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EXHIBIT 10.4
NONQUALIFIED STOCK OPTION AGREEMENT
GRANTED TO: Xxxxxxx X. Xxxxxxx
DATE OF GRANT: May 10, 2001
GRANTED PURSUANT TO: Nucentrix Broadband Networks, Inc.
First Amended and Restated 1999 Share
Incentive Plan, as amended
NUMBER OF UNDERLYING 20,000 shares
SHARES OF COMMON
STOCK:
EXERCISE PRICE: $9.68 per share
VESTING SCHEDULE: See Paragraph 4 below
1. This Nonqualified Stock Option Agreement (the "Agreement") is made
and entered into as of May 10, 2001 (the "Date of Grant"), between Nucentrix
Broadband Networks, Inc., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxx ("Employee"). It is the intent of the Company and Employee that the
Option (as defined in Paragraph 2 below) will not qualify as an "incentive stock
option" under Section 422 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code").
2. Employee is granted an option (the "Option") by the Compensation
Committee of the Company's Board of Directors (the "Committee") to purchase
20,000 shares of common stock of the Company, par value $.001 ("Common Stock")
pursuant to the Company's First Amended and Restated 1999 Share Incentive Plan,
as amended (the "Plan"). Capitalized terms not defined herein shall have the
meanings ascribed thereto in the Plan. The Option granted hereunder is a matter
of separate inducement and is not in lieu of salary or other compensation for
Employee's services.
3. The Option's exercise price is $9.68 per share, such exercise price
being in the judgment of the Committee not less than one hundred percent (100%)
of the Fair Market Value of a share of Common Stock on the Date of Grant.
4. Subject to Paragraphs 5, 6 and 7 below, 20% of the Option will
automatically vest and become exercisable on each of the first five
anniversaries of the Date of Grant.
Notwithstanding anything herein to the contrary, if the Employee is
employed by the Company on the date which is 30 days immediately prior to the
Expiration Date (such date referred to herein as the "Final Vesting Date"), the
unvested portion, if any, of the Option will immediately vest and become
exercisable on such date.
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5. Subject to Paragraphs 6 and 7 below, the unexercised portion of the
Option, unless sooner terminated, shall expire seven years after the Date of
Grant (the "Expiration Date") and, notwithstanding anything contained herein to
the contrary, no portion of the Option may be exercised after the Expiration
Date.
6. If prior to the Expiration Date, Employee's employment with the
Company or any subsidiary corporation terminates, the Option will terminate on
the applicable date as described below, provided, however, that none of the
events described below shall extend the period of exercisability beyond the
Expiration Date:
(a) If the employment of Employee is terminated by reason of
Employee's death while in the employ of the Company or any subsidiary
corporation, the Option shall immediately become fully exercisable and remain
exercisable for twelve (12) months after Employee's death and shall be
exercisable by the executor or administrator of the estate of the deceased
Employee or the person or persons to whom the deceased Employee's rights under
the Option shall pass by will or the laws of descent or distribution;
(b) If the employment of Employee is terminated by the Company or
any subsidiary corporation for reason of Employee's "Permanent Disability" (as
defined below), the Option shall immediately become fully exercisable on the
date of such termination and shall remain exercisable for six (6) months after
such date; provided, however, that if Employee dies during the six month period
following such date and Employee has not exercised the Option, the Option shall
remain exercisable for an additional twelve (12) months after Employee's death
and shall be exercisable by the executor or administrator of the estate of the
deceased Employee or the person or persons to whom the deceased Employee's
rights under the Option shall pass by will or the laws of descent or
distribution;
(c) If the employment of Employee is terminated by the Company or
any subsidiary corporation for "Cause" (as defined below), the Option shall, to
the extent not previously exercised, immediately become null and void on the
date of such termination;
(d) If the employment of Employee is terminated by the Company or
any subsidiary corporation other than (X) for "Cause", (Y) for reason of
Employee's death or "Permanent Disability," the Option, to the extent vested and
not previously exercised, shall immediately become fully exercisable on the date
of such termination and shall remain exercisable for thirty (30) days after such
date and the unvested portion of the Option shall be canceled;
(e) If the employment of Employee is terminated by the Employee
prior to the Final Vesting Date, the unvested portion of the Option shall
immediately become null and void on the date of such termination and the vested
portion of the Option shall, to the extent not previously exercised, remain
exercisable for thirty (30) days after the date of such termination; or
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(f) If the employment of Employee is terminated by the Employee on
or after the Final Vesting Date, the Option shall, to the extent not previously
exercised, remain exercisable for thirty (30) days after the date of such
termination.
For purposes of this Agreement, the terms "Permanent Disability" and
"Cause" shall have the meanings ascribed to such terms in Annex A attached
hereto.
7. Upon the occurrence of a "Change in Control" (as defined in the
Plan), the Option shall immediately become fully exercisable and shall terminate
thirty (30) days after the occurrence of the Change in Control. Upon such
termination, Employee shall receive, with respect to the unexercised portion of
the Option, an amount in cash, in one or more kinds of property (including the
property, if any, payable in the transaction) or in a combination thereof, as
the Committee, in its discretion, shall determine, equal to the product of (X)
the amount, if any, by which the Fair Market Value of a share of Common Stock
immediately prior to the occurrence of such Change in Control exceeds the
exercise price per share specified in Paragraph 3 hereof and (Y) the number of
shares with respect to which the Option remained exercisable on the date of such
termination; provided, however, that the apportionment and kind of property, if
any, to be received by the Employee shall not differ in any material respect
from the property to be received by the holders of Common Stock.
