ABC FUNDING, INC. STOCK OPTION AGREEMENT
EXHIBIT
99.3
This Stock Option Agreement (this
"Agreement") is effective as of October 1, 2008, (the "Option Grant Date") by
and between ABC Funding Inc., a Nevada corporation having its principal place of
business at 0000 XX 0000 Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (the "Company"),
and Xxx X. Xxxxx, an individual residing in the State of Texas (the
"Optionee"). The Optionee and the Company hereby agree as
follows:
1. Grant. The
Company hereby grants to the Optionee, pursuant to the ABC Funding, Inc. 2008
Stock Incentive Plan, an option (the "Option") to purchase up to an aggregate of
333,334 shares (the "Optioned Shares") of the Company's common stock, par value
$0.001 per share (the "Common Stock"), at an exercise price (the "Exercise
Price") of $0.54 per Optioned Share.
2. Term. The
Option granted hereby shall terminate no later than at the close of business on
October 1, 2015 (the "Termination Date").
3. Exercisability. The
Option shall vest and may be exercised in whole or in part, from and after the
effectiveness of the Charter Amendment (defined below) until the Termination
Date. Charter Amendment means the filing by the Company of an
Amendment to its Articles of Incorporation with the Secretary of State of
Nevada, increasing the number of shares of common stock that the Company may
issue to 149,000,000.
4. Procedure for
Exercise.
(a) Notice. The
Optionee may exercise the Option at any time with respect to all or any part of
the Optioned Shares by giving the Secretary of the Company written notice of
intent to exercise. The notice of exercise shall specify the number
of Optioned Shares as to which the Option is to be exercised and the date of
exercise thereof, which date shall be at least five days after the giving of
such notice unless an earlier time shall have been mutually agreed
upon.
(b) Payment of Exercise
Price. Full payment (in U.S. Dollars) by the Optionee of the Exercise
Price for the Optioned Shares purchased shall be made on or before the exercise
date specified in the notice of exercise in cash, or, with the prior written
consent of the Board, in whole or in part through the surrender of previously
acquired shares of Common Stock (valued at their fair market value on the
exercise date). If the Optionee fails to pay for any of the Optioned
Shares specified in such notice or fails to accept delivery thereof, the
Optionee's right to purchase such Optioned Shares may be terminated by the
Company. The date specified in the Optionee's notice as the date of
exercise shall be deemed the date of exercise of the Option, provided that
payment in full for the Optioned Shares to be purchased upon such exercise shall
have been received by such date.
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(c) Cashless Exercise. In addition to the method of
payment set forth above, provided that the Common Stock is either registered on
a national securities exchange or quoted on a national quotation system at the
time of exercise, Optionee shall have the right to exercise this Option in full
or in part by delivering written notice to the Company, and Optionee shall
receive the number of shares equal to the product of (x) the number of Optioned
Shares as to which this Option is being exercised, multiplied by (y) a fraction,
the numerator of which is the Market Price (defined below) of the Common Stock
minus the Exercise Price of the Optioned Shares and the denominator of which is
the Market Price of the Common Stock. As used in this Agreement, the
phrase "Market Price" for any given date shall be deemed to be the last reported
sale price on the trading day immediately preceding such date, or, in case no
such reported sale takes place on such day, the average of the last reported
sale prices for the last three (3) trading days immediately preceding such date
on which reported sales did take place, in either case as officially reported by
the OTC Bulletin Board or the principal securities exchange on which the Common
Stock is listed or admitted to trading if so listed and admitted.
(d) Other Limitations on
Exercise. The obligation of the Company to deliver shares of Common
Stock upon the exercise hereof shall be subject to the condition that if at any
time the Company's Board of Directors shall determine in its sole discretion
that the listing, registration or qualification of the Option or the Optioned
Shares upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the grant of this Option or
the issuance or purchase of stock hereunder, then this Option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board of Directors.
5. Adjustment of and
Changes in Stock of Company. If the Company at any time after the
Option Grant Date subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision will be proportionately reduced and the
number of shares of Common Stock obtainable upon exercise of this Option will be
proportionately increased. If the Company at any time after the
Option Grant Date combines (by combination, reverse stock split or otherwise)
one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of shares issuable
upon exercise of this Option will be proportionately decreased. Any adjustment
under this Section 5 shall become effective at the close of business on the date
the subdivision or combination becomes effective.
6. Non-Transferability of
Option. During the Optionee's lifetime, this Option shall be
exercisable only by the Optionee or any guardian or legal representative of the
Optionee, and the Option shall not be transferable except, in case of the death
of the Optionee, by will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In the event of (a) any attempt by the Optionee to alienate,
assign, pledge, hypothecate or otherwise dispose of this Option, except as
provided for herein, or (b) the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, the Company may terminate
the Option by notice to the Optionee and it shall thereupon become null and
void.
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7. Restrictions
on Underlying Stock. The shares of Common Stock issuable upon
exercise of this Option may not be sold, pledged, hypothecated, transferred or
assigned in the absence of an effective registration statement for the
securities under the applicable federal and state securities laws or an opinion
of counsel satisfactory to the Company to the effect that such registration is
not required thereunder.
8. Nonqualified
Option. The Option granted hereby shall be treated as a nonqualified
stock option and not as an incentive stock option under the Internal Revenue
Code.
9. No Rights as
Stockholder. Neither the Optionee nor any personal representatives
shall be, or shall have any of the rights and privileges of, a stockholder of
the Company with respect to any shares of Common Stock purchasable or issuable
upon the exercise of this Option, in whole or in part, prior to the date of
exercise of this Option in accordance with the provisions hereof, and then only
to the extent of the shares of Common Stock so purchased or issued.
10. Successors and
Assigns. This Option shall not be assignable by the Optionee without
the prior consent of the Company, which shall not be unreasonably
withheld. This Option shall be binding upon the successors and
assigns of the Company, and shall be expressly assumed by any successor to the
Company pursuant to a merger in which the Company is not the surviving
entity.
11. Miscellaneous. This
Option and any term hereof may be changed, waived, discharged or terminated only
by an instrument in writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought. This
certificate is deemed to have been delivered in the State of Texas and shall be
construed and enforced in accordance with and governed by the laws of such
State. The headings in this Stock Option Agreement are for purposes
of reference only, and shall not limit or otherwise affect any of the terms
hereof.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the Company
has caused this Agreement to be executed by a duly authorized representative and
the Optionee has hereunto set his hand as of the Option Grant Date.
| ABC FUNDING, INC. | |||
|
|
By:
|
/s/ Xxxx X. Xxxxx | |
| Xxxx X. Xxxxx | |||
| Chief Financial Officer | |||
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By:
|
/s/ Xxx X. Xxxxx | |
| Xxx X. Xxxxx | |||
