EXHIBIT 99.4
STATE OF ALABAMA )
MADISON COUNTY )
STOCK OPTION AGREEMENT
(NQO)
THIS STOCK OPTION AGREEMENT (this "Agreement"), made and entered into
as of the 1st day of January, 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 Xxxxxxx Xxxxxxxxx (the "Optionee"), as
follows:
WITNESSETH:
WHEREAS, the Corporation desires to grant to the Optionee options to
purchase shares of the Common Stock of the Corporation;
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 100,000 shares of the Common Stock of the
Corporation, par value $0.01 per share, at a purchase price of One Dollar
($1.50) per share (the "Option Shares"). The grant of this option shall be
effective as the Grant Date; provided, however, that the option granted herein
shall vest in the Optionee as providing in Section 2 hereof. 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 based on the gross revenue of the
Corporation during the period of April 1, 1997 till the Vesting Expiration Date
(as hereinafter defined) (the "Vesting Period"). For each $1,000,000 of
cumulative gross revenue of the Corporation during the Vesting Period, 20% of
the option granted herein shall vest. There shall be no fractional vesting of
options. Notwithstanding anything herein to the contrary, if the Corporation
shall sell substantially all of its assets or merge with another company or
substantially all of the stock of the Corporation is sold to a third party,
then the option grated herein shall fully vest immediately. The term "Vesting
Expiration Date" shall mean the earlier of:
(a) June 30, 2000;
(b) the date of death of the Optionee; or
(c) the resignation or termination of employment of the
Optionee with the Corporation.
3. Option Term. The duration of the option granted under this
Agreement shall specifically terminate upon the earlier of the following events
(the "Option Expiration Date"):
1.
3.1 Five (5) years from the Grant Date;
3.2 Mutual agreement of the Corporation and the
Optionee;
3.3 Six months after the death of the Optionee; or
3.4 Thirty (30) days after the resignation or
termination of the employment of the Optionee with the Corporation.
4. Exercise of Options. The option granted hereunder may be
exercised in part. The option may be exercised only by Optionee (or the Estate
of the Optionee during the period allowed by Section 3.3 of this Agreement)
anytime after the Grant Date and prior to the Option Expiration Date. In no
event is any portion of the option to be exercisable after the Option
Expiration Date.
5. Manner of Exercise of Options. To exercise the options
granted herein, the Optionee shall give written notice to the Corporation at
its principal executive office, to the attention of the President of the
Corporation accompanied by payment of the exercise price and by such other
documents as the Board of Directors of the Corporation (the "Board") may
request. The date the Corporation receives written notice of an exercise
hereunder accompanied by payment of the exercise price and all such other
documents as may be reasonably required by the Corporation will be considered
the date the option was exercised. Promptly after receipt of written notice of
exercise of an option, the Corporation shall, without stock issue or transfer
taxes to the Optionee or any other person entitled to exercise the option,
deliver to the Optionee or such other person a certificate or certificates for
the requisite number of Option Shares. An Optionee or transferee of an option
hereunder shall not have any privileges as a stockholder in the Corporation
with respect to any stock covered by this option until the date of issuance of
a stock certificate for such shares.
6. Changes in Capital Structure. If the common stock of the
Corporation is changed by reason of a stock split, reverse stock split, stock
dividend, or recapitalization, or converted into or exchanged for other
securities as a result of a merger, consolidation, or reorganization,
appropriate adjustments shall be made in (A) the number and class of shares of
stock subject to this option, and (B) the exercise price of this option;
provided, however, that the Corporation shall not be required to issue
fractional shares as a result of any such adjustment. Each such adjustment
shall be determined by the Board, in its sole discretion, which determination
shall be final and binding on all persons. Notwithstanding anything herein to
the contrary, there shall be no adjustment to the number of options merely
because the Corporation issues additional shares of it stock.
