EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of the 1st day of February, 2000
(the "AGREEMENT"), is by and between USA DIGITAL, INC., a Nevada corporation
(the "COMPANY"), and XXXXX X. XXXXX, an individual (the "EXECUTIVE").
WITNESSETH:
WHEREAS, the Company is presently engaged in the telecommunications
industry;
WHEREAS, Executive has extensive experience in this area;
WHEREAS, the Company wishes to employ Executive for the period provided
in this Agreement and Executive is willing to serve in the employ of the Company
for such period upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties, intending to be legally bound, hereby agree as follows:
1. EMPLOYMENT
The Company hereby employs Executive upon the terms and conditions
herein contained, and Executive hereby accepts such employment for the term
described below. Executive is and shall be employed in the capacity of the
Company's Chief Executive Officer, and shall perform the duties and functions
customarily performed by the Chief Executive Officer of a corporation during the
term of this Agreement and shall have such other duties, responsibilities and
authority as are assigned to him by the Board of Directors of the Company as
long as such additional duties, responsibilities and authority are consistent
with Executive's position and level of authority as the Chief Executive Officer
of the Company. Executive shall report directly to the Board of Directors of the
Company. Executive shall perform his duties and functions from the Orlando,
Florida area during the term of this Agreement or until in his own best judgment
and at his sole discretion he decides to relocate.
Throughout the term of this Agreement, Executive shall devote his best
efforts and substantially all of his business time and services to the business
and affairs of the Company.
2. TERM OF AGREEMENT
The initial term of employment under this Agreement shall be for a
period of five (5) years beginning on February 1, 2000 (the "EFFECTIVE DATE").
After the expiration of such initial employment period, the term of Executive's
employment hereunder shall automatically be extended without further action by
the parties for successive one (1) year renewal terms, provided that if either
party gives the other party at least thirty (30) days' advance written notice of
his or its
intention to not renew this Agreement for an additional term, the Agreement
shall terminate upon the expiration of the then current term.
Notwithstanding the foregoing, the Company shall be entitled to
terminate this Agreement immediately, subject to a continuing obligation to make
any payments required under Section 5 below, if Executive: (i) becomes disabled
as described in Section 5(b), (ii) is terminated for Cause, as defined in
Section 5(c), or (iii) voluntarily terminates his employment before the current
term of this Agreement expires, as described in Section 5(d).
3. SALARY
During the term of this Agreement, for all services rendered hereunder,
Executive shall receive a base salary ("Base Salary") at a rate of not less than
One Hundred Sixty Thousand and No/100 Dollars ($160,000.00) per annum. The Base
Salary shall be payable in equal installments in accordance with the Company's
payroll practices but not less than once per month. The Compensation Committee
of the Board shall review this base salary at annual intervals, and may adjust
Executive's annual base salary upward from time to time if the Committee deems
such adjustment to be appropriate.
4. ADDITIONAL COMPENSATION AND BENEFITS
Executive shall receive the following additional compensation and
welfare and fringe benefits:
(A) SIGNING BONUS OPTIONS. As of the Effective Date of this Agreement,
Executive shall be granted nonstatutory stock options ("Bonus Options") to
purchase up to 100,000 shares of the Company's common stock at an exercise price
of $3.50 per share, which such Bonus Options shall be exercisable as of the date
hereof. Such Bonus Options shall be subject to the provisions set forth in the
stock option agreement attached hereto as EXHIBIT A.
(B) EXECUTIVE STOCK OPTIONS. As of the Effective Date of this
Agreement, Executive shall be granted nonstatutory stock options ("Executive
Options") to purchase up to 500,000 shares of the Company's common stock at the
exercise prices set forth in, and subject to the provisions of the stock option
agreement attached hereto as EXHIBIT B. During the remaining term of this
Agreement, any additional stock option awards shall be at the discretion of the
Compensation Committee of the Company's Board.
(C) MEDICAL INSURANCE. The Company shall provide Executive with health
insurance coverage no less favorable than that from time to time made available
to other key employees.
(D) VACATION. Executive shall be entitled to three weeks annual
vacation leave during the term of this Agreement and any extension thereof,
prorated for partial years. Vacation shall be scheduled at reasonable times not
in conflict with Executive's duties hereunder.
