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EXHIBIT 4.3
FORM OF
PRIVATE BUSINESS, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made and entered into by and between
Private Business, Inc., a Tennessee corporation (the "CORPORATION"), and _______
(the "OPTIONEE"), effective _____________________ (the "DATE OF GRANT").
1. Recitals. In consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, have
entered into this Agreement.
2. Grant of Option. The Corporation hereby grants to Optionee the
option (the "OPTION"), exercisable in whole or in part, to
purchase _____________________ (________) shares of the
Corporation's Common Stock (the "STOCK") for an exercise price
of ___________________ ($_____) per share, subject to the
provisions of this Agreement.
3. Non-qualified Option Plan. This Option is granted as a
non-qualified stock option, and is not intended to qualify as
an incentive stock option, as that term is used in Section 422
of the Internal Revenue Code of 1986, as amended.
4. Timing of Exercise. The Optionee may exercise this Option with
respect to the shares above at any time after _______________,
subject to termination provisions of this Agreement and the
change of control provisions in Section 11 below.
5. Termination of Option. This Option shall immediately cease on
the sooner of (i) the expiration of ten (10) years from the
Date of Grant with respect to any then unexercised portion
hereof, or (ii) the termination of the Optionee's employment
by the Corporation for any reason, provided that the Option
shall be exercisable after such termination of employment only
to the extent provided in Paragraph 8 below. If the Optionee
is not an employee of the Corporation, but is an employee of a
subsidiary or affiliate of the Corporation, references in this
Agreement to employment with the Corporation shall be deemed
to refer to employment with such subsidiary or affiliate of
the Corporation. Transfers of employment among the Corporation
and its subsidiaries and affiliates shall not be deemed to be
termination of employment.
6. Manner of Exercise. This Option shall be exercised by the
Optionee (or other party entitled to exercise the Option under
Paragraph 8 of this Agreement) by delivering written notice to
the Corporation stating the number of shares
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of Stock to be purchased, the person or persons in whose name
the shares are to be registered and each such person's address
and social security number. Such notice shall not be effective
unless the following conditions are satisfied.
(a) Payment in Full. The notice must be accompanied by
the full purchase price for all shares so purchased.
The purchase price shall be payable (i) in cash
(payment in currency or by certified check, cashier's
check or postal money order shall be considered
payment in cash); or (ii) in the form of shares of
Stock already owned by Optionee; or (iii) in the form
of unexercised portions of vested Options which shall
be valued at the difference between the current value
of the Stock as determined by the Corporation's Board
of Directors, and the Option price.
(b) Tax Withholding Requirements. The Corporation shall
have the right to require the Optionee to remit to
the Corporation an amount sufficient to satisfy any
federal, state and local withholding tax requirements
prior to the delivery of any such shares.
(c) Execution of a Stock Redemption Agreement. The
Corporation may require the Optionee to become a
party to a Stock Redemption Agreement substantially
in the form of the Stock Redemption Agreement
attached hereto as Exhibit 1, or to other shareholder
or buy-sell agreements (any such agreement being
referred to herein as a "SHAREHOLDERS AGREEMENT")
upon and as a condition to exercise of the Option.
(d) Execution of Investment Letter. The Corporation may,
as a condition to exercise of this Option, require
the Optionee to execute an agreement in form and
substance satisfactory to the Corporation in which
the Optionee or such other recipient of the shares
represents that he or she is purchasing the shares
for investment purposes, and not with a view to
resale or distribution.
7. Nontransferability. Except as otherwise expressly provided
herein, this Option shall not be transferable by the Optionee
otherwise than by will or by the laws of descent and
distribution, and this Option is exercisable during Optionee's
lifetime only by the Optionee. The terms of the Option shall
be binding on the executors, administrators, heirs and
successors of the Optionee.
8. Termination of Employment.
(a) Termination by Death. If the Optionee's employment by
the Corporation terminates by reason of death, then
notwithstanding the provisions of Paragraph 4 hereof,
this Option shall immediately
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become one hundred percent (100%) vested and may
thereafter be exercised by the legal representative
of the estate or by the legatee of the Optionee under
the will of the Optionee, for a period of one year
from the date of such death or until the expiration
of the stated term of the Option, whichever period is
the shorter.
(b) Termination by Reason of Disability. If the
Optionee's employment by the Corporation terminates
by reason of Disability (as determined by the
Corporation's Board of Directors), then
notwithstanding the provisions of Paragraph 4 hereof,
this Option shall immediately become one hundred
percent (100%) vested and may thereafter be exercised
by the Optionee for a period of one year from the
date of such termination of employment or until the
expiration of the stated term of the Option,
whichever period is the shorter; provided, however,
that, if the Optionee dies within such one-year
period, the Option shall thereafter be exercisable
for a period of twelve months from the date of such
death or until the expiration of the stated term of
the Option, whichever period is shorter.
