the Final Exercise Date), and this Option shall be exercisable only to the extent that the Participant was entitled to exercise this Option on the date he or she ceased to be an Eligible Participant.  Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract or violates any confidentiality, nondisclosure or other agreement between the Participant and the Company, then the right to exercise this Option shall terminate immediately upon such violation.  If the Participant is party to an employment, consulting or other agreement that provides for termination of employment for “Good Reason” or some similar provision, and the Participant terminates employment such that the Participant is entitled to the benefits of the “Good Reason” or other similar

 

2

 

termination, the Participant’s termination will be treated as involuntary termination under this Section 4(c).

 

(d)                                 Exercise Period Upon Death or Disability.  If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) before the Final Exercise Date while he or she is an Eligible Participant and the Company has not terminated its relationship with the Participant for Cause (as defined in paragraph (e) below), this Option shall be exercisable, within the period of one year following the date of death or disability of the Participant (but in no event after the Final Exercise Date), by the Participant (or in the case of death, by an authorized transferee) and this Option shall be exercisable only to the extent that this Option was exercisable by the Participant on the date of his or her death or disability.

 

(e)                                  Termination for Cause.  If, before the Final Exercise Date, the Participant’s employment or other relationship with the Company is terminated by the Company for Cause, or the Participant voluntarily terminates employment with the Company (except if termination is for Good Reason, as provided in Section 4(c) above), the right to exercise this Option shall terminate immediately upon the effective date of such termination of employment or other relationship.  If the Participant is party to an employment, consulting or severance agreement with the Company that contains a definition of “Cause” for termination of employment or other relationship, the term “Cause” shall have the meaning ascribed to such term in such agreement.  Otherwise, “Cause” shall mean (1) the Participant’s conviction of or plea of guilty or nolo contendere to any felony crime, (2) the Participant’s willful or gross neglect of his or her responsibilities to the Company (including, without limitation, breach by the Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or other similar agreement between the Participant and the Company), or (3) the Participant’s knowingly dishonest act, or knowing bad faith or willful misconduct in the performance of his or her responsibilities to the Company.  The Participant shall be considered to have been discharged for Cause if the Company determines in its sole discretion, within 30 days after the Participant’s resignation, that discharge for Cause was warranted.

 

(f)                                    Expiration of Option.  No Option granted under this Agreement, to the extent it is an Incentive Stock Option Award, shall be have a Final Exercise Date, more than 10 years after the Grant Date listed in Section 1 above.  Except that, if any Incentive Stock Option is granted under this Agreement to a Ten Percent Owner, it shall not have a Final Exercise Date that is more than 5 years after the Grant Date listed in Section 1 above.

 

(g)                                 Disposition of the Option.  To the extent an Option under this Agreement is an Incentive Stock Option, an Eligible Participant may not dispose of the award before the later of: the second anniversary of the Grant Date, or the first anniversary of the date the shares have been transferred to the Eligible Participant.

 

3

 

Any shares impermissibly disposed of under this Agreement will be treated as a Nonqualified Stock Option.

 

5.                                      Method of Payment.

 

(a)                                  Shares of Common Stock purchased upon exercise of the Option (“Option Shares”) may be paid for in any one or more of the following forms:

 

(1)                                  by cash or check made payable to the Company;

 

(2)                                  subject to paragraphs (b), (c) and (d) below, and if not otherwise prohibited by applicable law, by the tendering to the Company of other shares of Common Stock of the Company already owned by the Participant (“Tendered Shares”) or the attestation to the ownership of shares of Common Stock that otherwise would be Tendered Shares (“Attested Shares”) in exchange for the Company’s reducing the number of shares that it issues to the Participant by the number of shares necessary for payment in full of the Exercise Price for the Option Shares so purchased; or

 

(3)                                  subject to paragraphs (b), (c) and (d) below, and if not otherwise prohibited by applicable law, by any combination of the forms of consideration set forth in (1) and (2) above.

