STOCK OPTION AGREEMENT
EXHIBIT
10.2
THIS
STOCK OPTION AGREEMENT
is made
this ____ day of _________, 200_ by and between Theater Xtreme Entertainment
Group, Inc., a Florida corporation (the "Company") and the individual who has
signed the signature page of this Agreement (the "Optionee").
W I T N E S S E T H:
Optionee
holds the position with the Company set forth on the signature page of this
Agreement. Company desires to grant to Optionee options to purchase shares
of
its common stock, par value $0.01 each ("Shares").
NOW,
THEREFORE,
for and
in consideration of the foregoing, the mutual covenants herein contained, and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties hereto, each intending to be legally bound
hereby, agree as follows:
1. Definitions.
As used
in this Agreement, the following terms shall have the following respective
meanings:
(a) The
term
"Affiliate" shall mean a corporation which is a parent corporation or a
subsidiary corporation with respect to the Company within the meaning of Section
425(e) or (f) of the Code.
(b) The
term
"Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) The
term
"Expiration Date" shall mean 5:00 p.m., local time in Wilmington, Florida on
the
anniversary of the date of this Agreement set forth on the signature page of
this Agreement.
(d) The
term
"ISO" shall mean an incentive stock option within the meaning of the Code,
for
Federal income tax purposes.
(e) The
term
"NSO" shall mean an option which is not an ISO.
(f) The
term
the "Plan" shall mean that certain 2005 Stock Option Plan of the Company adopted
by the Board of Directors of Company on March 24, 2005.
(g) The
term
"Termination Date" shall mean 5:00 p.m. local time in Wilmington, Florida on
the
day the Option terminates in accordance with the terms of Paragraph
5.
(h) The
term
"transfer" shall mean any sale, assignment, transfer, gift, donation, or other
disposition, or any pledge, deposit, or placing of an encumbrance
upon.
(i) The
term
"Fair Market Value" with respect to a Share on a date shall mean the closing
price of a share of Company's common stock on the day before such date on the
national securities exchange, NASDAQ, OTC Bulletin Board, or Pink Sheets, as
the
case may be, where such shares are traded, or if such shares are not then
traded, the fair market value as determined by the Board of Directors of the
Company in good faith.
(j) The
term
"Committee" shall mean the Committee of the Board of Directors designated by
the
Board to administer stock options of the Company, or in the absence of such
designation, shall mean the Board of Directors.
2. Grant
of Option.
The
Company hereby grants to Optionee the right and option (the "Option") to
purchase the number of Shares set forth on the signature page of this Agreement
(the "Option Shares"), on the terms and subject to the conditions hereinafter
set forth in this Agreement. All Options are and shall be deemed to be ISOs
issued under and pursuant to the Plan except to the extent set forth on the
signature page of this Agreement. In the event of any conflict between this
Agreement and the terms of the Plan, the terms of the Plan shall
govern.
3. Option
Price.
The
purchase price to be paid, if the Option is exercised, shall be the amount
per
share set forth on the signature page of this Agreement (the "Option Price"),
which shall be paid at the Closing (as hereinafter defined) in the manner
provided in this Agreement.
4. Exercise
of Option.
The
following provisions shall apply to exercise of the Option:
(a) Optionee
shall exercise the Option by sending a notice of election (the "Notice of
Election") to the Company in the form attached hereto and incorporated herein
by
reference. The Notice of Election shall be in writing, shall be sent to the
Company at the address and in the manner set forth in subparagraph 14 (c) hereof
(unless such address has been changed in the manner set forth in such
subparagraph), and shall contain the information about the Closing set forth
in
subparagraph 12 (a) hereof.
(b) If
exercised, the Option may be exercised as to some or all of the Option Shares,
and if with respect to some of the Option Shares, then the Option shall continue
until the Expiration Date with respect to the remaining Option
Shares.
(c) The
Option may be exercised at any time prior to the Termination Date; provided,
however, that the date and time of the exercise of the Option shall be that
day
and time when the Notice of Election is actually received by the
Company.
(d) Payment
for Shares shall be made in cash, by certified check payable to the order of
the
Company, or by such other mode of payment (including without limitation,
transfer of shares of common stock of the Company) as the Committee may
approve.
(e) Subject
to the provisions of this Agreement, Optionee will become obliged to purchase
the Option Shares on the terms and conditions set forth in this Agreement and
the Notice of Election upon the sending by Optionee of the Notice of
Election.
5. Term.
(a) Except
as
provided in subparagraph (b) of this Paragraph 5, the Option will terminate
at
5:00 p.m. local time in Wilmington, Florida on the Expiration Date.
(b)
(i) In
the
event of termination of the employment or other relationship between Optionee
and the Company at the election of the Optionee, the Option shall lapse as
of
the date of the termination of Optionee’s employment or other relationship with
the Company, and Optionee shall not be entitled to receive any Shares which
the
Company has not yet delivered the Share certificates, upon refund by the Company
of the Option Price (if any) already paid by Optionee on account of such Shares.
In the event of termination of such employment or other relationship at the
election of the Company, the Option shall terminate as of the earlier of (a)
three (3) months after the date of termination of such employment or other
relationship or (b) the Expiration Date of the Option.
(ii) If
the
employment or other relationship between Optionee and the Company and its
Affiliates terminates as a result of Optionee's death or disability (within
the
meaning of Section 72(m)(7) of the Code), then the Option shall terminate on
the
earlier of (A) one year from the date such employment or other relationship
terminates as a result of Optionee's death or disability, or (B) the Expiration
Date.
(iii) In
the
event of dissolution or liquidation of the Company or consummation of any
transaction in which the Company is not the surviving or acquiring entity,
then
the Option may be terminated prior to the Expiration Date by action of the
Committee, provided that (A) the Committee selects a new Termination Date which
is at least thirty (30) days after the date Optionee is given written notice
of
such selection, and (B) if and to the extent that the Option expires on such
date unexercised, the Company shall pay to Optionee with respect to each Option
Share which was not exercised the difference between the Fair Market Value
of a
Share on such date and the Option Price.
(iv) If
the
Committee finds, after full consideration of the facts presented on behalf
of
both the Company and the Optionee, that the Optionee has breached the terms
of
his or her employment with the Company, or has been discharged for Cause (as
defined herein), then the Option shall immediately terminate and Optionee shall
not be entitled to receive any Shares which the Company has not yet delivered
the share certificates, upon refund by the Company of the Option Price (if
any)
already paid by Optionee. Notwithstanding anything herein to the contrary,
the
Company may withhold delivery of Share certificates pending the resolution
of
any inquiry that could lead to a finding resulting in such a termination. For
purposes of this Agreement, the term "Cause" shall mean the breach by Optionee
of any material term of employment with Company (whether written or oral);
the
commission of a felony (or the pleading of nolo
contendere
to a
felony charge); being a drug addict or alcoholic; disobeying a lawful written
directive of the Company; or taking, using, licensing or transferring to a
third
person without the prior written consent of the Company, any proprietary
information, patent, trademark, trade name or trade secret of the
Company.
6. Change
or Exchange of Capital Stock.
(a) In
the
event that the outstanding shares of capital stock of the Company shall be
changed into or exchanged for a different number or kind of shares of capital
stock or other securities of the Company or of another company (whether by
reason of merger, consolidation, recapitalization, reclassification, split-up,
or otherwise), then there shall be substituted for each remaining Option Share
(those not acquired by exercise of the Option prior to the record date for
such
merger, consolidation, recapitalization, reclassification, split-up, or
otherwise) the number and kind of shares of capital stock or other securities
into which each outstanding share of capital stock of the Company shall be
so
changed or for which each such share of capital stock shall be so exchanged.
In
the event that there shall be any such change or exchange, then Optionee shall
be entitled to purchase all of such capital stock and other securities into
which each Option Share shall have been changed or for which it shall have
been
exchanged for the Option Price which would have been required to be paid for
such Option Share assuming there had been no such change or exchange, and
otherwise in accordance with the terms of this Agreement.
