INCENTIVE STOCK OPTION AGREEMENT
UNDER
DME INTERACTIVE HOLDINGS, INC.
STOCK OPTION PLAN OF 2000
THIS AGREEMENT, made this 11th day of May, 2000, by and
between DME INTERACTIVE HOLDINGS, INC., a Delaware corporation (hereinafter
called the "Company"), and
Xxxxxx X'Xxxxxx (hereinafter called "Optionee"),
WITNESSETH THAT:
WHEREAS, the Board of Directors of the Company ("Board of
Directors") has adopted the DME Interactive Holdings, Inc. Stock Option Plan of
2000 (the "Plan") pursuant to which options covering shares of the Common Stock
of the Company may be granted to employees of the Company; and
WHEREAS, Optionee is now an employee of the Company; and
WHEREAS, the Company desires to grant to Optionee the option
to purchase certain shares of its stock under the terms of the Plan;
NOW, THEREFORE, in consideration of the premises, and of the
mutual agreements hereinafter set forth, it is covenanted and agreed as follows:
1. Grant Subject to Plan. This option is granted under and is
expressly subject to, all the terms and provisions of the Plan, which terms are
incorporated herein by reference. The Committee referred to in Paragraph 4 of
the Plan ("Committee") has been appointed by the Board of Directors, and
designated by it, as the Committee to make grants of options.
2. Grant and Terms of Option. Pursuant to action of the
Committee, which action was taken as of May 8, 2000 ("Date of Grant"), the
Company grants to Optionee the option to purchase all or any part of Four
Million (4,000,000) shares of the Common Stock of the Company, no par value
("Common Stock"), for a period of ten (10) years from the Date of Grant, at the
purchase price of $2.81 per share per first 1.33 million shares, $4.00 per
additional 1.33 million shares, and $5.00 per remaining 1.33 million shares;
provided, however, that, except as provided in Section 4(c) of the Employment
Agreement by and between Employee and Company dated as of April 18, 2000, the
right to exercise such option shall be, and is hereby, restricted so that no
shares may be purchased prior to the first anniversary of the Date of Grant;
that at any time during the term of this option on or after the first
anniversary of the Date of Grant, Optionee may purchase up to 33-1/3 % of the
total number of shares to which this option relates; that at any time during the
term of this option on or after the second anniversary of the Date of Grant,
Optionee may purchase up to an additional 33-1/3% of the total number of shares
to which this option relates; that at any time during the term of this option on
or after the third anniversary of the Date of Grant, Optionee may purchase up to
an additional 33-1/3% of the total
number of shares to which this option relates so that on the third anniversary
of the Date of Grant, Optionee will have become entitled to purchase 100% of the
total number of shares to which this option relates. Notwithstanding the
foregoing, in the event of a Change of Control (as hereinafter defined) Optionee
may purchase 100% of the total number of shares (four (4) million) to which this
option relates. In no event may this option or any part thereof be exercised
after the expiration of ten (10) years from the Date of Grant. The purchase
price of the shares subject to the option may be paid by any manner specified in
Section 6 of the Plan. For the purposes of this Agreement, a Change of Control
means:
a. The purchase or other acquisition (other than from
the Company) by any person, entity or group of persons, within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (excluding, for this purpose, the
Company or its subsidiaries or any employee benefit plan of the Company
or its subsidiaries), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either
the then-outstanding shares of common stock of the Company or the
combined voting power of the Company's then-outstanding voting
securities entitled to vote generally in the election of directors; or
b. Approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case with respect to
which persons who were the stockholders of the Company immediately
prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of, respectively, the common
stock and the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated
corporation's then-outstanding voting securities, or of a liquidation
or dissolution of the Company or of the sale of all or substantially
all of the assets of the Company.
3. Anti-Dilution Provisions. In the event that, during the
term of this Agreement, there is any change in the number of shares of
outstanding Common Stock of the Company by reason of stock dividends,
recapitalizations, mergers, consolidations, split-ups, combinations or exchanges
of shares and the like, the number of shares covered by this option agreement
and the price thereof shall be adjusted, to the same proportionate number of
shares and price as in this original agreement.
