EXHIBIT 99.1
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EMPLOYEE STOCK OPTION AGREEMENT
DATE:
PARTIES: PHOBOS CORPORATION, a Utah Corporation ("PHOBOS")
("Employee")
RECITALS:
A. PHOBOS has adopted an Incentive Stock Option Plan (Plan) that
provides for the granting of options to purchase stock of PHOBOS to certain
employees of PHOBOS in order to induce the employees to remain employed by
PHOBOS and to continue to contribute to the growth and profitability of PHOBOS,
Such options are designed to qualify as incentive stock options under Section
422 of the internal Revenue Code of 1986,
B. The Employee is employed by PHOBOS as a(n) growth and
profitability of PHOBOS.
C. The Stock Option Committee (Committee) of the Board of
Directors of the Corporation has selected the Employee to receive an option to
purchase shares of the common stock of PHOBOS under the Plan.
AGREEMENTS:
SECTION 1. GRANT OF OPTION: PHOBOS hereby grants to the Employee
the option to purchase __________ shares of the authorized but unissued common
stock of PHOBOS upon the terms and conditions set forth in this Agreement.
SECTION 2. PURCHASE PRICE: The purchase price for shares of stock
purchased pursuant to this option shall be $0.50 per share
SECTION 3. EXERCISE OF OPTION: This option may be exercised in
blocks of 100 or more shares by the Employee at any time, or from time to time,
as to any part or all of the shares of stock covered by the option, as follows:
% of Total Quantity Vesting Date Expiration Date
---------- -------- ------------ ---------------
40% 2,000 October 9, 1998 June 1, 2008
30% 1,500 October 9, 1999 June 1, 2008
30% 1,500 October 9, 2000 June 1, 2008
The option shall be exercised by the Employee's giving written notice of such
exercise to PHOBOS, on or after the vesting date, but prior to the expiration
date, which notice shall state the number of shares to be purchased.
SECTION 4. PAYMENT OF PURCHASE PRICE AND CLOSING: Employee must
purchase vested shares in blocks of 100 or more shares. The purchase price for
all shares purchased under this option shall be paid in cash, or in collected
funds, upon closing The shares purchased shat) be issued by PHOBOS at the time
of closing as fully paid and non-assessable shares. The closing shall take place
at the principal office of PHOBOS within ten days after the effective date of
the notice of exercise of the option.
SECTION 5. TERMINATION: This option she!! terminate, and all rights
of the Employee under this option shall lapse, upon the earliest of the
following;
5.1 Expiration Date. The Expiration Date.
5.2 Cessation of Employment. Five business days after the
Employee ceases to be employed by PHOBOS for any reason other than the death or
disability of the Employee.
5.3 Disability. One year after the termination of the
Employee's employment by PHOBOS due to permanent disability, as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986.
5.4 Death. One year after the death of the Employee,
SECTION 6. SHAREHOLDER RIGHTS: The Employee shall net have any
rights as a shareholder of PHOi30S with respect to the shares covered by this
option except to the extent that the shares have been issued to the Employee
following the Employee's exercise of the option.
SECTION 7. ADJUSTMENTS: The number of shares subject to this option
may be, upon approval of the Stock Option Committee, proportionately adjusted
for any change in the stock structure of PHOBOS because of any stock dividends,
recapitalizations, reorganizations, mergers, or other restructuring.
SECTION 8. PROHIBITION AGAINST TRANSFER: This option is personal to
the Employee, and the Employee shall have no right to transfer any rights in the
option in any manner other than by will or by the laws of descent and
distribution. The option granted herein is exercisable during the Employee's
lifetime only by the Employee.
SECTION 9. EMPLOYMENT: This Agreement is not an employment
agreement and shall not be construed as such. Nothing in this Agreement shall be
construed to constitute or to be evidence of any agreement or understanding,
express or implied, on the part of PHOBOS to employ or retain the Employee as an
employee for any specific period of time, or on the part of the Employee to
remain as an employee of PHOBOS for any specific period of time.
SECTION 10. SECURITIES LAWS COMPLIANCE
10.1 Registration. The right of the Employee to exercise any
option granted pursuant to this Agreement may be suspended at any time if the
Committee determines that the Plan, any option granted under this Agreement, or
any shares of stock subject to such option must be registered or qualified under
applicable state or federal securities laws. Such suspension shall continue in
effect until the required registration or qualification is obtained or
completed.
10.2 Investment Representation. At the time of the closing of
any purchase of stock under this option, PHOBOS may require that the Employee,
or other person exercising the option, provide PHOBOS with a written
representation that the Employee or other person is acquiring such stock for the
Employee's or other person's own account for investment and not with a view to
the distribution of such shares and a written agreement that if the Employee or
other person should decide to sell, transfer, or otherwise dispose of such
shares, the Employee or other person will do so only if the shares are
registered under the Securities Act of 1933 and any applicable state securities
law unless, in the opinion of counsel to PHOBOS, such registration is not
required. Such representation and agreement shall be in a form reasonably
satisfactory to PHOBOS.
SECTION 11. MISCELLANEOUS PROVISIONS
11.1 Notice. Any notice or other communication required or
permitted to be given under this agreement shall be in writing and shall be
mailed by certified mail, return receipt requested, postage prepaid, addressed
to the parties at the following addresses:
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All notices and other communications shall be deemed to be given at the
expiration of three days after the date of mailing. The address of a party to
which notices or other communications shall be mailed may be changed from time
to time by giving written notice to the other party.
11.2 Litigation Expense. In the event of a default under
this agreement, the defaulting party shall reimburse the nondefaulting party or
parties for all costs and expenses reasonably incurred by the non-defaulting
party or parties in connection with the default, including without limitation
attorney's fees. Additionally, in the event a suit or action is filed to enforce
this agreement or with respect to this agreement, the prevailing party or
parties shall be reimbursed by the other party for all costs and expenses
incurred in connection with the suit or action, including without limitation
reasonable attorney's fees at the trial level and on appeal.
11.3 Waiver. No waiver of any provision of this agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
11.4 Applicable Law. This agreement shall be governed by and
shall be construed in accordance with the laws of the state of Utah.
11.5 Entire Agreement. This agreement constitutes the entire
agreement between the parties pertaining to its subject matter, and it
supersedes alt prior contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by all parties.
PHOBOS CORPORATION EMPLOYEE:
By:
Title:
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ACKNOWLEDGEMENT
In order to induce PHOBOS CORPORATION a Utah corporation ("PHOBOS") to
issue to the undersigned employee ____________________ shares of its common
stock (Shares) in consideration for services that have been provided and are to
be provided by the undersigned to PHOBOS, the undersigned:
1. Represents and warrants that the undersigned is acquiring the
Shares for investment and not with a view to distribution.
2. Acknowledges that the undersigned understands that the Shares have
not been registered under the Securities Act of 1933 in reliance upon an
exemption from registration. The undersigned also understands that the Shares
must be held indefinitely, unless they are later registered under the Securities
Act of 1933 or unless an exemption from registration is otherwise available, and
that PHOBOS has no obligation to register the Shares. The undersigned agrees
that the Shares will not be offered, sold, transferred, pledged, or otherwise
disposed of without registration under the Securities Act of 1933 and applicable
state securities laws or an opinion of counsel acceptable to PHOBOS that such
registration is not required.
3. Acknowledges that the undersigned understands that the fair market
value of the Shares represents compensation income to him or her for purposes of
federal, state, and local income taxation and that the undersigned agrees to
reimburse PHOBOS, upon request, for any income and employment withholding taxes
that PHOBOS is required to pay with respect to such compensation income.
Date:
EMPLOYEE:
