Exhibit 10.25
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made as of April 9, 2000,
between IWO Holdings, Inc., a Delaware corporation ("Holdings"), and Xxxxxx X.
Xxxxxxx (the "Optionee").
RECITALS
WHEREAS, Holdings has adopted the IWO Holdings, Inc. Stock Incentive Plan (the
"Plan") a copy of which is attached hereto as Exhibit 1.
WHEREAS, Optionee is an employee of Holdings, and Holdings desires to grant the
Optionee the opportunity to acquire a proprietary interest in Holdings to
encourage the Optionee's contribution to the success and progress of Holdings.
WHEREAS, in accordance with the Plan, the Committee (as defined in the Plan) has
granted to the Optionee a non-qualified option to purchase shares of Class B
Common Stock, $0.01 par value, of Holdings (the "Class B Common Stock") subject
to the terms and conditions of the Plan and this Agreement.
WHEREAS, this Agreement has been approved by the Board of Directors and the
Stockholders of Holdings.
AGREEMENT
1. Definitions. Capitalized terms used herein shall have the following meanings:
"Act" is defined in Section 9(a).
"Affiliate" means (a) any Person which, directly or indirectly, is in control
of, is controlled by, or is under common control with, such Person or (b) any
Person who is a director or officer (i) of such Person, (ii) of any subsidiary
of such Person or (iii) of any Person described in clause (a) above. For
purposes of this definition, "control" of a Person means the power, directly or
indirectly, (x) to vote 50% or more of the securities having ordinary voting
power for the election of directors of such Person whether by ownership of
securities, contract, proxy or otherwise, or (y) to direct or cause the
direction of the management and policies of such Person whether by ownership of
securities, contract, proxy or otherwise.
"Agreement" means this Stock Option Agreement.
"Approved Sale" means a transaction or a series of related transactions which
results in a change of economic beneficial ownership of Holdings or its business
of greater than 50% (disregarding for this purpose any disparate voting rights
attributable to the outstanding stock of Holdings), whether pursuant to the sale
of the stock of Holdings, the sale of all or substantially
all of the assets of Holdings, or a merger or consolidation; provided that a
sale of stock by an Initial Stockholder to (i) another Initial Stockholder or
Affiliate thereof, or (ii) a non-U.S. entity with respect to which an Initial
Stockholder or Affiliate thereof has an administrative relationship shall be
disregarded when determining if an Approved Sale has occurred.
"Certificate of Incorporation" means the Amended and Restated Certificate of
Incorporation of Holdings, as amended from time to time.
"Cause" has the meaning set forth in the Employment Agreement.
"Class B Common Stock" is defined in the Recitals.
"Closing Date" means December 20, 1999.
"Daily Vesting" means vesting of Time Vesting Options proportionately for each
of the 975 days on or after May 1, 2000 that the Optionee is employed by
Holdings such that if Optionee remains employed for all 975 days such Time
Vesting Options shall be vested in full. Daily vesting will commence on May 1,
2000.
"Disability" has the meaning set forth in the Employment Agreement.
"Effective Date" means May 1, 2000.
"Employment Agreement" means the Employment Agreement between Optionee and
Holdings, dated as of the date hereof, as amended from time to time.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"Exercise Price" is defined in Section 2.
"Fair Market Value" means (a) prior to an Initial Public Offering: the value of
Holdings' shares determined in good faith by the Holdings' Board of Directors.
The Board of Directors shall make its determination of Fair Market Value
annually (the "Annual Valuation") promptly after the completion of Holdings'
audited financial statements for the year then completed and such determination
shall remain in effect until the Board of Directors makes the next Annual
Valuation. Notwithstanding the foregoing, if the Board of Directors or an
investment banker or appraiser appointed by Holdings makes a determination of
Fair Market Value subsequent to an Annual Valuation, such subsequent
determination shall supersede the Annual Valuation then in effect and shall
establish the Fair Market Value until the next Annual Valuation. The Fair Market
Valuation shall be based on an assumed sale of 100% of the outstanding capital
stock of Holdings (without reduction for minority interest or lack of liquidity
of the Option Shares or similar discount). If such determination of the Fair
Market Value is challenged by the Optionee, the Board of Directors will select
an appraiser or investment bank with a national reputation who is independent
(not an Affiliate of the parties) (the "Appraiser") and who shall establish the
Fair Market Value as of the date of valuation referenced in the Annual Valuation
or a subsequent determination. The Appraiser's determination shall be conclusive
and binding on Holdings and Optionee. Holdings shall bear all costs incurred in
connection with the services of such
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Appraiser; and (b) subsequent to an Initial Public Offering: The price of the
last sale of the stock on the date Optionee exercises the Option.
