Exhibit 10.6
CARRIER1 INTERNATIONAL S.A.
OPTION AGREEMENT
This Agreement is by and among Carrierl International GmbH (the
"Employer"), [.] (the "Optionee"), Carrier One, LLC, a Delaware limited
liability company ("Carrier One"), and Carrierl International S.A., a Luxembourg
SOCIETE ANONYME (the "Company").
W I T N E S S E T H:
WHEREAS, Optionee is an employee of Employer.
WHEREAS, the Employer is a subsidiary of the Company.
WHEREAS, the Employer wishes to provide the Optionee with an
opportunity to participate in the ownership of the Company and its future growth
through the grant of the Option (as defined below) over certain Option Shares
(as defined below) under this Agreement.
WHEREAS, pursuant to the Carrier1 International S.A. Master Option
Agreement, the Company has agreed to make certain options available to the
Employer in order to enable the Employer to carry out its obligations under this
Agreement.
WHEREAS the Optionee agrees to grant to the Employer (or its
designees) certain repurchase rights.
NOW THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. GRANT OF OPTION. Pursuant to the provisions of the Carrierl
International S.A. 1999 Share Option Plan (the "Plan") attached hereto as Annex
A, effective as of March 1, 1999, the Employer grants to Optionee, subject to
the terms and conditions of the Plan and subject further to the terms and
conditions herein, the right and option (the "Option") to purchase from the
Employer all or any part of the Option Shares at a purchase price equal to
US$2.00 per Share plus the amount of any capital duty payable by the Company,
the Employer or the Optionee in respect of the issuance of such Option Shares
(the "Exercise Price").
2. DEFINITIONS. All capitalized terms used herein but not defined
herein shall have the meanings ascribed such terms in the Plan. For the purposes
of this Agreement, the following terms shall have the meanings set forth in this
Section 2:
(a) CAUSE. "Cause" shall mean (i) a breach by the Optionee of
any employment agreement between the Employer, the Company or a Related
Corporation and the Optionee, (ii) any act of dishonesty, embezzlement,
unauthorized use or disclosure of Confidential Information (as defined in the
employment agreement between optionee and the Employer, the Company or a Related
Corporation), intellectual property, or trade secrets, common law fraud or other
fraud with respect thereto, (iii) the commission by Optionee of a felony, a
crime involving moral turpitude or any other act causing material harm to the
Employer's, the Company's or any of the Related Corporations' standing or
reputation, (iv) Optionee's willful and continued failure to perform his duties
to the Employer, the Company or a Related Corporation as reasonably requested by
the Board of Directors thereof, (v) Optionee's willful misconduct or gross
negligence, or (v) the willful commission by Optionee of an act which (x)
constitutes unfair competition with the Employer or any of the Related
Corporations, (y) induces any other employee to leave the employ of the
Employer, the Company or any of the Related Corporations or (z) induces any
customer of the Employer, the Company or any of the Related Corporations to
breach or terminate a contract with the Employer, the Company or a Related
Corporation.
(b) CHANGE OF CONTROL. "Change of Control" shall mean (i) any
sale, transfer or other disposition of all or substantially all of the
consolidated assets of the Company and the Related Corporations (whether by
merger, consolidation, reorganization or otherwise), in one transaction or a
series of related transactions, to any "person" or "group" (as such terms are
used for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not applicable) and (ii) any sale,
transfer, disposition by a shareholder or shareholders of the Company of Shares
or by a member or members of Carrier One of Units or other equity securities of
Carrier One (including by merger, consolidation or otherwise) in a transaction
or series of related transactions which results in the Persons who are members
(or shareholders) who, directly or indirectly, own a majority of the Company's
Shares with the right to vote generally prior to such sale, transfer or
disposition owning less than 50% of the outstanding voting Shares of the
Company, directly or indirectly, with the right to vote generally.
