Document is copied.
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of the 7th day of
February, 2000, is entered into between MegaMedia Networks, Inc., (the
"Company"), and Xxxxx X. Xxxxx, III, (the "Executive").
RECITAL
WHEREAS, the Company desires to employ the Executive and the Executive desires
to be employed by the Company upon the terms and subject to the conditions set
forth in this Agreement.
NOW THEREFORE, in consideration of the Recital and of the mutual promises set
forth in this Agreement, the company and the Executive agree as follows:
AGREEMENT
1. EMPLOYMENT. The Company employs the Executive as the Chief Financial
Officer and as CFO he shall report directly to the CEO and the Chief financial
Officer's responsibilities will include, but not be limited to the following:
A. Direct and certify the financial reporting of the company in
accordance with generally accepted accounting principles, federal,
stated and other regulatory rules.
B. Oversee the integrity of the accounting, financial and strategic
information systems of the business including supporting internal
controls and internal audit procedures.
C. Oversee development of effective and efficient policies and procedures
for governance/recording of all transactions, expenditures and
expenses of the company.
D. Promptly and accurately file all necessary reports, tax documents,
regulatory compliance and other communications to appropriate federal,
stated, SEC and local authorities as required by regulation, law, or
customary practice.
E. Participate in the development of sound corporate growth strategic
business plans of the company.
F. Direct the preparation of all periodic, monthly, annual and strategic
business plans of the company.
G. Review all capital budgets.
H. Analyze and review corporate growth initiatives including possible
mergers and acquisitions, public stock offerings, debt financing, and
other capital structure options.
I. Manage all investment community/constituent relations including
investment banking, analyst, media and shareholder groups.
J. Direct all treasury functions of the company to maintain an optimal
capital structure necessary to meet company needs.
K. Direct all banking relationships, investment relationships and cash
management policies.
L. Manage any and all external audit requirements of the company.
M. Oversee all areas of insurance and risk administration for the
company.
N. Oversee the Human Resources functions of the company including
analysis of employee benefits plans and compliance with applicable
labor laws.
O. Manager the administrative functions of the company including
purchasing, occupancy, transaction processing and other functions as
may be delegated from time to time.
P. Provide sound leadership, management and training to all supporting
staff.
Q. Develop and maintain a world-call finance, accounting, and
administrative team capable of delivering competitive advantage
through superior quality of information and analytical capabilities.
R. Contribute as a productive, collegial member of the executive
management team working in a cooperative and positive fashion with the
other executives of the company.
Executive hereby accepts such employment, upon the terms and subject to the
conditions set forth in this Agreement.
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2. TERM. The term of this Agreement shall be three years, commencing on
February 7th, 2000, and ending three calendar years thereafter. Nothing
herein shall be construed as to limit in any manner the rights of the
parties hereto to terminate Executive's employment with the company in
accordance with the provisions for termination and for compensation upon
termination that are contained herein.
3. DUTIES. During the term of this Agreement, subject to the direction of the
Board of Directors of the Company, the Executive shall serve in the
capacities set forth in Section 1 hereof. The Executive shall devote his
full business time and energies to the business and affairs of the Company
and shall use his best efforts, skills and abilities to promote the
interests of the Company and to diligently and competently perform his
duties.
4. COMPENSATION, STOCK OPTION AND BENEFITS:
A. Executive Compensation. Commencing with the start of employment
pursuant to this Agreement, Executive shall receive an annual salary
of one hundred forty-five thousand dollars ($145,000) to be paid in
equal installments in accordance with the Company's usual and
customary payroll practices as in force from time to time, but not
less than monthly. Executive shall also be entitled to participate in
the executive bonus program as that Program may be in force and
determined from time to time by the Company's Board of Directors and
its Compensation Committee.
B. Stock Options.
i. Upon execution of this Agreement, the Company shall issued to
Executive three Stock Option Agreements as set forth in Exhibits
A, B, C, attached here to and incorporated herein by reference,
providing Executive conditional rights to purchase up to 350,000
shares of fully paid, non-assessable common stock of the
Company.
ii. Promptly upon Executive's vesting of stock option rights as
provided in the Stock Option Agreements, the Company shall
provide Executive with a Notice of Vesting confirming such
vesting of option rights. The Notice of Vesting shall set forth
the date of vesting, the number, exercise price and term of the
option rights that have vested in Executive. The stock that is
subject to the purchase rights and options referenced herein
shall not be subject to any dilution as to percentage of
ownership, that differs from any dilution of percentage of
ownership that may be from time to time be appropriately
approved and undertaken by the Company and that is applicable to
all issued and outstanding stock of the Company. Executive shall
also be entitled to participate in the Employer's standard stock
option and benefit programs as may be generally available to
Executives, including 401-k programs. All shares acquired by
Executive under these provisions will be subject to statutory
restrictions, registration and lockup agreements as Employer may
reasonably require of its Executives.
C. Benefits: During the term of this Agreement, the Executive shall be
entitled to participate in or benefit from, in accordance with the
eligibility and other provisions thereof such medical, insurance,
pension, retirement, life insurance, profit sharing and other fringe
benefit plans or policies as the company may make available to, or
have in effect for, its other senior executives and Executive's
participation shall not be less that that of any other executive
officer of the Company. The Company retains the right to terminate or
alter any such plans or policies from time to time. Participation of
Executive's family in medical insurance plans may be elected at
Executive's expense.
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D. Reimbursement of Business Expenses: During the term of this Agreement,
upon submission of appropriate supporting documentation, the Executive
shall be reimbursed by the Company for all reasonable business
expenses actually and necessarily incurred by the Executive on behalf
of the Company in connection with the performance of services under
this Agreement.
E. Reimbursement of Other Expenses: During the term of this Agreement,
the Executive shall receive an auto allowance of $400.00 per month and
shall participate in any other reimbursements (i.e. cellular phone,
pager, etc.) offered to other senior executives at a level that shall
not be less than that of any other executive officer of the Company.
F. Vacation: During the term of this Agreement Executive shall be
eligible for fifteen (15)-business days paid vacation per year.
Vacation days are not cumulative and will not carry over from year to
year.
G. Sick Leave: Executive will be eligible for 5 (five) paid sick days per
year. Paid sick days can be used for any purpose during the employment
year. Sick days are not cumulative and will not carry over from year
to year.
H. Temporary Housing Allowance. The Company agrees that for a period of
three (3) months, commencing on February 7, 2000, Company shall pay to
Executive one thousand dollars ($1,000.00) per month as a temporary
housing allowance.
5. REPRESENTATION OF EXECUTIVE: The Executive represents and warrants that he
is not a party to, or bound by, any agreement or commitment, or subject to
any restriction, including but not limited to agreements related to
previous employment containing confidentiality or non-compete covenants,
which in the future may have a possibility of adversely affecting or
interfering with the business of the Company, the full performance by the
Executive of his duties under this Agreement or the exercise of his best
efforts hereunder.