"Fiscal Year" means the fiscal year of Holdings.
"Initial Public Offering" means the sale of any of the common stock of Holdings
pursuant to a registration statement that has been declared effective under the
Act, if as a result of such sale (i) the issuer becomes a reporting company
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended,
and (ii) such stock is traded on the New York Stock Exchange or the American
Stock Exchange, or is quoted on the NASDAQ National Market or is traded or
quoted on any other national stock exchange or national securities system.
"Initial Stockholders" means the stockholders of Holdings who became
stockholders as of the Closing Date (including employees or directors of
Holdings or any Subsidiary who were granted options to purchase stock as of the
Closing Date) and any transferees of such stockholders described in clause (i)
or (ii) in the definition of Approved Sale.
"Option" is defined in Section 2.
"Optionee" is defined in the preamble.
"Option Shares" is defined in Section 2.
"Person" means an individual, partnership, joint venture, limited liability
company, corporation, trust, unincorporated organization or a government or any
department or agency thereof.
"Plan" is defined in recital A.
"Retirement" means age 65.
"Subsidiary" means any joint venture, corporation, partnership or other entity
as to which Holdings, whether directly or indirectly, has more than 50% of the
(i) voting rights or (ii) rights to capital or profits.
"Termination Date" means the date on which the Optionee ceases to be employed by
Holdings for any reason.
Defined terms used herein not otherwise defined shall have the meanings given
such terms in the Plan.
2. Grant of Option. Holdings grants to the Optionee the right and option (the
"Option") to purchase, on the terms and conditions hereinafter set forth, all or
any part of the number of shares of Class B Common Stock set forth below the
Optionee's signature below (the "Option Shares"), at the purchase price of
$172.34043 per Option Share (as such amount may be adjusted, the "Exercise
Price"), on the terms and conditions set forth herein.
3. Exercisability.
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(a) The Option shall be divided into three parts for purposes of determining
exercisability.
(i) The Option to purchase 7,022.4720 shares of Class B Common Stock (the "Time
Vesting Option") shall vest as follows: 2,808.9888 shares shall vest on May 1,
2000 and 4,213.4832 shares shall vest on the basis of Daily Vesting over a
period of 975 days commencing May 1, 2000.
(ii) The Option to purchase 4,213.4832 shares of Class B Common Stock (the
"Performance Vesting Option") shall vest on the basis of performance. The
Performance Vesting Option shall become exercisable to the extent of one-third
(1/3) of such option as of the end of fiscal 2000, 2001 and 2002 if the
Optionee's performance equals or exceeds the performance target as set by the
Chief Executive Officer of the Company and the Board of Directors of Holdings in
consultation with the Optionee and issued within 45 days of the commencement of
such fiscal year. If for any of 2001, 2002 or 2003 the Optionee's performance
for that fiscal year and such preceding fiscal years equal or exceed the
cumulative performance target amount set by the Board of Directors with respect
to such fiscal year, the Performance Vesting Option shall become exercisable to
the extent that it would have become exercisable had the Optionee achieved the
performance target amounts for that and each of the preceding fiscal years.
Notwithstanding the foregoing, if the Performance Vesting Option or any portion
of the Performance Vesting Option has not vested pursuant to the terms in this
Section 3(a)(ii) prior to December 20, 2004, such options shall become
exercisable on such date.
(b) Notwithstanding Section 3(a), upon the occurrence of an Approved Sale, in
which case the schedule set forth in Section 3(a) shall not apply with respect
to Performance Vesting Options and Time Vesting Options that are not yet
exercisable, the Optionee shall have the right to exercise 100% of all
unexercisable Performance Vesting Options and Time Vesting Options, provided
that a cash investment in Holdings at a price of $172.34043 per share would
achieve a 40% or greater annual internal rate of return (calculated on a fully
diluted basis) from the Closing Date until the date of the closing of the
Approved Sale (taking into account the Approved Sale); provided, further, that
if the internal rate of return is greater than 20% but less than 40%, a pro rata
portion of the unexercisable Performance Vesting Options and Time Vesting
Options shall become exercisable to the same extent the internal rate of return
is greater than 20% but less than 40% (e.g., if the internal rate of return is
30%, 50% of the unexercisable Performance Vesting Options and Time Vesting
Options shall become exercisable).
