EXHIBIT 10.27
EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement (this "Agreement") is made effective as of September
8, 1998, by and between WAM!NET Inc. ("WAM!NET" or the "Corporation"), of 0000
Xxxx 000xx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, and Xxxxxxx X. Xxxxxx
("Employee") of 0000 Xxxxxx Xxxxxx X., Xxx. 0000, Xxxxxxxxxxx, Xxxxxxxxx 00000.
BACKGROUND
A. WAM!NET is engaged in the business of high speed electronic courier
services for the transportation, storage and retrieval of large quantities of
data for print and CD-ROM prepress publishing industries as well as for medical
imaging;
B. WAM!NET desires to have the services of the Employee; and
C. The Employee is willing to be employed by WAM!NET.
Therefore, in consideration of the mutual promises set forth in this
Agreement, the parties agree as follows:
1. EMPLOYMENT. Effective September 8,1998, Employee shall serve WAM!NET
as Executive Vice President and Chief Financial Officer.
2. BEST EFFORTS OF EMPLOYEE. Employee agrees to perform faithfully,
industriously, and to the best of Employee's ability, experience, and talents,
all of the duties that may be reasonably required by the express and implicit
terms of this Agreement, to the reasonable satisfaction of WAM!NET. Such duties
shall be provided at such place(s) as the needs, business, or opportunities of
WAM!NET may reasonably require from time to time.
3. Notwithstanding the foregoing, Employee shall also be permitted to
serve on the Board of Directors of other non-competing business corporations and
may participate in charitable, cultural, professional, civic, and business
association activities.
4. WAM!NET shall add Employee to its Director and Officer insurance and
indemnification policies. Additionally, WAM!NET hereby indemnifies and holds
harmless Employer from any losses, damages, claims, and causes of action arising
out of the actions or inactions of the Board of Directors and/or the Officers of
the Company for any period before September 8, 1998.
5. COMPENSATION OF EMPLOYEE. As compensation for the services provided by
Employee under this Agreement, WAM!NET will pay the Employee a monthly base
salary of $16,666.67 (which salary may be adjusted upward by WAM!NET after the
first anniversary of the date of this Agreement). In addition, a bonus of up to
30% of Employee's annualized base salary (annualized for 1998 only) may be
earned if Employee achieves specific performance objectives.
These objectives will be determined by Employee and the Chief Executive Officer
or his successors. Upon termination of this Agreement, payments under this
paragraph shall cease; provided, however, that the Employee shall be entitled to
payments for periods or partial periods that occurred prior to the date of
termination and for which the Employee has not yet been paid.
6. STOCK OPTIONS. Subject to approval of the WAM!NET Board of Directors,
and in addition to any other compensation to which Employee may be entitled by
this Agreement, Employee shall be entitled to receive Incentive Stock Options
and/or Nonqualified Stock Options, as determined by the Board of Directors,
(cumulatively, the "Options") for Six Hundred Thousand (600,000) shares of
common stock of WAM!NET Inc. (the "Shares") under and subject to the provisions
of the WAM!NET Inc. Amended and Restated 1994 Stock Option Plan and/or the
WAM!NET Inc. 1998 Combined Stock Option Plan (cumulatively, the "Plans"). The
exercise price of the Options shall be Fair Market Value or Eight and no/100
Dollars ($8.00) per share for Four Hundred Thousand (400,000) of the Shares, and
shall be Twelve and no/100 Dollars ($12.00) for Two Hundred Thousand (200,000)
of the Shares. The Options shall vest and first become exercisable as follows at
the rate of twenty-five percent (25%) per year, with the first twenty-five
percent (25%) becoming vested and exercisable on the first anniversary of the
date of this Agreement:
Number of Shares Number of Shares
---------------- ----------------
First Exercisable First Exercisable
----------------- -----------------
Vesting Date at $8.00 Per Share at $12.00 Per Share
------------ ------------------ -------------------
First Anniversary of
date of Agreement 100,000 50,000
Second Anniversary of
date of Agreement 100,000 50,000
Third Anniversary of
date of Agreement 100,000 50,000
Fourth Anniversary of
date of Agreement 100,000 50,000
The previous provisions of this Paragraph 4 notwithstanding, any Options not
then exercised by Employee shall terminate and be forfeited by Employee upon the
termination of Employee's employment with WAM!NET or any subsidiary for either:
(i) Employee's material breach of Paragraph 6, 7, 8, 9, 10, 11 or 12 of this
Agreement, or (ii) Employee's commission of a felony or other willful act which
is materially and significantly detrimental to WAM!NET.
7. STOCK GRANT. Subject to approval of the WAM!NET Board of Directors,
Employee shall be entitled to purchase 37,500 shares of restricted stock at
$8.00 per share under terms and conditions of a Stock Restriction Agreement to
be negotiated.
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8. RELOCATION EXPENSES. Employee is entitled to receive relocation
benefits as outlined in Exhibit A, hereto. Employee may exercise his right to
relocation benefits at any time prior to September 30, 1999.
9. FAMILY VISITS. WAM!NET will pay for up to 12 round trip Economy Class
Airfares between Minneapolis and Washington DC to facilitate Employee's family
visits, and shall reimburse Employee for reasonable expenses incurred by him for
auto and lodging associated with such family visits up to two nights a month.
10. AUTOMOBILE ALLOWANCE. WAM!NET shall provide Employee with an annual
automobile allowance which amount shall cover lease payments of $750.00 per
month (payable monthly), plus maintenance, insurance and fuel costs associated
with the use of such automobile, which will be submitted as expenses.
11. REIMBURSEMENT FOR EXPENSES IN ACCORDANCE WITH WAM!NET POLICY. WAM!NET
will reimburse Employee for "out-of-pocket" expenses in accordance with WAM!NET
policies in effect from time to time.
