EXHIBIT 5
NON-STATUTORY STOCK OPTION AGREEMENT
BY THIS STOCK OPTION AGREEMENT ("Agreement") made and entered into this
19th day of July, 1999 ("Grant Date"), WAVETECH INTERNATIONAL, INC., a Nevada
corporation (the "Company"), and A. Xxxxxxxxxxx Xxxx, an independent member of
the Board of Directors of the Company (the "Optionee") hereby state, confirm,
represent, warrant and agree as follows:
I
RECITALS
I.1 The Company, through its Board of Directors (the "Board"), has
determined that in order to attract and retain the best available personnel for
positions of substantial responsibility to provide successful management of the
Company's business, it must offer a compensation package that provides employees
and key consultants of the Company a chance to participate financially in the
success of the Company by developing an equity interest in it.
I.2 As part of the compensation package, the Company had adopted the
Wavetech International, Inc. 1997 Stock Incentive Plan (the "Plan") pursuant to
resolution of the Board, effective January 31, 1997.
I.3 By this Agreement, the Company and the Optionee desire to establish
the terms upon which the Company is willing to grant to the Optionee, and upon
which the Optionee is willing to accept from the Company an option to purchase
shares of the Company's $.001 par value common stock.
II
AGREEMENTS
II.1 Grant of Non-Statutory Stock Option. Subject to the terms and
conditions hereinafter set forth and those provisions set forth and those
contained in the Plan, the Company grants to the Optionee the right and option
(the "Option") to purchase from the Company all or any part of an aggregate
number of two hundred fifty thousand (250,000) shares of the Company's $.001 par
value Common Stock (the "Common Stock"), authorized but unissued or, at the
option of the Company, treasury stock if available (the "Optioned Shares").
II.2 Exercise of Option. Subject to the terms and conditions of this
Agreement and those of the Plan, the Option may be exercised only by completing
and signing a written notice in substantially the following form:
I hereby exercise the Option granted to me by Wavetech International,
Inc. and elect to purchase __________ shares of $.001 par value Common
Stock of
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Wavetech International, Inc. for the purchase price to be determined
under Paragraph 2.3 of this Stock Option Agreement.
II.3 Purchase Price. The price to be paid for the Optioned Shares (the
"Purchase Price") shall be $0.625 per share.
II.4 Payment of Purchase Price. Payment of the Purchase Price may be
made as follows:
(a) In United States dollars in cash or by check, bank draft
or money order payable to the Company, or
(b) At the discretion of the Board, through the delivery of
shares of Common Stock with an aggregate fair market value at the date
of such delivery, equal to the Purchase Price, or
(c) By a combination of both (a) and (b) above, or
(d) Pursuant to financial assistance which may be provided by
the Company upon Board approval as set forth in Section 8(b) of the
Plan.
The Board shall determine acceptable methods for rendering Common Stock as
payment upon exercise of an option and may impose such limitations and
conditions on the use of Company Stock to exercise an Option as it deems
appropriate. At the irrevocable election of the Optionee pursuant to Section 21
of the Plan, and subject to the acceptance of such election by the Board, to
satisfy the Company's withholding obligations, it may retain such number of
shares of Common Stock subject to the exercised Option which have an aggregate
Fair Market Value (as defined in the Plan) on the date of exercise equal to the
Company's aggregate federal, state, local and foreign tax withholding and FICA
and FUTA obligations with respect to income generated by the exercise of the
Option by Optionee.
II.5 Exercisability of Option. Subject to the provisions of Paragraph
2.6, and except as otherwise provided in Paragraphs 2.8 and 2.9, the Option may
be exercised by the Optionee while providing services to the Company which shall
include any parent ("Parent") or subsidiary ("Subsidiary") corporation of the
Company as defined in Sections 425(e) and (f), respectively, of the Internal
Revenue Code of 1986, as amended ("Code"), in whole or in part from time to
time, after July 19, 2000. An option may not be exercised for a fraction of a
share.
II.6 Termination of Option. Except as otherwise provided herein, the
Option, to the extent not heretofore exercised, shall terminate upon July 19,
2009.
II.7 Adjustments. In the event of any stock split, reverse stock split,
stock divided, combination or reclassification of shares of Common Stock or any
other increase or decrease in the number of issued shares of Common Stock, the
number and kind of Optioned Shares (including any Option outstanding after
termination of employment or death) and the Purchase Price per share shall be
proportionately and appropriately adjusted without any change in the aggregate
Purchase Price to be paid therefor upon exercise of the Option. The
determination by the Board as to the terms of any of the foregoing adjustments
shall be conclusive and binding.
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II.8 Liquidation, Sale of Assets or Merger. In the event of a proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Board. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, the option shall be assumed or an equivalent option shall be
substituted by such successor corporation, unless the Board determines that the
Optionee shall have the right to exercise the Option as to all of the Common
Stock subject to the Option. If the Board makes an Option fully exercisable, the
Board shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice (but not later than the
expiration of the Option term under Paragraph 2.6), and the Option will
terminate upon the expiration of such period. In the event the thirtieth (30th)
day referred to in this Paragraph shall fall on a day that is not a business
day, then the thirtieth (30th) day shall be the next following business day.
II.9 Corporate Transaction or Change of Control. The Board shall have
the right in its sole discretion to accelerate the schedule for vesting with
respect to the Option granted hereby in the event of a Corporate Transaction or
Change of Control.
II.10 Notices. Any notice to be given under the terms of the Agreement
("Notice") shall be addressed to the Company in care of its Chief Financial
Officer at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 00000, or at its
then current corporate headquarters. Notice to be given to the Optionee shall be
addressed to him or her at his or her then current residential address as
appearing on the payroll records.
Notice shall be deemed duly given when enclosed in a properly sealed
envelope and deposited by certified mail, return receipt requested, in a post
office or branch post office regularly maintained by the United States
Government.
II.11 Transferability of Option. The Option shall not be transferable
by the Optionee otherwise than by the will or the laws of descent and
distribution, and may be exercised during the life of the Optionee only by the
Optionee.
II.12 Optionee Not A Shareholder. The Optionee shall not be deemed for
any purposes to be a shareholder of the Company with respect to any of the
Optioned Shares except to the extent that the Option herein granted shall have
been exercised with respect thereto and a stock certificate issued therefor.
II.13 Disputes or Disagreements. As a condition of the granting of the
Option herein granted, the Optionee agrees, for himself and his personal
representatives, that any disputes or disagreement which may arise under or as a
result of or pursuant to this Agreement shall be determined by the Board in its
sole discretion, and that any interpretation by the Board of the terms of this
Agreement shall be final, binding and conclusive.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer, and the Optionee has hereunto affixed
his or her signature.
WAVETECH INTERNATIONAL, INC.,
a Nevada corporation
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, President
"COMPANY"
/s/ Alexander Xxxxxxxxxxx Xxxx
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"OPTIONEE"
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