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EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the 7th
day of October, 1999 ("Effective Date"), between Global Media Technology, Inc.,
a Nevada corporation (the "Company"), and Barry B. Sandrew, P.H.D. (the
"Employee").
WITNESSETH:
WHEREAS, it is the desire of the Company to offer the Employee employment
with the Company upon the terms and subject to the conditions set forth herein;
and
WHEREAS, it is the desire of the Employee to accept the Company's offer
of employment upon the terms and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the premises and mutual covenants,
conditions and agreements contained herein and for such other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, each intending to be legally bound hereby, agree as follows:
1. Employment and Consultancy. The Company hereby agrees to employ the
Employee and the Employee hereby agrees to be employed by the Company upon the
terms and subject to the conditions set forth herein for the period of
employment as set forth in Section 2 hereof (the "Period of Employment"). During
the period commencing on the date of the parties' execution of this Agreement
and ending on October 6, 1999, the Employee will serve as an independent
consultant as set forth in Section 8 hereof.
2. Term: Period of Employment. Subject to the terms and conditions of
this Agreement, the Period of Employment hereunder shall be for an indefinite
period commencing on the date hereof (the "Effective Date") and ending on the
election of either the Employee or the Company or both such parties hereto to
exercise the termination provisions set forth in Section 7 or upon the election
of the parties to enter into other contractual terms. The phrase "Period of
Employment" as used herein shall be deemed to have terminated as of the date of
any notice provided to the Employee pursuant to Section 7 hereof,
notwithstanding the Company's obligation to pay the Employee pursuant to
Subsections 7(b) and 7(c) hereof.
3. Office and Duties. During the Period of Employment:
(a) The Employee shall be employed as the President of the
Company, having the authority and duties attendant to such position as set forth
in the bylaws of the Company (the "Bylaws") and having such responsibilities as
may reasonably be prescribed for such position by the board of directors of the
Company (the "Board of Directors") in accordance with the Bylaws;
(b) The Employee shall devote substantially all of his time to
the business and affairs of the Company except for vacations, illness or
incapacity, as hereinafter set forth. Notwithstanding the preceding sentence,
nothing in this Agreement shall preclude the Employee from devoting reasonable
amounts of time:
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(i) to serving as a director, officer or member of a
committee of any organization or entity involving no conflict of interest with
the Company; or
(ii) engaging in charitable and community activities; or
(iii) to work with the following entities:
UC MEDACCESS
Channel One
IATR
TalentKING
Dynamic Resources
WEC/WithIt
TowerHill Capital Group
(iv) to engage in other activities or work with other
entities with the prior written consent of the Company.
provided, however, that such activities do not interfere with the performance by
the Employee of his duties hereunder nor conflict with the interests of the
Company. In consideration of such employment, the Employee agrees that he shall
not, directly or indirectly, individually or as a member of any partnership or
joint venture, or as an officer, director, stockholder, employee or agent of any
other person, firm, corporation, business organization or other entity, engage
in any trade or business activity or pursuit for his own account or for or on
behalf of any other person, firm, corporation, business organization or other
entity, those activities which competes, conflicts or interferes with that of
the Company or the performance of the Employee's obligations hereunder.
Notwithstanding the foregoing, nothing contained herein shall be construed to
prevent the Employee from: (x) investing in the stock of any corporation which
is listed on a national securities exchange or traded in the over-the-counter
market if the Employee does not and will not, as a result of such investment,
own more than five percent (5%) of the stock of such corporation ("Permitted
Investments"); or (y) engaging in personal business ventures to which the
Employee devotes time outside of the time required to be devoted to the business
of the Company hereunder.
(c) The Employee shall be entitled to vacation time each year in
accordance with the following schedule:
Employment Years Vacation Days Per Year
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First and Second 10
Third and Fourth 15
Fifth through Tenth 20
Thereafter 25
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4. Compensation and Benefits. In exchange for the services rendered by
the Employee pursuant hereto in any capacity during the Period of Employment,
the Employee shall be compensated as follows:
(a) Compensation. Commencing on the Effective Date of this
Agreement, the Company shall pay the Employee a salary equal to Two Hundred
Fifty Thousand Dollars ($250,000) per annum at a rate of Twenty Thousand Eight
Hundred Thirty Three Dollars and Thirty Three cents ($20,833.33) per month (such
monthly amount, as the same may be increased from time to time by the Board of
Directors, shall be defined as the "Monthly Compensation"). Such salary shall be
payable in accordance with the customary payroll practices of the Company.
