1
EXHIBIT 10.5
AMENDED AND RESTATED STOCK AGREEMENT
THIS AGREEMENT, made this 26th day of May 2000, by and between Xxxx
Xxxxxxx, an individual currently residing at 00000 Xxxxxxxxx Xxxxx, Xxxxxxxx
Xxxx, Xxxxxxxx 00000 ("DAMOOSE"), AmeriVision Communications, Inc., an Oklahoma
corporation maintaining business offices at 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxxx Xxxx, Xxxxxxxx 00000, and each successor in interest (collectively the
"COMPANY"), and Xxxxx Xxxxxx, ("STOCKHOLDER"), hereby amends and restates in
full the Stock Agreement by and between the same parties dated as of May 24,
1999, and this Agreement is effective as of such date.
BACKGROUND INFORMATION
The Company wishes to obtain the continued services of Damoose as a
director of the Company and to create over time a shareholding in the Company by
Damoose for the mutual benefit of Damoose and the Company. Stockholder supports
the election of Damoose as a director and wishes to support his continued
service as set forth below. Damoose is willing to serve as a director of the
Company on the terms and conditions set forth below.
OPERATIVE PROVISIONS
1. Commencement Date.
Stockholder pledges that effective as of May 24, 1999 (the "COMMENCEMENT
DATE"), the Stockholder will vote in favor of and use his best efforts to ensure
the election of Damoose to the Board of Company and otherwise pledge to use his
best efforts to ensure that the Company agrees to the terms of this Agreement.
If the Company, prior to, on or subsequent to the Commencement Date, effects a
merger with and into another entity such that it then has no continuing legal
existence, the Stockholder shall, in connection with the consummation of such
transaction, ensure to the extent possible that the surviving entity assumes the
obligations described hereunder. To the extent that such an assumption is
undertaken, references herein to the Company shall also be deemed to refer to
the party assuming its obligations hereunder.
2. Duties.
Damoose agrees in good faith to perform those duties normally associated
with being a director of similar companies including attendance at board and
committee meetings as designated by the Board. In addition to board and
committee meetings, such duties shall also include limited consulting advisory
assistance, including sales proposals, meetings with charities, marketing
strategy, television network and programming development, and raising equity or
other funding for Company. In recognition of these services Company agrees to
compensate Damoose as described below in Section 3 Stock Bonus and Section 4
Stock Option Grant.
2
3. Stock Bonus.
In connection with the execution, delivery and performance of this
Agreement, the Company shall on July 1, 2000 grant to Damoose stock in the
Company representing an amount equal to one-half percent (1/2%) of the shares of
the Company's common stock that are issued and outstanding as of the close of
business on the date preceding the Commencement Date; determined on a fully
diluted basis inclusive of shares reserved for issuance upon (a) the complete
exercise of all then outstanding option, warrant or rights grants (inclusive of
the shares to be made the subject of Damoose's option grant herein described)
and employee stock incentive plans, (b) the conversion of then outstanding
preferred shares or convertible debt instruments into shares of the Company's
common stock, or (c) the consummation of any then-authorized stock split or
stock dividend provided that if at the time of such intended issuance the
Company constitutes a subsidiary of another corporation or its corporate
existence has been terminated as a result of its merger into or consolidation
with another corporation, then Damoose shall receive certificate(s) representing
an identical ownership interest in the ultimate parent of the Company or of the
survivor of any such merger or consolidation, or, if no such parent shall then
exist, then in the survivor of the merger or consolidation. The value of each
such share as of the date of issuance or date of vesting, as applicable, shall
be determined by the issuer's board of directors. The shares shall vest (i) as
to 50% of the shares on July 1, 2000 and (ii) as to an additional 25% of the
shares on each of July 1, 2001 and July 1, 2002, provided as to each such date
that Damoose continues his service to the Company. Damoose shall receive from
the Company one or more certificates, registered in his name, representing each
installment of vested shares on the vesting date of such shares. In addition,
the Company shall pay at the time of each such vesting a cash bonus to Damoose
equal to an amount such that after the payment by Damoose of all federal, state
and local income taxes, self-employment, taxes or other taxes (including any
interest or penalties, arising from the actions or inactions of the Company,
imposed with respect thereto) ("INCOME TAXES") imposed on the receipt of the
stock being vested and on such bonus, Damoose retains an amount of the bonus
equal to the Income Taxes imposed on him by the vesting of the stock and by the
bonus payments.