(c) Termination by Reason of Early or Normal Retirement.
If the Optionee's employment by the Corporation
terminates by reason of Normal or Early Retirement
(defined below), this Option may thereafter be
exercised to the extent the Option was exercisable at
the time of such Retirement, for a period of one year
from the date of such termination of employment or
until the expiration of the stated term of the
Option, whichever period is shorter; provided,
however, that if the Optionee dies within such
one-year period, the Option shall thereafter be
exercisable to the extent to which it was exercisable
at the time of death for a period of twelve months
from the date of such death or until the expiration
of the stated term of the Option, whichever period is
shorter. "EARLY RETIREMENT" means retirement, with
the express consent of the Corporation at or before
the time of such retirement, from active employment
with the Corporation or any subsidiary or affiliate
prior to age 65, in accordance with any applicable
early retirement policy of the Corporation then in
effect. "NORMAL RETIREMENT" means retirement from
active employment with the Corporation or any
subsidiary or affiliate on or after age 65.
(d) Other Termination; Violation of NonCompete. If the
Optionee's employment by the Corporation is
terminated for any reason other than death,
Disability or Normal or Early Retirement, this Option
shall thereupon terminate, except that this Option
may be exercised by the Optionee, to the extent
otherwise then exercisable, for a period of three
months from the date of such termination of
employment or the
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expiration of the Option's terms (whichever period is
the shorter) if such termination is other than for
cause as determined by the Board of Directors of the
Corporation. The violation of any applicable
noncompetition or confidentiality agreements with the
Corporation or any of its subsidiaries or affiliates
shall be deemed to result in termination for cause
for purposes of this Agreement and shall result in
the immediate cancellation of any outstanding portion
of this Option, whether or not the Optionee is
employed by the Corporation at the time of such
violation.
9. Restrictive Agreement; Legend. The Optionee understands and
acknowledges that the shares of Stock that may be purchased
under this Option have not been registered under the
Securities Act of 1933, as amended (the "ACT"), or any state
securities law and may not be transferred except pursuant to
an effective registration statement under the Act and any such
state securities law or pursuant to an applicable exemption
therefrom. Any stock certificate or certificates representing
shares may bear a legend approved by the Board of Directors of
the Corporation reflecting such restrictions on transfer and
any other applicable restrictions on transfer, including any
restrictions contained in any applicable Shareholders
Agreement.
10. Adjustment. In the event of any merger, reorganization,
consolidation, recapitalization, extraordinary cash dividend,
stock dividend, stock split or other change in corporate
structure affecting the Stock, the number of shares of Stock
of the Corporation subject to this Option and the exercise
price per share of such shares shall be appropriately adjusted
by the Corporation as may be determined by the Board of
Directors in its sole discretion.
[11. Change of Control. Notwithstanding Section 4 above, this
Option will be fully vested immediately prior to a Change of
Control of the Company. A "Change in Control" shall be deemed
to have occurred if (i) the Company shall enter into an
agreement to be merged or consolidated with another
corporation and as a result of such merger or consolidation
less than 75% of the outstanding voting securities of the
surviving or resulting corporation would be owned in the
aggregate by the former shareholders of the Company, as the
same shall have existed immediately prior to such merger or
consolidation, (ii) the Company shall enter into an agreement
to sell all or substantially all of its assets to another
corporation which is not a wholly-owned subsidiary, or (iii) a
person, within the meaning of Section 3(a)(9) or of Section
13(d)(3) (as in effect on the date hereof) of the Securities
and Exchange Act of 1934 ("EXCHANGE ACT")), shall acquire more
than 60% of the outstanding voting securities of the Company
(whether directly, indirectly, beneficially or of record). For
purposes hereof, ownership of voting securities shall take
into account and shall include ownership as determined by
applying the
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provisions of Rule 13d-3(d)(1)(i) (as in effect on the date
hereof) pursuant to the Exchange Act.] [This paragraph may or
may not be in the agreements based upon the decision of the
board]
12. No Rights Until Exercise. The Optionee shall have no rights
hereunder as a shareholder with respect to any shares subject
to this Option until the date of the issuance of a stock
certificate to the Optionee for such shares upon due exercise
of this Option.