(c) DISABILITY. "Disability" shall mean a mental or physical
condition which in the reasonable opinion of a majority of the Board renders
Optionee unable or incompetent to properly carry out his duties and
responsibilities contemplated by his employment by the Employer or a Related
Corporation, which condition shall have existed for a period of 90 or more
consecutive days or a total of 180 days in any period of 365 consecutive days.
(d) FAIR MARKET VALUE. "Fair Market Value" means the value of
the Shares determined as of the date (the "Valuation Date") prior to the date of
the Notice (as defined in Section 3(d)(iv) or (v) below, as the case may be).
The Fair Market Value of
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the Shares shall be determined by the mutual agreement of Optionee (or his
estate or personal representative, as the case may be) and the Employer, within
ten (10) days after the Valuation Date. If Optionee (or his estate or personal
representative, as the case may be) and the Employer fail to agree on the Fair
Market Value of the Shares during such ten (10) day period, the Fair Market
Value of the Shares shall be determined by a Qualified Appraiser selected by
mutual agreement of Optionee (or his estate or personal representative, as the
case may be) and the Employer within twenty (20) days after the Valuation Date.
If government, governmental department or agency or political subdivision
thereof or other entity.
(e) PUBLIC SALE. "Public Sale" shall have the meaning as
ascribed to it in the Securityholders' Agreement.
(f) QUALIFIED APPRAISER. "Qualified Appraiser" shall mean a
person experienced in evaluating international telecommunications companies.
(g) SECURITYHOLDERS' AGREEMENT. "Securityholders' Agreement"
shall mean the Securityholders' Agreement among the Company, Carrier One and the
other securityholders from time to time party thereto dated March 1, 1999.
(h) SHARES. "Shares" shall mean ordinary shares of the
Company.
3. TERMS AND CONDITIONS. In addition to the terms and conditions
contained in the Plan, it is understood and agreed that the Option evidenced
hereby is subject to the following additional terms and conditions:
(a) The Option shall expire on the tenth (10th) anniversary of
the Applicable Date, subject to earlier termination as provided in Paragraph (d)
below.
(b) VESTING.
(i) Subject to Paragraph (d) and the other terms of
this Agreement regarding the exercisability of this Option, this Option shall
become exercisable for the respective percentages of the total number of Option
Shares as is set forth opposite the date indicated below:
On or after December 1, 1998 (the "Applicable
Date") but prior to the First Anniversary of the
Applicable Date 0%
On or after the First Anniversary of the
Applicable Date but prior to the Second
Anniversary of the Applicable Date 20%
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On or after the Second Anniversary of the
Applicable Date but prior to the Third
Anniversary of the Applicable Date 40%
On or after the Third Anniversary of the
Applicable Date but prior to the Fourth
Anniversary of the Applicable Date 60%
On or after the Fourth Anniversary of the
Applicable Date but prior to the Fifth
Anniversary of the Applicable Date 80%
On or after the Fifth Anniversary of the 100%
Applicable Date
Once an installment becomes exercisable it shall remain exercisable
until expiration or termination of the Option.
(ii) Notwithstanding Paragraph 3(b)(i) above, this Option
shall automatically vest in its entirety upon the effective date of a Change in
Control which occurs while the Optionee is employed by the Employer or a Related
Corporation.
(c) EXERCISE OF OPTION. This Option (or any part of installment
thereof) may be exercised by giving written notice to the Employer at its
principal office address, or to such transfer agent as the Employer shall
designate. Such notice shall identify the Option being exercised and specify the
number of Shares as to which this Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in United States dollars in
cash or by check, (b) through delivery of Shares having a fair market value
equal as of the date of the exercise to the cash exercise price of the Option,
(c) by any combination of (a) and (b) above. Optionee shall not have the rights
of a shareholder with respect to the Shares covered by this Option until the
date on which the Shares are recorded in his or her name in the share registry
of the Company. Except as expressly provided below with respect to changes in
capitalization and share dividends, no adjustments shall be made for
distributions, dividends or similar rights for which the record date is before
the date such Share is issued.
