NONQUALIFIED STOCK OPTION AGREEMENT UNDER THE NEUSTAR, INC. 1999 EQUITY INCENTIVE PLAN
Exhibit 10.53
UNDER THE
NEUSTAR, INC. 1999 EQUITY INCENTIVE PLAN
NEUSTAR, INC. 1999 EQUITY INCENTIVE PLAN
THIS
AGREEMENT, made as of November 18, 2004 (the “Effective Date”), by and between
NeuStar, Inc., a Delaware corporation (the “Company), and Xxxx Xxxxxxx (the “Participant”).
WITNESSETH:
WHEREAS,
the Company desires to afford the Participant the opportunity to acquire an ownership
of the Company’s common stock, par value $.002 per share (“Common Stock”), so that the Participant
may have a direct proprietary interest in the Company’s success.
NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the
parties hereto hereby agree as follows:
1. Grant
of Option. Subject to the terms and conditions set forth herein and in the
Company’s 1999 Equity Incentive Plan, as restated as of
March 13, 2002 and as amended as of June 21,
2004 and September 22, 2004 (the “Plan”), the Company hereby grants to the Participant, during the
period commencing on the date of this Agreement and ending on
November 18, 2014 (the “Expiration
Date”), the right and option (the right to purchase any one share of Common Stock hereunder being
an “Option”) to purchase from the Company 270,824 shares of Common Stock. The Options shall have an
exercise price of $11.75 per share. None of the Options granted pursuant to this Section 1 is
intended to constitute Incentive Stock Options.
2. Limitations on Exercise of Options. Subject to the terms and conditions set forth herein
and the Plan, the Options shall vest and become exercisable, on a cumulative basis, with respect to
25% of the shares on October 18, 2005 so long as the Participant continues in the Service of the
Company from the Effective Date through October 18, 2005, and with respect to 2.083% of the shares
on the last day of each succeeding calendar month thereafter so long as the Participant continues
in the Service of the Company; provided, however, the Participant may not exercise any Option for
fractional shares of Common Stock. The Committee or the Board may accelerate the vesting and
exercisability of any or all of the then-unvested Options at any time.
3. Termination of Service. (a) If, prior to the Expiration Date, the Participant’s Service
with the Company shall terminate (the date of termination being the “Date of Termination”) by
reason of a Normal Termination (as defined in the Plan), the Options shall remain exercisable until
the earlier of the Expiration Date or the day three (3) months after the Date of Termination to the
extent the Options were vested and exercisable as of the Date of Termination.
(b) If the Participant’s Service with the Company shall cease prior to the Expiration
Date by reason of death or disability, or the Participant shall die or become disabled while
entitled to exercise any of the Options pursuant to paragraph 3(a), the Participant or the
Participant’s legal representative, or, in the case of death, the executor or administrator of the
estate of the Participant or the person or persons to whom the
Options shall have been validly transferred by the executor or
administrator pursuant to will or the laws of descent and distribution,
shall have the right, until the earlier of the Expiration Date or one year
after the date of death or disability, to exercise the Options to the
extent that the Participant was entitled to exercise them on the date of
death or disability.
(c) If, prior to the Expiration Date, the Participant’s Service with
the Company is terminated for “Cause” (as defined in the Plan), (i) unless
otherwise provided by the Committee, the Options, to the extent not
exercised as of the Date of Termination, shall lapse and be canceled, and
(ii) all shares of Common Stock received pursuant to an exercise of the
Options after such termination, in contravention of subsection (i) above,
may be purchased by the Company at its discretion for the exercise price of
such shares paid by the Participant. If the Participant’s Service
relationship with the Company is suspended pending an investigation of
whether the Participant shall be terminated for Cause, all the
Participant’s rights with respect to the Options shall be suspended during
the period of investigation.
(d) If, prior to the Expiration Date, the Participant’s Service with
the Company is terminated other than for Cause, a Normal Termination, death
or disability, the Options, to the extent then vested and exercisable as of
the Date of Termination, shall remain exercisable until the earlier of the
Expiration Date or thirty (30) days after the Date of Termination.
(e) After the expiration of any exercise period described in any of
Sections 3(a)-(d) hereof, or otherwise upon the Expiration Date, the
Options shall terminate together with all of the Participant’s rights
hereunder, to the extent not previously exercised.