12. CONFIDENTIALITY. Employee recognizes that WAM!NET has and will have
information regarding the following:
- inventions - business affairs
- machinery - processes
- products - trade secrets
- prices - technical matters
- apparatus - customer lists
- costs - product designs
- discounts - copyrights
- future plans
and other vital information (collectively, "Information") which are valuable,
special and unique assets of WAM!NET. Employee agrees that he will not at any
time or in any manner, either directly or indirectly, divulge, disclose, or
communicate in any manner any Information to any third party without prior
written consent of WAM!NET. Employee will protect the Information and treat it
as strictly confidential. Information under this paragraph shall not include
information that is generally available in the public domain or information that
WAM!NET disseminates to its the public at large or information that is filed as
a matter of public record with the SEC or similar state regulatory agencies.
13. TRADE SECRETS. Employee shall not at any time during the term of this
Agreement or thereafter, or in any manner, either directly or indirectly,
divulge, disclose or communicate to any person, firm or corporation in any
manner whatsoever any information which constitutes a "trade secret" as that
term is defined in section 325C.01, subd. 5 of Minnesota Statutes. In applying
this paragraph, the arbitrator may also take into account the special
circumstances of the Corporation's business.
3
14. DISCLOSURE AND ASSIGNMENT. Except as provided elsewhere in this
Agreement, Employee shall treat for the Corporation's sole benefit and fully and
promptly disclose to the Corporation, without additional compensation, all
ideas, discoveries, inventions and improvements, whether patentable or not,
which while the Employee is employed by the Corporation are made, conceived or
reduced to practice by Employee, alone or with others, during or after usual
working hours, either on or off the job, and Employee hereby assigns to the
Corporation all such ideas, discoveries, inventions and improvements to be the
Corporation's exclusive property.
15. DISCLOSURE AND RIGHT OF FIRST REFUSAL. Paragraph 14 of this Agreement
shall not apply to any ideas, discoveries, inventions and improvements for which
no equipment, supplies, facility or trade secret information of the Corporation
was used, and which was developed entirely on Employee's own time, and (1) which
does not relate (a) directly to the business of the Corporation or (b) to the
Corporation's actual or demonstrably anticipated research or development, or (2)
which does not result from any work performed by Employee for the Corporation.
Employee will, nonetheless, promptly disclose all such ideas, discoveries,
inventions and improvements to the Corporation and offer to the Corporation the
right of first refusal to enter into a license or purchase agreement covering
the subject idea, discovery, invention or improvement on terms mutually agreed
to by Employee and the Corporation. In the event the Corporation and Employee
cannot agree on terms and Employee receives an offer to enter into a license or
purchase agreement with some other party on terms more favorable to that other
party than the terms offered to the Corporation, then the Corporation shall have
the right and Employee shall have the obligation to offer to the Corporation the
idea, discovery, invention or improvement on such favorable terms. When such an
offer is made to the Corporation pursuant to the preceding sentence, it must be
accepted by the Corporation within thirty (30) days; or if not accepted, the
right of first refusal hereunder as to that offer shall terminate.
NOTICE: Paragraph 14 hereof requires Employee to assign rights to inventions to
the Corporation or its successors. Minnesota Statutes (S)181.78 limits the
scope of agreements requiring the inventions be assigned employers. The statute
states that such assignment agreements do not apply:
"to an invention for which no equipment, supplies, facility or
trade secret information of the employer was used and which was
developed entirely on the Employee's own time, and (1) which does
not relate (a) directly to the business of the employer or (b) to
the employer's actual or demonstrably anticipated research or
development, or (2) which does not result from any work performed
by the Employee for the employer."
Please note that Paragraph 14 of this Agreement uses these statutory terms
to define the inventions which are not automatically assigned to the Corporation
but instead are subject to a right of first refusal in favor of the Corporation.
16. UNAUTHORIZED DISCLOSURE OF INFORMATION. If it appears that the
Employee has disclosed (or has threatened to disclose) Information or Trade
Secrets in violation
4
of this Agreement, WAM!NET shall be entitled to an injunction to restrain
Employee from disclosing, in whole or in part, such Information, or from
providing any services to any party to whom such Information has been disclosed.
WAM!NET shall not be prohibited by this provision from pursuing other remedies,
including a claim for losses and damages.
17. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT. The confidentiality
provisions of this Agreement shall remain in full force and effect for a one
year period after the termination of Employee's employment.
18. NON-COMPETE AGREEMENT.
(a) Recognizing that the various items of Information are special and
unique assets of the company, Employee agrees and covenants that for a
period of 12 months following the termination of his or her employment,
whether such termination is voluntary or involuntary (unless such
termination is the result of a failure by WAM!NET to issue stock options or
to obtain Board approval therefor in accordance with paragraph 4), Employee
will not directly engage in any business competitive with WAM!NET, nor
shall Employee cause or solicit, directly for his own behalf or for the
benefit of a third party, any other employee or employees of WAM!NET to
terminate their employment with WAM!NET to engage in such competitive
activities. This covenant shall apply to the geographical area that
includes the United States and Canada. Directly engaging in any competitive
business includes, but is not limited to, (i) engaging in a business as
owner, partner or agent (other than as an owner of less than five (5%)
percent of a publicly traded company), (ii) becoming an employee of any
third party that is engaged in such business, (iii) becoming interested
directly in any such business, or (iv) soliciting any customer of WAM!NET
for the benefit of a third party that is engaged in such business. Employee
agrees that this non-compete provisions will not adversely affect the
Employee's livelihood.
(b) In the event that, solely because of this non-competition covenant,
the Employee is precluded from working in an industry for which he is
qualified by virtue of his experience, education, or training, then,
WAM!NET agrees to pay, after a period of three (3) months, and up to a
total period not to exceed six (6) months, the base compensation earned by
the Employee immediately prior to his separation from employment.
19. EMPLOYEE'S INABILITY TO CONTRACT FOR WAM!NET. Employee shall not have
the right to make any contracts or commitments for or on behalf of WAM!NET
except in accordance with WAM!NET policies or with the express written consent
of WAM!NET.