4. Investment Purpose. Optionee represents that, in the event
of the exercise by him of the option hereby granted, or any part thereof, he
intends to purchase the shares acquired on such exercise for investment and not
with a view to resale or other distribution; except that the Company shall waive
or release this condition in the event the shares acquired on exercise of the
option are registered under the Securities Act of 1933, or upon the happening of
any other contingency which the Company shall determine warrants the waiver or
release of this condition. Optionee agrees that the certificates evidencing the
shares acquired by him on exercise of all or any part of this option, may bear a
restrictive legend, if appropriate, indicating that the shares have not been
registered under said Act and are subject to restrictions on the transfer
thereof, which legend may be in the following form (or such other form as the
Company shall determine to be proper), to-wit:
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"The shares represented by this certificate have not been
registered under the Securities Act of 1933, but have been
issued or transferred to the registered owner pursuant to the
exemption afforded by Section 4(2) of said Act. No transfer or
assignment of these shares by the registered owner shall be
valid or effective, and the issuer of these shares shall not
be required to give any effect to any transfer or attempted
transfer of these shares, including without limitation, a
transfer by operation of law, unless (a) the issuer shall have
received an opinion of its counsel that the shares may be
transferred without requirement of registration under said
Act, or (b) there shall have been delivered to the issuer a
'no-action' letter from the staff of the Securities and
Exchange Commission, or (c) the shares are registered under
said Act."
5. Non-Transferability. Neither the option hereby granted nor
any rights thereunder or under this Agreement may be assigned, transferred or in
any manner encumbered except by will or the laws of descent and distribution,
and any attempted assignment, transfer, mortgage, pledge or encumbrance except
as herein authorized, shall be void and of no effect. The option may be
exercised during Optionee's lifetime only by him.
6. Termination of Employment. In the event of the termination
of employment of Optionee (including by death) the option granted may be
exercised at the times and to the extent provided in paragraph 9 of the Plan for
the total number of shares (four (4) million) to which this option relates.
7. Death of Optionee. In the event of the death of Optionee
during the term of this Agreement and while he is employed by the Company (or a
subsidiary), or within three (3) months after the termination of his employment
(or one (l) year in the case of the termination of employment of an Optionee who
is disabled as provided in the Plan), this option may be exercised, to the
extent that he was entitled to exercise it at the date of his death, by a
legatee or legatees of Optionee under his last will, or by his personal
representatives or distributees, at any time within a period of one (1) year
after his death, but not after ten (10) years from the date hereof, and only if
and to the extent that he was entitled to exercise the option at the date of his
death.
8. Shares Issued on Exercise of Option. It is the intention of
the Company that on any exercise of this option it will transfer to Optionee
shares of its authorized but unissued stock or transfer Treasury shares, or
utilize any combination of Treasury shares and authorized but unissued shares,
to satisfy its obligations to deliver shares on any exercise hereof.
9. Committee Administration. This option has been granted
pursuant to a determination made by the Committee, and such Committee or any
successor or substitute committee authorized by the Board of Directors or the
Board of Directors itself, subject to the express terms of this option, shall
have plenary authority to interpret any provision of this option and to make any
determinations necessary or advisable for the administration of this option and
the exercise of the rights herein granted, and may waive or amend any provisions
hereof in any manner not adversely affecting the rights granted to Optionee by
the express terms hereof.
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10. Option an Incentive Stock Option. This option is intended
as, and shall be treated as, an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf by its Chairman and Chief Executive Officer and to be
attested by its Secretary under the seal of the Company, pursuant to due
authorization, and Optionee has signed this Agreement to evidence his acceptance
of the option herein granted and of the terms hereof, all as of the date hereof.
DME INTERACTIVE HOLDINGS, INC.
By----------------------------
DARIEN DASH
ATTEST:
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Secretary
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Optionee
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