Exhibit No 4.1
Media Services Group, Inc.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), dated as of the 25th
of May, 2004, by and between Media Services Group, Inc., a Nevada corporation
(the "Company"), and Seth Xxxxxx Xxxxxx, (the "Grantee").
The Company hereby grants to the Grantee a stock option (the
"Option") to purchase all or any part of an aggregate of 60,000 shares of the
Company's common stock, $.01 par value per share (the "Shares"). This Option is
intended to be an Incentive Stock Option under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), but the Company does not
represent or warrant that the Option qualifies as such.
To evidence the Option and to set forth its terms, the Company
and the Grantee agree as follows:
1. Confirmation of Grant. The Company hereby evidences and confirms its grant of
the Option to the Grantee on the date of this Agreement.
2. Number of Shares. This Option shall be for an aggregate of 60,000 Shares.
3. Exercise Price. The exercise price shall be $12.00 per Share for a total of
$720,000 (the "Exercise Price").
4. Medium and Time of Payment. The Option shall be exercised by a written notice
signed by the Grantee, which identifies this Agreement and states the number of
Shares then being purchased (the "Exercise Notice"), delivered to the attention
of the Company's Secretary at the Company's principal office in New York, New
York. The exercise date shall be the date such notice is received by the
Company. Such notice shall be accompanied by (i) cash payment or certified check
equal to the Exercise Price; or (ii) a certificate representing Company stock
owned by the Grantee, if not subject to any restrictions, with a Fair Market
Value equal to the Exercise Price; or (iii) instructions for the Company to
withhold from the purchased shares an amount with a Fair Market Value equal to
the Exercise Price. "Fair Market Value" means the fair market value of a Share
as determined by the Board of reference to the closing price quotation, or, if
none, the average of the bid and asked prices, reported on Nasdaq Small Cap or
other exchange or quotation system as of the most recent available date with
respect to Company's common stock.
Upon acceptance of the Exercise Notice and receipt of payment
in full, the Company shall cause to be issued a certificate representing the
Shares so purchased.
5. Term and Exercise of the Option. These options shall terminate on or before
the earlier of (i) ninety (90) days after the termination of Grantee's
relationship to the Company as an employee of, or consultant to, the Company or
any of its subsidiaries or affiliates, (ii) upon the Grantee's death, or (iii)
three (3) years from the date hereof, and any shares not purchased on or before
the earlier of occurrence of one of these events may not thereafter be
purchased. For the purpose of making determinations as to termination event
number (i) preceding, decisions by the Company's Board of Directors as to when
such relationships have been terminated shall be binding on the Grantee,
provided that notice of such termination has been provided to all parties by way
of notice of resignation given by the Grantee or by notice of termination given
by the Company to the Grantee.
The Option shall be immediately vested upon issuance.
6. Nontransferability. The Option may be transferred only by will or the laws of
descent and distribution and the Option may be exercised during the Grantee's
lifetime only by the Grantee (or by the Grantee's legal representative under the
circumstances described in Section 7 hereof).
7. Representations and Warranties of Grantee.
(a) Grantee represents and warrants that this Option is being acquired by
Grantee for Grantee's personal account, for investment purposes only, and not
with a view to the distribution, resale or other disposition thereof.
(b) Grantee acknowledges that the Company may issue Shares upon the exercise of
the Option without registering such Shares under the Securities Act of 1933, as
amended (the "1933 Act"), on the basis of certain exemptions from such
registration requirement. Accordingly, Grantee agrees that his or her exercise
of the Option may be expressly conditioned upon his or her delivery to the
Company of an investment certificate including such representations and
undertakings as the Company may reasonably require in order to assure the
availability of such exemptions, including a representation that Grantee is
acquiring the Shares for investment and not with a present intention of selling
or otherwise disposing thereof and an agreement by Grantee that the certificates
evidencing the Shares may bear a legend indicating such non-registration under
the 1933 Act and the resulting restrictions on transfer. Grantee acknowledges
that, because Shares received upon exercise of an Option may be unregistered,
Grantee may be required to hold the Shares indefinitely unless they are
subsequently registered for resale under the 1933 Act or an exemption from such
registration is available, it being understood that the Company is making no
representation regarding registration of any Shares.