 

(b)                                 The Compensation Committee of the Board of Directors of the Company (the “Committee”) shall determine acceptable methods for tendering or attesting to shares of Common Stock to exercise an Option under the Plan and may impose such limitations and prohibitions on the use of shares of Common Stock to exercise Options as it deems appropriate.  For purposes of determining the amount of the Exercise Price satisfied by the Tendered Shares or the Attested Shares, such shares shall be valued at their Fair Market Value (as defined in Section 2 of the Plan) on the date of tender or attestation, as applicable. Notwithstanding the above, to the extent an Option under this Agreement is an Incentive Stock Option granted to a Ten Percent Stockholder, the exercise price shall not be less than 110% of Fair Market Value (as provided in Section 6 of the Plan).  Any Option granted to a Ten Percent Stockholder with an exercise price less than 110% of Fair Market Value will be considered a Nonqualified Stock Option.  The date of exercise shall be deemed to be the date that the notice of exercise and payment of the Exercise Price are received by the Company.

 

(c)                                  Prior to the delivery of any Tendered Shares, Attested Shares or cash pursuant to the Option (or exercise thereof), the Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required to be withheld with respect to the Option (or exercise thereof). To the extent that the Company is required by applicable law to 

 

4

 

withhold funds for taxes in respect of any exercise of the Option, then the aggregate Exercise Price shall not be deemed paid and the Option shall not be deemed exercised and the Option Shares issuable upon exercise shall not be deemed issued, until the Participant has paid to the Company, in a manner provided in this Section 5, the aggregate amount of such tax withholding.

 

(d)                                 Shares of Common Stock tendered or attested to in exchange for Option Shares must be held by the Participant for at least 6 months prior to their tender or their attestation to the Company and may not be shares of Restricted Stock (as defined in Section 2 of the Plan) at the time they are tendered or attested to.

 

6.                                      Business Combination

 

(a)                                  Upon the occurrence of a Business Combination (as defined in Section 2 of the Plan), other than a liquidation or dissolution of the Company, this Option shall be assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary of the successor corporation.  If the Option is assumed in connection with a Business Combination, then the Option shall be appropriately adjusted, immediately after such Business Combination, to apply to the number and class of securities which would have been issuable to the Participant in consummation of such Business Combination had the Option been exercised in full immediately prior to such Business Combination, and appropriate adjustments shall also be made to the Exercise Price, provided that the aggregate Exercise Price shall remain the same.

 

(b)                                 Notwithstanding the foregoing, if the successor corporation does not assume (within the meaning of Section 7 of the Plan) the Option or an equivalent option is not substituted, then the Committee shall, upon written or electronic notice to the Participant, provide that either: (i) the Option will become exercisable in full as of a specified time prior to the Business Combination and will terminate immediately prior to the consummation of such Business Combination, except to the extent exercised by the Participant prior to the consummation of the Business Combination; or (ii) the Option will terminate upon consummation of such Business Combination and the Participant will receive, in exchange therefor, a cash payment equal to the amount (if any) by which (A) the Change in Control Price (as defined in Section 7 of the Plan) multiplied by the number of outstanding shares of Common Stock subject to the Option (whether or not then exercisable), exceeds (B) the aggregate Exercise Price of the Option.

 

(c)                                  This agreement shall not in any way affect the right of the Company to adjust, reclassify, reorganize or to otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

5

 

7.                                      Withholding

 

No shares of Common Stock will be issued pursuant to the exercise of this Option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this Option.  The Participant is responsible for all applicable federal, state, local and other tax obligations, as provided in Section 8 of the Plan.

 

8.                                      Nontransferability of Option

 

This Option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this Option shall be exercisable only by the Participant.

 

 

The Company has caused this Option to be executed by its duly authorized officer.

 

	
 
    	
Smith   Electric Vehicles Corp.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

PARTICIPANT’S ACCEPTANCE

 

The Participant hereby accepts, and agrees to the terms and conditions of, the Option and acknowledges receipt of a copy of the Company’s 2012 Incentive Plan.

 

	
 
    	
Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

6

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