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EXHIBIT 10.54
HIGH SPEED ACCESS CORP.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is made and entered
into effective as of the 1st day of October, 1999, by and between HIGH SPEED
ACCESS CORP, a Delaware corporation (the "Corporation"), and XXXXXX X. X'XXXXX
("Optionee").
RECITALS:
A. The Corporation has adopted the High Speed Access Corp. 1999 Stock
Option Plan ("Plan") to promote the interests of the Corporation and its
shareholders by providing selected key employees of the Corporation with
additional incentive to invest in shares of the Corporation's common stock, $.01
par value per share ("Shares").
B. The Corporation believes that such investment should increase the
personal interest and special effort of the key employees in providing for the
continued success and progress of the business of the Corporation and should
enhance the Corporation's efforts to attract and retain competent key employees.
C. Optionee is one of the key employees for whom the Plan was adopted
and the Corporation desires to grant Optionee an option to acquire Shares
pursuant to the terms and conditions of the Plan and this Agreement.
D. Concurrently with the execution hereof, the Corporation and Optionee
have entered into an Employment Agreement (the "Employment Agreement") and a
Supplemental Executive Compensation Agreement (the "Supplemental Agreement").
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. GRANT OF OPTION; OPTION PRICE. The Corporation hereby grants to
Optionee the right and option to purchase ("Option") all or any part of an
aggregate of 750,000 Shares (the "Option Shares") on the terms and conditions
set forth herein, at a purchase price per Option Share equal to the lower of the
Fair Market Value Per Share (as defined under the Plan) on (i) October 1, 1999
and (ii) January 1, 2000 ("Option Price"). To the extent the Option meets the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), the Option Shares shall be considered incentive stock options as
defined in Section 422 of the Code.
2. TERM OF OPTION AND VESTING. The Option shall continue for a term
commencing on the date hereof and ending at 5:00 p.m. Eastern Time on September
2, 2009 ("Termination Date"), unless sooner terminated as provided in Section 5.
Subject to the other terms and conditions set forth
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in this Agreement, including without limitation Sections 6 and 7 hereof, the
Option shall vest and Optionee shall have the right to exercise the Option as
follows:
2.1 FIRST YEAR. Up to twenty percent (20%) of the total Option
Shares may be exercised at any time after September 2, 2000.
2.2 SECOND YEAR. Up to an additional twenty percent (20%) of
the total Option Shares may be exercised at any time after two (2) years
following September 2, 2001.
2.3 THIRD YEAR. Up to an additional twenty percent (20%) of
the total Option Shares may be exercised at any time after three (3) years
following September 2, 2002.
2.4 FOURTH YEAR. Up to an additional twenty percent (20%) of
the total Option Shares may be exercised at any time after four (4) years
following September 2, 2003.
2.5 FIFTH YEAR. Up to an additional twenty percent (20%) of
the total Option Shares may be exercised at any time after five (5) years
following September 2, 2004.
If an installment covers a fractional share, such installment shall be
rounded off to the next highest share, except for the final installment, which
will be for the balance of the total Option Shares.
3. CONDITIONS TO EXERCISE OF OPTIONS.
3.1 EXERCISE OF OPTION. Optionee may exercise the Option by
delivering to the Corporation: [i] seven (7) days' prior written notice
("Exercise Notice") specifying the number of Shares as to which the Option is
being exercised and, if determined by counsel for the Corporation to be
necessary, representing that such Shares are being acquired for investment
purposes only and not for purpose of resale or distribution; and [ii] payment by
the Optionee, or a broker-dealer (as provided in Section 3.2 hereof), of the
Option Price for the number of Shares with respect to which the Option is being
exercised, in the manner provided in Section 3.2.
3.2 PAYMENT OF OPTION PRICE. The Corporation shall accept as
payment for the Option Price cash, a certified or cashiers check, whole shares
of Common Stock owned by the Optionee evidenced by negotiable certificates, such
other consideration as shall constitute lawful consideration for the issuance of
Common Stock and be approved by the Compensation Committee of the Corporation's
Board of Directors (the "Committee") established to administer the Plan
(including without limitation, assurance satisfactory to the Committee from a
broker registered under the Securities Exchange Act of 1934 of the delivery of
the proceeds of an imminent sale of Common Stock to be issued pursuant to the
exercise of such Option, such sale to be made at the direction of the Optionee),
or a combination of such methods of payment, which payment must be delivered to
the Corporation with the Exercise Notice.