6. CONFIDENTIALITY:
A. Confidential Information. The Executive acknowledges that as a result
of his employment with the Company, the Executive will have knowledge
of and access to, all proprietary and confidential information of the
company, including, without limitation, all "Confidential Information"
(as defined herein), and that such information, even though it may be
contributed, developed or acquired by the Executive, and whether or
not the foregoing information is actually novel or unique, constitute
valuable assets of the Company developed at great expense which are
the exclusive property of the company or its affiliates. Accordingly,
the Executive shall not, at any time, either during or subsequent to
the terms of this Agreement, use, revel, report, publish, transfer or
otherwise disclose to any person, corporation or other entity (a
"person"), any of the Confidential Information without the prior
written consent of the Company's Board of Director's, except to
appropriate officers and executives of the Company and other
appropriate persons who are in a contractual or fiduciary relationship
with the company and who have a need for such information for purposes
in the best interests of the company, and except for such information
which is or becomes generally available to the public other than as a
result of an unauthorized disclosure by the Executive. As used in this
Agreement, "Confidential Information" shall mean any and all studies,
plans, reports, surveys, analysis, sketches, drawings, specifications,
notes, records, memoranda, computer-generated data, computer programs,
algorithms, or documents, and all other non-public information
relating to the business activities of the Company, including, without
limitation, all methods, processes, techniques, equipment, research
data, experiments, marketing and sales information, personnel data,
customer lists, pricing data, executive lists, supplier lists,
merchandising systems, financial data, trade secrets, and the like
which presently or, in the future, are in the possession of the
Company. Said Confidential Information may be in either human or
computer readable form, including,
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B. but not limited to, software, source code, hex code, or any other
form. Confidential Information shall not include any information that
is available to the general public or that is generally know or
available in the industry.
C. Return of Confidential Information. Upon the termination of the
Executive's employment with the Company, the Executive shall promptly
deliver to the Company all manuals. Letters, notes, notebooks, reports
and copies thereof and all other materials relating to the Company's
business, including without limitation any materials incorporating
Confidential Information, which are in the Executive's possession or
control.
7. NON-COMPETITION: The Executive acknowledges that his services to be
rendered hereunder are of a special and unusual character and have a unique
value to the Company, the loss of which cannot be adequately compensated by
damages in any court of law. In view of the unique value to the Company of
the services of the Executive, the Executive hereby covenants and agrees
that so long as he remains employed by the Company (whether under this
Agreement or any other written or oral agreement or arrangement) and for a
period of one (1) year after the termination or expiration of any such
employment for any reason, the Executive shall not directly or indirectly
engage in or have an active interest in, anywhere in the world, alone or in
association with others, as principal, officer, agent, executive,
consultant, independent contractor, director, partner or stockholder, or
through the investment of capital lending of money or property, rendering
of services or otherwise any business competitive with the business engaged
in by the Company, the Executive hereby acknowledging that the company
conducts business and distributes its products, or contemplates conducting
business and distributing its product(s), on a worldwide basis; provided,
however, that this Section 9 shall not prevent the Executive from
acquiring, solely as investment and through market purchases, up to ten
percent (10%) of the securities of any issuer that are registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended,
and that are listed or admitted for trading on any United States national
securities exchange or that are quoted on the National Association of
Securities Dealers Automated Quotations System. During the same period, the
Executive shall not, and shall not permit, cause or authorize any of his
Executives, agents or others under his control to, directly or indirectly,
on behalf of himself or any other Person, to recruit or otherwise solicit
or induce any person who is an Executive of; or otherwise engage by, the
Company or any successor to the business of the Company or any affiliate of
the Company to terminate his or her employment or other relationship with
the Company or such successor or affiliate. The Executive shall not at any
time, directly or indirectly, use or purport to authorize any Person to use
any name, xxxx, logo, trade dress or other identifying words or images
which are the same as or similar to those used at any time by the Company
or any affiliate in connection with any product or service, whether or not
such use would be in a business competitive with that of the Company. This
Restrictive Covenant on the part of the Executive is given and made by the
Executive to induce MegaMedia to employ the Executive and to enter into
this Employment Agreement with the Executive, and the Executive hereby
acknowledges the sufficiency of the consideration for this Restrictive
Covenant.
This Restrictive Covenant is not executory or otherwise subject to
rejection under the Bankruptcy Code. This Restrictive Covenant is a
reasonable an necessary restraint of trade and does not violate the Xxxxxxx
Antitrust Act, the Florida Antitrust Act, or the common law; it is
supported by valid business interests, including the protection of
MegaMedia trade secrets and confidential business information and the
protection of MegaMedia's relationships with its customers and prospective
customers, at the one (1) year restriction is essential to the full
protection of those valid business interests. If any portion of this
Restrictive Covenant is held by a court of competent jurisdiction to be
unreasonable, arbitrary, or against public policy for any reason, this
Restrictive Covenant shall be considered divisible as to line of business,
time, and geographic area; if a court of competent jurisdiction should
determine the specified lines of business, the specified period, or the
specified geographic area to be unreasonable, arbitrary, or against public
policy for any reason, a narrower line of business, a lesser period, or a
smaller geographic area that is determined to be reasonable, non-arbitrary,
and not against public policy for any reason, may be enforced by MegaMedia
against the Executive.
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8. REMEDIES: MegaMedia and the Executive agree that, in the event of a breach
by the Executive of the Restrictive Covenants set forth in Paragraphs 6 and
7, above, such a breach would irreparably injure MegaMedia and would leave
MegaMedia with no adequate remedy at law, and MegaMedia and the Executive
further agree that if legal proceedings (including arbitration proceedings)
should be brought by MegaMedia, against the Executive to enforce the
Restrictive Covenant, MegaMedia shall be entitled to all civil remedies,
including without limitation, preliminary and permanent injunctive relief
restraining the Executive from violating, directly or indirectly, either as
an individual on his own account or as a partner, joint venture, employee,
agent, salesman, contractor, officer, director, or stockholder or
otherwise, the restrictions of Paragraph 6 and 7, above.
Nothing in this Employment Agreement shall be construed as prohibiting
MegaMedia from pursuing any other legal or equitable remedies available to
it for breach or threatened breach of the Restrictive Covenants.
Should legal proceedings (including arbitration proceedings) be brought by
MegaMedia against the Executive to enforce the Restrictive Covenants, the
period of restriction shall be deemed to being running on the date of entry
of an order granting MegaMedia preliminary injunctive relief and shall
continue uninterrupted for the next succeeding one (1) year; the Executive
acknowledges that such purposes and effect would be frustrated by measuring
the period of restriction from the date of termination of employment where
the Executive failed to honor the Restrictive Covenant until directed to do
so by court order. MegaMedia and the Executive agree that, if MegaMedia is
granted preliminary injunctive relief under this Agreement, an injunction
bond of no more than $145,000.00 shall be sufficient to indemnify the
Executive for any costs or damages that he might incur if the Court
ultimately determines that the Executive was wrongfully enjoined. If the
Executive breaches any of the provisions of Paragraphs 6 or 7, in addition
to its other rights and remedies, the Company shall have the right to
require the Executive to account for any pay over to the Company all
compensation, profits, money, accruals, and other benefits derived or
received, directly or indirectly, by the Executive from the action
constituting such breach.