20. TERM/TERMINATION. Employee's employment under this Agreement shall be
for an unspecified term on an "at will" basis. This Agreement may be terminated,
with or without cause, by either party. Each party will give notice (as provided
in the paragraph of this Agreement captioned "Notices") of such action to other
party.
21. SEVERANCE PAY. If WAM!NET terminates Employee's employment other than
for cause WAM!NET agrees to pay Employee as severance pay an amount equal to 6
5
months of Employee's base pay as of the date of his termination, less customary
payroll deductions, to be paid in monthly installments in the same manner as
paid during his employment. The first severance payment shall be made to
Employee on WAM!NET's first regular payday after the date of Employee's
termination. WAM!NET's responsibility to pay the severance pay will immediately
terminate if Employee violates paragraphs 8, 13, or 14 of this Agreement. For
purposes of this Agreement "for cause" shall mean: (1) the Employee's dishonesty
or theft of WAM!NET's property; (2) the Employee's gross negligence or
inefficiency in the execution of his duties; (3) the Employee's material
violation of WAM!NET's rules, regulations, instructions or policies; (4) the
Employee's commission of a crime or other act which would materially damage the
reputation of WAM!NET; or (5) the Employee's material breach of provisions of
this Agreement.
22. ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or its breach, or to the employment relationship between the
Employee and the Company, shall be settled by final and binding arbitration,
upon the request of either party, in Minneapolis, Minnesota. Such arbitration
shall proceed in accordance with the then governing rules of the American
Arbitration Association (AAA) for Commercial Arbitration or Employment Law
Disputes, at the option of the petitioner. Judgment upon the award rendered may
be entered and enforced in any court of competent jurisdiction. It is agreed
that the parties shall choose a single, neutral arbitrator from among a panel of
not less than seven (7) proposed arbitrators, and that the parties may have no
more than two (2) panels of arbitrators presented to them by the AAA. The
parties agree that they shall each bear their own costs associated with the
arbitration, including any filing fee to be paid by them and their own legal
counsel expenses. The parties further agree that they shall share equally in the
reasonable costs and the fees of the neutral.
23. RETURN OF PROPERTY. Upon termination of this Agreement, the Employee
shall deliver all property (including keys, records, notes, data, memoranda,
models, and equipment) that is in the Employee's possession or under the
Employee's control which is WAM!NET's property.
24. NOTICES. All notices required or permitted under this Agreement shall
be in writing and shall be deemed given when delivered in person or five (5)
days after deposited in the United States mail, postage paid, addressed as
follows:
WAM!NET:
-------
President
WAM!NET Inc.
0000 Xxxx 000xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Employee:
--------
Xxxxxxx X. Xxxxxx
0000 Xxxxxx Xxxxxx X., Xxx. 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
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Such addresses may be changed from time to time by either party by providing
written notice in the manner set forth above.
25. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreements
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
26. AMENDMENT. This Agreement may be modified or amended, if the amendment
is made in writing and is signed by both parties.
27. SEVERABILITY. If any provisions of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall continue
to be valid and enforceable. If a court finds that any provision of this
Agreement is invalid or unenforceable, but that by limiting such provision it
would become valid or enforceable, then such provision shall be deemed to be
written, construed, and enforced as so limited.
28. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce
any provision of this Agreement shall not be construed as a waiver or limitation
of that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
29. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Minnesota.
WAM!NET:
WAM!NET Inc.
Dated: September 8, 1998 By: /s/ Xxxxxx X. Xxxxxxxx III
__________________ _________________________________
Its: An authorized Officer or Agent
AGREED AND ACCEPTED.
Employee:
Printed Name Xxxxxxx X. Xxxxxx
Dated: September 8, 1998 /s/ Xxxxxxx X. Xxxxxx
__________________ _____________________________________
Signature of Employee
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EXHIBIT A
RELOCATION PACKAGE
Household Goods Shipment. WAM!NET will pay for the shipment of Sparks' personal
------------------------
household goods via a professional moving service including packing and
unpacking services. WAM!NET will also pay for storage of Sparks' personal
household goods for up to 90 days and delivery out of storage.
Home sale Assistance - Guaranteed Buy-Out. Listing, marketing, home sale and
-----------------------------------------
closing assistance for Sparks' current home will be provided by Edina Realty
Relocation Services/American Escrow and Closing at WAM!NET'S expense. The
Guaranteed Buy-Out will be at a purchase price based upon the average of two
independent fee appraisals ordered by American Escrow and Closing. If the
appraisals are not within 5% of each other, a third appraisal will be ordered
and the purchase price will be determined by averaging the two closest
appraisals. Upon determination of the purchase price American Escrow and Closing
will prepare a contract to purchase the property for the purchase price. From
the date of the contract Sparks will have 120 days in which to sell the house to
a third party and during which time Sparks will be responsible for all home
related expenses. Sparks agrees that the listing and marketing of the house
during the 120 day period shall be coordinated through Edina Realty Relocation
Services. If such sale does not take place within the 120 day period the home
will be purchased by American Escrow and Closing at the purchase price listed in
the contract. The Guaranteed Buy-Out is subject to a satisfactory home
inspection and to the house being available for showings. Any work orders or
repairs mandated by the inspection are to be made at Sparks' expense. The costs
of any such work orders or repairs not made prior to the sale to American Escrow
and Closing shall be deducted from the purchase price.
Temporary Living Expenses. WAM!NET will pay for up to 90 days of temporary
-------------------------
lodging expenses incurred by Sparks upon his arrival in the Twin City area, such
lodging to be approved by WAM!NET.
Home Seeking Expenses. WAM!NET will pay for the cost of Sparks to travel to the
---------------------
Twin Cities for the purpose of locating permanent housing as well as all related
and reasonable expenses incurred during this trip.
