New Visual Corporation Non-Qualified Stock Option Agreement with Brad Ketch

Summary

This agreement between New Visual Corporation and Brad Ketch grants him the option to purchase up to 405,000 shares of the company's common stock at $1.09 per share, under the company's 2000 Omnibus Securities Plan. The options vest over time according to a set schedule, with full vesting possible upon a change of control. The agreement outlines the terms for exercising the options, payment, and transfer restrictions. The options expire on July 1, 2012, or one year after employment ends, whichever comes first.

EX-10.12 14 nv_10q-ex1012.txt EXHIBIT 10.12 NEW VISUAL CORPORATION NON-QUALIFIED STOCK OPTION AGREEMENT ------------------------------------ PURSUANT TO THE NEW VISUAL CORPORATION 2000 OMNIBUS SECURITIES PLAN THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT") is made and entered into by and between NEW VISUAL CORPORATION, a Utah corporation (the "COMPANY"), and BRAD KETCH (the "OPTIONEE"), effective as of July 1, 2002 (the "DATE OF GRANT"). 1. GRANT OF OPTION. The Company hereby grants to the Optionee and the Optionee hereby accepts, subject to the terms and conditions hereof, a Non-Qualified Stock Option (the "OPTION") to purchase up to 405,000 shares of Company's Common Stock, par value $0.001 per share (the "COMMON STOCK"), at the Exercise Price per share set forth in SECTION 4 below. 2. GOVERNING PLAN. This Option is granted pursuant to the Company's 2000 Omnibus Securities Plan (the "PLAN"), a copy of which is attached hereto as ATTACHMENT ONE and incorporated herein for all purposes. Capitalized terms used but not otherwise defined herein have the meanings as set forth in the Plan. The Optionee agrees to be bound by the terms and conditions of the Plan, which control in case of any conflict with this Agreement, except as otherwise specifically provided for in the Plan. 3. EXPIRATION OF THE OPTION. The Option (to the extent not earlier exercised or terminated in accordance with the Plan) will expire at the end of business on July 1, 2012, which date is not in excess of ten (10) years from the Date of Grant of the Option. The Option will terminate one (1) year after the termination of the Optionee's employment regardless of the reason therefor. The Option may not be exercised after its expiration or termination. 4. EXERCISE PRICE. The "EXERCISE PRICE" of the Option is One Dollar and Nine Cents ($1.09) per share of Common Stock. The Exercise Price is subject to adjustment or amendment as set forth in the Plan, including SECTION 3.4, SECTION 4.5(b) or SECTION 6.2 of the Plan. 5. VESTING. (a) On each Measurement Date set forth in Column 1 below, the Option shall vest and become exercisable for the corresponding number of shares of Common Stock set forth in Column 2 below if the Optionee's employment or engagement with the Company and/or any Affiliated Entity has not terminated. The "VESTED PORTION" of the Option as of any particular date shall be the cumulative total of all shares for which the Option has become exercisable as of that date. - ------------------------------------- ---------------------------------- COLUMN 1 COLUMN 2 Measurement Date Number of Shares Vested - ------------------------------------- ---------------------------------- July 1, 2002 105,000 - ------------------------------------- ---------------------------------- May 31, 2003 37,500 - ------------------------------------- ---------------------------------- August 31, 2003 37,500 - ------------------------------------- ---------------------------------- November 30, 2003 37,500 - ------------------------------------- ---------------------------------- February 28, 2004 37,500 - ------------------------------------- ---------------------------------- May 31, 2004 37,500 - ------------------------------------- ---------------------------------- August 31, 2004 37,500 - ------------------------------------- ---------------------------------- November 30, 2004 37,500 - ------------------------------------- ---------------------------------- February 28, 2005 37,500 - ------------------------------------- ---------------------------------- (b) Notwithstanding the forgoing, in the event of a "Change of Control" (as defined in Article 9 of the Plan), immediately prior to such Change in Control, the Option shall become fully vested (if not already vested). 1 (c) In addition, upon a Change in Control pursuant to SECTION 8.2 of the Plan, this Option shall be automatically converted into the right to receive, and thereafter shall be exercisable for, in accordance with the Plan and this Agreement, the securities, cash and/or other consideration that a holder of the shares underlying the Options would have been entitled to receive upon a consummation of the Change in Control had such shares been issued and outstanding immediately prior to the effective date and time of the Change in Control (net of appropriate exercise prices). 6. EXERCISE OF THE OPTION. The Vested Portion (as herein defined) of the Option may be exercised, to the extent not previously exercised, in whole or in part, at any time or from time to time prior to the expiration or termination of the Option, except that no Option shall be exercisable except in respect to whole shares, and not less than one hundred (100) shares may be purchased at one time unless the number purchased is the total number at the time available for purchase under the terms of the Option. Exercise shall be accomplished by providing the Company with written notice in the form of EXHIBIT A hereto, which notice shall be irrevocable when delivered and effective upon payment in full of the Option Price in accordance with SECTION 5.4 of the Plan and any amounts required in accordance with SECTION 5.11 of the Plan for withholding taxes, and the satisfaction of all other conditions to exercise imposed under the Plan. 7. PAYMENT OF OPTION PRICE. Upon any exercise of the Option, the total Exercise Price for the number of shares for which the Option is then being exercised and the amount of any federal, state and local withholding taxes shall be paid in full to the Company in cash or with shares of Common Stock that have been owned for at least six months by the Optionee (or by the Optionee and his or her spouse jointly), or a combination thereof, or in such other form permitted by applicable law and the Plan as the Administering Body deems acceptable at the time of exercise. 8. [RESERVED] 9. NONTRANSFERABILITY OF OPTION. The Option shall not be transferable or assignable by the Optionee, other than in accordance with Section 5.9 of the Plan or by will or the laws of descent and distribution (or as otherwise permitted by the Administering Body in its sole discretion), and shall be exercisable during the Optionee's lifetime only by him or her or by his or her legal representative(s) or guardian(s) or any permitted transferee. 10. ADMINISTRATION. The Plan and this Agreement shall be administered and may be definitively interpreted by the Administering Body, and the Optionee agrees that the decisions of such Administering Body concerning administration and interpretation of the Plan and this Agreement shall be final, binding and conclusive on all persons. 11. NOTICES. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if (i) personally delivered, (ii) sent by nationally-recognized overnight courier or (iii) sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows: (a) if to Optionee, at the address set forth on the signature page hereto; or (b) if to the Company, at the address set forth in the signature page hereto, or in either case, to such other address as the party to whom notice is to be given may have furnished to each other party in writing in accordance herewith. Any such communication shall be deemed to have been given (i) when delivered, if personally delivered, (ii) on the first Business Day (as hereinafter defined) after dispatch, if sent by nationally-recognized overnight courier and (iii) on the third Business Day following the date on which the piece of mail containing such communication is posted, if sent by mail. As used herein, "Business Day" means a day that is not a Saturday, Sunday or a day on which banking institutions in the city to which the notice or communication is to be sent are not required to be open. 12. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 2 IN WITNESS WHEREOF, this Agreement has been executed on behalf of the Company by its duly authorized officer, and by the Optionee in acceptance of the above-mentioned Option, subject to the terms and conditions of the Plan and of this Agreement, all as of the day and year first above written. COMPANY: -------- NEW VISUAL CORPORATION, a Utah corporation BY:/s/ Thomas J. Cooper Name:/s/ Thomas J. Cooper Title: President & CEO Address: 5920 Friars Road Suite 104 San Diego, California 92108 Telephone: 619 ###-###-#### OPTIONEE: --------- /s/ Brad Ketch Printed Name: Brad Ketch Address: 17112 SE Powell Blvd STE 2 #447 Portland OR 97233 Telephone No.: 503 ###-###-#### ------------ 3 EXHIBIT A --------- NOTICE OF EXERCISE UNDER NON-QUALIFIED STOCK OPTION AGREEMENT ------------------------------------ ISSUED PURSUANT TO THE NEW VISUAL CORPORATION 2000 OMNIBUS SECURITIES PLAN To: New Visual Corporation (the "COMPANY") From: Brad Ketch Date: ----------------------------------- Pursuant to the New Visual Corporation 2000 Omnibus Securities Plan (the "PLAN") and the Non-Qualified Stock Option Agreement (the "AGREEMENT") (capitalized terms used without definition herein have the meanings given such terms in the Agreement or the Plan) between the Company and myself effective July 1, 2002, I hereby exercise my Option as follows:

I hereby represent, warrant, and covenant to the Company that: a. I am acquiring the Common Stock for my own account, for investment, and not for distribution or resale, and I will make no transfer of such Common Stock except in compliance with applicable federal and state securities laws and in accordance with the provisions of the Plan. b. I can bear the economic risk of the investment in the Common Stock resulting from this exercise of the Option, including a total loss of my investment. c. I am experienced in business and financial matters and am capable of (i) evaluating the merits and risks of an investment in the Common Stock; (ii) making an informed investment decision regarding exercise of the Option; and (iii) protecting my interests in connection therewith. d. Any subsequent offer for sale or distribution of any of the shares of Common Stock shall be made only pursuant to (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, it being understood that to the extent any such exemption is claimed, I shall, prior to any offer for sale or sale of such shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Administering Body, from counsel for or approved by the Administering Body, as to the applicability of such exemption thereto. A-1 I acknowledge that I must pay the total Exercise Price in full and make appropriate arrangements for the payment of all federal, state and local tax withholdings due with respect to the Option exercised herein, before the stock certificate evidencing the shares of Common Stock resulting from this exercise of the Option will be issued to me. Attached in full payment of the Exercise Price for the Option exercised herein is ( ) a check made payable to the Company in the amount of $___________________ and/or ( ) a stock certificate for _______ shares of Common Stock that have been owned by me or by me and my spouse jointly for at least six months, with a duly completed stock power attached, with a total Fair Market Value on the date hereof to the Total Exercise Price. Also attached in full payment of all withholding tax obligations arising from exercise of the Option is (___) a check made payable to the Company in the amount of such required withholding and/or (____) a stock certificate for ____ shares of Common Stock that have been owned by me or by me and my spouse jointly for at least six months, with a duly completed stock power attached, with a total Fair Market Value on the date hereof to the amount of such required withholding. y ------------------------------------- Printed Name: Brad Ketch Address: -------------------------- RECEIVED BY THE COMPANY: NEW VISUAL CORPORATION By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- Date: -------------------------------- A-2 ATTACHMENT ONE -------------- TO NEW VISUAL CORPORATION NON-QUALIFIED STOCK OPTION AGREEMENT ISSUED PURSUANT TO THE 2000 OMNIBUS SECURITIES PLAN COPY OF NEW VISUAL CORPORATION 2000 OMNIBUS SECURITIES PLAN (SEE ATTACHED)