STOCK OPTION AGREEMENT
AGREEMENT, made as of December 1, 1998, by and between PRE-CELL
SOLUTIONS, INC., a Colorado corporation (the "Company"), and Xxxxxxx X.
XxXxxxxxxx (the "Employee").
WHEREAS, on December 1, 1998 (the "Grant Date"), the Board of Directors
authorized the employment of the Employee pursuant to the terms of an Employment
Agreement dated as of December 1, 1998, and the grant to the Employee of an
option (the "Option") to purchase an aggregate of 3,000,000 shares of the
authorized but unissued common stock of the Company, $.01 par value ("Common
Stock"), conditioned upon the Employee's acceptance thereof upon the terms and
conditions set forth in this Agreement; and
WHEREAS, the Employee desires to acquire the Option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Employee the
right and option ("Option") to purchase all or any part of an aggregate of
3,000,000 shares of Common Stock ("Option Shares") on the terms and conditions
set forth herein. The Option represented hereby is a non-qualified stock option
not intended to qualify under any section of the Internal Revenue Code of 1986,
as amended, and is not granted under any plan. Certain terms used herein,
however, are defined under the Plan.
2. Exercise Price. The exercise price ("Exercise Price") of the Option
shall be $0.04 per share.
3. Exercisability. This Option is exercisable, subject to the terms and
conditions of this Agreement, one year after the Grant Date. After the Option
vests, it shall remain exercisable for a period of five years from the date of
vesting, except as otherwise set forth in this Agreement (the "Exercise
Period").
4. Effect of Termination of Employment.
4.1 Termination Due to Death. If Employee's employment by the
Company terminates by reason of death, the Option shall become fully vested and
exercisable and may thereafter be exercised by the legal representative of the
estate or by the legatee of the Employee under the will of the Employee, for a
period of six months from the date of such death or until the expiration of the
Exercise Period, whichever period is shorter.
4.2 Termination Due to Disability. If Employee's employment by
the Company terminates by reason of Disability (as such term is defined under
the Plan), the Option shall become fully vested
and exercisable and may thereafter be exercised by the Employee for a period of
six months from the date of such termination or until the expiration of the
Exercise Period, whichever period is shorter.
4.3 Termination by the Company Without Cause and/or Due to
Retirement. If Employee's employment is terminated by the Company without cause
or due to Normal Retirement (as such term is defined under the Plan), then (i)
the portion of the Option which has vested by the date of termination of
employment may be exercised by the Employee until the expiration of the Exercise
Period and (ii) the portion of the Option that will vest within one year of the
date of termination of employment shall become fully vested and may be exercised
by the Employee until the expiration of the Exercise Period. The portion of the
Option not exercisable within one year of the date of termination of employment
shall immediately expire.
4.4 Other Termination.
(a) If Employee's employment is terminated for any
reason other than (i) death, (ii) Disability, (iii) Normal Retirement, or (iv)
without cause by the Company, the Option shall expire on the date of termination
of employment.
(b) The Board of Directors, in the event the
Employee's employment is terminated for cause, may require the Employee to
return to the Company the economic benefit of any Option Shares purchased
hereunder by the Employee within the six month period prior to the date of
termination. In such event, the Employee hereby agrees to remit to the Company,
in cash, an amount equal to the difference between the Fair Market Value (as
such term is defined under the Plan) of the Option Shares on the date of
termination (or the sales price of such Shares if the Option Shares were sold
during such six month period) and the Exercise Price of such Shares.
5. Withholding Tax. Not later than the date as of which an amount first
must be included in the gross income of the Employee for Federal income tax
purposes with respect to the Option, the Employee shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state and local taxes of any kind required by law to be withheld or
paid with respect to such amount ("Withholding Tax"). The obligations of the
Company under the Plan and pursuant to this Agreement shall be conditioned upon
such payment or arrangements with the Company and the Company shall, to the
extent permitted by law, have the right to deduct any Withholding Taxes from any
payment of any kind otherwise due to the Employee from the Company.
6. Adjustments. In the event of any change in the number of outstanding
shares of Common Stock of the Company occurring as the result of a stock split,
reverse stock split or stock dividend on the Common Stock, after the Grant Date,
the Company shall proportionately adjust the number of Option Shares and the
Exercise Price of the Option. Any right to acquire a fractional Option Share
resulting from adjustments will be rounded to the
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nearest whole Option Share. If the Company shall be the surviving corporation in
any merger, combination or consolidation, this Option shall pertain and apply to
the Option Shares to which the Employee is entitled hereunder, without
adjustment. In the event of a change in the par value of the shares of Common
Stock which are subject to this Option, this Option will be deemed to pertain to
the shares resulting from any such change. To the extent that the foregoing
adjustments relate to Common Stock, the adjustments will be made by the Board of
Directors whose determination will be final, binding and conclusive.
