ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
STOCK OPTION GRANT NOTICE
Advanced Remote Communication Solutions, Inc. (the "Company") hereby grants to
Optionholder an option to purchase the number of shares of the Company's Common
Stock set forth below (the "Shares"). This option is subject to all of the terms
and conditions as set forth herein and in the Stock Option Agreement and the
Notice of Exercise, all of which are attached hereto and incorporated herein in
their entirety.
Optionholder: Brandon Nixon
Date of Grant: May 31, 2002
Vesting Commencement Date: May 31, 2002
Number of Shares Subject to Option: 3,000,000
Exercise Price (Per Share): $0.21
Total Exercise Price: $630,000
Expiration Date: May 30, 2012
Type of Grant: Nonstatutory Stock Option
Vesting Schedule: This option (and any Shares issued upon the early exercise of
this Option) shall vest in accordance with the Employment Agreement (the
"Employment Agreement") made and entered into effective as of May 31, 2002, by
and between the Company and Optionholder, a copy of which is attached hereto and
incorporated herein by this reference.
Payment: By cash, check or a Loan (as defined in the Employment Agreement).
Repurchase Rights: The Optionholder agrees that all Shares acquired upon the
exercise of this Option shall be subject to repurchase rights exercisable by the
Company as set forth in the Employment Agreement.
Additional Terms/Acknowledgments: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Grant Notice and the Stock
Option Agreement. Optionholder further acknowledges that as of the Date of
Grant, this Grant Notice, the Stock Option Agreement and the Employment
Agreement set forth the entire understanding between Optionholder and the
Company regarding the acquisition of stock in the Company and supersede all
prior oral and written agreements on that subject.
ADVANCED REMOTE COMMUNICATION OPTIONHOLDER:
SOLUTIONS, INC.
By: _/s/ Dean Kernus /s/ Brandon Nixon
Signature Brandon Nixon
Name: Dean Kernus Date: May 31, 2002
Title: CFO/Secretary
Date: May 31, 2002
ATTACHMENTS: Stock Option Agreement
Notice of Exercise
ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
STOCK OPTION AGREEMENT
(NON-QUALIFIED)
Pursuant to your Stock Option Grant Notice ("Grant Notice") and this
Stock Option Agreement (this "Agreement"), Advanced Remote Communications, Inc.
(the "Company") has granted you an option to purchase the number of shares of
the Company's Common Stock indicated in your Grant Notice at the exercise price
indicated in your Grant Notice.
The details of your option are as follows:
1. VESTING. Subject to the limitations contained herein, your option
(and any shares of Common Stock issued upon the early exercise of your option)
will vest as provided in your Grant Notice, provided that in all events, vesting
will cease upon the termination of your Continuous Status. For purposes of this
Agreement, the term "Continuous Status" means your employment or relationship as
an officer, director or consultant has not been interrupted or terminated.
2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of
Common Stock subject to your option and your exercise price per share are
as referenced in your Grant Notice.
3. EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). Subject to the
provisions of your option, you may elect at any time that is both (i) during the
period of your Continuous Service and (ii) during the term of your option, to
exercise all or part of your option, including the nonvested portion of your
option; provided, however, that:
(a)______a partial exercise of your option shall be deemed to
cover first vested shares of Common Stock and then the earliest vesting
installment of unvested shares of Common Stock; and
(b)______any shares of Common Stock so purchased from
installments that have not vested as of the date of exercise shall be subject to
the repurchase rights in favor of the Company as described in Section 10 of this
Agreement.
4. METHOD OF PAYMENT. Payment of the exercise price is due in
full upon exercise of all or any part of your option. You may elect to make
payment of the exercise price in any manner permitted by your Grant Notice.
5. WHOLE SHARES. You may exercise your option only for whole shares
of Common Stock.
6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, you may not exercise your option unless the shares of Common
Stock issuable upon such exercise are then registered under the Securities Act
or, if such shares of Common Stock are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of your option must also comply
with other applicable laws and regulations governing your option, and you may
not exercise your option if the Company determines that such exercise would not
be in material compliance with such laws and regulations.