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3.3 DELIVERY OF STOCK ON EXERCISE. On or before the expiration
of the seven (7) day Exercise Notice period, and provided that all conditions
precedent contained in this Agreement are satisfied, the Corporation shall,
without transfer or issuance tax or other incidental expenses to Optionee,
deliver to Optionee, at the offices of the Corporation, or at such other place
as may be mutually acceptable, or, at the election of the Corporation, by
certified mail addressed to Optionee at Optionee's address as shown in the
records of the Corporation, a certificate or certificates for the number of
Shares set forth in the Exercise Notice and for which the Corporation has
received payment in the manner prescribed herein. The Corporation may postpone
such delivery until it receives satisfactory proof that the issuance or transfer
of such Shares will not violate any of the provisions of the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, or any
rules or regulations of the Securities and Exchange Commission promulgated
thereunder, or the requirements of applicable state law relating to
authorization, issuance or sale of securities, or until there has been
compliance with the provisions of such acts or rules or the requirements of the
regulations. Options are exercisable only in whole Shares. If Optionee fails to
accept delivery of all or any part of the number of Shares specified in the
Exercise Notice upon tender of delivery thereof, Optionee's right to exercise
this Option with respect to such undelivered shares may be terminated by the
Corporation.
3.4 OPTION NOT TRANSFERABLE EXCEPT IN EVENT OF DEATH. During
Optionee's lifetime, the Option shall be exercisable only by Optionee, and
neither the Option nor any right hereunder shall be transferable except by will
or by the laws of descent and distribution, provided, however, if permitted
under the terms of the Plan, as in effect from time to time, transfers of the
Option, or portions thereof, shall also be permitted under this Agreement. The
Option may not be subject to execution or other similar process. If Optionee
attempts to alienate, assign, pledge, hypothecate or otherwise dispose of the
Option or any of Optionee's rights hereunder, except as provided herein, or in
the event of any levy, attachment, execution or similar process upon the rights
or interests hereby conferred, the Corporation may, in its sole and absolute
discretion, terminate the Option by notice to Optionee and it shall thereupon
become null and void.
4. ACCELERATION OF EXERCISE DATES UPON DEATH OR DISABILITY. The Option
granted by this Agreement shall vest and become fully exercisable on or after
the date of termination of Optionee's employment with the Corporation due to
death or Disability.
5. TERMINATION.
5.1 TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN
DISABILITY, DISCHARGE FOR CAUSE, OR DEATH. Upon the termination of Optionee's
employment with the Corporation for a reason other than Optionee's Disability,
discharge for Cause or death, the Option granted hereunder shall be exercisable,
to the extent exercisable at the date of Optionee's termination of employment,
at any time prior to the earlier of [a] three (3) months following receipt by
Optionee or the Corporation of a notice of termination of employment, or [b] the
Termination Date.
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5.2 TERMINATION OF EMPLOYMENT BECAUSE OF DISABILITY. If
Optionee's employment with the Corporation terminates because of Optionee's
Disability, the Option granted hereunder shall be exercisable at any time within
a period ending on the earlier of [a] one year after Optionee's Disability or
[b] the Termination Date.
5.3 TERMINATION OF EMPLOYMENT BECAUSE OF DISCHARGE FOR CAUSE.
This Agreement shall terminate and the Option granted hereunder shall be null
and void immediately upon the termination of Optionee's employment with the
Corporation through discharge for Cause, as defined in the Employment Agreement.
5.4 DEATH OF OPTIONEE. If Optionee dies [i] while employed by
the Corporation, or [ii] within three (3) months after ceasing to be an employee
of the Corporation, then the Option granted hereunder shall be exercisable by
Optionee's personal representative or the person or persons to whom Optionee's
rights under the Option shall pass by will or by application of the laws of
descent and distribution, at any time within a period ending on the earlier of
[a] one (1) year after Optionee's date of death or [b] the Termination Date.
