EXHIBIT 10.3
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is effective as of the 18th day of October, 1996, by and
between Mystique Developments, Inc. (the "Company") and Xxx X. Xxxxxx (the
"Optionee") (together, the "Parties").
RECITALS:
A. On October 18, 1996, the Board of Directors of the Company adopted an
Incentive Stock Option Plan (the "Plan") under which the Optionee would receive
incentive stock options to purchase Common Stock of the Company.
B. The Plan permits the granting of incentive stock options, which conform
to the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
C. The Optionee is desirous of obtaining the incentive stock option on the
terms and conditions herein contained.
D. On October 18, 1996, the Board of Directors of the Company adopted a
grant resolution for the grant of incentive stock options described herein.
AGREEMENT:
IT IS THEREFORE agreed by and between the Parties, for and in consideration
of the premises and the mutual covenants herein contained and for other good and
valuable consideration, as follows:
1. The Company hereby confirms and acknowledges that it has granted to the
Optionee an option to purchase 500,000 shares of Common Stock of the Company
(the "Option") upon the terms and conditions herein set forth and subject to the
terms and conditions of the Plan. The Option is granted as a matter of separate
agreement, and not in lieu of salary or any other regular or special
compensation for services.
2. The purchase price of the shares which may be purchased pursuant to the
Option is One Dollar ($1.00) per share, which is, in the good faith opinion of
the Company, not less than the fair market value of the shares on the date the
Option was granted.
3. The Option shall continue for ten years after the date of grant unless
sooner terminated or modified under the provisions of this Agreement, and shall
automatically expire at midnight on the tenth anniversary of such date.
4. The Option may be exercised by the Optionee to purchase the total number
of shares specified in paragraph 1 as of the effective date hereof.
5. If the Optionee's employment with the Company or a participating
subsidiary of the Company shall terminate for any reason other than the
Optionee's disability, the Option, to the extent then exercisable as provided in
paragraph 4, shall remain exercisable after the termination of his employment
for a period of three months. If the Optionee's employment is terminated because
the Optionee is disabled within the meaning of Section 22(e)(3) of the Code, the
Option, to the extent then exercisable as provided in paragraph 4, shall remain
exercisable after the termination of his employment for a period of twelve
months. If the Option is not exercised during the applicable period, it shall be
deemed to have been forfeited and of no further force or effect.
6. The Option may not be exercised by anyone other than the Optionee during
his lifetime. In the event of the Optionee's death, the Option may be exercised
by the personal representative of the Optionee's estate or, if no personal
representative has been appointed, by the successor or successors in interest
determined under the Optionee's will or under the applicable laws of descent and
distribution. The Option may not be transferred, assigned, encumbered or
alienated in any way by the Optionee, and any attempt to do so shall render the
Option and any unexercised portion thereof, at the discretion of the Company,
null and void and unenforceable by the Optionee.
7. The Option may be exercised in whole or in part by delivering to the
Company written notice of exercise together with payment in full for the shares
being purchased upon such exercise.
8. The Company will, upon receipt of said notice and payment, issue or
cause to be issued to the Optionee (or to his personal representative or other
person entitled thereto) a stock certificate for the number of shares purchased
thereby.
9. The Company may, in its discretion, file and maintain effective with the
Securities and Exchange Commission a Registration Statement on Form S-8 under
the Securities Act of 1933, as amended (the "Act"), covering the sale of the
optioned shares to Optionee upon exercise of the Option. If, at the time of
exercise, the Company does not have an effective Registration Statement on file
covering the sale of the optioned shares, the Optionee represents and agrees
that: (i) the Option shall not be exercisable unless the purchase of optioned
shares upon the exercise of the Option is pursuant to an applicable effective
registration statement under the Act, or unless in the opinion of counsel for
the Company, the proposed purchase of such optioned shares would be exempt from
the registration requirements of the Act, and from the qualification
requirements of any state securities law; (ii) upon exercise of the Option, he
will acquire the optioned shares for his own account for investment and not with
any intent or view to any distribution, resale or other disposition of the
optioned shares; (iii) he will not sell or transfer the optioned shares, unless
they are registered under the Act, except in a transaction that is exempt from
registration under the Act, and each certificate issued to represent any of the
optioned shares shall bear a legend calling attention to the foregoing
restrictions and agreements. The Company may require, as a condition of the
exercise of the Option, that the Optionee sign such further representations and
agreements as it reasonably determines to be necessary or appropriate to assure
and to evidence compliance with the requirements of the Act.
2
10. If the Company or its stockholders enter into an agreement to dispose
of all, or substantially all, of the assets or outstanding capital stock of the
Company by means of a sale or liquidation, or a merger or reorganization in
which the Company is not the surviving corporation, any unexercised portion of
the Option as of the day before the consummation of such sale, liquidation,
merger or reorganization shall for all purposes under this Agreement become
exercisable in full as of such date.
11. In consideration of the granting by the Company of the Option, the
Optionee hereby affirms that he has a present intention to remain in the employ
and service of the Company for the period that this Option continues. This
affirmation, however, shall confer no right on the Optionee to continue in the
employ of the Company, nor interfere in any way with the right of the Company to
discharge the Optionee at any time for any reason whatsoever, with or without
cause.
12. The Optionee shall have no rights as a stockholder with respect to the
shares of Common Stock which may be purchased pursuant to the Option until such
shares are issued to the Optionee.
13. This Agreement is entered into and shall be governed by, construed and
enforced in accordance with the laws of the State of Wyoming.
14. The terms and conditions contained in the Plan, as it may be amended
from time to time hereafter, are incorporated into and made a part of this
Agreement by reference, as if the same were set forth herein in full, and all
provisions of the Option are made subject to any and all terms of the Plan.
15. If the Optionee is an officer or director of the Company, or a person
who is directly or indirectly the beneficial owner of more than 10% of the
Company's Common Stock, and the Option or a portion thereof is exercisable
within six months after the date on which it was granted, the Optionee
acknowledges that he understands that any sale or other disposition of the
Common Stock issued upon the full or partial exercise of the Option occurring
within six months after the date on which the Option was granted may subject the
Optionee to liability pursuant to Section 16(b) of the Securities Exchange Act
of 1934.
IN WITNESS WHEREOF, the parties have hereunto affixed their signatures in
acknowledgment and acceptance of the above terms and conditions on the date
first above mentioned.
MYSTIQUE DEVELOPMENTS, INC.
By /s/ Xxx X. Xxxxxx, President
-------------------------------------
3
OPTIONEE
/s/ Xxx X. Xxxxxx
----------------------------------------
Xxx X. Xxxxxx
4
