EXHIBIT 10.14(b)
XXXXXXXXXXXXX.XXX, LLC
EQUITY OPTION AGREEMENT
__________________________ Date Option Granted: __________
Name of Optionee
__________________________
__________________________ No. ____________
Residence Address
THIS AGREEMENT is made as of the date set forth above between
XxxxxXxxxxxxx.xxx, LLC, a Delaware Limited Liability Company (the "Company") and
the optionee named above (the "Optionee").
RECITAL
The Management Board of the Company (the "Board") thereof, has determined
that it is to the advantage and interest of the Company and its members to grant
the option provided for herein to Optionee as an inducement to remain in the
service of the Company or any Subsidiary and Parent Corporation of the Company
and as an incentive for increased effort during such service. In consideration
of the mutual covenants herein contained, the parties hereto agree as follows:
1. Grant of Option
(a) Pursuant to and subject to the terms and conditions of the
XxxxxXxxxxxxx.xxx, LLC 1998 Equity Option Plan (the "Plan"), the Company grants
to the Optionee the right and option (the "Option") to purchase on the terms and
conditions hereinafter set forth all or any part of an aggregate of____________
percent (the "Option Equity Percent") of the equity of the Company at the
purchase price of $_____________. Such Option shall be exercisable as follows:
one-twelvfth (1/12) of the Option at the close of each quarter, beginning
at the close of the first full quarter after this Option is granted to
Optionee, until the full amount of the Option is exercisable.
(b) Nothing contained herein shall be construed to amend, alter or
modify the terms or provisions set forth in the Employment Agreement between the
Company and Employee.
1.
2. Exercise.
(a) The right to exercise the Option granted hereunder, to the
extent unexercised, shall remain in effect for a period of five (5) years from
the date of grant of this Option.
(b) This Option is exercisable at the times specified Sections 1(a)
and 2(a) of this Agreement.
3. Method of Exercise. To the extent that the right to purchase equity has
accrued hereunder, the Option may be exercised from time to time by written
notice to the Company stating the portion of the Option Equity Percent which is
being purchased pursuant to this Option, together with payment, in full, in cash
or by certified or cashier's check payable to the order of the Company, of the
purchase price for the portion of the Option Equity Percent being exercised. If
requested by the Board, prior to completing the sale of the equity as
contemplated hereunder, the Optionee shall supply the Board with a
representation that the equity is not being acquired with a view to distribution
and will be sold or otherwise disposed of only in accordance with applicable
federal and state statutes, rules and regulations. As a condition to the
exercise of the Option, in whole or in part, the Board may, in its sole
discretion, require the Optionee to pay, in addition to the purchase price for
the equity being purchased, an amount equal to any federal, state or local taxes
that the Board has determined are required to be paid in connection with the
exercise of the Option. As soon after the notice of exercise as the Company is
reasonable able to comply, the Company shall, without transfer or issue tax to
the Optionee or other person entitled to exercise the Option, update its records
to reflect the change in the ownership of the Company due the exercise of this
Option.
In the Board's sole discretion, payment of the purchase price for
the equity to be delivered, but not of the amount of any withholding taxes, may
be made in whole or in part with an equity interest in the Company. If requested
by the Board, prior to the acceptance of payment with an equity interest in the
Company, the Optionee shall supply the Board with a written representation and
warranty that he has good and marketable title to the equity interest, free and
clear of liens and encumbrances. The value of the equity interest tendered in
payment for the equity being purchased shall be its Fair Market Value on the
date of the Optionee's notice of exercise.
The Optionee may exercise the Option for less than the total Option Equity
Percent for which the Option is exercisable.
4. Termination of Option. The Option shall terminate and expire upon the
earliest to occur of:
(a) The last date for exercise of the Option as provided in Section
2(a) of this Agreement;
2.