6. ACCELERATION UPON A CHANGE OF CONTROL. Notwithstanding any provision
of this Agreement to the contrary, upon a Change of Control, as defined in
Section 6.4 of this Agreement, the provisions of this Section 6 shall govern the
exerciseability of the Option granted hereunder.
6.1 ACCELERATION AMOUNT. The term "Change of Control Vested
Shares" shall mean the greatest of [i] 250,000, [ii] the number of Option Shares
that would have vested in accordance with Section 2 of this Agreement as of the
date of the first anniversary of the Change of Control, or [iii] the number of
Option Shares that would have vested upon a Change of Control in accordance with
Section 9 of the Plan. The term "Termination - Change of Control Vested Shares"
shall mean the greatest of [i] 250,000 or [ii] the number of Option Shares that
would have vested in accordance with Section 2 of this Agreement as of the date
of the second anniversary of the Change of Control.
6.2 VESTING UPON CHANGE OF CONTROL. Upon a Change of Control,
the Change of Control Vested Shares shall automatically vest and become
immediately exercisable by Optionee.
6.3 VESTING UPON TERMINATION FOLLOWING CHANGE OF CONTROL. If
Optionee's employment with the Corporation is terminated without Cause or for
Good Reason (as defined in Section 6.4 of this Agreement) within the six month
period following a Change of Control, then, to the extent not previously vested
and exercisable, the Termination - Change of Control Vested Shares shall
automatically vest and become immediately exercisable by Optionee.
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6.4 DEFINITIONS.
A. For purposes of this Agreement, "Change of Control" shall
mean (i) the purchase or other acquisition, sale or transfer of more than fifty
percent (50%) of the combined voting power of the Corporation, or (ii) the
approval by the stockholders of the Corporation of a reorganization, merger,
consolidation, or share exchange, in each case with respect to which persons who
were stockholders of the Corporation immediately prior to such reorganization,
merger, consolidation or share exchange do not, immediately thereafter, own more
than fifty percent (50%) of the combined voting power; provided, however, that
none of the foregoing shall be considered a Change of Control if Vulcan Ventures
Incorporated or any affiliate or affiliates thereof shall be the purchasing or
acquiring person or entity or shall as a result of such transaction own fifty
percent (50%) or more of the combined voting power of the Corporation or the
surviving entity in such transaction.
B. For purposes of this Agreement, "Cause" shall mean that
Optionee's employment with the Corporation shall have terminated upon the
occurrence of any of the following events:
(a) The discharge of Optionee for willful misconduct,
dishonesty or fraud on Optionee's part in connection with the
performance of any of his duties under the Employment Agreement; or
(b) The discharge of Optionee for a material breach
by Optionee of any of the terms of Sections 8 or 10 of the Employment
Agreement; or
(c) The discharge of Optionee upon a determination by
the Board of Directors of the Corporation, acting in good faith and
with reasonable justification, that Optionee's performance in his
position as Chief Operating Officer of the Corporation has been
unsatisfactory, after first having given written notice to Optionee
that his performance has been unsatisfactory (which notice shall set
forth in reasonable detail the nature of the unsatisfactory
performance), and Optionee having failed to cure such unsatisfactory
performance within thirty (30) days thereafter to the reasonable
satisfaction of the Board; or
(d) The discharge of Optionee for conviction of a
felony or a crime involving moral turpitude.
C. For purposes of this Agreement, "Good Reason" shall mean
that Optionee shall have terminated his employment with the Corporation upon the
determination by Optionee that any or more of the following events has occurred:
(a) a material change in Optionee's duties as Chief
Operating Officer or an adverse change in Optionee's title; or
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(b) any reduction by the Corporation in Optionee's
Salary or a material reduction in Optionee's benefits.
7. ACCELERATION UPON CERTAIN TERMINATION EVENTS. Upon Optionee's
termination of employment with the Corporation without Cause or for Good Reason,
within the six month period following the Corporation's hiring of a chief
executive officer, 250,000 of the Option Shares shall (to the extent not then
vested and exercisable) automatically vest and become exercisable by Optionee.
