EX-10 3 exhibit101.htm EXHIBIT 10.1 Exhibit 10.1

Exhibit 10.1

 

KONATEL, INC.

 

 

STOCK OPTION AGREEMENT

 

Name of Optionee:  D. Sean McEwen  
No. of Common Shares Covered: 1,500,000 Date of Grant: December 18, 2017
Exercise Price Per Common Share:  $0.22 Expiration Date: Five years from the Date of Vesting of each Tranche.
Exercise Schedule:  
   

Date(s) of

Exercisability (Vesting)

No. of Common Shares as to which the

Option becomes Exercisable

March 18, 2018 187,250
June 18, 2018 187,250
September 18, 2018 187,250
December 18, 2018 187,250
March 18, 2019 187,250
June 18, 2019 187,250
September 18, 2019 187,250
December 18, 2019 187,250

 

This is a Stock Option Agreement (the “Agreement”) between KonaTel, Inc., a Delaware corporation (the “Company”), and the optionee identified above (the “Optionee”), effective as of the Date of Grant specified above.

 

Recitals:

 

WHEREAS, the Company has entered into an Agreement and Plan of Merger (the “Merger Agreement” and the “Merger”) with KonaTel, Inc., a Nevada corporation, as of the Date of Grant listed above, that reserved certain shares, some to be granted simultaneous with the effective date of the Merger; and certain management and employee options as incentives or otherwise, some to be granted simultaneous with the effective date of the Merger; and

 

WHEREAS, Pursuant to the Merger Agreement, the Board of Directors of the Company (the “Board”) and any Committee of the Board authorized by the Board with the responsibility of determining the grants of Options on the Shares (the “Committee”) hereby grants the Option to the Optionee to purchase the number of shares of $0.001 par value common stock of the Company (the “Shares”) specified at the beginning of this Agreement under the following terms and conditions:

 

1. Grant. The Optionee is granted the Option to purchase the number of Shares specified at the beginning of this Agreement.

 

2. Exercise Price. The price to the Optionee of each Share subject to the Option will be the exercise price specified at the beginning of this Agreement (which price may not be less than the Fair Market Value as of the date of grant or, if the Optionee owns or is deemed to own stock possessing more than 10% of the combined voting power of all classes of stock of the Company, 110% of the Fair Market Value as of the Date of Grant).

 

3. Non-Incentive Stock Option. The Option is not intended to be an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

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4. Exercise Schedule. The Option will vest and become exercisable as to the number of Shares and on the dates specified in the Exercise Schedule at the beginning of this Agreement. The Exercise Schedule will be cumulative; thus, to the extent the Option has not already been exercised and has not expired, terminated or been cancelled, the Optionee or the person otherwise entitled to exercise the Option as provided herein may at any time, and from time to time, purchase all or any portion of the Shares then purchasable under the exercise schedule.

 

The Option may also be exercised in full (notwithstanding the Exercise Schedule) under the circumstances described in Section 8 of this Agreement if it has not expired prior thereto.

 

5. Expiration.

 

(a) Timing. The Option will expire at 5:00 p.m. Eastern Time on the earliest of:

 

(1) The Expiration Date specified at the beginning of this Agreement; or

 

(2) The expiration of the period within which the Option can be exercised as stated above.

 

(b) Expiration Final. In no event may anyone exercise the Option, in whole or in part, after it has expired, notwithstanding any other provision of this Agreement.

 

6. Procedure to Exercise Option.

 

(a) Notice of Exercise. The Option may be exercised by delivering written notice of exercise to the Company at the principal executive office of the Company, to the attention of the Company’s Secretary, in the form attached to this Agreement. The notice shall state the number of Shares to be purchased, and shall be signed by the person exercising the Option. If the person exercising the Option is not the Optionee, he/she also must submit appropriate proof of his/her right to exercise the Option.

 

(b) Tender of Payment. Upon giving notice of any exercise hereunder, the Optionee shall provide for payment of the Exercise Price of the Shares being purchased through one or a combination of the following methods:

 

(i) Cash (including check, bank draft or money order); or

 

(ii) By delivery to the Company of unencumbered Shares having an aggregate Fair Market Value on the date of exercise equal to the Exercise Price of such Shares.

 

(c) Limitation on Payment by Shares. Notwithstanding Section 6(b) hereof, the Option may not be exercised through payment of any portion of the Exercise Price with Shares if, in the opinion of the Board, payment in such manner could have adverse financial accounting consequences for the Company that were not applicable at the time of the Date of Grant.

 

(d) Delivery of Certificates. As soon as practicable after the Company receives the notice and payment of the Exercise Price provided for above, it shall deliver to the person exercising the Option, in the name of such person, a certificate or certificates representing the Shares being purchased. The Company shall pay any original issue or transfer taxes with respect to the issue or transfer of the Shares and all fees and expenses incurred by it in connection therewith. All Shares so issued shall be fully-paid and nonassessable. Notwithstanding anything to the contrary in this Agreement, no certificate for Shares distributable under this Agreement shall be issued and delivered unless the issuance of such certificate complies with all applicable legal requirements including, without limitation, compliance with the provisions of applicable state securities laws, the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the General Rules and Regulations of the United States Securities and Exchange Commission (the “SEC”) promulgated under the Securities Act and the Exchange Act, including published interpretations thereof by the SEC.

