EXHIBIT 10.3
STOCK OPTION AGREEMENT - PRIME CELLULAR INC.
AGREEMENT made as of this 30th day of April, 1999 between Prime
Cellular, Inc. (the "Company"), a Delaware corporation, having a principal place
of business at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 and Xxxxxx X. Xxxxxx
("Xxxxxx"), residing at 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxx, Xxxxxxxx 00000.
WHEREAS, the Company authorized on April 30, 1999 (the "Grant Date")
granting to Xxxxxx options to purchase up to 217,000 shares of the common stock
of the Company, par value $.01 per share ("Common Stock") pursuant to the
Company's 1990 Stock Option Plan (the "Plan"), upon the terms and conditions
herein contained; and
WHEREAS, Xxxxxx is the President of the Company and therefore eligible
for such option.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree:
1. Grant of Option.
(a) Subject to the terms and conditions of the Plan, a
copy of which is annexed hereto and made a part
hereof and the receipt of which is hereby
acknowledged by Xxxxxx, the Company hereby grants to
Xxxxxx as a matter of separate agreement and not in
lieu of salary, or any other compensation for
services, the right and option (the "Option") to
purchase all or any part of an aggregate of 217,000
shares of the authorized but unissued Common Stock
(the "Option Shares"), on the terms and conditions
set forth herein.
(b) The Option shall be deemed an Incentive Option, with
all the rights and restrictions associated therewith
as more particularly set forth in the Plan; it being
acknowledged and agreed that Xxxxxx is an employee of
the Company, or of any subsidiary of the Company as
of the Grant Date.
(c) All Option Shares, when issued and delivered in
accordance with the terms of this Agreement, shall be
fully paid and non-assessable, and the certificate or
certificates representing such Option Shares shall so
state.
2. Exercise Price. The purchase price of the Option Shares covered by
this Option shall be $1.625 per share (the "Exercise Price").
3. Term of Option.
(a) Except as otherwise earlier terminated in accordance
with Paragraphs 3(b)-(d) hereof, the Option, to the
extent unexercised, shall terminate five (5) years
from the Grant Date.
(b) In the event Xxxxxx'x employment by the Company or
any of its affiliates is terminated (for any reason
other than death or discharge for "cause" as defined
in the Plan) any Option granted to him or unexercised
portion thereof which was otherwise exercisable on
the date of termination of employment shall terminate
unless, such Option to the extent exercisable at
termination, is exercised within the earlier of
thirty (30) days after Xxxxxx ceases to be an
employee or the date of expiration of the Option
period.
(c) If Xxxxxx'x employment is terminated for "cause," as
defined in the Plan, any Option or unexercised
portion thereof granted to him shall terminate and be
of no further force and effect from the date of
discharge.
(d) Upon the death of Xxxxxx while Xxxxxx is employed by
the Company or any subsidiary of the Company, any
Option granted to him or the unexercised portion
thereof, which was otherwise exercisable on his date
of death, shall terminate unless such Option to the
extent exercisable at death is exercised by the
executor or administrator of his estate, within the
earlier of six (6) months following Xxxxxx'x death or
the date of the expiration of the Option.
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4. Exercise of Option and Issue of Shares.
(a) The Option may be exercised in whole or in part (to
the extent that it is exercisable in accordance with
its terms) by giving written notice to the Company,
in the form attached hereto as Exhibit A, together
with the tender of the Exercise Price. Such written
notice shall be signed by the person exercising the
Option, shall state the number of Option Shares with
respect to which the Option is being exercised, shall
contain any warranty required by Section 5 below and
shall otherwise comply with the terms and conditions
of this Agreement. The Company shall pay all original
issue taxes with respect to the issue of the Option
Shares pursuant hereto and all other fees and
expenses necessarily incurred by the Company in
connection herewith. Except as specifically set forth
herein, Xxxxxx acknowledges that any income or other
taxes due from him with respect to this Option or the
Option Shares issuable pursuant to this Option shall
be his responsibility. The holder of this Option
shall have rights as a shareholder only with respect
to any Option Shares covered by the Option after due
exercise of the Option and tender of the full
exercise price for the Option Shares being purchased
pursuant to such exercise.
