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EXHIBIT 4.20
STATE OF ALABAMA )
COUNTY OF MADISON )
STOCK OPTION AGREEMENT
(NQO)
THIS STOCK OPTION AGREEMENT (this "Agreement"), made and entered into
as of the 1st day of February, 1999 (the "Grant Date"), by and between REVNET
SYSTEMS, INC., a corporation organized and existing under the laws of the State
of Alabama (the "Corporation"), and Xxxxxx Xxxxxx ("Optionee"), as follows:
W I T N E S S E T H:
WHEREAS, the Corporation has reserved 1,185,000 shares of the Voting
Common Stock of the Corporation, par value $0.001 per share (the "Reserved
Shares") to be purchased by certain key personnel of Corporation; and
WHEREAS, the Corporation desires to grant the Optionee options to
purchase a portion of the Reserved Shares;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree specifically as follows:
1. Grant of Stock Option. Subject to the terms and conditions
contained herein, the Corporation hereby grants Optionee the right, privilege
and option to purchase up to 22,000 of the Reserved Shares, at an exercise price
of Forty Cents ($0.40) per share (the "Option Shares"). The grant of this option
shall be effective as of the Grant Date; provided, however, that the option
granted herein shall vest in the Optionee as provided in Section 2 hereof. The
approximate fair market value of the shares of the Reserved Shares is $1.50 per
shares as of the Grant Date. This option is hereby designated a "nonqualified
option".
2. Vesting of the Option Shares. The option to purchase the Option
Shares shall vest in the Optionee in accordance with the following:
(a) The option granted herein shall vest as to 50% of the Option
Shares on August 1, 2000; and
(b) The option granted herein shall vest as to 1/24th of the
Option Shares on the first day of each month beginning on September 1, 2000, and
continuing thereafter until all of the Option Shares are fully vested.
3. Option Term. The options granted herein shall terminate on the
earliest to occur of any of the following events (the "Option Expiration Date"):
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3.1 Five (5) years from the Grant Date; or
3.2 Mutual agreement of the Corporation and the Optionee.
4. Exercise of Options.
4.1 No portion of the option granted hereunder may be exercised
for a fraction of a share. The option granted hereunder shall be deemed to be
exercised when written notice of such exercise has been given to the Corporation
to the attention of the Secretary of the Corporation accompanied by full payment
of the exercise price and by such other documents as the Board of Directors of
the Corporation (the "Board") may reasonably request. Until the issuance (as
evidenced by the appropriate entry on the books of the Corporation or of a duly
authorized transfer agent of the Corporation) of the stock certificate
evidencing such Option Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Option Shares,
notwithstanding the exercise of the Option. The Corporation shall issue (or
cause to be issued) such stock certificate promptly upon exercise of any portion
of the option granted hereunder. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 5 hereof. Exercise of a portion of the
option granted hereunder in any manner shall result in a decrease in the number
of Option Shares which thereafter may be available by the number of Shares as to
which the Option is exercised.
4.2 In the event of termination of an Optionee as an employee or
consultant with the Corporation (but not in the event of an Optionee's change of
status from employee to consultant or from consultant to employee), such
Optionee may, but only within such period of time as is determined by the Board,
of at least thirty (30) days (but in no event later than the Option Expiration
Date), exercise the option granted hereunder to the extent that Optionee was
entitled to exercise it under Section 2 hereof at the date of such termination,
or to such greater extent as may be determined by the Board. If the Optionee
does not exercise such option to the extent so entitled within the time
specified herein, the option shall terminate.
4.3 In the event of termination of an Optionee's status as an
employee or consultant as a result of the Optionee's "disability," as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, the Optionee
may exercise the option granted hereunder within twelve (12) months from the
date of the Optionee's termination (but in no event shall the Optionee be
entitled to exercise the option after the Option Expiration Date) to the extent
that Optionee was entitled to exercise it under Section 2 on the date of
termination.
4.4 In the event of the death of the Optionee, the option granted
hereunder may be exercised at any time within twelve (12) months following the
date of death (but in no event later may the option be exercised after the
Option Expiration Date), by the Optionee's estate or by a person who acquired
the right to exercise the Option by bequest or inheritance, but only to the
extent that the Optionee was entitled to exercise the Option in accordance with
Section 2 hereof on the date of death.
5. Changes in Capitalization. Subject to any required action by the
shareholders of the Corporation, the number of shares of Option Shares covered
by this Agreement, as well as the price
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per share of Option Shares, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of voting common stock of the
Corporation resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the voting common stock of the Corporation,
or any other increase or decrease in the number of issued shares of voting
common stock of the Corporation effected without receipt of consideration by the
Corporation; provided, however, that conversion of any convertible securities of
the Corporation shall not be deemed to have been "effected without receipt of
consideration". Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Corporation of shares of stock of any class,
or securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares of the Option Shares.
