forecasts of earnings, revenue or other financial items

EX-10.14 5 a06470exv10w14.htm EXHIBIT 10.14 exv10w14
 

Exhibit 10.14
THE KEITH COMPANIES, INC.
INDEPENDENT DIRECTOR STOCK OPTION AGREEMENT
      This Nonqualified Stock Option Agreement (the “Agreement”) is entered into as of [Date], by and between The Keith Companies, Inc. (formerly known as The Keith Companies — Inland Empire, Inc.), a California corporation (the“Company”) and [Name] (the “Optionee”) pursuant to the Company’s Amended and Restated 1994 Stock Incentive Plan (the “Plan”).
      1. Grant of Option. The Company hereby grants to Optionee an option (the“Option”) to purchase all or any portion of a total of [number of shares] (#,###) shares (the “Shares”) of the Common Stock of the Company at a purchase price of [price] per share ($xx.xx), subject to the terms and conditions set forth herein and the provisions of the Plan. This Option is NOT intended to qualify as an “incentive stock option” as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
      2. Vesting of Option. The Shares under this Option shall vest:
      3. Term of Option. Optionee’s right to exercise this Option shall terminate upon the first to occur of the following:
        (a) the expiration of ten (10) years from the date of this Agreement.
 
        (b) the expiration of thirty (30) days from the date of termination of Optionee’s Continuous Service if such termination occurs for any reason other than permanent disability or death or voluntary resignation: provided, however, that if Optionee dies during such thirty-day period the provisions of Section 3(d) below shall apply;
 
        (c) the expiration of one (1) year from the date of termination of Optionee’s Continuous Service if such termination is due to permanent disability of the Optionee (as defined in Section 22(e)(3) of the Code);
 
        (d) the expiration of one (1) year from the date of termination of Optionee’s Continuous Service if such termination is due to Optionee’s death or if death occurs during the thirty-day period following termination of Optionee’s Continuous Service pursuant to Section 3(b) above; or
 
        (e) the expiration of ninety (90) days from the date of termination of Optionee’s Continuous Service if such termination is due to voluntary resignation; provided, however that if Optionee dies during such ninety-day period the provisions of Section 3(d) above shall apply.
      As used herein, the term “Continuous Service” means (i) employment by either the Company or any parent or subsidiary corporation of the Company, or by a corporation or a parent or subsidiary of a corporation issuing or assuming a stock option in a transaction to which Section 424(a) of the Code applies, which is uninterrupted except for vacations, illness (except for permanent disability as defined in Section 22(e)(3) of the Code), or leaves of absence which are approved in writing by the Company or any other employer corporations, if applicable, (ii) service as a member of the Board of Directors of the Company until Optionee resigns, is removed from office, or Optionee’s term of office expires and he or she is not reelected, or (iii) so long as Optionee is engaged as a consultant or service provider to the Company or other corporation referred to in clause (i) above.
      4. Exercise of Option. On or after the vesting of any portion of this Option in accordance with Section 2 above, and until termination of this Option in accordance with Section 3 above, the portion of this Option which has vested may be exercised in whole or in part by the Optionee (or, after his or her death, by the person designated in Section 5 below) upon delivery of the following to the Company at its principal executive offices:
        (a) a written notice of exercise which identifies this Agreement and states the number of Shares then being purchased (but no fractional Shares may be purchased).