(b) Notwithstanding anything to the contrary contained in
this Section 4, the Option shall be immediately
exercisable in full upon the happening, in the
determination of the Board of Directors of the
Company, of any of the following events:
i) the first purchase of shares of Common Stock
pursuant to a tender offer or exchange offer (other
than an offer by the Company) for all, or any part
of, the Common Stock;
ii) the approval by the stockholders of the Company
of an agreement for a merger in which the Company
will not survive as an independent, publicly owned
corporation, a consolidation, or a sale, exchange or
other disposition of all or substantially all of the
Company's assets;
iii) with respect to an employee, on the employee's
65th birthday; or
iv) with respect to an employee, on the employee's
involuntary termination from employment for any
reason other than discharge for "cause" as defined in
the Plan.
(c) The Option may be exercised in whole or in part (to
the extent that it is exercisable in accordance with
its terms) by giving written Notice of Exercise (in
the form of Exhibit A annexed hereto) to the Company,
together with the tender of the purchase price for
the Shares covered by the Option. The Company shall
pay all original issue taxes with respect to the
issuance of the Shares pursuant hereto and all other
fees and expenses necessarily incurred by the Company
in connection herewith. Except as specifically set
forth herein, Xxxxxx acknowledges that any income or
other taxes due from him with respect to this Option
or the Shares issuable pursuant to this Option shall
be Xxxxxx'x responsibility.
(d) Notwithstanding anything to the contrary contained in
paragraph 4(a), if the sum of (i) the Fair Market
Value (as defined in the Plan and as determined at
the Grant Date) of the Shares subject to this Option,
and (ii) the Fair Market Value (also determined as of
the Grant Date) of any other stock of the Company or
any parent or subsidiary corporation subject to
incentive stock options described in Section 422A of
the Internal Revenue Code granted to Xxxxxx prior to
the date of the Option is exercisable for the first
time during a calendar year in an amount which
exceeds $100,000, then this Option will become
exercisable, to the extent that the value exceeds
$100,000, for the first time on the January 1st of
the calendar year immediately following the calendar
year during which the right to exercise otherwise
commences.
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5. Purchase for Investment.
(a) Unless the offering and sale of the Option Shares to
be issued upon the particular exercise of the Option
shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter
amended, or any successor legislation (the "Act"), or
an exemption from such registration is available, the
Company shall be under no obligation to issue the
Option Shares covered by such exercise unless and
until the following conditions have been fulfilled:
(i) The person(s) who exercise the Option shall
warrant to the Company, at the time of such exercise,
that such person(s) are acquiring such Option Shares
for his or her own account, for investment and not
with a view to, or for sale in connection with, the
distribution of any such Option Shares, in which
event the person(s) acquiring such Option Shares
shall be bound by the provisions of the following
legend which shall be endorsed upon the
certificate(s) evidencing their Option Shares issued
pursuant to such exercise: "The shares represented by
this certificate have not been registered under the
Securities Act of 1933, as amended (the "Act"). Such
shares may not be sold, transferred or otherwise
disposed of unless they have first been registered
under the Act or, unless, in the opinion of counsel
satisfactory to the Company's counsel, such
registration is not required."
(ii) The Company shall have received an opinion of
its counsel that the Option Shares may be issued upon
such particular exercise in compliance with the Act
without registration thereunder. Without limiting the
generality of the foregoing, the Company may delay
issuance of the Option Shares until completion of any
action or obtaining of any consent, which the Company
deems necessary under any applicable law (including
without limitation state securities or "blue sky"
laws).
(b) Xxxxxx acknowledges that he has been informed of the
applicable provisions of Rule 144 promulgated under
the Act, including, without limitation, its
requirements that (i) shares must have been owned and
paid for a period of at least one year before sale
may occur;
(ii) the Company must be at the time of sale and for
a specified prior period a reporting company under
the Exchange Act of 1934 and current in its filings
thereunder;
(iii) sale must occur in a customary sale through a
broker;
(iv) the number of shares which may be sold within
any three (3) month period must not exceed the volume
limitations contained in the Rule; and
(v) prior notice of an intended sale must be fully
filed with the Commission in the manner prescribed by
law. Xxxxxx realizes that, in the event Rule 144 is
not available, registration under the Act or an
exemption therefrom will be required for any sale and
the Company is not obligated to register any shares
or to assist in obtaining an exemption from such
registration if such exemption is otherwise
available. Accordingly, Xxxxxx understands that, if
the terms and conditions of Rule 144 are not fully
met, sale of the shares acquired hereby may not be
readily possible.