(b) In
the
event that the outstanding Shares shall be subdivided into a greater or combined
into a lesser number of such shares, whether by stock dividend, stock split
or
combination of shares, the Option Price shall be proportionately decreased
or
increased, as the case may be, and the number of remaining Option Shares (those
not acquired by exercise of the Option prior to the record date of such stock
dividend, stock split, or combination of shares) subject to the Option shall
be
proportionately increased or decreased as the case may be, so as appropriately
to reflect such subdivision or combination, effective immediately upon the
effectiveness of such subdivision or combination.
(c) No
such
adjustment shall be made, however, by reason of the issuance of shares of common
stock of the Company for cash, property, or services; by way of stock options,
stock warrants, subscription rights; or otherwise.
7. Condition
Precedent to Exercise.
Notwithstanding anything to the contrary contained in this Agreement, unless
a
more favorable vesting schedule is set for on the signature page of this
Agreement, the Option shall first become exercisable with respect to the
following percentage of Shares covered by the grant set forth in paragraph
2
hereof at the respective times indicated in the following table:
|
Anniversary
Date
of
this Agreement
|
Percentage
of Shares Exercisable
|
||
|
Prior
to the First
|
0%
|
||
|
First
|
25%
|
|
|
|
Second
|
25%
|
|
|
|
Third
|
25%
|
||
|
Fourth
|
25%
|
||
|
Total:
|
100%
|
||
If
any
Options are not ISOs, the vesting schedule set forth in this paragraph 7 shall
apply separately to the ISOs and to the NSOs.
8. Representations
and Warranties of Company.
Company
hereby makes the following representations, warranties and agreements to and
with Optionee:
(a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida and has an authorized capital of Five
Million (5,000,000) shares of preferred stock and Fifty Million (50,000,000)
shares of common stock, each with par value One Tenth of One Cent ($0.001)
per
Share, and the Company has the power and authority to issue the number of Shares
required to be so issued upon the exercise of the Option.
(b) On
April
5, 2005 the Board of Directors and the shareholders of the Company duly adopted
the Plan which was intended, in part, to qualify to the fullest extent possible
as an incentive stock option plan under applicable provisions of the Code.
The
Plan also provides for the award of options not intended as incentive stock
options. The Plan is in full force and effect.
(c) If
the
Option is exercised, the Company has the power and authority to deliver good,
marketable, and unencumbered title to such Shares as to which Optionee shall
have exercised the Option, free of all liens, security interests, pledges,
claims, options and rights of others. There are no restrictions on Company's
right to transfer such Shares to Optionee pursuant to the terms of this
Agreement if the Option is exercised. No transfer of record ownership of, or
beneficial interest in, any of such Shares will be made between the date hereof
and Closing.
(d) This
Agreement constitutes the valid and binding obligation of the Company, and
is
enforceable against it in accordance with its terms, except to the extent that
the enforcement thereof is limited by bankruptcy, reorganization, insolvency,
moratorium, or other similar laws or orders affecting the enforcement of
creditors' rights generally, or by equitable principles.
9. Securities
Laws Compliance Procedures.
Optionee represents and acknowledges that (i) he or she knows, or has had the
opportunity to acquire, all information concerning the business, affairs,
financial condition and prospects of the Company which he or she deems relevant
to making a fully informed decision regarding the consummation of the
transactions contemplated hereby and (ii) he or she has been supplied with
copies of the Company's periodic and other reports as filed with the Securities
and Exchange Commission. Without intending any limitation on the generality
of
the foregoing, Optionee understands and acknowledges that neither the Company
nor anyone acting on his or her behalf has made any representations or
warranties other than those contained herein respecting the Company or the
future conduct of Company's business, and Optionee has not relied upon any
representations or warranties other than those contained herein in the belief
that they were made on behalf of the Company. Optionee further understands
and
acknowledges that the Fair Market Value of the Shares, and thus the value of
the
Option will depend, in part on the personal efforts and skills of Optionee
in
working for or on behalf of the Company.
10. Transfers.
The
Option is not transferable by Optionee otherwise than by will or pursuant to
the
laws of descent and distribution in the event of Optionee's death, in which
event the Option may be exercised by the heirs or legal representatives of
Optionee. The Option may be exercised during the lifetime of the Optionee only
by Optionee. Any attempt at assignment, transfer, pledge or disposition of
the
Option contrary to the provisions hereof or the levy of any execution,
attachment or similar process upon the Option shall be null and void and without
force or effect. Any exercise of the Option by a person other than Optionee
shall be accompanied by appropriate proofs, satisfactory in form and substance
to the Company, of the right of each person to exercise the Option.
