EXHIBIT 6.22
STOCK OPTION
THIS STOCK OPTION (the "Option") is granted effective the 1st day of January
1999, by Total Film Group, Inc., a Delaware corporation (the "Company")
pursuant to an employment agreement dated January 29, 1999, by and between
the Company and Xxxxxx Xxxxx ("Optionee").
RECITALS
WHEREAS, the Company has engaged Optionee to provided services to the Company
and as additional compensation the Company has agreed to issue Optionee
options to purchase up to 50,000 shares of the Company's common stock, par
value $.001 (the "Common Stock"); and
WHEREAS, the options shall vest immediately and shall be exercisable provided
that the Optionee remains employed by the Company at the time of exercise;
NOW, THEREFORE, in consideration of the mutual terms and conditions of this
Option, the parties hereto agree as follows:
1. GRANT OF OPTION
The Company hereby grants to Optionee the right and option to purchase all or
any part of an aggregate of 50,000 shares of Common Stock on the terms and
conditions hereof.
2. EXERCISE PRICE
The exercise price of this Option shall be $2.00 per share.
3. VESTING; TERM OF OPTION
Subject to the other provisions contained herein, the Options granted
pursuant to this Option shall vest immediately; provided that such Options
shall be exercisable only if Optionee is continuously employed by the Company
through and including the particular date of exercise. Further subject to the
other provisions contained herein, any Option may be exercised, in whole or
in part, at any time commencing immediately, but prior to 12:00 midnight
December 31st, 2000. In no event may an Option be exercised after the
expiration of its term.
4. SHAREHOLDER'S RIGHTS
The Optionee shall have the rights of a shareholder only with respect to
Common Stock fully paid for by Optionee under this Option.
5. PERSONS ENTITLED TO EXERCISE
During Employee's lifetime, this Option can only be exercised by Optionee,
and neither this Option nor any right hereunder can be transferred other than
by testamentary disposition or the laws of descent and distribution. neither
this Option nor any right hereunder shall be subject to lien, attachment,
execution, or similar process. In the even of any alienation, assignment,
pledge, hypothecation, or other transfer of this Option or any right
hereunder, or in the event of any levy, attachment, execution, or similar
process, this Option and all rights granted hereunder shall be immediately
null and void.
6. ADJUSTMENT TO NUMBER OF SHARES OF COMMON STOCK
In the event that the number of shares of Common Stock of the Company from
time to time issued or outstanding is increased pursuant to a stock split or
a stock dividend, the number of shares of Common Stock then covered by this
Option shall be increased proportionally, with no increase in the total
purchase price of the shares then so covered. In the event that the number of
shares of Common Stock of the Company from time to time issued and
outstanding is reduced by a combination or consolidation of shares, the
number of shares of Common Stock then covered by this Option shall be reduced
proportionately, with no reduction in the total purchase price of the shares
then so covered. In the event that the Company should transfer assets to
another corporation and distribute the stock of such other corporation
without the surrender of Common Stock of the Company, and if such disposition
is not taxable as a dividend and no gain or loss is recognized by reason of
section 355 of the Internal Revenue Code of 1986 (the "Code"), or any
amendment or successor statute of like tenor, then the total purchase price
of the Common Stock then covered by each outstanding Option shall be reduced
by an amount that bears the same ratio to the total purchase price then in
effect as the market value of the stock distributed in respect of a share of
the Common Stock of the Company, immediately following the distribution,
bears to the aggregate of the market value at such time of a share of the
Common Stock of the Company plus the stock distributed in respect thereof. In
the event that the Company distributes the stock of a subsidiary to its
shareholders, makes a distribution of a major portion of its assets, or
otherwise distributes significant portion of the value of its issued and
outstanding Common Stock to its shareholders, the number of shares then
subject to this Option, or the exercise price of this Option, may be adjusted
in the reasonable discretion of the Board or a duly authorized committee. All
such adjustments shall be made by the Board or duly authorized committee,
whose determination upon the same, absent demonstrable error, shall be final
and binding. No fractional shares shall be issued, and any fractional shares
resulting from the computations pursuant to this section shall be eliminated
from this Option. No adjustment shall be made for cash dividends, for the
issuance of additional shares of Common Stock for consideration approved by
the Board, or for the issuance to stockholders of rights to subscribe for
additional Common Stock or other securities.
7. METHOD OF EXERCISE
This Option may be exercised by delivery of a notice of exercise, a form of
which is attached hereto as Exhibit "A" and incorporated herein by this
reference, setting forth the number of
Options to be exercised together with either:
a. A certified check or bank check payable to the order of the Company in the
amount of full exercise price of the Common Stock being purchased;
b. Shares of Common Stock of the Company already owned by the Optionee equal
to the exercise price with the Common Stock valued at its fair market value
based on the closing bid quotation for such stock on the close of business on
the day last preceding the date of the exercise of such Option, as reported
on the OTC Bulletin Board, or if not quoted on the OTC Bulletin Board, then
as determined by the Company through any other reliable means of
determination available on the close of business on the day last preceding
the date of such exercise;
c. Options or other rights to purchase Common Stock valued at the amount by
which the closing bid quotations (as determined in accordance with
subparagraph (b) above) of the Common Stock subject to options or other
rights exceeds the exercise or purchase price provided on such options or
rights; or
d. Cancellation of debt owed by the Company to the Optionee, including debt
incurred for professional services rendered, employment relationships, or
otherwise, upon presentation of an invoice for services provided to the
Company.