Tax Gross-Up. If Sparks' uses the Home Sale Assistance and Guaranteed Buy-Out
------------
package offered by WAM!NET through Edina Realty Relocation Services/American
Escrow and Closing WAM!NET will provide Sparks with tax liability assistance for
non-deductible, taxable relocation income. Such tax liability assistance will be
based on WAM!NET income only. The gross-up for federal, state and FICA will be
based on established standards and will be calculated by an agent selected by
WAM!NET.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, made and entered into effective this 11th day of September,
1998, by and between WAM!NET INC., a Minnesota corporation (hereinafter referred
to as the "Corporation") and XXXXXXX XXXXXX, a resident of the State of
Minnesota (hereinafter referred to as the "Employee").
WHEREAS, the Corporation considers it desirable and in its best interests
that the Employee be given an inducement to acquire a proprietary interest in
the Corporation and an added incentive to advance the interests of the
Corporation, by possessing an option to purchase common shares of the
Corporation, in accordance with WAM!NET Inc. 1994 Stock Option Plan (the
"Plan").
NOW THEREFORE, in consideration of the premises and of the mutual promises
and consideration provided herein, the parties agree as follows:
1. Definitions. Words and phrases not otherwise defined herein shall have
-----------
the meanings ascribed to them, respectively, in the Plan.
2. Grant of Option. The Corporation grants to Employee an Option (the
---------------
"Option") to purchase Five Thousand (37,500) common shares of the Corporation at
a purchase price of $8.00 per share, in the manner and subject to the conditions
provided herein and in the Plan. The Option hereby granted shall be an ISO as
provided in the Plan.
3. Time of Exercise of Option. Employee may exercise the Option in four
--------------------------
equal increments; the initial increment of 9,375 shares being exercisable on and
after September 11, 1999 and the second increment of 9,375 shares being
exercisable on and after September 11, 2000, the third increment of 9,375 shares
being exercisable on and after September 11, 2001, and the fourth increment of
9,375 shares being exercisable on and after September 11, 2002. All options
shall expire at midnight on September 10, 2008, as illustrated by the following
table:
Number of Shares
From-To First Exercisable Cumulative Total
------- ----------------- ----------------
September 11, 1999 -
September 10, 2000 9,375 9,375
September 11, 2000-
September 10, 2001 9,375 18,750
September 11, 2001-
September 10, 2002 9,375 28,125
September 11, 2002-
September 10, 2003 9,375 37,500
On and after
September 11, 2008 0 0
No provision of this Agreement to the contrary withstanding, neither the
Option nor any right claimed thereby or hereby, therein or herein or thereunder
or hereunder shall be exercisable by anyone on or after September 11, 2008.
With respect to common shares that are purchasable for the first time
during any calendar year, the Employee may only exercise the Option to purchase
that number of common shares that have an aggregate fair market value (as of the
date first above written) which is less than or equal to $100,000. The Employee
may exercise the Option with respect to common shares valued in excess of
$100,000 in
any calendar year to the extent the right to exercise the Option to purchase
such shares has accumulated over a period in excess of one year.
4. Method of Exercise. The Option shall be exercised by written notice to
------------------
the Board of the Corporation, or the Committee if such exists, at the
Corporation's principal place of business. The notice shall be accompanied by
payment of the option price for the shares being purchased in cash or by
cashier's check or certified check or, in the sole discretion of the Board, or
the Committee if such exists, by such other form of payment as is permitted
under the Plan. The notice shall also be accompanied by any document reasonably
required by the Corporation to be executed by Employee, acknowledging the
applicable restrictions on the transfer of the common shares being purchased as
set forth under Section 8 of this Agreement. The Corporation shall make prompt
delivery of a certificate or certificates representing such common shares,
provided that if any law or regulation requires the Corporation to take any
action with respect to the common shares specified in such notice before the
issuance thereof, then the date of delivery of such common shares shall be
extended for the period necessary to take such action. The Option must be
exercised with respect to at least 500 of the common shares, unless only a
lesser number of the common shares are then exercisable, in which case it must
be exercised with respect to all of such lesser number.
5. Termination of Option. Except as herein otherwise provided, the Option
---------------------
granted under this Agreement, to the extent not heretofore exercised, shall
terminate upon the first to occur of the following events:
a. The expiration of three months after the date on which Employee's
employment by the Corporation is terminated, except if such
termination be by reason of permanent and total disability or
death;
b. The expiration of twelve months after the date on which
Employee's employment by the Corporation is terminated, if such
termination be by reason of the Employee's permanent and total
disability or death;
c. The expiration of twelve months from the date of Employee's death
should Employee die within three months of termination of
employment by the Corporation;
d. The termination of Employee's employment by the Corporation for
either (i) Employee's material breach of any agreement with the
Corporation or (ii) Employee's deliberate, willful or gross
misconduct in the performance or Employee's duties on behalf of
the Corporation; or
e. September 11, 2008.
6. Reclassification, Consolidation or Merger.
-----------------------------------------
6.1 If and to the extent that the number of issued common shares of the
Corporation shall be increased or reduced by change in par value, split up,
reverse split, reclassification, distribution of a dividend payable in stock, or
the like, the number of common shares subject to the Option and the option price
per share shall be proportionately adjusted in accordance with the Plan.
6.2 If the Corporation is reorganized or consolidated or merged with
another corporation, the Employee shall be entitled to receive an option (the
"New Option") covering common shares of such reorganized, consolidated or merged
company in the same proportion, at an equivalent price, and subject to the same
conditions as the Option. For purposes of the preceding sentence, the excess of
the fair market value of the common shares subject to the Option immediately
after the reorganization, consolidation or merger over the aggregate option
price of such common shares shall not be more than the excess of the aggregate
fair market value of all common shares subject to the Option immediately before
such reorganization, consolidation or merger over the aggregate option price of
such common
-2-
shares, and the New Option or assumption of the Option shall not give the
Employee additional benefits which he does not have under this Option, or
deprive him of benefits which he has under this Option.
7. Rights Prior to Exercise of Option. This Option is non-transferable by
----------------------------------
Employee, except in the event of his death, and during his lifetime is
exercisable only by him. No person shall have any rights as a stockholder with
respect to any common shares purchasable hereunder until payment of the option
price and delivery to him of such common shares as herein provided.
