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THE SECURITIES
EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER
SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH
RULE 144, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR
THE HOLDER OF
THESE SECURITIES, REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
OPTION TO PURCHASE COMMON STOCK
OF
STELLAR TECHNOLOGIES, INC.
Void after December 12, 2015
This certifies
that, for value received, Mark G. Sampson ("Holder") is
entitled, subject to the terms set forth
below, to purchase from Stellar
Technologies, Inc., a Colorado corporation
(the "Company"), shares of the common
stock, $.001 par value per share, of the
Company ("Common Stock"), as
constituted on the date hereof (the "Option
Issue Date"), with the Notice of
Exercise attached hereto duly executed, and
simultaneous payment therefor in
lawful money of the United States or as
otherwise provided in Section 3 hereof,
at the Exercise Price then in effect. The
number, character and Exercise Price
of the shares of Common Stock issuable upon
exercise hereof are subject to
adjustment as provided herein.
1. Term of
Option. Subject to compliance with the vesting provisions
identified at Section 2.3 hereof, this
Option shall be exercisable, in whole or
in part, during the term commencing on the
date Holder begins serving as Chief
Executive Officer of the Company and ending
at 5:00 p.m. EST on December 12,
2015 (the "Option Expiration Date") and
shall be void thereafter.
2. Number of
Shares, Exercise Price and Vesting Provisions.
2.1 Number of Shares. The number of shares of Common Stock which
may
be purchased pursuant to this Option shall
be 5,000,000 shares (the "Shares"),
subject, however, to adjustment pursuant to
Section 11 hereof.
2.2 Exercise Price. The Exercise Price at which this Option, or
portion thereof, may be exercised shall be
$0.40 per Share, subject, however, to
adjustment pursuant to Section 11
hereof.
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2.3 Vesting. This Option shall vest in accordance with the
following
schedule:
(i) Options to purchase 1,666,667 shares shall vest and become
exercisable on
June 15, 2006;
(ii) Options to purchase 1,666,667 shares shall vest and become
exercisable on
December 15, 2006; and
(iii) Options to purchase 1,666,666 shares shall vest and
become
exercisable on
June 15, 2007.
3. Exercise of
Option.
3.1 Payment of Exercise Price. Subject to the terms hereof, the
purchase rights represented by this Option
are exercisable by the Holder in
whole or in part, at any time, or from time
to time, by the surrender of this
Option and the Notice of Exercise annexed
hereto duly completed and executed on
behalf of the Holder, at the office of the
Company (or such other office or
agency of the Company as it may designate
by notice in writing to the Holder at
the address of the Holder appearing on the
books of the Company) accompanied by
payment of the Exercise Price in full (i)
in cash or by bank or certified check
for the Shares with respect to which this
Option is exercised; (ii) by delivery
to the Company of shares of the Company's
Common Stock having a Fair Market
Value (as defined below) equal to the
aggregate Exercise Price of the Shares
being purchased which Holder is the record
and beneficial owner of and which
have been held by the Holder for at least
six (6) months; (iii) if the sale of
the Shares is covered by an effective
registration statement, by delivering to
the Company a Notice of Exercise together
with an irrevocable direction to a
broker-dealer registered under the
Securities Exchange Act of 1934, as amended
(the "Exchange Act"), to sell a sufficient
portion of the Shares and deliver the
sales proceeds directly to the Company to
pay the Exercise Price; or (iv) by any
combination of the procedures set forth in
subsections (i), (ii) and (iii) of
this Section 3.1.