7. TERM. The term of your option commences on the Date of Grant and
expires upon the earliest of the following:
(a)______three (3) months after the termination of your
Continuous Status for any reason other than termination of your Continuous
Status as a result of death or Complete Disability (as defined in the Employment
Agreement); provided, however, if during any part of such three- (3-) month
period your option is not exercisable solely because of the condition set forth
in the preceding paragraph relating to "Securities Law Compliance," your option
shall not expire until the earlier of the Expiration Date or until it shall have
been exercisable for an aggregate period of three (3) months after the
termination of your Continuous Status. Despite the preceding sentence, to the
maximum extent permitted by applicable law, if your Continuous Status is
terminated for Cause (as defined in the Employment Agreement), this option shall
in all respects terminate immediately.
(b)______twelve (12) months after the termination of
your Continuous Status due to your Complete Disability;
(c)______twelve (12) months after your death if you die either
during your Continuous Status or within three (3) months after your Continuous
Status terminates;
(d)______the Expiration Date indicated in your Grant Notice;or
(e)______the tenth (10th) anniversary of the Date of Grant.
8. EXERCISE.
(a)______You may exercise your option during its term by
delivering a Notice of Exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require.
(b)______By exercising your option you agree that, as a
condition to any exercise of your option, the Company may require you to enter
into an arrangement providing for the payment by you to the Company of any tax
withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the
shares of Common Stock are subject at the time of exercise, or (3) the
disposition of shares of Common Stock acquired upon such exercise.
9. TRANSFERABILITY. Your option is not transferable, except by will or by
the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to
the Company, in a form satisfactory to the Company, you may designate a third
party who, in the event of your death, shall thereafter be entitled to exercise
your option
10. RIGHT OF REPURCHASE. If your Continuous Status is terminated: (a) for any
reason, the Company shall have the right to repurchase from you for cash, at the
Exercise Price indicated on your Grant Notice, any or all unvested Shares issued
to you upon the exercise of your option, and (b) for Cause, the Company shall
have the right to repurchase from you for cash, at the Exercise Price indicated
on your Grant Notice, all Shares, whether vested or unvested, which were issued
to you upon the exercise of your option (the "Repurchase Right"). The Repurchase
Right shall be exercisable by written notice delivered to you within sixty (60)
days after your Continuous Status is terminated for any reason. The notice shall
indicate the number of shares to be repurchased and the date on which the
purchase is to be effected (the "Purchase Date"), such date to be not more than
thirty (30) days after the date of notice. No fractional shares shall be
repurchased by the Company.
11. SPECIAL TAX ELECTION.
(a) Section 83(b) Election Applicable to the Exercise of a
Non-Statutory Stock Option. If any shares of Common Stock are unvested and
acquired hereunder ("Unvested Non-Statutory Shares") then you understand that
under Section 83 of the Internal Revenue Code of 1986, as amended (the "Code"),
the excess of the fair market value of the Unvested Non-Statutory Shares on the
date any forfeiture restrictions applicable to such shares lapse over the Option
Price paid for such shares will be reportable as ordinary income on such lapse
date. For this purpose, the term "forfeiture restrictions" includes the right of
the Company to repurchase the Unvested Non-Statutory Shares pursuant to the
Repurchase Right provided under Section 12 of this Agreement. You may elect
under Section 83(b) of the Code to be taxed at the time the Unvested
Non-Statutory Shares are acquired hereunder, rather than when and as such
Purchased Shares cease to be subject to such forfeiture restrictions. Such
election must be filed with the Internal Revenue Service within thirty (30) days
after the date of this Agreement. Even if the fair market value of the Unvested
Non-Statutory Shares at the date of this Agreement equals the Option Price paid
(and thus no tax is payable), the election must be made to avoid adverse tax
consequences in the future. THE FORM FOR MAKING THIS ELECTION IS ATTACHED AS
ATTACHMENT IV HERETO. YOU UNDERSTAND THAT FAILURE TO MAKE THIS FILING WITHIN THE
THIRTY (30)-DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY YOU
AS THE FORFEITURE RESTRICTIONS LAPSE.
(b) YOU ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY, AND
NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b), EVEN IF YOU
REQUEST THE COMPANY OR ITS REPRESENTATIVES MAKE THIS FILING ON YOUR BEHALF. This
filing should be made by registered or certified mail, return receipt requested,
and you must retain two (2) copies of the completed form for filing with your
State and Federal tax returns for the current tax year and an additional copy
for your records.
12. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or
service contract, and nothing in your option shall be deemed to create in any
way whatsoever any obligation on your part to continue in the employ of the
Company or an Affiliate, or of the Company or an Affiliate to continue your
employment. In addition, nothing in your option shall obligate the Company or an
Affiliate, their respective shareholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.
13. WITHHOLDING OBLIGATIONS.
(a) At the time you exercise your option, in whole or in part, or at
any time thereafter as requested by the Company, you hereby authorize
withholding from payroll and any other amounts payable to you, and otherwise
agree to make adequate provision for (including by means of a "cashless
exercise" pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with your option.
(b) Upon your request and subject to approval by the Company, in its
sole discretion, and compliance with any applicable conditions or restrictions
of law, the Company may withhold from fully vested shares of Common Stock
otherwise issuable to you upon the exercise of your option a number of whole
shares of Common Stock having a Fair Market Value, determined by the Company as
of the date of exercise, not in excess of the minimum amount of tax required to
be withheld by law. If the date of determination of any tax withholding
obligation is deferred to a date later than the date of exercise of your option,
share withholding pursuant to the preceding sentence shall not be permitted
unless you make a proper and timely election under Section 83(b) of the Code,
covering the aggregate number of shares of Common Stock acquired upon such
exercise with respect to which such determination is otherwise deferred, to
accelerate the determination of such tax withholding obligation to the date of
exercise of your option. Notwithstanding the filing of such election, shares of
Common Stock shall be withheld solely from fully vested shares of Common Stock
determined as of the date of exercise of your option that are otherwise issuable
to you upon such exercise. Any adverse consequences to you arising in connection
with such share withholding procedure shall be your sole responsibility.
(c) You may not exercise your option unless the tax withholding
obligations of the Company and/or any Affiliate are satisfied. Accordingly, you
may not be able to exercise your option when desired even though your option is
vested, and the Company shall have no obligation to issue a certificate for such
shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein.
14. NOTICES. Any notices provided for in your option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by mail by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the last
address you provided to the Company.
ATTACHMENT I
NOTICE OF EXERCISE
This constitutes notice under my stock option that I elect to purchase the
number of shares for the price set forth below.
Stock option dated: May 30, 2002
Number of shares as
to which option is
exercised: ___________________
Certificates to be
issued in name of: ___________________
Total exercise price $___________________
Cash payment delivered
herewith: $___________________
By this exercise, I agree to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating
to the exercise of this option.
I hereby make the following certifications and representations with
respect to the number of shares of Common Stock of the Company listed above (the
"Shares"), which are being acquired by me for my own account upon exercise of
the Option as set forth above:
I warrant and represent to the Company that I have no present
intention of distributing or selling the Shares, except as permitted under the
Securities Act of 1933 and any applicable state securities laws.
I further acknowledge that all certificates representing any of the
Shares subject to the provisions of the Option shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any legends
reflecting restrictions pursuant to the Bylaws and/or applicable securities
laws.
__________________________________
(Name)
__________________________________
(Date)
ATTACHMENT II
FORM OF 83B ELECTION NOTICE
Date:
Director of Internal Revenue
Internal Revenue Service Center
Fresno, CA 93888
Re: Election under Section 83(b)
Gentlemen:
This statement constitutes an election pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended from time to time.
Pursuant to Treasury Regulation Section 1.83-2, the following information is
submitted:
1. Name: ___________________ ("Purchaser")
Address: ___________________
___________________
Social Security No.: ___________________
2. Property Description: ___________________ shares (the
"Shares") of Common Stock of Advanced
Remote Communication Solutions, Inc. (the "Company")
3. The date on which property was transferred is ____________.
4. The taxable year for which the election is made is the calendar year__.
5. Restrictions: If Purchaser's employment with the Company is
terminated for any reason, the Company shall have the right to
repurchase from Purchaser for cash, at the price paid by Purchaser,
any or all unvested Shares issued to Purchaser.
6. The fair market value at the time of transfer of the property with
respect to which this election is being made, determined without regard
to any restriction other than a restriction which by its terms will
never lapse, is $_______ (_________shares having a fair market value of
$______ per share).
7. The amount paid by the undersigned taxpayer for the property is
$________in cash plus services rendered.
8. A copy of this statement has been furnished to Nu-Tec, Inc. and
the transferee of the property if different from the Purchaser.
Dated: _______________
Very truly yours,
Signature
Name
[Note: If married spouse should also sign]
Signature
Name