Exhibit 10.1(a)
DIRECTOR IPO GRANT
STOCK OPTION AGREEMENT
PURSUANT TO THE
REPUBLIC AIRWAYS HOLDINGS INC.
2002 EQUITY INCENTIVE PLAN
AGREEMENT, made as of the __ day of _________________, 2002, by and
between Republic Airways Holdings Inc., a Delaware corporation (the "Company"),
and _____________ (the "Optionee").
1. GRANT OF OPTION. Pursuant to Section 9 of the Company's 2002 Equity Incentive
Plan (the "Plan"), the Optionee, as a Non-Employee Director of the Company, has
been automatically granted an option (the "Option") to purchase 10,000 shares of
the Company's common stock, $.001 par value (the "Common Stock"), at a purchase
price per share of $[INSERT IPO PRICE].
2. TAX STATUS OF OPTION. The Option is not intended to qualify as an "incentive
stock option" under Section 422 of the Internal Revenue Code of 1986, as
amended.
3. TERM OF OPTION. The term of the Option shall be for a period of ten (10)
years from the date hereof, subject to earlier termination as provided herein.
4. VESTING OF OPTION. Subject to the Optionee remaining in continuous service as
a director of the Company through each applicable vesting date, the Option shall
become vested and exercisable with respect to 1/24th of the shares of Common
Stock covered hereby on the first day of each month for the first (12) twelve
months commencing after the date hereof, and with respect to 1/48th of the
shares of Common Stock covered hereby on the first day of each month for the
next twenty-four (24) months commencing thereafter. Notwithstanding anything in
this Section 4 to the contrary, the Option shall become fully vested and
exercisable upon the occurrence of a Change in Control of the Company. For this
purpose, a "Change in Control" of the Company shall be deemed to have occurred
upon any of the following:
(a) there occurs (x) any consolidation or merger in which the Company is
not the continuing or surviving entity or pursuant to which shares of the Common
Stock would be converted into cash, securities or other property, other than (1)
a consolidation or merger of the Company in which the holders of the Common
Stock immediately prior to the consolidation or merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the consolidation or merger, or (2) a consolidation or merger which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (by being converted into voting securities of
the continuing or surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the surviving or continuing
entity immediately after such consolidation or merger and which would result in
the members of the Board immediately prior to such consolidation or merger
(including, for this purpose, any individuals whose election or nomination for
election was approved by a vote of at least two-thirds of such members),
constituting a majority of the board of directors (or equivalent
governing body) of the surviving or continuing entity immediately after such
consolidation or merger, or (y) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially all
the Company's assets;
(b) the Company's stockholders approve any plan or proposal for the
liquidation or dissolution of the Company;
(c) any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall become
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of forty percent (40%) or more of the Common Stock other than pursuant to a plan
or arrangement entered into by such person and the Company; or
(d) during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the entire Board shall cease for any reason
to constitute a majority of the Board unless the election or nomination for
election by the Company's stockholders of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
5. EFFECT OF TERMINATION OF SERVICE AS A DIRECTOR.
(a) If the Optionee's service as a director of the Company terminates by
reason of the Optionee's death or Disability (as defined in the Plan), then: (i)
any portion of the Option that is exercisable on the date of termination shall
remain exercisable by the Optionee (or, in the event of death, the Optionee's
beneficiary) during the one year period following the date of termination but in
no event after expiration of the stated term hereof and, to the extent not
exercised during such period, shall thereupon terminate, provided that, in the
event of a termination due to Disability, if the Optionee dies during such
one-year period, then the deceased Optionee's beneficiary may exercise the
Option, to the extent exercisable by the deceased Optionee immediately prior to
death, for a period of one year following the date of death but in no event
after expiration of the stated term hereof, and (ii) any portion of the Option
that is not exercisable on the date of termination shall thereupon terminate.
(b) If the Optionee's service as a director of the Company terminates for
any other reason (other than those described in Section 5(a) above), then: (i)
any portion of the Option that is exercisable on the date of termination shall
remain exercisable by the Optionee during the one hundred eighty (180) day
period following the date of termination but in no event after expiration of the
stated term hereof and, to the extent not exercised during such period, shall
thereupon terminate, and (ii) any portion of the Option that is not exercisable
on the date of termination shall thereupon terminate.