4. Non -Transferable. Except as specifically authorized by the
Committee, the Participant may not transfer the Options except by will or
the laws of descent and distribution and the Options shall be exercisable
during the Participant’s lifetime only by the Participant or, in the event
of the Participant’s legal incapacity, his guardian or legal
representative. Except as so authorized, no purported assignment or
transfer of the Options, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except by will
or the laws of descent and distribution), shall vest in the assignee or
transferee any interest or right herein whatsoever.
5. Adjustments and Corporate Reorganizations; Changes in Organization.
(a) In accordance with and subject to the applicable terms of the
Plan and this Agreement, the Options shall be subject to adjustment or
substitution, as determined by the Committee in its sole discretion, as to
the number, price or kind of Common Stock or other consideration subject to
such Options or as otherwise determined by the Committee in its sole
discretion to be equitable (i) in the event of changes in the outstanding
Common Stock or in the capital structure of the Company by reason of stock
dividends, stock splits, reverse stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges, or other
relevant changes in capitalization
occurring after the date hereof or (ii) in the event of any change in applicable laws or any
change in circumstances which results in or would result in any substantial dilution or enlargement
of the rights granted to, or available for, the Participant, or which otherwise warrants equitable
adjustment because it interferes with the intended operation of the
Plan. The Committee shall give
the Participant written notice of an adjustment hereunder. Neither the foregoing, nor any similar
provision in the Plan, shall apply to changes in tax laws, tax interpretations or tax rates.
(b) In the event that the Company undertakes a change in its organization, including but not
limited to a combination of business units, the creation of a new business unit, the elimination of
a business unit, or the acquisition, sale or transfer of an interest in a business unit, the
Options shall be subject to adjustment or substitution (including but not limited to the
substitution of common stock of or other ownership interest in a Related Entity, other
consideration or another Award under the Plan), as to the number, price or kind of Common Stock or
other consideration subject to such Options or as otherwise determined by the Committee in its sole
discretion to be equitable. For purposes of this Agreement, a “business unit” shall mean any
Related Entity or any division or other unit or group within the Company that the Committee
designates as a “business unit”.
(c) Subject to the provisions of Section 13(b) of the Plan, in the event of a Corporate
Transaction (as defined below), if the Options evidenced by this Agreement are not assumed or
continued or a substantially equivalent option or right is not substituted by the surviving
corporation, the successor corporation or its parent corporation, as applicable (the “Successor
Corporation”), the Participant shall, as of the date of the Corporate Transaction, fully vest in
and have the right to exercise such Options as to all shares of Common Stock then subject thereto
that would otherwise have vested and become exercisable during the twelve-month period commencing
on the date of the Corporate Transaction and, subject to the next sentence, unvested Options with
respect to any other shares of Common Stock shall continue to vest as set forth in Section 2. If
any Options evidenced by this Agreement are assumed or replaced (and any such Options shall be
considered assumed if the Company in a Corporate Transaction reaffirms the Options) in connection
with a Corporate Transaction and do not otherwise vest at that time, and if Participant’s Service
with the Company is subsequently terminated within one (1) year following such Corporate
Transaction, unless such Service is terminated by the Successor Corporation for Cause or by the
Participant voluntarily other than for Good Reason (as defined below), the Participant shall fully
vest in and have the right to exercise the Options as to all shares of Common Stock then subject
thereto that, but for such termination, would have otherwise vested and become exercisable during
the twelve-month period commencing on the effective date of such termination, and unvested Options
with respect to any other shares of Common Stock shall continue to vest as set forth in Section 2.
(d) For purposes of this Agreement, a “Corporate Transaction” shall mean any of the following
events:
(i) The consummation of any merger or consolidation of the Company, if immediately
following such merger or consolidation the holders of the
Company’s outstanding voting securities immediately prior to such merger or
consolidation do not own at least a majority of the outstanding voting securities of the
surviving corporation in approximately the same proportion as they did immediately prior to
such merger or consolidation.
(ii) The consummation of any sale, lease, exchange or other transfer in one transaction
or a series of related transactions of all or substantially all of the Company’s assets,
other than a transfer of the Company’s assets to a majority-owned subsidiary of the
corporation, or to an entity in which the holders of the majority of the outstanding voting
securities of the entity immediately prior to the transfer own at least the majority of the
outstanding securities immediately after such transfer in approximately the same proportion
as immediately prior to such transfer.
(iii) The approval by the holders of the Common Stock of any plan or proposal for
the liquidation or dissolution of the Company.
