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EXHIBIT 10(i)
No. 4-006
THE OPTION TO PURCHASE SHARES OF THE COMMON STOCK OF eSAT, INC., REPRESENTED BY
THIS AGREEMENT 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. NEITHER THE OPTIONS NOR THE UNDERLYING SHARES MAY BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF SAID CORPORATION AND SUCH FURTHER RESTRICTIONS AS THE BOARD OF
DIRECTORS MAY DETERMINE.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT effective as of this 15 day of September , 1999,
between eSat, Inc., a Nevada corporation (the "Corporation"), and XXXX XXXXXXX
(the "Recipient").
WHEREAS, the Corporation, by action of the Board of Directors on July 28,
1998, has authorized the granting of stock options to purchase 300,000 shares of
this Corporation's common stock, $.001 par value ("Common Stock"), to XXXX
XXXXXXX at an exercise price of $ 3.00 per share.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy whereof is hereby acknowledged, the Corporation and the Optionee agree
as follows:
1. Grant of Option. The Corporation hereby grants to XXXX XXXXXXX an
option to purchase (the "Option") an aggregate of 300,000 shares of
the Corporation's common stock for a purchase price of $ 3.00 per
share (the "Option Price").
2. Vesting of Option. This option shall be immediately fully vested
from the Date of Grant.
3. Exercise of Option. This Option may be exercised in whole or in part
at any time during the term of the Option, provided, however, no
portion of this Option shall be exercisable after the expiration of
the term thereof.
The Option may be exercised, as provided in this Paragraph 3, by
notice and payment to the Corporation as provided in Paragraph 5
hereof.
4. Conversion. In lieu of exercising this Option as specified in
Paragraph 3, the Recipient may from time to time convert this
Option, in whole or in part, into a number of shares determined by
dividing (a) the aggregate Fair Market Value (determined on the date
of exercise) of the shares of the Corporation's Common Stock
issuable upon exercise of this Option (less the number of shares as
to which this Option has been previously exercised) minus the
aggregate Option Price of such shares minus all amounts which it is
required to withhold under federal, state or local law in connection
with the exercise of the Option, by (b) the Fair Market Value
(determined on the date of exercise) of one share. This is
represented mathematically as: {{(FMV per share) X [(number of share
issuable under the Option) - (share previously issued and converted
under the Option)]} - (amount required to be withheld)} / (FMV per
share). For purpose of this Paragraph 4, "Fair Market Value" shall
be the value determined in accordance with the following provisions:
(a) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded on the Nasdaq
National Market System or the Nasdaq SmallCap Market, the Fair
Market Value shall be the closing selling price per share of
Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers
through the Nasdaq National Market System or any successor
system or the Nasdaq SmallCap Market or any successor market.
If there is no closing selling price for the common stock on
the date in question, then the FMV shall be the closing
selling price on the last preceding date for which such
quotation exists.
(b) If the Common Stock is at the time listed or admitted to
trading on any stock exchange, the Fair Market Value shall be
the closing selling price per share of Common Stock on the
date in question on
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the stock exchange determined by the Board of Directors of the
Corporation to be the primary market for the Common Stock, as
such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling
price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(c) If the Common Stock is at the time neither listed nor admitted
to trading on any stock exchange, not traded on the Nasdaq
National Market System nor on the Nasdaq SmallCap Market, then
such Fair Market Value shall be determined by the Board of
Directors of the Corporation after taking into account such
factors as the Board of Directors of the Corporation shall
deem appropriate.
5. Manner of Exercise.
(a) During the lifetime of the Recipient, only he may exercise the
Option or any portion thereof. After the death of the
Recipient, any exercisable portion of the Option may, prior to
the time when the Option becomes unexercisable under Section
3.3, be exercised by the Recipient's personal representative
or by any person empowered to do so under the Recipient's will
or under the then applicable laws of descent and distribution.
