1
EXHIBIT 10.H
No. 8-001
THE OPTION TO PURCHASE SHARES OF THE COMMON STOCK OF ESAT, INC., REPRESENTED BY
THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144
UNDER THE ACT. NEITHER THE OPTIONS NOR THE UNDERLYING SHARES MAY BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF SAID CORPORATION AND SUCH FURTHER RESTRICTIONS AS THE BOARD OF
DIRECTORS MAY DETERMINE.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT effective as of this 22 day of August, 1998, between
eSat, Inc., a Nevada corporation (the "Corporation"), and XXXXX X. XXXXXXX (the
"Recipient").
WHEREAS, the Corporation, by action of the Board of Directors on March 22,
1999, has authorized the granting of stock options to purchase 1,500,000 shares
of this Corporation's common stock, $.001 par value ("Common Stock"), to XXXXX
X. XXXXXXX at an exercise price of $ 3.00 per share.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy
whereof is hereby acknowledged, the Corporation and the Optionee agree as
follows:
1. Grant of Option. The Corporation hereby grants to XXXXX X. XXXXXXX an
option to purchase (the "Option") an aggregate of 1,500,000 shares of the
Corporation's common stock for a purchase price of $ 3.00 per share (the
"Option Price").
2. Vesting of Option. This option shall be immediately fully vested from the
Date of Grant.
3. Exercise of Option. This Option may be exercised in whole or in part at
any time during the term of the Option, provided, however, no portion of
this Option shall be exercisable after the expiration of the term thereof.
The Option may be exercised, as provided in this Paragraph 3, by notice
and payment to the Corporation as provided in Paragraph 5 hereof.
(a) Conversion. [Deleted.]
4. Manner of Exercise.
(a) During the lifetime of the Recipient, only he may exercise the
Option or any portion thereof. After the death of the Recipient, any
exercisable portion of the Option may, prior to the time when the
Option becomes unexercisable under Section 3.3, be exercised by the
Recipient's personal representative or by any person empowered to do
so under the Recipient's will or under the then applicable laws of
descent and distribution.
(b) The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or the Secretary's office of all
of the following prior to the time when such exercisable Option or
portion thereof becomes unexercisable:
(i) Notice in writing signed by the Recipient, or such other person
then entitled to exercise the Option or portion thereof, stating
that the Option or portion thereof is thereby exercised, such notice
complying with all applicable rules established by the Corporation;
and
(ii) (a) Full payment (in cash or by check) for the shares with
respect to which such Option or portion thereof is exercised; or
- 1 -
2
5. Term of Option. The term of the Option will be through August 24, 2003,
subject to Paragraphs 8 and 9 as provided in this Agreement.
The Recipient of the Option will not have any rights to dividends or any
other rights of a shareholder with respect to any shares of Common Stock
subject to the Option until such shares shall have been purchased through
the exercise of the Option and has been evidenced on the stock transfer
records of the Corporation maintained by the Corporation's transfer agent.
Performance Restrictions. [Deleted.]
6. Transferability Restriction. The Option may not be assigned, transferred
or otherwise disposed of, or pledged or hypothecated in any way (whether
by operation of law or otherwise) unless such transfer is not in violation
of the Securities Act of 1933, the Corporate Securities Laws of the State
of Nevada, or the securities laws of any state. Any assignment, transfer,
pledge, hypothecation or other disposition of the Option or any attempt to
make any such levy of execution, attachment or other process not in
accordance with the foregoing sentence shall cause the Option to terminate
immediately upon the happening of any such event, and the Recipient shall
lose all rights under this agreement, provided, however, that any such
termination of the Option under the foregoing provisions of this Paragraph
6, will not prejudice any rights or remedies which the Corporation may
have under this Agreement or otherwise.
(a) Death, Disability or Retirement of Recipient. [Deleted.]
7. No Registration Obligation. The Recipient understands that the Option is
not registered under the Securities Act of 1933, as amended (the
"Securities Act") and the Corporation has no obligation to register under
the Securities Act the Option or any of the shares of Common Stock subject
to and issuable upon the exercise of the Option. The Recipient represents
that the Option is being acquired by him for investment and acknowledges
that all certificates for the shares issued upon exercise of the Option
will bear the following legend unless such shares are registered under the
Securities Act prior to their issuance:
The shares of Common Stock evidenced by this certificate have been
issued to the registered owner in reliance upon written
representations that these shares have been purchased solely for
investment. These shares may not be sold, transferred or assigned
unless in the opinion of the Corporation and its legal counsel such
sales, transfer or assignment will not be in violation of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder.
The Recipient further understands and agrees that the Option may be
exercised only if at the time of such exercise the Recipient and the Corporation
are able to establish the existence of an exemption from registration under the
Securities Act and applicable state laws.
8. Effect of Certain Changes.
(a) If there is any change in the number of shares of outstanding Common
Stock through the declaration of stock dividends, or through a
recapitalization resulting in stock splits or combinations or
exchanges of such shares, the number of shares of Common Stock
available for Options and the number of such shares covered by
outstanding Options, and the exercise price per share of the
outstanding Options, shall be proportionately adjusted by the Board
to reflect any increase or decrease in the number of issued shares
of Common Stock: provided, however, that any fractional shares
resulting from such adjustment shall be eliminated.