8. Restriction on Disposition. All common shares acquired by Employee
--------------------------
pursuant to this Agreement shall be subject to the restrictions on sale,
encumbrance and other disposition contained in the Company's By-Laws, or imposed
by applicable state and federal laws or regulations regarding the registration
or qualification of such acquisition of common shares, and may not be sold or
otherwise disposed of (i) within two years from the date of the granting of the
Option under which such common shares were acquired, (ii) within one year after
the exercise of the Option, and (iii) unless the Corporation has received a
prior opinion of Employee's counsel satisfactory in form and substance to
counsel for the Corporation that such transaction will not violate the
Securities Act of 1933 or any applicable state law regulating the sale of
securities.
9. Binding Effect - Plan Governs.
-----------------------------
9.1 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
This Agreement shall be construed in accordance with and shall be
governed by the terms of the Plan as adopted by the Board and approved or to be
approved by the shareholders of the Corporation within the meaning of Section
422 of the Internal Revenue Code of 1986, as the Plan may be amended from time
to time by the Board and the shareholders of the Corporation. Employee
acknowledges receipt of a copy of the Plan prior to the execution hereof. If
possible, this Agreement shall be construed along with and in addition to any
other agreement which the Corporation and Employee may enter into, but any
provision in this Agreement which contradicts any provision of any other
agreement shall take precedence and be binding over such other provision.
"Employee" "Corporation"
Xxxxxxx Xxxxxx WAM!NET Inc.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X'Xxxxxxx
____________________________ __________________________________
An Authorized Agent or Officer
-3-
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made and entered into effective this 11th day of September,
1998, by and between WAM!NET INC., a Minnesota corporation (hereinafter referred
to as the "Corporation") and XXXXXXX XXXXXX, a resident of the State of
Minnesota (hereinafter referred to as the "Employee").
WHEREAS, the Corporation considers it desirable and in its best interests
that the Employee be given an inducement to acquire a proprietary interest in
the Corporation and an added incentive to advance the interests of the
Corporation, by possessing an option to purchase common shares of the
Corporation, in accordance with WAM!NET Inc. 1994 Stock Option Plan (the
"Plan").
NOW THEREFORE, in consideration of the premises and of the mutual promises
and consideration provided herein, the parties agree as follows:
1. Definitions. Words and phrases not otherwise defined herein shall have
-----------
the meanings ascribed to them, respectively, in the Plan.
2. Grant of Option. The Corporation grants to Employee an Option (the
---------------
"Option") to purchase Five Thousand (362,500) common shares of the Corporation
at a purchase price of $8.00 per share, in the manner and subject to the
conditions provided herein and in the Plan. The Option hereby granted shall be
an NQO as provided in the Plan.
3. Time of Exercise of Option. Employee may exercise the Option in three
--------------------------
equal increments; the initial increment of 90,625 shares being exercisable on
and after September 11, 1999 and the second increment of 90,625 shares being
exercisable on and after September 11, 2000, the third increment of 90,625
shares being exercisable on and after September 11, 2001, and the fourth
increment for 90,625 shares being exercisable on and after September 11, 2002.
All options shall expire at midnight on September 10, 2008, as illustrated by
the following table:
Number of Shares
From-To First Exercisable Cumulative Total
------- ----------------- ----------------
September 11, 1999 - 90,625 9,375
September 10, 2000
September 11, 2000 - 90,625 18,750
September 10, 2001
September 11, 2001 - 90,625 28,125
September 10, 2002
September 11, 2002 - 90,625 37,500
September 10, 0000
Xx and after 0 0
September 11, 2008
No provision of this Agreement to the contrary withstanding, neither the
Option nor any right claimed thereby or hereby, therein or herein or thereunder
or hereunder shall be exercisable by anyone on or after September 11, 2008.
With respect to common shares that are purchasable for the first time
during any calendar year, the Employee may only exercise the Option to purchase
that number of common shares that have an aggregate fair market value (as of the
date first above written) which is less than or equal to $100,000.
The Employee may exercise the Option with respect to common shares valued in
excess of $100,000 in any calendar year to the extent the right to exercise the
Option to purchase such shares has accumulated over a period in excess of one
year.
4. Method of Exercise. The Option shall be exercised by written notice to
------------------
the Board of the Corporation, or the Committee if such exists, at the
Corporation's principal place of business. The notice shall be accompanied by
payment of the option price for the shares being purchased in cash or by
cashier's check or certified check or, in the sole discretion of the Board, or
the Committee if such exists, by such other form of payment as is permitted
under the Plan. The notice shall also be accompanied by any document reasonably
required by the Corporation to be executed by Employee, acknowledging the
applicable restrictions on the transfer of the common shares being purchased as
set forth under Section 8 of this Agreement. The Corporation shall make prompt
delivery of a certificate or certificates representing such common shares,
provided that if any law or regulation requires the Corporation to take any
action with respect to the common shares specified in such notice before the
issuance thereof, then the date of delivery of such common shares shall be
extended for the period necessary to take such action. The Option must be
exercised with respect to at least 500 of the common shares, unless only a
lesser number of the common shares are then exercisable, in which case it must
be exercised with respect to all of such lesser number.
5. Termination of Option. Except as herein otherwise provided, the Option
---------------------
granted under this Agreement, to the extent not heretofore exercised, shall
terminate upon the first to occur of the following events:
a. The expiration of three months after the date on which Employee's
employment by the Corporation is terminated, except if such
termination be by reason of permanent and total disability or
death;
b. The expiration of twelve months after the date on which
Employee's employment by the Corporation is terminated, if such
termination be by reason of the Employee's permanent and total
disability or death;
c. The expiration of twelve months from the date of Employee's death
should Employee die within three months of termination of
employment by the Corporation;
d. The termination of Employee's employment by the Corporation for
either (i) Employee's material breach of any agreement with the
Corporation or (ii) Employee's deliberate, willful or gross
misconduct in the performance or Employee's duties on behalf of
the Corporation; or
e. September 11, 2008.
