STOCK OPTION AGREEMENT
AGREEMENT made as of the 1st day of April, 2000, by and between Cyber
Mark International Corp., a Delaware corporation ("Company"), and Israel Ellis
("Employee").
WHEREAS, the Company has employed Employee and is entering into this
agreement as part of his compensation package;
WHEREAS, on April 1, 2000 ("Grant Date"), the Board of Directors of
the Company ("Board") authorized the grant to the Employee of an option
("Option") to purchase an aggregate of 300,000 shares of the authorized but
unissued Common Stock of the Company ("Common Stock"), conditioned upon the
Employee's acceptance thereof upon the terms and conditions set forth in this
Agreement; and
WHEREAS, the Employee desired to acquire the Option on the terms and
conditions set forth in this Agreement;
IT IS AGREED:
1. Grant of Stock Option: The Company hereby grants the Employee the
Option to purchase all or any part of an aggregate of 300,000 shares of Common
Stock ("Option Shares") on the terms and condition set forth herein.
2. Non-Incentive Stock Options. The Option represented hereby is not
intended to be an option which qualifies as an "Incentive Stock Option" under
Section 422 of the Internal Revenue Code of 1986, as amended.
3. Exercise Price. The Exercise Price of the Option is as set forth in
paragraph 4 hereof, subject to adjustment as hereinafter provided.
4. Exercisability. This Option shall be exerciseable commencing June
1, 2000, subject to the terms of this Agreement. The Option may be exercised at
US$.50 per share. The Option will remain exercisable until April 1, 2005. The
period during which a portion of the Option is exercisable is referred to as the
Exercise Period.
5. Effect of Termination of Employment. Upon termination of the
employment of Employee for death or disability (as hereinafter defined),
Employee or his representative or administrator or executive may exercise the
vested portion of this Option for one year after the date of termination. Upon
termination of the employment of Employee for any other reason, this Option
Agreement shall terminate and the Option may not be exercised as to any vested
portion after the date of termination. Disability shall mean Employee's
incapacity because of physical or mental illness which prevents him from
carrying out his duties as an employee of the Company on a full-time basis for a
period of 120 consecutive days or for an aggregate of 120 days in any
consecutive nine month period, after 30 days advance notice of
termination is given by the Company (which may be given before or after the end
of the disability periods described above).
6. Withholding Tax. Not later than the date as of which an amount
first becomes includible in the gross income of the Employee for United States
Federal income tax purposes with respect to the Option, the Employee shall
notify the Company of the amount and, to the extent required, pay to the
Company, or make arrangements satisfactory to the Company regarding the payment
of, any United States Federal, state, local and other taxes of any kind required
by law to be withheld or paid with respect to such amount. The obligations of
the Company under this Agreement shall be conditional upon such payment or
arrangements with the Company, and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Employee from the Company.
7. Adjustments. In the event of any stock dividend, forward stock
split, reverse stock split, or other recapitalization of the Company which
affects the number of outstanding shares of Common Stock, the Company shall
proportionally adjust the number and kind of Option Shares and the exercise
price of the Option in order to prevent the dilution or enlargement of the
Employee's proportionate interest in the Company and Employee's rights hereunder
immediately prior to the stock dividend, stock split, reverse stock split or
recapitalization, provided that the number of Option Shares shall always be a
whole number. No other adjustment is required to be made in the number of shares
or price per share subject to this Option.
8. Method of Exercise.
8.1 Notice to the Company. The Option shall be exercised in whole
or in part as to the exercisable portion by written notice in substantially the
form attached hereto as Exhibit A directed to the Company at its principal place
of business accompanied by full payment as hereinafter provided of the exercise
price for the number of Option Shares specified in the notice.
8.2 Delivery of Option Shares. The Company shall deliver a
certificate for the Option Shares to the Employee as soon as practicable after
payment therefor.
