Stock Option Agreement
January
12, 2007
Xxxxxx
Xxxxxxx
000
Xxxxx
Xxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
Dear
Xx.
Xxxxxxx:
I
am
pleased to inform you that on January 12, 2007 (the “Date of Grant”), InfoSearch
Media, Inc. (the “Company”) granted you a non-qualified
stock option
(the
“Stock Option”) to purchase shares of the Company’s common stock, par value
$0.001 per share (the “Company Stock”) as set forth below. The grant of the
Stock Option was not made pursuant to the MAC Worldwide, Inc. (predecessor
to
the Company) 2004 Stock Option Plan, as amended (the “Plan”). Please note that
because the Stock Option was granted outside of the Plan, it does not qualify
as
an “incentive stock option” under Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).
Now,
therefore, in consideration of the foregoing and the mutual covenants
hereinafter set forth:
1. Stock
Option.
The
Company hereby grants you the Stock Option to purchase from the Company Seven
Hundred Seventy-Two Thousand One Hundred Fifty (772,150) shares of the Company
Stock at a price of Twenty Cents ($0.20) per share (the closing market price
of
the Company Stock on the OTC Bulletin Board on January 12, 2007, the last day
of
trading prior to the Date of Grant). Unless earlier exercised or terminated
in
accordance with the terms hereunder, the Stock Option will expire on the date
that is the ten (10) year anniversary
of the Date of Grant.
2. Entitlement
to Exercise the Stock Option.
The
Stock Option shall vest and become immediately exercisable upon the first
occurrence of the Company reporting a net profit for a full fiscal year
following fiscal year 2006. The Stock Option shall be forfeited if unvested
as
of the date of termination for any reason of your
employment or other relationship underlying the issuance of the Stock
Option.
3. Method
of Exercise and Payment Under Stock Option.
(a) You
may
exercise the vested portion of the Stock Option in whole or in part, by giving
written notice to the Company which shall state the election to exercise the
Stock Option and the number of shares of Company Stock with respect to which
the
Stock Option is being exercised. The written notice shall be signed by the
person exercising the Stock Option, shall be delivered to the Corporate
Secretary of the Company at the Company’s principal executive office, and shall
be accompanied by payment in full of the exercise price for the shares of
Company Stock being purchased. The exercise price may be paid in cash or check
payable to the order of the Company or (i) by delivery or attestation of shares
of the Company Stock for which you have good title, free and clear of all liens
and encumbrances and which you either (A) have held for at least six (6) months
or (B) have purchased on the open market (“Mature Shares”) (valued at their Fair
Market Value (as defined below)) in satisfaction of all or any part of the
exercise price, (ii) by delivery of a properly executed exercise notice with
irrevocable instructions to a broker to deliver to the Company the amount
necessary to pay the exercise price from the sale or proceeds of a loan from
the
broker with respect to the sale of Company Stock or a broker loan secured by
the
Company Stock, or (iii) a combination of (i) and (ii). For purposes of the
Stock
Option, “Fair Market Value” means on any given date the fair market value of
Company Stock as of such date, as determined by the Board of Directors of the
Company (the “Board”), or a committee thereof. If the Company Stock is listed on
a national securities exchange or traded on the over-the-counter market, “Fair
Market Value” means the closing selling price or, if not available, the closing
bid price or, if not available, the high bid price of the Company Stock quoted
on such exchange, or on the over-the-counter market as reported by The NASDAQ
Stock Market (“NASDAQ”), or if the Company Stock is not listed on NASDAQ, then
by the National Quotation Bureau, Incorporated, as the case may be.
(b) Unless
prior to the exercise of the Stock Option the shares issuable upon such exercise
have been registered with the Securities and Exchange Commission pursuant to
the
Securities Act of 1933, as amended, the notice of exercise shall be accompanied
by your representation or agreement to the effect that such shares are being
acquired for investment purposes and not with a view to the distribution
thereof, and such other documentation as may be required by the Company, unless
in the opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with any such act.
(c) The
Company shall not be obligated to deliver any Company Stock until the shares
have been listed on each securities exchange or market on which the Company
Stock may then be listed or until there has been qualification under or
compliance with such federal or state laws, rules or regulations as the Company
may deem applicable. The Company shall use reasonable efforts to obtain such
listing, qualification and compliance.
4. Tax
Withholding.