7. Method of Exercise.
7.1 Notice to the Company. The Option may be exercised in
whole or in part by written notice in the form attached hereto as Exhibit A
directed to the Company at its principal place of business accompanied by full
payment as hereinafter provided of the exercise price for the number of Option
Shares specified in the notice and of the Withholding Taxes, if any.
7.2 Delivery of Option Shares. The Company shall deliver a
certificate for the Option Shares to the Employee as soon as practicable after
payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Employee shall make cash
payments by wire transfer, certified or bank check or personal check, in each
case payable to the order of the Company; the Company shall not be required to
deliver certificates for Option Shares until the Company has confirmed the
receipt of good and available funds in payment of the purchase price thereof.
7.3.2 Stock Payment. The Board of Directors, in its
sole discretion, may allow Employee to use Common Stock of the Company owned by
him to make any required payments by delivery of stock certificates in
negotiable form which are effective to transfer good and valid title thereto to
the Company, free of any liens or encumbrances. Shares of Common Stock used for
this purpose shall be valued at the Fair Market Value. Notwithstanding the
foregoing, the Company shall have the right to reject payment in the form of
Common Stock if in the opinion of counsel for the Company, (i) it could result
in an event of "recapture" under Section 16(b) of the Securities Exchange Act of
1934; (ii) such shares of Common Stock may not be sold or transferred to the
Company; or (iii) such transfer could create legal difficulties for the Company.
8. Nonassignability. The Option shall not be assignable or
transferable, except by will or by the laws of descent and distribution in the
event of the death of the Employee. No transfer of the Option by the Employee by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof
and a copy of the will and/or such other evidence as
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the Company may deem necessary to establish the validity of the transfer and the
acceptance by the transferee or transferees of the terms and conditions of the
Option.
9. Accelerated Vesting and Exercisability. If (i) any person or entity
other than the Company and/or any officer, director or principal stockholder
(i.e., a holder [beneficially or of record] of more than ten percent of the
Company's voting stock) of the Company acquires securities of the Company (in
one or more transactions) having 25% or more of the total voting power of all
the Company's securities then outstanding and (ii) the Board of Directors of the
Company does not authorize or otherwise approve such acquisition, then the
vesting periods of the Option shall be accelerated and the Option shall
immediately and entirely vest. In such event, Employee shall have the immediate
right to purchase all the Option Shares, subject to the provisions of this
Agreement.
10. Company Representations. The Company hereby represents and warrants
to the Employee that:
(i) the Company, by appropriate and all required
action, is duly authorized to enter into this Agreement and consummate
all of the transactions contemplated hereunder; and
(ii) the Option Shares, when issued and delivered by
the Company to the Employee in accordance with the terms and conditions
hereof, will be duly and validly issued and fully paid and
non-assessable.
11. Employee Representations. The Employee hereby represents and
warrants to the Company that:
(i) he is acquiring the Option and shall acquire the
Option Shares for his own account and not with a view towards the
distribution thereof;
(ii) he has received a copy of all reports and
documents required to be filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended, within the last 24 months and all reports issued by the
Company to its stockholders;
(iii) he understands that he must bear the economic
risk of the investment in the Option Shares, which cannot be sold by
him unless they are registered under the Securities Act of 1933 (the
"1933 Act") or an exemption therefrom is available thereunder and that
the Company is under no obligation to register the Option Shares for
sale under the 1933 Act;
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(iv) in his position with the Company, he has had
both the opportunity to ask questions and receive answers from the
officers and directors of the Company and all persons acting on its
behalf concerning the terms and conditions of the offer made hereunder
and to obtain any additional information to the extent the Company
possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of the
information obtained pursuant to clause (ii) above;
(v) he is aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the
Option Shares in the absence of registration under the 1933 Act or an
exemption therefrom as provided herein; and
(vi) if, at the time of issuance of the Option
Shares, the issuance of such shares have not been registered under the
1933 Act, the certificates evidencing the Option Shares shall bear the
following legend:
"The shares represented by this certificate have
been acquired for investment and have not been
registered under the Securities Act of 1933. The
shares may not be sold or transferred in the absence
of such registration or an exemption therefrom under
said Act."
12. Restriction on Transfer of Option Shares.
12.1 Anything in this Agreement to the contrary
notwithstanding, Employee hereby agrees that he shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him without
registration under the 1933 Act, or in the event that they are not so
registered, unless (i) an exemption from the 1933 Act registration requirements
is available thereunder, and (ii) the Employee has furnished the Company with
notice of such proposed transfer and the Company's legal counsel, in its
reasonable opinion, shall deem such proposed transfer to be so exempt.