6. Corporate Transactions. In the event of a merger of the
Corporation with or into another corporation after October 1, 1999, or the sale
of substantially all of the assets of the Corporation after October 1, 1999,
this Agreement shall be assumed or an equivalent option substituted by the
successor corporation or a parent or subsidiary of the successor corporation. In
the event that the successor corporation refuses to assume or substitute for the
option granted hereunder, the Optionee shall fully vest in and have the right to
exercise the option as to all of the Option Shares, including Option Shares as
to which it would not otherwise be vested or exercisable. If this option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Board shall notify the Optionee in writing or
electronically that the option shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the option shall
terminate upon the expiration of such period. For the purposes of this Section,
the option shall be considered assumed if, following the merger or sale of
assets, the option confers the right to purchase or receive, for each Option
Share immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of common stock of the Corporation for each share of
the common stock of the Corporation held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
the common stock of the Corporation); provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its parent, the Board may, with the
consent of the successor corporation, provide for the consideration to be
received upon the exercise of the option, for each share of Option Shares, to be
solely common stock of the successor corporation or its parent equal in fair
market value to the per share consideration received by holders of common stock
of the Corporation in the merger or sale of assets.
7. Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Corporation, the Board shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the extent
it has not been previously exercised, the Option will terminate immediately
prior to the consummation of such proposed action.
8. Insufficient Authorized Shares. In the event the option granted
herein is exercised, in whole or in part, at a time when insufficient authorized
capital shares of the Corporation are available for issuance, the Corporation
agrees to take all necessary and appropriate steps to provide sufficient
authorized capital shares to be issued pursuant to this option.
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9. Restrictions on Transfer of Shares. Except for a transfer upon the
death of the Optionee, the Corporation and Optionee agree that this is a
personal, non-transferable and nonassignable option.
10. Payment of Purchase Price. Except as provided below, payment in
full, in cash, shall be made for all stock purchased at the time written notice
of exercise of an option is given to the Corporation, and proceeds of any
payment shall constitute general funds of the Corporation.
11. Representations. The Optionee represents and warrants to the
Corporation that the following is true:
11.1 The Optionee has sufficient knowledge, background and
experience in financial and business matters to evaluate the merits and risks of
an investment in the Corporation.
11.2 The Optionee is aware of the great risks involved in an
investment in the Corporation.
11.3 The Optionee acknowledges that he is aware of the fact
that the receipt and exercise of the option granted hereunder may have effects
on the Optionee's personal income tax situation and that he has been advised to
consult with a qualified tax advisor regarding the possible implications.
11.4 The Optionee is aware of the fact that the common stock
of the Corporation has not been registered, nor is registration contemplated
under the Securities Act of 1933, as amended, or under the securities laws of
any state. Accordingly, such stock must be held indefinitely unless it is
subsequently registered under said securities laws or unless, in the opinion of
counsel for the Corporation, a sale or transfer of such stock may be made
without registration thereunder.
11.5 The Optionee agrees that any stock purchased pursuant to
the options shall be purchased solely for the investment of the Optionee and not
for resale.
12. Restrictive Legend. Any certificate evidencing common stock of the
Corporation purchased under the options granted herein shall bear the
restrictive legend normally attached to stock of the Corporation and the records
of the Corporation will indicate the normal restrictions on transferability and
such restriction shall be the same as on all other stock of the Optionee.
13. Governing Law. This Agreement shall be interpreted and construed
according to and governed by the laws of the State of Alabama.
14. Entire Agreement. This Agreement contains the entire agreement of
the parties and it supercedes all previous agreements and communications,
written or oral, regarding the matters contained in these agreements. It may not
be changed orally, but may be changed only by an agreement
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in writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
15. Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision of this Agreement.
16. Authority. The provisions of this Agreement required to be
approved by the Board have been so approved and authorized.
17. Benefit. This Agreement shall bind all parties, their respective
heirs, executors, administrators and assigns, but nothing contained herein shall
be construed as an authorization or right of any party to assign his or her
rights or obligations hereunder except that upon the death of the Optionee the
estate of the Optionee may exercise the Optionee's rights hereunder in
accordance with Section 3.3 hereof. The Optionee shall have no right to assign
any option herein granted to him and any such attempted assignment shall be
ineffective.
18. Attorneys Fees. If any legal proceeding, including, but not
limited to, any arbitration brought pursuant to Section 19 hereof, is brought by
either party to this Agreement against the other party to enforce any provision
of this Agreement, then the prevailing party shall be entitled to receive from
the other party reimbursement for its reasonable attorneys' fee incurred in such
proceeding.
19. Arbitration. Except as otherwise specifically provided herein, it
is agreed by the parties hereto that any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled in Huntsville,
Alabama, by binding arbitration in accordance with the rules of the American
Arbitration Association, and judgment upon the award rendered may be entered in
any court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed under seal on the day and year first above written.
REVNET SYSTEMS, INC.
By /s/ Xxxxxx Xxxxxxxx
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ATTEST: Its: CEO
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Its
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(Corporation)
/s/ Xxxxxx Xxxxxx (SEAL)
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WITNESS: Xxxxxx Xxxxxx
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(Optionee)
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