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EXHIBIT 10.15
INCENTIVE STOCK OPTION AGREEMENT
This INCENTIVE STOCK OPTION AGREEMENT is made as of _____________,
199__, between BIRCH TELECOM, INC., a Delaware corporation (the "Company"), and
[NAME], an individual ("Optionee").
The Company has adopted the 1998 Stock Option Plan (the "Plan") in
order to attract and retain the best available personnel for positions of
substantial responsibility and to provide incentives for them to exert maximum
efforts for the success of the Company and its Affiliates. Pursuant to the Plan,
certain employees of the Company and its Affiliates may be designated by the
Board of Directors of the Company to receive options to purchase shares of
common stock of the Company ("Common Stock").
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS. Capitalized terms not explicitly defined in this
Agreement, but defined in the Plan, shall have the same definitions as in the
Plan.
2. GRANT OF OPTION. The Company grants to Optionee an Incentive Stock
Option to purchase up to the aggregate number of shares of Common Stock set
forth on EXHIBIT A attached to this Agreement, in accordance with the vesting
schedule set forth on EXHIBIT A. The Company may make additional grants to
Optionee of Incentive Stock Options to purchase shares of Common Stock (together
with the initial grant of options, individually an "Option" and collectively,
the "Options") by delivering Optionee an amended EXHIBIT A describing those
additional grants.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(A) EXERCISE PRICE. The exercise price of each Option is set
forth on EXHIBIT A, being the fair market value of the Common Stock on
the date of grant of the Option.
(B) METHOD OF PAYMENT. Payment of the exercise price is due in
full upon exercise of all or any part of each installment which has
accrued to Optionee. Optionee may elect, to the extent permitted by
applicable laws and regulations, to make payment of the exercise price
under one of the following alternatives:
(i) in cash (including check) at the time of
exercise;
(ii) pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board
which, prior to the issuance of Common Stock, results in
either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds;
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(iii) by delivery of already-owned shares of Common
Stock, held for the period required to avoid a charge to the
Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall
be valued at its Fair Market Value on the date of exercise; or
(iv) by a combination of the methods of payment
permitted by Sections 3(b)(i) through 3(b)(iii) of this Agreement.
4. WHOLE SHARES. An Option may not be exercised for any number of
shares which would require the issuance of anything other than whole shares.
5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained in this Agreement, an Option may not be exercised unless the shares
issuable upon exercise of the Option are then registered under the Securities
Act or, if those Shares are not then so registered, the Company has determined
that exercise and issuance would be exempt from the registration requirements of
the Securities Act.
6. TERM. The term of each Option commences on the date of grant and
expires ten years thereafter (the "Expiration Date"), unless the Option expires
sooner as set forth below or in the Plan. An Option shall terminate on the
earlier of the Expiration Date or three months after the termination of
Optionee's Continuous Status as an Employee with the Company or an Affiliate of
the Company for any reason or for no reason unless:
(A) termination of Continuous Status as an Employee is because
of Optionee's permanent and total disability (within the meaning of
Section 422(c)(6) of the Code), in which event the Options shall expire
on the earlier of the Expiration Date or twelve months following
termination of Continuous Status as an Employee; or
(B) termination of Continuous Status as an Employee is because
of Optionee's death, or Optionee's death occurs within three months
following Optionee's termination for any other reason, in which event
the Options shall expire on the earlier of the Expiration Date or
twelve months after Optionee's death; or
(C) during any part of the three month period an Option is not
exercisable solely because of the condition set forth in Section 5 of
this Agreement, in which event the Option shall not expire until the
earlier of the Expiration Date or until it shall have been exercisable
for an aggregate period of three months after the termination of
Continuous Status as an Employee; or
(D) exercise of an Option within three months after
termination of Optionee's Continuous Status as an Employee would result
in liability under Section 16(b) of the Exchange Act, in which case the
Option will expire on the earliest of (i) the Expiration Date,
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(ii) the tenth day after the last date upon which exercise would
result in that liability, or (iii) six months and ten days after the
termination of Optionee's Continuous Status as an Employee.
However, an Option may be exercised following termination of Optionee's
Continuous Status as an Employee only as to that number of shares as to which it
was exercisable on the date of termination of Optionee's Continuous Status as an
Employee as set forth on EXHIBIT A.
