STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the 1st day of September, 1999 (the "Grant
Date"), between DME Interactive Holdings, INC., a Delaware corporation (the
"Company"), and Xxxxxxxx XxXxxxx Packard (the "Optionee").
WITNESSETH:
WHEREAS, Optionee will be serving as Senior Vice President of
Internet Services of the Company pursuant to an Employment Agreement dated an
even date herewith (the "Employment Agreement") and, in connection therewith,
the Board of Directors of the Company desires to grant Optionee a stock option
as an inducement to the Optionee's accepting the Company's offer of employment;
NOW, THEREFORE, in consideration of the premises, and of the mutual
agreements hereinafter set forth, it is covenanted and agreed as follows:
1. Grant of Option.
1.1 The Company hereby grants to the Optionee the right and option
(the "Option") to purchase all or any part of an aggregate of Sixty Thousand
(60,000) whole shares of the Common Stock of the Company, (the "Shares") subject
to, and in accordance with, the terms and conditions set forth in this
Agreement. The Shares to be delivered upon exercise of the Option may be shares
of the Company's Common Stock held by the Company as treasury stock or newly
issued shares.
1.2 The Option is not intended to qualify as an Incentive Stock
Option within the meaning of Section 422A of Internal Revenue Code of 1990 (the
"Code").
2. Exercise Price
The price at which the Optionee shall be entitled to purchase Shares
upon the exercise of the Option shall be $2.00 per Share (the "Exercise Price").
3. Term of Option.
The Option shall be exercisable to the extent and in the manner
provided herein (a) for a period of ten (10) years from the Grant Date, or (b)
until the date on which the Optionee is terminated for cause or (c) until the
date which is ninety (90) days after the Optionee voluntarily terminates her
employment or the Company terminates Optionee's employment without cause,
whichever is earlier (the "Exercise Term").
4. Exercise of Option
4.1 Subject to the provisions hereof, the Optionee may exercise the
Option in whole or in part at any time upon surrender of the Option to the
Company during normal business hours on any business day at the Company's
principal executive offices, and upon (i) payment to the Company in cash, by
certified or official bank check or by wire transfer for the account of the
Company of the Exercise Price for the Shares specified by the Optionee in
writing to the Company or (ii) delivery to the Company of a written notice of an
election to effect a "Cashless Exercise" (as defined below) for the Shares
specified by the Optionee in writing to the Company. The Exercise Price shall,
if paid in cash or by certified check, be payable in lawful money of the United
States of America.
4.2 To effect a Cashless Exercise, the Optionee shall submit to the
Company written notice of her intention to do so, including a calculation of the
number of Shares to be issued upon such exercise in accordance with the terms
hereof. In the event of a Cashless Exercise, in lieu of paying the Exercise
Price in cash, the Optionee shall surrender this Option for that number of
Shares determined by multiplying the number of Shares to which she would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock. For this purpose, "Market Price" shall
be the closing price per share of the Common Stock on the trading day first
preceding the date the Optionee submits written notice of her intention to
effect a Cashless Exercise.
5. Delivery of Shares.
5.1 Upon receipt of notice of exercise and the Exercise Price for
the Shares in respect of which the Option is being exercised (or the written
notice of a Cashless Exercise), the Company shall take appropriate action to
effect the issuance and delivery to the Optionee of the number of Shares as to
which such exercise was effective.
5.2 The Optionee shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any Shares subject to the Option
until (i) the Option shall have been exercised pursuant to the terms of this
Agreement and the Optionee shall have paid the full Exercise Price for the
number of Shares in respect of which the Option was exercised (or delivered the
written notice of a Cashless Exercise), (ii) the Company has complied, in its
discretion, with any listing, registration or qualification requirement of any
securities exchange or the National Association of Securities Dealers, Inc., as
the case may be, or under any state or federal law (including obtaining from
Optionee any necessary investment representations concerning the Shares), (iii)
the Optionee's name shall have been entered as a stockholder of record on the
books of the Company, and (iv) the Company shall have issued and delivered the
Shares in certificate form to the Optionee, whereupon the Optionee shall have
full voting and other ownership rights with respect to such shares.
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6. No Right to Employment; Termination of Employment.
6.1 Nothing in this Agreement shall be interpreted or construed to
confer upon the Optionee any right to employment or retention by the Company in
any capacity.
