STOCK OPTION AGREEMENT
AGREEMENT made as of the 19th day of April, 2000 by and between
XxxXxxxxx.xxx inc., a Nevada corporation ("Company"), and Xxxxx X. Xxxxxxx
("Employee" of XxxXxxxxx.xxx inc.).
WHEREAS, Employee has entered into an Employment Agreement of even date
herewith pursuant to which employee will be employed by the Company ("Employment
Agreement");
WHEREAS, on April 19, 2000 ("Grant Date"), the Board of Directors of the
Company ("Board") authorized the grant to the Employee of an option ("Option")
to purchase an aggregate of 300,000 shares of the authorized but unissued Common
Stock of the Company ("Common Stock"), conditioned upon the Employee's
acceptance thereof upon the terms and conditions set forth in this Agreement;
and
WHEREAS, the Employee desires to acquire the Option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants the Employee the Option
to purchase all or any part of an aggregate of 300,000 shares of Common Stock
("Option Shares") on the terms and conditions set forth herein.
2. Incentive Stock Option. The Option represented hereby is intended to be
an Option, which qualifies as an "Incentive Stock Option" under Section 422 of
the Internal Revenue Code of 1986, as amended.
3. Exercise Price. The exercise price of the Option is as set forth in
paragraph 4 hereof, subject to adjustment as hereinafter provided.
4. Exercisability. This Option is exercisable as follows (i) commencing on
June 1, 2000 and ending on May 31, 2005, this Option may be exercised for up to
25,000 shares of Common Stock at US$0.27 per share; (ii) commencing July 1, 2000
and ending on June 30, 2005, this Option may be exercised for up to 25,000
shares of Common Stock at US$0.27 per share; (iii) commencing August 1, 2000 and
ending on July 31, 2005 , this Option may be exercised for up to 25,000 shares
of Common Stock at US$0.27 per share; (iv) commencing September 1, 2000 and
ending August 31, 2005, this Option may be exercised for up to 25,000 shares of
Common Stock at US$0.27 per share; (v) commencing October 1, 2000 and ending on
September 30, 2005, this Option may be exercised for up to 25,000 shares of
Common Stock at US$0.27 per share; (vi) commencing November 1, 2000 and ending
on October 31, 2005 , this Option may be exercised for up to 25,000 shares of
Common Stock at US$0.27 per share; (vii) commencing December 1, 2000 and ending
on November 30, 2005, this Option may be exercised for up to 25,000 shares of
Common Stock at US$0.27 per share; (viii) commencing January 1, 2001 and ending
on December 31, 2006, this Option may be exercised for up to 25,000 shares of
Common Stock at US$0.27 per share; (ix) commencing February 1, 2001 and ending
on January 31, 2006, this Option may be exercised for up to 25,000 shares of
Common Stock at US$0.27 per share; (x) commencing March 1, 2001 and ending on
February 29, 2006, this Option may be exercised for up to 25,000 shares of
Common Stock at US$0.27 per share; (xi) commencing April 1, 2001 and ending on
March 31, 2006, this Option may be exercised for up to 25,000 shares of Common
Stock at US$0.27 per share; (xii) commencing June 1, 2001 and ending on May 31,
2006, this Option may be exercised for up to 25,000 shares of Common Stock at
US$0.27 per share. The period during which the Option is exercisable is referred
to as the Exercise Period.
5. Effect of Termination of Employment. The termination of the employment
of Employee will have no effect on the exercisability of a portion of this
Option once it becomes exercisable. If Employee's employment is terminated
before a portion of this Option is exercisable, that portion of the Option will
terminate and be of no further effect.
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6. Withholding Tax. Not later than the date as of which an amount first
becomes includible in the gross income of the Employee for Federal income tax
purposes with respect to the Option, the Employee shall notify the Company of
the amount and, to the extent required, pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any Federal, state, local
and other taxes of any kind required by law to be withheld or paid with respect
to such amount. The obligations of the Company under this Agreement shall be
conditional upon such payment or arrangements with the Company and the Company
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Employee from the Company.
7. Adjustments. In the event of any stock dividend, forward stock split,
reverse stock split, or other recapitalization of the Company which affects the
number of outstanding shares of Common Stock, the Company shall proportionally
adjust the number and kind of Option Shares and the exercise price of the Option
in order to prevent the dilution or enlargement of the Employee's proportionate
interest in the Company and Employee's rights hereunder immediately prior to the
stock dividend, stock split, reverse stock split or recapitalization, provided
that the number of Option Shares shall always be a whole number.
8. Method of Exercise.
8.1. Notice to the Company. The Option shall be exercised in whole or in
part by written notice in substantially the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice.
8.2. Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Employee as soon as practicable after payment therefor.
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8.3. Payment of Purchase Price.
8.3.1. Payment. The Employee shall make payments by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; the Company shall not be required to deliver certificates for
Option Shares until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof.
8.3.2. Payment of Withholding Tax. Any required withholding tax shall
be paid in cash in accordance with Sections 8.3.1.
9. Nonassignability. The Option shall not be assignable or transferable
except by will or by the laws of descent and distribution in the event of the
death of the Employee. No transfer of the Option by the Employee by will or by
the laws of descent and distribution shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a
copy of the will and such other evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option.
10. Company Representations. The Company hereby represents and warrants to
the Employee that:
(a) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the
transactions contemplated hereunder; and
(b) the Option Shares, when issued and delivered by the Company to the
Employee in accordance with the terms and conditions hereof, will be duly
and validly issued and fully paid and non-assessable.