(iv) The acquisition by a person, within the meaning of Section 3(a)(9) or of Section 13
(d)(3) of the Exchange Act of a majority or more of the Company’s outstanding voting
securities (whether directly or indirectly, beneficially or of record), other than a person
who held such majority on the date of adoption of the Plan. Ownership of voting securities
shall take into account and shall include ownership as determined by applying Rule
13d-3(d)(1)(i) pursuant to the Exchange Act.
(e) For purposes of this Agreement, “Good Reason” shall mean, without the Participant’s prior
written consent, any of the following events or conditions and the failure of the Successor
Corporation to cure such event or condition within thirty (30) days after receipt of written notice
from the Participant:
(i) A substantial diminution or material adverse change in the Participant’s status,
title, position, authority, duties or responsibilities (including reporting responsibilities)
as in effect immediately prior to a Corporate Transaction, except in connection with the
Participant’s termination of Service either by the Company for Cause or by the Participant
voluntarily other than for Good Reason or temporarily while the Participant is incapacitated.
(ii) A reduction in the Participant’s annual base salary.
(iii) The Successor Corporation’s failure to cover the Participant under employee benefit
plans, programs and practices that, in the aggregate, provide substantially comparable
benefits (from an economic perspective) to the Participant relative to the benefits and total
costs under the material employee benefit plans, programs and practices in which the
Participant (and/or his family or dependents) is participating immediately preceding the
Corporate Transaction.
(iv) The Successor Corporation’s requiring the Participant to be based at any office
location that is more than fifty (50) miles further from the Participant’s office location
immediately prior to a Corporate Transaction; except for reasonable required travel for the
Successor Corporation’s business that is not
(c) The Committee reserves the right to require, upon
exercise of all or any portion of the Option while the Company is not a
reporting company under Section 12 of the Securities Exchange Act of
1034, as amended, the deposit of the shares issued into a trust (with a
trustee designated by the Company) to the extent the Committee
determines in its discretion that such an arrangement is appropriate to
ensure compliance with applicable laws, rules or regulations governing
ownership of Company shares. The trust would be the shareholder of
record, and would hold the shares for the benefit of the Participant.
Any transferee of the shares would be required to retain the shares in
the voting trust. The trust would end at such time as the Company has
become a reporting Company under such Section 12 of the Securities
Exchange Act of 1934, as amended. The trust would provide that the
trustee would exercise voting rights with respect to the shares in
trust, and would contain such other provisions and limitations
governing transfer and other ownership rights as the Committee
determines in its discretion are necessary or desirable.
7. Rights
as Common Stockholder. The Participant or a
transferee of the Options shall have no rights as a stockholder with
respect to any shares covered by the Options until he shall have become
the holder of record of such shares (and the Company shall use its
reasonable best efforts to cause the Participant promptly to become the
holder of record of such shares), and, except as provided in Section 5
hereof, no adjustment shall be made for dividends or distributions or
other rights in respect of such shares for which the record date is
prior to the date upon which he shall become the holder or record
thereof.
8. Company Participant. (a) The term “Company as used in this
Agreement with reference to employment shall include the Company
and its affiliates.
(b) Whenever the word “Participant” is used in any provision
of this Agreement under circumstances where the provision should
logically be construed to apply to the executors, the administrators,
legal representatives or the person or persons to whom the Options may
be transferred by will or by the laws of descent and distribution, the
word “Participant” shall be deemed to include such person or persons.
9. Requirements of Law. (a) By accepting the Options, the
Participant represents and agrees for himself and his transferees
(whether by will or the laws of descent and distribution) that, unless a
registration statement under the Securities Act of 1933, as amended (the
“Act”), is in effect as to shares purchased upon any exercise of the
Options, (i) any and all shares so purchased shall be acquired for his
personal account and not with a view to, or for sale in connection with,
any distribution, (ii) each notice of the exercise of any portion of the
Options shall be accompanied by a representation and warranty in
writing, signed by the person entitled to exercise the same, that the
shares are being so acquired in good faith for his personal account and
not with any present intention of distributing or selling any of such
shares of Common Stock; and (iii) the shares have not been registered
under the Securities Act on the ground that no distribution or
public offering of the shares is to be effected (it being
understood, however, that the shares are being issued and sold in
reliance on the exemption provided
under Rule 701 under the Securities Act), and in this connection the Company is relying in part on
the Participant’s representations set forth in this Section.
(b) No certificate or certificates for shares of Common Stock may be purchased, issued or
transferred if the exercise hereof or the issuance or transfer of such shares shall constitute a
violation by the Company or the Participant of any (i) provision of any Federal, state or other
securities law, (ii) requirement of any securities exchange listing agreement to which the Company
may be a party, or (iii) other requirement of law or of any regulatory body having jurisdiction
over the Company. Any reasonable determination in this connection by the Board or the Committee,
upon notice given to the Participant, shall be final, binding and conclusive.