In order to obtain the federal income tax advantages associated with an
Incentive Stock Option, the Code requires that at all times beginning on the
date of grant of an option and ending on the day three months before the date of
the option's exercise, the optionee must be an employee of the Company or an
Affiliate of the Company, except in the event of the optionee's death or
permanent and total disability. This Section 7 provides for extended
exercisability of Options under certain circumstances for the benefit of
Optionee, but cannot guarantee that an Option will necessarily be treated as an
Incentive Stock Option if Optionee exercises the Option more than three months
after the date of termination of Optionee's Continuous Status as an Employee.
8. REPRESENTATIONS. By executing this Agreement, Optionee warrants and
represents that he or she has either (a) preexisting personal or business
relationships with the Company or any of its officers, directors or controlling
persons, or (b) the capacity to protect his or her own interests in connection
with the grant and exercise of the Options by virtue of the business or
financial expertise of any of Optionee's professional advisors who are
unaffiliated with and who are not compensated by the Company or any of its
Affiliates, directly or indirectly.
9. EXERCISE.
(A) An Option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the
Company, or to another person as the Company may designate, during
regular business hours, together with any additional documents that the
Company may require pursuant to Section 9(b) of this Agreement and
Section 6(f) of the Plan.
(B) By exercising an Option, Optionee agrees that:
(i) as a precondition to the completion of any
exercise of the Option, the Company may require Optionee to
enter into an arrangement providing for the cash payment by
Optionee to the Company of any tax withholding obligation of
the Company arising by reason of: (1) the exercise of the
Option, (2) the lapse of any substantial risk of forfeiture to
which the shares are subject at the time of exercise, or (3)
the disposition of shares acquired upon exercise; and Optionee
also agrees that any exercise of an Option has not been
completed and that the Company is under no obligation to issue
any Common Stock until such an arrangement is established or
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the Company's tax withholding obligations are satisfied, as
determined by the Company;
(ii) the Company (or a representative of the
underwriters) may, in connection with the first underwritten
registration of the offering of any securities of the Company
under the Securities Act, require that Optionee not sell or
otherwise transfer or dispose of any shares of Common Stock or
other securities of the Company during that period (not to
exceed 180 days) following the effective date of the
registration statement of the Company filed under the
Securities Act as may be requested by the Company or the
representative of the underwriters. Optionee further agrees
that the Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions
until the end of that period; and
(iii) unless the Common Stock of the Company is then
registered under Section 12(d) or 12(g) of the Exchange Act,
Optionee shall execute and deliver a Stock Restriction
Agreement in the form attached as EXHIBIT B.
10. TRANSFERABILITY. An Option is not transferable; provided, however,
by delivering written notice to the Company, in a form satisfactory to the
Company, Optionee may designate a third party who, in the event of Optionee's
death, shall be entitled to exercise the Options.
11. OPTION NOT A SERVICE CONTRACT. This Agreement is not an employment
contract and nothing in this Agreement shall be deemed to create any obligation
on Optionee's part to continue in the employ of the Company, or of the Company
to continue Optionee's employment with the Company.
12. NOTICES. Any notices provided for in this Agreement or the Plan
shall be given in writing and shall be deemed effectively given upon receipt or,
in the case of notices delivered by the Company to Optionee, five days after
deposit in the United States mail, postage prepaid, addressed to Optionee at the
address specified below or at another address designated by Optionee by written
notice to the Company.
13. GOVERNING PLAN DOCUMENT. This Agreement is subject to all the
provisions of the Plan (a copy of which has been provided to Optionee), the
provisions of which are hereby made a part of this Agreement. In the event of
any conflict between the provisions of this Agreement and those of the Plan, the
provisions of the Plan shall control. This Agreement also is further subject to
all interpretations, amendments, rules and regulations which may from time to
time be promulgated and adopted pursuant to the Plan. If, however, the Plan is
amended or terminated after the date of this Agreement, that amendment or
termination shall not adversely affect the Options granted pursuant to this
Agreement, unless mutually agreed otherwise by Optionee and the Company, which
agreement shall be in writing and signed by Optionee and the Company.
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IN WITNESS WHEREOF, the Optionee and the Company have executed this
Agreement as of the date first written above.
OPTIONEE
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[NAME]
Address:
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BIRCH TELECOM, INC.
By:
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Senior Vice President
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EXHIBIT A
to Incentive Stock Option Agreement dated as of_____________, 199__, between
Birch Telecom, Inc.
and
[NAME]
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NUMBER OF EXERCISE
DATE OF GRANT SHARES SUBJECT TO VESTING SCHEDULE PRICE PER
OPTION SHARE
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_______ ______ 25% of shares subject to the $______
Option will vest on each
anniversary of the date of grant.
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________ ______ 25% of shares subject to the $______
Option will vest on each
anniversary of the date of grant.
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