3.2 Fair Market Value. If previously owned shares of Common Stock
are
tendered as payment of the Exercise Price,
the value of such shares shall be the
"Fair Market Value" of such shares on the
trading date immediately preceding the
date of exercise. For the purpose of this
Agreement, the "Fair Market Value"
shall be:
(a) If the Common Stock is admitted to quotation on the
National
Association of Securities Dealers Automated
Quotation System ("NASDAQ"), the
Fair Market Value on any given date shall
be the average of the highest bid and
lowest asked prices of the Common Stock as
reported for such date or, if no bid
and asked prices were reported for such
date, for the last day preceding such
date for which such prices were
reported;
(b) If the Common Stock is admitted to trading on a United
States
securities exchange or the NASDAQ National
Market System, the Fair Market Value
on any date shall be the closing price
reported for the Common Stock on such
exchange or system for such
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date or, if no sales were reported for such
date, for the last day preceding
such date for which a sale was
reported;
(c) If the Common Stock is traded in the over-the-counter
market
and not on any national securities exchange
nor in the NASDAQ Reporting System,
the Fair Market Value shall be the average
of the mean between the last bid and
ask prices per share, as reported by the
National Quotation Bureau, Inc., or an
equivalent generally accepted reporting
service, or if not so reported, the
average of the closing bid and asked prices
for a share as furnished to the
Company by any member of the National
Association of Securities Dealers, Inc.,
selected by the Company for that purpose;
or
(d) If the Fair Market Value of the Common Stock cannot be
determined on the basis previously set
forth in this definition on the date that
the Fair Market Value is to be determined,
the Board of Directors of the Company
shall in good faith determine the Fair
Market Value of the Common Stock on such
date.
If the tender of previously owned shares
would result in an issuance of a whole
number of Shares and a fractional Share of
Common Stock, the value of such
fractional share shall be paid to the
Company in cash or by check by the Holder.
3.3 Termination of Employment or Service; Death.
(a) If Holder shall cease to be employed by or provide
management
services to the Company, all Options to
which Holder is then entitled to
exercise may be exercised only within
ninety (90) days after the termination of
employment or cessation of service and
prior to the Option Termination Date or,
if such termination or cessation was due to
death, within one (1) year after
termination of employment or cessation of
service and prior to the Option
Termination Date. Notwithstanding the
foregoing, in the event that any
termination of employment or cessation of
service shall be for Cause (as defined
below), then this Option shall forthwith
terminate.
For purposes of this Option, the term "Cause" shall mean (a) if
Holder
is a party to a written agreement with the
Company, or provides services to the
Company pursuant to a services agreement
between the Company and a third party,
which contains a definition of "cause" or
"for cause" or words of similar import
for purposes of termination of employment
or service thereunder by the Company,
"cause" or "for cause" as defined in such
agreement; (b) in all other cases (i)
the Holder's intentional, persistent
failure, dereliction, or refusal to perform
such duties as are reasonably assigned to
him or her by the officers or
directors of the Company; (ii) the Holder's
fraud, dishonesty or other
deliberate injury to the Company in the
performance of his or her duties on
behalf of, or for, the Company; (iii) the
Holder's conviction of a crime which
constitutes a felony involving moral
turpitude, fraud or deceit in the
jurisdiction in which the Holder is
employed, regardless of whether such crime
involves the Company; (iv) the willful
commission by the Holder of a criminal or
other act that causes substantial economic
damage to the Company or substantial
injury to the business reputation of the
Company; or (v) the Holder's material
breach of his or her employment agreement,
or the breach of a services agreement
by and between the Company and a third
party pursuant to which the Holder
provides services to the
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Company, if any. For purposes of this
Option, no act, or failure to act, on the
part of any person shall be considered
"willful" unless done or omitted to be
done by the person other than in good faith
and without reasonable belief that
the person's action or omission was in the
best interest of the Company.
(b) If Holder shall die while employed by or providing services
to the Company and prior to the Option
Termination Date, any Options then
exercisable may be exercised only within
one (1) year after Holder's death,
prior to the Option Termination Date, and
only by the Holder's personal
representative or persons entitled thereto
under the Holder's will or the laws
of descent and distribution.
