Document:

exh10_5.htm

 

Exhibit 10.5

 

 

ZBB ENERGY CORPORATION

NONSTATUTORY STOCK OPTION AGREEMENT

This Nonstatutory Stock Option Agreement (this “Agreement”) is executed as of November 9, 2011, by and between ZBB ENERGY CORPORATION, a Wisconsin corporation (the “Company”), and Charles W. Stankiewicz (“Employee”).

W I T N E S S E T H:

WHEREAS, the Compensation Committee of the Board of Directors of the Company wishes to grant Employee a Nonstatutory Stock Option in conjunction with Employee’s appointment as Executive Vice President-Operations of the Company subject to the terms provided in this Agreement; and

WHEREAS, the Compensation Committee of the Board of Directors of the Company anticipates that this Agreement will promote the best interests of the Company and its shareholders by providing Employee a proprietary interest in the Company with a stronger incentive to put forth maximum effort for the continued success and growth of the Company and its subsidiaries.

NOW, THEREFORE, in consideration of the benefits that the Company will derive in connection with the services to be rendered by Employee, the Company and Employee hereby agree as follows:

1.  Determinations by Administrator.  The Administrator (as defined below) shall make all interpretations, rules and regulations necessary to administer this Agreement, and such determinations of the Administrator shall be binding upon Employee.  For purposes of this Agreement, the term “Administrator” shall mean the Compensation Committee of the Board of Directors.

2.  Option; Number of Shares; Option Price.  The Option (as defined below) granted hereunder is intended to be a nonstatutory stock option and therefore, shall not qualify as an incentive stock option pursuant to Section 422 of the Internal Revenue Code of 1986, as amended.  Employee shall have the right and option to purchase all or any part of an aggregate of [________] shares of $0.01 par value common stock of the Company (“Share(s)”) at the purchase price of $0.79 per Share (the “Option”), which is equal to the Fair Market Value (as defined below) of a Share as of the date of this Agreement.  For purposes of this Agreement, the term “Fair Market Value” shall mean, as of any date, the closing price of a Share on the NYSE Amex.

3.  Vesting and Expiration.

(a)           Vesting.  The Option shall vest (become exercisable) and remain exercisable only in accordance with Annex 1 attached hereto.

 

  

  

  

 

(b)           Expiration.  To the extent not previously exercised according to the terms hereof,  the Option shall expire on the eighth anniversary of the date hereof.

4.  Exercise Period.

(a)           Disability.  Upon Employee’s termination of employment due to a Disability, Employee shall have one (1) year from the date of such termination to exercise the Option granted hereunder as to all or part of the Shares subject to this Option; provided, however, that this Option shall not be exercisable subsequent to the expiration date specified in Section 3(b), above.

(b)           Death.  Upon Employee’s termination of employment due to death, the Option, as to all or any part of the Shares subject to this Option, shall be exercisable:

 

(1)           for one (1) year after Employee’s death, but in no event subsequent to the expiration dates specified in Section 3(b), above; and

(2)           only (i) by the designated beneficiary of Employee (such designation to be made in writing at such time and in such manner as the Administrator shall approve or prescribe), or, if Employee dies without a surviving designated beneficiary, (ii) by the personal representative, administrator, or other representative of the estate of Employee, or by the person or persons to whom the deceased rights of Employee under the Option shall pass by will or the laws of descent and distribution.  Employee may change the beneficiary designation at any time, by giving written notice to the Administrator, subject to such conditions and requirements as the Administrator may prescribe in accordance with applicable law.

(c)           Other Terminations of Employment.  Upon Employee’s termination of employment for any reason other than those specified above in this Section 4, Employee shall have ninety (90) days from the date of such termination to exercise the Option as to all or part of the Shares, provided Employee has a present right to exercise such Option as of the date of such termination; provided, however, that the Option shall not be exercisable subsequent to the expiration dates specified in Section 3(b), above.  Notwithstanding the foregoing, if Employee’s employment is terminated for Cause (as defined in Employee’s offer letter of employment dated October 24, 2011 (the “Offer Letter”)), to the extent the Option held by Employee is not effectively exercised prior to such termination, it shall lapse immediately upon such termination.