6. Reclassification, Consolidation or Merger.
-----------------------------------------
6.1 If and to the extent that the number of issued common shares of the
Corporation shall be increased or reduced by change in par value, split up,
reverse split, reclassification, distribution of a dividend payable in stock, or
the like, the number of common shares subject to the Option and the option price
per share shall be proportionately adjusted in accordance with the Plan.
6.2 If the Corporation is reorganized or consolidated or merged with
another corporation, the Employee shall be entitled to receive an option (the
"New Option") covering common shares of such reorganized, consolidated or merged
company in the same proportion, at an equivalent price, and subject to the same
conditions as the Option. For purposes of the preceding sentence, the excess of
the fair market value of the common shares subject to the Option immediately
after the reorganization, consolidation or merger over the aggregate option
price of such common shares shall not be more than the excess of the aggregate
fair market value of all common shares subject to the Option immediately
-2-
before such reorganization, consolidation or merger over the aggregate option
price of such common shares, and the New Option or assumption of the Option
shall not give the Employee additional benefits which he does not have under
this Option, or deprive him of benefits which he has under this Option.
7. Rights Prior to Exercise of Option. This Option is non-transferable by
----------------------------------
Employee, except in the event of his death, and during his lifetime is
exercisable only by him. No person shall have any rights as a stockholder with
respect to any common shares purchasable hereunder until payment of the option
price and delivery to him of such common shares as herein provided.
8. Restriction on Disposition. All common shares acquired by Employee
--------------------------
pursuant to this Agreement shall be subject to the restrictions on sale,
encumbrance and other disposition contained in the Company's By-Laws, or imposed
by applicable state and federal laws or regulations regarding the registration
or qualification of such acquisition of common shares, and may not be sold or
otherwise disposed of (i) within two years from the date of the granting of the
Option under which such common shares were acquired, (ii) within one year after
the exercise of the Option, and (iii) unless the Corporation has received a
prior opinion of Employee's counsel satisfactory in form and substance to
counsel for the Corporation that such transaction will not violate the
Securities Act of 1933 or any applicable state law regulating the sale of
securities.
9. Binding Effect - Plan Governs.
-----------------------------
9.1 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
9.2 This Agreement shall be construed in accordance with and shall be
governed by the terms of the Plan as adopted by the Board and approved
or to be approved by the shareholders of the Corporation within the
meaning of Section 422 of the Internal Revenue Code of 1986, as the
Plan may be amended from time to time by the Board and the
shareholders of the Corporation. Employee acknowledges receipt of a
copy of the Plan prior to the execution hereof. If possible, this
Agreement shall be construed along with and in addition to any other
agreement which the Corporation and Employee may enter into, but any
provision in this Agreement which contradicts any provision of any
other agreement shall take precedence and be binding over such other
provision.
"Employee" "Corporation"
Xxxxxxx X. Xxxxxx WAM!NET Inc.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X'Xxxxxxx
____________________________ _____________________________
An Authorized Agent or Officer
-3-
WAM!NET INC.
NONQUALIFIED STOCK OPTION AGREEMENT
1998 COMBINED STOCK OPTION PLAN
THIS AGREEMENT, made and entered into effective this 11th day of September,
1998, by and between WAM!NET Inc., a Minnesota corporation (hereinafter referred
to as the "Corporation") and Xxxxxxx Xxxxxx, an employee of the Corporation
("Employee").
WHEREAS, the Corporation considers it desirable and in its best interests
that Employee be given an inducement to acquire a proprietary interest in the
Corporation and an added incentive to advance the interests of the Corporation,
by possessing an option to purchase common shares of the Corporation, in
accordance with the WAM!NET Inc. 1998 Combined Stock Option Plan (the "Plan").
NOW THEREFORE, on the basis of the premises and of the mutual
considerations provided herein, the parties agree as follows:
1. Definitions. Words and phrases not otherwise defined herein shall have
-----------
the meanings ascribed to them, respectively, in the Plan.
2. Grant of Option. The Corporation grants to Employee an Option (the
---------------
"Option") to purchase 139,250 common shares of the Corporation at a purchase
price of $12.00 per share, in the manner and subject to the conditions provided
herein and in the Plan. The Option hereby granted shall be a nonqualified stock
option as provided in the Plan.
3. Time of Exercise of Option. Employee may exercise the Option in 4
--------------------------
equal increments; the initial increment for 34,812 shares being exercisable on
and after September 11, 1999, the second increment for 34,812 shares being
exercisable on and after September 11, 2000, the third increment for 34,813
shares being exercisable on and after September 11, 2001, and the fourth
increment for 34,813 shares being exercisable on and after September 11, 2002.
All options shall expire at midnight on September 10, 2008, as illustrated by
the following table:
Number of Shares
From - To First Exercisable Cumulative Total
--------- ----------------- ----------------
September 11, 1999- 34,812 34,812
September 10, 2000
September 11, 2000- 34,812 69,624
September 10, 2001
September 11, 2001- 34,813 104,437
September 10, 2002
September 11, 2002- 34,813 139,250
September 10, 2003
No provision of this Agreement to the contrary withstanding, neither the
Option nor any right claimed thereby or hereby, therein or herein or thereunder
of hereunder shall be exercisable by anyone on or after September 11, 2008.
4. Method of Exercise. The Option shall be exercised by written notice to
------------------
the Board of the Corporation, or the Committee if such exists, at the
Corporation's principal place of business. The notice shall be accompanied by
payment of the option price for the shares being purchased in cash or by
cashier's check or certified check or, in the sole discretion of the Board of
Directors, or the Committee if
such exists, by such other form of payment as is permitted under the Plan. The
notice shall also be accompanied by any document reasonably required by the
Corporation to be executed by Employee, acknowledging the applicable
restrictions on the transfer of the common shares being purchased as set forth
under this Agreement. The Corporation shall make prompt delivery of a
certificate or certificates representing such common shares, provided that if
any law or regulation requires the Corporation to take any action with respect
to the common shares specified in such notice before the issuance thereof, then
the date of delivery of such common shares shall be extended for the period
necessary to take such action. The Option must be exercised with respect to at
least 100 of the common shares, unless the Option is only exercisable with
respect to a lesser number of common shares, in which case it must be exercised
with respect to all of such lesser number.