8.3 Payment of Purchase Price.
8.3.1 Payment. The Employe shall make payments by wire
transfer, certified or bank check or personal
check, in each case payable to the order of the
Company; the Company shall not be required to
deliver certificates for Option Shares until the
Company has confirmed the receipt of
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good and available funds in payment of the
purchase price thereof.
8.3.2 Payment of Withholding Tax. Any required
withholding tax shall be paid in cash in
accordance with Sections 8.3.1.
9. Nonassignability. The Option shall not be assignable or
transferable except by will or by the laws of descent and distribution in the
event of the death of the Employee. No transfer of the Option by the Employee by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice thereof
and a copy of the will and such other evidence as the Company may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions of the Option.
10. Company Representations. The Company hereby represents and
warrants to the Employee that:
(a) the Company, by appropriate and all required action, is duly
authorized to enter into this Agreement and consummate all of the transactions
contemplated hereunder; and
(b) the Option Shares, when issued and delivered by the Company to
the Employee in accordance with the terms and conditions hereof, will be duly
and validly issued and fully paid and non-assessable.
11. Employee Representations. The Employee hereby represents and
warrants to the Company that:
(a) he is acquiring the Option and shall acquire the Option Shares
for his own account and not with a view towards the distribution thereof;
(b) he understands that he must bear the economic risk of the
investment in the Option Shares, which cannot be sold by him unless they are
registered under the Securities Act of 1933 ("1933 Act") or an exemption
therefrom is available thereunder (which exemption may require a holding period
of not less than one year after exercise in certain circumstances and not less
than two years after exercise in certain other circumstances and if an affiliate
of the Company may impose other restrictions) and that the Company is under no
obli gation to register the Option Shares for its issuance or sale by the
Employee under the 1933 Act except as stated in this Agreement;
(c) he has had both the opportunity to ask questions and receive
answers from the officers and directors of the Company and all persons acting on
its behalf concerning the terms and conditions of the offer made hereunder and
to obtain any additional information to the extent the Company possesses or may
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possess such information or can acquire it without unreasonable effort or
expense necessary to verify the accuracy of the information obtained pursuant to
this clause;
(d) he is aware that the Company shall place stop transfer orders
with its transfer agent against the transfer of the Option Shares in the absence
of registration under the 1933 Act or an exemption therefrom as provided herein;
and
(e) The certificates evidencing the Option Shares may bear the
following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated
as of April 1, 2000, a copy of which is on file with
the Company, and may not be trans ferred, pledged or
disposed of except in accordance with the terms and
conditions thereof."
12. Restriction on Transfer of Stock Option Agreement and Option
Shares. Anything in this Agreement to the contrary notwithstanding and in
addition to the provisions of Section 11 of this Agreement, the Employee hereby
agrees that he shall not sell, transfer by any means or otherwise dispose of the
Option Shares acquired by him without registration under the 1933 Act, or in the
event that they are not so registered, unless (i) an exemption from the 1933 Act
registration requirements is available thereunder, and (ii) the Employee has
furnished the Company with notice of such proposed transfer and the Company's
legal counsel, in its reasonable opinion, shall deem such proposed transfer to
be so exempt.
13. Registration Right. If the Company shall file (time not being of
the essence) a Registration Statement on Form S-8 (or successor form) at any
time prior to the exercise of any portion of this Option, if it is permitted to
do so, it will register the Option Shares for issuance to Employee on such Form
S-8 (or successor form).
14. Miscellaneous.
14.1 Notices. All notices, requests, deliveries, payments,
demands and other communications which are required or
permitted to be given under this Agreement shall be in
writing and shall be either delivered personally or sent by
registered or certified mail, or by private courier, return
receipt requested, postage prepaid to the parties at their
respective addresses set forth herein, or
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to such other address as either shall have specified by
notice in writing to the other. Notice shall be deemed duly
given hereunder when delivered or mailed as provided herein.