(c) Grantee hereby acknowledges that, in addition to certain restrictive legends
that the securities laws of the state in which Optionee resides may require,
each certificate representing the Shares may be endorsed with the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933; THEY HAVE BEEN
ACQUIRED BY THE HOLDER FOR INVESTMENT AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND ANY
APPLICABLE STATE SECURITIES LAW OF RECEIPT BY THE ISSUER OF AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS NOT
REQUIRED.
8. Adjustment in the Shares. If the Shares, as presently constituted, shall be
changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split, reverse split,
combination of shares, or otherwise) or if the number of Shares shall be
increased through the payment of a share dividend, the Grantee shall receive
upon exercise of the Option the number and kind of shares or other securities
into which each outstanding Share shall be so changed, or for which each such
Share shall be exchanged, or to which each such Share shall be entitled, as the
case may be. If there shall be any other change in the number or kind of the
outstanding Shares, or of any shares or other securities into which the Shares
shall have been changed, or for which the Shares shall have been exchanged,
then, if the Board shall, in its sole discretion, determine that such change
equitably requires an adjustment in the Option, such adjustment shall be made in
accordance with that determination. Notice of any adjustment shall be given by
the Company to the Grantee.
9. Stop-Transfer Notices. Grantee understands and agrees that, in order to
ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop-transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
10. No Limitation on Rights of the Company. The grant of this Option shall not
in any way affect the right or power of the Company to make adjustments,
reclassifications, or changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell, or transfer all or any part of its
business or assets.
11. Rights as a Shareholder. The Grantee shall have the rights of a shareholder
with respect to the Shares covered by the Option only upon becoming the holder
of record of those Shares.
12. Compliance with Applicable Law. Notwithstanding anything herein to the
contrary, the Company shall not be obligated to cause to be issued or delivered
any certificates for Shares pursuant to the exercise of the Option, unless and
until the Company is advised by its counsel that the issuance and delivery of
such certificates is in compliance with all applicable laws, regulations of
governmental authority, and the requirements of any exchange upon which Shares
are traded. The Company shall in no event be obligated to register any
securities pursuant to the 1933 Act (as now in effect or as hereafter amended)
or to take any other action in order to cause the issuance and delivery of such
certificates to comply with any such law, regulation or requirement. The Board
may require, as a condition of the issuance and delivery of such certificates
and in order to ensure compliance with such laws, regulations, and requirements,
that the Grantee make such covenants, agreements, and representations as the
Board, in its sole discretion, considers necessary or desirable.
13. No Obligation to Exercise Option. The granting of the Option shall impose no
obligation upon the Grantee to exercise the Option.
14. Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally or sent by certified,
registered, or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally or, if mailed, four days after the date of
deposit in the United States mails, to each party at its address set forth above
or to such other address as may be designated in a notice given in accordance
with this Section.
15. Governing Law. Except to the extent preempted by Federal law, this Agreement
shall be construed and enforced in accordance with, and governed by, Nevada law.
16. Attorneys' Fees. In the event any litigation concerning any controversy,
claim or dispute between the parties hereto, arising out or relating to this
Agreement or the breach hereof, or the interpretation hereof, the prevailing
party shall be entitled to recover from the losing party reasonable expenses,
reasonable attorneys' fees and reasonable costs incurred therein or in the
enforcement or collection of any judgement or award rendered therein. The
"prevailing party" means the party determined by the court to have most nearly
prevailed, even if such party did not prevail in all matters, not necessarily
the one in whose favor a judgement is rendered.
17. Entire Agreement. This Agreement contains all of the understandings and
agreements between the Company and its Affiliates, and the Grantee concerning
this Option and supersedes all earlier negotiations and understandings, written
or oral, between the parties with respect thereto. The Company, its Affiliates
and the Grantee have made no promises, agreements, conditions or understandings
either orally or in writing, that are not included in this Agreement.
18. Headings. The headings of Sections and subsections herein are included
solely for convenience of reference and shall not affect the meaning of any of
the provisions of the Agreement.
19. Amendments. This Agreement may be amended or modified at any time by an
instrument in writing signed by the parties hereto.
IN WITNESS WHEREOF, the Company and the Grantee have duly
executed this Agreement as of the date first written above.
Media Services Group, Inc.
__________________________ By:___________________________
Witness
Grantee
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Witness