(i) Signing Bonus. In addition to the compensation and
benefits provided herein, the Employee shall be entitled to a signing bonus of
30,000 shares of the common stock of eSat, Inc., $0.001 par value ("Shares")
upon his execution of this Agreement. Such Shares shall be "restricted
securities" as that term is defined in Rule 144 under the Securities Act of 1933
and therefore subject to a twelve (12)-month trading restriction from date of
issue. The Employee's interest in the Shares granted to him hereunder shall be
fully vested upon the parties' execution of this Agreement. In connection with
the issuance and delivery of the Shares to the Employee pursuant to this
Subsection 4(b), the Employee shall pay the Company the minimum amount necessary
to satisfy all applicable federal, state and local income and employment tax
withholding requirements. If the Employee fails to pay such taxes or at the
Employee's request, the Company may withhold the required amounts from other
payments payable to the Employee hereunder or withhold the requisite number of
Shares necessary to satisfy any such requirement.
(b) Discretionary Bonuses. In addition to the signing bonus set
forth above, the Employee shall be entitled to receive a bonus from time to time
if, in the sole judgment of the Board of Directors, the financial performance of
the Company or the services rendered by the Employee merit such a bonus.
(c) Withholding and Employment Tax. Payment of all compensation
hereunder shall be subject to customary withholding tax and other employment
taxes as may be required with respect to compensation paid by an employer to an
employee.
(d) Options. In consideration of the Employee's agreement to
render the services provided herein, the Company shall grant to the Employee an
option exercisable to purchase an aggregate of One Million (1,000,000) shares of
the Company's common stock at an exercise price of Ten Cents ($0.10) per share.
Such options shall vest and become exercisable in accordance with the terms and
conditions set forth in the Stock Option Agreement, which is attached hereto as
Addendum A of this Agreement.
5. Business Expenses. The Company shall reimburse the Employee for all
reasonable travel or other expenses incurred by the Employee in connection with
the performance of his duties under this Agreement, provided that the same are
previously authorized by the Company in accordance with such procedures as the
Company may from time to time establish for employees and as required to
preserve any deductions for federal income taxation purposes to which the
Company may be entitled. The foregoing business expense reimbursement policy
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shall also apply to cover the Employee's reasonable commuting expenses,
including the cost of overnight accommodations and the Employee's daily commute
from his residence in Encinitas, California.
6. Company Benefits. The Employee shall be entitled to participate in the
fringe benefit programs, 401(k) plan and group medical, dental, vision and life
insurance plans or programs of the Company, if any, to the extent that his
position, tenure, salary, age, health and other qualifications make him eligible
to participate, subject to the rules and regulations applicable thereto.
7. Termination of Employment. Notwithstanding any other provision of this
Agreement, employment hereunder may be terminated:
(a) By the Company, in the event of the Employee's death or
Disability (as hereinafter defined) or for Just Cause (as hereinafter defined).
"Just Cause" shall mean: (i) the Employee's indictment for, conviction of or the
entering into of a plea of guilty to a crime involving a felonious act or acts,
including dishonesty, fraud or moral turpitude by the Employee; (ii) prolonged
or repeated absence from duty without the consent of the Company (for reasons
other than the Employee's health or incapacity); (iii) habitual engaging in any
activity which is competitive with the business of the Company; and (iv) willful
misconduct, gross negligence or dishonesty on the part of the Employee relating
to the performance of his duties hereunder. The Employee shall be deemed to have
a "Disability" for purposes of this Agreement if he is unable to perform with
reasonable accommodation, by reason of physical or mental incapacity, a material
portion of his duties or obligations under this Agreement for a period of one
hundred twenty (120) consecutive days in any 365-day period. The Board of
Directors shall determine whether and when the Disability of the Employee has
occurred and such determination shall not be arbitrary or unreasonable. The
Company shall provide written notice to the Employee within thirty (30) days
after discovery of the occurrence of an event or circumstance which constitutes
"Just Cause," specify the event or circumstance giving rise to the Company's
exercise of its right hereunder and, with respect to Just Cause arising under
either Subsection 7(a)(i), (iii) or (iv), the Employee's employment hereunder
shall be deemed terminated as of the date of such notice. With respect to Just
Cause arising under Subsection 7(a)(ii), the Company shall provide the Employee
with thirty (30) days written notice of such violation and the Employee shall be
given reasonable opportunity during such thirty (30) day period to cure the
subject violation;
(b) By the Company, in its sole and absolute discretion and for
any reason other than the Employee's death or Disability or for Just Cause,
provided that in such event the Company shall, as liquidated damages or
severance pay, or both continue to pay the Employee an amount equal to the
Employee's then Monthly Compensation (as defined in Section 4(a) hereof) for one
(1) year following the date of termination; provided that during such one
(1)-year period should the Employee be engaged as a consultant or employee by
another company the wages or fees earned by the Employee during such period
shall offset and reduce the amounts otherwise payable pursuant to this
Subsection; and
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(c) By the Employee (i) upon any material violation of any
material provision of this Agreement by the Company, which violation remains
unremedied for a period of thirty (30) days after written notice of the same is
delivered to the Company by the Employee, and (ii) upon any material change in
the responsibilities of the Employee, without the Employee's prior consent;
provided that, in such event the Company shall, as liquidated damages or
severance pay, or both continue to pay to the Employee an amount equal to the
Employee's Monthly Compensation for one (1) year following the date of
termination; provided that during such one (1)-year period should the Employee
be engaged as a consultant or employee by another company the wages or fees
earned by the Employee during such period shall offset and reduce the amounts
otherwise payable pursuant to this Subsection.
