STOCK OPTION GRANT AGREEMENT
(Under Provisions of the AANetcom, Inc. Stock Option Plan,
Amended and Restated Effective June 15, 1998)
THIS AGREEMENT is made this ___ day of ___________, by and between
AANETCOM, INC., a Delaware corporation (hereinafter referred to as the
"Company"), qualified to transact business in the Commonwealth of Pennsylvania
and with its principal place of business located at 0000 Xxxxxxx Xxxx Xxxxxxxxx,
Xxxxxxxxxxxx and ______________________ an individual (hereinafter referred to
as the "Purchaser"), residing at ___________________________.
RELEVANT FACTS
A. Purchaser is employed by the Company in the position of
____________ commencing _____________.
B. The Company is engaged in a highly technical and competitive
business.
C. The Company wishes to encourage equity ownership in the Company
by Purchaser.
D. Purchaser wishes to own an equity interest in the Company.
NOW, THEREFORE, intending to be legally bound hereby, the Parties
hereto agree as follows:
AGREEMENT
1. As of the date of this agreement, Purchaser is hereby granted options to
purchase _______________ shares of stock of the Company under the following
option terms:
1. the strike price of the options is ________ per share;
2. the options become exercisable as follows: (a) 25% on the first
anniversary of the Purchaser's employment with the Company; and
(b) an additional 2-1/12% per month commencing on the first
anniversary of the Purchaser's employment with the Company, so
that the Purchaser's options shall be 100% exercisable upon the
completion of four years of continuous employment with the
Company;
3. if not exercised when first exercisable, the right to exercise
expires 5 years from the date on which the shares are first
exercisable;
4. Upon termination of employment for any reason by the Company or a
parent or subsidiary of the Company, the Purchaser may exercise
only those options which are immediately purchasable by him or
her at the date of such termination. All such options must be
exercised within three (3) months of such termination, but not
later than the date of expiration of any such option, or they
shall expire. If termination is the result of the death of the
Purchaser, such exercise may be accomplished by the executor or
administrator of the estate of the Purchaser.
2. Payment of Purchase Price.
For shares acquired through exercise under section 1, the Purchaser may
pay for these shares using either of the following methods:
1. by delivering a check equal to the strike price times the number
of shares the Purchaser has elected to exercise;
2. via installment payments, if approved by the Stock Option
Committee, for this option grant.
3. Issuance of Shares. Upon receipt by the Company of the Purchase Price, the
Company shall issue to the Purchaser a duly executed certificate evidencing the
shares of Stock so acquired in the name of Purchaser.
4. Right of First Refusal. Before any shares of Stock registered in the name of
Purchaser may be sold or transferred (including transfer by operation of law or
other involuntary transfer and excluding transfers by gift, will or intestate
succession of the Purchaser to the Purchaser's spouse or lineal descendants or
ancestors or a trust for the benefit of such persons, if the transferee agrees
in writing in a form satisfactory to the company to be subject to the terms of
this Agreement), such shares shall first be offered to the Company in the
following manner:
a. The Purchaser or his or her transferee shall deliver a notice by
certified mail (hereinafter referred to as "Notice") to the principal business
office of the Company, stating (i) his or her bona fide intention to sell or
transfer such shares; (ii) the number of such shares to be sold or transferred;
(iii) the price and terms, if any, for which he or she proposes to sell or
transfer such shares; and (iv) the name and address of the proposed purchaser or
transferee and that such purchaser or transferee is committed to acquire the
stated number of shares at the stated price and on the stated terms.
b. The Company shall have the right at any time within sixty (60) days
of receipt of the Notice to purchase some or all of the shares to which the
Notice refers at the price per share specified in the Notice, or if no price is
specified therein, at the fair market value thereof as determined by the Board
of Directors in good faith. Said right shall be exercised by written notice
signed by an officer of the Company and delivered or mailed as provided in
Section 7(b), which notice shall specify the time, place and date for settlement
of such purchase, which date shall not be later than seventy-five (75) days
after the date of the Notice.
c. In the event the Company does not, for any reason, exercise all or
any part of its right pursuant hereto, the Company may assign such right or part
thereof, provided such right shall not extend beyond such 60-day period. If
exercised by the assignee pursuant hereto, the right to purchase shall be
exercised by written notice signed by the exercising assignee and delivered or
mailed as provided in Section 7(b), which notice shall specify the time, place
and date for settlement of such purchase, which date shall not be later than
seventy-five (75) days after the date of the Notice. Purchaser shall sell to the
Company or such assignees the number of shares that either of them elects to
purchase such sale to be consummated within seventy-five (75) days after the
date of the Notice.
d. If some or all of the shares to which the Notice refers are not so
purchased, as provided in Sections 5(b) and (c), the Purchaser may sell such
shares to the person named in the Notice at the price and on the terms specified
in the Notice, provided that such sale or transfer is consummated within
seventy-five (75) days of the date of said Notice to the Company, and provided
further that any such sale is in accordance with all of the terms and conditions
hereof. If Purchaser does not consummate the sale or transfer within such
seventy-five (75) day period, the right provided hereby shall be deemed to be
revived with respect to such shares, and no sale or transfer shall be effected
without first offering the shares in accordance herewith.
e. Notwithstanding the above, neither the Company nor the assignees of
the Company shall have any right under this Section 4 at any time subsequent to
the closing of a bona fide, firm commitment underwritten public offering of the
common stock of the Company pursuant to a Registration Statement declared
effective under the Securities Act of 1933, as amended.