(d)           Extension of Exercise Period.  The Administrator may in its sole discretion extend the period permitted for exercise of the Option upon Employee’s termination of employment as otherwise provided in this Section 4 if allowable under applicable law.

5.  Method of Exercising Option.  Except as otherwise permitted by the Administrator, the Option shall be exercisable by delivery to the Company (to the attention of its Secretary), at its offices in Menomonee Falls, Wisconsin, of (i) written notice identifying the Option and stating the number of Shares with respect to which it is being exercised, (ii) payment in full of the exercise price of the Shares then being acquired as provided in Section 6, below, and (iii) execution of such other documentation as is determined to be necessary or appropriate by the Administrator from time to time the form of which shall be provided to Employee at the time of execution and delivery of this Agreement.  The Company shall have the right to delay the issue or delivery of any Shares to be delivered hereunder until (i) the completion of such registration or qualification of such Shares under federal, state, or foreign law, ruling, or regulation as the Company shall deem to be necessary or advisable, and (ii) receipt from Employee of such documents and information as the Administrator may deem necessary or appropriate in connection with such registration or qualification or the issuance of Shares hereunder.

 

  

  

  

 

6.  Payment of Exercise Price.  The exercise price shall be payable in whole or in part in cash, Shares held by Employee, other property, or such other consideration consistent with the Agreement’s purpose and applicable law as may be determined by the Administrator from time to time.  Except as otherwise determined by the Administrator at the time of grant, such price shall be paid in cash in full at the time that the Option is exercised.  If Employee is permitted by the Administrator to pay all or a part of the exercise price in Shares and elects to do so, Employee may make such payment by delivering to the Company a number of Shares, either directly or by attestation, which are equal in value to the purchase or exercise price hereunder.  For this purpose, all Shares so delivered shall be valued per share at the Fair Market Value (as defined above; provided, however, if a Share is not susceptible to valuation by the above method, the term “Fair Market Value” of a Share shall mean the fair market value of a Share as the Administrator may determine in conformity with pertinent law) of a Share on the business day immediately preceding the day on which such Shares are delivered.

7.  Prohibition Against Transfer.  Unless otherwise provided by the Administrator and except as provided below, the Option, and the rights and privileges conferred hereby, may not be transferred by Employee, and shall be exercisable during the lifetime of Employee only by Employee.  The Option shall not be subjected to execution, attachment or similar process.  Employee shall have the right to transfer the Option upon Employee’s death, either to Employee’s designated beneficiary (such designation to be made in writing at such time and in such manner as the Administrator shall approve or prescribe), or, if Employee dies without a surviving designated beneficiary, by the terms of Employee’s will or under the laws of descent and distribution, subject to any limitations set forth in this Agreement and all such distributees shall be subject to all terms and conditions of this Agreement to the same extent as Employee would be if still living.

8.  Nature of Option.  Employee shall not have any interest in any fund or in any specific asset or assets of the Company by reason of the Option granted hereunder, or any right to exercise any of the rights or privileges of a stockholder with respect to the Option until Shares are issued in connection with any exercise.

9.  Adjustment provisions.

(a)           Share Adjustments.  In the event of any stock dividend, stock split, recapitalization, merger, consolidation, combination or exchange of shares of Company stock, or the like, as a result of which shares of any class shall be issued in respect of the outstanding Shares, or the Shares shall be changed into the same or a different number of the same or another class of stock, or into securities of another person, cash or other property (not including a regular cash dividend), the number of Shares subject to the Option and the exercise price applicable to the Option shall be appropriately adjusted in such equitable and proportionate amount as determined by the Administrator.  No fractional Share shall be issued under the Agreement resulting from any such adjustment but the Administrator in its sole discretion may make a cash payment in lieu of a fractional Share.