(c) The certificates representing shares of Common Stock acquired pursuant to the exercise of
Options shall carry such appropriate legend, and such written instructions shall be given to the
Company’s transfer agent, as may be deemed necessary or advisable by counsel to the Company in
order to comply with the requirements of the Act or any state securities laws.
(d) The Participant hereby confirms that the Participant has been informed that any shares of
Common Stock acquired hereunder are restricted securities under Rule 144 promulgated under the
Securities Act and may not be resold or transferred unless the Common Stock is first registered
under the Federal securities laws or unless an exemption from registration is available. The
Company shall in no event be obligated to register any securities pursuant to the Securities Act or
to take any other affirmative action in order to cause the issuance or transfer of shares acquired
pursuant to this Agreement to comply with any law or regulation of any governmental authority.
10. Notices. Any notice to be given to either party shall be in writing and shall be
given by hand delivery to such party or by registered or certified mail, return receipt requested,
postage prepaid, addressed to the Company in care of its Secretary at its principal office, and to
the Participant at the address given beneath his signature hereto, or at such other address as
either party shall have furnished to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the
addressee.
11. Disposition of Common Stock. The Participant agrees to notify the Company, in
writing, within thirty (30) days of any disposition (whether by sale, exchange, gift or otherwise)
of shares of Common Stock purchased under this Agreement.
12. Binding
Effect. Subject to Section 4 hereof this Agreement shall be binding upon
the heirs, executors, administrators, successors and permitted assigns of the parties hereto.
13. Plan.
The terms and provisions of the Plan are incorporated herein by reference
and made a part hereof as though fully set forth herein. In the event of any conflict or
inconsistency between discretionary terms and provisions of this Agreement, this Agreement shall
govern and control. In all other instances of conflicts or inconsistencies or omissions, the terms
and provisions of the Plan shall
govern and control. All capitalized terms not otherwise expressly defined in this Agreement
shall have the meaning ascribed to them in the Plan.
14. Governing
Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware, without regard to the principles of conflicts of
law thereof.
15. Counterparts. This Agreement may be signed in counterparts, each of which shall be an
original with the same effect as if the signatures thereto and hereto were upon the same
instrument.
16. No
Right to Continued Service. This Agreement does not confer upon the Participant
any right to continue as an employee of the Company, nor shall it interfere in any way with the
right of the Company to terminate the Participant’s employment at any time For any reason (subject
to any employment agreement).
17. Entire
Agreement. This Agreement, together with the Plan, contains the entire
agreement and understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect
thereto.
IN WITNESS WHEREOF, the Company has granted this Option on the Effective Date.
This instrument may be executed in any number of counterparts, each of which shall be deemed
to be an original, and such counterparts together shall constitute one and the same instrument.
| NEUSTAR, INC. |
||||
| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Chairman and Chief Executive Officer | |||
ACCEPTED:
/s/ Xxxx Xxxxxxx
|
NONQUALIFIED STOCK OPTION AGREEMENT AMENDMENT
This Nonqualified Stock Option Agreement Amendment dated as of May 20, 2005 (this “Amendment”)
is made by and between NeuStar, Inc. a Delaware corporation having its principal place of business
in Sterling, Virginia (the “Company”), and Xxxx Xxxxxxx (the “Participant”). Capitalized terms not
otherwise defined herein shall have the meaning ascribed to such terms in the Option Agreement (as
defined below).
WITNESSETH:
WHEREAS, Company granted Participant the right and option to purchase from the Company 270,824
shares (the “Option Shares”) of Company’s common stock, par value $.002 per share;
WHEREAS, Company and Participant entered into a Nonqualified Stock Option Agreement under the
NeuStar, Inc. 1999 Equity Incentive Plan (the “Option Agreement”) dated
November 18, 2004.
WHEREAS, the Company and Participant desire to amend the Option Agreement to provide for,
among other things, accelerated vesting of a certain number of the Option Shares under the
circumstance and terms as set forth below.