As soon as practicable after receipt by the Company of such notice, a
certificate or certificates representing such shares of Common Stock shall be
issued in the name of the Optionee, or, if the Optionee shall so request in
the notice exercising the Option, in the name of the Optionee and another
person jointly, with right of survivorship, and shall be delivered to the
Optionee. If this Option is not exercised with respect to all Common Stock
subject hereto, Optionee shall be entitled to receive a similar Option of
like tenor covering the number of shares of Common Stock with respect to
which this Option shall not have been exercised.
8. WITHHOLDING
If the exercise of this Option is subject to withholding or other trust fund
payment requirements of the Code or applicable state or local laws, such
requirements may, at the discretion of the Board or a duly authorized
committee and to the extent permitted by the then governing provisions of the
Code, be met (i) by the holder of this Option either delivering shares of
Common Stock or canceling Options or other rights to acquire Common Stock
with a fair market value equal to such requirements; (ii) by the Company
withholding shares of Common Stock subject to this Option with a fair market
value equal to such requirements; or (iii) by the Company making such
withholding or other trust fund payment and the Optionee reimbursing the
Company such amount paid within 10 days after written demand therefor from
the Company.
9. AVAILABILITY OF SHARES
During the term of this Option, the Company shall at all times reserve for
issuance the number of shares of Common Stock subject to this Option.
10. LIMITATIONS ON RIGHT TO EXERCISE
If the Board of Directors, in its sole discretion, shall determine that it is
necessary or desirable to list, register, or qualify the Common Stock under
any state or federal law, this Option may not be exercised, in whole or in
part, until such listing, registration, or qualification shall have been
obtained free of any conditions not acceptable to the board.
11. RESTRICTIONS ON TRANSFER
The Option and the Common Stock subject to the Option (collectively referred
to as the "Securities") are subject to registration under the Security Act of
1933, as amended (the "Securities Act"), and any applicable state securities
statutes. Optionee acknowledges that unless a registration statement with
respect to the Securities is filed and declared effective by the Securities
and exchange Commission, and the appropriate state governing agency, the
Securities have or will be issued in reliance on specific exemptions from
such registration requirements for transactions by an issuer not involving a
public offering and specific exemptions under state statutes. Any disposition
of the Securities may, under certain circumstances, be inconsistent with such
exemptions. The Securities may be offered for sale, sold, or otherwise
transferred only if (i) registered under the Security Act, and in some cases,
under the applicable state securities acts, or, if not registered, (ii) only
if pursuant to an exemption from such registration requirements and only
after the Optionee provides an opinion of counsel or other evidence
satisfactory to the Company to the effect that registration is not required.
In some states, specific conditions must be met or approval of the securities
regulatory authorities may be required before any such offer or sale. If Rule
144 is available (and no assurance is given that it would be), only routine
sales of Common Stock in limited amounts can be made after one year following
the acquisition date of the Securities, as determined under Rule 144(d), in
accordance with the terms and conditions of Rule 144. The Company is under no
obligation to make Rule 144 available. In the event Rule 144 is not
available, compliance with Regulation A or some other disclosure exemption
may be required before the Optionee can sell, transfer, or otherwise dispose
of the Securities without registration.
If the Securities are not registered, the Company may refuse to transfer the
Securities to any transferee who does not furnish in writing to the Company
the same representations and warranties set forth in this paragraph and agree
to the same conditions with respect to such Securities as are set forth
herein. The Company may further refuse to transfer the Securities if certain
circumstances are present reasonably indicating that the proposed
transferee's representations and warranties are not accurate. In any event,
in the absence of an effective registration statement covering the
Securities, the Company may refuse to consent to any transfer in the absence
of an opinion of legal counsel, satisfactory to and independent of counsel of
the Company, that such proposed transfer is consistent with the above
conditions and applicable securities laws.
12. RECORD OWNER
The Company may deem the Optionee as the absolute owner of this Option for
all purposes. This Option is exercisable only by the Optionee or by the
Optionee's duly designated or appointed representative. This Option is not
assignable.
13. NO RIGHT OF EMPLOYMENT
Nothing contained in this Option shall be construed as conferring on the
Optionee any right to continue or remain as an employee of the Company or its
subsidiaries.
14. VALIDITY AND CONSTRUCTION
The validity and construction of this Option shall be governed by the laws of
the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this document the day
and year first above written.
Company TOTAL FILM GROUP, INC.
By: /s/ Xxxxxx Xxxxx
Its: President
Optionee: /s/ Xxxxxx Xxxxx
EXHIBIT "A"
FORM OF EXERCISE
To: Total Film Group, Inc.
The Undersigned, the owner of the attached Option, hereby irrevocably elects to
exercise the purchase rights represented by the Option for, and to purchase
thereunder, _________ shares of Common Stock of Total Film Group, Inc.
Enclosed is payment in the amount of $_________, the exercise price of the
Common Stock to be acquired.
Please have the certificate(s) registered in the name of ____________________
and delivered to ____________________.
If this exercise does not include all of the Common Stock covered by the
attached Option, please deliver a new Option of like tenor for the balance of
the Common Stock to the undersigned at the foregoing address.
DATED this _________ day of ______________, _____.
Signature of Optionee _____________________