(d) TERMINATION OF EMPLOYMENT.
(i) NO FURTHER VESTING. If Optionee ceases to be employed by
the Employer and all Related Corporations for any reason whatsoever, the portion
of this Option not exercisable as of the date Optionee ceases to be so employed
shall be void and not exercisable in any event. For purposes of this Paragraph
(d), employment shall be considered as continuing uninterrupted during any bona
fide leave of absence approved in writing by the Employer. This Option shall not
be affected by any change of
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employment within or among the Employer and Related Corporations so long as
Optionee continues to be an employee of the Employer or any Related Corporation.
Nothing in the Plan or this Agreement shall be deemed to give Optionee the right
to be retained in employment or other service by the Employer or any Related
Corporation for any period of time.
(ii) TERMINATION UPON DEATH OR DISABILITY. If the Optionee
ceases to be employed by the Employer and all Related Corporations by reason of
his death or Disability, then Optionee (or his personal representative, estate
or beneficiary, as applicable) shall have the right to exercise this Option for
the number of Shares for which Optionee could have exercised it on the date of
termination of employment until the specified expiration date of the Option,
(iii)TERMINATION NOT FOR CAUSE. If the Employer or a
Related Corporation terminates Optionee's employment for any reason other than
for Cause (and the Optionee does not continue in the employ of another Related
Corporation), then Optionee (or his personal representative, estate or
beneficiary, as applicable) shall have the right to exercise this Option for the
number of Shares for which Optionee could have exercised it on the date of
termination of employment until the earlier of (i) the specified expiration date
of the Option or (ii) 90 days from the date of the termination of Optionee's
employment.
(iv) RIGHT TO PURCHASE. In the event (a) Optionee dies or
becomes Disabled or (b) the Employer or a Related Corporation terminates the
Optionee's employment for any reason other than Cause, then in any such event,
the Employer shall have an option for 18 months after such event to both (x)
purchase all or any portion of the Shares owned by the Optionee as of the date
Optionee's employment was terminated, whether or not acquired pursuant to the
exercise of this Option, at a purchase price equal to the Fair Market Value per
Share and (y) cancel any unexercised portion of any outstanding Option upon
written notice and an aggregate payment to Optionee equal to the number of
Shares for which the Option is exercisable multiplied by the difference between
(A) the Fair Market Value per Share and (B) the Exercise Price. If the Employer
elects to so purchase such Shares, then upon twenty (20) days prior written
notice (the "Notice") to Optionee, Optionee shall sell and the Employer shall
purchase such Shares. The closing of such purchase and sale shall take place on
a date designated by the Employer, which shall not be more than sixty (60) days
following the date of the Notice.
(v) VOLUNTARY TERMINATION. If the Optionee voluntarily
terminates his employment with the Employer or a Related Corporation (and is not
in the employ of another Related Corporation), then Optionee shall have the
right to exercise this Option for the number of Shares for which he could have
exercised it on the date of termination of employment until the earlier of (i)
the specified expiration date of the Option or (ii) 30 days from the date of the
termination of Optionee's employment. In the event the
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Optionee voluntarily terminates his employment with the Employer or a Related
Corporation, the Employer shall have an option for a period of 18 months after
such termination to purchase all or any portion of the Shares owned by the
Optionee as of the date Optionee's employment was terminated, whether or not
acquired pursuant to the exercise of this Option, at the purchase price set
forth opposite the applicable date below:
Date of voluntary termination is on or the Exercise Price
after the Applicable Date but prior to the
third anniversary of the Applicable Date
Date of voluntary termination is on or 50% of the Fair
after the third anniversary of the Market Value per
Applicable Date but prior to the fifth Share
anniversary of the Applicable Date
Date of voluntary termination is after the Fair Market Value per
fifth anniversary of the Application Date Share
In addition, and without limiting the Employer's right to repurchase the
Optionee's Shares, the Employer shall have the right to cancel the unexercised
portion of any outstanding Option upon written notice without compensation. If
the Employer elects to so purchase such Shares, then upon twenty (20) days prior
written notice (the "Notice") to Optionee, Optionee shall sell and the Employer
shall purchase such Shares. The closing of such purchase and sale shall take
place on a date designated by the Employer, which shall not be more than sixty
(60) days following the date of the Notice.