4. Stock Option Grant.
Damoose is hereby granted a non-qualified option (the "OPTION") to acquire
from the Company authorized but unissued shares of its common stock in a
quantity equal to one percent (1%) of the Company's then issued and outstanding
common stock, to be determined on a fully diluted basis inclusive of shares
reserved for issuance upon (a) the complete exercise of all then outstanding
option, warrant or rights grants (inclusive of the shares to be made the subject
of Damoose's option grant herein described) and employee stock incentive plans,
(b) the conversion of then outstanding preferred shares or convertible debt
instruments into shares of the Company's common stock, or (c) the consummation
of any then-authorized stock split or stock dividend provided that if at the
time of such intended issuance the Company constitutes a subsidiary of another
corporation or its corporate existence has been terminated as a result of its
merger into or consolidation with another corporation, then Damoose shall
receive certificate(s) representing an identical ownership interest in the
ultimate parent of the Company or of the survivor of any such merger or
consolidation, or, if no such parent shall then exist, then in the survivor of
the merger or consolidation. The exercise price of each share the subject of the
Option grant shall in
- 2 -
3
consideration of Damoose's prior commitments to the Company be the fair value at
February 1, 1998 as determined by the Company's Board of Directors, and on the
condition that Damoose is then a director of the Company, the date upon which
exercise of incremental portions of the Option may commence shall be determined
in the following manner:
The following percentage shall be exercisable
of the Option shares commencing
------------------------ --------------------
25% on July 1, 1999
25% July 1, 2000
25% July 1, 2001
25% July 1, 2002
and each exercise right shall continue in force for a period of five years
following its commencement, irrespective of Damoose's subsequent status with the
Company. Further, on the date of any sale of all or substantially all of the
Company's assets or any merger or consolidation transaction as the result of
which the Company is not the surviving entity (other than any merger effected
for the principal purpose of reincorporation in another jurisdiction or for
another purpose not resulting in at least a 30% change in the ultimate
beneficial ownership of the Company), Damoose (or, in the event of his legal
incapacity, his legal representative(s)) shall also be entitled to exercise the
Option as to all shares then otherwise ineligible for exercise, and within the
six-month period following his death, Damoose's representative(s) or
Beneficiary(ies) shall be entitled to exercise the Option as to one-half of all
shares which would otherwise be ineligible for acquisition as of the date of his
death. Shares made the subject of the Option grant as to which no exercise right
shall have commenced on the date of Damoose's termination as a board member,
shall be returned to the status of authorized but unreserved shares and shall no
longer be available for acquisition by Damoose.
5. Proprietary Interests.
During or after the expiration of his term as a director with the Company,
Damoose shall not communicate or divulge to, or use for the benefit of, any
individual, association, partnership, trust, corporation or other entity except
the Company, any proprietary or confidential information of the Company received
by Damoose by virtue of such directorship, without first being in receipt of the
Company's written consent to do so and in compliance with the terms of any other
confidentiality or non-competition agreement which Damoose may hereafter execute
with the Company; provided that nothing contained herein shall restrict
Damoose's use or disclosure of such information known to the public (other than
that which he may have disclosed in breach of this Agreement), or as required by
law (so long as Damoose gives the Company prior notice of such required
disclosure).
- 3 -
4
6. Remedies for Breach of Obligations.
a. Injunctive Relief. The parties agree that the services of Damoose are of
a personal, specific, unique and extraordinary character and cannot be readily
replaced by the Company. They further agree that in the course of performing his
Services, Damoose will have access to various types of proprietary information
of the Company, which, if released to others or used by Damoose other than for
the benefit of the Company, in either case without the Company's consent, could
cause the Company to suffer irreparable and continuing injury. Therefore, the
confidentiality obligations of Damoose established under Section 5 hereof shall
be enforceable by the Company both at law and in equity, by injunction, specific
performance, damages or other remedy; and the right of the Company to obtain any
such remedy shall be cumulative and not alternative and shall not be exhausted
by any one or more uses thereof.
b. Arbitration. In the event of any dispute between the parties under or
relating to this Agreement, such dispute shall be submitted to and settled by
arbitration in Oklahoma County, Oklahoma, in accordance with the rules and
regulations of the American Arbitration Association then in effect. The
arbitrator(s) shall have the right and authority to determine how their award or
decision as to each issue and matter in dispute may be implemented or enforced.
Any decision or award shall be final and conclusive on the parties; there shall
be no appeal therefrom other than for claimed bias, fraud or misconduct by the
arbitrator(s); judgment upon any award or decision may be entered in any court
of competent jurisdiction in the State of Oklahoma or elsewhere; and the parties
hereto consent to the application by any party in interest to any court of
competent jurisdiction for confirmation or enforcement of such award. The party
against whom a decision is made shall pay the fees of the American Arbitration
Association. Notwithstanding the foregoing, the Company, at its sole option
shall be entitled to enforce its rights, as contemplated by Section 6a hereof,
to injunctive and other equitable relief in the event of a breach of Section 5
hereof or of any material term of a confidentiality or non-competition agreement
to which the Company and Damoose shall then be parties, either by arbitration
pursuant to this Section 6b, or directly in any court of competent jurisdiction.
7. Miscellaneous Provisions.
a. Notice: All notices or other communications required or permitted to be
given pursuant to this Agreement shall be in writing and shall be considered
properly given to the recipient party if furnished by hand delivery; by sending
a copy thereof by first class or express mail, postage prepaid, or by courier
service (with charges prepaid), in each case to the address indicated above or
to such other address as the recipient shall have provided in accordance with
the terms hereof; or by sending a copy thereof by whatever telecopier service
the recipient shall have designated below (or by subsequent notice provided in
accordance with the terms hereof). If the notice is sent by mail or courier
service, it shall be deemed to have been given to the recipient when deposited
in the United States mail or courier service for delivery to that party; or if
by telecopier, when the sending party is in receipt of documentary evidence that
the transmission has been successfully completed. Whenever the furnishing of
notice is required, the same may be waived by the party entitled to receive such
notice.