 

  

  

  

 

(b)           Acquisitions.  In the event of a merger or consolidation of the Company with another corporation or entity, or a sale or disposition by the Company of all or substantially all of its assets, the Administrator shall, in its sole discretion, have authority to provide for (i) waiver in whole or in part of any remaining restrictions or vesting requirements in connection with the Option granted hereunder, (ii) the conversion of the outstanding Option into cash, (iii) the conversion of the Option into the right to receive securities, including options, of another person or entity upon such terms and conditions as are determined by the Administrator in its sole discretion and/or (iv) the lapse of the Option after notice in writing has been given that the Option may be exercised within a set period from the date of such notice and that any Option not exercised within such period shall lapse.

(c)           Binding Effect.  Without limiting the generality of what is provided in Section 1 hereof and for avoidance of doubt, any adjustment, waiver, conversion or other action taken by the Administrator under this Section 9 shall be conclusive and binding on Employee and the Company and any respective successors and assigns.

10.  Notices.  Any notice to be given to the Company under the terms of this Agreement shall be given in writing to the Company at its offices in Menomonee Falls, Wisconsin.  Any notice to be given to Employee may be addressed to Employee’s address as it appears on the payroll records of the Company or any subsidiary thereof.  Any such notice shall be deemed to have been duly given if and when actually received by the party to whom it is addressed, as evidenced by a written receipt to that effect.

11.  Taxes.  The Company may require payment or reimbursement of or may withhold any minimum tax that it believes is required as a result of the grant or exercise of the Option, and the Company may defer making delivery with respect to Shares or cash payable hereunder or otherwise until arrangements satisfactory to the Company have been made with respect to such withholding obligations.

12.  Rights of Employee.  The Option, and any payments or other benefits received by Employee under the Option, is discretionary and shall not be deemed a part of Employee’s regular, recurring compensation for any purpose, including without limitation for purposes of termination, indemnity, or severance pay law of any country and shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided to Employee unless expressly so provided by such other plan, contract or arrangement, or unless the Administrator expressly determines otherwise.

13.  Amendment.  The Administrator may amend the Agreement; provided, however, that Employee’s consent to such action shall be required unless the Administrator determines that the action, taking into account any related action, would not materially and adversely affect Employee.  However, notwithstanding any other provision of the Agreement, the Administrator may not adjust or amend the exercise price of the Option, whether through amendment, cancellation and replacement grants, or any other means, except in accordance with Section 9 hereof.

 

  

  

  

 

14.  No Right To Employment.  The Agreement shall not confer upon Employee any right to continue employment with the Company or a subsidiary, nor shall it interfere in any way with the right of the Company or such subsidiary to terminate Employee’s employment any time.

15.  Severability.  In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

16.  Governing Law.  This Agreement and all actions taken hereunder shall be governed by, and construed in accordance with, the laws of the State of Wisconsin, applied without regard to the laws of any other jurisdiction that otherwise would govern under conflict of law principles.

 

 

  

  

  

 

 

IN WITNESS WHEREOF, the Company has caused these presents to be executed as of the date and year first above written, which is the date of the granting of the Option evidenced hereby.

 

 

 

	 	ZBB ENERGY CORPORATION
	 	 	 
	 	By: 	________________________________________   
	 	 	

Name:

	 	 	Title:

 

 

The undersigned Employee hereby accepts the foregoing Option and agrees to the several terms and conditions hereof.

 

 

	 	______________________________________________
	 	Employeeexh10_9.htm

 

Exhibit 10.9

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as of December 13, 2011 is entered into by and among ZBB Energy Corporation, a Wisconsin corporation (the “Company”), and the stockholders of the Company signatory hereto (each a “Stockholder” and collectively, “Stockholders”).

 

WHEREAS, this Agreement is entered into in connection with the issuance of shares of the Company’s common stock (the “Common Stock”) to Stockholders as contemplated by that certain Stock Purchase Agreement dated as of the date hereof (the “Stock Purchase Agreement”);

 

NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

	
1.  

	
Definitions.

 

Holder:  Any Stockholder so long as such Stockholder owns any Registrable Securities and any of such Stockholder’s respective successors and assigns who acquire rights in accordance with this Agreement with respect to Registrable Securities, directly or indirectly from such Stockholder, or from such other successor and assign, and who agree in writing, in form and substance reasonably satisfactory to the Company, to be bound hereby.