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(E) BUSINESS EXPENSES. The Company shall reimburse Executive for all
reasonable expenses he incurs in promoting the Company's business, including
expenses for travel, entertainment of business associates and similar items,
upon presentation by Executive from time to time of an itemized account of such
expenditures.
(F) CAR ALLOWANCE. Executive shall be entitled to receive a monthly car
allowance in the amount of One Thousand Dollars ($1,000.00).
In addition to the benefits provided pursuant to the preceding
paragraphs of this Section 4, Executive shall be eligible to participate in such
other executive compensation and retirement plans of the Company as are
applicable generally to other officers, and in such welfare benefit plans,
programs, practices and policies of the Company as are generally applicable to
other key employees.
5. PAYMENTS UPON TERMINATION
(A) INVOLUNTARY TERMINATION. If Executive's employment is terminated by
the Company during the term of this Agreement, Executive shall be entitled to
receive his base salary accrued through the date of termination. Executive shall
also receive any nonforfeitable benefits already earned and payable to him under
the terms of any deferred compensation, incentive or other benefit plan
maintained by the Company, payable in accordance with the terms of the
applicable plan.
If the termination is not for death, failure to renew as provided in
Section 2, disability as described in Section 5(b), for Cause as described in
Section 5(c) or a voluntary termination by Executive as described in Section
5(d), the Company shall also be obligated to pay to Executive an amount equal to
an aggregate of all salary payments which would otherwise be due Executive for
the months remaining in the then current term of this Agreement. Any such
payment shall, at the option of the Company, be made either in equal bi-monthly
installments over the remaining term of this Agreement, or in a lump sum cash
payment on the date of termination.
(B) DISABILITY. The Company shall be entitled to terminate this
Agreement if the Board determines that Executive has been unable to attend to
his duties for at least ninety (90) days because of a medically diagnosable
physical or mental condition. Upon such termination, the Company shall pay to
Executive a monthly disability benefit equal to one-twenty-fourth (1/24th) of
his current annual base salary at the time he became permanently disabled.
Payment of such disability benefit shall commence on the last day of the month
following the date of the termination by reason of permanent disability and
cease with the earliest of: (i) the month in which Executive returns to active
employment, either with the Company or otherwise, (ii) the end of the initial
term of this Agreement, or the current renewal term, as the case may be, or
(iii) the twelfth month after the date of the termination. Any amounts payable
under this Section 5(b) shall be reduced by any amounts paid to Executive under
any long-term disability plan or other disability program or insurance policies
maintained or provided by the Company.
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(C) TERMINATION FOR CAUSE. If Executive's employment is terminated by
the Company for Cause, the amount Executive shall be entitled to receive from
the Company shall be limited to his base salary accrued through the date of
termination, and any nonforfeitable benefits already earned and payable to
Executive under the terms of deferred compensation or incentive plans maintained
by the Company. For purposes of this Agreement, the term "CAUSE" shall be
limited to: (i) any action by Executive involving willful disloyalty to the
Company, such as embezzlement, fraud, misappropriation of corporate assets or a
breach of the covenants set forth in Sections 8 or 9 hereof; (ii) Executive
being convicted of a felony; (iii) Executive being convicted of any lesser crime
or offense committed in connection with the performance of his duties hereunder
or involving moral turpitude; or (iv) the intentional and willful failure by
Executive to substantially perform his duties hereunder as directed by the Board
(other than any such failure resulting from Executive's incapacity due to
physical or mental disability); provided that in the event of a termination for
Cause under this Section 5(c)(iv), Executive shall have a period of thirty (30)
days in which to cure such breach after receiving notice from the Company
specifying in reasonable detail the nature of such breach.
(D) VOLUNTARY TERMINATION BY EXECUTIVE. If Executive resigns or
otherwise voluntarily terminates his employment before the end of the current
term of this Agreement, the amount Executive shall be entitled to receive from
the Company shall be limited to his base salary accrued through the date of
termination, and any nonforfeitable benefits already earned and payable to
Executive under the terms of any deferred compensation or incentive plans of the
Company. For purposes of this Section, a resignation by Executive shall not be
deemed to be voluntary if Executive resigns during the period of three (3)
months after the date he is: (i) assigned to a position of lesser rank (other
than for Cause, or by reason of permanent disability), (ii) assigned duties
materially inconsistent with such position, or (iii) directed to report to
anyone other than the Company's Board of Directors.
6. DEATH
If Executive dies during the term of this Agreement, the Company shall
pay to Executive's estate a lump sum payment equal to the sum of Executive's
base salary accrued through the date of death plus the total unpaid amount of
any bonuses earned with respect to the fiscal year of the Company most recently
ended. In addition, the death benefits payable by reason of Executive's death
under any retirement, deferred compensation or other employee benefit plan
maintained by the Company shall be paid to the beneficiary designated by
Executive in accordance with the terms of the applicable plan or plans.
7. WITHHOLDING
The Company shall, to the extent permitted by law, have the right to
withhold and deduct from any payment hereunder any federal, state or local taxes
of any kind required by law to be withheld with respect to any such payment.
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8. PROTECTION OF CONFIDENTIAL INFORMATION
Executive agrees that, both during the term of this Agreement and
thereafter, he will keep all confidential and proprietary information of the
Company or relating to its business (including, but not limited to, information
regarding the Company's customers, pricing policies, methods of operation,
proprietary computer programs and trade secrets) confidential, and that he will
not (except with the Company's prior written consent), while in the employ of
the Company or thereafter, disclose any such confidential information to any
person, firm, corporation, association or other entity, other than in
furtherance of his duties hereunder, and then only to those with a "need to
know." Executive shall not make use of any such confidential information for his
own purposes or for the benefit of any person, firm, corporation, association or
other entity (except the Company) under any circumstances during or after the
term of his employment. The foregoing shall not apply to any information which
is already in the public domain, or is generally disclosed by the Company or is
otherwise in the public domain at the time of disclosure.
Executive recognizes that because his work for the Company will bring
him into contact with confidential and proprietary information of the Company,
the restrictions of this Section 8 are required for the reasonable protection of
the Company and its investments and for the Company's reliance on and confidence
in Executive. For purposes of this Section 8, the term "Company" means the
Company, any of the Company's subsidiary corporations and its other affiliated
entities.
9. COVENANT NOT TO COMPETE; NON SOLICITATION
Executive hereby agrees that he will not, either during the Employment
Term or during the period of one (1) year from the time Executive's employment
under this Agreement is terminated, engage in any business activities on behalf
of any enterprise which competes with the Company in the telecommunications
business. Executive will be deemed to be engaged in such competitive business
activities if he participates in such a business enterprise as an employee,
officer, director, consultant, agent, partner, proprietor, or other participant;
provided that the ownership of no more than two percent (2%) of the stock of a
publicly traded corporation engaged in a competitive business, shall not be
deemed to be engaging in competitive business activities.
Executive agrees that he shall not, for a period of one (1) year from
the time his employment under this Agreement ceases (for whatever reason), or,
if later, during any period in which he is receiving monthly severance payments
under Section 5 of this Agreement:
(a) solicit any employee or full-time consultant of the Company for the
purposes of hiring or retaining such employee or consultant, or
(b) contact any present or prospective client of the Company to solicit
such a person to enter into any business transaction, other than with
the Company or with one of the Company's affiliates.
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For this purpose, Executive shall be considered to be receiving monthly
severance payments under Section 5 of this Agreement during any period for which
he would be entitled to receive such severance payments.
10. INJUNCTIVE RELIEF
Executive acknowledges and agrees that it would be difficult to fully
compensate the Company for damages resulting from the breach or threatened
breach of the covenants set forth in Sections 8 and 9 of this Agreement and
accordingly agrees that the Company shall be entitled to temporary and
injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, to enforce such provisions in any action
or proceeding instituted in the Circuit Court of Hillsborough County, Florida,
or in any court in the State of Florida having subject matter jurisdiction, and
the Company shall not be required to post a bond in order to receive such
relief. This provision with respect to injunctive relief shall not, however,
diminish the Company's right to claim and recover damages.
It is expressly understood and agreed that although the parties
consider the restrictions contained in this Agreement to be reasonable, if a
court determines that the time or territory or any other restriction contained
in this Agreement is an unenforceable restriction on the activities of
Executive, no such provision of this Agreement shall be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
extent as such court may judicially determine or indicate to be reasonable.
11. SEPARABILITY
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect.
12. ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by Executive.
13. ENTIRE AGREEMENT
This Agreement represents the entire agreement of the parties and shall
supersede any and all previous or contemporaneous contracts, arrangements or
understandings between the Company and Executive. The Agreement may not be
modified or amended other than by mutual written agreement of the parties
hereto.
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14. GOVERNING LAW
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of the State of Florida.
15. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute but one and
the same Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed, and Executive has hereunto set his hand, as of the day and year first
above written.
Attest: USA DIGITAL, INC.
/s/ Xxxx X. Xxxx By: /s/ Xxxx X. Xxxx
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Secretary Xxxx X. Xxxx, Its President
Witness: EXECUTIVE:
/s/ Xxxxx Xxxxx-Xxxxxx /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, made as of February 1, 2000, between USA
Digital, Inc., a Nevada corporation (the "CORPORATION"), and Xxxxx X. Xxxxx
("EMPLOYEE").
WITNESSETH:
WHEREAS, the Corporation desires to employ Employee pursuant to the
terms of an Employment Agreement dated the date hereof; and
WHEREAS, pursuant to Employee's Employment Agreement, the Corporation
desires to provide Employee with an opportunity to acquire an equity interest in
the Corporation; and
WHEREAS, the Corporation has decided to grant stock options to the
Employee on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
1. GRANT OF OPTIONS. Subject to the terms and conditions of this
Agreement, the Corporation hereby grants to the Employee the right and option to
purchase up to a total of Five Hundred Thousand shares of the common stock,
$.001 par value, of the Corporation (the "Common Stock"), at an option price per
share as indicated in Section 2 hereof. The options to purchase up to Five
Hundred Thousand (500,000) shares of Common Stock granted under this Agreement
(the "Options") are not intended to qualify as incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
2. PERIOD OF EXERCISE. The Options granted in this Agreement shall be
fully vested and nonforfeitable immediately upon grant. However, these vested
Options shall become exercisable by the Employee on a delayed basis, in four
installments. The maximum number of shares of Common Stock for which the
Employee may exercise the Options to purchase at any time during the term of the
Options shall be limited as specified in the following schedule:
PERIOD OPTIONS MAY BE EXERCISED FOR:
------ -----------------------------
From February 1, 2001 Up to 125,000 shares of the Common Stock at
Through January 31, 2006 $3.50 per share
From February 1, 2002 Up to 125,000 shares of the Common Stock at
Through January 31, 2007 $4.00 per share
From February 1, 2003 Up to 125,000 shares of the Common Stock at
Through January 31, 2008 $5.00 per share
From February 1, 2004 Up to 125,000 shares of the Common Stock at
Through January 31, 2009 $6.00 per share
If, at any time during any of these periods, the Employee fails to exercise the
Options with respect to all of the shares which may be acquired at such time,
the Employee shall be entitled to exercise the Options again with respect to the
remaining portion of such shares at any subsequent time prior to the termination
date of the Options.
3. TERMINATION DATE OF OPTIONS. The Options granted herein shall
terminate on the dates specified in Section 2 hereof. The Employee shall have no
right to exercise the Options at any time after the dates specified in Section 2
hereof.
4. MANNER OF EXERCISE. When the Employee elects to exercise Options to
purchase shares of Common Stock and such exercise is permitted hereunder, he
shall give written notice of such exercise to the Corporate Secretary of the
Corporation. The notice of exercise shall state the number of shares of Common
Stock as to which the Options are being exercised and the exercise price for
such shares of Common Stock. The Employee may exercise the Options to purchase
all or any whole number portion of the number of shares of Common Stock which
the Employee is then permitted to purchase under Paragraph 2 (but not for any
fractional shares).
