EMPLOYEE STOCK OPTION AGREEMENT
XxxxxxXxxxxxxx.xxx Inc.
Employee Stock Option Agreement
This Agreement, is effective as of September 15, 1999, between
XxxxxxXxxxxxxx.xxx Inc., a Nevada corporation (the "Company"), and Xxxxxx
Xxxxxxx ("Grantee").
WHEREAS, Company has agreed to employ Grantee; and
WHEREAS, the Company desires to provide an incentive to Grantee to encourage
stock ownership and to remain an employee of the Company; and
WHEREAS, the achievement of these goals will be assisted by the grant of a
non-qualified option to purchase shares of the Company's Class A Common Stock,
$.01 par value (the "Class A Common Stock");
NOW, THEREFORE, the parties agree as follows:
1. Grant of Option. The Company hereby grants to Grantee, subject to the terms
and conditions herein set forth, the right and option to purchase from the
Company all or any part of an aggregate of 2,000,000 (two million) shares of
Class A Common Stock, vesting over a three year period from the Grantee's date
of hire, at the purchase price of $35 (thirty-five cents) per share. Such option
to be exercisable as hereinafter provided.
2. Terms and Conditions. The option evidenced hereby is subject
to the following terms and conditions
(A) Expiration Date. The option shall expire on December 31,
2009.
(B) Exercise of Option.
One third of the option is vested on the dates of each of the Grantee's annual
service anniversaries for a period of three years from the date of hire. It may
be exercised, in whole or in part, at any time (from time to time) after the
third service year anniversary, before the expiration date of the option as
provided in paragraph (a) above. A written notice shall accompany any exercise
to the Company specifying the number of shares as to which the option is being 1
exercised. If Grantee shall so request, shares of the Class A Common Stock
purchased upon
exercise of an option may be issued in the name of Grantee or
another person.
(C) Payment of Purchase Price.
At the time of any exercise, Grantee shall deliver to the Company, together with
the notice provided in paragraph (b) above, the full amount of the purchase
price therefore either by bank cashiers check or certified check payable to the
Company or in Class A Common Stock delivered by Grantee valued at the Closing
Price of the Class A Common Stock, or any combination of cash or Class A Common
Stock. The term "Closing Price" shall be the last sale price on the date of the
exercise of the option or, in the case no sale takes place on such date, the
average of the high and low sales prices on the next preceding trading day, in
either case as reported by NASDAQ, or if the shares of Class A Common Stock are
not listed or admitted to trading on NASDAQ, the average high bid and low asked
prices on the principal National Securities Exchange in which the Class A Common
Stock is listed or admitted to trading. If the Class A Common Stock is not
traded such that the Closing Price can be determined in accordance with the
preceding sentence, the Closing Price shall mean the fair market value of the
Class A Common Stock as of the last day of the measuring period as determined by
an independent investment banker approved by the Company and Grantee.
(D) Exercise Upon Termination of Employment.
After vesting, any option granted hereunder may be exercised by Grantee, his
heirs, devises, legatees, legal representative or assigns at any time up to and
including December 31, 2009, whether or not Grantee shall cease to be an
employee of the Company for any reason, including, without limitation,
termination by voluntary resignation, by action of the Company, for cause,
without cause, or by reason of death or disability.
(E) Transferability of Option and Shares Acquired Upon Exercise
of Option.
This option shall be transferable only by will or the laws of descent and
distribution; provided Grantee may transfer the option only with the consent of
the Company. Except as limited by applicable securities laws, shares of Class A
Common Stock acquired upon exercise of this option hereunder shall be freely
tradeable.
(F) Adjustment of the Changes in the Stock.
(i) In the event the shares of Class A Common Stock, as presently
constituted, shall be changed into or exchanged for a different number
or kind of shares of stock o other securities of the Company or of
another corporation (whether by reason o merger, consolidation,
recapitalization, reclassification, split, reverse split, combination
of shares, or otherwise) or if the number of such shares of Class A
Common Stock shall be increased through the payment of a stock
dividend, then there shall be substituted for or added to each share of
Class A Common Stock theretofore appropriated or thereafter subject or
which may become subject to an option, the number and kind of shares of
stock or other securities into which each outstanding share of Class A
Common Stock shall be so changed, or to which each such share shall be
entitled, as the case may be. Outstanding options shal also be
appropriately amended as to price and other terms as may be necessary
to reflect the foregoing events, and immediately vested in their
entirety.
(ii) Further, in the event of a reorganization, recapitalization, stock
split, stock dividend, combination of shares, consolidation, merger
(other than a merger or consolidation which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares), any sale or transfer by the Company of al or substantially all
of its assets or any tender offer or exchange offer for or th
acquisition, directly or indirectly, by any person or group of all or a
majority of th then outstanding voting securities of the Company,
rights offering, or any othe change in the corporate structure or
rights with respect to any shares of th Company, adjustments shall be
made to the number or type of stock subject to thi Agreement and, in
order to prevent dilution or enlargement of the rights o Grantee, to
the number of shares of Class A Common Stock subject to the option and
the type and option price of the Class A Common Stock subject to the
then outstanding option.
(G) Withholding.
Grantee may elect that shares of the Class A Common Stock valued at the Closing
Price b applied towards the payment of withholding taxes.
(3) Registration.
The Company shall register all the shares underlying the option on a
Registration Statement with the Registration Statement filed for the shares
underlying the Company's 1999 Stock Option and Restricted Stock Plan (the
"Plan") or on Form S-8 as soon as reasonably practical after the filing of the
Registration Statement for the Plan, but in no event later than 120 days after
the date the Class A Common Stock shall first be traded on NASDAQ (on other than
a when issued basis). If the shares underlying the option granted hereunder have
not been registered by the Company by the date of exercise of the option, the
Company shall cause such shares to be registered on Form S-3 upon Grantee's
exercise of the option.
(4) Non-Qualified Stock Options.
The Company and Grantee acknowledge the stock options granted hereunder shall be
treated as nonqualified stock options for U.S. federal income tax purposes.
(5) Grantee to Have No Rights as a Stockholder.
With regard to the stock underlying the option (from time to time) Grantee shall
not have the rights of a stockholder until Grantee has timely exercise the
option relating to such stock and paid in full the option price relating
thereto.
(6) Notice.
Notice to the Company shall be deemed given if in writing and mailed to the
Secretary of the Company at its principal executive offices by first class,
certified mail at the then principal office of the Company.
(7) Governing Law.
This Agreement shall be construed and enforced in accordance with, and governed
by, the laws of the State of Nevada.
(8) Binding Agreement.
This Agreement constitutes the binding agreement of the parties with respect to
the grant of options to Grantee. The Company represents and warrants to Grantee
that this Agreement and the grant of options hereunder have been duly authorized
pursuant to any necessary corporate action. This Agreement may not be modified
except by the mutual agreement of the parties in writing. In the event of any
overlap, inconsistency, contradiction or any other conflict between this
Agreement and any other agreement, option plan, policy or other statement, this
Agreement shall be controlling.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year written above.
XxxxxxXxxxxxxx.xxx Inc. Employee
Xxxx Xxxxxxxxx Xxxx Xxxxxxxxx
Chairman and CEO Director and Secretary
XxxxxxXxxxxxxx.xxx XxxxxxXxxxxxxx.xxx