(b) The Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or the
Secretary's office of all of the following prior to the time
when such exercisable Option or portion thereof becomes
unexercisable:
(i) Notice in writing signed by the Recipient, or such other
person then entitled to exercise the Option or portion
thereof, stating that the Option or portion thereof is
thereby exercised, such notice complying with all
applicable rules established by the Corporation; and
(ii) (a) Full payment (in cash or by check) for the shares
with respect to which such Option or portion thereof is
exercised; or
(b) With the consent of the Corporation, shares of the
Company's Common Stock owned by the Recipient duly
endorsed for transfer to the Company with a Fair Market
Value on the date of delivery equal to the aggregate
purchase price of the shares with respect to which such
Option or portion thereof is exercised.
6. Term of Option. The term of the Option will be through August 24,
2003, subject to Paragraphs 8 and 9 as provided in this Agreement.
The Recipient of the Option will not have any rights to dividends or
any other rights of a shareholder with respect to any shares of
Common Stock subject to the Option until such shares shall have been
purchased through the exercise of the Option and has been evidenced
on the stock transfer records of the Corporation maintained by the
Corporation's transfer agent.
7. Performance Restrictions. The Recipient of this Option will not have
the right to exercise this Option until confirmation by the Board of
Directors that the following performance goals have been completed:
2000 UNITS SOLD '99 BY THE COMPANY.
For purposes of this paragraph, the East Coast Office shall mean the
people working out of the office the Corporation located in the
Washington, D.C., metropolitan area as of the date of this
Agreement, and those who subsequently work in at such office as
approved by the Corporation as part of the East Coast Office.
For purposes of this paragraph, a "unit" shall consist of a server
and associated hardware and software that allows access to the
Internet.
A sale of a unit shall be deemed to occur or at such time as a sale
is recognized the Company in accordance with generally accepted
accounting principles. Units which are returned to the Company shall
be deducted
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from the number of units sold. The number of units sold less the
number of units returned shall be the net units sold.
8. Transferability Restriction. The Option may not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in
any way (whether by operation of law or otherwise) (1) without the
consent of the Corporation, and (2) such transfer is not in
violation of the Securities Act of 1933, the Corporate Securities
Laws of the State of Nevada, or the securities laws of any state.
Any assignment, transfer, pledge, hypothecation or other disposition
of the Option or any attempt to make any such levy of execution,
attachment or other process not in accordance with the foregoing
sentence shall cause the Option to terminate immediately upon the
happening of any such event, and the Recipient shall lose all rights
under this agreement, provided, however, that any such termination
of the Option under the foregoing provisions of this Paragraph 6,
will not prejudice any rights or remedies which the Corporation may
have under this Agreement or otherwise.
9. Death, Disability or Retirement of Recipient. The Recipient's rights
to exercise this Option upon the death, disability or retirement of
the Recipient are set forth as follows:
(a) If the Recipient ceases to be in Service to the Corporation
for a reason other than permanent disability or death, the
Recipient must, within (2) months after the date of
termination of such Service, but in no event after the
Option's stated expiration date, exercise some or all of the
Options that the Recipient was entitled to exercise on the
date the Recipient's Service terminated. All options which
have not vested in accordance with Paragraph 2 will thereafter
be void for all purposes. If the Recipient ceases to be in
Service to the Corporation by reason of permanent disability
within the meaning of section 22(e)(3) of the Internal Revenue
Code (as determined by the Board of Directors), the Recipient
will have two (2) months after the date of termination of
Service, but in no event after the stated expiration date of
the Recipient's Options, to exercise Options that the
Recipient was entitled to exercise on the date the Recipient's
Service terminated as a result of the disability.
(b) If a Recipient dies while in the Corporation's Service, any
Options that the Recipient was entitled to exercise on the
date of death will be exercisable within the six-month period
following the date of issuance of letters testamentary or
letters of administration of a deceased Recipient, in the case
of the Recipient's death during his Service to the
Corporation's Board, but not later than one year after the
Recipient's death or until the stated expiration date of the
Recipient's Option, whichever occurs first, by the person or
persons ("successors") to whom the Recipient's rights pass
under a will or by the laws of descent and distribution. As
soon as practicable after receipt by the Corporation of such
notice and of payment in full of the Option Price, a
certificate or certificates representing the Optioned Shares
shall be registered in the name or names specified by the
successors in the written notice of exercise and shall be
delivered to the successors.
