Arbinet-thexchange, Inc. Non-Qualified Stock Option Agreement Granted Under 2004 Stock Incentive Plan
Exhibit
10.1
Arbinet-thexchange,
Inc.
Granted
Under 2004 Stock Incentive Plan
1. Grant
of Option.
This
Non-Qualified Stock Option Agreement (the “Agreement”) evidences the grant by
Arbinet-thexchange, Inc., a Delaware corporation (the “Company”), on September
2, 2008 (the
“Grant Date”) to Xxxxx
X.
X’Xxxxxxx, an employee of the Company (the “Participant”), of an option to
purchase, in whole or in part, on the terms provided herein and in the Company’s
2004 Stock Incentive Plan, as amended (the “Plan”), a total of 375,000 shares
(the “Shares”) of common stock, $0.001 par value per share, of the Company
(“Common Stock”) at $3.71 per Share. Unless earlier terminated, this option
shall expire at 5:00 p.m., Eastern time, on September 2, 2018 (the “Final
Exercise Date”).
It
is
intended that the option evidenced by this Agreement shall not be an incentive
stock option as defined in Section 422 of the Internal Revenue Code of 1986,
as
amended, and any regulations promulgated thereunder (the “Code”). Except as
otherwise indicated by the context, the term “Participant”, as used in this
option, shall be deemed to include any person who acquires the right to exercise
this option validly under its terms.
2. Vesting
Schedule.
(a) Subject
to the terms of Section 2(b) and Section 2(c) hereof below, this option will
become exercisable (“vest”) as to 25% of the original number of Shares on the
first anniversary of the Grant Date and pro-rata thereafter on a monthly basis
at the end of each successive month following the first anniversary of the
Grant
Date until the fourth anniversary of the Grant Date.
(b) Prior
to
first anniversary of the Grant Date, if the Participant is discharged by the
Company without “Cause” (as defined below) this option will vest as to that
percentage of the original number of Shares equal to the product of (i) 2.0833
and (ii) the number of full calendar months served by the Participant pursuant
to the Employment Agreement dated as of the date hereof by and between the
Participant and the Company (the “Employment Agreement”). “Cause” shall have the
meaning, and be subject to the terms, set forth in the Employment
Agreement.
(c) Except
as
set forth below, in the case of a Change of Control (as defined below) of the
Company, this option shall terminate on the effective date of such transaction,
unless provision is made in connection with such transaction for the assumption
of this option or the substitution for this option of a new option of the
successor corporation or parent thereof, with appropriate adjustment as to
the
number and kind of shares and the per share exercise price, as provided in
the
Plan. In the event of a Change of Control, the Company shall give written notice
thereof to the Participant at least twenty (20) days prior to the effective
date
of any such transaction or the record date on which stockholders of the Company
entitled to participate in such transaction shall be determined, whichever
shall
first occur. In the event of such Change of Control, (i) the Company shall
have
the option (in its sole discretion) to make or provide for a cash payment to
the
Participant, in exchange for the cancellation thereof, in an amount equal to
the
difference between (A) the consideration payable, or otherwise to be received
by
stockholders, per share of Common Stock pursuant to a Change of Control (the
“Sale Price”), multiplied by the number of Shares subject to this option (to the
extent then exercisable (after taking into account any acceleration hereunder)
at prices not in excess of the Sale Price) and (B) the aggregate exercise price
of this option; and (ii) any unexercised portion of this option, whether or
not
then vested and exercisable, shall be exercisable in full for at least fifteen
(15) days prior to the date of such termination whether or not otherwise
exercisable during such period; provided,
however,
that in
no event shall this option be exercisable after the Final Exercise
Date.
For
purposes of this Agreement, a “Change of Control” shall mean:
(i) a
merger,
consolidation or other reorganization approved by the Company’s stockholders,
unless securities representing more than fifty percent (50%) of the total
combined voting power of the voting securities of the successor corporation
are
immediately thereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned the
Company’s outstanding voting securities immediately prior to such transaction;
or
(ii) a
stockholder-approved liquidation, dissolution, sale, transfer or other
disposition of all or substantially all of the Company’s assets; or
(iii) the
closing of any transaction or series of related transactions pursuant to which
any person or any group of persons comprising a “group” within the meaning of
Rule 13d-5(b)(1) of the Securities Exchange Act of 1934 Act, as amended (the
“Exchange Act”) (other than the Company or a person that, prior to such
transaction or series of related transactions, directly or indirectly controls,
is controlled by or is under common control with, the Company) becomes directly
or indirectly the beneficial owner (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing (or convertible into or exercisable
for
securities possessing) more than fifty percent (50%) of the total combined
voting power of the Company’s securities (as measured in terms of the power to
vote with respect to the election of Board members) outstanding immediately
after the consummation of such transaction or series of related transactions,
whether such transaction involves a direct issuance from the Company or the
acquisition of outstanding securities held by one or more of the Company’s
existing stockholders.
