STOCK OPTION AGREEMENT
AGREEMENT, made as of January 30, 1998, by and between GLOBAL
TELECOMMUNICATION SOLUTIONS, INC., a Delaware corporation (the "Company"), and
X.X.X. PARTNERS (the "Consultant").
WHEREAS, the Consultant recently became employed by the Company; and
WHEREAS, the Board of Directors has authorized the grant to the
Consultant of an option (the "Option") to purchase an aggregate of 60,000 of the
authorized but unissued or treasury shares of the Common Stock of the Company,
$.01 par value ("Common Stock"), on the terms and conditions set forth in this
Agreement; and
WHEREAS, the Consultant 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 to the Consultant the right
and option to purchase all or any part of an aggregate of 60,000 shares of the
Common Stock ("Option Shares") on the terms and conditions set forth herein.
Said Option is a non-qualified stock option not intended to qualify under any
section of the Internal Revenue Code of 1986, as amended, and is not granted
under any plan, including the Company's 1994 Performance Equity Plan ("Plan").
Certain terms used herein, however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option shall be
$6.125 per share, subject to adjustment as hereinafter provided.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement immediately upon execution of this Agreement and
shall remain exercisable for a period of five years from the date of vesting
("Exercise Period"), except as otherwise set forth in this Agreement.
4. Withholding Tax. Not later than the date as of which an amount first must be
included in the gross income of the Consultant for Federal income tax purposes
with respect to the Option, the Consultant shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Consultant from the Company.
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5. Adjustments. If and to the extent that the number of issued shares of Common
Stock shall be increased or reduced by reclassification, split-up, stock
dividend, combination of shares, or any similar change in the Common Stock of
the Company as a whole, the Company shall proportionally adjust the number and
kind of Option Shares and the exercise price of the Option, to such extent and
in such manner as shall as closely as possible maintain Consultant's
proportionate interest in the Company and his rights hereunder. If (i) the
Company shall not be the surviving corporation in any merger, combination,
consolidation or similar type of corporate transaction, or (ii) if the Company
is the survivor, but the outstanding shares of Common Stock are exchanged for
securities of another company, or property, then the Board of Directors will
make appropriate provision so that this Option will be exercisable for the full
period as provided in this Agreement for securities or other property of the
surviving or other entity as if this Option had been exercised for Common Stock
immediately before such merger, combination, consolidation or other transaction.
No fractional shares of Common Stock shall be issued as a result of any
adjustment under this provision, and to the extent any adjustment results in a
fractional share of Common Stock, then the adjustment will be to the lower full
share.
6. Method of Exercise.
6.1 Notice to the Company. The Option may be exercised in whole or in part
by written notice in 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 and of the Withholding Taxes, if any.
6.2 Delivery of Option Shares. The Company shall deliver a certificate for
the Option Shares to the Consultant as soon as practicable after payment
therefor.
6.3 Payment of Purchase Price.
6.3.1 Cash Payment. The Consultant shall make cash 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.
6.3.2 Cashless Payment. The Committee, in its sole discretion, may allow
Consultant to use Common Stock of the Company owned by him to make any required
payments by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of any
liens or encumbrances. Shares of Common Stock used for this purpose shall be
valued at the Fair Market Value. Notwithstanding the foregoing, the Company
shall have the right to reject payment in the form of Common Stock if in the
opinion of counsel for the Company, (i) it could result in an event of
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"recapture" under Section 16(b) of the Securities Exchange Act of 1934; (ii)
such shares of Common Stock may not be sold or transferred to the Company; or
(iii) such transfer could create legal difficulties for the Company.
7. 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 Consultant. No transfer of the Option by the Consultant 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/or 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.
8. Form S-8 Registration. The Company hereby grants to Consultant the right to
have the Option Shares registered on any registration statement on Form S-8
filed by the Company after the date hereof and during the period in which
Consultant is employed by the Company or by any subsidiary thereof.
Notwithstanding the foregoing, the Company shall have no obligation hereunder in
connection with any registration statement or amendment thereto unless the
Consultant provides to the Company information with respect to his ownership of
Option Shares, manner of proposed disposition and such other matters as the
Company shall reasonably request for disclosure in the registration statement or
any amendment thereto.
9. Company Representations. The Company hereby represents and warrants to
Consultant that:
(i) 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
(ii) the Option Shares, when issued and delivered by the Company to
Consultant in accordance with the terms and conditions hereof, will be duly and
validly issued and fully paid and non-assessable.
10. Consultant Representations. The Consultant hereby represents and warrants to
the Company that:
(i) he is acquiring the Option and shall acquire the Option Shares for his
own account and not with a view towards the distribution thereof;
(ii) he has received a copy of all reports and documents required to be
filed by the Company with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, within the last 24 months and all
reports issued by the Company to its stockholders;
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(iii) 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 (the "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;
(iv) in his 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 clause (iii) above;
(v) 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
(vi) if, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"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."
11. Restriction on Transfer of Option Shares.
11.1 Anything in this Agreement to the contrary notwithstanding, Consultant
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
Consultant 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.
11.2 Anything in this Agreement to the contrary notwithstanding, Consultant
hereby agrees that he shall not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by him (i) prior to six months after the Grant
Date and (ii) except in accordance with Company's policy, if any, regarding the
sale and disposition of securities owned by employees and/or directors of the
Company.
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12. Miscellaneous.
12.1 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 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.
12.2 Consultant and Stockholder Rights. The Consultant 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 Consultant 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 Consultant in
accordance with the provisions regarding such termination set forth in
Consultant's written consulting agreement with the Company, or if there exists
no such agreement, to terminate Consultant at will.
12.3 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.
12.4 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 Consultant and the Company.
12.5 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 per son
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
12.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law provisions).
12.7 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.
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IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above:
GLOBAL TELECOMMUNICATION Address: 5697 Rising Sun Avenue
SOLUTIONS, INC. Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
By:________________________
CONSULTANT: Address: ________________________________
________________________________
____________________________
X.X.X. PARTNERS
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
0000 Xxxxxx Xxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of _________________
with Global Telecommunication Solutions, Inc. (the "Company"), I hereby
irrevocably elect to exercise the right to purchase _________ shares of the
Company's common stock, par value $.01 per share ("Common Stock").
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 "Global Telecommunication Solutions, Inc." in the sum of
$_________;
|_| confirmation of wire transfer in the amount of $_____________; and/or
|_| with the consent of the Company, a certificate for __________ shares
of the Company's Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such term is defined in
the 1994 Performance Equity Plan) of $_________.
I hereby represent and warrant to, and agree with, the Company that:
1. I have acquired the Option and shall acquire the Option Shares for my
own account, for investment, and not with a view towards the distribution
thereof;
2. I have received a copy of all reports and documents required to be filed
by the Company with the Commission pursuant to the Exchange Act within the last
24 months and all reports issued by the Company to its stockholders;
3. 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 (the "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;
4. I agree that I will not sell, transfer by any means or otherwise dispose
of the Option Shares acquired by me hereby except in accordance with Company's
policy, if any, regarding the sale and disposition of securities owned by
employees and/or directors of the Company;
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4. 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;
5. 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
6. If, at the time of issuance of the Option Shares, the issuance of such
shares have not been registered under the 1933 Act, the certificates evidencing
the Option Shares shall bear the following legend:
"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."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
------------------------------ ----------------------------------------
(Signature) (Address)
------------------------------ ----------------------------------------
(Print Name)
----------------------------------------
(Social Security Number)
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