13. Amendment. The Board of Directors of the Corporation may amend
the terms of this Option, but no such amendment shall impair
the rights of the Optionee hereunder without the Optionee's
consent.
14. Binding Effect; Successors. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their
respective heirs, successors, personal representatives and
assigns; provided that nothing herein shall be construed as an
authorization or right for any party to assign his rights or
obligations hereunder.
15. Entire Agreement. The entire understanding among the parties
is set forth in this Agreement and this Agreement supersedes
all prior agreements, whether oral or written, among the
parties hereto.
16. Governing Law. This is a Tennessee contract and its terms and
provisions shall be governed by and construed in accordance
with the laws of the State of Tennessee.
17. Severability. If any term, covenant, condition or provision of
this Agreement or the application hereto to any person or
circumstance shall be determined to be invalid or
unenforceable, the remainder of this Agreement, or the
application of such term, covenant, condition or provision to
persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be affected thereby; and
each term, covenant, condition and provision of this Agreement
shall be valid and be enforced to the fullest extent permitted
by law.
18. Notices. Any notices required to be given hereunder shall be
in writing and shall be either delivered personally or mailed
by U.S. certified mail, return receipt requested, to the
parties at their respective last known addresses. Notices
delivered personally shall be deemed to be given upon delivery
and notices delivered by mail shall be deemed to be given
three (3) days after the mailing thereof.
19. Headings. The marginal notes used as headings for the various
paragraphs of this Agreement are used only as a matter of
convenience for reference,
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and are not to be construed as part of this Agreement or to be
used in determining the intent of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Stock Option Agreement
to be duly executed on the dates indicated below, effective as of the Date of
Grant.
PRIVATE BUSINESS, INC.
By: ________________________________
Title: _____________________________
Date: ___________________, _________
OPTIONEE:
____________________________________
Date: ___________________, _________
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EXHIBIT 1
STOCK REDEMPTION AGREEMENT
THIS STOCK REDEMPTION AGREEMENT (the "Agreement") is made and entered
into on this _____ day of _____________, 199__, by and between _______________
______________________ ("Shareholder") and Private Business, Inc., a Tennessee
corporation (the "Corporation").
1. Recitals. The Shareholder is the owner of a portion of the
issued and outstanding stock of the Corporation, and it is
anticipated that the Shareholder may acquire additional shares
of the Corporation's stock in the future. The Shareholder and
the Corporation feel that it is in their best interests to
impose certain restrictions upon the transfer of the
Corporation's stock by the Shareholder (including the stock
now owned by the Shareholder and all additional stock acquired
by the Shareholder in the future) and to provide for the
orderly disposition of the Corporation's stock upon certain
contingencies, and they have therefore entered into this
Agreement in consideration of the mutual covenants contained
herein.
2. General Restrictions on the Transfer of Stock. Except as
otherwise permitted by the terms of paragraphs 3 and 4 of this
Agreement, the Shareholder may not sell, offer to sell,
pledge, hypothecate, or otherwise transfer or encumber any
shares of stock of the Corporation now or hereafter owned by
such Shareholder without the prior written consent of the
Corporation.
3. Restrictions on Transfers During Life. The Shareholder may not
transfer or encumber by any method whatsoever any or all of
the Shareholder's stock in the Corporation without first
offering the same in writing to the Corporation at a price
computed in accordance with paragraph 5 of this Agreement,
which price shall be determined as if the Shareholder's
employment with the Corporation had terminated on the date of
the Shareholder's written offer. If the Corporation accepts
such an offer to purchase stock, payment for such stock shall
be made in accordance with the provisions of paragraph 6 of
this Agreement. If this offer is not accepted by the
Corporation within sixty (60) days after the receipt of the
written offer, the Shareholder may transfer the Shareholder's
stock to whomever the Shareholder wishes, provided that such
transfer must be at a price and on terms which are not more
favorable to the transferee than the price and terms upon
which the stock was offered to the Corporation. If the
Shareholder does not dispose of the offered shares within
ninety (90) days after the expiration of the Shareholder's
offer to the Corporation, then the Shareholder shall not
thereafter transfer or encumber such shares unless the
Shareholder first recomplies with the terms of this paragraph.
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4. Option to Redeem Stock Upon Shareholder's Termination of
Employment. At such time as the Shareholder ceases to be an
employee of the Corporation, the Corporation shall have a
period of thirteen months following the termination of
employment of the Shareholder in which to elect to purchase
all or any portion of the stock of the Corporation owned by
the Shareholder. Should the Corporation elect to exercise said
option, the closing of the transaction shall take place as
soon after the Shareholder's termination of employment as is
reasonably possible, and the purchase will be at the same
price and upon the same terms as are provided for in
paragraphs 5 and 6 of this Agreement.