9. TERMINATION: This Agreement may be terminated prior to the expiration of
the term set forth in Section 2 upon the occurrence of any of the events
set forth in, and subject to the terms of this Section 9.
A. Death. This Agreement will terminate immediately and automatically
upon the death of the Executive. In the event of Executive's death,
Executive's estate or his designated beneficiary shall be paid by the
Company all of the compensation and benefits due to Executive through
the date of his death, including without limitation, the Escrow Stock
and stock option benefits to which Executive was entitled as of the
date of his death.
B. Disability. This Agreement may be terminated at the Company's option,
immediately upon written notice to the Executive, if the Executive
shall suffer a permanent disability. For the purposes of this
Agreement, the term "permanent disability" shall mean the Executive's
inability to perform his duties under this Agreement for a period of
120 consecutive days or for an aggregate of 180 days, whether or not
consecutive, in any twelve (12) month period, due to illness, accident
or any other physical or mental condition, as determined by the Board
of Directors of the Company. In the event of a permanent disability,
Executive shall be paid by the Company all of the compensation and
benefits due to Executive through the date of his permanent
disability, including without limitation, the stock purchase rights
and stock option benefits to which Executive was entitled as of the
date of his permanent disability.
C. Voluntary termination by Executive.This Agreement may be terminated by
Executive upon the giving of 60 days written notice to the Board of
Directors. In the event that Executive voluntarily terminates this
Agreement as herein provided, except for "Constructive Discharge" as
hereinafter defined, he shall be paid by the Company all of the
compensation and benefits due to Executive through the date of
termination. In the event that Employee is Constructively Discharged,
his termination shall be treated
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as if made by Company without cause. For purposes of this Agreement,
"Constructive Discharge" shall mean: (i) any reduction of
compensation, stock options or other benefits set forth in Section 4
hereof; (ii) a material reduction in Executive's job function, duties
or responsibilities, or a similar change in Executive's reporting
relationships; or (iii) any breach of any of the material terms of
this Agreement by the Company which is not fully cured within 15
(fifteen) days of Company's receipt of written notice thereof from
Executive.
D. Cause. This Agreement may be terminated at the Company's option,
immediately upon written notice to the Executive, upon (i)
"Misconduct" which includes, but is not limited to, the following,
which shall not be construed in pari materia with each other: (a)
Conduct evincing such willful or wanton disregard of an employer's
interests as is found by the Company's Board of Directors to be in
deliberate violation or disregard of standards of behavior which the
employer has the right to expect of the Executive; or (b) Carelessness
or negligence of such a degree or recurrence as is found by the
Company's Board of Directors to manifest culpability, wrongful intent,
or evil design, or to show an intentional and substantial disregard of
an employer's interests or of the Executive's duties and obligations
to the employer, or (ii) fraud, criminal conduct (as evidenced by a
plea of no contest or guilty or upon conviction of the Executive for
any felony) or embezzlement by the Executive. In the event that
Executive is terminated for cause, he shall be paid by the Company all
compensation and benefits due through the date of written notice of
termination, including without limitation all stock option benefits
vested prior to the date of written notice of termination hereunder.
E. Without Cause. This Agreement may be terminated at the Company's
option without cause immediately upon notice to the Executive. In the
event the Company elects to terminate this Agreement without cause
pursuant to this subsection, or the Executive is Constructively
Discharged as specified in Paragraph 9C above, the Company shall:
i. Pay to Executive as wages in lieu of notice the sum of
$145,000.00, payable in 52 weekly payments of $2,788.47, with
the first payment due at termination and subsequent payments of
$2,788.47 being due and payable weekly after termination, until
paid in full.
ii. Executive's stock option rights would vest provided in the Stock
Option Agreements as though he remained employed for the entire
first three years of this Agreement.
iii. Simultaneous with the receipt of the first installment of the
wages in lieu of notice, and as a condition to the receipt
thereof, the Executive or his estate, shall deliver to the
Company a general release in form acceptable to the Company
releasing the Company from any and all rights, claims, demands,
judgments, obligations, liabilities and damages, whether accrued
or unaccrued, asserted or unasserted, and whether known or
unknown, relating to the Company which ever existed, then
existed, or may thereafter exist, by reason of the termination
of this Agreement without cause, except payment of the
$145,000.00 wages in lieu of notice and the stock purchase
rights due if any, and the vested stock options, if any.
iv. Simultaneous with delivery of the Executive's general release
referenced in paragraph 9(e)(iii), Company shall deliver to
Executive or Executive's estate a general release, in form
substantially similar to Executives Release, releasing the
Executive and/or his estate from any and all rights, claims,
demands, judgments, obligations, liabilities and damages,
whether accrued or unaccrued, asserted or unasserted, and
whether known or unknown, relating to the Company which ever
existed, then existed, or may thereafter exist, by reason of the
termination of this Agreement without cause except Executive's
future performance of his duties and obligations under Sections
6 and 7 of this Agreement.
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E. Effect of Termination. In the event of any termination under this
Section 9, except as set forth herein, the Company shall have no
further obligation under this Agreement to make any payment to, or
bestow any benefits on, the Executive from and after the date of the
termination other than payments or benefits accrued and due and
payable to Executive prior to the date of the termination as provided
herein..
10. INVENTIONS, IDEAS, PROCESSES AND DESIGNS: All inventions, ideas, processes,
programs, software, and designs (including all improvements) (i) conceived
(whether or not actually conceived during regular business hours) or made
by the Executive during the course of his employment with MegaMedia (ii)
integrally related to the business of MegaMedia, shall be disclosed in
writing promptly to MegaMedia and shall be the sole and exclusive property
of MegaMedia. The Executive shall cooperate with MegaMedia and its
attorneys in the preparation of patent and copyright applications for such
developments and shall promptly assign all such inventions, ideas,
processes, and designs to MegaMedia. The decision to file for patent or
copyright protection or to maintain such development as a trade secret
shall be in the sole discretion of MegaMedia, and the Executive shall be
bound by such decision. The Executive shall provide, on the back of this
Employment Agreement, a complete list of all inventions, ideas, processes,
and designs, if any, patented or unpatented, copyrighted or uncopyrighted,
including a brief description, which he or she made or conceived prior to
his or her employment with MegaMedia and which therefore are excluded from
the scope of this Agreement.