(b) In the event of the proposed dissolution or liquidation of the
Corporation, or any corporate separation or division, including, but
not limited to, split-up, split-off or spin-off, or a merger or
consolidation of the Corporation with another corporation, or any
sale or transfer by the Corporation of all or substantially all its
assets or any tender offer or exchange offer for or the acquisition,
directly or indirectly, by any person or group for more than 50% of
the then outstanding voting securities of the Corporation, the Board
may provide that the Recipient shall have the right to exercise such
Option (at its then current Option Price) solely for the kind and
amount of shares of stock and other securities, property, cash or
any combination
- 2 -
3
thereof receivable upon such dissolution, liquidation, corporate
separation or division, merger or consolidation, sale or transfer of
assets or tender offer or exchange offer, by a Recipient of the
number of shares of Common Stock for which such Option might have
been exercised immediately prior to such dissolution, liquidation,
corporate separation or division, or merger or consolidation: sales
or transfer of assets or tender offer or exchange offer, or in the
alternative the Board may provide that each Option granted herein
shall terminate as of a date fixed by the Board: provided, however,
that not less than 30 day's written notice of the date so fixed
shall be given to the Recipient, who shall have the right, during
the period of 30 days preceding such termination, to exercise the
Option.
(c) Paragraph (b) of this Section 11 shall not apply to a merger or
consolidation in which the Corporation is the surviving corporation
and shares of Common Stock are not converted into or exchanged for
stock, securities of any other corporation, cash or any other thing
of value. Notwithstanding the preceding sentence, in case of any
consolidation or merger of another corporation into the Corporation
in which the Corporation is the surviving corporation and in which
there is a reclassification or change (including a change which
results in the right to receive cash or other property) of the
shares of Common Stock (other than a change in par value, or from no
par value to par value, or as a result of a subdivision or
combination, but including any change in such shares into two or
more classes or series of shares), the Board may provide that the
Recipient shall have the right to exercise such Option solely for
the kind and amount of shares of stock and other securities
(including those of any direct or indirect Parent of the
Corporation), property, cash or any combination thereof receivable
upon such reclassification, change consolidation or merger by the
Recipient of the number of shares of Common Stock for which Option
might have been exercised.
(d) If there is a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with
a different par value or without par value, the shares resulting
from any such change shall be deemed to be the Common Stock within
the meaning of this Stock Option Agreement.
(e) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the
Board.
(f) Except as expressly provided in this Section 11, the Recipient shall
have no rights by reason of any subdivision or consolidation of
shares of stock of any class or the payment of any stock dividend or
any other increase in the number of shares of stock of any class or
by reason of any dissolution, liquidation, merger, or consolidation
or split-up, split-off, or spin-off of assets or stock of another
corporation; and any issue by the Corporation of shares of stock of
any class, or securities convertible into shares of stock of any
class, shall not effect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common
Stock subject to this Option. The grant of this Option shall not
affect in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structures or to merge or consolidate or to
dissolve, liquidate or sell or transfer all or any part of its
business or assets.
9. Notices. Each notice relating to this Agreement will be in writing and
delivered in person or by certified mail to the proper address. Notices to
the Corporation shall be addressed to the Corporation c/o President, eSat,
Inc., 00000 Xxxxxx Xxxx., Xxxx, X, Xxxxxxxx, Xxxxxx, XX 00000. Notices to
the Recipient or other person or persons then entitled to exercise the
Option shall be addressed to the Recipient or such other person or persons
at the Recipient's address specified below. Anyone to whom a notice may be
given under this Agreement may designate a new address by notice to that
effect given pursuant to this Paragraph 12.
10. Approval of Consent. The exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Corporation's counsel of all legal matters in connection
therewith, including compliance with the requirements of the Securities
Act, the Securities Exchange Act of 1934, as amended, applicable state
securities laws, the rules and regulations thereunder, and the
requirements of any national securities exchange or association upon which
the Common Stock than may be listed.
- 3 -
4
11. Benefits of Agreement. This Agreement will inure to the benefit of and be
binding upon each successor and assign of the Corporation. All obligations
imposed upon the Recipient and all rights granted to the Corporation under
this Agreement will be binding upon the Recipient" heirs, legal
representatives and successors.
12. Governmental and Other Regulations. The exercise of the Option and the
Corporation's obligation to sell and deliver shares upon the exercise of
rights to purchase shares is subject to all applicable federal and state
laws, rules and regulations, and to such approvals by the regulatory or
governmental agency which, in the opinion of counsel for the Corporation,
may be required.
13. Conditions to Exercise. The shares of stock deliverable upon the exercise
of the Option, or any portion thereof, may be either previously authorized
but unissued shares or issued shares which have then been reacquired by
the Company. Such shares shall be fully paid and non-assessable. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of the Option
or portion thereof prior to fulfillment of all of the following
conditions:
(i) The admission of such shares to listing on all stock exchanges, if
any, on which such class of stock is then listed;
(ii) The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Corporation shall, in its
absolute discretion, deem necessary or advisable;
(iii) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Corporation shall, in its
absolute discretion, determine to be necessary or advisable;
(iv) The payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the
exercise of the Option; and
(v) The lapse of such reasonable period of time following the exercise
of the Option as the Corporation may from time to time establish for
reasons of administrative convenience.
- 4 -
5
This Stock Option Agreement is executed in the name and on behalf of the
Corporation by one of its duly authorized officers and by the Recipient all as
of the date first above written.
ESAT, INC.
By ____________________________
The undersigned Recipient understands the terms of this Option
Agreement. The undersigned agrees to comply with the terms and conditions of
this Option Agreement.
Date ________________, 1999 Signature:______________________________
Printed Name: Xxxxxxx
Tax ID # (SSN):_________________________
Address:________________________________
________________________________
- 5 -