(vi) TERMINATION FOR CAUSE. If the Employer or a Related
Corporation terminates Optionee's employment for Cause, then Optionee shall have
the right to exercise this Option for the number of Shares for which he could
have exercised it on the date of termination of employment until the earlier of
(i) the specified expiration date of the Option or (ii) 30 days from the date of
the termination of Optionee's employment. In the event the Employer or a Related
Corporation terminates the Optionee's employment for Cause, the Employer shall
have an option for a period of 18 months after such termination to purchase all
or any portion of the Shares owned by the Optionee as of the date Optionee's
employment was terminated, whether or not acquired pursuant to the exercise of
this Option, at a purchase price of the Exercise Price per Share. In addition,
and without limiting the Employer's right to repurchase the Optionee's Shares,
the Employer shall have the right to cancel the unexercised portion of any
outstanding Option upon written notice without compensation. If the Employer
elects to so purchase such Shares, then upon twenty (20) days prior notification
of Optionee, Optionee shall sell and the Employer shall purchase such Shares.
The closing of such purchase and sale shall take place on a date designated by
the Employer, which shall not be more than sixty (60) days following the date of
notification to Optionee.
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(vii) VIOLATION OF NONCOMPETITION NONSOLICITATION OR
CONFIDENTIALITY OBLIGATIONS. Notwithstanding anything to the contrary in this
Paragraph (d), if the Optionee breaches any confidentiality, noncompetition or
nonsolicitation obligation to the Employer, the Company or a Related
Corporation, including any such obligation contained in any employment agreement
between the Optionee and the Employer or a Related Corporation or in the
Securityholders' Agreement, the Employer shall have an option for a period of 18
months after the Employer has actual knowledge of such breach to purchase all or
any portion of the Shares owned by the Optionee as of the date Optionee's
employment was terminated, whether or not purchased pursuant to the exercise of
Options granted pursuant to the Plan, at a purchase price equal to the Exercise
Price per Share. In addition, and without limiting the Employer's right to
repurchase the Optionee's Shares, the Employer shall have the right to cancel
any unexercised portion of any outstanding Option upon written notice without
compensation. If the Employer elects to so purchase such Shares, then upon
twenty (20) days prior notification of such Optionee, Optionee shall sell and
the Employer shall purchase such Shares. The closing of such purchase and sale
shall take place on a date designated by the Employer, which shall not be more
than sixty (60) days following the date of notification to the Optionee,
(viii) In the event that any purchase of Shares by the
Employer pursuant to this Agreement, taking into consideration any other
purchases of Shares made by the Company or any Related Corporation, would
violate any law applicable to the Company, the Employer or any other Related
Corporations or result in a default under any financing agreement entered into
from time to time by the Company, the Employer or any Related Corporations with
third parties, then, provided the Employer has elected to purchase such Shares
within the applicable time period specified herein, the Employer may defer the
closing of the purchase and sale of such Shares until such time as such closing
would no longer result in such a violation or default. In such case, the
purchase price payment obligations of the Employer shall bear interest from the
date such price would otherwise have come due but for the operation of this
subparagraph (viii) until the date of payment at a rate equal to the average
annual interest rate payable by the Company and any other Related Corporations
on its and their third party indebtedness for money borrowed, as determined by
the Board.
