GATEWAY DISTRIBUTORS LTD
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of March 21st, 2005, between GATEWAY DISTRIBUTORS
LTD , a Nevada corporation (the "Company"), and Xxxxx Xxxxxx (the "Optionee").
THE PARTIES AGREE AS FOLLOWS:
1 Option Grant. The Company hereby grants to the Optionee an option (the
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"Option") to purchase the number of shares of the Company's common stock (the
"Shares"), for an exercise price per share (the "Option Price") and based upon a
Grant Date, ail as set forth below:
Shares under option: 1,000,000,000
Option Price per Share: $ .0001
Grant Date: March 21st, 2005
The Option granted hereunder will be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
2. Stockholder Rights. No rights or privileges of a stockholder in the
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Company are conferred by reason of the granting of the Option. Optionee will not
become a stockholder in the Company with respect to the Shares unless and until
the Option has been properly exercised and the Option Price fully paid as to the
portion of the Option exercised.
3. Exercise Procedure. Subject to the conditions set forth in this
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Agreement, this option shall be exercised by the Optionee's delivery of written
notice of exercise to the Treasurer of the Company, specifying the number of
shares to be purchased and the purchase price to be paid therefore and
accompanied by payment in full in accordance with Section 4. Such exercise shall
be effective upon receipt by the Treasurer of the Company of such written notice
together with the required payment. The Optionee may purchase less than the
number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than ten whole shares.
4. Continuous Relationship with the Company. Except as otherwise provided in
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this Section 3, this option may not be exercised unless the Optionee, at the
time he or she exercises this option, is, and has been at all times since the
date of grant of this option, an employee, officer or director of, or consultant
or advisor to, the Company (an "Eligible Optionee").
5. Termination of Relationship with the Company. If the Optionee ceases to
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be an Eligible Optionee for any reason, then, except as provided in paragraphs
(a) and (b) below, the right to exercise this option shall terminate three (3)
years after such cessation (but in no event after the Expiration Date), provided
that this option shall be exercisable only to the extent that the Optionee was
entitled to exercise this option on the date of such cessation. Notwithstanding
the foregoing, if the Optionee, prior to the Expiration Date, materially
violates the non-competition or confidentiality provisions of
any employment contract, confidentiality and nondisclosure agreement or other
agreement between the Optionee and the Company, the right to exercise this
option shall terminate immediately upon written notice to the Optionee from the
Company describing such violation.
(a) Exercise Period Upon Death or Disability. If the Optionee dies or
becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior
to the Expiration Date while he or she is an Eligible Optionee, or if the
Optionee dies within three months after the Optionee ceases to be an
Eligible Optionee (other than as the result of a termination of such
relationship by the Company for "cause" as specified in paragraph (f)
below), this option shall be exercisable, within the period of three years
following the date of death or disability of the Optionee (whether or not
such exercise occurs before the Expiration Date), by the Optionee or by the
person to whom this option is transferred by will or the laws of descent
and distribution, provided that this option shall be exercisable only to
the extent that this option was exercisable by the Optionee on the date of
his or her death or disability. Except as otherwise indicated by the
context, the term "Optionee," as used in this option, shall be deemed to
include the estate of the Optionee or any person who acquires the right to
exercise this option by Bequest or inheritance or otherwise by reason of
the death of the Optionee.
(b) Discharge for Cause. If the Optionee, prior to the Expiration Date,
is discharged by the company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon such cessation of
employment. "Cause" shall mean willful misconduct by the Optionee or
willful failure to perform his or her responsibilities in the best
interests of the Company (including, without limitation, breach by the
Optionee of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or other similar agreement between the
Optionee and the Company), as determined by the Company, which
determination shall be conclusive. The Optionee shall be considered to have
been discharged for "cause" if the Company determines, within 30 days after
the Optionee's resignation, that discharge for cause was warranted.
6 Payment of Purchase Price.
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(a) Method of Payment. Payment of the purchase price for shares purchased
upon exercise of this option shall be made (i) by delivery to the Company of
cash or a check to the order of the Company in an amount equal to the purchase
price of such shares, (ii) subject to the consent of the Company, by delivery to
the Company of shares of Common Stock of the Company then owned by the Optionee
having a fair market value equal in amount to the purchase price of such shares,
(iii) by any other means which the Board of Directors determines are consistent
with the purpose of the Plan and with applicable laws and regulations
(including, without limitation, the provisions of Rule 16b- 3 under the
Securities Exchange Act of 1934 and Regulation T promulgated by the Federal
Reserve Board), or (iv) by any combination of such methods of payment.
(b) Valuation of Shares or Other Non-Cash Consideration Tendered in
Payment of Purchase Price. For the purposes hereof, the fair market value of
any share of the Company's Common Stock or other non-cash consideration which
may be delivered to the Company in exercise of this option shall be determined
in good faith by the Board of Directors of the Company.
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(c) Delivery of Shares Tendered in Payment of Purchase Price. If the
Optionee exercises this option by delivery of shares of Common Stock of the
Company, the certificate or certificates representing the shares of Common Stock
of the Company to be delivered shall be duly executed in blank by the Optionee
or shall be accompanied by a stock power duly executed in blank suitable for
purposes of transferring such shares to the Company. Fractional shares of Common
Stock of the Company will not be accepted in payment of the purchase price of
shares acquired upon exercise of this option.
(d) Restrictions on Use of Option Stock. Notwithstanding the foregoing, no
shares of Common Stock of the Company may be tendered in payment of the purchase
price of shares purchased upon exercise of this option if the shares to be so
tendered were acquired within twelve (12) months before the date of such tender
through the exercise of an option granted under the Plan or any other stock
option or restricted stock plan of the Company.
Delivery of Shares: Compliance With Securities Laws. Etc
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(a) General. The Company shall, upon payment of the option price for the
number of shares purchased and paid for, make prompt delivery of such shares to
the Optionee, provided that if any law or regulation requires the Company to
take any action with respect to such shares before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to complete such action.
(b) Listing, Qualification Etc. This option shall be subject to the
requirement that if at any time, counsel to the Company shall determine that the
listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification or disclosure, or to satisfy such other condition.
8. No Special Employment or Similar Rights. Nothing contained in this
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option shall be construed or deemed by any person under any circumstances to
bind the Company to continue the employment or other relationship of the
Optionee with the Company for the period within which this option may be
exercised.
9. Rights as a Shareholder. The Optionee shall have no rights as a
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shareholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other right for which
the record date is prior to the date such stock certificate is issued.
10. Termination. This Option will expire, unless previously exercised in
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full, on March 21st. 2008 which date is on or prior to the third anniversary of
the Grant Date.
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11. Miscellaneous. This Agreement sets forth the complete agreement of the
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parties concerning the subject matter hereof, superseding all prior agreements,
negotiations and understandings. This Agreement will be governed by the
substantive law of the State of Nevada, and may be executed in counterparts.
The parties hereby have entered into this Agreement as of the date set
forth above.
GATEWAY DISTRIBUTORS LTD
By: /s/ Xxxx Xxxxxx
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Title: President March 21st 05
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"Optionee"
Xxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
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Address:
2111 Palomar illegible Rd H 320
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Xxxxxxxx, XX 00000
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3-2-2005
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