Exhibit 10.7
MEDIACOMM BROADCASTING SYSTEMS, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into as
of October 15, 1999 (the "Date of Grant"), by and between MediaComm Broadcasting
Systems, Inc., a Colorado corporation (the "Company"), and Xxxxxxxx Xxxxxx
("Optionee").
WITNESSETH:
WHEREAS, effective August 25, 1999, the Board of Directors determined that
the Optionee should receive an option to purchase shares of the Company's Common
Stock under the Company's Non-Qualified Stock Option and Stock Grant Plan in
order to provide the Optionee with an opportunity for investment in the Company
and additional incentive to pursue the success of the Company, said option to be
for the number of shares, at the price per share and on the terms set forth in
this Agreement; and
WHEREAS, Optionee desires to receive an option on the terms and conditions
set forth in this Agreement and agrees to perform the services requested by the
Company.
NOW, THEREFORE, the parties agree as follows:
1. Stock Option Plan. This agreement is granted pursuant to, and is subject
to the terms and conditions of the MediaComm Broadcasting Systems Non-Qualified
Stock Option and Stock Grant Plan dated March 1, 1999 (the "Plan"). All
conditions of the Plan, except as may be modified herein, shall govern the
rights of Optionee under this Agreement.
2. Grant of Option. The Company hereby giants to Optionee, as a matter of
separate agreement and not in lieu of salary or any other compensation for
service, and subject to the vesting schedule set forth in Section 3, the right
and option (the "Option") to purchase all or any part of an aggregate of 75,000
shares of reserved authorized and unissued no par value Common Stock of the
Company subject to adjustment as hereinafter set forth (the "Option Shares"),
pursuant to the terms and conditions set forth in this Agreement.
3. Vesting Schedule. The grant of the Option is subject to a vesting
schedule hereinafter set forth and is dependent on the Optionee remaining an
employee of the Company at all times during the time set forth in such vesting
schedule, subject only to vacation, sick leave, leaves of absence and other
absence permitted by the Company in accordance with its policies applicable
generally to employees. Optionee cbeame an employee of the Company on or about
April 1, 1999. Accordingly, the vesting schedule to which the grant of the
Option shall be subject as is follows:
Number of Shares Date Exercisable
---------------- -----------------
15,000 April 1, 2000
15,000 April 1, 2001
15,000 Apri1 1, 2002
15,000 April 1, 2003
15,000 April 1, 2004
Separation from employment by Optionee for any reason prior to any of the
foregoing dates shall void any options not vested prior thereto. Any options
previously vested shall also be subject to the terms and
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conditions of Section 7 hereof.
4. Option Price. At any time when shares are to be purchased pursuant to
the Option, the purchase price for each Option Share shall be $0.35 subject to
adjustment as hereinafter set forth (the "Option Price").
5. Option Period. Subject to Section 7 hereof, the Option shall be
exercisable beginning on the date of vesting described in Section 3 and
continuing until April 1, 2005.
65. Exercise of Option.
-------------------
(a) The Option may be exercised by delivering to the Company:
(i) a Notice and Agreement of Exercise of Option, substantially in
the form attached hereto as Exhibit A, specifying the number of
Option Shares with respect to which the Option is exercised; and
(ii) full payment in cash of the Option Price for such shares.
(b) Notwithstanding the foregoing, an Option may not be exercised in part
unless the purchase price of the Option Shares purchased is at least $1,000.00.
(c) Promptly upon receipt of the Notice and Agreement of Exercise and the
finial payment of the Option Price by the Optionee (including payment or
provision for payment of any applicable withholding or similar taxes), the
Company shall deliver to the Optionee a properly executed certificate or
certificates presenting the Option Shares being purchased.
(d) The Optionee shall report all sales of Option shares to the Company in
writing on a form prescribed by the Company. Based upon the report of sales
submitted by the Optionee, the Company may make any withholding required by
state or Federal income tax laws.
7. Termination of Employment. Exercise of the Option shall at all times be
subject to the terms and conditions of Section 7 of the Plan, the terms and
conditions of which are incorporated herein by reference in their entirety. Such
provisions include acceleration of the exercise period in the event the Optionee
shall die, become disabled or otherwise separate from employment with the
Company. Optionee hereby acknowledges receipt of a copy of the Plan, and agrees
to be bound by the terms and conditions hereof, in addition to the terms and
conditions of this Agreement.
