NON-INCENTIVE STOCK OPTION AGREEMENT
(STOCK OPTION AGREEMENT)
NON-INCENTIVE STOCK OPTION AGREEMENT as of November 26, 1999, by and between
eContent Inc., a Delaware corporation with its principal office located at 000
Xxxxx Xxxxxxxxx Xxxxxx Xxxxx 000, Xxxx Xxxx Xxxxx, Xxxxxxx (the "Company") and
Xxxxxx Xxxxx (the "Optionee").
***********************
The Company has determined to grant to the Optionee an option to purchase shares
of the Company's Common Stock in connection with services performed by Optionee
as a consultant to the Company. The options that are granted under this
agreement are exercisable only at the Optionee's discretion, or at the
discretion of Optionee's legal representative, in the case of death or
disability.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Company, pursuant to
the Agreement, hereby grants the Optionee the option to acquire shares of the
common stock of the Company upon the following terms and conditions:
1. Grant of Option
(a) The Company hereby grants to the Optionee, pursuant to the Agreement, the
right and option (the "Option") to purchase up to 500,000 fully paid and
non-assessable shares of Common Stock par value $.08 per share of the Company
(the "Shares"), to be issued upon the exercise hereof. The Option to purchase
the Shares may be exercised at any time during the term hereof.
(b) The Option may be exercised during the period commencing on the
date hereof and, unless sooner terminated as provided herein, expiring and
terminating at the tenth anniversary hereof, at which time the Optionee shall
have no further right to purchase any Shares not then purchased. The Company
shall at all times during the term of this Agreement reserve and keep available
such number of shares of Common Stock as will be sufficient to satisfy the
requirement of this Agreement.
(c) It is not intended that these Options qualify as Incentive Stock
Options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Exercise Price
The exercise price of the Option (the "Exercise Price") shall be $.20 per Share,
and shall be payable by certified or bank check payable to the-order of the
Company in full at the time of the exercise. Notwithstanding the foregoing, in
lieu of payment in full in such manner, Optionee shall be entitled to pay for
the Shares by payment to the Corporation by certified or bank check of a sum
equal to at least the par value of the Shares from the first proceeds of a sale
of any portion of the shares, with the remainder of the purchase price satisfied
by the issuance of a promissory note or notes, substantially in conformity of
Exhibit A to the employment agreement.
3.Exercise of Option
The Optionee may exercise this option to purchase shares vested by providing
notice to the Company by registered or certified mail, return receipt requested,
addressed to its principal office, signed by Optionee, indicating the number of
vested Shares which he desires to purchase under the Option. The notice shall be
accompanied by payment of the Option Price therefore as specified in Paragraph 2
above and any required written representation as pursuant to Paragraph 7(a)
below. As soon as practicable after the receipt of such notice of exercise, the
Company shall issue to the Optionee certificates issued in the Optionee's name
evidencing the Shares purchased by the Optionee hereunder.
4. Limitations on Right to Exercise
In the event that the services of the Optionee shall be terminated (otherwise
than by reason of death), such Option shall be exercisable (to the extent that
such Option was vested at the time of termination of service) for a period of
three months after such termination, except that the Option shall not be
exercisable after termination of the Optionee's services for reason of his
dishonesty or wrongful conduct or voluntary termination to avoid termination for
such causes.
5. Death of Optionee
In the event of the death of the Optionee, any unexercised portion of his Option
shall be exercisable (to the extent that such Option was exercisable at the time
of his death) for a period of six months after his death or upon the expiration
of the Option, whichever shall occur first, but, in any event, not more than ten
years after the date on which such Option shall have been granted and shall be
exercisable only by his personal representative or such person or persons to
whom such deceased Optionee's rights shall pass under such Optionee's will or by
the laws of descent and distribution.
Restricted Legend
The shares represented by the Certificate have not been registered under the
Securities Act of 1933 (the"Act") and are "restricted securities" as the term is
defined in Rule 144 under the "Act". The shares may not be offered for sale,
sold or otherwise transferred except pursuant to an effective registration
statement under the Act or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the satisfaction of the
Company.
6. Adjustments Upon Changes in Capitalization
(a) In the event of changes in the outstanding shares of the Company by reason
of stock dividends, split-ups, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations or
liquidations, the number and class of shares available under the Agreement, the
number and class of shares or the amount of cash or other assets or securities
available upon the exercise of any Option granted hereunder, at the exercise
price of such option specified hereunder, and the maximum number of shares as to
which Options may be granted to an Optionee shall be correspondingly adjusted,
to the end that the Optionee's proportionate interest in the Company, in any
successor thereto or in the cash, assets or other securities into which the
shares are converted or exchanged shall be maintained to the same extent, as
near as may be practicable, as immediately before the occurrence of any such
event. All references in this Agreement to "Shares" from and after the
occurrence of such event shall be deemed for exercise of Options granted
pursuant hereto.
(b) Any adjustment in the number of Shares shall, apply proportionately to only
the then unexercised portion of the Option. If fractional Shares would result
from any such adjustment, the adjustment shall be revised to the next higher
number.
7. Registration Rights
The Company shall grant to the Optionee "piggy back" registration to include the
shares of Common Stock issuable upon exercise of the Options in any registration
statement filed by the Company under the Securities Act of 1933, as amended.
Optionee agrees that its right to register its shares hereunder may be limited
by any underwriter(s) of the Company's securities in a registered offering, if
such underwriter(s) reasonably believes that the inclusion of the shares will
have an adverse affect on the market for the Company's securities in such
offering, in which case, the amount of Optionee's shares to be registered may be
reduced by such underwriter(s) in their reasonable discretion. In addition the
Company will give its best efforts to file a registration statement on form S-8
or other appropriate form within three to five days of the signing of this
agreement. The Company hereby undertakes to take all actions necessary to
maintain current and effective any registration statement filed by the Company
with respect to the shares so as to enable the Optionee to freely sell, absent
of restriction, any or all of the shares as defined in Rule 144 under the
Securities Act of 1933
8. No Rights as Shareholder
The Optionee shall have no rights as a shareholder in respect of the Shares as
to which the Option shall not have been exercised and payment made as herein
provided.
9. No Obligation Relating to Engagement of Optionee
Nothing herein shall obligate the Company or any subsidiary to engage the
Optionee, nor shall this Agreement constitute a contract or an agreement of
consultants or for services, for confer upon the Optionee any right to continue
to render services to the Company or any subsidiary or interfere
in any way with the right of the Company or any subsidiary to terminate the
services of the Optionee at any time without liability to the Company or the
subsidiary, except as may be set forth in any separate consulting agreement
between the Optionee and the Company.
10. Taxes
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with any
options granted under the Agreement. The Company may further require
notification from the Optionee upon any disposition of shares acquired pursuant
to the exercise of options granted hereunder.
11. Binding-Effect
Except as herein otherwise expressly provided, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, their legal
representatives and assigns.
12. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the State of Delaware applicable to agreements made and to be performed wholly
within the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
eContent Inc.
By:
------------------------------------
Xxxx X. Xxxxxxx
Chairman of the Board &
Chief Executive Officer
By:
------------------------------------
Xxxxxx Xxxxx