5. Termination of Option. Except as herein otherwise provided, the Option
---------------------
granted under this Agreement, to the extent not heretofore exercised, shall
terminate upon the first to occur of the following events:
a. The expiration of three months after the date on which Employee
ceases for a reason other than death, permanent disability, or
deliberate, willful or gross misconduct to be an employee within
the meaning of the Plan;
b. The date on which Employee ceases to be an employee within the
meaning of the Plan by reason of Employee's deliberate, willful or
gross misconduct as determined by the Committee;
c. The expiration of twelve months after the date on which Employee
ceases to be an employee within the meaning of the Plan by reason
of permanent disability;
d. The expiration of twelve months from the date of Employee's death;
or
e. September 10, 2008 (being the date immediately preceding the 10th
anniversary of the date of this Agreement).
6. Reclassification, Consolidation or Merger.
-----------------------------------------
6.1 If and to the extent that the number of issued common shares of the
Corporation shall be increased or reduced by change in par value, split up,
reverse split, reclassification, distribution of a dividend payable in stock, or
the like, the number of common shares subject to the Option and the option price
per share shall be proportionately adjusted in accordance with the Plan.
6.2 If the Corporation is reorganized or consolidated or merged with
another corporation, Employee shall be entitled to receive an option (the "New
Option") covering common shares of such reorganized, consolidated or merged
company in the same proportion, at an equivalent price, and subject to the same
conditions as the Option. For purposes of the preceding sentence, the excess of
the fair market value of the common shares subject to the Option immediately
after the reorganization, consolidation or merger over the aggregate option
price of such common shares shall not be more than the excess of the aggregate
fair market value of all common shares subject to the Option immediately before
such reorganization, consolidation or merger over the aggregate option price of
such common shares, and the New Option or assumption of the Option shall not
give Employee additional benefits which he does not have under this Option, or
deprive him of benefits which he has under this Option.
7. Rights Prior to Exercise of Option. This Option is non-transferable by
----------------------------------
Employee, except in the event of his death, and during his lifetime is
exercisable only by him; provided, however, that this Option may be transferred
by Employee's for estate planning purposes subject to prior or other written
approval by the Corporation, or the Committee if such exists, in its sole
discretion or pursuant to any policy and requirements concerning such transfers
as may then be in effect. In the event of death, this Option may be exercised by
Employee's personal representative or the party inheriting the Option. No
-2-
person shall have any rights as a stockholder with respect to any common shares
purchasable hereunder until payment of the option price and delivery to him of
such common shares as herein provided.
8. Restriction on Disposition. All common shares acquired by Employee
--------------------------
pursuant to this Agreement shall be subject to the restrictions on sale,
encumbrance and other disposition contained in the Corporation's By-Laws, or
imposed by applicable laws or regulations of the State of Minnesota or the
United States of America regarding the registration or qualification of such
acquisition of common shares. The Corporation may require a prior opinion of its
counsel, which the Corporation shall use its best efforts to obtain, that the
transfer or other disposition of common shares acquired pursuant to this
Agreement will not violate the Securities Act of 1933 or any applicable state
law regulating the sale of securities.
9. Binding Effect - Plan Governs.
-----------------------------
9.1 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
9.2 This Agreement shall be construed in accordance with and shall be
governed by the terms of the Plan as adopted by the Board and approved or to be
approved by the shareholders of the Corporation within the meaning of Section
422 of the Internal Revenue Code of 1986, as the Plan may be amended from time
to time by the Board, and if appropriate the shareholders, of the Corporation.
Employee acknowledges receipt of a copy of the Plan prior to the execution
hereof and agrees to be bound by the terms of the Plan. If possible, this
Agreement shall be construed along with and in addition to any other agreement
which the Corporation and Employee may enter into, but any provision in this
Agreement which contradicts any provision of any other agreement shall take
precedence and be binding over such other provision.
9.3 The provisions of this Agreement, the Plan or other document
incorporated therein, shall be governed by, interpreted and enforced in
accordance with the laws of the State of Minnesota, unless and to the extent
they are pre-empted by the laws of the United States of America.
9.4 This Agreement shall be effective as of the dated first stated above.
"Employee" "Corporation"
Xxxxxxx X. Xxxxxx WAM!NET Inc.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X' Xxxxxxx
____________________________ __________________________________
An Authorized Agent or Officer
Dated: September 11, 1998 Dated: September 11, 1998
______________________ _____________________________
-3-
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made and entered into effective this 11th day of
September, 1998, by and between WAM!NET INC., a Minnesota corporation
(hereinafter referred to as the "Corporation") and XXXXXXX XXXXXX, a resident of
the State of Minnesota (hereinafter referred to as the "Employee").
WHEREAS, the Corporation considers it desirable and in its best
interests that the Employee be given an inducement to acquire a proprietary
interest in the Corporation and an added incentive to advance the interests of
the Corporation, by possessing an option to purchase common shares of the
Corporation, in accordance with WAM!NET Inc. 1994 Stock Option Plan (the
"Plan").
NOW THEREFORE, in consideration of the premises and of the mutual
promises and consideration provided herein, the parties agree as follows:
1. Definitions. Words and phrases not otherwise defined herein shall have
-----------
the meanings ascribed to them, respectively, in the Plan.
2. Grant of Option. The Corporation grants to Employee an Option (the
---------------
"Option") to purchase Five Thousand (60,750) common shares of the Corporation at
a purchase price of $12.00 per share, in the manner and subject to the
conditions provided herein and in the Plan. The Option hereby granted shall be
an NQO as provided in the Plan.
3. Time of Exercise of Option. Employee may exercise the Option in three
--------------------------
equal increments; the initial increment of 15,187 shares being exercisable on
and after September 11, 1999 and the second increment of 15,187 being
exercisable on and after September 11, 2000, the third increment of 15,188
shares being exercisable on and after September 11, 2001, and the fourth
increment of 15,188 shares being exercisable on and after September 11, 2002.