7. Corporate Transactions. New option rights may be substituted
for the options granted herein, or the Corporations obligations as to an
outstanding option may be assumed, by a successor corporation or an affiliate
thereof, in connection with any merger, consolidation, acquisition, separation,
reorganization, dissolution, liquidation, sale or like occurrence ("Corporate
Transaction") in which the Corporation is involved and which the Board
determines, in its absolute discretion, would materially alter the structure of
the Corporation or its ownership. Notwithstanding the foregoing, if such an
event occurs and if such successor corporation, or an
2.
affiliate thereof, does not substitute new options rights for, and
substantially equivalent to, the outstanding options granted hereunder, or
assume the outstanding options granted hereunder, or if there is no successor
corporation, of if the Board determines, in its sole discretion, that the
outstanding options should not then continue to be outstanding, the Board may
upon ten days' prior written notice to the Optionee in its absolute discretion
(A) shorten the period during which this option is exercisable, (provided it
remains exercisable, to the extent otherwise exercisable, for at least ten (10)
days after the date the notice is given), or (B) cancel the option upon payment
to the Optionee in cash, with respect to the option to the extent then
exercisable, of an amount which, in the absolute discretion of the Board, is
determined to be equivalent to any excess of the fair market value (at the
effective time of the Corporate Transaction) of the consideration that the
Optionee would have received if the option had been exercised before the
effective time, over the exercise price of the option; provided, however, if
there is a successor corporation and replacement options are not granted by the
successor Corporation, all outstanding options shall become exercisable prior
to the consummation of the transaction such that the Optionee shall have not
less than ten (10) days to exercise his option and become a stockholder of
record entitled to receive the consideration paid to the other stockholders of
the Corporation. If the Optionee fails to exercise his option within any
exercise period described in this paragraph and the Corporate Transaction is
consummated, his option shall no longer be exercisable and any unexercised
option shall be cancelled and terminated. Notwithstanding anything herein to
the contrary, nothing shall extend an Optionee's right to exercise the option
after the Option Expiration Date. The actions described in this Section may be
taken without regard to any resulting tax consequences to the purchaser.
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.
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 provide 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. Representatives. 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.
3.
11.2 The Optionee is aware of the great risks involved in
an investment of the Corporation, such risks include, but are not limited to,
the lack of operating history, the Corporation's competition, and the
inadequacy of the Corporation's working capital.
11.3 The Optionee is aware of the current negotiations by
the Corporation with venture capital firms and investment banking firms and
acknowledges that there is no assurance the Corporation will be able to secure
funding from a venture capital firm.
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. The Optionee is further aware that
he may not be able to make any sales or transfers of common stock of the
Corporation and that any transfer will require the prior approval of the
Corporation and that such approval will be in the sole discretion of the
Corporation.
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.
11.6 The Optionee represents that he is an employee of
the Corporation.
12. Restrictive Legend. Any certificate evidencing common stock
of the Corporation purchased under the options granted herein shall bear a
restrictive legend and the records of the Corporation will indicate
restrictions on transferability and sale.
13. Governing Law. This Agreement shall be interpreted and
construed according to an governed by the laws of the State of Alabama.
14. Entire Agreement. This Instrument contains the entire
Agreement of the parties. It may not be changed orally, but may be changed only
by an Agreement 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
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
is or her rights or obligations hereunder. The Optionee shall have no right to
assign any option herein granted to him and any such attempted assignment shall
be ineffective.
18. Termination of Agreement. This Agreement shall terminate:
4.
18.1 Upon the Option Expiration Date;
18.2 Upon the dissolution or bankruptcy of the
Corporation; or
18.3 Upon the Corporation's final payment of the amount
as provided in Section 7(B) hereof.
19. Arbitration. Any controversy or claim arising out of or
relating to this Agreement or the Breach thereof shall be settled in
Huntsville, Alabama, by 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
--------------------------------
Its: President
ATTEST:
- -----------------------------------
Its: Chairman
(CORPORATION)
/s/ Xxxxxxx Xxxxxxxxx (SEAL)
--------------------------------
Xxxxxxx Xxxxxxxxx
WITNESS:
- ----------------------------------- (OPTIONEE)
5.
