EXHIBIT 6.39
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Option") is granted this 15th day of
May 2000, by Total Film Group, Inc., a Delaware corporation, (the "Company")
pursuant to a resolution of the Board of Directors of the Company (the
"Board") to Xxxxxx Xxxxx ("Optionee").
RECITALS:
WHEREAS, the Board of Directors has determined that the services of Mr.
Xxxxxx Xxxxx warrant the issuance of additional compensation beyond that which
the Company is obligated to pay to Xx. Xxxxx; and
WHEREAS, for such additional compensation the Board of Directors has
agreed to grant to Optionee options to purchase up to 500,000 shares of the
Company's common stock, par value $.001 (the "Common Stock");
NOW, THEREFORE, in consideration of the mutual terms and conditions of
this Option, the parties hereto agree as follows:
1. Grant of Option. The Company hereby irrevocable grants to
Optionee the right and option to purchase all or any part of an aggregate of
500,000 shares of Common Stock on the terms and conditions hereof.
2. Exercise Price. The exercise price of this Option shall be $2.00
per share.
3. Vesting; Term of Option. Subject to the other provisions
contained herein, such options shall vest immediately and shall be immediately
exercisable. Further subject to the other provisions contained herein, the
Options shall expire at 5:00 p.m Pacific Time on May 15, 2003. In no event
may an Option be exercised after the expiration of its term.
4. Shareholder's Rights. The Optionee shall have the rights of a
shareholder only with respect to Common Stock fully paid for by Optionee under
this Option.
5. Persons Entitled to Exercise. During the Optionee's lifetime,
this Option can only be exercised by the Optionee, and neither this Option nor
any right hereunder can be transferred other than by testamentary disposition
or the laws of descent and distribution. Neither this Option nor any right
hereunder shall be subject to lien, attachment, execution, or similar
process. In the event of any alienation, assignment, pledge, hypothecation,
or other transfer of this Option or any right hereunder, or in the event of
any levy, attachment, execution, or similar process, this Option and all
rights granted hereunder shall be immediately null and void.
6. Adjustment to Number of Shares of Common Stock. In the event that
the number of shares of Common Stock of the Company from time to time issued
and outstanding is increased pursuant to a stock split or a stock dividend,
the number of shares of Common Stock then covered by this Option shall be
increased proportionately, with no increase in the total purchase price of the
shares then so covered. In the event that the number of shares of Common
Stock of the Company from time to time issued and outstanding is reduced by a
combination or consolidation of shares, the number of shares of Common Stock
then covered by this Option shall be reduced proportionately, with no
reduction in the total purchase price of the shares then so covered. In the
event that the Company should transfer assets to another corporation and
distribute the stock of such other corporation without the surrender of Common
Stock of the Company, and if such distribution is not taxable as a dividend
and no gain or loss is recognized by reason of section 355 of the Internal
Revenue Code of 1986 (the "Code"), or any amendment or successor statute of
like tenor, then the total purchase price of the Common Stock then covered by
each outstanding Option shall be reduced by an amount that bears the same
ratio to the total purchase price then in effect as the market value of the
stock distributed in respect of a share of the Common Stock of the Company,
immediately following the distribution, bears to the aggregate of the market
value at such time of a share of the Common Stock of the Company plus the
stock distributed in respect thereof. In the event that the Company
distributes the stock of a subsidiary to its shareholders, makes a
distribution of a major portion of its assets, or otherwise distributes
significant portion of the value of its issued and outstanding Common Stock to
its shareholders, the number of shares then subject to this Option, or the
exercise price of this Option, may be adjusted in the reasonable discretion of
the Board or a duly authorized committee. All such adjustments shall be made
by the Board or duly authorized committee, whose determination upon the same,
absent demonstrable error, shall be final and binding. No fractional shares
shall be issued, and any fractional shares resulting from the computations
pursuant to this section shall be eliminated from this Option. No adjustment
shall be made for cash dividends, for the issuance of additional shares of
Common Stock for consideration approved by the Board, or for the issuance to
stockholders of rights to subscribe for additional Common Stock or other
securities.
7. Method of Exercise. This Option may be exercised by delivery of a
notice of exercise, a form of which is attached hereto as Exhibit "A" and
incorporated herein by this reference, setting forth the number of Options to
be exercised together with either:
a. A certified check or bank check payable to the order of the
Company in the amount of the full exercise price of the Common Stock being
purchased;
b. Shares of Common Stock of the Company already owned by the
Optionee equal to the exercise price with the Common Stock valued at its fair
market value based on the closing bid quotation for such stock on the close of
business on the day last preceding the date of the exercise of such Option, as
reported on the OTC Bulletin Board, or if not quoted on the OTC Bulletin
Board, then as determined by the Company through any other reliable means of
determination available on the close of business on the day last preceding the
date of such exercise;
c. Options or other rights to purchase Common Stock valued at
the amount by which the closing bid quotations (as determined in accordance
with subparagraph (b) above) of the Common Stock subject to options or other
rights exceeds the exercise or purchase price provided on such options or
rights; or
d. Cancellation of debt owed by the Company to the Optionee,
including debt incurred for professional services rendered, employment
relationships, or otherwise, upon presentation of an invoice for services
provided to the Company.