 

Registration Expenses:  Any and all reasonable expenses actually incurred incident to performance of or compliance with this Agreement other than underwriting and brokerage discounts and commissions, all fees and expenses of counsel for any Holder or Holder, transfer taxes and other expenses, if any, relating to the sale or disposition of such Holder’s Registrable Securities pursuant to a Registration Statement.

 

Registrable Securities:  All or part of the shares of Common Stock issued to Stockholders pursuant to the Stock Purchase Agreement; provided, however, that shares of Common Stock shall not be Registrable Securities if and to the extent that (i) a Registration Statement with respect to such Common Stock shall have been declared effective under the Securities Act and such shares of Common Stock shall have been disposed of in accordance with such Registration Statement, (ii) such shares of Common Stock may be distributed to the public in accordance with Rule 144 (or any successor provision) promulgated under the Securities Act, or (iii) such shares of Common Stock shall have been otherwise transferred and new shares of Common Stock, which do not bear restrictions against further transfer, shall have been issued by the Company.

 

Registration Statement:  Any registration statement of the Company filed with the SEC which applies to any of the Registrable Securities (in whole or in part), including the prospectus included therein, all amendments and any supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.

 

SEC:  The United States Securities and Exchange Commission.

 

 

  

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Securities Act:  The Securities Act of 1933, as amended from time to time, or any successor statute, and the rules and regulations of the SEC thereunder, all as in effect at the time.

 

	
2.  

	
Registration under the Securities Act:

 

	
(a)  

	
Demand Registration.  At any time during the two year period commencing upon the date hereof, the holders of at least fifty percent (50%) of the Registrable Securities may notify the Company that they intend to offer or cause to be offered for public sale all or any portion of their Registrable Securities in a registered public offering on Form S-3.  Such requests shall be in writing and shall state the number of shares of Registrable Securities to be disposed of and the intended method of disposition of such shares by such holder or holders.  The Company will use its best efforts to expeditiously effect the registration of all Registrable Securities whose holders request participation in such registration under the Securities Act, but only to the extent provided for in this Agreement; provided, however, that the Company shall not be required to effect registration pursuant to a request under this Section 2(a) more than once.

 

	
(b)  

	
Right to Piggyback.  Subject to Sections 2(d) hereof, if at any time during the two year period commencing upon the date hereof, the Company proposes to file a Registration Statement under the Securities Act with respect to any offering of shares of Common Stock by the Company for its own account and/or on behalf of any of its security holders (including a registration pursuant to Section 2(a) above) and the registration form to be used may be used for the registration of Registrable Securities (other than (i) a registration on Form S-8 or S-4 or any successor form, (ii) a registration relating to a transaction subject to Rule 145 under the Securities Act, (iii) any registration of securities as it relates to an offering and sale to management of the Company pursuant to any employee stock plan or other employee benefit plan arrangement or (iv) any registration pursuant to the Amended and Restated Securities Purchase Agreement dated August 30, 2010 between the Company and Socius CG II, Ltd.) then, as soon as practicable (but in no event less than twenty (20) days prior to the proposed date of filing such Registration Statement), the Company shall give written notice of such proposed filing to the Holders, and such notice shall offer the Holders the opportunity to register such number of Registrable Securities as the Holders may request (a “Registration Request“).  Subject to Section 2(d), the Company shall include in such Registration Statement all Registrable Securities requested within fifteen (15) days after the receipt of any such notice (which request shall specify the Registrable Securities intended to be disposed of by the Holders) to be included in the registration for such offering pursuant to a Registration Request; provided, however, that if, at any time after giving written notice of its intention to register shares of Common Stock and prior to the effective date of the Registration Statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of such shares of Common Stock, the Company may, at its election, give written notice of such determination to the Holders of Registrable Securities and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration, and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities, for the same period as the delay in registering such shares of Common Stock.

 

 

  

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(c)  

	
Expenses.  The Registration Expenses of the Holders of Registrable Securities will be paid by the Company in a Registration Request.  Underwriting or brokerage discounts and commissions, transfer taxes, if any, and any expenses of a Holder for counsel relating to the sale or disposition of such Holder’s Registrable Securities pursuant to such Registration Statement shall be borne by the Holder.

