EXHIBIT 10.4
AGREEMENT EVIDENCING A GRANT OF NON-QUALIFIED STOCK OPTION
This Agreement (the "Agreement") is made as of September 20, 2000 the
("Grant Date"), between U.S. Interactive, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxxxxxx ("Grantee").
1. Grant of Option. In connection with Grantee's employment with the
Company as described in the Employment Agreement, dated as of September 8, 2000,
by and between the Company and Grantee (the "Employment Agreement"), the Company
hereby grants to Grantee, as of this date, an option to purchase an aggregate of
Five Hundred Thousand (500,000) shares (the "Option Shares") of the Common Stock
of the Company (the "Common Stock") at a price per share and in the manner
hereinafter provided.
2. Exercise of Option. Subject to the termination of the Option as
provided herein, the Option may be exercised, to the extent vested, by written
notice to the Company at any time and from time to time thereafter. The Option
exercise price is $2.66 per share. This Option may not be exercised for a
fraction of a share of Common Stock. This Option shall vest in installments as
follows:
(a) with respect to options for 145,800 shares of Common
Stock, upon execution of this Agreement;
(b) with respect to options for 104,200 shares of Common
Stock, in equal monthly installments beginning September 30, 2000 and on the
30th day of each subsequent calendar month (each a "vesting date") through June
30, 2001; and
(c) with respect to options for 250,000 shares of Common
Stock, in equal monthly installments beginning July 1, 2001, 23 equal monthly of
10,416 and a final installment of 10,432, if and for so long as Grantee is Chief
Executive Officer of the Company or a member of the Board; provided, however, if
on or after June 30, 2001, the Company requests Grantee to become the Chairman
of the Board, and Grantee declines to become Chairman of the Board, any unvested
options under this Section 2(c) shall become null and void and shall terminate;
Notwithstanding the foregoing, upon a Change in Control,
(1) that occurs on or before December 31, 2000,
the balance of the options referenced above in Section 2(b)
shall become fully vested and nonforfeitable under the Stock
Option Agreement, all restrictions (except for restrictions
required by law), if any, thereon shall lapse, and the
Executive shall thereupon be entitled to exercise any or all
such options in accordance with this terms of the Stock Option
Agreement;
(2) involving any transaction under
consideration as of the date hereof that occurs on or before
March 1, 2001, the balance of the options referenced above in
Section 2(b) shall become fully vested and nonforfeitable
under the Stock Option Agreement, all restrictions (except for
restrictions required by law), if any, thereon shall lapse,
and Grantee shall thereupon be entitled to exercise any or all
such options in accordance with the terms of this Agreement;
and
(3) other than as set forth as set forth in the
foregoing Sections (1) and (2), all options granted under the
Stock Option Agreement shall become fully vested and
nonforfeitable, all restrictions (except for restrictions
required by law), if any, thereon shall lapse, and Grantee
shall thereupon be entitled to exercise any or all such
options in accordance with the terms of this Stock Option
Agreement.
3. Expiration and Termination. This Option shall not be
exercisable in any event after the tenth anniversary of the Grant Date. Except
as otherwise provided herein, upon termination of Grantee's employment (for any
reason, including death or Disability (as such term is defined in the Employment
Agreement), all Options or portions thereof that are not vested and exercisable
on the date of such termination shall expire and be forfeited as of such date
and all vested options shall expire to the extent not theretofore exercised at
the end of the third month (one year in the event of Grantee's death or
Disability) following the date of termination. In the event of a termination of
Grantee's employment for "Cause," as defined in the Employment Agreement, or as
a result of a voluntary termination by Grantee, all unexercised Options, whether
or not vested, shall terminate immediately upon the earlier to occur of the date
Grantee receives or delivers notice of termination or the actual date of
termination.
4. Conditions to Exercise. This Option may not be exercised by
Grantee unless the following conditions are met:
(a) Legal counsel for the Company must be satisfied at
the time of exercise that the issuance of Option Shares upon exercise will be in
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and applicable United States federal, state and local laws and foreign laws.