As soon as practicable after receipt by the Company of such notice, a
certificate or certificates representing such shares of Common Stock shall be
issued in the name of the Optionee, or, if the Optionee shall so request in
the notice exercising the Option, in the name of the Optionee and another
person jointly, with right of survivorship, and shall be delivered to the
Optionee. If this Option is not exercised with respect to all Common Stock
subject hereto, Optionee shall be entitled to receive a similar Option of like
tenor covering the number of shares of Common Stock with respect to which this
Option shall not have been exercised.
8. Withholding. If the exercise of this Option is subject to
withholding or other trust fund payment requirements of the Code or applicable
state or local laws, such requirements may, at the discretion of the Board or
a duly authorized committee and to the extent permitted by the then governing
provisions of the Code, be met (i) by the holder of this Option either
delivering shares of Common Stock or canceling Options or other rights to
acquire Common Stock with a fair market value equal to such requirements; (ii)
by the Company withholding shares of Common Stock subject to this Option with
a fair market value equal to such requirements; or (iii) by the Company making
such withholding or other trust fund payment and the Optionee reimbursing the
Company such amount paid within 10 days after written demand therefor from the
Company.
9. Availability of Shares. During the term of this Option, the
Company shall at all times reserve for issuance the number of shares of Common
Stock subject to this Option.
10. Limitations on Right to Exercise. If the Board of Directors, in
its sole discretion, shall determine that it is necessary or desirable to
list, register, or qualify the Common Stock under any state or federal law,
this Option may not be exercised, in whole or in part, until such listing,
registration, or qualification shall have been obtained free of any conditions
not acceptable to the board.
11. Restrictions on Transfer. The Option and the Common Stock
subject to the Option (collectively referred to as the "Securities") are
subject to registration under the Securities Act of 1933, as amended (the
"Securities Act"), and any applicable state securities statutes. Optionee
acknowledges that unless a registration statement with respect to the
Securities is filed and declared effective by the Securities and Exchange
Commission, and the appropriate state governing agency, the Securities have or
will be issued in reliance on specific exemptions from such registration
requirements for transactions by an issuer not involving a public offering and
specific exemptions under state statutes. Any disposition of the Securities
may, under certain circumstances, be inconsistent with such exemptions. The
Securities may be offered for sale, sold, or otherwise transferred only if (i)
registered under the Securities Act, and in some cases, under the applicable
state securities acts, or, if not registered, (ii) only if pursuant to an
exemption from such registration requirements and only after the Optionee
provides an opinion of counsel or other evidence satisfactory to the Company
to the effect that registration is not required. In some states, specific
conditions must be met or approval of the securities regulatory authorities
may be required before any such offer or sale. If Rule 144 is available (and
no assurance is given that it would be), only routine sales of the Common
Stock in limited amounts can be made after one year following the acquisition
date of the Securities, as determined under Rule 144(d), in accordance with
the terms and conditions of Rule 144. The Company is under no obligation to
make Rule 144 available. In the event Rule 144 is not available, compliance
with Regulation A or some other disclosure exemption may be required before
the Optionee can sell, transfer, or otherwise dispose of the Securities
without registration.
If the Securities are not registered, the Company may refuse to transfer
the Securities to any transferee who does not furnish in writing to the
Company the same representations and warranties set forth in this paragraph
and agree to the same conditions with respect to such Securities as are set
forth herein. The Company may further refuse to transfer the Securities if
certain circumstances are present reasonably indicating that the proposed
transferee's representations are not accurate. In any event, in the absence
of an effective registration statement covering the Securities, the Company
may refuse to consent to any transfer in the absence of an opinion of legal
counsel, satisfactory to and independent of counsel of the Company, that such
proposed transfer is consistent with the above conditions and applicable
securities laws.
12. Record Owner. The Company may deem the Optionee as the absolute
owner of this Option for all purposes. This Option is exercisable only by the
Optionee or by the Optionee's duly designated or appointed representative.
This Option is not assignable.
13. No Right of Employment. Nothing contained in this Option shall
be construed as conferring on the Optionee any right to continue or remain as
an employee of the Company or its subsidiaries.
14. Validity and Construction. The validity and construction of this
Option shall be governed by the laws of the State of Utah.
IN WITNESS WHEREOF, the parties hereto have executed this document the
7th day of July, 2000, to be effective the day and year first above written.
Company:Total Film Group, Inc.
By /s/ Xxx Xxxxx, Secretary
Optionee: /s/ Xxxxxx Xxxxx
EXHIBIT "A"
FORM OF EXERCISE
(To be signed only upon exercise of Option)
To: Total Film Group, Inc.
The undersigned, the owner of the attached Option, hereby irrevocable
elects to exercise the purchase rights represented by the Option for, and to
purchase thereunder, __________________ shares of Common Stock of Total Film
Group, Inc. Enclosed is payment in the amount of
$____________________________________________, the exercise price of the
Common Stock to be acquired. Please have the certificate(s) registered in the
name of _______________________ and delivered to
_________________________________________________________________. If this
exercise does not include all of the Common Stock covered by the attached
Option, please deliver a new Option of like tenor for the balance of the
Common Stock to the undersigned at the foregoing address.
DATED this ___________ day of ____________________ 200____.
Signature of Optionee