5. PAYMENT FOR SHARES. Full payment of the Price for each share of
Common Stock purchased by exercising the Options shall be due at the time the
notice of exercise is delivered pursuant to Paragraph 4. Such payment may be
made (i) in cash, (ii) by delivery of shares of Common Stock which the Employee
has already owned for at least six (6) months which have a fair market value
equal to the Price multiplied by the number of shares being exercised, or (iii)
at the discretion of the Board of Directors, in any other form acceptable to the
Corporation.
At the time of any exercise, the Employee may exercise his Options by
delivering a signed, irrevocable notice of exercise, accompanied by payment in
full of the option price by the Employee's stockbroker and an irrevocable
instruction to the Corporation to deliver the shares of Common Stock issuable
upon exercise of the Options promptly to the Employee's stockbroker for the
Employee's account.
6. ISSUANCE OF STOCK CERTIFICATES FOR SHARES. The stock certificates
for any shares of Common Stock issuable to the Employee upon exercise of the
Options shall be delivered to the Employee (or to the person to whom the rights
of the Employee shall have passed by will or the laws of descent and
distribution) as promptly after the date of exercise as is feasible, but not
before the Employee has paid the Price for each such share so exercised.
7. TERMINATION OF EMPLOYMENT FOR DEATH, DISABILITY OR WITHOUT CAUSE. If
the Employee's employment with the Corporation ends during the term of the
Options specified in Section 2 hereof either as a result of death, disability or
involuntary termination by the Corporation without Cause (as defned in the
Employee's Employment Agreement), Employee's right to exercise the Options shall
not expire prematurely. The Options shall not be forfeited, but Employee (or
Employee's estate) shall continue to have the right to exercise the Options
during the remainder of the term of the Options specified in Section 2 hereof.
The maximum number of shares Employee (or Employee's estate) may purchase by
exercising the Options at any time during such period shall not exceed the
number of shares which could be purchased at that date pursuant to Section 2
hereof.
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8. TERMINATION OF EMPLOYMENT BY EMPLOYEE OR FOR CAUSE. If Employee's
employment with the Corporation ends during the term of the Options either as a
result of voluntary termination by the Employee or termination by the
Corporation for Cause (as defined in Employee's Employment Agreement), Employee
shall have the right to exercise only those Options exercisable on the date of
such termination and Employee must exercise such options during a period of
ninety (90) days following the termination of employment, but in no event later
than January 31, 2009. The maximum number of shares the Employee may purchase by
exercising the Options during this period shall not exceed the number of shares
which could be purchased at the date of termination pursuant to Paragraph 2.
9. LIMITED TRANSFERABILITY OF OPTIONS. The Employee's rights under the
Options may not be assigned or transferred by the Employee other than (i) by
will or the laws of descent and distribution, or (ii) in the manner described in
the next paragraph.
Notwithstanding the foregoing, the Employee may transfer all or a
portion of the Options to trusts for the benefit of members of her immediate
family, or to family partnerships in which immediate family members are the only
partners, as long as the Employee receives no consideration for the transfer.
Any transferred Options will still be terminated in accordance with Paragraph 7
if the any of the events described in Paragraph 7 occur.
10. SECURITIES LAWS. The Corporation may from time to time impose any
conditions on the exercise of the Options as it deems necessary or advisable to
ensure that the Options granted hereunder, and each exercise thereof, satisfy
the applicable requirements of federal and state securities laws. Such
conditions to satisfy applicable federal and state securities laws may include,
without limitation, the partial or complete suspension of the right to exercise
the Options until the offering of the shares covered by the Options have been
registered under the Securities Act of 1933, or the printing of legends on all
stock certificates issued to the Employee referring to the restrictions on the
transferability of such shares.
11. RIGHTS PRIOR TO ISSUANCE OF CERTIFICATES. Neither the Employee nor
any person to whom the rights of the Employee shall have passed by will or the
laws of descent and distribution shall have any of the rights of a stockholder
with respect to any shares of Common Stock until the date of the issuance to her
of certificates for such Common Stock as provided in Paragraph 6 above.
