EXHIBIT 3.1
FULLNET COMMUNICATIONS, INC.
STOCK OPTION AGREEMENT
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THIS STOCK OPTION AGREEMENT (this "Agreement") is made this 17th day of
February, 1999, by and between FULLNET COMMUNICATIONS, INC., an Oklahoma
corporation (the "Company"), and XXXXXXX X. XXXXXXXX, an individual duly elected
to serve as a the President and Chief Executive Officer of the Company (the
"Grantee").
W I T N E S S E T H
WHEREAS, the Company desires to advance the interests of the Company
and its shareholders by encouraging and providing for the acquisition of an
equity interest in the Company by its key employees by providing additional
incentives to such persons, and by enabling the Company to attract and retain
the services of such persons who make substantial contributions to the Company
through their ability, loyalty and efforts.
WHEREAS, Grantee is a key employee of the Company, and the Company
desires to provide incentive to Grantee to continue to render valuable services
to it in the form of an inducement to acquire a further proprietary interest in
the Company by grant of an option to purchase shares of the Company's common
stock, par value $.00001 (the "Common Stock").
NOW, THEREFORE, in consideration of the foregoing and of the mutual
representations, covenants, warranties and agreements and upon the terms and
subject to the conditions hereinafter set forth, the parties hereto agree as
follows:
1. Grant of Option. The Company hereby grants to Grantee the right and
option to purchase, on the terms and conditions hereinafter set forth, an
aggregate of 120,000 shares of the Common Stock at the purchase price of $1.15
per share ("Grantee's Options").
2. Time and Manner of Exercise.
(a) Grantee's Options shall vest and be exercisable beginning October
7, 2000. The right of Grantee to exercise Grantee's Options, subject to
the terms and provisions of this Agreement, shall expire at the end of
the third year following the date on which the option was granted. Once
Grantee's Options become exercisable, they may be exercised in whole at
any time or in part from time to time until the expiration or
termination of the option, whether or not any option granted previously
to the Grantee remains outstanding at the time of such exercise.
(b) Grantee's Options shall be exercised by written notice delivered to
the Company at its principal offices at 000 X. Xxxxxx, Xxxxx 0000,
Xxxxxxxx Xxxx, Xxxxxxxx, 00000, or such other address as the Company
shall designate in writing to the Grantee, setting forth the number of
shares as to which the option is being exercised, and accomplished by
payment of the option purchase price as follows:
(i) In cash;
(ii) By exchange of Common Stock valued at its Fair
Market Value on the date of exercise;
(iii) By means of a brokers' cashless exercise procedure by
the delivery to the Company of an exercise notice together
with irrevocable instructions to a broker to deliver promptly
to the Company the amount of proceeds necessary to pay the
purchase price of the shares of Common Stock as to which such
exercise relates; or
(iv) By any combination of the foregoing.
(c) Where payment of the purchase price is to be made with shares of
Common Stock acquired under any compensation plan of the Company, such
shares will not be accepted as payment unless the Grantee has acquired
such shares at least six months prior to such payment.
(d) Upon delivery by Grantee to the Company of notice and payment as
provided for in this section, the Company shall deliver to Grantee a
certificate or certificates representing such shares of Common Stock.
3. Termination of Option.
(a) Upon cessation of service to the Company by Grantee (for reasons
other than retirement or death), including cessation of service due to
physical or mental disability that prevents such person from rendering
further services to the Company as an employee, only those of Grantee's
Options which are exercisable at the date of cessation of service shall
be exercisable by the Grantee. Such options shall be exercisable until
the first to occur of (i) the expiration of the remaining term of the
option, or (ii) three months after cessation of service of the Grantee.
(b) Upon the retirement or death of the Grantee, options shall be
exercisable as follows:
(i) Upon retirement of Grantee while an employee of the
Company pursuant to a retirement plan maintained by the
Company, Grantee's Options shall continue to be exercisable
during their terms as if such person had remained an employee;
(ii) In the event of the death of Grantee while an employee of
the Company, the Grantee's Options shall be exercisable until
the first to occur of (A) the expiration of the remaining term
of the option or (B) one year after the date of the Grantee's
death, but only to the extent that the Grantee would have been
entitled to exercise the options had he lived during such
period.
4. Adjustments in Shares. If the Company shall at any time change the
number of issued shares of Common Stock without new consideration to the Company
(such as by stock dividend or stock split), the total number of shares available
under this Agreement, the number of shares to be granted to the Grantee pursuant
to this Agreement, and the number and price of shares of Common Stock subject to
outstanding options, shall be adjusted so that the aggregate consideration
payable to the Company and the value of such options shall not be changed. If,
during the term of Grantee's Options, the Common Stock shall be changed into
another kind of stock or into securities of another corporation, whether as a
result of a reorganization, recapitalization, sale, merger, consolidation, or
other similar transaction, or if additional rights shall be offered with respect
to the Common Stock, the Board shall cause adequate provision to be made so that
the Grantee shall thereafter be entitled to receive, upon the due exercise of
any outstanding options, the securities or rights that the Grantee would have
been entitled to receive had he owned the Common Stock acquired on the exercise
of such options on the effective date of any such transaction.
5. Rights Prior to Exercise. Neither the Grantee nor his or her legal
representatives or beneficiaries shall have any of the rights of a stockholder
with respect to any shares subject to any option until payment of the option
purchase price and delivery of a certificate for such shares as provided herein.
6. Non-Transferability of Options. No option may be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated otherwise than by will
or by the laws of descent and distribution. Except as otherwise specifically
provided herein, all options granted to Grantee under this Agreement shall be
exercisable during the lifetime of such Grantee only by such Grantee. When the
Grantee dies, the personal representative or other person entitled to succeed to
the rights of the Grantee may exercise such rights, subject to furnishing to the
Company proof satisfactory to the Company of his or her right to receive the
option under Grantee's will or under the applicable laws of descent and
distribution.
7. No Guaranteed Term of Office. Nothing in this Agreement, or any
modification thereof, and no grant of an option, or any term thereof, shall be
deemed an agreement or condition guaranteeing to any employee any particular
term of office or limiting the right of the Company, the Board of Directors or
the stockholders to terminate the employment of the Grantee.
8. Administration. The grant of options to Grantee pursuant to this
Agreement shall be administered by the Board of Directors of the Company.
9. Other Provisions. This option is granted and delivered in the State
of Oklahoma and is intended to be construed and enforced under the laws thereof.
The provisions hereof shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators,
successors, and assigns.
IN WITNESS WHEREOF, this option is executed on behalf of the Company by
its duly authorized officer and by Grantee as of the day and year first above
written.
"COMPANY"
Fullnet Communications, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
"GRANTEE"
/s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