8. Transferbility of Option. The Option shall not be transferable except by
will or the laws of descent and distribution, and any attempt to do so shall
void the Option. Any transfer by will or intestate laws shall be subject to the
provisions of Paragraph 7.
9. Adjustment By Stock Split, Stock Dividend, Etc. If at any time the
Company increases or decreases the number of its outstanding shares of Common
Stock, or changes in any way the rights and privileges of such shares, by means
of the payment of a stock dividend or the making of any other distribution on
such shares payable in its Common Stock, or through a stock split or subdivision
of shares, or a consolidation or combination of shares, or through a
reclassification or recapitalization involving its Common Stock included in the
Option and/or the exercise price of the Option shall be increased, decreased or
changed in like manner so that the Optionee shall be entitled to substantially
the same rights as set forth in this Agreement.
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10. Common Stock To Be Received Upon Exercise. Optionee understands that
the Option Shares represent restricted securities within the meaning of the
Securities Act of 1933, have not been registered and that the Company is under
no obligation to register the Option Shares under the 1933 Act, and that in the
absence of any such registration, the Option Shares cannot be sold unless they
are sold pursuant to an exemption from registration under the Act. The Company
is under no obligation to comply, or to assist the Optionee in complying with
any exemption from such registration requirement, including supplying the
Optionee with any information necessary to permit routines sales of the Stock
under Rule 144 of the Securities and Exchange Commission. Optionee also
understands that with respect to Rule 144, routine sales of securities made in
reliance upon such Rule can only be made in limited amounts in accordance with
the terms and conditions of the Rule, and that in cases in which the Rule is
inapplicable, compliance with either Regulation A or another disclosure
exemption under the Act will be required. Thus, the Option Shares will have to
be held indefinitely in the absence of registration under the Act or an
exemption from registration.
Furthermore the Optionee fully understands that the Option Shares have not
been registered under the Act and that they will be issued in reliance upon an
exemption which is available only if Optionee acquiressuch shares for investment
and not with a view to distribution. Optionee is familiar with the phrase
"acquired for investment and not with a view to distribution" as it relates to
the Act and the special meaning given to such term in various releases of the
Securities and Exchange Commission.
The forgoing restrictions or notices thereof may be placed on the
certificates representing the Option Shares purchased pursuant to the Option and
the Company may refuse to issue the certificates or to transfer the shares on
its books unless it is satisfied that no violation of such restrictions will
occur.
11. Privilege of Ownership. Optionee shall not have any of the rights of a
shareholder with respect to the shares covered by the Option except to the
extent that one or more certificates for such shares hall be delivered to him
upon exercise of the Option.
12. Notices. Any notices required or permitted to be given under this
Agreement shall be in writing and they shall be deemed to be given upon receipt
by sender or sender's return receipt for acknowledgment of delivery of said
notice by postage prepaid registered mail. Such notice shall be addressed o the
party to be notified as shown below:
Company: MediaComm Broadcasting Systems, Inc.
000 X. Xxxxxx #00
Xxxxxxxxx, Xxxxxxxx 00000
Optionee: Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxx 00000
Any party may change its address for purposes of this paragraph by giving
the other parties written notice of the new address in the manner set forth
above.
13. Miscellaneous. This Agreement and the Plan constitutes the entire
understanding of the parties with respect to the subject matter herein. This
Agreement shall be governed by the laws of the State Colorado. There are no
representations, promises, warranties, covenants or undertakings other than
those expressly set forth herein. No modification, waiver or termination of
any of the terms herein shall be valid unless in writing and executed with the
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same formality as this Agreement. No waiver by either party of any breach or
default hereof by the other shall be deemed to be a waiver of any preceding or
succeeding breach or default hereof, and no waiver shall be operative unless the
same shall be in writing. The headings contained in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof. Should any provision of this agreement be declared invalid by
a court of competent jurisdiction, the remaining provisions hereof shall remain
in full force and effect regardless of such declaration. In the event of any
dispute or litigation between the parties, the prevailing party shall be
entitled to reasonable attorneys fees and costs. Time is of the essence.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
set forth below, to be effective as of the date and year first above written.
COMPANY: OPTIONEE:
MEDIACOMM BROADCASTING SYSTEMS, INC.
By:
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxxxx Xxxxxx
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