All options shall expire at midnight on September 10, 2008, as illustrated by
the following table:
Number of Shares
From-To First Exercisable Cumulative Total
------- ----------------- ----------------
September 11, 1999- 15,187 15,187
September 10, 2000
September 11, 2000- 15,187 30,374
September 10, 2001
September 11, 2001- 15,188 45,562
September 10, 2002
September 11, 2002- 15,188 60,750
September 10, 0000
Xx and after 0 0
September 11, 2008
No provision of this Agreement to the contrary withstanding, neither the
Option nor any right claimed thereby or hereby, therein or herein or thereunder
or hereunder shall be exercisable by anyone on or after September 11, 2008.
With respect to common shares that are purchasable for the first time
during any calendar year, the Employee may only exercise the Option to purchase
that number of common shares that have an aggregate fair market value (as of the
date first above written) which is less than or equal to $100,000. The Employee
may exercise the Option with respect to common shares valued in excess of
$100,000 in
any calendar year to the extent the right to exercise the Option to purchase
such shares has accumulated over a period in excess of one year.
4. Method of Exercise. The Option shall be exercised by written notice to
------------------
the Board of the Corporation, or the Committee if such exists, at the
Corporation's principal place of business. The notice shall be accompanied by
payment of the option price for the shares being purchased in cash or by
cashier's check or certified check or, in the sole discretion of the Board, or
the Committee if such exists, by such other form of payment as is permitted
under the Plan. The notice shall also be accompanied by any document reasonably
required by the Corporation to be executed by Employee, acknowledging the
applicable restrictions on the transfer of the common shares being purchased as
set forth under Section 8 of this Agreement. The Corporation shall make prompt
delivery of a certificate or certificates representing such common shares,
provided that if any law or regulation requires the Corporation to take any
action with respect to the common shares specified in such notice before the
issuance thereof, then the date of delivery of such common shares shall be
extended for the period necessary to take such action. The Option must be
exercised with respect to at least 500 of the common shares, unless only a
lesser number of the common shares are then exercisable, in which case it must
be exercised with respect to all of such lesser number.
5. Termination of Option. Except as herein otherwise provided, the Option
---------------------
granted under this Agreement, to the extent not heretofore exercised, shall
terminate upon the first to occur of the following events:
a. The expiration of three months after the date on which Employee's
employment by the Corporation is terminated, except if such
termination be by reason of permanent and total disability or
death;
b. The expiration of twelve months after the date on which Employee's
employment by the Corporation is terminated, if such termination
be by reason of the Employee's permanent and total disability or
death;
c. The expiration of twelve months from the date of Employee's death
should Employee die within three months of termination of
employment by the Corporation;
d. The termination of Employee's employment by the Corporation for
either (i) Employee's material breach of any agreement with the
Corporation or (ii) Employee's deliberate, willful or gross
misconduct in the performance or Employee's duties on behalf of
the Corporation; or
e. September 11, 2008.
6. Reclassification, Consolidation or Merger.
-----------------------------------------
6.1 If and to the extent that the number of issued common shares of the
Corporation shall be increased or reduced by change in par value, split up,
reverse split, reclassification, distribution of a dividend payable in stock, or
the like, the number of common shares subject to the Option and the option price
per share shall be proportionately adjusted in accordance with the Plan.
6.2 If the Corporation is reorganized or consolidated or merged with
another corporation, the Employee shall be entitled to receive an option (the
"New Option") covering common shares of such reorganized, consolidated or merged
company in the same proportion, at an equivalent price, and subject to the same
conditions as the Option. For purposes of the preceding sentence, the excess of
the fair market value of the common shares subject to the Option immediately
after the reorganization, consolidation or merger over the aggregate option
price of such common shares shall not be more than the excess of the aggregate
fair market value of all common shares subject to the Option immediately before
such reorganization, consolidation or merger over the aggregate option price of
such common
-2-
shares, and the New Option or assumption of the Option shall not give the
Employee additional benefits which he does not have under this Option, or
deprive him of benefits which he has under this Option.
7. Rights Prior to Exercise of Option. This Option is non-transferable by
----------------------------------
Employee, except in the event of his death, and during his lifetime is
exercisable only by him. No person shall have any rights as a stockholder with
respect to any common shares purchasable hereunder until payment of the option
price and delivery to him of such common shares as herein provided.
8. Restriction on Disposition. All common shares acquired by Employee
--------------------------
pursuant to this Agreement shall be subject to the restrictions on sale,
encumbrance and other disposition contained in the Company's By-Laws, or imposed
by applicable state and federal laws or regulations regarding the registration
or qualification of such acquisition of common shares, and may not be sold or
otherwise disposed of (i) within two years from the date of the granting of the
Option under which such common shares were acquired, (ii) within one year after
the exercise of the Option, and (iii) unless the Corporation has received a
prior opinion of Employee's counsel satisfactory in form and substance to
counsel for the Corporation that such transaction will not violate the
Securities Act of 1933 or any applicable state law regulating the sale of
securities.
9. Binding Effect - Plan Governs.
-----------------------------
9.1 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
9.2 This Agreement shall be construed in accordance with and shall be
governed by the terms of the Plan as adopted by the Board and approved or to be
approved by the shareholders of the Corporation within the meaning of Section
422 of the Internal Revenue Code of 1986, as the Plan may be amended from time
to time by the Board and the shareholders of the Corporation. Employee
acknowledges receipt of a copy of the Plan prior to the execution hereof. If
possible, this Agreement shall be construed along with and in addition to any
other agreement which the Corporation and Employee may enter into, but any
provision in this Agreement which contradicts any provision of any other
agreement shall take precedence and be binding over such other provision.
"Employee" "Corporation"
Xxxxxxx X. Xxxxxx WAM!NET Inc.
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X'Xxxxxxx
____________________________ ________________________________
An Authorized Agent or Officer
-3-