11. CONSIDERATION. The Executive expressly acknowledges and agrees that the
execution by MegaMedia of this Employee Agreement constitutes full,
adequate, and sufficient consideration to the Executive from MegaMedia for
the duties, obligations, and covenants of the Executive under this
Agreement, including, by way of illustration and not by way of limitation,
the agreements, covenants, and obligations of the Executive under
Paragraphs 6 and 7 of this Agreement. MegaMedia expressly acknowledges and
agrees similarly with respect to the consideration received by it from the
Executive under this Agreement.
12. INDEBTEDNESS. If, during the course of the Executive's employment under
this Employment Agreement, the Executive becomes indebted to MegaMedia for
any reason, MegaMedia may, if it so elects, set off any sum due to
MegaMedia from the Executive and collect form the Executive any remaining
balance.
13. TRAINING EXPENSES. MegaMedia shall pay for all reasonable training expenses
incurred by the Executive while he is employed under this Employment
Agreement.
14. CONSENT TO PERSONAL JURISDICTION AND VENUE; WAIVER OF JURY TRIAL. The
Executive and Company hereby consent to personal jurisdiction and venue,
for any action brought by either party arising out of a breach or
threatened breach of this Employment Agreement, exclusively in the United
States District Court for the Middle District of Florida, Orlando Division,
or in the Circuit Court in and for Orange County, Florida; the Executive
and Company hereby agree that any action brought by either party, alone or
in combination with others, against the other party, whether arising out of
this Agreement or otherwise, shall be brought exclusively in the United
States District Court for the Middle District of Florida, Orlando Division,
or in the Circuit Court in and for Orange County, Florida. The Executive
and Company hereby agree that any controversy which may arise under this
Agreement would involve complicated and difficult factual and legal issues.
Therefore, if a court of law determines for any reason that the arbitration
clause of Paragraph 15 of the Agreement is unenforceable, then any action
brought by MegaMedia against the Executive, alone or in combination with
others, against MegaMedia, whether arising out of this Agreement or
otherwise, shall be determined by a Judge sitting without a jury.
15. ARBITRATION. All controversies, claims, disputes, and matters in question
arising out of, or related to, this Employment Agreement or the breach of
this Agreement, or the relations between the signatories to this Agreement,
shall be decided by arbitration in accordance with the commercial
Arbitration Rules of the American Arbitration Association. The signatories
agree that the arbitration shall take place exclusively in Orlando,
Florida, and shall be governed by the substantive law of the state of
Florida. Any award rendered by the arbitrator shall be final, and final
judgment may be entered upon it in accordance with applicable law in any
court having
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jurisdiction thereof, including a federal district court, pursuant to the
Federal Arbitration Act. The arbitrator may grant a party injunctive
relief, including mandatory injunctive relief, to protect the rights of
such party, but the arbitrator shall not be limited to such relief. This
arbitration provision shall not preclude a party from seeking temporary or
preliminary injunctive relief in a court of law to protect its rights, nor
shall the filing of such an action constitute any waiver by either party of
its right to arbitrate. In connection with the arbitration of any dispute
between the signatories to this Agreement, each signatory may utilize all
methods of discovery authorized by the Federal and Florida Rules of Civil
Procedure.
16. SERVICE OF PROCESS - MEGAMEDIA. If the Executive institutes legal
proceedings (including arbitration proceedings) against MegaMedia, the
signatories to this Employment Agreement agree that service of process by
registered and certified U.S mail of the complaint and summons to the
national headquarters of MegaMedia, currently located at 00 Xxxx Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxx 00000, is reasonably calculated to apprise
MegaMedia of any legal proceedings (including arbitration proceedings)
instituted against it by the Executive. The above-described method for
service of process shall not constitute by MegaMedia to the exercise of
personal jurisdiction by any court except the United States District Court
for the Middle District of Florida, Orlando Division or the Circuit Court
for Orange County, Florida, in connection with any controversy or dispute
between the signatories to this Agreement.
17. SERVICE OF PROCESS - EXECUTIVE. If MegaMedia institutes legal proceedings
(including arbitration proceedings) against the Executive, the parties
agree that, except as provided below, MegaMedia shall server process by
process server upon the Executive at his last known residence address
located in the United States. The Executive shall notify MegaMedia in
writing of any change in his residence address within ten (10) calendar
days of the change. If the Executive changes his U.S. residence address and
fails to notify MegaMedia in writing within ten (10) calendar days of the
change, the signatories agree that the following specified method of
service of process is reasonably calculated to reach the Executive and to
apprise the Executive of the legal proceedings instituted by MegaMedia:
MegaMedia shall (i) serve copies of the summons and complaint by certified
and registered U.S. Mail to the Executive's last known residence located in
the United States and (ii) place a public notice in a newspaper of general
circulation in the geographic area of the Executive's last known residence
address for a period of two (2) consecutive weeks following commencement
(i.e., filing) of the proceedings. The Executive expressly acknowledges
that the above-described method for service of process is (i) reasonably
calculated to apprise him of any legal proceedings instituted against him
by MegaMedia and (ii) sufficient for the court issuing the summons or the
American Arbitration Association to exercise personal jurisdiction over him
or her.
18. ACKNOWLEDGEMENTS. The Executive hereby acknowledges that he has been
provided with a copy of this Employment Agreement for review prior to
signing it, that he has been given the opportunity to have this Agreement
reviewed by his own attorney prior to signing it, that he understands the
purposes and effects of this Agreement, and that he has been given a signed
copy of this Agreement for his own records. The parties hereto acknowledge
that this Agreement and all matters contemplated herein, have been
negotiated between both of the parties hereto and their respective legal
counsel and that both parties have participated in the drafting and
preparation of this Agreement from the commencement of negotiation at all
times through the executive hereof.
19. WAIVER. The waiver by either party of a breach or threatened breach of this
employment Agreement by the other party shall not be construed as a waiver
of any subsequent breach. The refusal or failure of MegaMedia to enforce
the Restrictive Covenants or prohibitions of this Agreement (or any similar
Agreement) against any other executive, agent, or independent contractor,
for any reason shall not constitute a defense to the enforcement by
MegaMedia of the Restrictive Covenants or the prohibitions of this
Agreement, nor shall it give rise to any claim or cause of action by such
executive, agent, or independent contractor or consulting against
MegaMedia.
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21. INDEMNIFICATION. The Company shall indemnify Executive to the fullest
extent permitted by applicable law against damages and expenses (including
fees and disbursements of counsel) in connection with his status or arising
out of the ordinary and proper conduct of his duties as an employee or
officer of the Company.
22. MISCELLANEOUS.
A. Entire Agreement. This Employment Agreement, together with Exhibits A,
B, & C, constitutes the entire agreement between its signatories
pertaining to the subject matters of the Agreement, and it supersedes
all negotiations, preliminary agreements, and all prior and
contemporaneous discussions and understandings of the signatories in
connection with the subject matters of the Agreement. Except as
otherwise herein provided, no covenant, representation, or condition
not expressed in this Agreement, or in an amendment made and executed
in accordance with the provisions of subparagraph (b) of this
paragraph, shall be binding upon the signatories or shall affect or be
effective to interpret, change, or restrict the provisions of this
Agreement.