5. "Market Stand-Off" Agreement. Purchaser hereby agrees that, during the period
specified by the Company and the underwriter or underwriters of common stock or
other securities of the Company, following the effective date of a Registration
Statement of the Company filed under the Securities Act of 1933, as amended
(hereinafter referred to as the "Act"), Purchaser shall not, to the extent
requested by the Company and such underwriter, directly or indirectly, sell,
offer or contract to sell (including without limitation any short sale), grant
any option to purchase or otherwise transfer or dispose of (other than to donees
who agree to be similarly bound) any securities of the Company at any time
during such period, except common stock included in such registration; provides,
however, that (a) such agreement shall be applicable only to the first such
Registration Statement of the Company, which covers common stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
and (b) all officers and directors of the Company holding securities of the
Company, directly or indirectly, enter into similar agreements.
In order to enforce the foregoing covenant, the Company may
impose stop transfer instructions with respect to common stock held by Purchaser
until the end of such period.
6. Representations and Warranties of Purchaser.
a. Investment Intent. This Agreement is made with Purchaser in
reliance upon his or her representation to the Company, which by his or her
acceptance hereof he or she confirms, that the Stock has been acquired with his
or her own funds for investment for an indefinite period for his or her own
account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and that he or she has no present intention of
selling, granting participation in, or otherwise distributing the same. By
executing this Agreement, Purchaser further represents that he or she does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer, or grant participation to such person or to any third person,
with respect to any of the Stock.
b. Restricted Securities. Purchaser understands that the Stock
has not been registered under the Act, on the ground that the sale provided for
in this Agreement is exempt from the registration requirements of the Act, and
that the Company's reliance on such exemption is predicated on his or her
representations set forth herein, including but not limited to Purchaser's place
of residence.
Purchaser understands that if the Company does not register
with the Securities and Exchange Commission pursuant to Section 12 or 15 of the
Securities Exchange Act of 1934, as amended, or if a Registration Statement
covering the Stock (or a filing pursuant to the exemption from registration
under Regulation A of the Act) under the Act is not in effect when he or she
desires to sell the Stock, he or she may be required to hold the Stock for an
indeterminate period. The Purchaser also acknowledges that he or she understands
that any sale of the Stock that might be made by him or her in reliance upon
Rule 144 under the Act may be made only in limited amounts in accordance with
the terms and conditions of that Rule and that he or she may not be able to sell
the Stock at the time or in the amount he or she so desires. Purchaser is
familiar with Rule 144 and understands that the Stock constitutes "restricted
securities" within the meaning of that Rule.
c. Investment Experience. In connection with the investment
representations made herein, Purchaser represents that he or she is able to fend
for himself or herself in the transactions contemplated by this Agreement, has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of his or her investment, has the ability to
bear the economic risks of his or her investment and has been furnished with and
has had access to such information as he or she has requested and deems
appropriate to his or her investment decision.
d. Limitations on Disposition. Purchaser agrees that in no
event will he or she make a disposition of any of the Stock, unless and until he
or she shall have notified the Company of the proposed disposition and shall
have furnished the Company with a statement of the circumstances surrounding the
proposed disposition, and he or she shall have furnished the Company with an
opinion of counsel satisfactory to the Company to the effect that (i) such
disposition will not require registration of such Stock under the Act; or (ii)
that appropriate action necessary for compliance with the Act has been taken; or
(iii) the Company shall have waived, expressly and in writing, its rights under
clauses (i) and (ii) the Company shall have waived, expressly and in writing,
its rights under clauses (i) and (ii) of this Section. In addition, prior to any
disposition of any of the Stock, the Company may require the transferee or
assignee to provide in writing investment representations and its agreement to
the market stand-off provisions hereof in a form acceptable to the Company.
