EXHIBIT 4.1
XXXXXXXXXXXX.XXX, INC.
1999 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
THIS AGREEMENT is entered into as of the 14th day of October, 1999 (the
"Date of Grant") between XXXXXXXXXXXX.XXX, INC., a Florida corporation (the
"Company"), and xxxxxxx xxxxxxx (the "Optionee"), of X.X. Xxx 00000, 0000 Xxxx
00xx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0, Xxxxxx.
WHEREAS the Company's Board of Directors (the "Board") has approved and
adopted the 1999 Stock Option Plan (the "Plan"), pursuant to which the Board is
authorized to grant to employees and other selected persons stock options to
purchase common stock without par value of the Company (the "Common Stock");
WHEREAS the Plan provides for the granting of stock options that either (i)
are intended to qualify as "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
(ii) do not qualify under Section 422 of the Code ("Non-Qualified Stock
Options");
WHEREAS the Board has authorized the grant to the Optionee of an option to
purchase a total of 50,000 shares of Common Stock (the "Option"), which Option
is intended to be (select one):
--- an Incentive Stock Option
X a Non-Qualified Stock Option
---
NOW THEREFORE the Company agrees to offer to the Optionee the option to
purchase, on the terms and conditions set forth herein and in the Plan, 50,000
shares of Common Stock. The Option will not be exercisable by the Optionee until
the Company has filed a Form S-8 with the United States Securities and Exchange
Commission (the "Form S-8 Filing Date"). Capitalized terms not otherwise defined
herein will have the meanings ascribed to them in the Plan.
1. Exercise Price. The exercise price of the Option will be $3.20 per share.
2. Limitation on the Number of Shares. If the Option granted is an Incentive
Stock Option, the number of shares that may be acquired on exercise thereof is
subject to the limitations set forth in Section 5(a) of the Plan.
3. Vesting Schedule. The Option is exercisable in accordance with the following
vesting schedule:
(a) 100% of the Option may be exercised after the Form S-8 Filing Date.
4. Option Not Transferable. The Option may not be transferred, assigned,
pledged, or hypothecated in any manner (whether by operation of law or
otherwise) other than by will, by applicable laws of descent and distribution,
or (except in the case of an Incentive Stock Option) pursuant to a qualified
domestic relations order, and will not be subject to execution, attachment, or
similar process; provided however that if the Option represents a Non-Qualified
Stock Option, the Option is transferable without payment of consideration to
immediate family members of the Optionee or to trusts or partnerships
established exclusively for the benefit of the Optionee and the Optionee's
immediate family members. On any attempt to transfer, pledge, hypothecate, or
otherwise dispose of the Option or of any right or privilege conferred by the
Plan contrary to the provisions thereof, or on the sale, levy or attachment, or
similar process on the rights and privileges conferred by the Plan, the Option
will terminate and become null and void.
5. Investment Intent. By accepting the Option, the Optionee represents and
agrees that none of the shares of Common Stock purchased on exercise of the
Option will be distributed in violation of applicable federal and state laws and
regulations. In addition, the Company may require, as a condition of exercising
the Option, that the Optionee sign an undertaking, in the form reasonably
specified by the Company, that the shares are being purchased only for
investment and without any then-present intention to sell or distribute the
shares.
6. Termination of Employment and Options. A vested Option will terminate, to the
extent not previously exercised, on the occurrence of the first of the following
events:
(a) Expiration: October 14, 2004; except that the expiration date of any
Incentive Stock Option granted to a greater-than-ten-percent (>10%)
shareholder of the Company will not be later than five years from the
Date of Grant;
(b) Termination for Cause: The date of an Optionee's termination of
employment or contractual relationship with the Company or any Related
Corporation for cause (as determined in the sole discretion of the
Plan Administrator);
(c) Termination Due to Death or Disability: The expiration of one year
from the date of the death of the Optionee or cessation of an
Optionee's employment or contractual relationship by reason of
Disability (as defined in Section 5(g) of the Plan). If an Optionee's
employment or contractual relationship is terminated by death, any
Option held by the Optionee will be exercisable only by the person or
persons to whom the Optionee's rights under the Option will pass by
the Optionee's will or by the laws of descent and distribution;
(d) Termination Due to Cessation of Service as a Director: The expiration
of three months from the date an Optionee, if a director of the
Company, ceases to serve as a director of the Company; or
(e) Termination for Any Other Reason: The expiration of three months from
the date of an Optionee's termination of employment or contractual
relationship with the Company or any Related Corporation for any
reason whatsoever other than cause, death or Disability (as defined in
Section 5(g) of the Plan).