As a
condition of exercise, you agree that at the time of exercise that you will
pay
to the Company the aggregate minimum amount of federal, state, local, and
foreign income, payroll, and other taxes that the Company is required to
withhold in connection with the grant, vesting, or exercise of the Stock Option
(the “Applicable Withholding Taxes”). To satisfy the Applicable Withholding
Taxes, you may elect to (a) make cash payment or authorize additional
withholding from cash compensation; (b) deliver Mature Shares (valued at their
Fair Market Value); or (c) have the Company retain that number of shares of
the
Company Stock that would satisfy all or a portion of the Applicable Withholding
Taxes.
5. Transferability
of the Stock Option.
The
Stock Option is not transferable by you (other than by will or by the laws
of
descent and distribution) and may be exercised during your lifetime only by
you.
6. Termination.
(a) In
the
event that your employment or other relationship underlying the issuance of
the
Stock Option is terminated for Cause (as defined below) or you voluntarily
terminate your employment with the Company or a “parent corporation” or a
“subsidiary corporation” (as set forth in Code Sections 424(e) and 424(f),
respectively) of the Company (each an “Affiliate”) other than for “Good Reason,”
your vested and non-vested Stock Option rights shall be forfeited and terminated
immediately and may not thereafter be exercised to any extent. For purposes
of
the Stock Option, “Cause” and “Good Reason” shall have the same meanings given
to such terms (or other terms of similar meaning) in any written employment
or
other similar agreement between you and the Company or an Affiliate for purposes
of termination of employment under such agreement, and in the absence of any
such agreement or if such agreement does not include a definition of “Cause” (or
other term of similar meaning), the term “Cause” shall mean (i) any material
breach by you of any agreement to which you and the Company or an Affiliate
are
parties; (ii) any continuing act or omission to act by you which may have a
material and adverse effect on the Company's business or on your ability to
perform services for the Company or an Affiliate, including, without limitation,
the commission of any crime (other than minor traffic violations); or (iii)
any
material misconduct or material neglect of duties by you in connection with
the
business or affairs of the Company or an Affiliate.
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(b) If
such
employment or services terminate for any other reason, the Stock Option, to
the
extent exercisable as of the date of termination, may be exercised at any time
within six (6) months of termination. For purposes of this Section 6, (i) your
retirement pursuant to a pension or retirement plan maintained by the Company
or
an Affiliate or at the applicable normal retirement date prescribed from time
to
time by the Company shall be deemed to be termination of your employment other
than voluntarily or for Cause; and (ii) if you leave the employ or services
of
the Company or an Affiliate to become an employee or an Outside Director (as
defined below) of, or a consultant or advisor to, an entity that has assumed
the
Stock Option as a result of a corporate reorganization or the like, then such
shall not be considered to have terminated employment or services. For purposes
of the Stock Option, “Outside Director” means a member of the Board who is not
an employee of, or a consultant or advisor to, the Company or an Affiliate.
(c) If
your
employment or services with the Company or an Affiliate ceases because of a
disability within the meaning of Code Section 22(e)(3) (“Disability”), while
employed by, or while serving as an Outside Director for or a consultant or
advisor to, the Company or an Affiliate, then the Stock Option may, subject
to
the provisions of subsection (e) below, be exercised at any time within one
(1)
year after the termination of employment or services due to the
Disability.
(d) If
you
die (i) while employed by, or while serving as an Outside Director for or a
consultant or advisor to, the Company or an Affiliate; or (ii) within six
(6) after
the
termination of employment or services other than voluntarily by you or for
Cause, then the Stock Option may, subject to the provisions of subsection (e)
below, be exercised at any time within one (1) year after your death by the
person or entity designated by you, in a form approved by the Company, to
exercise your rights with respect to the Stock Option after your death, or
if
you do not validly designate a beneficiary, or if the designated beneficiary
no
longer exists, then your beneficiary shall be your estate.
(e) The
Stock
Option may not be exercised after termination of employment, termination of
directorship, termination of consulting or advisory services, Disability or
death except to the extent that you were entitled to exercise the Stock Option
at the time of such termination, and in any event may not be exercised after
the
expiration of the Stock Option in accordance with the terms of this
grant.
(f) The
employment relationship of you and the Company or an Affiliate, if any, shall
be
treated as continuing intact while you are on military or sick leave or other
bona fide leave of absence if such leave does not exceed ninety (90) days or,
if
longer, so long as your right to reemployment is guaranteed either by statute
or
by contract.
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7. Change
in Capital Structure.