14.2 Stockholder Rights. The Employee shall not have any of the
rights of a stockholder with respect to the Option Shares
until such shares have been issued after the due exercise of
the Option. Nothing contained in this Agreement shall be
deemed to confer upon Employee any right to continued
employment with the Company or any subsidiary thereof, nor
shall it interfere in any way with the right of the Company
to terminate Employee in accordance with the provisions
regarding such termination set forth in Employee's written
agreement with the Company, or if there exists no such
agreement, to terminate Employee at will.
14.3 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be
construed as a waiver of any other or subsequent breach.
14.4 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject
matter hereof. This Agreement may not be amended except by
writing executed by the party to be charged.
14.5 Binding Effect; Successors. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and,
to the extent not prohibited herein, their respective heirs,
successors, assigns and representatives. Nothing in this
Agreement, expressed or implied, is intended to confer on
any person other than the parties hereto and as provided
above, their respective heirs, successors, assigns and
representatives any rights, remedies, obligations or
liabilities.
14.6 Governing Law. This Agreemen shall be governed by and
construed in accordance with the laws of the State of
Delaware (without regard to conflicts of law provisions).
14.7 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any
way limit or affect the meaning or interpretation of any of
the terms or provisions of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as
of the day and year first above written.
CYBER MARK INTERNATIONAL CORP. Address:
359 Enford Road - Unit 1
Richmond Hill, Ontario L4C 3G2
Canada
/s/ Samuel Singal
By: _________________________________
EMPLOYEE: Address: 27 Hiram Rd.
Richmond Hill, Ont.
L4C 9E6 Canada
/s/ Israel Ellis
______________________________
Israel Ellis
EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
Cyber Mark International Corp.
50 West Pearce Street - Unit 6
Richmond Hill, Ontario L4B 1E3
Canada
_______________________________
DATE
Attention: Secretary or Treasurer
Re: Purchase of Option Shares
Gentlemen:
In accordance with my Stock Option Agreement dated as of
April 1, 2000 ("Agreement") with Cyber Mark International Corp. ("Company"), I
hereby irrevocably elect to exercise the right to purchase _________ shares of
the Company's common stock ("Common Stock"), which are being purchased for
investment and not for resale.
As payment for my shares, enclosed is (check and complete
applicable box[es]):
|_| a [personal check] [certified check] [bank check]
payable to the order of "Cyber Mark International Corp." in
the sum of $_________; and/or
|_| confirmation of wire transfer in the amount of
$_____________.
I hereby represent, warrant to, and agree with, the Company
that:
(1) I have acquired the Option and shall acquire the Option
Shares for my own account and not with a view towards the distribution thereof;
(2) I understand that I must bear the economic risk of the
investment in the Option Shares, which cannot be sold by me unless they are
registered under the Securities Act of 1933 ("1933 Act") or an exemption
therefrom is available thereunder and that the Company is under no obligation to
register the Option Shares for sale under the 1933 Act;
(3) I have had both the opportunity to ask questions and
receive answers from the officers and directors of the Company and all persons
acting on its behalf concerning the terms and conditions of the offer made
hereunder and to obtain any additional information to the extent the Company
possesses or may possess such information or can acquire it without unreasonable
effort or expense necessary to verify the accuracy of the information obtained
pursuant to clause (2) above;
(4) I am aware that the Company shall place stop transfer
orders with its transfer agent against the transfer of the Option Shares in the
absence of registration under the 1933 Act or an exemption therefrom as provided
herein; and
(5) the certificates evidencing the Option Shares may bear
the following legends:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
"The shares represented by this certificate have been
acquired pursuant to a Stock Option Agreement, dated
as of April 1, 2000, a copy of which is on file
with the Company, and may not be transferred, pledged
or disposed of except in accordance with the terms
and conditions thereof."
Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
____________________________________ _______________________________________
(Signature) (Address)
____________________________________ _______________________________________
(Print Name) (Address)
_______________________________________
(Social Security Number)
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