AMERICAN MILLENNIUM CORPORATION, INC.
2003 EMPLOYEE STOCK OPTION AGREEMENT
(Non-Qualified Stock Option)
STOCK OPTION AGREEMENT NUMBER: 02-24-03 JH
February 24, 2003
THIS 2003 EMPLOYEE STOCK OPTION AGREEMENT (the "Agreement") is
made effective as of the 23 day of February 2003 ("Effective Date") by and
between AMERICAN MILLENNIUM CORPORATION, INC. (the "Corporation"), a New Mexico
corporation, and Xxxxx Xxxxxxxx (the "Participant"). This Agreement is only
valid if Participant is or was employed by the Corporation on the Effective
Date.
RECITALS
A. The Corporation desires to compensate Participant by
providing Participant with a proprietary interest in the Corporation.
B. The Board of Directors of the Corporation has determined
that Participant is therefore eligible to receive a right to purchase shares of
the Corporation's common voting stock, $.001 par value (the "Common Stock") in
accordance with the terms and conditions set forth in this Agreement. The shares
will be issued as Rule 144 restricted shares.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of the
mutual promises hereinafter set forth and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, do hereby agree as follows:
X. Xxxxx of Option. Subject to the terms and conditions hereinafter
set forth, the Corporation hereby grants to Participant the option to
purchase, during the period specified in Section III hereof, ONE
MILLION FIVE HUNDRED THOUSAND SHARES (1,500,000) shares of Common
Stock (such shares of Common Stock being hereinafter referred to as
the "Shares") at a price of US$0.10 (TEN CENTS) per Share (the
"Exercise Price") in accordance with the terms of this Agreement (such
option being hereinafter referred to as the "Option"). The Board of
Directors of the Corporation, exercising good faith, has determined
the Exercise Price may or may not be equal to the fair market value of
the Common Stock as of the date hereof. The parties hereby agree that
the Corporation shall not be responsible for the payment of any tax
imposed on the Participant, nor will the Corporation reimburse the
Participant for the payment of any tax so imposed on the Participant.
The Corporation makes no warranty or representation to the Participant
regarding the federal or state income tax consequences of the grant or
exercise of the Option.
II. Vesting; Transferability. The Corporation and Participant agree that
the Option is being granted for Participant's ongoing leadership and
service and therefore the Option is to become vested in the Participant
upon the occurrence of the following events commencing from the
Effective Date:
A. Upon the Corporation's trailing gross revenues (including
revenues from its consolidated subsidiaries) for twelve months
achieving US$2,500,000 or more (including in such computation the
prior twelve months gross revenues of any enterprise acquired by
or merged into the Corporation looking back from the date of the
closing of any such acquired or merged enterprise); then,
simultaneous with such occurrence, FIVE HUNDRED THOUSAND
(500,000) SHARES shall become fully vested and shall not be
subject to forfeiture unless the Participant willfully engages in
misconduct in connection with the Participant's departure that is
materially injurious to the Corporation.
B. Upon the Corporation's trailing gross revenues (including
revenues from its consolidated subsidiaries) for twelve months
achieving US$5,000,000 or more (including in such computation the
prior twelve months gross revenues of any or all enterprises
acquired by or merged into the Corporation looking back from the
date of the closing of any or all of such acquired or merged
enterprises); then, simultaneous with such occurrence, FIVE
HUNDRED THOUSAND (500,000) SHARES shall become fully vested and
shall not be subject to forfeiture unless the Participant
willfully engages in misconduct in connection with the
Participant's departure that is materially injurious to the
Corporation.
C. Upon the Corporation's trailing gross revenues (including
revenues from its consolidated subsidiaries) for twelve months
achieving US$7,500,000 or more (including in such computation the
prior twelve months gross revenues of any or all enterprises
acquired by or merged into the Corporation looking back from the
date of the closing of any or all of such acquired or merged
enterprises); then, simultaneous with such occurrence, FIVE
HUNDRED THOUSAND (500,000) SHARES shall become fully vested and
shall not be subject to forfeiture unless the Participant
willfully engages in misconduct in connection with the
Participant's departure that is materially injurious to the
Corporation.
The Option shall be fully and completely transferable by the
Participant, subject to the provisions of Section VII.E hereof.
III. Exercise of Option.
A. Term. Subject to the provisions of Section II immediately above,
the Option shall be effective and shall be exercisable at any
time during the period commencing on the Effective Date, and
ending on the earliest of (i) the date all of the Shares are
purchased pursuant to the terms of this Agreement, or (ii) three
years from the Effective Date.
B. Effect of Expiration. Upon the expiration of the Option, the
Option shall have no further force or effect and Participant
shall have no further rights in or under the Option or to the
Shares, which shall not have been purchased by such time pursuant
to the Option.
C. Manner of Exercise. All or a portion of the Option shall be
deemed exercised upon delivery to the Secretary of the
Corporation at the Corporation's principal office in Golden,
Colorado of all of the following:
1. A written notice of exercise signed by the Participant or
other person entitled to exercise the Option specifying the
number of Shares to be purchased and specifying the amount
payable (the "Purchase Price") which shall be equal to the
amount obtained by multiplying the Exercise Price by the
number of Shares being purchased pursuant to such exercise:
2. Full payment of the Purchase Price for such Shares by any of
the following or combination thereof:
a. Certified or cashier's check payable in United States
dollars to the Corporation;
b. Wire transfer of United States dollars to one or more
of the Corporation's bank accounts in accordance with
written instructions provided by the Secretary of the
Corporation;
c. The delivery of whole Shares of the Common Stock owned
by the Participant or the person entitled to exercise
the Option provided that no Shares of the Common Stock
which have been held for less than six (6) months may
be delivered in payment of the Purchase Price;
d. By requesting that the Corporation withhold whole
Shares of the Common Stock then issuable upon exercise
of the Option (for purposes of such a transaction the
value of such Shares of the Common Stock shall be
deemed to equal the fair market value of the Common
Stock on the date of the exercise of the Option);
e. By arrangement with a broker which is acceptable to the
Secretary of the Corporation under which the broker
makes a loan for all or any portion of the Purchase
Price in full compliance with Regulation T of the Board
of Governors of the Federal Reserve System; or
f. By arrangement with a broker which is acceptable to the
Secretary of the Corporation where payment of all or
any portion of the Purchase Price is made pursuant to
an irrevocable direction to the broker to deliver all
or part of the proceeds from the sale of the Shares to
the Corporation.
3. Full payment of all of Participant's portion of any
withholding tax liability imposed by the Internal Revenue
Service and/or any applicable state taxing authority by any
of the following or combination thereof:
a. Certified or cashier's check payable in United States
dollars to the Corporation; or
b. Wire transfer of United States dollars to one or more
of the Corporation's bank accounts in accordance with
written instructions provided by the Secretary of the
Corporation.
4. In the event the Option is exercised by any person or
persons other than the Participant, appropriate proof of the
right of such person or persons to exercise the Option.
D. Issuance of Shares. No Shares shall be issued and delivered upon
exercise of any Option unless and until:
1. In the opinion of the Corporation's legal counsel, any
applicable requirements under the Securities Act of 1933 and
any applicable state securities laws have been fully
complied with;
2. The lapse of a reasonable time period following the exercise
of the Option as the Corporation may deem necessary for
administrative convenience; and
3. The receipt by the Corporation of the full amount of the
Purchase Price in accordance with Section 3.3 above.
E. Delivery of Certificates. After the terms of Section 3.4 have
been met, the Corporation shall issue and deliver to Participant,
or the person or persons properly exercising the Option, a
certificate or certificates evidencing such number of Shares as
Participant has then so elected to purchase.
IV. Rights Prior to Exercise.
A. Option is Not An Equity Interest. Participant shall have no
equity interest in the Corporation or any voting, dividend,
liquidation or dissolution rights with respect to any capital
stock of the Corporation solely by reason of having the Option or
having executed this Agreement. Furthermore, prior to the
exercise of all or a portion of the Option, as set forth in
Section 3 hereof, and the issuance and delivery of a certificate
or certificates evidencing the Shares purchased pursuant to the
exercise of all or a portion of such Option, Participant shall
have no interest in, or any voting, dividend, liquidation or
dissolution rights with respect to, the Shares, except to the
extent that Participant has exercised all or a portion of such
Option and has been issued and received delivery of a certificate
or certificates evidencing the Shares purchased pursuant to such
exercise.
B. No Right of Continued Employment. The grant of the Option does
not give the Participant any right to continued employment by the
Corporation or a subsidiary for any period, nor shall the
issuance of Shares on exercise of the Option give the Corporation
or any subsidiary any right to the continued services of the
Participant for any period except as specified in a written
employment agreement between the Participant and the Corporation.
V. Adjustments and Corporate Reorganizations. If the Common Stock is increased
or decreased, or is changed into or exchanged for a different number or
kind of shares or securities or other forms of property (including cash) or
rights, as a result of one or more reorganizations, recapitalizations,
spin-offs, stock splits, reverse stock splits, stock dividends or the like,
appropriate adjustments shall be made in the number and/or kind of shares
or securities or other forms of property (including cash) or rights for
which this Option may thereafter be exercised, all without any change in
the aggregated Exercise Price applicable to the unexercised portions of
this Option, but with a corresponding adjustment in the Exercise Price per
share or other unit. No fractional share of stock shall be issued under
this Option or in connection with any such adjustment. Such adjustments
shall be made by or under authority of the Corporation's Board of Directors
whose determinations as to what adjustments shall be made, and the extent
thereof, shall be final, binding and conclusive.
VI. Liquidation, Sale of Company, Etc. Upon the dissolution or liquidation of
the Corporation or upon a reorganization, merger or consolidation of the
Corporation as a result of which the outstanding Common Stock is changed
into or exchanged for property (including cash), rights or securities not
of the Corporation's issue, or any combination thereof, or upon a sale of
substantially all the property of the Corporation to, or the acquisition of
stock representing more than eighty percent (80%) of the voting power of
the stock of the Corporation then outstanding by, another corporation or
person, this Option shall not terminate, unless provision be made in
writing in connection with such transaction for the assumption of this
Option, or the substitution for this Option of an option covering the stock
of a successor corporation, or a parent thereof, with appropriate
adjustments in accordance with the provisions of the proceeding Section 5
as to the number and kind of shares optioned and their Exercise Prices, in
which event this Option shall continue in the manner and under the terms so
provided.
VII. Participant's Representations. Participant hereby represents and warrants
to the Corporation as follows:
A. Investment Purpose. Participant is acquiring the Option and will
purchase the Shares solely for Participant's own account for
investment and not with a view to or for sale in connection with
any distribution of the Shares or any portion thereof and not
with the present intention of selling, offering to sell or
otherwise disposing of or distributing the Shares or any portion
thereof in any transaction other than a transaction exempt from
registration under the Act.
B. Information Concerning Corporation. Participant agrees to discuss
the Corporation and its plans, operations and financial condition
with the Corporation's officers prior to purchasing the Shares in
order to obtain such information as the Participant deems
necessary and appropriate to enable the Participant to evaluate
the financial risks inherent in making an investment in the
Shares.
C. Speculative Investment. Participant realizes that the purchase of
the Shares will be a speculative investment and involves a degree
of risk, and Participant is able, without impairing Participant's
financial condition, to hold the Shares for an indefinite period
of time and to suffer complete loss on the Participant's
investment.