 

	
(d)  

	
Underwriter’s Cutback.  Notwithstanding Section 2(b), if a Registration Request involves an underwritten offering being made on behalf of the Company, and the managing underwriter or underwriters advise the Company in writing that in their opinion the number of shares of Common Stock requested to be included in such registration exceeds the number which can be sold in such offering or would be reasonably likely to adversely affect the price or distribution of the shares of Common Stock offered in such offering or the timing thereof, then the shares of Common Stock to be included in such registration shall be the number of shares of Common Stock, adjusted on a pro rata basis based on the number of shares requested to be registered, that, in the opinion of such underwriter or underwriters, can be sold without an adverse effect on the price, timing or distribution of the shares of Common Stock to be included.

 

	
3.  

	
Registration Procedures.  In connection with the Company’s obligations under Section 2 hereof, the Company shall use it best efforts to effect or cause to be effected the registration of the Registrable Securities under the Securities Act to permit offers and sales in accordance with the intended method or methods of distribution thereof.  In addition, and as a condition to Stockholder’s right pursuant to Section 2(b), Stockholder shall execute such underwriting agreement and otherwise sell the Registrable Securities on the same terms as applicable to the offering of shares pursuant to such registration generally.

 

	
4.  

	
Indemnification.

 

	
(a)  

	
The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each person or entity who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses caused by any untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein or by such Holder’s failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such holder with same.

 

 

  

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(b)  

	
In connection with any registration statement in which a Holder of Registrable Securities is participating, each such Holder will furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify the Company, its directors and officers and each person or entity who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder; provided that the obligation to indemnify will be several, not joint and several, among such Holder of Registrable Securities and the liability of each such Holder of Registrable Securities will be in proportion to and limited to the net amount received by such Holder from the sale of Registrable Securities pursuant to such registration statement.

 

	
(c)  

	
Any person or entity entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided, however, that failure to give such notice will not prejudice such person’s or entity’s right to indemnification from the indemnifying party, except as to any losses suffered by such person or entity which are attributable to such person’s or entity’s failure to promptly give such notice to such indemnifying party and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party.  The indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld).  An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.

 

	
(d)  

	
The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person or entity of such indemnified party and will survive the transfer of securities and the termination of this Agreement.  The Company also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s indemnification is unavailable for any reason.

 

 

  

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5.  

	
Miscellaneous.

 

	
(a)  

	
Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holder holding at least two-thirds of the Registrable Securities to such amendment, modification, or supplement or waiver or consents to such departures.

 

	
(b)  

	
Notices.  All notices and other communications provided for or permitted under this Agreement shall be in writing and given in accordance with the notice provision in the Stock Purchase Agreement.

 

	
(c)  

	
Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Wisconsin.

 

	
(d)  

	
Severability.  In the event that any one or more of the provisions contained herein, or the application, thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

	
(e)  

	
Successors and Assigns.  All covenants and agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective permitted successors and assigns of the parties hereto whether so expressed or not.  The registration rights of the Holder under this Agreement may be transferred to any transferee who lawfully acquires Registrable Securities; provided, that the Company is given written notice by the Holder at the time of such transfer stating the name and address of the transferee and identifying the securities with respect to which the rights under this Agreement are being assigned; and provided, further, that such transferee is a person who is reasonably satisfactory to the Company and executes an agreement in writing agreeing to be bound by the provisions of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

  

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.

 

 

 

 

	 	 ZBB ENERGY CORPORATION
	 	 
	 	 
	 	 By:                                                                                     
	 	        Eric C. Apfelbach
	 	        President and Chief Executive Officer
	 	 

 

 

 

 

 

 

 

[Registration Rights Agreement]

  

  

  

 

Signature Page to Registration Rights Agreement

 

 

	 	 	 
	 	 Purchaser	 
	 	 	 
	 	 	 
	 	 Signature of Purchaser	 
	 	 	 
	 	 	 
	 	 Title, if Purchaser is an entity	 
	 	 	 
	 	 	 
	 	 Address:

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