The Company shall not be required (i) to transfer on its
books any shares of Stock of the Company which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement or
(ii) to treat as owner of such shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such shares shall have been
so transferred. Purchaser shall, during the term of this Agreement, exercise all
rights and privileges of a shareholder of the Company with respect to the Stock
after the issuance, and prior to the repurchase, thereof.
e. Legends. All certificates representing any shares of Stock
of the Company subject to the provisions of this Agreement shall have endorsed
thereon the following legends:
(i) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN
COFOUNDER STOCK OPTION AGREEMENT WHICH INCLUDES A
MARKET STAND-OFF AGREEMENT AND A RIGHT OF FIRST
REFUSAL ON THE SALE OF SECURITIES. COPIES OF THE
AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE CORPORATION."
(ii) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY
NOT BE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF
1933, OR PURSUANT TO RULE 144 UNDER THE ACT OR AN
OPTION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT."
(iii) A legend required to be placed thereon by applicable
state laws.
7. Miscellaneous
a. Further Instruments and Actions. The parties hereto agree
to execute such further instruments and to take such further action as may
reasonably be necessary to carry out the intent of this Agreement.
b. Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal delivery
or upon deposit in the United States Post Office, by registered or certified
mail with postage and fees prepaid, addressed to the other part hereto at the
address stated hereinabove for AANETCOM, INC., or to Purchaser at the address
hereinafter shown below his or her signature or at such other address as such
party may designate by ten (10) days' advance written notice to the other party
hereto.
c. Governing Law, Assignment and Enforcement. This Agreement
shall be interpreted and enforced in accord with the laws of the Commonwealth of
Pennsylvania and shall inure to the benefit of the successors and assigns of the
Company and, subject to the restrictions on transfer herein set forth, be
binding upon Purchaser, his or her heirs, executors, administrators, guardians,
successors and assigns. The prevailing party in any action to enforce this
Agreement shall be entitled to reasonable attorneys' fees and costs. The parties
agree that damages are not an adequate remedy for Purchaser's breach hereof, and
the Company shall accordingly be entitled to specific performance of this
Agreement.
d. Amendments and Waivers. This Agreement represents the
entire understanding of the parties with respect to the subject matter hereof
and supersedes all previous understandings, written or oral. This Agreement may
only be amended with the written consent of the parties hereto and the Company's
assignees pursuant to Section 4 hereof, or the successors or assigns of the
foregoing, and no oral waiver or amendment shall be effective under any
circumstances whatsoever.
e. Cooperation. Purchaser agrees to cooperate affirmatively
with the Company, to the extent reasonably requested by the Company, to enforce
rights and obligations pursuant to this Agreement.
8. Pennsylvania Securities Commission. The Company has not filed for
registration of the securities which are the subject of this Agreement.
Transactions in these securities may be exempt from registration based on
Section 203(r) of the Pennsylvania Securities Act and the regulations
promulgated thereto as a small issuer transaction as defined in Section 203.187
of the regulations and/or as a sale to a principal as defined in Section 203.184
of the regulations.
9. Internal Revenue Code Section 83(b) Election. By signing below, Purchaser
acknowledges receipt of the 83(b) election attached hereto as Exhibit A.
Purchaser acknowledges that Purchaser and not the Company will be responsible
for completing the form and filing the election with the appropriate office of
the federal and state tax authorities and that if such filing is not completed
within thirty (30) days after exercise of a non-qualified option, Purchaser
shall forfeit the tax benefits of Section 83(b). Purchaser further acknowledges
that such filing should be made by registered or certified mail, return receipt
requested, and that Purchaser must retain two (2) copies of the completed form
for filing with Purchaser's state and federal tax returns for the current tax
year and an additional copy for Purchaser's records.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the day and year first above written.
AANetcom, Inc.
By:
_____________________________ ___________________________
Secretary President
WITNESS: PURCHASER:
_____________________________ ______________________________
(Signature)
______________________________
(Print Name)
Purchaser's Address:
______________________________
______________________________
EXHIBIT A
ELECTION PURSUANT TO SECTION 83(b) OF
THE INTERNAL REVENUE CODE
This statement is being made pursuant to Section 83(b) of the Internal
Revenue Code and Treasury Regulations Section 1.83-2.
(1) The person who performed the services is:
Name: ________________________________
Address: _____________________________
_____________________________
_____________________________
SS#: _________________________________
Tax Yr: ______________________________
(2) The property with respect to which the election is being made is
_______________________ (___________) shares of the Common Stock
of AANetcom, Inc.
(3) The property was issued on ______________________________________.
(4) The property is subject to a repurchase right pursuant to which
the issuer has the right to repurchase the property at the
original purchase price if for any reason the shareholder's
employment with the issuer is terminated in the first 12 months of
employment.
(5) The fair market value at the time of transfer (determined without
regard to any restriction other than a restriction which by its
terms will never lapse) is $____________ per share.
(6) The amount paid for such property is $_____________ per share.
(7) A copy of this statement was furnished to AANetcom, Inc. of whom
Purchaser rendered the service underlying the transfer of
property.
____________________________
Purchaser
____________________________
Spouse (if any)
Dated:__________________________