11. Conditions
Precedent to Optionee's Obligation to Close.
The
following shall be conditions precedent to the obliga-tion of Optionee to close
after having exercised the Option, any of which may be waived by
Optionee:
(a) All
documents required to be delivered by the Company at or prior to the Closing
shall have been delivered or shall be tendered at the time and place of
Closing.
(b) There
shall have been no material adverse change in the business, financial condition,
or operations of the Company from that existing on the date the Notice of
Election was sent.
12. Closing.
(a) The
Closing shall be held at a date and time to be selected by Optionee in the
Notice of Election; provided, however, that the date specified in the Notice
of
Election shall not be less than fifteen (15) nor more than forty-five (45)
days
after the sending of such Notice of Election.
(b) Closing
shall be held at the chief executive offices of the Company or such other place
as shall be agreed upon by the parties.
(c) At
Closing, the Company shall deliver or cause to be delivered to Optionee
certificates for all of the Option Shares to be purchased by Optionee pursuant
to the Notice of Election issued to and registered in the name of Optionee,
and
with all required transfer tax stamps, if any, affixed.
(d) At
Closing Optionee shall pay by certified check or other draft acceptable to
Company the full Option Price required to be paid in cash for all of the Option
Shares to be purchased by Optionee pursuant to the Notice of
Election.
(e) At
Closing, at the request of the Company, Optionee shall deliver to the Company
a
certificate signed by Optionee certifying to the truth and correctness as of
the
date of Closing of each of the representations, warranties, acknowledgments,
agree-ments, and confirmations set forth in Paragraph 9 of this
Agreement.
13. No
Rights As Shareholder Pending Exercise.
Optionee shall not have any rights as a shareholder of the Company as a result
of the existence of the Option until and unless he or she shall acquire some
or
all of the Option Shares. Without intending any limitation on the generality
of
the foregoing, Optionee shall not be entitled to vote on any matter presented
to
the shareholders of the Company nor to receive any dividends or other
distributions made or declared by the Company, the record date or ex-dividend
date of which, respectively, precedes the date on which some or all of the
Option Shares are acquired pursuant hereto.
14. Miscellaneous.
(a) Indulgences,
Etc.
Neither
the failure nor any delay on the part of either party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power
or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver
of
such right, remedy, power or privilege with respect to any other occurrence.
No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
(b) Controlling
Law.
This
Agreement and all questions relating to its validity, interpretation,
performance and enforcement (including, without limitation, provisions
concerning limitations of actions), shall be governed by and construed in
accordance with the laws of the State of Florida, notwithstanding any
conflict-of-laws doctrines of such jurisdiction to the contrary, and without
the
aid of any canon, custom or rule of law requiring construction against the
draftsman.
(c) Notices.
All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received when personally delivered or when deposited in the United
States mails, registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below:
(i) If
to
Optionee: to the address set forth on the signature page of this
Agreement
(ii) If
to
Company:
000
Xxxxxxxxx Xxxxxxxxx
Xxxxx
X
& X
Xxxxxx,
XX 00000
with
a
copy, given in the manner prescribed above, to:
|
Xxxxxx
X. Xxxx, Esquire
|
|
|
Xxxxxxx
Xxxxx Xxxxxxx & Ingersoll, LLP
|
|
|
0000
Xxxxxx Xxxxxx, 00xx
Xxxxx
|
|
|
Xxxxxxxxxxxx,
XX 00000
|
In
addition, notice shall be sent by a reputable international courier (such as
Fed
Ex) if posted outside of the continental United States. Either party may alter
the address to which communications or copies are to be sent by giving notice
of
such change of address in conformity with the provisions of this subparagraph
(c) for the giving of notice.
(d) Binding
Nature of Agreement; No Assignment.