B. Amendments. No change, modification, or termination of any of the
terms, provisions, or conditions of this Agreement shall be effective
unless made in writing and signed or initialed by all signatories to
this Agreement.
C. Governing Law. This Agreement shall be governed and construed in
accordance with the statutory and decisional law of the State of
Florida governing contracts to be performed in their entirety in
Florida.
D. Separability. If any paragraph, subparagraph, or provision of this
Agreement, or the application of such paragraph, subparagraph or
provision, is held invalid by a court of competent jurisdiction, the
remainder of the Agreement, and the application of such paragraph,
subparagraph, or provision to persons or circumstances other than
those with respect to which is held invalid, shall not be affected.
E. Headings and Captions. The titles and captions of paragraphs and
subparagraphs contained in this Agreement are provided for convenience
of reference only, and they shall not be considered a part of this
Agreement for purposes of interpreting or applying this Agreement;
such titles or captions are not intended to define, limit, extend,
explain or describe the scope or extent of this Agreement or any of
its terms, provisions, representations, warranties, or conditions in
any manner or way whatsoever.
F. Attorney's Fees. In the event it shall be necessary for any party to
seek arbitration or court intervention in order to enforce or defend
its rights hereunder, the prevailing party in any such action shall
recover from the non-prevailing party or parties, all reasonable
attorneys' and paralegal fees in the trail and appellate courts and in
all arbitration, including expert witness fees, deposition costs
(appearance fees and transcript charges), injunction bond premiums,
travel and lodging expenses, arbitration fees and charges, and all
other reasonable costs and expenses.
G. Continuance of Agreement. The rights, responsibilities, and duties of
the signatories to this Agreement, and the covenants and agreements
contained in this Agreement, shall continue to bind the signatories,
shall continue in full force and effect until each and every
obligation of the signatories pursuant to this Agreement (and any
document or agreement incorporated hereby by reference) shall have
been fully performed, and shall be binding upon the successors and
assigns of the signatories.
H. Successors and Assigns. Neither party shall have the right to assign
this personal Agreement, or assign any rights or delegate any
obligations hereunder, without the consent of the other party;
provided, however, that upon the sale of all or substantially all of
the assets, business and goodwill of the Company to another company,
this Agreement shall inure to the benefit of; and be binding upon,
both Executive and the company purchasing such assets, business and
goodwill, or surviving such merger or
Page 9 of 22
consolidation, as the case may be, in the same manner and to the same
extent as though such other company were the Company, subject to the
Executive's rights hereunder. Subject to the foregoing, this Agreement
shall inure to the benefits of; and be binding upon, the parties
hereto and their legal representatives, heirs, successors and assigns.
I. Additional Acts. The Executive and the Company each agrees to execute,
acknowledge and deliver and file, or cause to be executed,
acknowledged and delivered and filed, any and all further instruments,
agreements or documents as may be necessary or expedient in order to
consummate the transactions provided for in this Agreement and do any
and all further acts and things as may be necessary or expedient in
order to carry out the purposes and intent of this Agreement.
J. Notices. Any notice or other communication under this Agreement, other
than as provided above, shall be in writing and shall be delivered
personally or sent by certified mail, return receipt requested,
postage prepaid, or sent by facsimile or prepaid overnight courier to
the parties at the addresses set forth below (or at such other
addresses as shall be specified by the parties by like notice). Such
notices, demands, claims and other communications shall be deemed
given when actually received or (a) in the case of delivery by
overnight service with guaranteed next day delivery, the next day or
the day designated for delivery, (b) in the case of facsimile, the
date upon which the transmitting party received confirmation of
receipt by facsimile, telephone or otherwise.
To the Company: To the Executive:
MegaMedia Networks, Inc. 0000 Xxx Xxxxxx Xxxx
00 Xxxx Xxxx Xxxxxx Xxxxxxx, Xxxxxxx 00000
Xxxxxxx, Xxxxxxx 00000
Attn: Legal Department
Fax: 000-000-0000
K. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which, together, will
constitute one and the same agreement. Any facsimile version of a
manually executed signature page delivered by one party to the other
shall be deemed manually executed and delivered original.
L. No Rights as Stockholder. Executive shall have no rights as a
stockholder in Shares as to which title has not vested in Executive or
for which options have not been exercised.
----------------------------------- -----------------------------------
Witness Executive - Xxxxx X. Xxxxx, III
----------------------------------- -----------------------------------
Attest: By Xxxx X. Xxxxx, Secretary MegaMedia Networks, Inc.
By Xxxxxxx X. Xxxxxx, Xx., President
Page 10 of 12
STOCK OPTION AGREEMENT
EXHIHBIT A
STOCK OPTION AGREEMENT dated as of February 7, 2000, by and between
MegaMedia Networks, Inc. and Xxxxx X. Xxxxx, III,, (the "Optionee").
-------------------------------------
In consideration for the Optionee signing an employment Agreement (the
"Employment Agreement") with MegaMedia Networks, Inc. (the Company") and for
other good and valuable consideration, receipt of which is hereby acknowledged,
MegaMedia Networks hereby grants the Optionee the option to acquire shares of
the common stock of the Company upon the following terms and conditions:
1. GRANT OF OPTION
A. The Company hereby grants to the Optionee the right and option (the
"Option") to purchase up to 150,000 fully paid and non-assessable
shares of Common Stock par value $.01 per share of the Company (the
"Shares"), subject to the vesting provisions described below.
B. This Option shall vest in Executive on the earliest to occur of the
following:
(i) On February 6, 2001, provided that Executive remains employed by
Company, a parent or subsidiary corporation of Company; or
(ii) Upon termination of Executive's employment by Company without
"Cause" as defined in paragraph 9D of Executive's Employment
Agreement of even date herewith prior to February 6, 2001; or
(iii) Upon Executive's voluntary termination of his employment for
"Constructive Discharge" as defined paragraph 9C of Executive's
Employment Agreement of even date herewith prior to February 6,
2001; or
(iv) Upon a "change in control" of the Company, which shall be
defined as (i) a sale, purchase, merger or other business
combination which results in transfer to a third party of an
ownership interest of greater than 50% of the Company or any
successor entity to the Company, or (ii) a sale of all or
substantially all of the Company's assets prior to February 6,
2001..
C. The Option once vested, may be exercised during the period ("Option
Period") commencing on February 6, 2001, and expiring at 5:00 p.m.
Eastern Standard Time on February 6, 2011 at which time the Optionee
shall have no further right to purchase any Shares not then purchased.
MegaMedia Networks shall at all times during this Agreement have
available such number of Shares of Common Stock as will be sufficient
to satisfy the Option.
D. It is not intended that these Options qualify as Incentive Stock
Options within the meaning of Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code").