Nothing set forth in this section shall: (i) require the Employee in the
event of termination pursuant to Subsections 7(b) or 7(c) above to mitigate
damages during the period in which the Employee is receiving payment thereunder
(the "Severance Period"); or (ii) entitle the Company to offset the amounts owed
by the Company to the Employee pursuant to Subsections 7(b) or 7(c) by any
income or compensation received by the Employee from sources other than the
Company during such Severance Period. In addition, the Company shall not be
entitled to withhold or otherwise offset any amounts payable to the Employee
under Subsections 7(b) or 7(c) above in response to an alleged violation by the
Employee of any of the obligations which are imposed under this Agreement and
survive termination hereof until such time as court of competent jurisdiction or
other appropriate governing body has rendered judgment or otherwise made a
determination with respect to whether such violation has occurred.
8. Consultancy. The Company hereby appoints the Employee as an
independent consultant in a consulting capacity with respect to the business of
the Company. In such capacity, the Employee shall perform all duties as set
forth in Section 2 hereof. The Employee will serve as an independent consultant
from the date of the parties' execution of this Agreement until October 6, 1999
(the "Consultancy Period"). By his execution of this Agreement, the Employee
accepts such appointment. During the Consultancy Period, the Employee shall earn
the same compensation as would otherwise be payable pursuant to Section 4(a)
hereof. The Employee shall operate his consulting business and shall freely
employ any such employees or agents and on such terms as he chooses. All persons
employed by the Employee in connection with the performance of the Employee's
duties hereunder during the Consultancy Period shall be employees or agents of
the Employee and shall not have any relationship to the Company. The Employee
shall be responsible for all costs of operating his business, including but not
limited to, taxes, all licenses, insurance policies, employee expenses,
telephone, travel, or equipment. The Employee agrees that he will, at his own
expense, comply with all applicable laws, and will, among other things, file any
required reports, take any required actions, and obtain any required
governmental permits, approvals and clearances. Because the Employee is an
independent contractor of the Company during the Consultancy Period, he shall be
solely responsible for the payment of federal, state and local taxes on the
compensation payments he may receive pursuant to this Section. During the
Consultancy Period, the Employee shall not be eligible to participate in any
fringe benefit, welfare benefit, retirement benefit or deferred compensation
plans or programs of the Company. During the entire term of the Consultancy
Period, the Employee shall be subject to the non-solicitation and
confidentiality provisions under this Agreement.
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9. Non-Solicitation. Notwithstanding any earlier termination, during the
Period of Employment (including any Renewal Period) and for one (1) year
thereafter, the Employee shall not: (i) solicit or induce any employee of the
Company to terminate his or her employment or otherwise leave the Company's
employ or hire any such employee (unless the Board of Directors shall have
authorized such employment and the Company shall have consented thereto in
writing); or (ii) contact or solicit any clients or customers of the Company,
either as an individual or as a member of any partnership or joint venture, or
as an officer, director, stockholder, investor, employee or agent of any other
person, person, corporation, business organization or other entity.
10.Confidential Information. The parties hereto recognize that it is
fundamental to the business and operation of the Company, its affiliates,
subsidiaries and divisions to preserve the specialized knowledge, trade secrets,
and confidential information of the foregoing concerning the fields of
advertising, marketing and interactive solutions. The strength and good will of
the Company is derived from the specialized knowledge, trade secrets, and
confidential information generated from experience through the activities
undertaken by the Company, its affiliates, subsidiaries and divisions thereof.