(a) In
the
event of a stock dividend, stock split, or combination of shares, share
exchange, share distribution, recapitalization or merger in which the Company
is
the surviving corporation, a spin-off or split-off of a subsidiary or Affiliate,
or other change in the Company’s capital stock (including, but not limited to,
the creation or issuance to stockholders generally of rights, options, or
warrants for the purchase of common stock or preferred stock of the Company),
the aggregate number and kind of shares of stock or securities of the Company
to
be subject to the Stock Option, the per share exercise price of the Stock
Option, the terms of the Stock Option, and other relevant provisions shall
be
proportionately and appropriately adjusted by the Board, or a committee thereof,
in its discretion, and the determination of the Board, or a committee thereof,
shall be binding on all persons. If the adjustment would produce fractional
shares with respect to any unexercised portion of the Stock Option, the Board,
or a committee thereof, may adjust appropriately and in a nondiscriminatory
manner the number of shares covered by the Stock Option so as to eliminate
the
fractional shares.
(b) If
the
Company is a party to a consolidation or a merger in which the Company is not
the surviving corporation, a transaction that results in the acquisition of
substantially all of the Company’s outstanding stock by a single person or
entity, or a sale or transfer of substantially all of the Company's assets,
the
Board, or a committee thereof, may take such actions with respect to the Stock
Option as the Board, or a committee thereof, deems appropriate.
8. Delivery
of Certificate.
The
Company may delay delivery of the certificate for shares purchased pursuant
to
the exercise of the Stock Option until (a) receipt of any required
representation by you or completion of any registration or other qualification
of such shares under any state or federal law or regulation that the Company’s
counsel shall determine as necessary or advisable; and (b) receipt by the
Company of advice by counsel that all applicable legal requirements have been
complied with. As a condition of exercising the Stock Option, you may be
required to execute a customary written indication of your investment intent
and
such other agreements the Company deems necessary or appropriate to comply
with
applicable securities laws.
9. No
Guaranteed Right of Employment.
If you
are employed by the Company, nothing contained herein shall confer upon you
any
right to be continued in the employment of the Company or interfere in any
way
with the right of the Company to terminate your employment at any time for
any
cause.
10. No
Rights of a Stockholder.
Nothing
contained herein shall confer upon you any rights of a stockholder with respect
to the shares covered by the Stock Option until such stock shall be transferred
to you upon the exercise of the Stock Option.
11. Notices.
Notices
hereunder shall be mailed or delivered to the Company at its principal place
of
business, and shall be delivered to you in person or mailed or delivered to
you
at the address set forth below, or in either case at such other address as
one
party may subsequently furnish to the other party in writing.
12. Non-Solicitation.
If you
(a) become associated with, recruit or solicit customers or other employees
of
the Company or an Affiliate, are employed by, render services to, or own any
interest in (other than any nonsubstantial interest, as determined by the Board,
or a committee thereof) any business that is in competition with the Company
or
any of its Affiliates; or (b) engage in, or have engaged in, conduct which
the
Board, or a committee thereof, determines to be detrimental to the interests
of
the Company or any of its Affiliates, the Board, or a committee thereof, may,
in
its sole discretion:
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(i)
cancel the Stock Option, regardless of whether then exercisable;
(iii)
require you to repay any payment or benefit received under the Stock Option
within the previous two (2) years; and/or
(iii)
offset any other amounts owed to you by any payment received under the Stock
Option within the previous two (2) years.
13. American
Jobs Creation Act of 2004.
(a) It
is
intended that the Stock Option comply in all applicable respects with the
American Jobs Creation Act of 2004 and Code Section 409A, as either may be
amended from time to time, and any rulings, regulations, or other guidelines
promulgated under either or both statutes (such statutes, rulings, regulations
and other guidelines to be referred to collectively herein as “Section 409A”).
The Stock Option, and any amendments hereto, shall therefore be interpreted
and
implemented at all times so as to (i) ensure compliance with Section 409A and
(ii) avoid any penalty or early taxation of any payment or benefit under the
Stock Option.
(b) Anything
herein to the contrary notwithstanding, the Board shall approve and implement
such amendments as it deems necessary or desirable to ensure compliance with
Section 409A and to avoid any penalty or early taxation of any payment or
benefit under the Stock Option.
15. Choice
of Law.
The
Stock Option shall be governed by Delaware law, without giving effect to the
conflicts of laws provisions thereof.
| INFOSEARCH MEDIA, INC. | ||
| |
|
|
|
By: Xxxxx Xxxxxxxx, XX |
||
| Title: Chief Financial Officer | ||
ACKNOWLEDGEMENT
BY OPTIONEE
The
foregoing Stock Option is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned as of the Date of Grant specified
above.
| OPTIONEE | ||
| Xxxxxx Xxxxxxx | ||
| |
|
|
|
Optionee’s Signature |
||
|
|
||
|
Optionee’s
Address:
000
Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
|
||
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