5. Purchase Price. The purchase price per share of any shares of
stock of the Corporation purchased under the terms of this
Agreement shall be determined as follows:
a. Termination of Employment for Reasons Other Than
Cause. If the Shareholder's employment with the
Corporation terminates for reasons other than cause
(as hereinafter defined), then the purchase price per
share of the stock purchased shall be the greater of
(i) the Shareholder's cost of such shares, or (ii)
the following applicable percentage of the per share
value of the Corporation's stock as valued from time
to time by the Corporation's Board of Directors:
Shareholder's Years
of Employment Applicable Percentage
------------- ---------------------
Less than 10 70%
More than 10, less than 11 75%
More than 11, less than 12 80%
More than 12, less than 13 85%
More than 13, less than 14 90%
More than 14, less than 15 95%
More than 15 100%
b. Termination of Employment for Cause. If the
Shareholder's employment with the Corporation
terminates for cause (as hereinafter defined), then
the purchase price of the stock purchased shall be
_____________ percent (_____%) of the amount that
would otherwise be payable under subparagraph 5(a)
above.
c. Definition of Cause. For the purposes of this
Agreement "cause" shall mean conduct determined by
the Board of Directors of the Corporation to be
detrimental to the best interests of the Corporation.
The violation of any applicable noncompetition or
confidentiality
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agreements with the Corporation or any of its
subsidiaries or affiliates shall be deemed to result
in termination for cause for purposes of this
Agreement, whether or not the Shareholder is employed
by the Corporation at the time of such violation.
6. Matter of Payment. When the Corporation purchases stock in
accordance with the terms of this Agreement, payment for such
stock shall be made as follows:
a. Downpayment. ________________ percent (_____%) of the
purchase price of the shares being purchased shall be
paid in cash at the closing.
b. Payment of Remaining Balance. The remaining balance
of the purchase price shall be payable in sixty
equal, consecutive monthly installments of principal
and interest, with the first payment being due on the
first day of the month following the month in which
the closing occurs, and subsequent payments being due
on the same day of each succeeding month thereafter
until the note is paid in full. The payments shall be
equal in amount and shall contain both principal and
interest computed on the unpaid balance at the annual
rate in effect under section 7520 of the Internal
Revenue Code of 1986, as amended, during the month in
which the closing occurs; provided, however, that in
no event shall such rate exceed the maximum contract
rate of interest permitted under applicable law. The
obligation to make such deferred payments shall be
evidenced by an unsecured promissory note executed by
the Corporation's duly authorized officer
substantially in the form of the note attached hereto
as Exhibit A. The Corporation shall have the right to
prepay such note in whole or in part at any time
without penalty.
7. Method of Transfer. At the time of the closing of any sale
pursuant to the terms of this Agreement, the Shareholder (or
the Shareholder's estate) shall surrender to the Corporation
for cancellation certificates representing the Shareholder's
shares, duly endorsed in blank, or accompanied by a duly
executed stock power, in each case in proper form for
transfer. The Shareholder (or the Shareholder's estate) shall
also deliver a representation dated as of the date of the sale
to the effect that the delivery of such shares
of common stock will transfer good title to such shares, free
and clear of all liens, charges, security interests, pledges
or other encumbrances.
8. Endorsement of Stock Certificates. Upon the execution of this
Agreement, all certificates of stock owned by the Shareholder
shall be surrendered to the Corporation and endorsed as
follows:
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"THIS CERTIFICATE IS TRANSFERABLE ONLY UPON
COMPLIANCE WITH THE PROVISIONS OF A CERTAIN AGREEMENT
DATED THE ______ DAY OF ______________________,
199__, BETWEEN THE CORPORATION AND
__________________, A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF THE CORPORATION."
9. Effect of Noncompliance. Any attempt to transfer or encumber
shares of stock in the Corporation without complying with the
terms of this Agreement shall be void and of no force or
effect whatsoever. In the event that any party to this
Agreement defaults in the performance of their obligations
hereunder, then in any such event the non-defaulting party
shall have the right to enforce this Agreement through a suit
for specific performance or otherwise (including the right to
obtain an injunction against the defaulting party). Nothing
herein contained, however, shall be construed as prohibiting
the non-defaulting party from pursuing any other remedies
available at law or in equity for such breach or threatened
breach. In the event it becomes necessary for any party to
employ an attorney to enforce the provisions of this
Agreement, the defaulting party shall be liable for reasonable
attorneys' fees, court costs and expenses so incurred by the
non-defaulting party.