The disclosure of any of such information and the knowledge thereof on the part
of competitors would be beneficial to such competitors and detrimental to the
Company, its affiliates, subsidiaries and divisions thereof, as would the
disclosure of information about the marketing practices, pricing practices,
costs, profit margins, design specifications, analytical techniques, concepts,
ideas, process developments (whether or not patentable), customer and client
agreements, vendor and supplier agreements and similar items or technologies. By
reason of his being an employee of the Company, in the course of his employment,
the Employee has or shall have access to, and has obtained or shall obtain,
specialized knowledge, trade secrets and confidential information such as that
described herein about the business and operation of the Company, its
affiliates, subsidiaries and divisions thereof. Therefore, the Employee hereby
agrees as follows, recognizing and acknowledging that the Company is relying on
the following in entering into this Agreement:
(a) The Employee hereby sells, transfers and assigns to the
Company, or to any person or entity designated by the Company, any and all
right, title and interest of the Employee in and to all creations, designs,
inventions, ideas, disclosures and improvements, whether patented or unpatented,
and copyrightable material, made or conceived by the Employee solely or jointly,
in whole or in part, during or before the term hereof (commencing with the date
of the Employee's employment with the Company) which: (i) relate to methods,
apparatus, designs, products, processes or devices created, promoted, marketed,
distributed, sold, leased, used, developed, relied upon or otherwise provided by
the Company or any affiliate, subsidiary or division thereof; or (ii) otherwise
relate to or pertain to the business, operations or affairs of the Company or
any affiliate, subsidiary or division thereof. Whether during the Period of
Employment or thereafter, the Employee shall execute and deliver to the Company
such formal transfers and assignments and such other papers and documents as may
be required of the Employee to permit the Company or any person or entity
designated by the Company to file, enforce and prosecute the patent applications
to any of the foregoing and, as to copyrightable material, to obtain copyright
thereon; and
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(b) Notwithstanding any earlier termination, during the Period of
Employment (including any Renewal Period) and for a period of one (1) year
thereafter, the Employee shall, except as otherwise required by or compelled by
law, keep secret and retain in strict confidence, and shall not use, disclose to
others, or publish any information, other than information which is in the
public domain or becomes publicly available through no wrongful act on the part
of the Employee, which information shall be deemed not to be confidential
information, relating to the business, operation or other affairs of the
Company, its affiliates, subsidiaries and divisions thereof, including but not
limited to confidential information concerning the design and marketing
practices, pricing practices, costs, profit margins, products, methods,
guidelines, procedures, engineering designs and standards, design
specifications, analytical techniques, technical information, customer, client,
vendor or supplier information, employee information, and any and all other
confidential information acquired by him in the course of his past or future
services for the Company or any affiliate, subsidiary or division or division
thereof. The Employee shall hold as the Company's property all notes, memoranda,
books, records, papers, letters, formulas and other data and all copies thereof
and therefrom in any way relating to the business, operation or other affairs of
the Company, its affiliates, subsidiaries and divisions thereof, whether made by
him or otherwise coming into his possession. Upon termination of his employment
or upon the demand of the Company, at any time, the Employee shall deliver the
same to the Company within twenty-four (24) hours of such termination or demand.
11.Reasonableness of Restrictions. The Employee hereby agrees that the
restrictions in this Agreement, including without limitation, those relating to
the duration of the provisions hereof and the territory to which such
restrictions apply, are necessary and fundamental to the protection of the
business and operation of the Company, its affiliates, subsidiaries and
divisions thereof, and are reasonable and valid.
12.Reformation of Certain Provisions. In the event that a court of
competent jurisdiction determines that the non-solicitation or the
confidentiality provisions hereof are unreasonably broad or otherwise
unenforceable because of the length of their respective terms or the breadth of
their territorial scope, of for any other reason, the parties hereto agree that
such court may reform the terms and/or scope of such covenants so that the same
are reasonable and, as reformed, shall be enforceable.
13.Indemnification. The Employee represents and warrants that except as
otherwise disclosed on Addendum B hereof, there is no agreement preventing his
performance of the duties and responsibilities to the Company required of him
pursuant to this Agreement or which shall impair or diminish the value of the
rights granted hereunder. The Employee agrees to indemnify and hold the Company
harmless from all liability, actions, claims, demands, loss and damage,
including reasonable attorney's fees, which may be suffered by the Company by
reason of any breach of any warranty made by him hereunder.
14. Arbitration. Subject to Section 15 below, any controversy, dispute
and/or claim in any manner arising out of or relating to this Agreement; any
claim, including but not limited to any claim of race, age, national origin,
religion, sex, pregnancy, family leave, harassment, sexual orientation,
disability discrimination, defamation, infliction of emotional distress, breach
of
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contract, violation of public policy or statute, or wrongful termination arising
out of the voluntary or involuntary termination of the employment, shall be
settled solely by final and binding arbitration in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association. Any
arbitration proceeding shall take place in Orange County, California. Judgment
on any decision rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
15.Certain Provisions; Specific Performance. In the event of a breach by
the Employee of the non-solicitation or confidentiality provisions hereof, such
breach shall not be subject to the arbitration provision of Section 14 above and
the Company shall be entitled to seek immediate injunctive relief and a decree
of specific performance against the Employee. Such remedy is non-exclusive and
shall be in addition to any other remedy to which the Company or any affiliate,
subsidiary or division thereof may be entitled.