(b) Grantee must pay at the time of exercise the full
purchase price for the shares of Common Stock being acquired hereunder (i) in
cash or by certified check, (ii) by delivery of shares of Common Stock already
owned by Grantee valued at the Fair Market Value (as such term is defined in the
Company's Amended and Restated 1998 Incentive Stock Option Plan) of the Common
Stock on the date of exercise, or (iii) by "cashless exercise" in the same
manner as provided in the Company's 1998 Incentive Stock Option Plan. Grantee
shall also remit to the Company the appropriate withholding taxes due upon
exercise, in cash or in such other manner as approved in advance by the
Company's Board of Directors.
(c) Grantee shall be employed by the Company, except as
otherwise provided herein or in the Employment Agreement.
(d) Grantee shall have fully complied with such further
conditions to exercise as the Company's Board of Directors, in its sole
discretion, shall deem necessary or desirable to fully comply with all federal
and applicable state securities and tax laws relating to the exercise of the
Option.
5. Transferability. This Option may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of by Grantee, except by will or the
laws of descent and distribution (in which case, such transferee shall succeed
to the rights and obligations of Grantee hereunder) and is exercisable during
Grantee's lifetime only by Grantee. If Grantee or anyone claiming under or
through Grantee attempts to violate this Section 5, such attempted violation
shall be null and void and without effect, and the Company's obligation
hereunder shall terminate. If at the time of Grantee's death this Option has not
been fully exercised, Grantee's estate or any person who acquires the right to
exercise this Option by bequest or inheritance or by reason of Grantee's death
may, at any time within one year after the date of Grantee's death (but in no
event after the expiration of ten years from the date of Grant), exercise this
Option with respect to the number of shares, determined under Section 2 above,
as to which Grantee could have exercised this Option at the time of Grantee's
death.
6. No Rights as Stockholder. Unless and until a certificate or
certificates representing such shares of Common Stock shall have been issued to
Grantee, Grantee shall not be, nor have any of the rights or privileges of, a
stockholder of the Company with respect to shares of Common Stock acquirable
upon exercise of the Option.
7. Investment Representation. Grantee hereby acknowledges that the
shares of Common Stock which Grantee may acquire by exercising the Option shall
be acquired for investment without a view to distribution, within the meaning of
the Securities Act, have not been registered under the Securities Act or any
applicable state law, are restricted securities within the meaning of the
Securities Act, and shall not be sold, transferred, assigned, pledged or
hypothecated in the absence of an effective registration statement for the
shares of Common Stock under the Securities Act, and applicable state securities
laws or an applicable exemption from the registration requirements of the Act
and any applicable state securities laws shall have been perfected. Grantee also
agrees that the shares of Common Stock which Grantee may acquire by exercising
the Option will not be sold or otherwise disposed of in any manner which would
constitute a violation of any applicable securities laws, whether federal or
state.
8. Notices. Any notice hereunder to the Company shall be addressed to
the Company, Attention: Secretary, and any notice hereunder to Grantee shall be
addressed to Grantee at Grantee's last address on the records of the Company,
subject to the right of either party to designate at any time hereafter in
writing some other address. Any notice shall be deemed to have been duly given
when delivered personally, one day following dispatch if sent by nationally
recognized overnight courier, fees prepaid, or three days following mailing if
sent by registered mail, return receipt requested, postage prepaid and addressed
as set forth above.
9. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any successors to the Company and all persons lawfully claiming
under Grantee.
10. Governing Law. The validity, construction, interpretation,
administration and effect of the Option shall be governed by the substantive
laws, but not the choice of law rules, of the State of Delaware.
IN WITNESS WHEREOF, the Company and Grantee have executed this
Agreement as of the date first above written.
U. S. INTERACTIVE, INC.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Chairman
/s/ Xxxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX
