AMERICAN MILLENNIUM CORPORATION, INC.
2003 EMPLOYEE STOCK OPTION AGREEMENT
(Non-Qualified Stock Option)
STOCK OPTION AGREEMENT NUMBER: 02-24-03 RC
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 Xxxxxx X. Xxxxxxxxxx (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 (1,000,000) 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, THREE HUNDRED THIRTY THREE THOUSAND THREE HUNDRED AND
THIRTY THREE (333,333) 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, THREE HUNDRED THIRTY THREE THOUSAND THREE
HUNDRED AND THIRTY THREE (333,333) 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, THREE HUNDRED THIRTY THREE THOUSAND THREE
HUNDRED AND THIRTY FOUR (333,334) 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/ Xxxxxx X. Xxxxxxxxxx February 24, 2003
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Xxxxxx X. Xxxxxxxxxx Date