(c) Xxxxxx further acknowledges that he has reviewed such
information regarding the Company's activities as he
deems necessary to satisfy himself regarding the
desirability of purchasing the Common Stock pursuant
hereto, which information has included, without
limitation, copies of the annual reports of the
Company on Forms 10-K and 10-K/A for the year ended
December 31, 1998 and Forms 10-K for the years ended
May 31, 1997 and 1996, as amended, and on Forms 10-Q,
as filed with the Securities and Exchange Commission
during the fiscal years 1998 and 1997.
6. Shareholder Rights. Xxxxxx shall have rights as a shareholder only
with respect to any Shares covered by the Option after due exercise of the
Option and tender of the full purchase price for the Option Shares being
purchased pursuant to such exercise.
7. Adjustments. The Board reserves the right to adjust the number
and/or kind of securities, to the extent applicable, allocated to the Option in
accordance with Paragraph 12 of the Plan. The Board's determination as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive. No fractional shares of Common Stock shall be issued under the Plan
or any such adjustment.
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8. Non-Assignability. The Option shall not be transferable by Xxxxxx
otherwise than by will or by the laws of descent and distribution and shall be
exercisable, during Xxxxxx'x lifetime, only by Xxxxxx. The Option shall not be
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process.
Any attempted transfer, assignment, pledge, hypothecation or other disposition
of the Option or of any rights granted hereunder contrary to the provisions of
this Section 7, or the levy of any attachment or similar process upon the Option
or such right, shall be null and void.
9. Notices. Any notices required or permitted by the terms of this
Agreement shall be given by registered or certified mail, return receipt
requested, addressed as follows:
To the Company:
Prime Cellular, Inc.
000 Xxxxxxxx Xxxxxx Xxxxxxxxxxxx, XX 00000
Attention: Chief Financial Officer
To Xxxxxx:
Xxxxxx X. Xxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
or to such other address or addresses of which notice in the same
manner has previously been given. Any such notice shall be deemed to
have been given three (3) days from mailing when mailed in accordance
with the foregoing provisions. Either party hereto may change the
address of which notices shall be given by providing the other party
hereto with written notice of such change.
10. Governing Law. This Agreement shall be construed and enforced in
accordance with the law of the State of New Jersey without giving effect to its
conflicts of laws provisions.
11. Benefit of Agreement. This Agreement shall be for the benefit of
and shall be binding upon the heirs, executors, administrators and successors of
the parties hereto.
12. Severability. In the event that any term or condition in this
Agreement shall for any reason be held by a court of competent jurisdiction to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other term or condition of this
Agreement, but this Agreement shall be construed as if such invalid or illegal
or unenforceable term or condition had never been contained herein.
13. Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the subject matter hereof and contains all of the covenants and agreements
between the parties with respect thereto. Any modification or termination of
this Agreement will be effective only if it is in writing signed by all of the
parties hereto.
14. Execution in CounterQarts. This Agreement may be executed by the
parties in one or more counterparts, each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Xxxxxx has hereunto set his hand,
all as of the day and year first above written.
PRIME CELLULAR, INC.
/s/ XXXXXXXX X. XXXXX
/s/ XXXXXX X. XXXXXX
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EXHIBIT A
NOTICE OF EXERCISE OF
PRIME CELLULAR INC. STOCK OPTION TO PURCHASE COMMON STOCK OF
PRIME CELLULAR INC.
Name ___________________
Address ___________________
Date ___________________
Re:
Exercise of Prime Cellulart Inc. Stock Option
Gentlemen:
Subject to acceptance hereof in writing by Prime Cellulart Inc. (the
"Company") pursuant to the provisions of the Amended and Restated Stock
Option Agreement between the Company and the Undersigned the
Undersigned hereby elects to exercise options granted to the
Undersigned to purchase _____________ shares of $.01 par value Common
Stock of the Company (the "Common Stock"). Enclosed is a certified
check (or bank cashiers check) for $_________ for the full purchase
price payable to the order of Prime Cellulart Inc.
As soon as the Stock Certificate is registered in the name of the
Undersigned please deliver it to the Undersigned at the above address.
The Undersigned hereby represents, warrants, covenants and agrees with
the Company as follows:
(i) The Common Stock being acquired by the Undersigned will be acquired
for his own account without the participation of any other person with
the intent of holding the Common Stock for investment and without the
intent of participating directly or indirectly in a distribution of
the Common Stock and not with a view tat or for resale in connection
with any distribution of the Common Stock, nor is the Undersigned
aware of the existence of any distribution of the Common Stock;
(ii) The Undersigned is not acquiring the Common Stock based upon any
representation, oral or written, by any person with respect to the
future value of, or income from, the Common Stock but rather upon an
independent examination and judgment as to the prospects of the
Company;
(iii) The Common Stock was not offered to the Undersigned by means of
publicly disseminated advertisements or sales literature, nor is the
Undersigned aware of any offers made to other persons by such means;
(iv) The Undersigned is able to bear the economic risks of the
investment in the Common Stock, including the risk of complete loss of
the investment of the Undersigned therein;
(v) The Undersigned understands and agrees that the Common Stock will
be issued and sold to the undersigned without registration under any
state law relating to the registration of securities for sale, and will
be issued and sold in reliance on the exemptions from registration
under the Securities Act of 1933, as amended ("xxx 0000 Xxx"), provided
by Sections 3(b) and/or 4(2) thereof and the rules and regulations
promulgated thereunder; The Common Stock cannot be offered for sale,
sold or transferred by the Undersigned other than pursuant to an
effective registration under the 1933 Act or in a transaction otherwise
in compliance with the 1933 Act and evidence satisfactory to the
Company of the compliance with the applicable securities laws or other
jurisdictions. The Company shall be entitled to rely upon an opinion of
counsel satisfactory to it with respect to compliance with the above
laws; The Company will be under no obligation to register the Common
Stock or to comply with any exemption available for sale of the Common
Stock without registration, and the information or conditions necessary
to permit routine sales of securities of the Company under Rule 144 of
the 1933 Act are not now available and no assurance has been given that
it or they will become available. The Company is under no obligation to
act in any manner so as to make Rule 144 available with respect to the
Common Stock;
(vi) The Undersigned has had complete access to and the opportunity to
review and make copies of all material documents related to the
business of the Company.
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(vii) The Undersigned has examined such of these documents as the
Undersigned wished and is familiar with the business and affairs of the
Company.
(viii) The Undersigned realizes that the purchase of the Common Stock
is a speculative investment and that any possible profit therefrom is
uncertain;
(ix) The Undersigned has had the opportunity to ask questions of, and
receive answers from, the Company and any person acting on its behalf
and to obtain all material information reasonably available with
respect to the Company and its affairs. The Undersigned has received
all information and data with respect to the Company which the
Undersigned has requested and which the Undersigned has deemed relevant
in connection with the evaluation of the merits and risks of the
investment of the Undersigned in the Company;
(x) The Undersigned has such knowledge and experience in financial and
business matters that the Undersigned is capable of evaluating the
merits and risks of the purchase of the Shares hereunder and the
Undersigned is able to bear the economic risk of such purchase; and
(xi) The agreements, representations, warranties and covenants made by
the Undersigned herein extend to and apply to all of the Common Stock
of the Company issued to the Undersigned pursuant to this Option.
Acceptance by the Undersigned of the certificate representing such
Common Stock shall constitute a confirmation by the Optionee that all
such agreement, representations, warranties and covenants made herein
shall be true and correct at such time.
(xii) The Undersigned understands that the certificates representing
such shares being purchased by the Undersigned in accordance with this
notice shall bear a legend referring to the foregoing covenants,
representations and warranties and restrictions on transfer, and the
Undersigned agrees that a legend to that effect may be placed on any
certificate which may be issued to the Undersigned as a substitute for
the certificates being acquired by the Undersigned in accordance with
this notice.
AGREED TO AND ACCEPTED BY:
PRIME CELLULAR, INC.
By:
Name:
Title:
Number of Shares Exercised:
Number of Shares Remaining:
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