Each unvested Option granted pursuant hereto will terminate immediately on
termination of the Optionee's employment or contractual relationship with the
Company for any reason whatsoever, including death or Disability unless vesting
is accelerated in accordance with Section 5(f) of the Plan.
7. Stock. In the case of any stock split, stock dividend, or similar alteration
of the shares of Common Stock covered by this Agreement, the number of shares
and exercise price will be proportionately adjusted as set forth in Section 5(m)
of the Plan.
8. Exercise of Option. The vested portion of the Option will be exercisable, in
full or in part, at any time after vesting, until termination; provided however
that any Optionee who is subject to the reporting and liability provisions of
Section 16 of the Securities Exchange Act of 1934 with respect to the Common
Stock will be precluded from selling or transferring any Common Stock or other
security underlying an Option during the six months immediately following the
grant of that Option. If less than all of the shares included in the vested
portion of the Option are purchased, the remainder may be purchased at any
subsequent time before the expiration of the Option term. No portion of the
Option for less than 100 shares (as adjusted pursuant to Section 5(m) of the
Plan) may be exercised; provided that if the vested portion of the Option is
less than 100, it may be exercised with respect to all shares for which it is
vested. Only whole shares may be issued pursuant to the Option, and to the
extent that the Option covers less than one share, it is unexercisable.
Each exercise of the Option must be by means of delivery of a notice of
election to exercise (which may be in the form attached hereto as Exhibit A) to
the Company's President at its principal executive office, specifying the number
of shares of Common Stock to be purchased and accompanied by payment in cash by
certified or cashier's cheque in the amount of the full exercise price for the
Common Stock to be purchased. In addition to payment in cash by certified or
cashier's cheque, an Optionee or transferee of an Option may pay for all or any
portion of the aggregate exercise price by complying with one or more of the
following alternatives:
(a) by delivering to the Company shares of Common Stock previously held by
that person or by the Company withholding shares of Common Stock
otherwise deliverable pursuant to exercise of the Option, which shares
of Common Stock received or withheld will have a fair market value at
the date of exercise (as
determined by the Plan Administrator) equal to the aggregate purchase
price to be paid by the Optionee on exercise;
(b) by delivering a properly signed exercise notice together with
irrevocable instructions to a broker promptly to sell or margin a
sufficient portion of the shares and deliver directly to the Company
the amount of sale or margin loan proceeds to pay the exercise price;
or
(c) by complying with any other payment mechanism approved by the Plan
Administrator at the time of exercise.
9. Holding Period for Incentive Stock Options. In order to obtain the tax
treatment provided for Incentive Stock Options by Section 422 of the Code, the
shares of Common Stock received on exercise of any Incentive Stock Option
pursuant to this Agreement must be sold, if at all, after a date which is later
of two years from the date of this Agreement or one year from the date on which
the Option is exercised. The Optionee agrees to report sales of shares before
the above determined date to the Company within one business day after the sale
is concluded. The Optionee also agrees to pay to the Company, within five
business days after the sale is concluded, the amount necessary for the Company
to satisfy its withholding requirement required by the Code in the manner
specified in Section 5(l)(2) of the Plan. Nothing in this Section 9 is intended
as a representation that Common Stock may be sold without registration under
state and federal securities laws or an exemption therefrom, or that
registration or exemption will be available at any specified time.
10. Subject to 1999 Stock Option Plan. The terms of the Option are subject to
the provisions of the Plan, as it may from time to time be amended, and any
inconsistencies between this Agreement and the Plan, as it may be from time to
time amended, will be governed by the provisions of the Plan, a copy of which
has been delivered to the Optionee and which is available for inspection at the
Company's principal offices.
