NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT made and entered into as of April 20, 1999, by and between
AUTO NETWORK GROUP, INC., an Arizona corporation (the "Company"), and DENNIS E.
HECKER, a Minnesota resident (the "Optionee");
W I T N E S S E T H:
WHEREAS, the Optionee has consented to serving as a consultant to the;
and
WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase shares of its common stock, no par value, (the "Common Stock"),
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee the right
and option (hereinafter called the "Option") to purchase all or any part of an
aggregate of three million (3,000,000) shares of Common Stock (the "Option
Shares") (such number being subject to adjustment as provided in Paragraph 4
hereof) on the terms and conditions herein set forth. The Option is a
non-qualified stock option under the Internal Revenue Code of 1986, as amended.
2. PURCHASE PRICE. Subject to the provisions of Paragraph 4 hereof, the
purchase price for the Option Shares shall be $3.00 per share, which has been
determined to be the fair market value of the Option Shares at the date of grant
of the Option.
3. TERM AND VESTING OF OPTION. The Option shall expire (the "Expiration
Date") on the close of business on the tenth anniversary of the date hereof.
Prior to the Expiration Date, the Optionee shall be entitled to exercise the
Option as to all or any part of the Option Shares which have theretofore become
vested. The Option Shares shall vest and become exercisable as follows: (1)
1,000,000 shares in the event the closing sales price of the Company's Common
Stock during any five (5) consecutive trading days closes at or above $5.00 per
share (adjusted for any stock dividends, stock splits or similar events after
the date hereof); (2) 1,000,000 shares in the event the closing sales price of
the Company's Common Stock during any five (5) consecutive trading days closes
at or above $7.00 per share (adjusted for any stock dividends, stock splits or
similar events after the date hereof); and (3) 1,000,000 shares in the event the
closing sales price of the Company's Common Stock during any five (5)
consecutive trading days closes at or above $10.00 per share (adjusted for any
stock dividends, stock splits or similar events after the date hereof);
provided, however, in the event of (i) the sale of all or substantially all of
the assets of the Company, or (ii) a merger, consolidation or other
reorganization of the Company in which the shareholders of the Company
immediately prior to such merger, consolidation or reorganization constitute
less than fifty-one percent (51%) of the voting power of the surviving
corporation, then all of the shares subject to the Option shall be vested and
exercisable in full upon the occurrence of such event.
4. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. If all or any portion of
this Option shall be exercised subsequent to any share dividend,
recapitalization, merger, consolidation, exchange of shares or reorganization as
a result of which shares of any class shall be issued in
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respect to outstanding Common Stock, or if Common Stock shall be changed into
the same or a different number of shares of the same or another class or
classes, the person so exercising this Option shall receive, for the aggregate
price paid upon such exercise, the aggregate number and class of shares to which
they would have been entitled if Common Stock (as authorized at the date hereof)
had been purchased at the date hereof for the same aggregate price (on the basis
of the price per share set forth in Paragraph 2 hereof) and had not been
disposed of. No fractional share shall be issued upon any such exercise and the
aggregate price paid shall be appropriately reduced on account of any fractional
share not issued.
5. METHOD EXERCISE. Subject to the terms and conditions of this Agreement,
the Option may be exercised by written notice to the Company at its principal
office and place of business. Such notice shall state the election to exercise
the Option and the number of Option Shares in respect of which it is being
exercised, and shall be signed by the person so exercising the Option. Such
notice shall be accompanied by the payment of the full purchase price of such
Option Shares and the delivery of such payment to the Treasurer of the Company.
The certificate for the Option Shares as to which the Option shall have been so
exercised shall be registered in the name of the person exercising the Option.
If the Optionee shall so request in the notice exercising the Option, the
certificate shall be registered in the name of the Optionee and another person
jointly with right of survivorship, and shall be delivered as provided above to
or upon the written order of the person exercising the Option. In the event the
Option shall be exercised by any person other than Optionee, such notice shall
be accompanied by appropriate proof of the right of such person to exercise the
Option.
6. RESERVATION OF SHARES. The Company shall, at all times during the term
of the Option, reserve and keep available such number of shares of its capital
stock as will be sufficient to satisfy the requirements of this Agreement, and
shall pay all original issue and transfer taxes with respect to the issue and
transfer of Option Shares pursuant hereto, and all other fees and expenses
necessarily incurred by the Company in connection therewith.
7. NO RIGHTS AS STOCKHOLDER. The holder of the Option shall not have any
of the rights of a stockholder with respect to the Option Shares covered by the
Option except to the extent that one or more certificates for shares shall be
delivered to him upon the due exercise of the Option.
8. REGISTRATION. The Company shall register the sale of the shares
issuable upon the exercise of this Option on an appropriate form of Registration
Statement with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, and shall maintain the effectiveness of such registration
statement so long as the Option is outstanding.
9. MISCELLANEOUS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, successors, assigns and
representatives and shall be governed by the laws of the State of Minnesota.
Optionee may assign its rights under this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
AUTO NETWORK GROUP, INC.
By /S/MARK MOLDENHAUER
Mark Moldenhauer, Vice President
/S/DENNIS E. HECKER
Dennis E. Hecker