2. EXERCISE PRICE
The exercise price of the Option (the "Exercise Price") shall be Three
Dollars ($3.00) per Share, and shall be payable by certified or bank check
payable to the order of MegaMedia Networks in full at the time of the
exercise. As an alternative, Optionee may present Shares already owned by
the Optionee with a market value at least equal to the aggregate Exercise
Price of the Options which Optionee seeks to exercise.
Page 11 of 12
3. EXERCISE OF OPTION
The Optionee may exercise this Option in whole or in part, by providing
notice to the MegaMedia Networks, in the form attached as Exhibit A, by
registered, or certified mail, return receipt requested, or by overnight
mail or personal delivery, addressed to its principal office, signed by
Optionee, indicating the number of Options which he desires to exercise.
The notice shall be accompanied by payment of the Option Price as specified
in Paragraph 2 above. As soon as practicable after the receipt of such
notice of exercise, MegaMedia Networks shall cause the Company's transfer
agent to issue to the Optionee certificates issued in the Optionee's name
evidencing the Shares purchased by the Optionee.
4. DEATH OF OPTIONEE
In the event of the death of the Optionee, any unexercised portion of his
or her Option shall be exercisable (to the extent that such Option was
exercisable at the time of his or her death) for sixty (60) days after the
Optionee's death only by his personal representative or such persons to
whom the deceased Option's rights shall pass under the Optionee's will or
by the laws of descent and distribution.
5. NON-TRANSFERABILITY OF OPTION
The Optionee may not give, grant, sell, exchange, transfer legal title,
pledge, assign or otherwise encumber or dispose of the Option or any
interest therein, otherwise than by will or laws of descent and
distribution and, except as provided in this paragraph and paragraph 4, the
Option shall be exercisable only by the Optionee. Upon any attempt to so
transfer the Option, or upon the levy or attachment or similar process of
the Option, the Option shall automatically become null and void.
6. RESTRICTION OF ISSUANCE OF SHARES - INVESTMENT REPRESENTATION
By accepting the Option, the Optionee agrees for himself, his or her heirs
and legatees that any and all Shares purchased upon the exercise of the
Option shall be acquired for investment and not for distribution. Upon the
issuance of any or all of the Shares subject to the Option, the Company, in
its discretion, may require the Optionee, or his or her heirs or legatees
receiving such Shares to deliver to the Company a representation in
writing, in a from satisfactory to the Board of Directors, that such Shares
are being acquired in good faith for investment and not for distribution.
The Company may place a "stop transfer" order with respect to such Shares
with its transfer agent and will place an appropriate restrictive legend on
the certificate(s) evidencing such Shares. Any stock certificates issued
upon the exercise of the Option may bear an appropriate restrictive legend,
if deemed necessary by the Company. The Company agrees to register the
Shares as part of any Form S-8 registration by the Company for so long as
any Shares subject to Options remain outstanding.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
A. In the event of changes in the outstanding shares of the Company by
reason of stock dividends, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations or liquidations, the number and class of shares or the
amount of cash or other assets or securities available upon the
exercise of the Option and he Exercise Price shall be correspondingly
adjusted.
B. Any adjustment in the number of Shares shall apply proportionately to
only the then unexercised portion of the Option. If fractional Shares
would result from any such adjustment, the adjustment shall be revised
to the next higher whole number.
8. NO RIGHTS AS STOCKHOLDER
The Optionee shall have no rights as a stockholder in Shares as to which
the Option has not been exercised.
9. TAXES
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with
the exercise of the Option granted hereby. The Company may further require
notification from the Optionee upon any disposition of Shares acquired
pursuant to the exercise of the Options granted hereunder.
10. BINDING EFFECT
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
legal representatives and assigns.
11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida applicable to agreements made and to be
performed wholly within the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
-------------------------------- --------------------------------
Witness_________________________ MegaMedia Networks, Inc.
By:Xxxxxxx X. Xxxxxx, Xx., President
--------------------------------- --------------------------------
Witness:_________________________ Optionee: XXXXX X. XXXXX, III
Page 13 of 22
EXHIBIT A
EXERCISE FORM
(To be Executed If Optionee Desires to Exercise the Options)
TO: MegaMedia Networks, Inc.
The undersigned, being the Optionee of certain options ("Options") to
purchase shares of common stock of MegaMedia Networks, Inc. (the "Company" and
the "Shares"), under the conditions thereof, hereby exercises Options to
purchase _____________ Shares evidenced by the within Option Agreement, and
herewith makes payment of the exercise price in full in cash or immediately
available funds or by presenting shares already owned by the Optionee with a
market value at lease equal to the aggregate exercise price due. Kindly issue
all Shares to the undersigned and deliver them to the undersigned at the address
stated below. If such number of Shares shall not be all of the Shares
purchasable under the within Option Agreement, please issue a new Option
Agreement of like tenor for the balance of the remaining Shares purchasable
hereunder to be delivered to the undersigned at the address stated below.
By signing below, the Undersigned acknowledges that he has received such
financial and other information to his or her satisfaction regarding the Company
as he requires to make an informed investment decision. The Undersigned has had
the opportunity to ask questions and receive answers from the Company regarding
the Shares and the Company. The Undersigned further acknowledges that he is
aware that the Shares issued pursuant to this exercise may be restricted from
transfer.
Name_______________________________
(Please Print)
Address_____________________________
Signature____________________________
Dated____________________
Page 14 of 22
STOCK OPTION AGREEMENT
EXHIBIT B
STOCK OPTION AGREEMENT dated as of February 7, 2000, by and between MegaMedia
Networks, Inc. and Xxxxx X. Xxxxx, III,, (the "Optionee").
------------------------------------
In consideration for the Optionee signing an employment Agreement (the
"Employment Agreement") with MegaMedia Networks, Inc. (the Company") and for
other good and valuable consideration, receipt of which is hereby acknowledged,
MegaMedia Networks hereby grants the Optionee the option to acquire shares of
the common stock of the Company upon the following terms and conditions:
7. GRANT OF OPTION
A. The Company hereby grants to the Optionee the right and option (the
"Option") to purchase up to 100,000 fully paid and non-assessable
shares of Common Stock par value $.01 per share of the Company (the
"Shares"), subject to the vesting provisions described below.
B. This Option shall vest in Executive on the earliest to occur of the
following:
(i) On February 6, 2002, provided that Executive remains employed by
Company, a parent or subsidiary corporation of Company; or
(v) Upon termination of Executive's employment by Company without
"Cause" as defined in paragraph 9D of Executive's Employment
Agreement of even date herewith prior to February 6, 2002; or
(vi) Upon Executive's voluntary termination of his employment for
"Constructive Discharge" as defined paragraph 9C of Executive's
Employment Agreement of even date herewith prior to February 6,
2002; or
(vii) Upon a "change in control" of the Company, which shall be
defined as (i) a sale, purchase, merger or other business
combination which results in transfer to a third party of an
ownership interest of greater than 50% of the Company or any
successor entity to the Company, or (ii) a sale of all or
substantially all of the Company's assets prior to February 6,
2002.
