SECURITIES ISSUED UPON EXERCISE OF THIS OPTION 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. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
TELECOM WIRELESS CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT ("Agreement") is made as of the 4th day of
May, 1999, between TELECOM WIRELESS CORPORATION, a Utah corporation (the
"Company"), and XXX X. XXXXXX (the "Optionee"), residing at 000 Xxxx Xxxxxx,
Xxxxxx, XX 00000.
The Company hereby grants an option (the "Option") for the purchase of
261,192 shares of common stock (the "Option Shares") of the Company, $.001
par value per share ("Common Stock"), to the Optionee at the price and in all
respects subject to the terms, definitions and provisions of this Agreement.
The Option is not granted pursuant to the terms of the TELECOM WIRELESS
CORPORATION 1999 Stock Option Plan (the "Plan") and shall not reduce the
shares of Common Stock available for issuance under the Plan.
1. DESIGNATION OF OPTION. The Option granted hereby is a non-qualified
option. A "non-qualified option" means a stock option which is not intended
to qualify as an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code.
2. OPTION EXERCISE PRICE. The Option exercise price is $7.73 for each
share.
3. OPTION EXERCISE PERIOD. The period during which this Option may be
exercised (the "Option Exercise Period") shall expire at 12:00 o'clock p.m.,
Denver time, on the 4th day of May, 2009.
4. VESTING AND EXERCISE OF OPTION. The Option Shares shall be divided
into three (3) equal installments. So long as Optionee is then employed by or
a consultant to the Company or any affiliate of the Company, each installment
shall accrue and the Option shall be exercisable with respect to the shares
included therein on each yearly anniversary date thereafter. An Option may be
exercised when installments accrue and at any time thereafter within the
Option Exercise Period set forth in Section 3 above with respect to all or a
part of the shares covered by such accrued installments, subject, however, to
further provisions of this Section 4. Installments which have accrued and are
exercisable may be referred to herein as the "Vested Options." Vested Options
shall be void if not exercised during the Option Exercise Period.
4.1 RIGHT TO EXERCISE. Except as otherwise provided herein, Vested
Options shall be exercisable during the Option Exercise Period only by the
Optionee whether or not the Optionee is then an employee of or consultant to
the Company or any affiliate of the Company. If Optionee should die or
become permanently and totally disabled while an employee of or consultant to
the Company or any affiliate of the Company, any Vested Option or unexercised
portion thereof, at the time of his death or disability, may be exercised by
Optionee, his conservator or legal guardian or by the person or persons to
whom his rights under the Vested Options passed by will or the laws of
descent and distribution during the Option Exercise Period.
4.2 ACCELERATED VESTING. All Options shall immediately vest and
become exercisable in full in the event Optionee's position as an employee of
or consultant to the Company or any affiliate of the Company shall be
terminated by the Company without cause or by Optionee with cause or upon a
Change in Control. "Cause" with respect to termination of such relationship
by the Company or by Optionee and "Change in Control" shall be as defined in
the Executive Employment Agreement between the Company and Optionee dated May
4, 1999, as amended.
4.3 METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:
4.3.1 State the election to exercise the Option, the number of
shares in respect of which it is being exercised (which must be in
multiples of one hundred (100) shares), the person in whose name the
stock certificate or certificates for such shares of common stock is to
be registered, his address and Social Security number (or if more than
one, the names, addresses and Social Security numbers of such persons);
4.3.2 Contain such representations and agreement as to the
holder's investment intent with respect to such shares of common stock as
may be satisfactory to the Company's counsel; and
4.3.3 Be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or persons
other than the Optionee, be accompanied by proof, satisfactory to counsel
for the Company, of the right of such person or persons to exercise the
Option.
Payment of the purchase price of any shares with respect to which the
Option is being exercised shall be by (A) cash or certified check, (B)
previously acquired shares having a fair market value equal to the
purchase price, (C) previously acquired shares having a fair market value
less than the purchase price, plus cash or certified check, or
(D)reduction of the number of vested Option Shares having a fair market
value equal to the purchase price on the date of exercise, and shall be
delivered with the notice of exercise. The certificate or certificates
for shares of Common Stock as to which the Option shall be exercised
shall be registered in the name of the person or persons exercising the
Option.
4.4 RESTRICTIONS ON EXERCISE. As a condition to his exercise of
this Option, the Company may require the person exercising this Option to
make any representation and warranty to the Company as may be required by any
applicable law or regulation.
5. NONTRANSFERABILITY OF OPTION. Except as otherwise provided herein,
this Option may not be transferred in any manner and may be exercised during
the lifetime of the Optionee only by him and after his death by the person or
persons to whom his rights under the Option passed by will or the laws of
descent and distribution.
6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Whenever a stock split,
stock dividend or other relevant change in capitalization occurs, the number
of shares that can thereafter be purchased, and the Option exercise price per
share, under each Option that has been granted and not exercised, and every
number of shares used in determining whether a particular Option is grantable
thereafter, shall be appropriately adjusted.
7. NOTICES. Each notice relating to this Agreement shall be in writing
and delivered in person or by certified mail to the proper address. Each
notice shall be deemed to have been given on the date it is received. Each
notice to the Company shall be addressed to it at its principal office,
attention of the Secretary. Each notice to Optionee or other person or
persons then entitled to exercise the Option shall be addressed to the
Optionee or such other person or persons at the Optionee's address set forth
in the heading of this Agreement. Anyone to whom a notice may be given under
this Agreement may designate a new address by notice to that effect.
8. BENEFITS OF AGREEMENT. This Agreement shall inure to the benefit of
and be binding upon each successor of the Company. All obligations imposed
upon the Optionee and all rights granted to the Company under this Agreement
shall be binding upon the Optionee's heirs, legal representatives and
successors.
9. ARBITRATION. The parties agree that they will use their best efforts
to amicably resolve any dispute arising out of or relating to this Agreement.
Any controversy, claim or dispute that cannot be so resolved shall be
settled by final binding arbitration in accordance with the rules of the
American Arbitration Association and judgment upon the award rendered by the
arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. Any such arbitration shall be conducted in Denver, Colorado, or
such other place as may be mutually agreed upon by the parties. Within
fifteen (15) days after the commencement of the arbitration, each party shall
select one person to act as arbitrator, and the two arbitrators so selected
shall select a third arbitrator within ten (10) days of their appointment.
2
10. REGISTRATION. The Company covenants and agrees that, as soon as
practicable but not later than one year after the date of this Agreement, the
Company, at its sole cost and expense, will have taken any necessary action
so as to allow removal of any legends and transfer restrictions with respect
to the Option Shares and public sale thereof for the remaining term of the
Option Exercise Period under the Securities Act of 1933 and applicable state
laws by the Optionee or any other person as provided herein, other than any
applicable volume limitations with respect to control securities imposed by
Rule 144 under that Act.
IN WITNESS WHEREOF, the Company and the Optionee have caused this
Agreement to be executed as of the day, month and year first above written.
TELECOM WIRELESS CORPORATION
By
----------------------------------
President
------------------------------------
Optionee
3