12. EFFECT OF CHANGE IN CORPORATE CONTROL. In the event of a Change in
Corporate Control, the vesting of any stock options or other awards granted to
Executive under any stock option plan or scheme of the Company shall become
immediately vested in full and, in the case of stock options, exercisable in
full. For purposes of this Agreement, a "CHANGE IN CORPORATE CONTROL" shall
include any of the following events:
(i) The acquisition in one or more transactions of more than thirty
percent (30%) of the Company's outstanding Common Stock by any corporation, or
other person or group (within the meaning of Section 14(d)(3) of the Securities
Exchange Act of 1934, as amended); or
(ii) Any merger or consolidation of the Company into or with another
corporation in which the Company is not the surviving entity, or any transfer or
sale of substantially all of the
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assets of the Company or any merger or consolidation of the Company into or with
another corporation in which the Company is the surviving entity and, in
connection with such merger or consolidation, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for other stock or
securities of any other person, or cash, or any other property.
provided that, no acquisition of stock by any person in a public offering or
private placement of the Company's common stock, approved by the Company's Board
of Directors, shall be considered a Change in Control.
13. MISCELLANEOUS.
(a) This Agreement may be executed in one or more counterparts
all of which taken together will constitute one and the same instrument.
(b) The terms of this Agreement may only be amended, modified
or waived by a written agreement executed by both the Employee and the
Corporation.
(c) The validity, performance, construction and effect of this
Agreement shall be governed by the laws of the State of Florida, without giving
effect to principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement in two
counterparts on the date and year first above written.
ATTEST: USA DIGITAL, INC.
/s/ Xxxx X. Xxxx By: /s/ Xxxx X. Xxxx
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Secretary Xxxx X. Xxxx, President
Witness EMPLOYEE:
/s/ Xxxxx Xxxxx-Xxxxxx /s/ Xxxxx X. Xxxxx
---------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxx
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STOCK OPTION AGREEMENT
(Signing Bonus)
THIS STOCK OPTION AGREEMENT, made as of February 1, 2000, between USA
Digital, Inc., a Nevada corporation (the "CORPORATION"), and Xxxxx X. Xxxxx
("EMPLOYEE").
WITNESSETH:
WHEREAS, the Corporation desires to employ Employee pursuant to the
terms of an Employment Agreement dated the date hereof; and
WHEREAS, pursuant to Employee's Employment Agreement, the Corporation
desires to provide Employee with an opportunity to acquire an equity interest in
the Corporation; and
WHEREAS, the Corporation has decided to grant stock options to the
Employee on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
1. GRANT OF OPTIONS. Subject to the terms and conditions of this
Agreement, the Corporation hereby grants to the Employee the right and option to
purchase up to a total of One Hundred Thousand shares of the common stock, $.001
par value, of the Corporation (the "Common Stock"), at an option price per share
of $3.50. The options to purchase up to One Hundred Thousand (100,000) shares of
Common Stock granted under this Agreement (the "Options") are not intended to
qualify as incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended.
2. PERIOD OF EXERCISE. The Options granted in this Agreement shall be
immediately exercisable by the Employee. If, at any time during the term of
these Options, the Employee exercises the Options with respect to some but not
all of the shares which may be acquired at such time, the Employee may exercise
the Options again with respect to the remaining portion of such shares at any
subsequent time prior to the termination date of the Options.
3. TERMINATION DATE OF OPTIONS. The Options granted herein shall
terminate on January 31, 2005, the fifth anniversary of the date of grant. The
Employee shall have no right to exercise the Options at any time after this
date.
4. MANNER OF EXERCISE. When the Employee elects to exercise the Options
to purchase shares of Common Stock and such exercise is permitted hereunder, he
shall give written notice of such exercise to the Corporate Secretary of the
Corporation. The notice of exercise shall state the number of shares of Common
Stock as to which the Options are being exercised. The Employee may exercise the
Options to purchase all or any whole number portion of the number of shares of
Common Stock which the Employee is then permitted to purchase under Paragraph 2
(but not for any fractional shares).
5. PAYMENT FOR SHARES. Full payment of the Price for each share of
Common Stock purchased by exercising the Options shall be due at the time the
notice of exercise is delivered pursuant to Paragraph 4. Such payment may be
made (i) in cash, (ii) by delivery of shares of Common Stock which the Employee
has already owned for at least six (6) months which have a fair market value
equal to the Price multiplied by the number of shares being exercised, or (iii)
at the discretion of the Board of Directors, in any other form acceptable to the
Corporation.
At the time of any exercise, the Employee may exercise his Options by
delivering a signed, irrevocable notice of exercise, accompanied by payment in
full of the option price by the Employee's stockbroker and an irrevocable
instruction to the Corporation to deliver the shares of Common Stock issuable
upon exercise of the Options promptly to the Employee's stockbroker for the
Employee's account.
6. ISSUANCE OF STOCK CERTIFICATES FOR SHARES. The stock certificates
for any shares of Common Stock issuable to the Employee upon exercise of the
Options shall be delivered to the Employee (or to the person to whom the rights
of the Employee shall have passed by will or the laws of descent and
distribution) as promptly after the date of exercise as is feasible, but not
before the Employee has paid the Price for each such share so exercised.
7. TERMINATION OF EMPLOYMENT FOR DEATH, DISABILITY OR WITHOUT CAUSE. If
the Employee's employment with the Corporation ends during the term of the
Options specified in Section 2 hereof either as a result of death, disability or
involuntary termination by the Corporation without Cause (as defned in the
Employee's Employment Agreement), Employee's right to exercise the Options shall
not expire prematurely. Employee (or Employee's estate) shall continue to have
the right to exercise the Options during the remainder of the term of the
Options specified in Section 2 hereof.
8. TERMINATION OF EMPLOYMENT BY EMPLOYEE OR FOR CAUSE. If Employee's
employment with the Corporation ends during the term of the Options either as a
result of voluntary termination by the Employee or termination by the
Corporation for Cause (as defined in Employee's Employment Agreement), the
Options shall expire. Employee shall only have the right to exercise the Options
during a period of ninety (90) days following the termination of employment, but
in no event later than January 31, 2005.
9. LIMITED TRANSFERABILITY OF OPTIONS. The Employee's rights under the
Options may not be assigned or transferred by the Employee other than (i) by
will or the laws of descent and distribution, or (ii) in the manner described in
the next paragraph.
Notwithstanding the foregoing, the Employee may transfer all or a
portion of the Options to trusts for the benefit of members of his immediate
family, or to family partnerships in which immediate family members are the only
partners, as long as the Employee receives no consideration for the transfer.
Any transferred Options will still be terminated in accordance with Paragraph 7
if any of the events described in Paragraph 7 occur.
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10. SECURITIES LAWS. The Corporation may from time to time impose any
conditions on the exercise of the Options as it deems necessary or advisable to
ensure that the Options granted hereunder, and each exercise thereof, satisfy
the applicable requirements of federal and state securities laws. Such
conditions to satisfy applicable federal and state securities laws may include,
without limitation, the partial or complete suspension of the right to exercise
the Options until the offering of the shares covered by the Options have been
registered under the Securities Act of 1933, or the printing of legends on all
stock certificates issued to the Employee referring to the restrictions on the
transferability of such shares.
11. RIGHTS PRIOR TO ISSUANCE OF CERTIFICATES. Neither the Employee nor
any person to whom the rights of the Employee shall have passed by will or the
laws of descent and distribution shall have any of the rights of a stockholder
with respect to any shares of Common Stock until the date of the issuance to him
of certificates for such Common Stock as provided in Paragraph 6 above.
12. MISCELLANEOUS.
(a) This Agreement may be executed in one or more counterparts
all of which taken together will constitute one and the same instrument.
(b) The terms of this Agreement may only be amended, modified
or waived by a written agreement executed by both the Employee and the
Corporation.
(c) The validity, performance, construction and effect of this
Agreement shall be governed by the laws of the State of Florida, without giving
effect to principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement in two
counterparts on the date and year first above written.
ATTEST: USA DIGITAL, INC.
/s/ Xxxx X. Xxxx By: /s/ Xxxx X. Xxxx
----------------------------------- ---------------------------------
Secretary Xxxx X. Xxxx, President
Witness EMPLOYEE:
/s/ Xxxxx Xxxxx-Xxxxxx /s/ Xxxxx X. Xxxxx
----------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxx
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