(d) The
right
of exercise shall be cumulative so that to the extent this option is not
exercised in any period to the maximum extent permissible it shall continue
to
be exercisable, in whole or in part, with respect to all Shares for which it
is
vested until the earlier of the Final Exercise Date or the termination of this
option under Section 2(c) hereof, Section 3 hereof or the Plan.
3. Exercise
of Option.
(a) The
Participant may exercise this option only in the following manner: from time
to
time on or prior to the Final Exercise Date of this option, the Participant
may
give written notice to the Company of his or her election to purchase some
or
all of the Shares purchasable at the time of such notice. This notice shall
specify the number of Shares to be purchased.
Payment
of the purchase price for the Shares may be made by one or more of the following
methods: (i) in cash or by check payable to the order of the Company;
(ii) by the Participant delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company cash or a check payable and acceptable to the Company
to
pay the option purchase price and any required tax withholding;
(iii) through the delivery of shares of Common Stock that have been
purchased by the Participant on the open market or that are beneficially owned
by the Participant and are not then subject to any restrictions under any
Company plan and that otherwise satisfy any holding periods as may be required
by the Board; or (iv) a combination of (i), (ii) and (iii) above. Payment
instruments will be received subject to collection.
(b) Termination
of Relationship with the Company.
If the
Participant ceases to be an employee, officer or director of, or consultant
or
advisor to, the Company or any other entity the employees, officers, directors,
consultants, or advisors of which are eligible to receive option grants under
the Plan (an “Eligible Participant”) for any reason, then, except as provided in
Sections 3(c) and (d) below, the right to exercise this option shall terminate
three months after such cessation (but in no event after the Final Exercise
Date), provided that
this
option shall be exercisable only to the extent that the Participant was entitled
to exercise this option on the date of such cessation.
Notwithstanding
the foregoing, if the Participant, prior to the Final Exercise Date, violates
the non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the
Participant and the Company, the right to exercise this option shall terminate
immediately upon written notice to the Participant from the Company describing
such violation.
(c) Exercise
Period Upon Death or Disability.
If the
Participant dies or becomes disabled (within the meaning of
Section 22(e)(3) of the Code) prior to the Final Exercise Date while he or
she is an Eligible Participant and the Company has not terminated such
relationship for “cause” as specified in Section 3(d) below, this option shall
be exercisable, within the period of one year following the date of death or
disability of the Participant, by the Participant (or in the case of death
by an
authorized transferee), provided that
this
option shall be exercisable only to the extent that this option was exercisable
by the Participant on the date of his or her death or disability, and further
provided that this option shall not be exercisable after the Final Exercise
Date.
(d) Discharge
for Cause.
If the
Participant, prior to the Final Exercise Date, is discharged by the Company
for
“Cause” (as defined in Section 2(b)), the right to exercise this option shall
terminate immediately upon the effective date of such discharge.
4. Withholding.
No
Shares
will be issued pursuant to the exercise of this option unless and until the
Participant pays to the Company, or makes provision satisfactory to the Company
for payment of, any federal, state or local withholding taxes required by law
to
be withheld in respect of this option.
5. Nontransferability
of Option.
This
option may not be sold, assigned, transferred, pledged or otherwise encumbered
by the Participant, either voluntarily or by operation of law, except by will
or
the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the
Participant.
6. Provisions
of the Plan.
This
option is subject to the provisions of the Plan, a copy of which is furnished
to
the Participant with this option.
Remainder
of Page Intentionally Left Blank
IN
WITNESS WHEREOF, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer. This option shall take effect
as
a sealed instrument.
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ARBINET-THEXCHANGE,
INC.
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Dated:
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September 2, 2008 |
By:
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/s/
W. Xxxxxxx Xxxxxxxxx, Xx.
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Name:
W. Xxxxxxx Xxxxxxxxx, Xx.
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Title:
General Counsel and Secretary
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PARTICIPANT’S
ACCEPTANCE
The
undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof. The undersigned hereby acknowledges receipt of a copy of
the
Company’s 2004 Stock Incentive Plan, as amended.
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PARTICIPANT:
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/s/
Xxxxx X. O’Xxxxxxx
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Xxxxx
X. X’Xxxxxxx
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Address:
