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EXHIBIT 10.4
AMERICAN MULTIPLEXER(TM) CORPORATION,
RESTRICTED STOCK WARRANT AGREEMENT
American Multiplexer(TM) Corporation, a California corporation (the
"Company"), has granted to Douglas R. Hanson (the "Warrantee"), a warrant (the
"Warrant") to purchase a total of One Million (1,000,000) shares of Common
Stock (the "Shares") of the Company on the terms and conditions set forth below.
1. Nature of the Warrant: This Warrant is intended to qualify according to
SEC rules.
2. Exercise Price: The exercise price will be $1.00 per share.
3. Right to Exercise Warrant: The Warrant is granted by the Company based on
the intent of the Parties to the Warrant for the company to enter into a
new business and to accomplish certain goals and objectives some of which
are identified in the Descriptive Memorandum (c)1998. Warrantee shall
accumulate the right to exercise the shares of the Warrant based on a) the
Company's stock increasing in price over time, and/or b) the Company's
achievement of certain milestones as identified herein. Said rights may be
exercised independently based on the following set of conditions:
(a) Stock Price. The right to exercise up to 50% of the warrant
(500,000 shares) is based on the following stock price milestones (with a
base of 20 million shares in the company), whereby the stock maintains an
average price on the OTC BB or other market for a period of 30 days:
Stock Price @ $1.00 per share - 100,000 shares exercisable
Stock Price @ $3.00 per share - 100,000 shares exercisable
Stock Price @ $5.00 per share - 100,000 shares exercisable
Stock Price @ $10.00 per share - 100,000 shares exercisable
Stock Price @ $20.00 per share - 100,000 shares exercisable
The above stock prices will be adjusted downward proportionally if
the base of 20 million shares increases in the future.
(b) Marketing and Technical Milestones. The right to exercise up
to 50% of the warrant (500,000 shares) is based on the Company achieving
the following marketing, sales and engineering milestones. The achievement
of the milestones is subject to the availability of funding to support the
development and sales efforts as specified herein., and is based on time
following the expenditure of said funds. If the funding is delayed, the
technical or marketing milestone date is also delayed, but such change in
milestone date does not cancel or void the Warrant.
<TABLE>
<CAPTION>
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Milestone Months Cumulative Eng. Shares
From Funding Exercisable
Funding Amount
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<S> <C> <C> <C>
1. DigiCop-1 Redesign $ 1,217,000 50,000
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2. DVB Compliant System Integration $ 2,051,540 50,000
---------------------------------------------------------------------------------------------
3. Ku Band Radio Production $ 3,279,653 75,000
---------------------------------------------------------------------------------------------
4. Availability of DVB Services $ 4,496,706 75,000
---------------------------------------------------------------------------------------------
6. Beta Test SatExpress $ 9,713,278 100,000
---------------------------------------------------------------------------------------------
7. Hub Production $11,267,098 75,000
---------------------------------------------------------------------------------------------
8. SatExpress Production $14,785,718 75,000
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</TABLE>
(c) This Warrant may not be exercised for a fraction of a share.
The right to exercise to purchase the individual share as described above
will expire 3 years after it becomes exercisable.
1998-99 American Multiplexer(TM) Corp. Confidential-Stock Option Agreement
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4. Rights of Survivorship. In the event of the warrantee's death, disability
or other termination of employment, other than cause, the rights to
exercise the warrants will be transferable to the warrantee's beneficiary
or other designatee defined by the warrantee.
5. Merger, Consolidation or Sale of Assets. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, the Company shall provide
Warrantee with written notice of such transaction not later than thirty
(30) days prior to the projected date of such transaction. Notwithstanding
the vesting provisions of Section 3(a)(b) above, after delivery of such
notice Warrantee may exercise this Warrant to the full extent. After
delivery of such notice, the warrantee can, upon providing notice,
accelerate vesting at 100% of the full value of the warrant on or prior to
the date of such transaction and may condition his exercise upon the
occurrence of the transaction. Whether or not so exercised, this Warrant
agreement shall terminate immediately upon the consummation of such
proposed sale, merger or offering.