11. Professional Advice. The acceptance of the Option and the sale of Common
Stock issued pursuant to the exercise of the Option may have consequences under
federal and state tax and securities laws which may vary depending on the
individual circumstances of the Optionee. Accordingly, the Optionee acknowledges
that he or she has been advised to consult his or her personal legal and tax
advisor in connection with this Agreement and his or her dealings with respect
to the Option for the Common Stock. Without limiting other matters to be
considered, the Optionee should consider whether, on exercise of the Option, the
Optionee must file an election with the Internal Revenue Service pursuant to
Section 83(b) of the Code.
12. No Employment Relationship. Whether or not any Options are to be granted
under the Plan will be exclusively within the discretion of the Plan
Administrator, and nothing contained in the Plan will be construed as giving any
person any right to participate under the Plan. The grant of an Option will in
no way constitute any form of agreement or understanding binding on the Company
or any Related Company, express or implied, that the Company or any Related
Company will employ or contract with an Optionee for any length of time, nor
will it
interfere in any way with the Company's or, where applicable, a Related
Company's right to terminate the Optionee's employment at any time, which right
is hereby reserved.
13. Entire Agreement. This Agreement is the only agreement between the Optionee
and the Company with respect to the Option, and this Agreement and the Plan
supersede all prior and contemporaneous oral and written statements and
representations and contain the entire agreement between the parties with
respect to the Option.
14. Notices. Any notice required or permitted to be made or given hereunder will
be mailed or delivered personally to the addresses set forth below, or as
changed from time to time by written notice to the other:
The Company: XXXXXXXXXXXX.XXX, INC.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
Attention: Xxxxx Xxxxx
The Optionee: Xxxxxxx Xxxxxxx
P.O. Box 18111
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
Xxxxxx
XXXXXXXXXXXX.XXX, INC.
Per:
/s/ Xxxxx Xxxxx
--------------------------------
Xxxxx Xxxxx, President
/s/ Xxxxxxx Xxxxxxx
--------------------------------
Signature of Optionee
Xxxxxxx Xxxxxxx
--------------------------------
Print Name
THERE MAY NOT BE PRESENTLY AVAILABLE EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS FOR THE ISSUANCE OF
SHARES OF COMMON STOCK ON EXERCISE OF THIS OPTION. ACCORDINGLY, THIS OPTION
CANNOT BE EXERCISED UNLESS THE OPTION AND THE SHARES OF COMMON STOCK TO BE
ISSUED ON
EXERCISE ARE REGISTERED OR AN EXEMPTION FROM REGISTRATION REQUIREMENTS IS
AVAILABLE.
THE SHARES OF COMMON STOCK ISSUED PURSUANT TO THE EXERCISE OF THIS OPTION WILL
BE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF
1933 AND WILL BEAR A LEGEND RESTRICTING RESALE UNLESS THEY ARE REGISTERED UNDER
STATE AND FEDERAL SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THE COMPANY IS NOT OBLIGED TO REGISTER THE SHARES OF COMMON STOCK OR
TO MAKE AVAILABLE ANY EXEMPTION FROM REGISTRATION.
EXHIBIT A
Notice of Election to Exercise
This Notice of Election to Exercise will constitute proper notice pursuant
to Section 5(h) of the 1999 Stock Option Plan (the "Plan") of XXXXXXXXXXXX.XXX,
INC. (the "Company") and Section 8 of the Stock Option Agreement dated as of the
14th day of October, 1999 between the Company and the undersigned (the
"Agreement").
The undersigned elects to exercise the Optionee's option to purchase
------------ shares of the common stock of the Company at a price of $3.20 per
share, for aggregate consideration of $------------, on the terms and conditions
set forth in the Agreement and the Plan. The aggregate consideration, in the
form specified in Section 8 of the Agreement, accompanies this notice.
The undersigned has signed this Notice this ----- day of --------------,
-----.
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Signature
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Name (typed or printed)