8. Employee may exercise the Option regardless of whether any other
option that Employee has been granted by the Company remains unexercised. In no
event may Employee exercise the Option for a fraction of a share or for less
than 100 shares unless such number is the remaining balance for which the Option
is then exercisable.
9. The Option's exercise price shall be paid by Employee on the date
the Option is exercised, in full in cash or, in the sole discretion of the
Committee, in shares of Common Stock or any other method that the Committee
shall prescribe, including, without limitation, by the withholding of shares or
the delivery of an executed promissory note to the Company on such terms and
conditions as the Committee shall determine in its sole discretion.
10. The Company or any subsidiary corporation may withhold from sums
due or to become due to Employee from the Company or any subsidiary corporation
an amount necessary to satisfy its obligation to withhold taxes incurred by
reason of the issuance or disposition of shares pursuant to the Option, or may
require Employee to reimburse the Company or any subsidiary corporation in such
amount. The exercise of the Option shall not be effective until the withholding
tax liability associated with the exercise of the Option has been satisfied.
11. Employee shall not have any of the rights of a stockholder with
respect to the shares of Common Stock underlying the Option while the Option is
unexercised.
12. Any exercise of this Option shall be in writing addressed to the
Corporate Secretary of the Company at the principal place of business of the
Company, specifying
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the Option being exercised and the number of shares to be purchased, accompanied
by payment therefor.
13. This Option shall not be transferable otherwise than by will or the
laws of descent and distribution, and shall be exercisable, during Employee's
lifetime, only by Employee. Notwithstanding the foregoing, but subject to the
approval of the form of the transfer by the Committee which approval shall not
be unreasonably withheld, this Option may be transferred by Employee solely to
Employee's spouse, siblings, parents, children and grandchildren or trusts for
the benefit of such persons, subject to any restriction included in this
Agreement.
14. If the Company, in its sole discretion, shall determine that it is
necessary, to comply with applicable securities laws, the certificate or
certificates representing the shares purchased pursuant to the exercise of the
Option shall bear an appropriate legend in form and substance, as determined by
the Company, giving notice of applicable restrictions on transfer under or in
respect of such laws.
15. The Company agrees that at the time of exercise of the Option it
will use reasonable efforts in good faith to have an effective Registration
Statement on Form S-8 under the Securities Act of 1933, as amended (the "Act"),
which includes a prospectus that is current with respect to the shares subject
to the Option. Employee covenants and agrees with the Company that if, at the
time of exercise of the Option, there does not exist a Registration Statement on
an appropriate form under the Act, which Registration Statement shall have
become effective and shall include a prospectus that is current with respect to
the shares subject to the Option, (i) that he or she is purchasing the shares
for his or her own account and not with a view to the resale or distribution
thereof, (ii) that any subsequent offer for sale or sale of any such shares
shall be made either pursuant to (x) a Registration Statement on an appropriate
form under the Act, which Registration Statement shall have become effective and
shall be current with respect to the shares being offered and sold, or (y) a
specific exemption from the registration requirements of the Act and applicable
state securities laws, but in claiming such exemption, Employee shall, prior to
any offer for sale or sale of such shares, obtain a favorable written opinion
from counsel for or approved by the Company as to the applicability of such
exemption and (iii) that Employee agrees that the certificates evidencing such
shares shall bear a legend to the effect of the foregoing.
16. This Agreement is subject to all terms, conditions, limitations and
restrictions contained in the Plan, which shall be controlling in the event of
any conflicting or inconsistent provisions.
17. This Agreement is not a contract of employment and the terms of
Employee's employment shall not be affected hereby or by any agreement referred
to herein except to the extent specifically so provided herein or therein.
Nothing herein shall be construed to impose any obligation on the Company or any
subsidiary corporation to continue Employee's employment, and it shall not
impose any obligation on Employee's part to remain in the employ of the Company
or any subsidiary corporation.
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18. Employee acknowledges and agrees that neither the Company, its
stockholders nor its directors and officers, has any duty or obligation to
disclose to the Employee any material information regarding the business of the
Company or any subsidiary corporation or affecting the value of the Common Stock
before or at the time of a termination of the employment of Employee by the
Company or any subsidiary corporation, including, without limitation, any
information concerning plans for the Company or any subsidiary corporation to
make a public offering of its securities or to be acquired by or merged with or
into another firm or entity.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first written above.
NUCENTRIX BROADBAND NETWORKS, INC.
By: /s/ Xxxxxxx X. XxXxxxx
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Xxxxxxx X. XxXxxxx
Chairman and Chief Executive Officer
ACCEPTED: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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ANNEX A
TO NONQUALIFIED STOCK OPTION AGREEMENT
BETWEEN NUCENTRIX BROADBAND NETWORKS, INC. ("NUCENTRIX")
AND XXXXXXX X. XXXXXXX
"Cause" shall mean a finding by a majority of the directors of Nucentrix that
you have:
(1) acted with gross negligence or willful misconduct in connection with
the performance of your duties as an officer of Nucentrix;
(2) engaged in a material act of insubordination or of common law fraud
against Nucentrix or its employees;
(3) acted against the best interests of Nucentrix in a manner that has or
could have a material adverse affect on the financial condition of
Nucentrix;
(4) been convicted of a crime or pleaded nolo contendere (other than minor
infractions and traffic violations);
(5) materially violated your duty of loyalty to Nucentrix which results or
may reasonably be expected to result in material injury to Nucentrix or
any subsidiary; or
(6) engaged in chronic alcohol or drug abuse.
"Permanent Disability" shall mean any physical or mental disability which
renders you unable to perform the essential functions of your job as an employee
of Nucentrix on a full-time basis with or without reasonable accommodation for
180 calendar days whether or not consecutive, within any period of 12
consecutive months.
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