EXHIBIT 10.3
XXXXX TELECOM INC.
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NON-QUALIFIED OPTION TO PURCHASE STOCK
PURSUANT TO AMENDED AND RESTATED 1992 STOCK PLAN
Number of Shares: _____ April 25, 2002
Xxxxx Telecom Inc., a Delaware corporation (hereinafter called the
"Company"), pursuant to its 1992 Amended and Restated Stock Plan (hereinafter
called the "Plan"), a copy of which is attached hereto as Exhibit A and is
incorporated herein by reference, hereby awards unto __________________________
(hereinafter called the "Employee") a non-qualified option to purchase ______
shares of Common Stock of the Company, par value $1.00 per share, at a price of
$6.10 per share, on the terms and subject to the conditions hereinafter set
forth:
1. The number of shares and purchase price is subject to adjustment as
provided in Section 7 of the Plan.
2. The Employee agrees to remain in the employ of the Company or of a
subsidiary thereof until April 24, 2004, but this provision shall not affect in
any way any right of the Company or any such subsidiary to terminate the
Employee's employment at any time.
3. This option shall expire on the tenth anniversary of the date hereof and
shall be exercisable to the extent of 50% after April 25, 2004, 75% after April
25, 2005, and 100% after April 25, 2006.
Notwithstanding the foregoing, if (i) any "person", as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company's then outstanding
securities, (ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (i), (iii) or (iv) of
this paragraph) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof, (iii)
the stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than (a) a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into
voting securities of the surviving entity) more than 80% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (b) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires more
than 30% of the combined voting power of the Company's then outstanding
securities, or (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets, then from and after
the date on which public announcement of the acquisition of such percentage
shall have been made, or the date on which the change in the composition of the
Board set forth above shall have occurred, or the date of any such stockholder
approval (any such date being referred to herein as the "Acceleration Date"),
this option shall be exercisable in full, whether or not otherwise exercisable.
4. If the Employee's employment by the Company or any subsidiary thereof
terminates for any reason other than for cause (it being understood that a
transfer of employment from the Company to a subsidiary or from a subsidiary to
the Company or between subsidiaries shall not be deemed a termination of
employment for the purposes of this paragraph), this option may be exercised
within three (3) months after such termination of employment. If the Employee
shall die within such three (3) month period or if the termination of the
Employee's employment shall have been due to his or her death, this option may
be exercised at any time within one (1) year after his or her death by his or
her executor or administrator or by the distributee or legatee to whom this
option may have been transferred by will or the laws of descent and distribution
but only to the extent that is was exercisable on the date of his or her death.
In the event that the Employee's employment is terminated for cause, this option
will cease to be exercisable to the extent exercisable as of such termination
and will not become exercisable after such termination. For purposes of this
agreement, termination for "cause" shall mean termination upon the events set
forth in the Plan. Except as permitted by this paragraph, no option shall be
exercisable after the date of termination of the Employee's employment. Anything
herein to the contrary notwithstanding, this option may in no event be exercised
subsequent to the tenth anniversary of the date hereof and may be exercised only
if it would have been exercisable by the Employee on the date of the termination
of his or her employment. Notwithstanding anything to the contrary herein, if
upon the Employee's termination of employment the Employee becomes a senior
management consultant to the Company and/or its subsidiaries under a
post-employment consulting arrangement, this option shall continue to vest under
its original vesting schedule set forth in paragraph 3 hereof, and may be
exercised by the Employee, during the period ending on the earliest of (i) the
ninetieth (90th) day following the date that the Employee permanently ceases to
render consulting services to the Company and/or its subsidiaries under a
post-employment consulting arrangement for any reason other than cessation by
reason of death, (ii) the date that is one year after the date described in
clause (i) if the Employee ceases to render consulting services on account of
his or her death (in which case this option may be exercised by the Employee's
executor or administrator or by his or her distributee to whom this option may
have been transferred by will or by the laws of descent and distribution, but
only to the extent that it was exercisable on the date of the Employee's death),
or (iii) the date of termination of service if such service is terminated for
cause (as defined in the Plan). The foregoing provision shall not extend the
period during which this option may be exercised beyond the date it expires by
its terms.
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5. During the lifetime of the Employee, this option and any related Right
or Limited Right (as such terms are defined in paragraphs 8 and 10 hereof,
respectively) are exercisable only by him or her and neither this option nor
such related Right or Limited Right nor any right or privilege pertaining
thereto may be transferred, assigned, pledged or hypothecated in any way, by
operation of law or otherwise, and shall not be subject to execution, attachment
or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of this option, such related Right or Limited Right or any
right or privilege pertaining thereto, otherwise than by will or by the laws of
descent and distribution, or upon the levy of any execution, attachment or
similar process thereupon, this option, such related Right and Limited Right,
and all rights and privileges given hereby shall immediately become null and
void. Notwithstanding any other provision hereof or of the Plan, no Right
granted pursuant to Section 5(f) of the Plan may be exercised at a time when any
Limited Rights held by the holder of such Right may be exercised.
6. This option may be exercised only by the execution and delivery to the
Company of a written notice in the form attached hereto as Exhibit B (with
appropriate changes in the case of a deceased optionee) duly completed and
accompanied by payment in full for the shares purchased either (i) in cash
(including check, bank draft or money order, or wire or other transfer of funds,
or advice of credit to the Company); (ii) by the delivery of such number of
shares of the Company's Common Stock multiplied by the last sale price of such
Common Stock on the New York Stock Exchange on the day such notice is received
by the Company (or if no sale of such Common Stock shall have been made on such
Exchange on that date, on the next preceding day on which there was a sale)
which equals the option price stated in this option multiplied by the number of
shares subject to that portion of this option in respect of which such notice
shall be given; or (iii) any combination of cash and shares of the Company's
Common Stock valued as of the date and in the manner provided in (ii) above
which in the aggregate are equal in value to payment in full for the shares
purchased. No fractional share of Common Stock shall be issued or transferred
and any such fractional share shall be eliminated by the optionee paying the
Company in cash an amount necessary to round the fraction up to a full share.
7. The provisions hereof shall be subject to all the terms, provisions and
conditions of the Plan (as amended from time to time by the Board of Directors
of the Company within the limitations permitted by the Plan) and the rules and
regulations relating to the Plan prescribed by the Management Compensation
Committee of the Company, and this option and the Plan and said rules and
regulations relating thereto shall be construed as one instrument and in the
event of any inconsistency the provisions of the Plan as interpreted and
construed by the Management Compensation Committee shall control.
8. The Employee (or any person entitled to act under paragraph 4 hereof)
shall have the right (the "Right"), prior to exercising this option, in whole or
in part, to request that the Company purchase all or any portion of this option
as shall then be exercisable, at a price equal to the difference between (i) an
amount equal to the option price stated in this option multiplied by the number
of shares subject to that portion of this option in respect of which such
request shall be made, and (ii) an amount equal to such number of shares
multiplied by the last sale price of the Company's Common Stock on the New York
Stock Exchange on the day such request is received by the Company (or in the
event no sale of the Company's Common Stock shall have been made on such
Exchange on that date, on the next preceding day on which there was such a
sale). The
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Company shall have no obligation to make any purchase pursuant to such request,
but if it elects to do so, such portion of this option as to which such request
is made shall be surrendered to the Company. The purchase price for the portion
of this option so to be surrendered shall be paid by the Company, at its
election, or at the election of the Management Compensation Committee, either in
cash or in shares of the Company's Common Stock (valued as of the date and in
the manner provided in clause (ii) above), or in any combination of cash and
Common Stock, which may consist either in whole or in part of shares of the
Company's authorized but unissued Common Stock or shares of the Company's Common
Stock held in its treasury. No fractional share of Common Stock shall be issued
or transferred and any such fractional share shall be disregarded.
9. It shall be a condition to the obligation of the Company to issue or
transfer shares of Common Stock upon the exercise of this option or to the
payment of the purchase price of this option by the Company, whether such
purchase price is paid in shares of Common Stock or cash, that the Employee (or
any person entitled to act under paragraph 4 hereof) pay to the Company, upon
its demand, such amount as may be requested by the Company for the purpose of
satisfying its liability to withhold federal, state or local income or other
taxes incurred by the Company by reason of the exercise of this option. If the
amount requested is not paid, the Company may refuse to issue or transfer shares
of Common Stock upon exercise of this option or to pay such purchase price.
10. (a) The Employee (or any person entitled to act under paragraph 4
hereof) shall have a limited stock appreciation right (the "Limited Right")
which shall automatically be exercised on an Acceleration Date (as defined in
paragraph 3 hereof). Each Limited Right shall be exercisable only if, and to the
extent that, this option is exercisable, provided, that no Limited Right may be
exercised until six months from the date hereof. Upon the exercise of a Limited
Right, this option shall cease to be exercisable to the extent of the shares of
Common Stock with respect to which such Limited Right is exercised, but shall be
considered to have been exercised to that extent for purposes of determining the
number of shares of Common Stock available for the grant of further stock
options and stock appreciation rights pursuant to the Plan. Upon the exercise or
termination of this option, the Limited Right shall terminate to the extent of
the shares of Common Stock with respect to which the option was exercised or
terminated.
(b) Upon the exercise of the Limited Right, the holder thereof shall
receive in cash whichever of the following amounts is applicable:
(i) in the case of an exercise of the Limited Right by reason of
an acquisition of Common Stock described in clause (i) of paragraph 3
hereof, an amount equal to the Acquisition Spread (as defined in
Section 14(d) of the Plan);
(ii) in the case of an exercise of the Limited Right by reason of
the change in composition of the Board of Directors described in
clause (ii) of paragraph 3 hereof, an amount equal to the Spread (as
defined in Section 14(e) of the Plan);
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(iii) in the case of an exercise of the Limited Right by reason
of stockholder approval of an agreement described in clause (iii) of
paragraph 3 hereof, an amount equal to the Merger Spread (as defined
in Section 14(g) of the Plan); or
(iv) in the case of an exercise of the Limited Right by reason of
stockholder approval of a plan or agreement described in clause (iv)
of paragraph 3 hereof, an amount equal to the Liquidation Spread (as
defined in Section 14(i) of the Plan).
XXXXX TELECOM INC.
By: __________________________________
Authorized Signatory
The foregoing option is hereby accepted on the terms and conditions set forth
therein.
__________________________________
Employee's Signature
__________________________________
Employee's Social Security Number
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