C. The Option once vested, may be exercised during the period ("Option
Period") commencing on February 6, 2002, and expiring at 5:00 p.m.
Eastern Standard Time on February 6, 2012 at which time the Optionee
shall have no further right to purchase any Shares not then purchased.
MegaMedia Networks shall at all times during this Agreement have
available such number of Shares of Common Stock as will be sufficient
to satisfy the Option.
D. It is not intended that these Options qualify as Incentive Stock
Options within the meaning of Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code").
8. EXERCISE PRICE
The exercise price of the Option (the "Exercise Price") shall be Four
Dollars and Fifty Cents ($4.50) per Share, and shall be payable by
certified or bank check payable to the order of MegaMedia Networks in full
at the time of the exercise. As an alternative, Optionee may present Shares
already owned by the Optionee with a market value at least equal to the
aggregate Exercise Price of the Options which Optionee seeks to exercise.
Page 15 of 22
9. EXERCISE OF OPTION
The Optionee may exercise this Option in whole or in part, by providing
notice to the MegaMedia Networks, in the form attached as Exhibit A, by
registered, or certified mail, return receipt requested, or by overnight
mail or personal delivery, addressed to its principal office, signed by
Optionee, indicating the number of Options which he desires to exercise.
The notice shall be accompanied by payment of the Option Price as specified
in Paragraph 2 above. As soon as practicable after the receipt of such
notice of exercise, MegaMedia Networks shall cause the Company's transfer
agent to issue to the Optionee certificates issued in the Optionee's name
evidencing the Shares purchased by the Optionee.
10. DEATH OF OPTIONEE
In the event of the death of the Optionee, any unexercised portion of his
or her Option shall be exercisable (to the extent that such Option was
exercisable at the time of his or her death) for sixty (60) days after the
Optionee's death only by his personal representative or such persons to
whom the deceased Option's rights shall pass under the Optionee's will or
by the laws of descent and distribution.
11. NON-TRANSFERABILITY OF OPTION
The Optionee may not give, grant, sell, exchange, transfer legal title,
pledge, assign or otherwise encumber or dispose of the Option or any
interest therein, otherwise than by will or laws of descent and
distribution and, except as provided in this paragraph and paragraph 4, the
Option shall be exercisable only by the Optionee. Upon any attempt to so
transfer the Option, or upon the levy or attachment or similar process of
the Option, the Option shall automatically become null and void.
12. RESTRICTION OF ISSUANCE OF SHARES - INVESTMENT REPRESENTATION
By accepting the Option, the Optionee agrees for himself, his or her heirs
and legatees that any and all Shares purchased upon the exercise of the
Option shall be acquired for investment and not for distribution. Upon the
issuance of any or all of the Shares subject to the Option, the Company, in
its discretion, may require the Optionee, or his or her heirs or legatees
receiving such Shares to deliver to the Company a representation in
writing, in a from satisfactory to the Board of Directors, that such Shares
are being acquired in good faith for investment and not for distribution.
The Company may place a "stop transfer" order with respect to such Shares
with its transfer agent and will place an appropriate restrictive legend on
the certificate(s) evidencing such Shares. Any stock certificates issued
upon the exercise of the Option may bear an appropriate restrictive legend,
if deemed necessary by the Company. The Company agrees to register the
Shares as part of any Form S-8 registration by the Company for so long as
any Shares subject to Options remain outstanding.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
C. In the event of changes in the outstanding shares of the Company by
reason of stock dividends, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations or liquidations, the number and class of shares or the
amount of cash or other assets or securities available upon the
exercise of the Option and he Exercise Price shall be correspondingly
adjusted.
D. Any adjustment in the number of Shares shall apply proportionately to
only the then unexercised portion of the Option. If fractional Shares
would result from any such adjustment, the adjustment shall be revised
to the next higher whole number.
8. NO RIGHTS AS STOCKHOLDER
The Optionee shall have no rights as a stockholder in Shares as to which
the Option has not been exercised.
Page 16 of 22
9. TAXES
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with
the exercise of the Option granted hereby. The Company may further require
notification from the Optionee upon any disposition of Shares acquired
pursuant to the exercise of the Options granted hereunder.
11. BINDING EFFECT
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
legal representatives and assigns.
11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida applicable to agreements made and to be
performed wholly within the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
-------------------------------- -------------------------------
Witness_________________________ MegaMedia Networks, Inc.
By:Xxxxxxx X. Xxxxxx, Xx., President
--------------------------------- -------------------------------
Witness:_________________________ Optionee: XXXXX X. XXXXX, III
Page 17 of 22
EXHIBIT A
EXERCISE FORM
(To be Executed If Optionee Desires to Exercise the Options)
TO: MegaMedia Networks, Inc.
The undersigned, being the Optionee of certain options ("Options") to
purchase shares of common stock of MegaMedia Networks, Inc. (the "Company" and
the "Shares"), under the conditions thereof, hereby exercises Options to
purchase _____________ Shares evidenced by the within Option Agreement, and
herewith makes payment of the exercise price in full in cash or immediately
available funds or by presenting shares already owned by the Optionee with a
market value at lease equal to the aggregate exercise price due. Kindly issue
all Shares to the undersigned and deliver them to the undersigned at the address
stated below. If such number of Shares shall not be all of the Shares
purchasable under the within Option Agreement, please issue a new Option
Agreement of like tenor for the balance of the remaining Shares purchasable
hereunder to be delivered to the undersigned at the address stated below.
By signing below, the Undersigned acknowledges that he has received such
financial and other information to his or her satisfaction regarding the Company
as he requires to make an informed investment decision. The Undersigned has had
the opportunity to ask questions and receive answers from the Company regarding
the Shares and the Company. The Undersigned further acknowledges that he is
aware that the Shares issued pursuant to this exercise may be restricted from
transfer.
Name_______________________________
(Please Print)
Address_____________________________
Signature____________________________
Dated____________________
Page 18 of 22
STOCK OPTION AGREEMENT
EXHIBIT C
STOCK OPTION AGREEMENT dated as of February 7, 2000, by and between MegaMedia
Networks, Inc. and Xxxxx X. Xxxxx, III,, (the "Optionee").
-------------------------------------
In consideration for the Optionee signing an employment Agreement (the
"Employment Agreement") with MegaMedia Networks, Inc. (the Company") and for
other good and valuable consideration, receipt of which is hereby acknowledged,
MegaMedia Networks hereby grants the Optionee the option to acquire shares of
the common stock of the Company upon the following terms and conditions:
13. GRANT OF OPTION
A. The Company hereby grants to the Optionee the right and option (the
"Option") to purchase up to 100,000 fully paid and non-assessable
shares of Common Stock par value $.01 per share of the Company (the
"Shares"), subject to the vesting provisions described below.