(b) The expiration of ninety (90) days after the date of the
Optionee's termination of employment with the Company or any Subsidiary and
Parent Corporation of the Company other than by reason of death or Permanent
Disability, unless the Optionee has been rehired and is an employee of the
Company or any Subsidiary and Parent Corporation of the Company on such date;
but if the termination of employment is for cause, the date of such termination
for cause will apply;
(c) The expiration of one year from the date of the Optionee's
termination of employment with the Company or any Subsidiary and Parent
Corporation of the Company by reason of death or Permanent Disability; or
(d) The termination of the Option pursuant to Section 6 hereof.
A termination of employment by reason of the death, retirement or
Permanent Disability of the Optionee or otherwise shall not accelerate or
otherwise affect the equity with respect to which the Option may be exercised,
and the Option may only be exercised with respect to the portion of the Option
Equity Percent for which it was exercisable at the date of such termination of
employment. In the event of the Optionee's death, the Option may be exercised
prior to its expiration or termination by his personal representative, or if
there is no personal representative, by his heir or legatee.
Termination of employment (other than by reason of death or
Permanent Disability) for purposes hereof shall be deemed to take place upon the
earliest to occur of the following: (i) the date of the Optionee's retirement
under the normal retirement policies of the Company or any Subsidiary and Parent
Corporation of the Company; (ii) the date of the Optionee's retirement with the
approval of the Board because of disability other than Permanent Disability;
(iii) the date the Optionee receives notice or advice that his employment is
terminated; or (iv) the date the Optionee ceases to render his services to the
Company or any affiliate of the Company (absences for temporary illness,
emergencies and vacations or leaves of absence of not more than ninety (90)
days' duration and approved in writing by the Board excepted). The fact that the
Optionee may receive payment from the Company or any Subsidiary and Parent
Corporation of the Company after termination for vacation pay, for services
rendered prior to termination, for salary in lieu of notice or for other
benefits shall not affect the termination date
As defined in the Plan, "Permanent Disability" means termination of
employment with the Company or any affiliate of the Company with the consent of
the Company or Subsidiary and Parent Corporation by reason of permanent and
total disability within the meaning of Section 22(e)(3) of the Code.
5. Adjustments. If there is any change in the Percentage Interests of the
Company from the date this Option was granted (provided the Option does not
thereby terminate pursuant
3.
to Section 6 hereof), then the purchase price of this Option shall be
accordingly adjusted as determined by the Board.
6. Cessation of Legal Existence. Upon the dissolution or liquidation of
the Company, the reorganization, merger or consolidation of the Company with one
or more entities as a result of which the Company is not the surviving entity or
the sale of substantially all the assets of the Company or of more than 80% of
the then outstanding equity of the Company to another corporation or entity, the
Option granted hereunder shall terminate; provided, however, that: (i) each
Option for which no option has been tendered by the surviving corporation in
accordance with all of the terms of provision (ii) immediately below shall,
within 30 days before the effective date of such dissolution or within 30 days
before the effective date of such dissolution or liquidation, merger or
consolidation or sale of equity or assets in which the Company is not the
surviving entity, become fully exercisable subject to the provisions of Section
16(b) and (c) of the Plan; or (ii) in its sole and absolute discretion, the
surviving corporation may, but shall not be so obligated to, tender to any
Optionee holding an Option, an option or options to purchase equity of the
surviving entity, and such new option or options shall contain such terms and
provisions as shall be required substantially to preserve the rights and
benefits of any Option then outstanding under the Plan.
7. Non-Transferability. The Option is not assignable or transferable by
the Optionee, either voluntarily or by operation of law, otherwise than by will
or by the laws of descent and distribution, and is exercisable, during the
Optionee's lifetime, only by the Optionee.
8. No Ownership Rights. The Optionee or other person entitled to exercise
the Option shall have no rights or privileges as a Member with respect to any
equity interest subject hereto until the Optionee or such person has become the
holder of record of such equity, and no adjustment (except such adjustments as
may be effected pursuant to the provisions of Section 5 hereof) shall be made
for dividends or distribution of rights in respect of such equity if the record
date is prior to the date on which the Optionee or such person becomes the
holder of record.