 

        (b) a check or cash in the amount of the Exercise Price (or payment of the Exercise Price in such other form of lawful consideration as the Administrator may approve from time to time under the provisions of Section 5.3 of the Plan);
 
        (c) a check or cash in the amount reasonably requested by the Company to satisfy the Company’s withholding obligations under Federal, State or other applicable tax laws with respect to the taxable income, if any, recognized by the Optionee in connection with the exercise of this Option (unless the Company and Optionee shall have made other arrangements for deductions or withholding from Optionee’s wages, bonus or other compensation payable to Optionee, or by the withholding of Shares issuable upon exercise of this Option or the delivery of Shares owned by the Optionee in accordance with Section 10 of the Plan, provided such arrangements satisfy the requirements of applicable tax laws); and
 
        (d) a letter, if requested by the Company, in such form and substance as the Company may require, setting forth the investment intent of the Optionee, or person designated in Section 5 below, as the case may be.
      5. Death of Optionee; No Assignment. The rights of the Optionee under this Agreement may not be assigned or transferred except by will or by the laws of descent and distribution, and may be exercised during the lifetime of the Optionee only by such Optionee. Any attempt to sell, pledge, assign, hypothecate, transfer or dispose of this Option in contravention of this Agreement or the Plan shall be void and shall have no effect. If the Optionee’s Continuous Service terminates as a result of his or her death, and provided Optionee’s rights hereunder shall have vested pursuant to Section 2 hereof, Optionee’s legal representative, his or her legatee, or the person who acquired the right to exercise this Option by reason of the death of the Optionee (individually, a “Successor”) shall succeed to the Optionee’s rights and obligations under this Agreement. After the death of the Optionee, only a Successor may exercise this Option.
      6. Representations and Warranties of Optionee.
        (a) Optionee represents and warrants that this Option is being acquired by Optionee for Optionee’s personal account, for investment purposes only, and not with a view to the distribution, resale or other disposition thereof.
 
        (b) Optionee acknowledges that the Company may issue Shares upon the exercise of the Option without registering such Shares under the Securities Act of 1933, as amended (the “Act”), on the basis of certain exemptions from such registration requirement. Accordingly, Optionee agrees that his or her exercise of the Option may be expressly conditioned upon his or her delivery to the Company of an investment certificate including such representations and undertakings as the Company may reasonably require in order to assure the availability of such exemptions, including a representation that Optionee is acquiring the Shares for investment and not with a present intention of selling or otherwise disposing thereof and an agreement by Optionee that the certificates evidencing the Shares may bear a legend indicating such non-registration under the Act and the resulting restrictions on transfer. Optionee acknowledges that, because Shares received upon exercise of an Option may be unregistered, Optionee may be required to hold the Shares indefinitely unless they are subsequently registered for resale under the Act or an exemption from such registration is available.
 
        (c) Optionee acknowledges receipt of a copy of the Plan and understands that all rights and obligations connected with this Option are set forth in this Agreement and in the Plan.
      7. Restrictive Legends. Optionee hereby acknowledges that Federal securities laws and the securities laws of the State in which he or she resides may require the placement of certain restrictive legends upon the Shares issued upon exercise of this Option, and Optionee hereby consents to the placing of any such legends upon certificates evidencing the Shares as the Company, or its counsel, may deem necessary or advisable.
      8. Limitation of Company’s Liability for Nonissuance. The Company agrees to use its reasonable best efforts to obtain from any applicable regulatory agency such authority or approval as may be required in order to issue and sell the Shares to the Optionee pursuant to this Option. Inability of the Company to obtain, from any such regulatory agency, authority or approval deemed by the Company’s counsel to be necessary for the

 