(c) The term "Service" means service as an employee, as an
independent contractor, or an employee of an independent
contractor.
10. No Registration Obligation. The Recipient understands that the
Option is not registered under the Securities Act of 1933, as
amended (the "Securities Act") and the Corporation has no obligation
to register under the Securities Act the Option or any of the shares
of Common Stock subject to and issuable upon the exercise of the
Option. The Recipient represents that the Option is being acquired
by him for investment and acknowledges that all certificates for the
shares issued upon exercise of the Option will bear the following
legend unless such shares are registered under the Securities Act
prior to their issuance:
The shares of Common Stock evidenced by this
certificate have been issued to the registered
owner in reliance upon written representations
that these shares have been purchased solely for
investment. These shares may not be sold,
transferred or assigned unless in the opinion of
the Corporation and its legal counsel such sales,
transfer or assignment will not be in violation of
the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
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The Recipient further understands and agrees that the Option may be
exercised only if at the time of such exercise the Recipient and the Corporation
are able to establish the existence of an exemption from registration under the
Securities Act and applicable state laws.
11. Effect of Certain Changes.
(a) If there is any change in the number of shares of outstanding
Common Stock through the declaration of stock dividends, or
through a recapitalization resulting in stock splits or
combinations or exchanges of such shares, the number of shares
of Common Stock available for Options and the number of such
shares covered by outstanding Options, and the exercise price
per share of the outstanding Options, shall be proportionately
adjusted by the Board to reflect any increase or decrease in
the number of issued shares of Common Stock: provided,
however, that any fractional shares resulting from such
adjustment shall be eliminated.
(b) In the event of the proposed dissolution or liquidation of the
Corporation, or any corporate separation or division,
including, but not limited to, split-up, split-off or
spin-off, or a merger or consolidation of the Corporation with
another corporation, or any sale or transfer by the
Corporation of all or substantially all its assets or any
tender offer or exchange offer for or the acquisition,
directly or indirectly, by any person or group for more than
50% of the then outstanding voting securities of the
Corporation, the Board may provide that the Recipient shall
have the right to exercise such Option (at its then current
Option Price) solely for the kind and amount of shares of
stock and other securities, property, cash or any combination
thereof receivable upon such dissolution, liquidation,
corporate separation or division, merger or consolidation,
sale or transfer of assets or tender offer or exchange offer,
by a Recipient of the number of shares of Common Stock for
which such Option might have been exercised immediately prior
to such dissolution, liquidation, corporate separation or
division, or merger or consolidation: sales or transfer of
assets or tender offer or exchange offer, or in the
alternative the Board may provide that each Option granted
herein shall terminate as of a date fixed by the Board:
provided, however, that not less than 30 day's written notice
of the date so fixed shall be given to the Recipient, who
shall have the right, during the period of 30 days preceding
such termination, to exercise the Option.
(c) Paragraph (b) of this Section 11 shall not apply to a merger
or consolidation in which the Corporation is the surviving
corporation and shares of Common Stock are not converted into
or exchanged for stock, securities of any other corporation,
cash or any other thing of value. Notwithstanding the
preceding sentence, in case of any consolidation or merger of
another corporation into the Corporation in which the
Corporation is the surviving corporation and in which there is
a reclassification or change (including a change which results
in the right to receive cash or other property) of the shares
of Common Stock (other than a change in par value, or from no
par value to par value, or as a result of a subdivision or
combination, but including any change in such shares into two
or more classes or series of shares), the Board may provide
that the Recipient shall have the right to exercise such
Option solely for the kind and amount of shares of stock and
other securities (including those of any direct or indirect
Parent of the Corporation), property, cash or any combination
thereof receivable upon such reclassification, change
consolidation or merger by the Recipient of the number of
shares of Common Stock for which Option might have been
exercised.