6. Method of Exercise of Warrants. This Warrant shall be exercisable by
written notice which shall state the election to exercise the Warrant, the
number of Shares in respect of which the Warrant is being exercised, and
such other representations. Such written notice shall be signed by the
Warrantee and shall be delivered in person or by certified mail to the
Secretary of the Company or designee. The written notice shall be deemed to
be exercised upon receipt by the Company of such written notice accompanied
by the exercise price at the fair market value at the time of exercise.
Exhibit A contains the form that should be used. No shares will be issued
pursuant to the exercise of an Warrant unless such issuance and such
exercise shall comply with all relevant provisions of law and the
requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, for income tax purposes the Shares shall
be considered transferred to the Warrantee on the date on which the Warrant
is exercised with respect to such Shares.
7. Method of Payment. Payment of the exercise price shall be by cash, check,
or delivery of Common Stock of the Company that has been vested by the
Warrantee. The value of such common stock shall have a fair market value at
least equal to the exercise price payable with respect to the exercise
hereof or any combination of such methods of payment.
8. Termination of Status as an Employee.
a) Termination without Cause: In the event of termination without
cause of the warrantee's status as an employee, the full value of this
warrant will be exercisable.
b) Termination with Cause. In the event of termination with cause of
Warrantee's status as an employee, he may, but only within one
hundred-eighty (180) days after date of such termination, exercise this
warrant to the extent that he was entitled to exercise it at the date of
such termination. To the extent that he was not entitled to exercise this
warrant at the date of such termination, or if he does not exercise this
Warrant within the time specified herein, the Warrant shall terminate.
9. Disability of Warrantee. Notwithstanding the provisions of Section 8 above,
in the event of termination of Warrantee's status as an employee as a
result of disability, he may, but only within six months from the date of
termination of employment, exercise his Warrant to the extent he was
entitled to exercise it at the date of such termination. To the extent that
he was not entitled to exercise the Warrant at the date of termination, or
if he does not exercise such Warrant within the time specified herein, the
Warrant shall terminate.
10. Death of Warrantee. In the event of the death of Warrantee, the Warrant may
be exercised, at any time within six months following the date of death, by
Warrantee's estate, spouse or by a person who acquired the right to
exercise the Warrant by bequest or inheritance but only to the extent of
the right
1998-99 American Multiplexer(TM) Corp. Confidential-Stock Warrant Agreement
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to exercise that has accrued at the date of death of the Warrantee. To the
extent that Warrantee was not entitled to exercise the Warrant at the date
of his death, or if the Warrantee's estate or legatee does not exercise the
Warrant within the time specified herein, the Warrant shall terminate.
11. Transferability of Warrant. This Warrant may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Warrantee only by him. The terms of
this Warrant shall be binding upon the executors, administrators, heirs,
successors and assigns of the Warrantee.
12. Term of Warrant. This Warrant may not be exercised more than ten (10) years
from the date of grant of this Warrant, and may be exercised during such
term only in accordance with the Plan and the terms of this Warrant.
13. Early Disposition of Stock. Warrantee understands that if he disposes of
any Shares received under this Warrant within two years after the date of
this Agreement or within one year after such Shares were transferred to
him, he will be treated for federal income tax purposes as having received
ordinary income at the time of such disposition in an amount generally
measured by the difference between the price paid for the Shares and the
lower of the fair market value of the Shares at the date of the exercise or
the fair market value of the Shares at the date of disposition. Warrantee
understands that if he disposes of such Shares at any time after the
expiration of such two-year and one-year holding periods, any gain on such
sale will be taxed as long-term capital gain.
Date of grant: November 1, 1998
AMERICAN MULTIPLEXER CORPORATION,
a California corporation
By: /s/ EDWARD TAN
----------------------------
Edward Tan, President/CEO
1998-99 American Multiplexer(TM) Corp. Confidential-Stock Warrant Agreement
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