16.Consolidation; Merger; Sale of Assets. Nothing in this Agreement shall
preclude the Company from combining, consolidating or merging with or into,
transferring all or substantially all of its assets to, or entering into a
partnership or joint venture with, another corporation or other entity, or
effecting any other kind of corporate combination, provided that, the
corporation resulting from or surviving such combination, consolidation or
merger, or to which such assets are transferred, or such partnership or joint
venture assumes this Agreement and all obligations and undertakings of the
Company hereunder. Upon such a consolidation, merger, transfer or assets or
formation of such partnership or joint venture, this Agreement shall inure to
the benefit of, be assumed by, and be binding upon such resulting or surviving
transferee corporation or such partnership or such joint venture, and the term
"Company," as used in this Agreement, shall mean such corporation, partnership
or joint venture, or other entity and this Agreement shall continue in full
force and effect and shall entitle the Employee and his heirs, beneficiaries and
representatives to exactly the same compensation, benefits, perquisites,
payments and other rights as would have been their entitlement had such
combination, consolidation, merger, transfer of assets or formation of such
partnership or joint venture not occurred.
17.Survival. Sections 7 and 9 through 15 shall survive the termination
for any reason of this Agreement (whether such termination is by the Company, by
the Employee, upon the expiration of this Agreement by its terms or otherwise).
18.Severability. The provisions of this Agreement shall be considered
severable in the event that any of such provisions are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable. Such
invalid, or otherwise unenforceable provisions shall be automatically replaced
by other provisions which are valid and unenforceable and which are as similar
as possible in term and intent to those provisions deemed to be invalid, void or
otherwise unenforceable. Notwithstanding the foregoing, the remaining provisions
hereof shall remain enforceable to the fullest extent permitted by law.
19. Entire Agreement; Amendment. This Agreement contains the entire
agreement between the Company and the Employee with respect to the subject
matter hereof. This Agreement may not be amended, changed, modified or
discharged, nor may any provision hereof
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be waived, except by an instrument in writing, executed by or on behalf of the
party against whom enforcement of any amendment, waiver, change, modification or
discharge is sought. No course of conduct or dealing shall be construed to
modify, amend or otherwise affect any of the provisions hereof.
20.Notices. All notices, request, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
physically delivered, delivered by express mail or other expedited service or
upon receipt if mailed, postage prepaid, via first class mail as follows:
a) To the Company: Global Media Technology, Inc.
16520 Harbor Boulevard, Bldg. G
Fountain Valley, California 92708
Attention: Chief Executive Officer
b) To the Employee: Barry B. Sandrew, P.H.D.
c/o Global Media Technology, Inc.
16520 Harbor Boulevard, Bldg. G
Fountain Valley, California 92708
and/or to such other persons and addresses as any party hereto shall have
specified in writing to the other.
21. Assignability. This Agreement shall not be assignable by the
Employee, but shall be binding upon and shall inure to the benefit of his heirs,
executors, administrators and legal representatives. This Agreement shall be
binding upon any successor to the Company and shall be assignable by the Company
to any affiliate, subsidiary or division thereof.
22. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California, without regard to the principles of
conflicts of laws thereof.
23. Waiver and Further Agreement. Any waiver or any breach of any terms
or conditions of this Agreement shall not operate as a waiver of any other
breach of such terms or conditions or any other term or condition hereof, nor
shall any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof. Each of the parties hereto agrees to
execute all such further instruments and documents and to take all such further
action as the other party may reasonably require in order to effectuate the
terms and purposes of this Agreement.
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24. Headings of No Effect. The headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
GLOBAL MEDIA TECHNOLOGY, INC.
Date: August 7, 1999 By: /s/ Michael C. Palmer
------------------------------------
Michael C. Palmer, CEO
THE EMPLOYEE
By: /s/ Barry B. Sandrew
------------------------------------
Date: August 7, 1999 Barry B. Sandrew
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ADDENDUM A
THE OPTION TO PURCHASE SHARES OF THE COMMON STOCK OF GLOBAL MEDIA TECHNOLOGY,
INC., REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT TERM
IS DEFINED IN RULE 144 UNDER THE ACT. NEITHER THE OPTIONS NOR THE UNDERLYING
SHARES MAY BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, THE AVAILABILITY OF WHICH IS
TO BE ESTABLISHED TO THE SATISFACTION OF SAID CORPORATION AND SUCH FURTHER
RESTRICTIONS AS THE BOARD OF DIRECTORS MAY DETERMINE.
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT effective as of this 7thday of October, 1999,
between Global Media Technology, Inc., a Nevada corporation (the "Corporation"),
and Barry B. Sandrew (the "Recipient").