(d) If there is a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of
its authorized shares with par value into the same number of
shares with a different par value or without par value, the
shares resulting from any such change shall be deemed to be
the Common Stock within the meaning of this Stock Option
Agreement.
(e) To the extent that the foregoing adjustments relate to stock
or securities of the Corporation, such adjustments shall be
made by the Board.
(f) Except as expressly provided in this Section 11, the Recipient
shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment
of any stock dividend or any other increase in the number of
shares of stock of any class or by reason of any dissolution,
liquidation, merger, or consolidation or split-up, split-off,
or spin-off of assets or stock of another corporation; and
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any issue by the Corporation of shares of stock of any class,
or securities convertible into shares of stock of any class,
shall not effect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Common
Stock subject to this Option. The grant of this Option shall
not affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or
changes of its capital or business structures or to merge or
consolidate or to dissolve, liquidate or sell or transfer all
or any part of its business or assets.
12. Notices. Each notice relating to this Agreement will be in writing
and delivered in person or by certified mail to the proper address.
Notices to the Corporation shall be addressed to the Corporation c/o
President, eSat, Inc., 00000 Xxxxxx Xxxx., Xxxx, X, Xxxxxxxx,
Xxxxxx, XX 00000. Notices to the Recipient or other person or
persons then entitled to exercise the Option shall be addressed to
the Recipient or such other person or persons at the Recipient's
address specified below. Anyone to whom a notice may be given under
this Agreement may designate a new address by notice to that effect
given pursuant to this Paragraph 12.
13. Approval of Consent. The exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject
to approval by the Corporation's counsel of all legal matters in
connection therewith, including compliance with the requirements of
the Securities Act, the Securities Exchange Act of 1934, as amended,
applicable state securities laws, the rules and regulations
thereunder, and the requirements of any national securities exchange
or association upon which the Common Stock than may be listed.
14. Benefits of Agreement. This Agreement will inure to the benefit of
and be binding upon each successor and assign of the Corporation.
All obligations imposed upon the Recipient and all rights granted to
the Corporation under this Agreement will be binding upon the
Recipient" heirs, legal representatives and successors.
15. Governmental and Other Regulations. The exercise of the Option and
the Corporation's obligation to sell and deliver shares upon the
exercise of rights to purchase shares is subject to all applicable
federal and state laws, rules and regulations, and to such approvals
by the regulatory or governmental agency which, in the opinion of
counsel for the Corporation, may be required.
16. Conditions to Exercise. The shares of stock deliverable upon the
exercise of the Option, or any portion thereof, may be either
previously authorized but unissued shares or issued shares which
have then been reacquired by the Company. Such shares shall be fully
paid and non-assessable. The Company shall not be required to issue
or deliver any certificate or certificates for shares of stock
purchased upon the exercise of the Option or portion thereof prior
to fulfillment of all of the following conditions:
(i) The admission of such shares to listing on all stock
exchanges, if any, on which such class of stock is then
listed;
(ii) The completion of any registration or other qualification of
such shares under any state or federal law or under the
rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body, which
the Corporation shall, in its absolute discretion, deem
necessary or advisable;
(iii) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Corporation
shall, in its absolute discretion, determine to be necessary
or advisable;
(iv) The payment to the Company of all amounts which it is required
to withhold under federal, state or local law in connection
with the exercise of the Option; and
(v) The lapse of such reasonable period of time following the
exercise of the Option as the Corporation may from time to
time establish for reasons of administrative convenience.
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This Stock Option Agreement is executed in the name and on behalf of the
Corporation by one of its duly authorized officers and by the Recipient all as
of the date first above written.
ESAT, INC.
By
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The undersigned Recipient understands the terms of this Option
Agreement. The undersigned agrees to comply with the terms and conditions of
this Option Agreement.
Date , 1999 Signature:
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Printed Name:
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Tax ID # (SSN):
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Address:
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