This
Agreement shall be binding on and shall inure to the benefit of the parties
hereto and their respective heirs, personal representa-tives, successors and
assigns, except that neither party may assign or transfer its rights nor
delegate its obligations under this Agreement without the prior written consent
of the other party hereto.
(e) Provisions
Separable.
The
provisions of this Agreement are independent of and separable from each other,
and no provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.
(f) Entire
Agreement.
This
Agreement contains the entire understanding between the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of
the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
(g) Paragraph
Headings.
The
Paragraph and subparagraph headings in this Agreement have been inserted for
convenience of reference only; they form no part of this Agreement and shall
not
affect its interpretation.
(h) Gender,
Etc.
Words
used herein, regardless of the number and gender specifically used, shall be
deemed and con-strued to include any other number, singular or plural, and
any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate.
(i) Number
of Days.
In
computing the number of days for purposes of this Agreement, all days shall
be
counted, including Saturdays, Sundays and Holidays; provided, however, that
if
the final day of any time period falls on a Saturday, Sunday or Holiday, then
the final day shall be deemed to be the next day which is not a Saturday, Sunday
or Holiday. For purposes of this subparagraph (i), the term "Holiday" shall
mean
a day, other than a Saturday or Sunday, on which national banks with branches
in
the State of Florida are or may elect to be closed.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement the date first above written.
| Theater Xtreme Entertainment Group, Inc. | ||
| ATTEST: | ||
|
_______________________________
|
By:
|
__________________________
|
|
________________,
Secretary
|
Xxxxx
Xxxxx, President
|
|
[Corporate
Seal]
WITNESS:
|
_______________________________
|
_____________________________(SEAL)
|
|
Print
Name:
|
Optionee’s
Social Security Number: ______________________
Optionee’s
position with the Company (Recitals): _________________________
Expiration
Date anniversary of the date of this Agreement: _________________
[Not
later than the fifth anniversary for ISOs granted to 10% holders; not later
than
the tenth anniversary for ISOs granted to others.]
Number
of
Shares Subject to Option grant (paragraph 2): ___________
Number
of
Shares, if any, Subject to Option grant which are not ISOs (paragraph 2):
__________
Option
Price per Share (paragraph 3): $________________
Optionee’s
Address
____________________________
____________________________
____________________________
NOTICE
OF ELECTION
The
undersigned and Theater Xtreme Entertainment Group, Inc. (the "Company") are
parties to that certain Stock Option Agreement dated _________________. Pursuant
to the terms thereof, the undersigned hereby exercises his/her option to
purchase ___________ shares of the common stock (the "Shares") par value $0.001
per Share of the Company. Closing hereunder shall be held at the chief executive
offices of the Company at _____ _.m., on ____________________ ___,
________.
Please
register the Shares in the name of the undersigned and use the address set
forth
herein as the registered address of the undersigned.
I
understand that the Shares have not been registered under the Securities Act
of
1933, as amended (the "Act") or under any state securities law, and the Company
is under no obligation to do so. I understand that the Shares may not be resold
or otherwise transferred in the absence of such applicable registrations or
exemptions from the registration requirements. I understand that I may have
to
hold the Shares for the indefinite future. I understand that the Shares are
"restricted securities" within the meaning of Rule 144 promulgated under the
Act
and the Company has no obligation to make any information available or to file
any reports to permit sales to be made under such rule.
The
undersigned represents and warrants to the Company that he/she (a) has been
advised and understands that the Shares may not be transferred without
compliance with all applicable Federal and state securities laws; and (b) has
had all material information about the Company's business and financial
condition made available to him/her prior to exercise of the Option, and that
he
or she was afforded the opportunity to ask questions of and receive answers
from
the officers and directors of the Company with respect to the Company's business
affairs and prospects.
The
undersigned represents and warrants that he is acquiring the Shares for his/her
own account as principal for investment and not with a view to resale or
distribution, and that he or she has such knowledge and experience in financial
and business matters as will enable him or her to evaluate the merits and risks
of the proposed investment in the Shares.
The
undersigned understands that the Share certificate shall bear a restrictive
legend with respect to the transferability of the Shares.
|
______________________________
|
__________________________________
|
|
Name:
|
|
|
Address:
|