(e) NON-TRANSFERABILITY. No Option shall be assignable or
transferable by Optionee except by will, by the laws of descent and distribution
or pursuant to a valid domestic relations order. Except as set forth in the
previous sentence, during the lifetime of Optionee, this Option shall be
exercisable only by Optionee.
(f) CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. Upon the
occurrence of any of the following events, an Optionee's rights with respect to
this Option shall be adjusted as hereinafter provided:
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(i) SHARE DIVIDENDS AND SHARE SPLITS. If the Shares
shall be subdivided or combined into a greater or smaller number of Shares or if
the Company shall issue any Shares as a share dividend on its outstanding
Shares, the number of Shares deliverable upon the exercise of this Option shall
be appropriately increased or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per share to reflect such
subdivision, combination or share dividend.
(ii) CONSOLIDATIONS OR MERGERS. If the Company is to be
consolidated with or acquired by another entity in a merger, sale of all or
substantially all of the Company's assets or otherwise (an "Acquisition"), the
Employer, under the instruction from the Committee or the board of directors of
any entity assuming the obligations of the Company hereunder (the "Successor
Board"), shall either (i) make appropriate provision for the continuation of
this Option by substituting on an equitable basis for the Shares then subject to
this Option either (a) the consideration payable with respect to the outstanding
Shares in connection with the Acquisition, (b) equity securities of the
surviving corporation or (c) such other securities as the Successor Board deems
appropriate, the fair market value of which shall approximate the fair market
value of the Shares subject to this Option immediately preceding the
Acquisition; or (ii) upon written notice to Optionee, provide that this Option
must be exercised, to the extent then exercisable, within a specified number of
days of the date of such notice, at the end of which period this Option shall
terminate; or (iii) terminate this Option in exchange for a cash payment equal
to the excess of the fair market value of the Shares subject to this Option (to
the extent then exercisable) over the exercise price thereof.
(iii) RECAPITALIZATION OR REORGANIZATION. In the event
of a recapitalization or reorganization of the Company (other than a transaction
described in subparagraph (ii) above) pursuant to which securities of the
Company or of another corporation or entity are issued with respect to the
outstanding Shares, Optionee upon exercising this Option shall be entitled to
receive for the purchase price paid upon such exercise the securities he would
have received if he had exercised this Option prior to such recapitalization or
reorganization.
(iv) DISSOLUTION OR LIQUIDATION. In the event of the
proposed dissolution or liquidation of the Company, this Option will terminate
immediately prior to the consummation of such proposed action or at such other
time and subject to such other conditions as shall be determined by the
Committee.
(v) ISSUANCES OF SECURITIES. Except as expressly
provided herein, no issuance by the Company of Shares of any class, or
securities convertible into Shares of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
subject to this Option. No adjustments shall be made for dividends paid in cash
or in property other than securities of the Company.
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(vi) FRACTIONAL SHARES. No fractional Shares shall be
issued pursuant to an exercise of this Option and Optionee shall receive from
the Employer cash in lieu of such fractional Shares.
(vii) The Company and Carrier One hereby agree to take
such actions (including, in the case of Carrier One, voting its shares to amend
the articles of association and modify the capital of the Company) as may be
reasonably required to give effect to this Section 3(f).
(g) MODIFICATION OF OPTION. The Employer, under the
instruction from the Committee, shall have the authority to effect, at any time
and from time to time, with the consent of Optionee, the modification of the
terms of this Agreement (subject to the limitations contained in the Plan).
(h) NO RIGHT TO CONTINUED EMPLOYMENT. This Option shall not
confer upon Optionee any right with respect to continuance of employment by the
Employer or any Related Corporation, nor shall it interfere in any way with the
right of the Employer to terminate Optionee's employment at any time.
