STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is entered into as of the 10th
day of August, 1998 by and among XXXXXX X. XXXXXX ("Optionee") and GALAXY
ENTERPRISES, INC., a Nevada corporation (the "Company").
WHEREAS, in consideration for the Optionee agreeing to serve as a member
of the Company's Board of Directors, the Company desires to grant to Optionee
an option to acquire Ten Thousand (10,000) shares of the Company's Common
Stock (the "Shares") pursuant to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1 . Grant of Option. The Company hereby grants to Optionee an option
(the "Option") to purchase all or any portion of the Shares, at a purchase
price of $1.375 per share (the "Exercise Price"), subject to the terms and
conditions set forth herein.
2. Vesting of Option. The Optionee shall have the immediate right to
exercise the Option, in full, upon execution of this Agreement.
3. Term of Option. Optionee's right to exercise the Option shall
terminate on the date which is ten (10) years from the date hereof, regardless
of whether or not the Optionee is serving as a member of the Company's Board
of Directors.
4. Exercise of Option. Until termination of the right to exercise the
Option in accordance with Section 3 above, the Option may be exercised in
whole or in part by Optionee upon delivery to the Company of a check or cash
in the amount of the Exercise Price.
5. Representations and Warranties of Optionee. Optionee hereby
represents and warrants to the Company as follows:
(a) Investment Intent. Optionee is acquiring the Option for
investment for Optionee's own account and not with a view to, or for resale in
connection with any distribution thereof. Optionee understands that the Shares
underlying the Option have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), nor qualified under any applicable
state securities laws.
(b) Rule 144. Optionee acknowledges that the Shares underlying the
Option must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available.
Optionee has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act.
(c) Legend. Optionee understands that -the certificate evidencing
the Shares underlying the Option will bear a legend substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933; THEY HAVE BEEN ACQUIRED BY THE HOLDER
FOR INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT
OF 1933, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
6. Adjustments Upon Changes in Capital Structure. In the event that the
Outstanding shares of common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of a recapitalization,
stock split, combination of shares, reclassification, stock dividend or other
change in the capital structure of the Company, then appropriate adjustment
shall be made to the number of Shares subject to the unexercised portion of
the Option and to the Exercise Price per share, in order to preserve, as
nearly as practical, but not to increase, the benefits of Optionee under the
Option.
7. Rights as Stockholder. Optionee (or transferee of the Option by will
or by the laws of descent and distribution) shall have no rights as a
stockholder with respect to any Shares covered by the Option until the date of
the issuance of a stock certificate or certificates to him or her for such
Shares pursuant to the exercise of such Option.
8. Miscellaneous.
(a) Severability. Should any provision or portion of this
Agreement be held to be unenforceable or invalid for any reason, the remaining
provisions and portions of this Agreement shall be unaffected by such holding.
(b) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed aa original and all of which
together shall be deemed one instrument.
(c) Entire Agreement, This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by
the Party to be bound thereby. No waiver of any Of the Provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
(d) Further Assurances. Each party hereto shall, from time to time
at and after the date hereof, execute and deliver such instruments, documents
and assurances and take such further actions as the other party may reasonably
request in order to carry out the purpose and intent of this Agreement.
(e) Notices, etc. All notices and other communications provided
for herein shall be in writing by hand-delivery, next-day air courier,
certified first class mail, return receipt requested, telex or facsimile:
If to the Company: GALAXY ENTERPRISES, INC.
000 Xxxxx Xxxxxxxxxx Xxxx Xxxxx
Xxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
If to Optionee: Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxxx Xxx
Xxxxx, Xxxx 00000
Except as otherwise provided in this Agreement, all such communications shall
be deemed to have been duly given when (i) delivered by hand, if personally
delivered, (ii) one Business Day after being timely delivered to a next-day
air courier, (iii) three Business Days following mailing by registered or
certified mail, return receipt requested, postage prepaid, (iv) when answered
back, if telexed, or (vi) when receipt is acknowledged by the recipient's
facsimile machine, if faxed.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
GALAXY ENTERPRISES, INC.
By:
Its:
Xxxxxx X. Xxxxxx