- 4 -
5
b. Assignability: The Company may assign this Agreement to, and only to, an
entity owned more than 50% by the Company (directly or indirectly), and which
acquires all or substantially all of the Company's business, and upon such
assignment this Agreement shall inure to the benefit of and be binding upon such
entity. Neither this Agreement nor any right or interest hereunder shall be
assignable by Damoose, but shall inure to the benefit of and be binding upon
him, his Beneficiaries and legal representatives.
c. Nontransferability of Option: The Option is not transferable by Damoose
otherwise than by will or the laws of descent and distribution. During Damoose's
lifetime, only Damoose may exercise the Option. This Option may not be
transferred, assigned, pledged, hypothecated, or otherwise disposed by Damoose
during his lifetime, whether by operation of law or otherwise, and is not
subject to execution, attachment or similar process. Any attempted transfer,
assignment, pledge, hypothecation, or other disposition of this Option contrary
to the provisions hereof, and the levy of an attachment or similar process upon
the Option, shall be null and void and without effect. The Company shall have
the right to terminate the Option in the event of such attempted transfer,
assignment, pledge, hypothecation, or other disposition, or levy of attachment
or similar process, by notice to that effect to Damoose, provided, however, that
termination of the Option hereunder shall not prejudice any rights or remedies
which the Company may have under this Agreement or otherwise.
d. Restrictions on the Transferability of Shares: The shares of common
stock of the Company received under Section 3 above are not transferable other
than after they have vested in accordance with such Section or by will or the
laws of descent and distribution, or as set forth in this Section 7. Any
attempted transfer, assignment, pledge, hypothecation, or other disposition of
any such shares contrary to the provisions hereof shall be null and void and
without effect. The certificate(s) evidencing such shares described in Section 3
shall bear a legend indicating that the transferability of the shares is
governed by this Agreement.
e. Entire Agreement: This Agreement, and any other document referenced
herein, constitute the entire understanding of the parties hereto with respect
to the subject matter hereof, and no amendment, modification or alteration of
the terms hereof shall be binding unless the same be in writing, dated
subsequently to the date hereof and duly approved and executed by each of the
parties hereto. This Agreement supersedes the Stock Agreements dated June 4,
1998 and May 24, 1999 between Damoose and the Company.
f. Enforceability: If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby and each and every term and condition
of this Agreement shall be valid and enforced to the fullest extent and in the
broadest application permitted by law.
g. Governing Law. This Agreement shall be deemed to have been made in and
shall be construed and interpreted in accordance with the laws of the State of
Oklahoma without giving effect to principles of conflicts of laws.
- 5 -
6
h. Counterparts: This Agreement may be executed by any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
i. Binding Effect: Each of the provisions and agreements herein contained
shall be binding upon and inure to the benefit of the personal representatives,
devisees, heirs, successors, transferees and assigns of the respective parties
hereto.
j. Legal Fees and Costs: If a legal action is initiated by any party to
this Agreement against another, arising out of or relating to the alleged
performance or non-performance or any right or obligation established hereunder,
or any dispute concerning the same, any and all fees, costs and expenses
reasonably incurred by each successful party or his or its legal counsel in
investigating, preparing for, prosecuting, defending against, or providing
evidence, producing documents or taking any other action in respect of, such
action shall be the joint and several obligation of and shall be paid or
reimbursed by the unsuccessful party(ies).
k. Adjustments: In the event of any change in the common stock of the
Company by reason of a stock dividend, forward or reverse stock split,
recapitalization, corporate merger or combination, exchange of shares with
another corporation, or a substantially similar event which dilutes the value of
or otherwise adversely affects such stock or the ability of Damoose to exercise
his Option rights, granted under Section 4 above, in accordance with the terms
of this Agreement (each a "CORPORATE FINANCE TRANSACTION"), the number of shares
made the subject of Damoose's Option and the price at which each share is
subject to purchase by Damoose shall be adjusted appropriately to ensure that
the shares will be subject to acquisition by Damoose at a price and upon terms
commensurate to those herein set forth. Moreover, the Company shall be required
to notify Damoose promptly following its approval of a Corporate Finance
Transaction, and to provide Damoose with the right to effect an exercise of the
Option within whatever period of time then precedes the scheduled consummation
of such Transaction.
l. Board of Directors: For five years, Stockholder agrees to vote his
shares of the Company in favor of election of Damoose as a director of the
Company or any controlled or affiliated entity.
- 6 -
7
IN WITNESS WHEREOF, the parties have executed this Agreement.
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Xxxxx Xxxxxx, Stockholder
By: /s/ Xxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxxxx
AmeriVision Communications, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, Chief Executive Officer
- 7 -