12.2 Anything in this Agreement to the contrary
notwithstanding, Employee hereby agrees that he shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him (i) prior to six
months after the Grant Date and (ii) except in accordance with Company's policy,
if any, regarding the sale and disposition of securities owned by employees
and/or directors of the Company.
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13. Miscellaneous.
13.1 Notices. All notices, requests, deliveries, payments,
demands and other communications which are required or permitted to be given
under this Agreement shall be in writing and shall be either delivered
personally, transmitted by electronic means or sent by a nationally recognized
next-day courier to the parties at their respective addresses set forth herein,
or to such other address as either shall have specified by notice in writing to
the other. Notice shall be deemed duly given hereunder when delivered or
transmitted as provided herein.
13.2 Employee and Stockholder Rights. The Employee shall not
have any of the rights of a stockholder with respect to the Option Shares until
such shares have been issued after the due exercise of the Option. Nothing
contained in this Agreement shall be deemed to confer upon Employee any right to
continued employment with the Company or any subsidiary thereof, nor shall it
interfere in any way with the right of the Company to terminate Employee in
accordance with the provisions regarding such termination set forth in
Employee's written employment agreement with the Company, or if there exists no
such agreement, to terminate Employee at will.
13.3 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
13.4 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof. This
Agreement may not be amended except by writing executed by the Employee and the
Company.
13.5 Binding Effect; Successors. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
13.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida (without regard to
choice of law provisions).
13.7 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day and year first above:
PRE-CELL SOLUTIONS, INC. Address: 000 Xxxx Xxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxx 00000
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Chief Executive Officer
EMPLOYEE: Address: 0000 X. Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxx 00000
/s/ Xxxxxxx X. XxXxxxxxxx
----------------------------
Xxxxxxx X. XxXxxxxxxx
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
--------------------
DATE
PRE-CELL SOLUTIONS, INC.
000 Xxxx Xxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxx 00000
Attention: Stock Option Committee of the Board of Directors
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of December 1,
1998 with Pre-Cell solutions, Inc. (the "Company"), I hereby irrevocably elect
to exercise the right to purchase _________ shares of the Company's common
stock, par value $.01 per share ("Common Stock").
As payment for my shares, enclosed is (check and complete applicable
box[es]):
" a [personal check] [certified check] [bank check] payable to
the order of "Global Telecommunication Solutions, Inc." in the
sum of $_________;
" confirmation of wire transfer in the amount of
$_____________; and/or
" with the consent of the Company, a certificate for
__________ shares of the Company's Common Stock, free and
clear of any encumbrances, duly endorsed, having a fair market
value of $---------.
I hereby represent and warrant to, and agree with, the Company that:
(i) I have acquired the Option and shall acquire the
Option Shares for my own account, for investment, and not with a view
towards the distribution thereof;
(ii) I have received a copy of all reports and
documents required to be filed by the Company with the Commission
pursuant to the Exchange Act within the last 24 months and all reports
issued by the Company to its stockholders;
(iii) I understand that I must bear the economic risk
of the investment in the Option Shares, which cannot be sold by me
unless they are registered under the Securities Act of 1933 (the "1933
Act") or an exemption therefrom is available thereunder and that the
Company is under no obligation to register the Option Shares for sale
under the 1933 Act;
(iv) I agree that I will not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by me hereby
except in accordance with Company's policy, if any, regarding the sale
and disposition of securities owned by employees and/or directors of
the Company;
(v) in my position with the Company, I have had both
the opportunity to ask questions and receive answers from the officers
and directors of the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made hereunder and to
obtain any additional information to the extent the Company possesses
or may possess such information or can acquire it without unreasonable
effort or expense necessary to verify the accuracy of the information
obtained pursuant to clause (ii) above;
(vi) I am aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the
Option Shares in the absence of registration under the 1933 Act or an
exemption therefrom as provided herein; and
(vii) if, at the time of issuance of the Option
Shares, the issuance of such shares have not been registered under the
1933 Act, the certificates evidencing the Option Shares shall bear the
following legend:
"The shares represented by this certificate have
been acquired for investment and have not been
registered under the Securities Act of 1933. The
shares may not be sold or transferred in the absence
of such registration or an exemption therefrom under
said Act."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
------------------------------ ------------------------------------
(Signature) (Address)
------------------------------ ------------------------------------
(Print Name)
------------------------------ ------------------------------------
(Social Security Number)
