ABC FUNDING, INC. STOCK OPTION AGREEMENT
This Stock Option Agreement (this
"Agreement") is effective as of October 1, 2008, (the "Option Grant Date") by
and between ABC Funding, Inc., a Nevada corporation having its principal place
of business at 0000 XX 0000 Xxxx Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the
"Company"), and Xxx X. Xxxxx, an individual residing in the State of Texas (the
"Optionee"). The Optionee and the Company hereby agree as
follows:
1. Grant. The
Company hereby grants to the Optionee, pursuant to the ABC Funding, Inc. 2008
Stock Incentive Plan, an option (the "Option") to purchase up to an aggregate of
333,333 shares (the "Optioned Shares") of the Company's common stock, par value
$0.001 per share (the "Common Stock"), at an exercise price (the "Exercise
Price") of $0.59 per Optioned Share.
(a) Exercisability. Subject
to Sections 3(b) and 3(c) below, the Option shall vest and may be exercised in
whole or in part for up to 333,333 Optioned Shares at any time from and after
the first anniversary date of the Option Grant Date (the "Vesting Date") until
the Termination Date; provided, that on such Vesting Date, the Optionee shall
have been continuously employed by the Company through such date. To
the extent the Option has become vested and is exercisable, the Option may
thereafter be exercised by the Optionee, in whole or in part, at any time or
from time to time prior to the expiration of the Option as provided
herein. Optioned Shares that are available to be issued to the
Optionee upon exercise pursuant to this Section 3 are referred to herein as
"Exercisable Shares."
(1) If the Optionee's
employment under his current employment agreement with the Company ("Employment
Agreement") is terminated by the Company without Cause (as defined in the
Employment Agreement) or by the Optionee pursuant to the requirements for his
voluntary resignation for Good Reason (as defined in the Employment Agreement)
prior to the Vesting Date, then Optioned Shares that had not yet vested and
become exercisable as of the employment termination date shall immediately vest
and become exercisable in a number that is equal to (x) multiplied by (y), where
(x) is the total number of Optioned Shares that would have become exercisable on
the Vesting Date, and (y) is a fraction, the numerator of which is the number of
whole thirty-day periods the Optionee was employed from the Option Grant Date
through such termination date and the denominator of which is twelve
(12).
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(2) If the Optionee's employment with the Company is terminated by
the Company for Cause or by the Optionee other than pursuant to the requirements
for voluntary resignation for Good Reason, or for any other reason (except as
provided in Section 3(b)(1) above), then the unvested portion of the Option
shall be immediately forfeited and canceled, but any portion of the Option that
had vested prior thereto shall continue to be exercisable by the Optionee
pursuant to the terms hereof.
(i) a merger or
consolidation to which the Company is a party if the individuals and entities
who were stockholders of the Company immediately prior to the effective date of
such merger or consolidation have beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of less than 50% of the total combined voting power for
election of directors of the surviving corporation following the effective date
of such merger or consolidation;
(ii) the
acquisition or holding of direct or indirect beneficial ownership (as defined
under Rule 13d-3 of the Exchange Act) of securities of the Company representing
in the aggregate 30% or more of the total combined voting power of the Company's
then issued and outstanding voting securities by any person, entity or group of
associated persons or entities acting in concert, other than any employee
benefit plan of the Company or of any subsidiary of the Company, or any entity
holding such securities for or pursuant to the terms of any such
plan;
(iii) the sale of all or
substantially all of the assets of the Company to any person or entity that is
not a wholly-owned subsidiary of the Company; or
(iv) the approval by the
stockholders of the Company of any plan or proposal for the liquidation of the
Company or its material subsidiaries, other than into the Company.
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11. Miscellaneous. This
Option and any term hereof may be changed, waived, discharged or terminated only
by an instrument in writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought. This
certificate is deemed to have been delivered in the State of Texas and shall be
construed and enforced in accordance with and governed by the laws of such
State. The headings in this Stock Option Agreement are for purposes
of reference only, and shall not limit or otherwise affect any of the terms
hereof.
[Signature
Page Follows]
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ABC FUNDING, INC. | |||
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By:
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/s/ Xxxx X. Xxxxx | |
Xxxx X. Xxxxx | |||
Chief Financial Officer | |||
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By:
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/s/ Xxx X. Xxxxx | |
Xxx X. Xxxxx | |||