D. Restricted Nature of Shares. Participant understands and
acknowledges that until the Shares are registered in accordance
with the provisions of Section VIII below, the sale of the Shares
has not been registered under the Act and the Shares must be held
under Rule 144.
E. Transfer of Option. Participant agrees not to transfer or assign
the Option unless, in the opinion of the Corporation's legal
counsel, any applicable requirements under the Securities Act of
1933 and any applicable state securities laws have been fully
complied with.
VIII. Registration of Shares. The Corporation hereby agrees, notwithstanding any
provision herein to the contrary, at its sole cost and expense to file an
appropriate registration statement with the United States Securities and
Exchange Commission.
IX. General Provisions.
A. Entire Agreement; Amendment. This Agreement sets forth all of the
promises, agreements, conditions, understandings, warranties and
representations between the parties hereto with respect to the
Option and the Shares, and there are no promises, agreements,
conditions, understandings, warranties or representations, oral
or written, express or implied, between them with respect to the
Option or the Shares other than as set forth herein. Any and all
prior agreements between the parties hereto with respect to any
stock purchase rights or stock option rights regarding the Shares
or the Option are hereby revoked. This Agreement is, and is
intended by the parties to be, an integration of any and all
prior agreements or understandings, oral or written, with respect
to the Option and the Shares.
B. Counterpart Executions. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
C. Notice. Any and all notices provided for herein shall be
sufficient if in writing, and sent by hand delivery or by
certified or registered mail (return receipt requested and first
class postage prepaid), in the case of the Corporation, to its
principal office, and, in the case of Participant, to
Participant's address as shown on the Corporation's records.
D. Law Governing. This Agreement has been executed and delivered in
the State of New Mexico and shall be construed and enforced in
accordance with the laws of such state.
E. Benefit. This Agreement shall be binding upon, and shall inure to
the benefit of, the Corporation and Participant, and their
respective heirs, personal and legal representatives, successors
and assigns.
F. Time of Essence. Time is of the essence in this Agreement.
G. Gender and Number. Whenever used in this Agreement, the singular
shall include the plural and the plural shall include the
singular, the male shall include the female gender and a trust,
partnership, firm, company or corporation, all as the context and
meaning of this Agreement may require.
H. Further Assurances. Each party hereby agrees that she or it will,
whenever and as often as it shall be reasonably required by any
other party, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such further instruments
and documents as may be reasonably necessary in order to complete
the transactions and agreements herein provided and to do any and
all other acts and to acknowledge, execute and deliver any and
all documents which may be reasonably requested in order to
reasonably carry out the intent and purposes of this Agreement.
I. Severability. If any provision or term of this Agreement shall be
held or determined to be unenforceable, the balance of this
agreement shall nevertheless continue in full force and effect,
unaffected by such holding or determination. In addition, in any
such event, the parties agree that it is their intention and
agreement that any such provision or term which is held or
determined to be unenforceable as written, shall nonetheless be
enforced and binding to the fullest extent permitted by law as
though such provision or term had been written un such a manner
to such an extent as to be enforceable under the circumstances.
J. Legal Proceedings. If any party hereto finds it necessary to
employ legal counsel or to bring a lawsuit or other proceeding
against any other party to enforce any of the terms, covenants or
conditions hereof, the party prevailing in such action or other
proceeding shall be paid all reasonable attorney's fees by the
other party, as deemed by the court and not the jury, and in any
event any judgment is secured by such prevailing party, all such
attorney's fees shall be included in any such judgment in such
action or proceeding.
IN WITNESS WHEREOF, the Corporation and Participant have executed this
Agreement as of the day and year first above written.
AMERICAN MILLENNIUM CORPORATION, INC., a New Mexico corporation
By:/s/ Xxxxxxx X. Xxxxxxx February 24, 2003
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Its Duly Authorized Officer Date
By:/s/ Xxxxx Xxxxxxxx February 24, 2003
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Xxxxx Xxxxxxxx Date
