NATIONAL TELEPHONE & COMMUNICATIONS, INC.
1996 SENIOR EXECUTIVE AND CONSULTANT
CONVERTIBLE DEBT PLAN (THE "PLAN")
GRANT AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Grant Agreement ("Grant Agreement").
I. NOTICE OF CONVERTIBLE DEBT UNIT GRANT
Xxxxxxx's Name and Address Xxxxxx X. Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
You have been granted Convertible Debt Units of the Company (the
"Convertible Debt Units") in the form of Schedule I hereto, which may be
converted to shares of the Common Stock of the Company (the "Shares"), subject
to the terms and conditions of the Plan and this Grant Agreement, as follows:
Date of Grant April 11, 1997
Number of Convertible Debt Units 400,000
Purchase Price per Convertible Debt Unit $3.00
Interest Rate 6.49% per annum,
payable annually
Total Number of Shares into which the
Convertible Debt Units may be converted 400,000
Conversion Price per Share $.01
Expiration Date April 11, 2002
(No more than 5 years from date of
grant)
II. AGREEMENT
1. GRANT OF CONVERTIBLE DEBT UNITS. The Committee hereby grants to the
Grantee named in Section I of this Grant Agreement (the "Grantee"), the right to
purchase
the number of Convertible Debt Units set forth in Section 1, at the purchase
price per Convertible Debt Unit set forth in Section I (the "Purchase Price"),
subject to the terms and conditions of the Plan, which is incorporated herein by
reference. In the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Grant Agreement, the terms and
conditions of the Plan shall prevail. The Grantee may review a copy of the Plan
at the office of the Secretary of the Company at 0000 Xxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000.
2. METHOD OF PAYMENT. The purchase price of Convertible Debt Units shall
be paid as set forth in the Plan. The price of Shares issued upon conversion of
Convertible Debt Units shall be paid as set forth in the Plan.
3. Transferability of Convertible Debt Unit . Convertible Debt Units may
be transferred in by the Grantee but only on the condition that the transferee
(the "Transferee") agrees in writing to be bound by all of the terms of the Plan
and this Grant Agreement. Convertible Debt Units may be exercised during the
lifetime of the Grantee only by the Grantee, or in the event of a transfer of
such Convertible Debt Units by the Grantee, only by the Transferee. The terms
of the Plan and this Grant Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Grantee.
4. LOCK-UP AGREEMENT . No less than thirty (30) days prior to the
commencement of any offering of Shares in a bona fide underwriting pursuant to a
registration statement under the Securities Act, the Grantee shall execute and
deliver a written agreement (the "Lock-Up Agreement") between the Company, the
underwriter or underwriters of the Shares and the Grantee pursuant to which the
Grantee agrees that he will not offer, sell, contract to sell or otherwise
dispose of up to one hundred percent (100%) of the Convertible Debt Units or
Shares issued upon the conversion thereof for a period not to exceed 180 days
after the commencement by such underwriter or underwriters of such offering in a
form negotiated by the Committee (which form of Lock-Up Agreement shall be
conclusive and not subject to negotiation by the Grantee). A condition precedent
to any transfer of the Convertible Debt Units or any Shares issued upon the
conversion thereof is that the transferee agree in writing to be bound by the
obligation described in the preceding sentence to execute and deliver a Lock-Up
Agreement.
5. TERM OF CONVERTIBLE DEBT UNITS. Convertible Debt Units may be
converted only on or before the expiration date set forth in Section I and may
be converted only in accordance with the Plan and the terms of this Grant
Agreement.
6. TAX CONSEQUENCES. The conversion of Convertible Debt Units will have
federal and state income tax consequences. THE GRANTEE SHOULD CONSULT A TAX
ADVISER UPON THE GRANT OF CONVERTIBLE DEBT UNITS AND
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BEFORE CONVERTING CONVERTIBLE DEBT UNITS OR DISPOSING OF THE SHARES OF COMMON
STOCK ACQUIRED UPON CONVERSION, PARTICULARLY WITH RESPECT TO HIS STATE'S TAX
LAWS.
7. ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by
reference. The Plan, the Convertible Debt Unit and this Grant Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof. This Grant Agreement is governed by the laws of the State of Delaware,
without giving effect to principles of conflict of laws.