10. Covenants by Shareholder Regarding Corporation's Status as S
Corporation. The Shareholder agrees that so long as the
Corporation has not voluntarily revoked its election to be an
S corporation for federal income tax purposes, the Shareholder
will not take any actions that would cause a termination of
the Corporation's election to be an S corporation. Any actions
by the Shareholder in violation of this covenant shall be null
and void.
11. Binding Effect; Successors. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their
respective heirs, successors, personal representatives and
assigns; provided that nothing herein shall be construed as an
authorization or right for any party to assign his rights or
obligations hereunder.
12. Entire Agreement. The entire understanding among the parties
is set forth in this Agreement and this Agreement supersedes
all prior agreements, whether oral or written, among the
parties hereto.
13. Governing Law. This is a Tennessee contract and its terms and
provisions shall be governed by and construed in accordance
with the laws of the State of Tennessee.
14. Severability. If any term, covenant, condition or provision of
this Agreement or the application thereto to any person or
circumstance shall be determined
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to be invalid or unenforceable, the remainder of this
Agreement, or the application of such term, covenant,
condition or provision to persons or circumstances other than
those to which it is held invalid or unenforceable, shall not
be affected thereby; and each term, covenant, condition and
provision of this Agreement shall be valid and be enforced to
the fullest extent permitted by law.
15. Notices. Any notices required to be given hereunder shall be
in writing and shall be either delivered personally or mailed
by U.S. certified mail, return receipt requested, to the
parties at their respective last known addresses. Notices
delivered personally shall be deemed to be given upon delivery
and notices delivered by mail shall be deemed to be given
three (3) days after the mailing thereof.
16. Amendments. This Agreement may be amended at any time only by
the written consent of all of the parties who are then bound
by the terms hereof.
17. Headings. The marginal notes used as headings for the various
paragraphs of this Agreement are used only as a matter of
convenience for reference, and are not to be construed as part
of this Agreement or to be used in determining the intent of
the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
PRIVATE BUSINESS, INC.
By: _________________________________
Its: ________________________________
SHAREHOLDER
_____________________________________
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STATE OF TENNESSEE )
COUNTY OF _______________ )
Personally appeared before me, ________________________, a Notary
Public, _______________________, with whom I am personally acquainted, and who
acknowledged that __he executed the within instrument for the purposes therein
contained.
WITNESS my hand, at office, this _____ day of ______________, 199__.
__________________________________
Notary Public
My Commission Expires:
_____________________
STATE OF TENNESSEE )
COUNTY OF _______________ )
Personally appeared before me, ________________________, a Notary
Public, _______________________, with whom I am personally acquainted, and who
acknowledged that __he executed the within instrument for the purposes therein
contained, and who further acknowledged that __he is the
___________________________ of Private Business, Inc., a Tennessee corporation,
and is authorized by the corporation to execute this instrument on behalf of the
corporation.
WITNESS my hand, at office, this _____ day of ______________, 199__.
__________________________________
Notary Public
My Commission Expires:
_____________________
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EXHIBIT A
PROMISSORY NOTE
$____________ Nashville, Tennessee ___________ ,____
FOR VALUE RECEIVED, Private Business, Inc., a Tennessee corporation
("Maker"), promises to pay to the order of ______________________________
("Payee") the principal sum of _____________________________________________
($____________), together with interest on the unpaid balance at the rate of
_______ percent (_____%) per annum. Interest and principal shall be payable in
sixty (60) equal, successive monthly installments of ___________________________
($____________), with the first such installment being due on _________________,
and subsequent installments being due on the same day of each succeeding month
thereafter until the indebtedness evidenced by this note is paid in full.
It is agreed that if any installment is not paid when due, this note
may be declared due and payable in full unless payment of such installment is
made within ten (10) days after notice of such failure to pay has been given to
the Maker by the Payee. The Payee may waive any default before or after the same
has been declared and may restore this note to full force and effect without
impairing the right to declare this note due for a subsequent default, this
right being a continuing one.
This note may be prepaid in whole or in part at any time without
penalty, and if prepaid in part, then the remaining installments shall be
reduced appropriately so that the remaining unpaid balance will be paid in equal
quarterly payments containing both principal and interest.
Demand, notice, presentment and protest are waived.
In the event this note is placed in the hands of an attorney for
collection, the Maker and any endorsers hereof agree to pay a reasonable
attorney's fee and all court and other costs.
PRIVATE BUSINESS, INC.
By: ___________________________________
Its: __________________________________
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