WHEREAS, pursuant to that certain Employment Agreement entered into as of
October 7, 1999 by and between the Corporation and Recipient (the "Employment
Agreement"), the Corporation agreed to grant to Recipient an option to purchase
1,000,000 shares of this Corporation's common stock, $.001 par value ("Common
Stock") at an exercise price of $0.10 per share.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy whereof is hereby acknowledged, the Corporation and the Optionee agree
as follows:
1. Grant of Option. The Corporation hereby grants to Recipient an option to
purchase (the "Option") an aggregate of 1, 000,000 shares of the
Corporation's Common Stock for a purchase price of $0.10 per share (the
"Option Price").
2. Vesting of Option. The option shall become exercisable by Recipient
during the term of the Option, as provided in Paragraph 6, at the rate of
20% of the shares of the Corporation's Common Stock covered by the Option
upon the Recipient's completion of each full year of continuous
employment pursuant to the Employment Agreement. Accordingly, the Option
shall be fully exercisable upon the Recipient's completion of 5 full
years of continuous employment with the Corporation.
3. Exercise of Option. Once exercisable, as provided in Paragraph 2, this
Option may be exercised in whole or in part at any time during the term
of the Option, provided, however, no portion of this Option shall be
exercisable after the expiration of the term thereof.
The Option may be exercised, as provided in this Paragraph 3, by
notice and payment to the Corporation as provided in Paragraph 5 hereof.
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4. Fair Market Value. For purpose of this Option, "Fair Market Value" shall
be the value determined in accordance with the following provisions:
(a) If the Common Stock is not at the time listed or admitted to
trading on any stock exchange but is traded on the Nasdaq National
Market System or the Nasdaq SmallCap Market, the Fair Market Value
shall be the closing selling price per share of Common Stock on
the date in question, as such price is reported by the National
Association of Securities Dealers through the Nasdaq National
Market System or any successor system or the Nasdaq SmallCap
Market or any successor market. If there is no closing selling
price for the Common Stock on the date in question, then the FMV
shall be the closing selling price on the last preceding date for
which such quotation exists.
(b) If the Common Stock is at the time listed or admitted to trading
on any stock exchange, the Fair Market value shall be the closing
selling price per share of Common Stock on the date in question on
the stock exchange determined by the Board of Directors of the
corporation to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions
on such exchange. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value
shall be the closing selling price on the last preceding date for
which such quotation exists.
(c) If the Common Stock is at the time neither listed nor admitted to
trading on any stock exchange, not traded on the Nasdaq National
Market System nor on the Nasdaq SmallCap Market, then such Fair
Market Value shall be determined by the Board of Directors of the
Corporation after taking into account such factors as the Board of
Directors of the Corporation shall deem appropriate.
1. Manner of Exercise.
(a) During the lifetime of the Recipient, only he may exercise the
Option or any portion thereof. After the death of the Recipient,
any exercisable portion of the Option may, prior to the time when
the Option becomes unexercisable under Paragraph 6 and/or 8, be
exercised by the Recipient's personal representative or by any
person empowered to do so under the Recipient's will or under the
then applicable laws of descent and distribution.
(b) The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or the Secretary's office of
all of the following prior to the time when such exercisable
Option or portion thereof becomes unexercisable:
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i. Notice in writing signed by the Recipient, or such other
person then entitled to exercise the Option or portion
thereof, stating that the Option or portion thereof is
thereby exercised, such notice complying with all
applicable rules established by the Corporation; and
ii. (a) Full payment (in cash or by check) for the shares with
respect to which such Option or portion thereof is
exercised; or
(b) With the consent of the Corporation, shares of the
Company's Common Stock owned by the Recipient duly endorsed
for transfer to the Company with a Fair Market Value on the
date of delivery equal to the aggregate purchase price of
the shares with respect to which such Option or portion
thereof is exercised.
1. Term of Option. The term of the Option will be through October 6, 2009,
subject to Paragraphs 7 and 8 as provided in this Agreement.
The Recipient of the Option will not have any rights to dividends
or any other rights of a shareholder with respect to any shares of Common
Stock covered by the Option until such shares shall have been purchased
through the exercise of the Option and has been evidenced on the stock
transfer records of the Corporation maintained by the Corporation's
transfer agent.
2. Transferability Restriction. The Option may not be assigned, transferred
or otherwise disposed of, or pledged or hypothecated in any way (whether
by operation of law or otherwise); provided, however, that nothing herein
shall be construed as prohibiting Recipient from providing for the
disposition of the Option or his right, title and interest in it upon his
death (at anytime while he has the right to exercise the Option) by will
or testamentary device, or as prohibiting the transfer of the Option by
the laws of descent and distribution. Any assignment, transfer, pledge,
hypothecation or other disposition of the Option or any attempt to make
any such levy of execution, attachment or other process not in accordance
with the foregoing sentence shall cause the Option to terminate
immediately upon the happening of any such event, and the Recipient shall
lose all rights under this Agreement, provided, however, that any such
termination of the Option under the foregoing provisions of this
Paragraph 7, will not prejudice any rights or remedies which the
Corporation may have under this Option Agreement or otherwise.