11. Employee Representations. The Employee hereby represents and
warrants to the Company that:
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(a) he is acquiring the Option and shall acquire the Option Shares for
him own account and not with a view towards the distribution thereof;
(b) he understands that he must bear the economic risk of the
investment in the Option Shares, which cannot be sold by him unless they
are registered under the Securities Act of 1933 ("1933 Act") or an
exemption therefrom is available thereunder (which exemption may require a
holding period of not less than one year after exercise in certain
circumstances and not less than two years after exercise in certain other
circumstances and if an affiliate of the Company impose other restrictions)
and that the Company is under no obligation to register the Option Shares
for sale under the 1933 Act except as stated in this agreement;
(c) in him position with the Company, he has had both the opportunity
to ask questions and receive answers from the officers and directors of the
Company and all persons acting on its behalf concerning the terms and
conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possesses or may possess such
information or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information obtained pursuant to
this clause;
(d) he is aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence
of registration under the 1933 Act or an exemption therefrom as provided
herein; and
(e) the certificates evidencing the Option Shares may bear the
following legends:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of April __19___, 2000,
a copy of which is on file with the Company, and may not be
transferred, pledged or disposed of except in accordance with the
terms and conditions thereof."
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12. Restriction on Transfer of Stock Option Agreement and Option Shares.
Anything in this Agreement to the contrary notwithstanding and in addition to
the provisions of Section 11 of this Agreement, the Employee hereby agrees that
he shall not sell, transfer by any means or otherwise dispose of the Option
Shares acquired by him without registration under the 1933 Act, or in the event
that they are not so registered, unless (i) an exemption from the 1933 Act
registration requirements is available thereunder, and (ii) the Employee has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.
13. Registration Right. The Company shall promptly file a Registration
Statement on Form S-8 (or successor form) to register the Option Shares for
issuance to Employee at such time as is permitted for the Company to use Form
S-8, after it has registered a class of securities under the Exchange Act of
1934, as amended, ("Exchange Act"), and provided further that the Option Shares
may be registered on Form S-8. Employee agrees that the Company is not obligated
to register a class of securities under the Exchange Act at any time.
14. Miscellaneous.
14.1. Notices. All notices, requests, deliveries, payments, demands
and other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be either delivered personally or sent
by registered or certified mail, or by private courier, return receipt
requested, postage prepaid to the parties at their respective addresses set
forth herein, or to such other address as either shall have specified by notice
in writing to the other. Notice shall be deemed duly given hereunder when
delivered or mailed as provided herein.
14.2. Stockholder Rights. The Employee shall not have any of the
rights of a stockholder with respect to the Option Shares until such shares have
been issued after the due exercise of the Option. Nothing contained in this
Agreement shall be deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor shall it interfere in
any way with the right of the Company to terminate Employee in accordance with
the provisions regarding such termination set forth in Employee's written
agreement with the Company, or if there exists no such agreement, to terminate
Employee at will.
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14.3. Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any other or subsequent breach.
14.4. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof.
This Agreement may not be amended except by writing executed by the party
to be charged.
14.5. Binding Effect; Successors. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
14.6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada (without regard to conflicts
of law provisions).
14.7. Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as
of the day and year first above written.
XxxXxxxxx.xxx inc. Address: 0000 X. Xxxxxxx, Xxxxx 00 and 14
Xxx Xxxxx, XX 00000
By: /s/ Xxxxxx Xxxxx
---------------------------
Xxxxxx Xxxxx, President
EMPLOYEE: Address: 0000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
/s/ Xxxxx Xxxxxxx
------------------
Xxxxx X. Xxxxxxx
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
XxxXxxxxx.xxx inc.
0000 X. Xxxxxxx, Xxxxx 00 and 14
Xxx Xxxxx, XX 00000
---------------------------------------
DATE
Attention: Secretary or Treasurer
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of April ____, 2000
("Agreement") with XxxXxxxxx.xxx inc. ("Company"), I hereby irrevocably elect to
exercise the right to purchase _________ shares of the Company's common stock
("Common Stock"), which are being purchased for investment and not for resale.
As payment for my shares, enclosed is (check and complete applicable
box[es]):
[_] a [personal check] [certified check] [bank check]
payable to the order of "XxxXxxxxx.xxx inc." in the sum of $_________;
and/or
[_] confirmation of wire transfer in the amount of
$-------------.
I hereby represent, warrant to, and agree with, the Company that:
(i) I have acquired the Option and shall acquire the Option Shares for
my own account and not with a view towards the distribution thereof;
(ii) I understand that I must bear the economic risk of the investment
in the Option Shares, which cannot be sold by me unless they are registered
under the Securities Act of 1933 ("1933 Act") or an exemption therefrom is
available thereunder and that the Company is under no obligation to
register the Option Shares for sale under the 1933 Act;
(iii) in my position with the Company, I have had both the opportunity
to ask questions and receive answers from the officers and directors of the
Company and all persons acting on its behalf concerning the terms and
conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possesses or may possess such
information or can acquire it without unreasonable effort or expense
necessary to verify the accuracy of the information obtained pursuant to
clause (ii) above;
(iv) I am aware that the Company shall place stop transfer orders with
its transfer agent against the transfer of the Option Shares in the absence
of registration under the 1933 Act or an exemption therefrom as provided
herein; and
(v) the certificates evidencing the Option Shares may bear the
following legends:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933. The shares may not be sold or transferred in the absence of such
registration or an exemption therefrom under said Act."
"The shares represented by this certificate have been acquired
pursuant to a Stock Option Agreement, dated as of April ____, 2000 a
copy of which is on file with the Company, and may not be transferred,
pledged or disposed of except in accordance with the terms and
conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
------------------------------ ------------------------------------------
(Signature) (Address)
------------------------------ ------------------------------------------
(Print Name) (Address)
------------------------------------------
(Social Security Number)
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