6.2 If Optionee's employment by the Company shall be terminated (i)
on account of death or disability, or (ii) by the Optionee for or the Company
for any reason other than for cause, then the Option may be exercised by
Optionee (or Optionee's representative or heirs if Optionee has died), to the
extent Optionee was entitled to exercise it at the time of such death or
termination of employment at any time within ninety (90) days after such death
or termination. Any unexercised portion of the Option shall expire at the end of
such ninety (90) days. In the event Optionee's employment is terminated for
cause, the option hereby granted shall immediately terminate.
7. Adjustments.
7.1 Subject and pursuant to the provisions of this Section 7, the
Exercise Price and number of Shares subject to this Option shall be subject to
adjustment from time to time as set forth hereinafter.
7.2 If the Company shall at any time or from time to time while the
Option is outstanding, pay a dividend or make a distribution on its Common Stock
in shares, subdivide its outstanding shares into a greater number of shares or
combine its outstanding shares into a smaller number of shares or issue by
reclassification of its outstanding shares any shares of its capital stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then the number of
Shares purchasable upon exercise of the Option and the Exercise Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Optionee shall be entitled to
receive the number of Shares or other capital stock which the Optionee would
have received if the Option had been exercised immediately prior to such event.
Such adjustment shall be made successively whenever any event listed above shall
occur.
7.3 If any capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another
corporation, or sale, transfer or other disposition of all or substantially all
of the Company's properties to another corporation shall be effected, then, as a
condition of such reorganization, reclassification, consolidation, merger, sale,
transfer or other disposition, lawful and adequate provision shall be made
whereby the Optionee shall thereafter have the right to purchase and receive
upon the basis and upon the terms and conditions herein specified and in lieu of
the Shares immediately theretofore issuable upon exercise of the Option, such
shares of stock, securities or properties as may be issuable or payable with
respect to or in exchange for a number of outstanding Shares equal to the number
of Shares immediately theretofore issuable upon exercise of the Option, had such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition not taken place, and in any such case appropriate provision shall
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be made with respect to the rights and interests of the Optionee to the end that
the provisions hereof (including, without limitation, provision for adjustment
of the Exercise Price) shall thereafter be applicable, as nearly equivalent as
may be practicable in relation to any shares of stock, securities or properties
thereafter deliverable upon the exercise thereof. The Company shall not effect
any such consolidation, merger, sale, transfer or other disposition unless prior
to or simultaneously with the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger, or the
corporation purchasing or otherwise acquiring such assets or other appropriate
corporation or entity shall assume, by written instrument executed and delivered
to the Company, the obligation to deliver to the Optionee such shares of stock,
securities or assets as, in accordance with the foregoing provisions, the
Optionee may be entitled to purchase and the other obligations under this
Option. These provisions shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
7.4 In case the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 7.1 above), or
subscription rights or warrants, the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding multiplied by
the Market Price per Share (as determined pursuant to Section 4.3 above), less
the fair market value (as determined by the Company's Board of Directors in good
faith) of said assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, and the denominator of which shall be the total
number of shares of Common Stock outstanding multiplied by such current Market
Price per share. Such adjustment shall be made successively whenever such a
record date is fixed. An adjustment shall become effective immediately after the
record date in the case of each dividend or distribution and immediately after
the effective date of each other event which requires an adjustment.
7.5 In the event that, as a result of an adjustment made pursuant to
Section 7.2, the Optionee shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, the number of such other
shares so receivable upon exercise of the Option shall be subject thereafter to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Shares covered by this Option.
7.6 Shares of Common Stock owned by or held for the account of the
Company or any majority-owned subsidiary shall not be deemed outstanding for the
purpose of any computation under this Agreement.
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8. Amendment.
This Agreement may be amended or terminated and any terms or
condition hereof may be waived in accordance with a written instrument executed
on behalf of each party hereto.
9. Notice.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered in person, by facsimile transmission or by registered or certified
mail (postage prepaid, return receipt requested) to the parties at the
respective addresses last given by each party to the other.
10. Validity.
The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
11. Headings.
The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
12. Counterparts.
This Agreement may be executed by the parties hereto in two or
more counterparts, each of which shall be deemed to be an original instrument,
but all of which together shall be deemed to be one and the same instrument.
13. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of the laws thereof.
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14. Resolution of Disputes.
Any dispute or disagreement which may arise under, or as a
result of, or in any way relate to, the interpretation, construction or
application of this Agreement shall be determined by the Board of Directors of
the Company. Any such determination shall be final, binding and conclusive on
the Optionee and the Company for all purposes.
DME INTERACTIVE HOLDINGS, INC.
By: /s/ Darien Dash
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Name: Darien Dash
Title: President
XXXXXXXX XXXXXXX PACKARD
/s/ Xxxxxxxx XxXxxxx Packard
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