9. Plan Controls. The Option shall be subject to and governed by the
provisions of the Plan (a copy of which is attached hereto as Exhibit A), which
the Board alone shall have the authority to interpret and construe. In the event
of any conflict between the provisions of this Agreement and the Plan, the Plan
shall govern. All determinations and interpretations thereof made by the Board
shall be conclusive and binding on all parties hereto and upon their successors
and assigns. All capitalized terms not otherwise defined herein shall have the
same meanings as set forth in the Plan.
The Option will not be treated as an incentive stock option within
the meaning of Section 422 of the Code.
10. Conditions to Issuance of Option. THE COMPANY'S OBLIGATION TO ISSUE AN
EQUITY INTEREST UPON EXERCISE OF THE OPTION IS EXPRESSLY CONDITIONED UPON THE
COMPLETION BY THE COMPANY OF ANY
4.
REGISTRATION OR OTHER QUALIFICATION OF SUCH EQUITY UNDER ANY STATE AND/OR
FEDERAL LAW OR RULINGS OR REGULATIONS OR ANY GOVERNMENT REGULATORY BODY OR THE
MAKING OF SUCH INVESTMENT REPRESENTATIONS OR OTHER REPRESENTATIONS AND
AGREEMENTS BY THE OPTIONEE OR ANY PERSON ENTITLED TO EXERCISE THE OPTION IN
ORDER TO COMPLY WITH THE REQUIREMENTS OF ANY EXEMPTION FROM ANY SUCH
REGISTRATION OR OTHER QUALIFICATION OF SUCH EQUITY WHICH THE BOARD SHALL, IN ITS
SOLE DISCRETION, SEEM NECESSARY OR ADVISABLE. SUCH REQUIRED REPRESENTATIONS AND
AGREEMENTS INCLUDE REPRESENTATIONS AND AGREEMENTS THAT THE OPTIONEE, OR ANY
OTHER PERSON ENTITLED TO EXERCISE THE OPTION, (A) IS NOT PURCHASING SUCH EQUITY
FOR DISTRIBUTION AND (B) AGREES TO HAVE PLACED UPON THE FACE AND REVERSE OF ANY
CERTIFICATE FOR SUCH SHARES A LEGEND SETTING FORTH ANY REPRESENTATIONS AND
AGREEMENTS WHICH HAVE BEEN GIVEN TO THE BOARD OR A REFERENCE THERETO AND STATING
THAT, PRIOR TO MAKING ANY SALE OR OTHER DISPOSITION OF ANY SUCH SHARES, THE
OPTIONEE, OR ANY OTHER PERSON ENTITLED TO EXERCISE THE OPTION, WILL GIVE THE
COMPANY NOTICE OF INTENTION TO SELL OR DISPOSE OF THE EQUITY NOT LESS THAN FIVE
DAYS PRIOR TO SUCH SALE OR DISPOSITION.
12. Irrevocable Proxy. Optionee agrees to grant the Board an irrevocable
proxy to vote all exercised and unexercised equity which is granted or acquired
pursuant to this Option (the "Proxy") the form of which is attached as Exhibit
"A" hereto. Such proxy shall remain in effect for the maximum time permitted
under Delaware law or until it is terminated by the Management Board, whichever
is sooner.
13. Operating Agreement. Upon the exercise of any portion of this Option,
Optionee agrees to become a party to the Company's operating agreement and be
bound by such agreement's terms and conditions.
14. Method of Acceptance. This Agreement is addressed to the Optionee in
duplicate and shall not be effective until the Optionee executes the acceptance
below and returns one copy to the Company, thereby acknowledging that he has
read and agreed to all the terms and conditions of this Agreement and the Plan.
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5.
EXECUTED this ___ day of __________________,199_.
XXXXXXXXXXXXX.XXX, LLC
By:________________________________
Title:_____________________________
ACCEPTED:
__________________________
Signature of Optionee
__________________________
Date
6.
