STOCK OPTION AGREEMENT
Exhibit
10.1
THIS
AGREEMENT,
made as
of the 30th
day of
June, 2005 by and between XXXXXX
INDUSTRIES, INC.,
a
Florida corporation (the "Company"), and XXXXXX
XXXXXXXXXX (the
"Optionee").
RECITALS:
A. The
Company has agreed to issue options to purchase shares of the Company's common
stock to the Optionee in exchange for (i) the substantial benefits provided
to
the Company through the Optionee’s personal guarantee of the Company’s bank
loan; and (ii) the services rendered by the Optionee in his capacity as the
Company’s sole officer and director.
B. The
parties desire to set forth their agreement with respect to such options by
entering into this Agreement.
NOW
THEREFORE,
in
consideration of the mutual covenants set forth herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant
of the Option.
Subject
to and upon the terms and conditions set forth in this Agreement, the Company
hereby grants options (the "Options") to the Optionee to purchase up to
2,017,338 shares (the "Option Shares") of the Company's common stock (the
"Common Stock"), during the term of the Options at a price equal to $0.18
(eighteen cents) per share (the "Exercise Price").
2. Term.
The
term of the Options shall commence on the date of this Agreement, and, subject
to the provisions of Sections 5 and 6 hereof, expire ten (10) years from the
date of this Agreement. Upon their termination, the Options shall be of no
further force and effect and shall not be exercisable to any
extent.
3. Vesting.
The
Options will be fully vested as of the date of this Agreement, and may be
exercised by the Optionee in whole or in part and from time to time at any
time
during the term of the Options.
4. Restrictions
on Exercise and Transfer.
The
Option and the rights of the Optionee in the Options and under this Agreement
may not be transferred except upon the Optionee's death as provided by Section
5(c) hereof.
5. Adjustment
in the Event of Changes in Capital Structure, Reorganization, Anti-Dilution
or
Accounting Change.
(a) In
the
event of a change in the corporate structure or shares of the Company, the
Board
of Directors (subject to any required action by the shareholders of the Company)
shall make such equitable adjustments as are necessary and appropriate to
protect against dilution in the number, kind and in the exercise price of the
shares underlying the Options; provided, however, that the Board of Directors
shall not be required to make any such adjustments in the event of a change
which does not result in a dilution of at least one percent (1%) in the number
or exercise price of the shares underlying the Options. For the purposes of
this
Section 5, a change in the corporate structure or shares of the Company shall
include, but is not limited to, changes resulting from a recapitalization,
stock
split, consolidation, rights offering, stock dividend, reorganization or
liquidation.
(b) Upon
a
reorganization, merger or consolidation in which the Company is not the
surviving corporation, or upon a transfer of all or substantially all of the
property of the Company and its subsidiaries (taken as a whole), the Options
and
all of the Optionee's rights hereunder shall terminate, unless provision is
made
by the Company in connection with such transaction for the assumption or
purchase of the Options granted hereunder, or for the substitution for the
Options of new options of the successor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number, kind of shares and
the
purchase price per share, in which event the Options or a new option substituted
for the Options shall continue in the manner and under the terms as
provided.
(c) If
the
Company does not make provision for the assumption or purchase of the Options
or
the substitution of new options in connection with the transactions listed
in
Section 5(b), then: (i) the Company shall provide the Optionee with at least
30
days prior written notice of such transaction; and (ii) during such 30-day
period, the Optionee shall be entitled to exercise the Options.
(d) This
Agreement shall not in any way limit or affect the right of the Company to
make
changes in its capital structure or to merge or consolidate or to dissolve,
liquidate or sell all or any part of its business or assets.
6. Privilege
of Stock Ownership.
The
Optionee shall not be deemed to be the holder of, or to have any of the rights
of the holder with respect to, any Option Shares unless and until the Company
shall have issued and delivered the shares to the Optionee, and the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting and other ownership
rights with respect to such shares.
7. Manner
of Exercising Options.
(a) The
Options may be exercised only as to whole shares and only by written notice
signed by the Optionee (or in the case of exercise after Optionee's death or
disability by Optionee's legal representative, executor, administrator, or
heir
or legatee, as the case may be), and mailed or delivered to the Secretary of
the
Company at its principal office, which notice shall: (i) specify the number
of
Option Shares with respect to which the Options is being exercised; (ii) be
accompanied by payment in full for such Shares in cash; (iii) include a
statement to the effect that the Optionee or other person exercising the Options
is purchasing the Option Shares for investment and not with a view to, or for
sale in connection with, any distribution thereof; and (iv) if being exercised
by a person or persons other than the Optionee, be accompanied by proof
satisfactory to the Company and its counsel that such person or persons have
the
right to exercise the Options.
(b) The
Options shall be deemed to have been exercised with respect to the Option Shares
specified in said notice at the time of receipt by the Company of: (i) said
notice; (ii) any representations required by the Company pursuant to Section
8
hereof; and (iii) payment therefor.
8. Compliance
with Laws and Regulations.
Prior
to exercise of the Options hereunder, the Optionee shall execute and deliver
to
the Company such representations in writing as may be reasonably requested
by
the Company in order for it to comply with the applicable requirements of
federal and state securities law.
9. Reservation
of Shares.
The
Company shall take appropriate steps to reserve from the Company’s authorized
but unissued capital a sufficient number of shares of the Company’s common stock
to cover all shares issuable pursuant to the Options.
10. Governing
Law.
The
validity, enforcement or construction of this Agreement shall be governed by
the
laws of the State of Florida.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above
written.
COMPANY:
XXXXXX
INDUSTRIES, INC.
By:
/s/
Xxxxxx Xxxxxxxxxx
Its:
President
OPTIONEE:
/s/
Xxxxxx Xxxxxxxxxx
Xxxxxx
Xxxxxxxxxx, Individually