(c) This Option may not be exercised for more Shares (subject
to
adjustment as provided in Section 11
hereof) after the termination of the
Holder's employment, cessation of services
to the Company, or death, as the case
may be, than the Holder was entitled to
purchase thereunder at the time of the
termination of the Holder's employment, the
cessation of services to the
Company, or death.
3.4 Exercise Date; Delivery of Certificates. This Option shall
be
deemed to have been exercised immediately
prior to the close of business on the
date of its surrender for exercise as
provided above, and Holder shall be
treated for all purposes as the holder of
record of such Shares as of the close
of business on such date. As promptly as
practicable on or after such date and
in any event within ten (10) days
thereafter, the Company at its expense shall
issue and deliver to the Holder a
certificate or certificates for the number of
Shares issuable upon such exercise. In the
event that this Option is exercised
in part, the Company at its expense will
execute and deliver a new Option of
like tenor exercisable for the number of
shares for which this Option may then
be exercised.
4. No Fractional
Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be
issued upon the exercise of this Option.
In lieu of any fractional share to which
the Holder would otherwise be entitled,
the Company shall make a cash payment equal
to the Exercise Price multiplied by
such fraction.
5. Replacement
of Option. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction
or mutilation of this Option and, in
the case of loss, theft or destruction, on
delivery of an indemnity agreement
reasonably satisfactory in form and
substance to the Company or, in the case of
mutilation, on surrender and cancellation
of this Option, the Company at its
expense shall execute and deliver, in lieu
of this Option, a new Option of like
tenor and amount.
6. Rights of
Stockholder. Except as otherwise contemplated herein, the
Holder shall not be entitled to vote or
receive dividends or be deemed the
holder of Common Stock or any other
securities of the Company that may at any
time be issuable on the exercise hereof for
any purpose, nor shall anything
contained herein be construed to confer
upon the Holder, as such, any of the
rights of a stockholder of the Company or
any right to vote for the election of
directors or upon any matter submitted to
stockholders at any meeting thereof,
or to give or withhold consent to any
corporate action (whether upon any
recapitalization, issuance of stock,
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reclassification of stock, change of par
value, or change of stock to no par
value, consolidation, merger, conveyance or
otherwise) or to receive notice of
meetings, or to receive dividends or
subscription rights or otherwise until the
Option shall have been exercised as
provided herein.
7. Transfer of
Option.
7.1. Non-Transferability. This Option shall not be assigned,
transferred, pledged or hypothecated in any
way, nor subject to execution,
attachment or similar process, otherwise
than by will or by the laws of descent
and distribution. Any attempted assignment,
transfer, pledge, hypothecation or
other disposition of this Option contrary
to the provisions hereof, and the levy
of an execution, attachment, or similar
process upon the Option, shall be null
and void and without effect.
7.2. Compliance with Securities Laws; Restrictions on Transfers.
In
addition to restrictions on transfer of
this Option and Shares set forth in
Section 7.1 above.
(a) The Holder of this Option, by acceptance hereof,
acknowledges
that this Option and the Shares to be
issued upon exercise hereof are being
acquired solely for the Holder's own
account and not as a nominee for any other
party, and for investment (unless such
shares are subject to resale pursuant to
an effective prospectus), and that the
Holder will not offer, sell or otherwise
dispose of any Shares to be issued upon
exercise hereof except under
circumstances that will not result in a
violation of applicable federal and
state securities laws. Upon exercise of
this Option, the Holder shall, if
requested by the Company, confirm in
writing, in a form satisfactory to the
Company, that the Shares of Common Stock so
purchased are being acquired solely
for the Holder's own account and not as a
nominee for any other party, for
investment (unless such shares are subject
to resale pursuant to an effective
prospectus), and not with a view toward
distribution or resale.
(b) Neither this Option nor any share of Common Stock issued
upon
exercise of this Option may be offered for
sale or sold, or otherwise
transferred or sold in any transaction
which would constitute a sale thereof
within the meaning of the 1933 Act, unless
(i) such security has been registered
for sale under the 1933 Act and regis