3. Death, Disability or Retirement of Recipient. The Recipient's rights to
exercise this Option upon the death, disability or retirement of the
Recipient are set forth as follows:
(a) If the Recipient ceases to be in Service to the Corporation for a
reason other than Disability or death, the Option, to the extent
it has not yet been exercised, shall immediately terminate. If the
Recipient ceases to be in Service to the Corporation by reason of
Disability within the meaning of Section 7(a) of the Employment
Agreement (as determined by the Board of Directors), the Recipient
will have three (3) months after the date of termination of
Service, but in no event after the stated expiration date of the
Option (as provided in Paragraph 6), to exercise the Option to
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the same extent the Recipient was entitled to exercise the Option
on the date the Recipient's Service terminated as a result of the
Disability.
(b) If a Recipient dies while in the Corporation's Service, the Option
or any portion thereof that the Recipient was entitled to exercise
on the date of death will be exercisable within the six-month
period following the date of issuance of letters testamentary or
letters of administration of a deceased Recipient, in the case of
the Recipient's death during his Service to the Corporation's
Board, but not later than one (1) year after the Recipient's death
or until the stated expiration date of the Option (as provided in
Paragraph 6), whichever occurs first, by the person or persons
("successors") to whom the Recipient's rights pass under a will or
by the laws of descent and distribution. As soon as practicable
after receipt by the Corporation of such notice and of payment in
full of the Option Price, a certificate or certificates
representing the Optioned Shares shall be registered in the name
or names specified by the successors in the written notice of
exercise and shall be delivered to the successors.
(c) The term "Service" means service as an employee pursuant to the
Employment Agreement or as an independent contractor.
1. No Registration Obligation. The Recipient understands that the Option is
not registered under the Securities Act of 1933, as amended (the
"Securities Act") and the Corporation has no obligation to register under
the Securities Act the Option or any of the shares of Common Stock
subject to and issuable upon the exercise of the Option. The Recipient
represents that the Option is being acquired by him for investment and
acknowledges that all certificates for the shares issued upon exercise of
the option will bear the following legend unless such shares are
registered under the Securities Act prior to their issuance:
The shares of Common Stock evidenced by this certificate have been
issued to the registered owner in reliance upon written representations
that these shares have been purchased solely for investment. These shares
may not be sold, transferred or assigned unless in the opinion of the
Corporation and its legal counsel such sales, transfer or assignment will
not be in violation of the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
The Recipient further understands and agrees that the Option may
be exercised only if at the time of such exercise the Recipient and the
Corporation are able to establish the existence of an exemption from
registration under the Securities Act and applicable state laws.
2. Effect of Certain Changes.
(a) If there is any change in the number of shares of outstanding
Common Stock through the declaration of stock dividends, or
through a recapitalization resulting in stock
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splits or combinations or exchanges of such shares, the number of
shares of Common Stock available for options and the number of
such shares covered by outstanding options, and the exercise price
per share of the outstanding options, shall be proportionately
adjusted by the Board to reflect any increase or decrease in the
number of issued shares of Common Stock; provided, however, that
any fractional shares resulting from such adjustment shall be
eliminated.
(b) In the event of the proposed dissolution or liquidation of the
Corporation, or any corporate separation or division, including,
but not limited to, split-up, split-off or spin-off, or a merger
or consolidation of the Corporation with another corporation, or
any sale or transfer by the Corporation of all or substantially
all its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group for
more than 50% of the then outstanding voting securities of the
Corporation, or an initial public offering of the common stock of
the Corporation, the Option shall become immediately exercisable
as to all or any portion of the shares of Common Stock covered by
the Option without regard to whether the Option is fully
exercisable in accordance with the exercise schedule provided in
Paragraph 2. The Recipient shall have the right to exercise such
Option (at its then current Option Price) solely for the kind and
amount of shares of stock and other securities, property, cash or
any combination thereof receivable upon such dissolution,
liquidation, corporate separation or division, merger or
consolidation, sale or transfer of assets or tender offer or
exchange offer, by a Recipient of the number of shares of Common
Stock for which such Option might have been exercised immediately
prior to such dissolution, liquidation, corporate separation or
division, or merger or consolidation; sales or transfer of assets
or tender offer or exchange offer, or in the alternative the Board
may provide that the Option granted herein shall terminate as of a
date fixed by the Board; provided, however, that not less than
thirty (30) day's written notice of the date so fixed shall be
given to the Recipient, who shall have the right, during the
period of thirty (30) days preceding such termination, to exercise
the Option.