 

7. Employment Requirement. The Option is not subject to any employment requirement.

 

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8. Acceleration of Vesting.

 

(a) Change in Control. If a change in control (as defined below) of the Company or buyout of the operations of the Company shall or is to occur, then the Option, if not already exercised in full or otherwise terminated, expired or cancelled, shall become immediately vested and exercisable in full and shall remain exercisable for a period of thirty (30) days following the completion of the change in control.

 

(b) Discretionary Acceleration. Notwithstanding any other provisions of this Agreement to the contrary, the Board or any Committee may, in its sole discretion, declare at any time that the Option shall be immediately exercisable.

 

9. Limitation on Transfer. There is no limitation on transfer of the Option, so long as the transfer complies with applicable United States and state securities laws, rules and regulations.

 

10. No Shareholder Rights Before Exercise. No person shall have any of the rights of a shareholder of the Company with respect to any Shares subject to the Option until the Shares actually are issued to him/her upon exercise of the Option.

 

11. Discretionary Adjustment. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, or extraordinary dividend or divestiture (including a spin off), or any other change in the corporate structure or Shares of the Company, the Board or the Committee (or if the Company does not survive any such transaction, a comparable committee of the Board of Directors of the surviving corporation) may, without the consent of the Optionee, make such adjustment as it determines in its discretion to be appropriate as to the number and kind of securities granted herein and, in order to prevent dilution or enlargement of rights of the Optionee, the number and kind of securities issuable upon exercise of the Option and the exercise price hereof.

 

12. Interpretation of This Agreement. All decisions and interpretations made by the Board or the Committee, if there is a Committee, with regard to any question arising hereunder shall be binding and conclusive upon the Company and the Optionee.

 

13. Option Subject to Articles of Incorporation and Bylaws. The Optionee acknowledges that the Option and the exercise thereof is subject to the Articles of Incorporation, as amended from time to time, and the Bylaws, as amended from time to time, of the Company, and any applicable federal or state laws, rules or regulations.

 

14. Obligation to Reserve Sufficient Shares. The Company shall at all times during the term of the Option reserve and keep available a sufficient number of Shares to satisfy this Agreement.

 

15. Binding Effect. This Agreement shall be binding in all respects on the heirs, representatives, successors and assigns of the Optionee.

 

16. Choice of Law. This Agreement is entered into under the laws of the State of Delaware and shall be construed and interpreted thereunder without regard to its conflict of law principles for all matters, including fundamental or procedural laws.

 

17. Change in Control. For all purposes of this Agreement, “Change in Control” shall mean: (i) the completion of one or more transactions by which any person or entity (and his, her or its affiliates) becomes the beneficial owner 50.1% or more of the voting power of the Company’s securities; or (ii) any merger, consolidation or liquidation of the Company in which the Company is not the continuing or surviving company or pursuant to which stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the shares stock immediately before the merger have the same proportionate ownership of the Common Stock of the surviving company immediately after the merger; or (iii) substantially all of the assets of the Company are sold or otherwise to parties that are not within a “controlled group of corporations” (as defined in Section 1563 of the Internal Revenue Code of 1986, as amended) in which the Company is a member at the time of such sale or transfer.

 

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The Optionee and the Company have executed this Agreement as of the 18th day of December, 2017.

 

 

OPTIONEE:

 

/s/ D. Sean McEwen
D. Sean McEwen

 

KonaTel, Inc.:

 

By /s/ Charles D. Griffin
    Its Charles Griffin, President/COO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(This space intentionally left blank.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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NOTICE OF STOCK OPTION EXERCISE

 

KonaTel, Inc.

500 N. Central Expressway, Suite 202

Plano, TX 75074

 

Attention: Board of Directors

Dear Sir or Madam:

I am the holder of ____________ Stock Options, granted to me KonaTel, Inc., a Delaware corporation (the “Company”), Stock Option Agreement, granted on _____________________(date of grant) for the purchase of ___________shares of $0.001 par value Common Stock of the Company (“Shares”) at a purchase price of $0.22 per share.

I hereby exercise my option to purchase ________________shares, for which I have enclosed: please enter one of three choices (“cash,” “personal check” or “Stock Certificate No.(s)) ____________________________ in the total aggregate amount of __________________. Please register my stock certificate as follows:

 

Name(s):____________________________________

 

Street Address:_______________________________

 

City, State & Zip Code_________________________

 

Social Security No. : __________________________

 

In connection with your acceptance of this Notice of Stock Option Exercise, I hereby represent, warrant and covenant as follows:

I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act of 1933 (the “Securities Act”), or any rule or regulation under the Securities Act.

I have had such opportunity as I have deemed adequate to obtain from representatives of the Company such information as is necessary to permit me to evaluate the merits and risks of my investment in the Company.

I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.

I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Shares for an indefinite period.

I understand that (i) the Shares have not been registered under the Securities Act and are “restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; (iii) in any event, the exemption from registration under Rule 144 will not be available for at least one year and even then will not be available unless a public market then exists for the Common Stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file with the Securities and Exchange Commission with respect to any stock of the Company and the Company has no obligation or current intention to register the Shares under the Securities Act.

 

Very truly yours,

 

 

 ___________________________________________

Signature)

 

 

 

 

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