NOW, THEREFORE, in consideration of the premises and further valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Amendment to Section 5 of the Option Agreement. Subject to the terms and conditions set
forth herein. Section 5 of the Option Agreement is hereby amended by deleting Sections 5 (c), (d)
and (e) thereof and replacing such Sections with the following language:
“(c) Subject to the provisions of Section 13(b) of the Plan, in the event of a Corporate
Transaction (as defined below), if the Option evidenced by this Agreement is not assumed or
continued or a substantially equivalent option or right is not substituted by the surviving
corporation, the successor corporation or its parent corporation, as applicable (the
“Successor Corporation”), the Participant shall fully vest in and have the right to exercise
the Option as to all shares of Common Stock then subject thereto, including shares as to
which the Option would not otherwise be vested or exercisable. Any such Options that are
assumed or replaced (and any such Option shall be considered assumed if the Company in a
Corporate Transaction reaffirms the Option) in connection with a Corporate Transaction and do
not otherwise vest at that time shall be fully vested and exercisable in the event the
Participant’s Service with the Company should
subsequently be terminated within two (2) years following such Corporate Transaction,
unless such Service is terminated by the Successor Corporation for Cause or by the Participant
voluntarily without Good Reason (as defined below).
(d) For purposes of this Agreement, a “Corporate Transaction” shall mean any of the following
events:
(i) The consummation of any merger or consolidation of the Company, if
immediately following such merger or consolidation the holders of the Company’s
outstanding voting securities immediately prior to such merger or consolidation do
not own at least a majority of the outstanding voting securities of the surviving
corporation in approximately the same proportion as they did immediately prior to
such merger or consolidation.
(ii) The consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all of the
Company’s assets, other than a transfer of the Company’s assets to a majority-owned
subsidiary of the corporation, or to an entity in which the holders of the majority
of the outstanding voting securities of the entity immediately prior to the transfer
own at least the majority of the outstanding securities immediately after such
transfer in approximately the same proportion as immediately prior to such transfer.
(iii) The approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company.
(iv) The acquisition by a person, within the meaning of Section 3(a)(9)
or of Section 13(d)(3) of the Exchange Act of a majority or more of the Company’s
outstanding voting securities (whether directly or indirectly, beneficially or of
record), other than a person who held such majority on the date of adoption of the
Plan. Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) pursuant to the Exchange
Act.”
(e) For purposes of this Agreement, “Good Reason” shall mean, without the Participant’s prior
written consent, any of the following events or conditions and the failure of the Successor
Corporation to cure such event or condition within thirty (30) days after receipt of written notice
from the Participant:
| (i) | A substantial diminution or material adverse change in the Participant’s status, title, position, authority, duties or responsibilities (including reporting responsibilities) as in effect immediately prior to a Corporate Transaction, except in connection with the Participant’s termination of |
2
| Service with the Company for Cause, disability, death or by the Participant other than for Good Reason. | |||
| (ii) | A reduction in the Participant’s annual base salary. | ||
| (iii) | The Successor Corporation’s failure to cover the Participant under employee benefit plans, programs and practices that, in the aggregate, provide substantially comparable benefits (From an economic perspective) to the Participant relative to the benefits and total costs under the material employee benefit plans, programs and practices in which the Participant (and/or his family or dependents) is participating immediately preceding the Corporate Transaction. | ||
| (iv) | The Successor Corporation’s requiring the Participant to be based at any office location that is more than fifty (50) miles further from the Participant’s office location immediately prior to a Corporate Transaction; except for reasonable required travel for the Successor Corporation’s business that is not materially greater than such travel requirements prior to such Corporate Transaction. | ||
| (v) | A material breach by the Successor Corporation of its obligations to the Participant under the Plan.” |
2. Entire Agreement. This Amendment sets forth the entire understanding and agreement
of the parties hereto in relation to the subject matter hereof and supersedes any prior
negotiations and agreements among the parties relating to such subject matter. None of the terms or
conditions of this Amendment may be changed, modified, waived or canceled orally or otherwise,
except in writing.
3. Full Force and Effect of Agreement. Except as hereby specifically amended, modified
or supplemented, the Option Agreement is hereby confirmed and ratified in all respects and shall be
and remain in full force and effect according to their respective terms.
4. Counterparts. This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original as against any party whose signature appears thereon, and all of
which shall together constitute one and the same instrument.
Governing
Law. This Amendment shall be construed and interpreted in accordance with the laws of the
Sate of Delaware, without regards to the principles of conflicts of law.
3
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to the
Nonqualified Stock Option Agreement to be made, executed and delivered by their duly authorized
officers as of the day and year first above written.
| NEUSTAR, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Chairman and Chief Executive Officer | |||
| OPTIONEE: |
||||
| Xxxx Xxxxxxx | ||||
| /s/ Xxxx Xxxxxxx | ||||
4