(c) Subparagraph (b) of this Paragraph 10 shall not apply to a merger
or consolidation in which the Corporation is the surviving
corporation and shares of Common Stock are not converted into or
exchanged for stock, securities of any other corporation, cash or
any other thing of value. Notwithstanding the preceding sentence,
in case of any consolidation or merger of another corporation into
the Corporation in which the Corporation is the surviving
corporation and in which there is a reclassification or change
(including a change which results in the right to receive cash or
other property) of the shares of Common Stock (other than a change
in par value, or from no par value to par value, or as a result of
a subdivision or combination, but including any change in such
shares into two or more classes or series of shares), the Board
shall provide that the Recipient shall have the right to exercise
such Option solely for the kind and amount of shares of stock and
other securities (including those of any direct or indirect Parent
of the Corporation), property, cash or any combination thereof
receivable upon such reclassification, change consolidation or
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merger by the Recipient of the number of shares of Common Stock
for which Option might have been exercised.
(d) If there is a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares
with a different par value or without par value, the shares
resulting from any such change shall be deemed to be the Common
Stock within the meaning of this Stock Option Agreement.
(e) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by
the Board.
(f) Except as expressly provided in this Paragraph 10, the Recipient
shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class or the payment of any stock
dividend or any other increase in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or
consolidation or split-up, split-off, or spin-off of assets or
stock of another corporation; and any issue by the Corporation of
shares of stock of any class, or securities convertible into
shares of stock of any class, shall not effect, and no adjustment
by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to this Option. The grant
of this Option shall not affect in any way the right or power of
the Corporation to make adjustments, reclassifications,
reorganizations or changes of its capital or business structures
or to merge or consolidate or to dissolve, liquidate or sell or
transfer all or any part of its business or assets.
1. Notices. Each notice relating to this Agreement will be in writing and
delivered in person or by certified mail to the proper address. Notices
to the Corporation shall be addressed to the Corporation, c/o Chief
Executive Officer, Global Media Technology, Inc., 16520 Harbor Blvd.,
Bldg. G, Fountain, Valley, CA 92708. Notices to the Recipient or other
person or persons then entitled to exercise the option shall be addressed
to the Recipient or such other person or persons at the Recipient's
address specified below. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect given
pursuant to this Paragraph 11.
2. Approval of Consent. The exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject to
approval by the Corporation's counsel of all legal matters in connection
therewith, including compliance with the requirements of the Securities
Act, the Securities Exchange Act of 1934, as amended, applicable state
securities laws, the rules and regulations thereunder, and the
requirements of any national securities exchange or association upon
which the Common Stock than may be listed.
3. Benefits of Agreement. This Agreement will inure to the benefit of and be
binding upon each successor and assign of the Corporation. All
obligations imposed upon the Recipient and all rights granted to the
Corporation under this Agreement will be binding upon the Recipient's
heirs, legal representatives and successors.
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4. Governmental and other Regulations. The exercise of the Option and the
Corporation's obligation to sell and deliver shares upon the exercise of
rights to purchase shares is subject to all applicable federal and state
laws, rules and regulations, and to such approvals by the regulatory or
governmental agency which, in the opinion of counsel for the Corporation,
may be required.
5. Conditions to Exercise. The shares of stock deliverable upon the exercise
of the Option, or any portion thereof, may be either previously
authorized but unissued shares or issued shares which have then been
reacquired by the Company. Such shares shall be fully paid and
non-assessable. The Company shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of
the following conditions:
i. The admission of such shares to listing on all stock exchanges, if
any, on which such class of stock is then listed;
ii. The completion of any registration or other qualification of such
shares under any state or federal law or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Corporation shall, in its
absolute discretion, deem necessary or advisable;
iii. The obtaining of any approval or other clearance from any state or
federal governmental agency which the Corporation shall, in its
absolute discretion, determine to be necessary or advisable;
iv. The payment to the Company of all amounts which it is required to
withhold under federal, state or local law in connection with the
exercise of the Option; and
v. The lapse of such reasonable period of time following the exercise
of the Option as the Corporation may from time to time establish
for reasons of administrative convenience.
This Stock Option Agreement is executed in the name and on behalf of the
corporation by one of its duly authorized officers and by the Recipient all as
of the date first above written.
GLOBAL MEDIA TECHNOLOGY, INC.
By
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The undersigned Recipient understands the terms of this Stock Option
Agreement. The undersigned agrees to comply with the terms and conditions of
this Stock Option Agreement.
Date , 1999 Signature:
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Printed Name:
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Tax ID # (SSN):
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Address:
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Addendum B
Contracts with T. P. EG/IATR
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