lawful issuance and sale of the Shares hereunder and under the Plan shall relieve the Company of any liability in respect of the nonissuance or sale of such shares as to which such requisite authority or approval shall not have been obtained.
      9. Adjustments Upon Changes in Capital Structure. In the event that the outstanding shares of Common Stock of the Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a recapitalization, stock split, combination of shares, reclassification, stock dividend or other change in the capital structure of the Company, then appropriate adjustment shall be made by the Administrator to the number of Shares subject to the unexercised portion of this Option and to the Exercise Price per share, in order to preserve, as nearly as practical, but not to increase, the benefits of the Optionee under this Option, in accordance with the provisions of Section 4.2 of the Plan.
      10. Change in Control.
        (a) In the event of the earlier of: (i) a sale of substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation in which shareholders immediately before the merger or consolidation have, immediately after the merger or consolidation, greater stock voting power or a merger solely for the purpose of reincorporating the Company in another jurisdiction); (iii) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (other than a reverse merger in which shareholders immediately before the merger have, immediately after the merger, greater stock voting power): or (iv) any transaction or series of related transactions in which in excess of 50% of the Company’s voting power is transferred (collectively an “Acceleration Event”), the portion of the Option not otherwise vested as of the date of the Acceleration Event shall become vested and exercisable (the “Accelerated Vested Portion”) from the date of Company’s Board of Directors approves the Acceleration Event, but in no event more than fifteen business days before the effective date of the Acceleration Event, until the fifth business day immediately before the effective date of the Acceleration Event (the “Exercise Period”), and the Option shall terminate upon the expiration of the Exercise Period, except as provided in Section 10(b) below.
 
        (b) The Option shall not terminate upon the expiration of the Exercise Period if provision is made in writing in connection with the Acceleration Event for (i) the assumption of this Option or the substitution of this Option with a new option of comparable value covering shares of a successor corporation, with the appropriate adjustments as to the number and kind of shares and the Exercise Price, in which event this Option or the new option substituted therefore shall continue in the manner and under the terms so provided, or (ii) the substitution for this Option of a program or plan to provide rights to Optionee to receive, on exercise of such rights, the type and amount of consideration Optionee would have received had he or she exercised this Option prior to the Acceleration Event less the aggregate Exercise Price therefore.
      11. No Employment Contract Created. Neither the granting of this Option nor the exercise hereof shall be construed as granting to the Optionee any right with respect to continuance of employment by the Company or any of its subsidiaries. The right of the Company or any of its subsidiaries to terminate at will the Optionee’s employment at any time (whether by dismissal, discharge or otherwise), with or without cause, is specifically reserved.
      12. Rights as Shareholder. The Optionee (or transferee of this option by will or by the laws of descent and distribution) shall have no rights as a shareholder with respect to any Shares covered by this Option until the date of the issuance of a stock certificate or certificates to him or her for such Shares, notwithstanding the exercise of this Option.
      13. “Market Stand-Off” Agreement. Optionee agrees that, if requested by the Company or the managing underwriter of any proposed public offering of the Company’s securities, Optionee will not sell or otherwise transfer or dispose of any Shares held by Optionee without the prior written consent of the Company

 

or such underwriter, as the case may be, during such period of time, not to exceed 180 days following the effective date of the registration statement filed by the Company with respect to such offering, as the Company or the underwriter may specify.
      14. Interpretation. This Option is granted pursuant to the terms of the Plan, and shall in all respects be interpreted in accordance therewith. The Administrator shall interpret and construe this Option and the Plan, and any action, decision, interpretation or determination made in good faith by the Administrator shall be final and binding on the Company and the Optionee. As used in this Agreement, the term “Administrator” shall refer to the committee of the Board of Directors of the Company appointed to administer the Plan, and if no such committee has been appointed, the term Administrator shall mean the Board of Directors.
      15. Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed given when delivered personally or three (3) days after being deposited in the United States mail, as certified or registered mail, with postage prepaid, and addressed, if to the Company, at its principal place of business, Attention: the Chief Financial Officer, and if to the Optionee, at his or her most recent address as shown in the employment or stock records of the Company.
      16. Governing Law. The validity, construction, interpretation, and effect of this Option shall be governed by and determined in accordance with the laws of the State of California.
      17. Severability. Should any provision or portion of this Agreement be held to be unenforceable or invalid for any reason, the remaining provisions and portions of this Agreement shall be unaffected by such holding.
      18. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be deemed one instrument.
      IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
THE KEITH COMPANIES, INC.
By: 
 
Aram H. Keith
Chief Executive Officer
By: 
 
Gary C. Campanaro
Chief Financial Officer
OPTIONEE
 
[Name]