8. ADJUSTMENT OF SHARES. In the event of capital adjustment after the
Date of Grant in the Common Stock of the Corporation by reason of any
reorganization, recapitalization, stock split, stock dividend, combination or
exchange of shares, merger or consolidation, or any other change (after the
effective date of the Plan) in the nature or number of shares of Common Stock of
the Corporation, a proportionate adjustment shall be made in the Option Price
and the number and kind of shares of Common Stock covered by outstanding Options
granted pursuant to this Agreement. By virtue of such a capital adjustment, the
price of any share under Option shall be adjusted so that there will be no
change in the aggregate purchase price payable upon exercise of any such Option.
Such determination by the Compensation Committee shall be conclusive.
9. SECURITIES LAWS. Optionee understands that the shares issuable upon
exercise of the Option have not been registered under the Securities Act of
1933, as amended (the "Act"), or under the laws of any other jurisdiction, and
that the Corporation does not contemplate registering, and is under no
obligation to register, such securities. Optionee understands and agrees that
the shares issuable upon exercise of the Option may not be sold, transferred,
pledged or otherwise disposed of unless they are subsequently registered under
the Act and, where required, under the laws of other jurisdictions or an
exemption from registration is available and the Corporation is in receipt of an
opinion of counsel satisfactory to the Corporation to such effect.
10. TAX WITHHOLDING. The Corporation shall have the right to require
Optionee to remit to the Corporation an amount sufficient to satisfy all
federal, state and local withholding tax requirements, or, alternatively, the
Corporation shall have the right to withhold from any payment due Optionee or
retain Common Stock otherwise payable to the Optionee pursuant to exercise of an
Option in an amount sufficient to satisfy such withholding requirements, before
the delivery to the Optionee of any certificate(s) for shares of Common Stock.
11. MISCELLANEOUS PROVISIONS.
11.1 OPTION TERMINATES UPON TERMINATION DATE. Notwithstanding
any provision contained herein to the contrary, this Option shall terminate and
become null and void and of no effect after the Termination Date.
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11.2 NO RIGHTS AS A SHAREHOLDER. Optionee shall not have any
of the rights of a shareholder regarding the Option Shares, except to the extent
that certificate(s) for such Option Shares shall have been issued upon the
exercise of the Option as provided herein.
11.3 CAPTIONS. The captions and section headings used herein
are for convenience only, shall not be deemed part of this Agreement and shall
not in any way restrict or modify the context and substance of any section or
paragraph of this Agreement.
11.4 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
11.5 ENTIRE AGREEMENT. This Agreement, the Employment
Agreement, the Supplemental Agreement (which is incorporated by reference herein
as if fully set forth herein) and the Plan contain the entire agreement between
the parties regarding its subject matter. It supersedes all prior written or
contemporaneous oral agreements related thereto.
11.6 AMENDMENT AND MODIFICATIONS. No amendment or other
modification to this Agreement shall be binding upon any party unless executed
in writing by all of the parties hereto.
11.7 WAIVER. No waiver by any party of any of the provisions
of this Agreement will be deemed, or will constitute, a waiver of any other
provision, whether similar, nor will any waiver constitute a continuing waiver.
No waiver will be binding unless executed in writing by the party making the
waiver.
11.8 CUMULATIVE REMEDIES. No right or remedy conferred upon or
reserved to any of the parties under the terms of this Agreement is intended to
be, nor shall it be deemed, exclusive of any other right or remedy provided
herein or by law or equity, but each shall be cumulative of every other right or
remedy.
11.9 CAPITALIZED TERMS. Capitalized terms in this Agreement
shall have the meaning ascribed to such terms in the Plan unless otherwise
defined herein.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
HIGH SPEED ACCESS CORP.
By: /s/ Xxxxx X. Xxxxx, Xx.
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Title: Chairman
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("Corporation")
/s/ Xxxxxx X. X'Xxxxx
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XXXXXX X. X'XXXXX
("Optionee")
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