6. METHOD OF EXERCISE. Once vested and exercisable, the Option may be exercised
in whole or in part by delivering to the Secretary of the Company (a) a written
notice specifying the number of shares of Common Stock to be purchased and (b)
payment of the aggregate exercise price of the shares of Common Stock so
purchased in cash or its equivalent, and any taxes due thereon in accordance
with Section 14 of the Plan. Payment, in whole or in part, of the exercise price
of the Option may also be made (i) if the Common Stock is publicly traded, by
means of a
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cashless exercise procedure approved by the Committee, (ii) in the form of
unrestricted shares of Common Stock which, (x) in the case shares acquired upon
exercise of an option, have been owned by the Optionee for more than six (6)
months on the date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the shares of Common Stock as
to which the Option is exercised, or (iii) any combination of the foregoing.
7. RIGHTS AS A STOCKHOLDER. No shares of Common Stock shall be issued hereunder
until full payment for such shares has been made and any other exercise
conditions have been fully satisfied. The Optionee shall have no rights as a
stockholder with respect to any shares covered by the Option until the date such
shares are reflected as having been issued to the Optionee on the Company's
records. No adjustment shall be made for dividends or distributions or the
granting of other rights for which the record date is prior to the date such
shares are issued.
8. NONTRANSFERABILITY. The Option is not assignable or transferable other than
to a beneficiary designated to receive the Option upon the Optionee's death in a
manner acceptable to the Company or by will or the laws of descent and
distribution, and the Option shall be exercisable during the lifetime of the
Optionee only by the Optionee (or, in the event of the Optionee's incapacity,
the Optionee's legal representative or guardian). Any attempt by the Optionee or
any other person claiming against, through or under the Optionee to cause the
Option or any part of it to be transferred or assigned in any manner and for any
purpose shall be null and void and without effect upon the Company, the Optionee
or any other person.
9. LOCK-UP. The Optionee shall not during the period commencing on the date of
the final prospectus relating to the Company's initial public offering and
ending on the date specified by the Company and the managing underwriter (but
not to exceed one hundred eighty (180) days) (a) lend, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock, or (b) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the shares of Common Stock. The foregoing provisions of this Section 9 shall
apply only to the Company's initial public offering of equity securities and
shall not apply to the sale of any shares to an underwriter pursuant to an
underwriting agreement.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Upon a Change in Capitalization
(as defined in the Plan), an equitable substitution or adjustment may be made in
the kind, number and/or exercise price of shares or other property subject to
the Option as may be determined by the Committee, in its sole discretion.
Without limiting the generality of the foregoing, in connection with a Change in
Capitalization, the Committee may provide, in its sole discretion, for the
cancellation of the Option in exchange for payment in cash or other property of
the Fair Market Value of the shares of Common Stock covered by the Option
(whether or not otherwise vested or exercisable), reduced by the exercise price
of the Option.
11. PROVISIONS OF THE PLAN CONTROL. This Agreement is subject to all the terms,
conditions and provisions of the Plan and to such rules, regulations and
interpretations as may be established or made by the Committee acting within the
scope of its authority and responsibility under the Plan. The Optionee
acknowledges receipt of a copy of the Plan prior to execution of this Agreement.
The applicable provisions of the Plan shall govern in any situation where this
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Agreement is silent or where the applicable provisions of this Agreement are
contrary to or not reconcilable with such Plan provisions.
12. COMPLIANCE WITH LAW. Shares of Common Stock shall not be issued pursuant to
the exercise of the Option unless such exercise and the issuance and delivery of
such shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act and the requirements of any stock exchange or market upon which the
Common Stock may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance. The Committee may
require each person acquiring shares of Common Stock to represent to and agree
with the Company in writing that such person is acquiring the shares without a
view to distribution thereof. All certificates for shares of Common Stock
delivered hereunder shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange or market upon which the Common Stock may then be listed, and any
applicable federal or state securities law. The Committee may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions.
13. MISCELLANEOUS. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its
principles of conflict of laws. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and may not be
amended, except as provided in the Plan, other than by a written instrument
executed by the parties hereto.
(Signature Page Follows)
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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
REPUBLIC AIRWAYS HOLDINGS INC.
By:
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Name:
Title:
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[Name of Optionee]
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