THIS OPTION AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
CRESCENT COMMUNICATIONS, INC. NO. E-03-23
STOCK OPTION AGREEMENT
Date of Grant: October 9, 2003
THIS GRANT, dated as of the date of grant first stated above (the "Date of
Grant"), is delivered by Crescent Communications, Inc. (the "Company") to Xxxx
Xxxxxxxx (the "Grantee"), who is an employee or consultant of the Company or one
of its subsidiaries (the Company is sometimes referred to herein as the
"Employer").
WHEREAS, the Board of Directors of the Company (the "Board") on October 9,
2003 granted to Grantee the right to purchase shares of the Common Stock of the
Company, par value $0.001 per share (the "Stock"), in accordance with the terms
and provisions hereof.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. GRANT OF OPTION.
Subject to the terms and conditions hereinafter set forth, the Company,
with the approval and at the direction of the Board, hereby grants to the
Grantee, as of the Date of Grant, an option to purchase up to 30,000 shares
of Stock at a price of $0.20 PER SHARE. Such option is hereinafter referred
to as the "Option" and the shares of stock purchasable upon exercise of the
Option are hereinafter sometimes referred to as the "Option Shares." The
Option Shares to be issued pursuant to this Stock Option Agreement shall be
restricted securities.
2. VESTING.
This Option shall vest as to 100% of the total number of shares covered by
the Option on October 9, 2004, and is otherwise governed by and subject to
the Company's Stock Option Plan that is in effect on the vesting date.
3. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with respect thereto, to the
extent such Option has vested, shall terminate and become null and
void after the expiration of five (5) years from the Date of Grant
(the "Option Term"). To the extent that the Option has not vested in
accordance with Section 2 above, then the non-vested portion of the
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Option shall terminate and become null and void upon the termination
of the Grantee as an employee, officer or director of the Company.
(b) In the event of the death of the Grantee, the Option may be exercised
by the Grantee's legal representative(s), but only to the extent that
the Option would otherwise have been exercisable by the Grantee.
(c) In the event the Board (or Committee, if any) finds by a majority vote
after full consideration of the facts that Grantee, before or after
termination of his employment with the Company or an Affiliate for any
reason (i) committed or engaged in fraud, embezzlement, theft,
commission of a felony, or proven dishonesty in the course of his
employment by the Company or any subsidiary or affiliate of the
Company, which conduct damaged the Company or subsidiary or affiliate,
or disclosed trade secrets of the Company its subsidiary or its
affiliate, or (ii) participated, engaged in or had a material,
financial or other interest, whether as an employee, officer,
director, consultant, contractor, shareholder, owner, or otherwise, in
any commercial endeavor anywhere which is competitive with the
business of the Company or a subsidiary or Affiliate without the
written consent of the Company, the Grantee shall forfeit all
outstanding Options. Clause (ii) shall not be deemed to have been
violated solely by reason of the Grantee's ownership of stock or
securities of any publicly owned corporation, if that ownership does
not result in effective control of the corporation.
The decision of the Board (or Committee, if any) as to the cause of
the Grantee's discharge, the damage done to the Company or a
subsidiary or an affiliate, and the extent of the Grantee's
competitive activity shall be final. No decision of the Board (or
Committee, if any) however, shall affect the finality of the discharge
of the Grantee by the Company.
4. EXERCISE OF OPTIONS.
(a) The Grantee may exercise the Option with respect to all or any part of
the number of Option Shares then exercisable hereunder by giving the
Secretary of the Company written notice of intent to exercise. The
notice of exercise shall specify the number of Option Shares as to
which the Option is to be exercised and the date of exercise thereof,
which date shall be at least five days after the giving of such notice
unless an earlier time shall have been mutually agreed upon.
Notwithstanding the foregoing, an Option granted under this Agreement
may be exercised in increments of not less than 10% of the full number
of Shares as to which it can be exercised. A partial exercise of an
Option will not affect the Grantee's right to exercise the Option from
time to time in accordance with this Agreement as to the remaining
Shares subject to the Option.
(b) Full payment (in U.S. dollars) by the Grantee of the option price for
the Option Shares purchased shall be made on or before the exercise
date specified in the notice of exercise in cash, or certified or
cashier's check or money order, or, with the prior
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written consent of the Board, in whole or in part through the
surrender of previously acquired shares of Stock at their fair market
value on the exercise date.