(i) COMPLIANCE WITH LAW AND REGULATIONS. This Option and the
obligation of the Employer to sell and deliver Shares hereunder shall be subject
to all applicable laws, rules and regulations of any jurisdiction and to such
approvals by any government or regulatory agency as may be required. The
Employer shall not be required to issue or deliver any certificates for Shares
prior to (i) the listing of such Shares on any stock exchange on which the
Shares may then be listed, and (ii) the completion of any registration or
qualification of such Shares under any applicable law, or any rule or regulation
of any government body which the Employer shall, in its sole discretion,
determine to be necessary or advisable. Moreover, this Option may not be
exercised if its exercise, or the receipt of Shares pursuant thereto, would be
contrary to applicable law.
4. RESTRICTIONS ON DISPOSITION. All Shares acquired by Optionee
pursuant to this Agreement shall be subject to such restrictions on sale,
encumbrance and other disposition as may be set forth in the Securityholders'
Agreement or other applicable securityholders' agreement to which Optionee is,
or is required to become, a party.
5. OPTIONEE BOUND BY PLAN. Optionee hereby acknowledges receipt of a
copy of the Plan and agrees to be bound by all the terms and provisions
thereof.
6. WITHHOLDING TAXES. Optionee acknowledges and agrees that the
Employer and the Related Corporations have the right to demand from the Optionee
or to deduct from payments of any kind otherwise due to Optionee any foreign,
federal, state or local taxes of any kind required by law to be withheld with
respect to the exercise of this
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Option hereunder. The Employer in its discretion may condition the exercise of
this Option on the Optionee's making satisfactory arrangements for such
withholding. Such arrangements may include (i) payment by the Optionee to the
Employer in cash or by check, (ii) withholding by the Employer from the
Optionee's salary, and/or (iii) delivery of Shares by the Optionee to the
Employer having a fair market value equal as of the date of the exercise to the
amount of the withholding taxes.
7. ASSIGNMENT. The Employer may assign all or any part of its rights
and obligations under this Agreement to the Company or any other Related
Corporations and may designate any third party to consummate any purchase of
Shares required or permitted by the terms of this Agreement.
8. NOTICES. Any notice hereunder to the Employer shall be addressed to
it at its principal business office, with a copy to Providence Equity Partners,
000 Xxxxx Xxxxxx, 00 Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 and to the Company, c/o
Carrierl International GmbH, Xxxxxxxxxxxxxx 00, 0000 Xxxxxx, Xxxxxxxxxxx, and
any notice hereunder to Optionee shall be sent to the address reflected on the
payroll records of the Employer, subject to the right of either party to
designate at any time hereafter in writing some other address.
9. GOVERNING LAW JURISDICTION. (a) This Agreement shall be construed
and administered in accordance with and governed by the laws of Luxembourg. In
the event of any conflict or inconsistency between the provisions of the Plan
and this Agreement, the terms of this Agreement shall govern.
(b) The courts of England have jurisdiction to hear and decide
any suit, action or proceedings, and to settle any disputes, which may arise out
of or in connection with this Agreement (respectively, "Proceedings" and
"DISPUTES") and for this purpose each party irrevocably submits to the
jurisdiction of the Courts of England.
(c) Paragraph (b) above does not prevent any party to this
Agreement from taking proceedings relating to Proceedings or Disputes in any
other courts with jurisdiction.
(d) Each party irrevocably waives any objection which it might
at any time have to the courts of England being nominated as the forum to hear
and decide any Proceedings and to settle any disputes and agrees not to claim
that the courts of England are not a convenient or appropriate forum.
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IN WITNESS WHEREOF, the Employer has caused this Agreement to be
executed by its duly authorized officer and Optionee has executed this Agreement
as of the first day of March 1999.
------------------------------
/./
CARRIER1 INTERNATIONAL
GmbH
BY:
---------------------------
NAME:
TITLE:
CARRIER1 INTERNATIONAL
S.A.
BY:
---------------------------
NAME:
TITLE:
CARRIER ONE, LLC
BY:
---------------------------
NAME:
TITLE:
[SIGNATURE PAGE TO OPTION AGREEMENT]
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