NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made as of the 8th day of August 2,000, between XXXXXXXX.XXX,
Inc., a New York corporation, (hereinafter called the "Company") and Xxx Xxxx
(hereinafter called "Optionee").
W I T N E S S E T H:
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Whereas, the Company, for the purposes stated therein, has adopted a
2000 Stock Option Plan, a copy of which is annexed hereto as Exhibit "A"
(hereinafter called the "Plan"); and
Whereas, in accordance with said Plan the Board of Directors has
determined that Optionee is eligible for and should be granted an option
pursuant to said Plan as herein below provided, and Optionee desires to have
such option;
Now, Therefore, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. Grant and Exercise of Option. The Company hereby grants to Optionee an
option to purchase a total of 50,000 shares of the authorized and unissued
Common Stock of the Company.
2. The Directors of the company has elected to have Xxx Xxxx act as a
consultant, advisor and a member of the Board and we have agreed to compensate
Xx. Xxxx by providing him with stock options based on the length of the
consulting agreement. At the company's sole discretion at the beginning of each
six month period beginning August 8, 2000 we will provide Xx. Xxxx with stock
options of 12,500 shares having a par value of $.001 per share, at the price of
$3.50 per share (the "Option"). For each subsequent sixth month period extending
for up to four option dates totally we will grant stock options of 12,500 shares
for each period as described above. Prior to any six month period based on dates
indicates below the company has the right at it's sole discretion to terminate
the agreement, and no further stock options will be issued for the remaining
period of the consulting agreement.
(a) The within option may be exercised before five (5) years (the
"Expiration Date") and, within such period, only at the following times and in
the following amounts:
(i) At the beginning of the first six month period as of August 8,
2000, the Option may be exercised to the extent of not more than
12,500 shares of Common Stock granted in Paragraph 1 hereof:
(ii) At the beginning of the second sixth month period dated
February 9, 2001 of this Agreement, the option may be exercised to the extent of
not more than 12,500 shares of Common Stock granted in Paragraph 1
hereof;
(iii) At the beginning of the fourth sixth month period beginning
August 9,2001 of the Agreement, the option may be exercised for
12,500 shares of Common Stock granted in Paragraph 1 hereof.
(iiii) At the beginning of the fourth sixth month period beginning
February 9, 2002 of this Agreement, the option may be exercised for 12,500
shares of Common Stock granted in Paragraph 1 hereof.
(b) The within Option may be thereafter exercised in each instance,
during its lifetime shall vest in increments as issued and under certain other
circumstances as set forth in Section 6 of the Plan.
(c) Each exercise of the within Option shall be by delivery to the
Company, at its then principal office (attention of the Secretary), of written
notice stating the number of shares of Common Stock to be purchased, accompanied
by payment in full of the option price of such shares of Common Stock. The
option price shall be payable in United States dollars in cash or by certified
check, bank draft, postal or express money order; provided, however, that in
lieu of payment in full in cash, an Optionee may, with the approval of the Board
or the Committee, exercise the within Option by tendering to the Company shares
of Common Stock owned by him and having a Fair Market Value equal to the cash
exercise price (or the balance thereof) applicable to the within Option.
(d) In the event of each exercise of the within Option, the Company
shall deliver to the Optionee, personally or at his designated address, as soon
as practicable, a certificate made out to the Optionee for the number of shares
being purchased.
(e) The within Option is not intended to be an Incentive Stock Option
under Section 422 of the Internal Revenue Code of 1986, as amended.
(f) If at any time, the Company or any Subsidiary or Affiliate is
required, under applicable laws and regulations, to withhold, or to make any
deduction for any taxes, or take any other action in connection with any Option
exercise, the Optionee shall be required to pay to the Company or such
Subsidiary or Affiliate, the amount of any taxes required to be withheld, or, in
lieu thereof, at the option of the Company, the Company or such Subsidiary or
Affiliate may accept Common Stock valued at its Fair Market Value on the date of
payment, to cover the amount required to be withheld.
3. Non-Transferability of Option. The Option granted under this Agreement
shall not be transferable otherwise than by will or the laws of descent and
distribution.
4. Death, Retirement, Disability and Termination of Employment. Upon
termination of all employment by Total Disability, the Optionee may exercise the
Option at any time within one (1) year thereafter, but only to the extent the
Option is exercisable on the date of such termination.
In the event of the death of the Optionee while an employee of the
Company or any Subsidiary, the Optionee's estate or any person who acquires the
right to exercise the Option by bequest or inheritance or by reason of the death
of the Optionee may exercise the Optionee's Option at any time within the period
of one (1) year from the date of death.
Notwithstanding the foregoing provisions regarding the exercise of the
Option, in the event of death, Total Disability or other termination of
employment, in no event shall the Option be exercisable in whole or in part
after the Expiration Date provided in Paragraph 1, above.
5. Adjustments Due to Stock Splits, Mergers, Consolidation, Etc. If, at any
time, the Company shall take any action, whether by stock dividend, stock split,
combination of shares of Common Stock or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, the number of shares which are reserved for
issuance under the Plan and the number of shares which, at such time, are
subject to this Option shall, to the extent deemed appropriate by the Committee,
be increased or decreased in the same proportion, provided, however, that the
Company shall not be obligated to issue fractional shares.
Likewise, in the event of any change in the outstanding shares of Common
Stock by reason of any recapitalization, merger, consolidation, reorganization,
combination or exchange of shares or other corporate change, the Committee shall
make such substitution or adjustments, if any, as it deems to be appropriate, as
to the number or kind of shares of Common Stock or other securities which are
reserved for issuance under the Plan and the number of shares of Common Stock or
other securities which, at such time are subject to this Option.
In the event of a Change in Control, (a) the within Option shall, for a
period of sixty (60) days following such Change in Control, become immediately
and fully exercisable, and (b) the Optionee will be permitted to surrender for
cancellation within sixty (60) days after such Change in Control this Option or
portion of this Option which was granted more than six (6) months prior to the
date of such surrender, to the extent not yet exercised, and to receive a cash
payment in an amount equal to the excess, if any, of the Fair Market Value (on
the date of surrender) of the shares of Common Stock subject to the Option or
portion thereof surrendered, over the aggregate exercise price for such Shares
under this Option or portion thereof surrendered.
6. Purchase for Investment. The Optionee represents, on behalf of himself
and the person or persons referred to in Paragraph 3 above, that any shares of
Common Stock purchased pursuant to this Agreement will be acquired in good faith
for investment and not for resale or distribution, and Optionee on behalf of
himself and said person or persons, agrees that each notice of the exercise of
the within Option shall contain or be accompanied by a representation in writing
signed by him or said person or persons, as the case may be, in form
satisfactory to the Company, that the shares of Common Stock to be purchased
pursuant to such notice are being so acquired and will not be sold except in
compliance with applicable securities laws. The requirements of this Paragraph 5
may be waived by the Company if the Company shall have received an opinion of
its counsel that such representation is not required.
7. Binding Effect of the Plan. Optionee represents that he has read and
understands the Plan and agrees to be bound by all of the terms and conditions
thereof.
8. Capitalized Terms. The capitalized terms used herein without definition
are used as defined in the Plan.
In Witness Whereof, the parties hereto have duly executed this Agreement
as of the day and year first above written.
XXXXXXXX.XXX, Inc.
By: _____________________________________
_____________________________________
Xxx Xxxx, Optionee