On the exercise date specified in the Grantee's notice or as soon
thereafter as is practicable, but not to exceed ten (10) business
days, the Company shall cause to be delivered to the Grantee, a
certificate or certificates for the Option Shares then being purchased
(out of theretofore unissued Stock or reacquired Stock, as the Company
may elect) upon full payment for such Option Shares.
(c) If the Grantee fails to pay for any of the Option Shares specified in
such notice, the Grantee's right to purchase such Option Shares may be
terminated by the Company. The date specified in the Grantee's notice
as the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such date.
(d) Notwithstanding any of the other provisions hereof, Grantee agrees
that he will not exercise this Option and that the Company will not be
obligated to issue any Option Shares pursuant to this Stock Option
Agreement, if the exercise of the Option or the issuance of such
Option Shares would constitute a violation by the Grantee or by the
Company of any provision of any law or regulation of any governmental
authority or national securities exchanges. Upon the acquisition of
any Option Shares pursuant to the exercise of the Option herein
granted, Grantee will enter into such written representations,
warranties and agreements as the Company may reasonably request in
order to comply with applicable securities laws with this Stock Option
Agreement.
5. ADJUSTMENT OF AND CHANGES IN STOCK OF THE COMPANY.
In the event of a reorganization, recapitalization, change of shares, stock
split, spin-off, stock dividend, reclassification, subdivision or
combination of shares, merger, consolidation, rights offering, or any other
change in the corporate structure or shares of capital stock of the
Company, the Board shall make such adjustment in the number and kind of
shares of Stock subject to the Option or in the option price; provided,
however, that no such adjustment shall give the Grantee any additional
benefits under the Option.
6. FAIR MARKET VALUE.
As used herein, the "fair market value" of a share of Stock shall be the
closing price per share of Stock on the PINK SHEETS, OTCBB, the BBXCHANGE,
NASDAQ, the NYSE, the Amex, the composite tape or other recognized market
source, as determine by the Board, on the applicable date of reference
hereunder, or if there is no sale on such date, then the closing price on
the last previous day on which a sale is reported.
7. NO RIGHTS OF STOCKHOLDERS.
Neither the Grantee nor any personal representative shall be, or shall have
any of the rights and privileges of, a stockholder of the Company with
respect to any shares of Stock purchasable or issuable upon the exercise of
the Option, in whole or in part, prior to the date of exercise of the
Option.
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8. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option hereunder shall be exercisable
only by the Grantee or any guardian or legal representative of the Grantee,
and the Option shall not be transferable except, (i) in case of the death
of the Grantee, by will or the laws of descent and distribution, and (ii)
to a child, grandchild or stepchild of the Grantee or to a trust or
partnership created by the Grantee, who, in each case, will be subject to
all of the provisions hereof, nor shall the Option be subject to
attachment, execution or other similar process. In the event of (a) any
attempt by the Grantee to alienate, assign, pledge, hypothecate or
otherwise dispose of the Option, except as provided for herein, or (b) me
levy of any attachment, execution or similar process upon the rights or
interest hereby conferred, the Company may terminate the Option by notice
to the Grantee and it shall thereupon become null and void and of no value
to any such party.
9. DISPUTES.
As a condition of the granting of this Option, the Grantee and his heirs
and successors agree that any dispute or disagreement which may arise
hereunder shall be determined by the Board (or Committee, if any) in its
sole discretion and judgment, and that any such determination and any
interpretation by the Board (or Committee, if any) of the terms of this
Option shall be final and shall be binding and conclusive, for all purposes
upon the Company, the Grantee, his heirs and successors.
10. NOTICE.
Any notice to the Company provided for in this instrument shall be
addressed to it in care of its Secretary at its executive offices at
Crescent Communications, Inc., and any notice to the Grantee shall be
addressed to the Grantee at the current address shown on the records of the
Company. Any notice shall be deemed to be duly given if and when properly
addressed and posted by registered or certified mail, postage prepaid.
11. GOVERNING LAW.
The validity, construction, interpretation and effect of this instrument
shall exclusively be governed by and determined in accordance with the law
of the State of Texas, except to the extent preempted by federal law, which
shall to the extent govern.
12. CAPITALIZED TERMS
Capitalized terms used herein shall having the meanings to be set forth in
The Crescent Communications, Inc. 2002 Stock and Stock Option Plan.
IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute and attest to this Stock Option Agreement, and to apply the corporate
seal hereto, and the Grantee has placed his or her signature hereon, effective
as of the Date of Grant.
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Crescent Communications, Inc.
By:
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Xxxxxxx Xxxxxxxxx, Chief Executive Officer
Grantee:
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Xxxx Xxxxxxxx
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