Exhibit 10.3
STOCK OPTION AGREEMENT
THIS AGREEMENT (this "Agreement"), effective as of October 21, 2003, is
made and entered into by and between Atomic Paintball, Inc., a Texas corporation
(the "Company"), and Xxxxxxx X. Xxxxx (the "Optionee").
WHEREAS, the Company has awarded the non-qualified stock option
described in this Agreement (the "Option") to the Optionee;
WHEREAS, the parties hereto desire to evidence in writing the terms and
conditions of the Option.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained, and as an inducement to the Optionee
to continue as an employee of the Company or its subsidiaries and to promote the
success of the business of the Company and its subsidiaries, the parties hereby
agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee, upon the terms
and subject to the conditions, limitations and restrictions set forth in this
Agreement, and effective as of the date of this Agreement (the "Date of Grant"),
an Option to acquire up to 600,000 shares of Common Stock, at an exercise price
per share of $0.25. The Optionee hereby accepts the Option from the Company.
2. Vesting. The shares of Common Stock underlying the Option shall vest as
follows:
360,000 shares on October 21, 2003
60,000 shares on October 21, 2004
60,000 shares on October 21, 2005
60,000 shares on October 21, 2006
60,000 shares on October 21, 2007
3. Exercise. In order to exercise the Option with respect to any vested portion,
the Optionee shall provide written notice to the Company at its principal
executive office. At the time of exercise, the Optionee shall pay to the Company
the exercise price per share set forth in Section 1 times the number of vested
shares as to which the Option is being exercised. The Optionee shall make such
payment in cash, check or at the Company's option in its sole discretion, by the
delivery of shares of Common Stock having a fair market value on the date
immediately preceding the exercise date equal to the aggregate exercise price.
If the Option is exercised in full, the Optionee shall surrender this Agreement
to the Company for cancellation. If the Option is exercised in part, the
Optionee shall surrender this Agreement to the Company so that the Company may
make appropriate notation hereon or cancel this Agreement and issue a new
agreement representing the unexercised portion of the Option.
4. Who May Exercise. The Option shall be exercisable only by the Optionee,
except in the case of death or disability (determined by the Company in it sole
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discretion). To the extent exercisable after the Optionee's death or disability,
the Option shall be exercised only by the Optionee (in case of a disability) or
the Optionee's representatives, executors, successors or beneficiaries.
5. Expiration of Option. The Option shall expire, and shall not be exercisable
with respect to any vested portion as to which the Option has not been
exercised, on the first to occur of: (a) the tenth anniversary of the Date of
Grant; (b) 30 days after the date of termination of the Optionee's employment
with the Company for any reason other than death or disability; or (c) one year
after any termination of the Optionee's employment with the Company if such
termination is due to the death or disability of the Optionee. The Option shall
expire, and shall not be exercisable, with respect to any unvested portion,
immediately upon the termination of the Optionee's employment with the Company
for any reason, including death or disability.
6. Tax Withholding. Any provision of this Agreement to the contrary
notwithstanding, the Company may take such steps as it deems necessary or
desirable for the withholding of any taxes that it is required by law or
regulation of any governmental authority, federal, state or local, domestic or
foreign, to withhold in connection with any of the shares of Common Stock
subject hereto.
7. Transfer of Option. The Optionee shall not, directly or indirectly, sell,
transfer, pledge, encumber or hypothecate ("Transfer") any unvested portion of
the Option or the rights and privileges pertaining thereto. In addition, the
Optionee shall not, directly or indirectly, Transfer any vested portion of the
Option other than by will or the laws of descent and distribution. Any permitted
transferee to whom the Optionee shall Transfer the Option shall agree to be
bound by this Agreement. Neither the Option nor the underlying shares of Common
Stock is liable for or subject to, in whole or in part, the debts, contracts,
liabilities or torts of the Optionee, nor shall they be subject to garnishment,
attachment, execution, levy or other legal or equitable process.
8. Certain Legal Restrictions. The Company shall not be obligated to sell or
issue any shares of Common Stock upon the exercise of the Option or otherwise
unless the issuance and delivery of such shares shall comply with all relevant
provisions of law and other legal requirements including, without limitation,
any applicable federal or state securities laws and the requirements of any
stock exchange upon which shares of the Common Stock may then be listed. As a
condition to the exercise of the Option or the sale by the Company of any
additional shares of Common Stock to the Optionee, the Company may require the
Optionee to make such representations and warranties as may be necessary to
assure the availability of an exemption from the registration requirements of
applicable federal or state securities laws. The Company shall not be liable for
refusing to sell or issue any shares if the Company cannot obtain authority from
the appropriate regulatory bodies deemed by the Company to be necessary to
lawfully sell or issue such shares. In addition, the Company shall have no
obligation to the Optionee, express or implied, to list, register or otherwise
qualify any of the Optionee's shares of Common Stock. The shares of Common Stock
issued upon the exercise of the Option may not be transferred except in
accordance with applicable federal or state securities laws. At the Company's
option, the certificate evidencing shares of Common Stock issued to the Optionee
may be legended as follows:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR
PLEDGED EXCEPT IN COMPLIANCE WITH THE REQUIREMENTS OF SUCH ACT
AND THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION.
9. Miscellaneous.
(a) The granting of the Option shall impose no obligation upon the
Optionee to exercise the Option or any part thereof. Nothing contained in this
Agreement shall affect the right of the Company to terminate the Optionee at any
time, with or without cause, or shall be deemed to create any rights to
employment on the part of the Optionee.
(b) The rights and obligations arising under this Agreement are not
intended to and do not affect the employment relationship that otherwise exists
between the Company and the Optionee, whether such employment relationship is at
will or defined by an employment contract.
(c) Neither the Optionee nor any person claiming under or through the
Optionee shall be or shall have any of the rights or privileges of a shareholder
of the Company in respect of any of the shares issuable upon the exercise of the
Option herein unless and until certificates representing such shares shall have
been issued and delivered to the Optionee or such Optionee's agent.
(d) Any notice to be given to the Company under the terms of this
Agreement or any delivery of the Option to the Company shall be addressed to the
Company at its principal executive offices, and any notice to be given to the
Optionee shall be addressed to the Optionee at the address set forth in the
Company's records, or at such other address for a party as such party may
hereafter designate in writing to the other. Any such notice shall be deemed to
have been duly given if mailed, postage prepaid, addressed as aforesaid.
(e) Subject to the limitations in this Agreement on the transferability
by the Optionee of the Option and any shares of Common Stock, this Agreement
shall be binding upon and inure to the benefit of the representatives,
executors, successors or beneficiaries of the parties hereto.
(f) The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Texas and the United States, as
applicable, without reference to the conflict of laws provisions thereof.
(g) If any provision of this Agreement is declared or found to be
illegal, unenforceable or void, in whole or in part, then the parties shall be
relieved of all obligations arising under such provision, but only to the extent
that it is illegal, unenforceable or void, it being the intent and agreement of
the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while
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preserving its intent or, if that is not possible, by substituting therefor
another provision that is legal and enforceable and achieves the same
objectives.
(h) All section titles and captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement, and in no way
shall define, limit, extend or describe the scope or intent of any provisions of
this Agreement.
(i) The parties shall execute all documents, provide all information,
and take or refrain from taking all actions as may be necessary or appropriate
to achieve the purposes of this Agreement.
(j) This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supercedes all prior
agreements and understandings pertaining thereto.
(k) No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute a waiver of
any such breach or any other covenant, duty, agreement or condition.
(l) This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.
(m) At any time and from time-to-time, the Company may execute an
instrument providing for modification, extension or renewal of any outstanding
option, provided that no such modification, extension or renewal shall impair
the Option in any respect without the consent of the holder of the Option.
Except as provided in the preceding sentence, no supplement, modification or
amendment of this Agreement or waiver or any provision of this Agreement shall
be binding unless executed in writing by all parties to this Agreement. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision of this Agreement (regardless of
whether similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.
(n) In addition to all other rights or remedies available at law or in
equity, the Company shall be entitled to injunctive and other equitable relief
to prevent or enjoin any violation of the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY:
Atomic Paintball, Inc.
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President
OPTIONEE:
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
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