8. WARRANTIES, REPRESENTATIONS AND COVENANTS. The undersigned Grantee
warrants and represents that he has reviewed the Plan and this Grant Agreement
in its entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Grant Agreement and fully understands all provisions of the Plan
and this Grant Agreement. The Grantee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any
questions relating to the Plan and Grant Agreement. The Grantee further agrees
to notify the Company promptly upon any change in the residence address
indicated below.
GRANTEE: NATIONAL TELEPHONE &
COMMUNICATIONS, INC.
a Delaware corporation
/s/ X. X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
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Signature Title: President
X. X. Xxxxxx
--------------------------------
Print Name
Residence Address:
27101 Puerta Del Oro
--------------------------------
Mission Viejo, CA d 92691
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EXHIBIT A
NATIONAL TELEPHONE & COMMUNICATIONS, INC.
1996 SENIOR EXECUTIVE AND CONSULTANT
CONVERTIBLE DEBT PLAN
CONVERSION NOTICE
National Telephone & Communications, Inc.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Secretary
1. CONVERSION OF CONVERTIBLE DEBT UNITS. Effective as of today,
__________, 199_, the undersigned ("Purchaser") hereby elects to convert _____
Convertible Debt Units into __________ shares (the "Shares") of the Common Stock
of National Telephone & Communications, Inc. (the "Company") under and pursuant
to the 1996 Senior Executive and Consultant Convertible Debt Plan (the "Plan")
and the Grant Agreement dated __________, 199__ (the "Grant Agreement"). The
purchase price for the Shares shall be $__________, as specified in the Grant
Agreement.
2. DELIVERY OF PAYMENT. Purchaser herewith delivers to the Company the
full purchase price for the Shares.
3. REPRESENTATION OF PURCHASER. Purchaser acknowledges that Xxxxxxxxx has
received, read and understood the Plan and this Grant Agreement and agrees to
abide by and be bound by their terms and conditions.
4. RIGHTS OF STOCKHOLDER. Purchaser shall not be deemed to be the holder
of, or to have any of the rights of a holder with respect to, any Shares for
which such Convertible Debt Units arc converted including, but not limited to,
rights to vote or to receive dividends unless and until Purchaser has satisfied
all requirements for conversion of the Convertible Debt Units pursuant to their
terms, the certificates evidencing such Shares have been issued and Purchaser
has become a record holder of such Shares. A share certificate for the number of
Shares so acquired shall be issued to Purchaser as soon as practicable after
conversion of the Convertible Debt Units. No adjustment will be made for a
dividend or other right for which the record date is prior to the date all the
conditions set forth above arc satisfied, except as provided in Section 10 of
the Plan.
5. LOCK-UP AGREEMENT. No less than thirty (30) days prior to the
commencement of any offering of Shares in a bona fide underwriting pursuant to a
registration statement under the Securities Act, Purchaser shall execute and
deliver a written agreement (the "Lock-Up Agreement") between the Company, the
underwriter or underwriters of the Shares and Purchaser pursuant to which
Purchaser agrees that he will not offer, sell, contract to sell or otherwise
dispose of up to one hundred percent (100%) of the Convertible Debt Units or
Shares issued upon the conversion thereof for a period not to exceed 180 days
after the commencement by such underwriter or underwriters of such offering in a
form negotiated by the Committee (which form of Lock-Up Agreement shall be
conclusive and not subject to negotiation by Purchaser). A condition precedent
to any transfer of the Convertible Debt Units or any Shares issued upon the
conversion thereof is that the transferee agree in writing to be bound by the
obligation described in the preceding sentence to execute and deliver a Lock-Up
Agreement.
6. TAX CONSULTATION. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
7. ENTIRE AGREEMENT; GOVERNING LAW . The Plan, the Convertible Debt Unit
and Grant Agreement are incorporated herein by reference. This Agreement, the
Plan, the Convertible Debt Unit and the Grant Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Purchaser with respect to the subject matter hereof This agreement is governed
by the laws of the State of Delaware without giving effect to principles of
conflict Of laws.
Submitted by: Accepted by:
PURCHASER: NATIONAL TELEPHONE &
COMMUNICATIONS, INC.
By:
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Signature Its:
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Print Name
Address: Address:
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