B. This Option shall vest in Executive on the earliest to occur of the
following:
(i) On February 6, 2003, provided that Executive remains employed
by Company, a parent or subsidiary corporation of Company; or
(viii) Upon termination of Executive's employment by Company without
"Cause" as defined in paragraph 9D of Executive's Employment
Agreement of even date herewith prior to February 6, 2003; or
(ix) Upon Executive's voluntary termination of his employment for
"Constructive Discharge" as defined paragraph 9C of Executive's
Employment Agreement of even date herewith prior to February 6,
2003; or
(x) Upon a "change in control" of the Company, which shall be
defined as (i) a sale, purchase, merger or other business
combination which results in transfer to a third party of an
ownership interest of greater than 50% of the Company or any
successor entity to the Company, or (ii) a sale of all or
substantially all of the Company's assets prior to February 6,
2003.
C. The Option once vested, may be exercised during the period ("Option
Period") commencing on February 6, 2003, and expiring at 5:00 p.m.
Eastern Standard Time on February 6, 2013 at which time the Optionee
shall have no further right to purchase any Shares not then purchased.
MegaMedia Networks shall at all times during this Agreement have
available such number of Shares of Common Stock as will be sufficient
to satisfy the Option.
D. It is not intended that these Options qualify as Incentive Stock
Options within the meaning of Section 422A of the Internal Revenue
Code of 1986, as amended (the "Code").
14. EXERCISE PRICE
The exercise price of the Option (the "Exercise Price") shall be Five
Dollars ($5.00) per Share, and shall be payable by certified or bank check
payable to the order of MegaMedia Networks in full at the time of the
exercise. As an alternative, Optionee may present Shares already owned by
the Optionee with a market value at least equal to the aggregate Exercise
Price of the Options which Optionee seeks to exercise.
Page 19 of 22
15. EXERCISE OF OPTION
The Optionee may exercise this Option in whole or in part, by providing
notice to the MegaMedia Networks, in the form attached as Exhibit A, by
registered, or certified mail, return receipt requested, or by overnight
mail or personal delivery, addressed to its principal office, signed by
Optionee, indicating the number of Options which he desires to exercise.
The notice shall be accompanied by payment of the Option Price as specified
in Paragraph 2 above. As soon as practicable after the receipt of such
notice of exercise, MegaMedia Networks shall cause the Company's transfer
agent to issue to the Optionee certificates issued in the Optionee's name
evidencing the Shares purchased by the Optionee.
16. DEATH OF OPTIONEE
In the event of the death of the Optionee, any unexercised portion of his
or her Option shall be exercisable (to the extent that such Option was
exercisable at the time of his or her death) for sixty (60) days after the
Optionee's death only by his personal representative or such persons to
whom the deceased Option's rights shall pass under the Optionee's will or
by the laws of descent and distribution.
17. NON-TRANSFERABILITY OF OPTION
The Optionee may not give, grant, sell, exchange, transfer legal title,
pledge, assign or otherwise encumber or dispose of the Option or any
interest therein, otherwise than by will or laws of descent and
distribution and, except as provided in this paragraph and paragraph 4, the
Option shall be exercisable only by the Optionee. Upon any attempt to so
transfer the Option, or upon the levy or attachment or similar process of
the Option, the Option shall automatically become null and void.
18. RESTRICTION OF ISSUANCE OF SHARES - INVESTMENT REPRESENTATION
By accepting the Option, the Optionee agrees for himself, his or her heirs
and legatees that any and all Shares purchased upon the exercise of the
Option shall be acquired for investment and not for distribution. Upon the
issuance of any or all of the Shares subject to the Option, the Company, in
its discretion, may require the Optionee, or his or her heirs or legatees
receiving such Shares to deliver to the Company a representation in
writing, in a from satisfactory to the Board of Directors, that such Shares
are being acquired in good faith for investment and not for distribution.
The Company may place a "stop transfer" order with respect to such Shares
with its transfer agent and will place an appropriate restrictive legend on
the certificate(s) evidencing such Shares. Any stock certificates issued
upon the exercise of the Option may bear an appropriate restrictive legend,
if deemed necessary by the Company. The Company agrees to register the
Shares as part of any Form S-8 registration by the Company for so long as
any Shares subject to Options remain outstanding.
7. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
E. In the event of changes in the outstanding shares of the Company by
reason of stock dividends, split-ups, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, separations,
reorganizations or liquidations, the number and class of shares or the
amount of cash or other assets or securities available upon the
exercise of the Option and he Exercise Price shall be correspondingly
adjusted.
F. Any adjustment in the number of Shares shall apply proportionately to
only the then unexercised portion of the Option. If fractional Shares
would result from any such adjustment, the adjustment shall be revised
to the next higher whole number.
8. NO RIGHTS AS STOCKHOLDER
The Optionee shall have no rights as a stockholder in Shares as to which
the Option has not been exercised.
Page 20 of 22
9. TAXES
The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with
the exercise of the Option granted hereby. The Company may further require
notification from the Optionee upon any disposition of Shares acquired
pursuant to the exercise of the Options granted hereunder.
12. BINDING EFFECT
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
legal representatives and assigns.
11. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Florida applicable to agreements made and to be
performed wholly within the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
-------------------------------- -------------------------------
Witness_________________________ MegaMedia Networks, Inc.
By:Xxxxxxx X. Xxxxxx, Xx., President
--------------------------------- -------------------------------
Witness:_________________________ Optionee: XXXXX X. XXXXX, III
Page 21 of 22
EXHIBIT A
EXERCISE FORM
(To be Executed If Optionee Desires to Exercise the Options)
TO: MegaMedia Networks, Inc.
The undersigned, being the Optionee of certain options ("Options") to
purchase shares of common stock of MegaMedia Networks, Inc. (the "Company" and
the "Shares"), under the conditions thereof, hereby exercises Options to
purchase _____________ Shares evidenced by the within Option Agreement, and
herewith makes payment of the exercise price in full in cash or immediately
available funds or by presenting shares already owned by the Optionee with a
market value at lease equal to the aggregate exercise price due. Kindly issue
all Shares to the undersigned and deliver them to the undersigned at the address
stated below. If such number of Shares shall not be all of the Shares
purchasable under the within Option Agreement, please issue a new Option
Agreement of like tenor for the balance of the remaining Shares purchasable
hereunder to be delivered to the undersigned at the address stated below.
By signing below, the Undersigned acknowledges that he has received such
financial and other information to his or her satisfaction regarding the Company
as he requires to make an informed investment decision. The Undersigned has had
the opportunity to ask questions and receive answers from the Company regarding
the Shares and the Company. The Undersigned further acknowledges that he is
aware that the Shares issued pursuant to this exercise may be restricted from
transfer.
Name_______________________________
(Please Print)
Address_____________________________
Signature____________________________
Dated____________________
Page 22 of 22