4. Expiration.
(a) Subject to Section 6(a), the exercisable portion of the Option shall expire
upon the tenth anniversary of the Effective Date, unless: (i) the Optionee is
terminated by Holdings with Cause, in which case the exercisable portion of the
Option will expire 90 days after the Termination Date; (ii) the Optionee
voluntarily leaves, in which case the exercisable portion of the Option will
expire 90 days after the Termination
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Date, provided that if the Board of Directors determines that the Optionee left
Holdings due to personal hardship, then the exercisable portion of the Option
will expire three years after the Termination Date; (iii) the Optionee is
terminated by Holdings without Cause, in which case the exercisable portion of
the Option will expire one year after the Termination Date; or (iv) the
Optionee's employment is terminated due to death, Disability or Retirement, in
which case the exercisable portion of the Option will expire three years after
the Termination Date.
(b) The unexercisable portion of the Time Vesting Option and the Performance
Vesting Option shall expire on the earlier to occur of (i) the Termination Date,
provided that a pro rata portion of the portion of the Performance Vesting
Option scheduled to become exercisable in the year including the Termination
Date shall become exercisable as if the Optionee's employment had not been
terminated if performance targets for the Fiscal Year during which the
Termination Date have been met or exceeded, or (ii) except to the extent
provided in Section 3(b) and Section 6(a), an Approved Sale. The proration
provided for in clause (b)(i) above will be determined by the number of days
elapsed in the year in which the termination occurred before the Termination
Date. The Performance Vesting Options that become exercisable pursuant to clause
(b)(i) above shall expire one year following the date on which the Optionee
received notice that the performance targets were met.
5. Nontransferability. The Option shall not be transferable by the Optionee
other than by will or the laws of descent and distribution except that the
Optionee may transfer the Option to (a) his or her spouse, child, estate,
personal representative, heir or successor (b) a trust for the benefit of the
Optionee or his or her spouse, child or heir, or (c) a partnership or limited
liability company the partners or members of which consist solely of the
Optionee and/or his or her spouse, children or heirs (each, a "permitted
transferee") and the Option is exercisable, during the Optionee's lifetime, only
by him or her or his or her spouse or child, or, in the event of the Optionee's
Disability, his or her guardian or legal representative. More particularly (but
without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as aforesaid), pledged or hypothecated in any way
(whether by operation of law or otherwise), and shall not be subject to
execution, attachment or similar process. This Agreement shall be binding on and
enforceable against any person who is a permitted transferee of the Option
pursuant to the first sentence of this Section.
6. Effect of Approved Sale; Adjustments.
(a) In the event of an Approved Sale, the unexercised portion of the Option
shall terminate upon such Approved Sale unless (i) provision is made in writing
in connection with such Approved Sale for the continuance of the Plan and for
the assumption of such Options, or for the substitutions of such Options of new
awards covering the securities of a successor entity or an Affiliate thereof,
with appropriate adjustments as to the number and kind of securities and
exercise prices, in which event the Plan and such outstanding Options shall
continue or be replaced, as the case may be, in the manner and under the terms
so provided; or (ii) the Board of Directors otherwise shall provide in writing
for such adjustments as it deems appropriate in the terms and conditions of the
then-outstanding Options, including without limitation (A) accelerating
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the vesting of outstanding Options and/or (B) providing for the cancellation of
Options and their automatic conversion into the right to receive the securities,
cash or other consideration that a holder of the shares underlying such Options
would have been entitled to receive upon consummation of such Approved Sale had
such shares been issued and outstanding immediately prior to the closing date of
the Approved Sale (net of the appropriate option exercise prices). If pursuant
to this Section 6(a) the Options are to terminate upon an Approved Sale without
provision for any of the actions described in clause (i) or (ii) above, then the
Optionee shall be given at least ten (10) days' prior notice of the proposed
Approved Sale and shall be entitled to exercise such exercisable but unexercised
portion of the Option (including all options that become exercisable immediately
prior to the Approved Sale pursuant to Section 3(b)) at any time during such ten
(10) day period up to and until the close of business on the day immediately
preceding the date of consummation of such Approved Sale and upon exercise of
the Option the Option Shares shall be treated in the same manner as the shares
of any other holder of Class B Common Stock.
(b) Subject to Section 6(a), if the shares of the Class B Common Stock, or to
the extent it affects the economic rights of the holders of the Class B Common
Stock, shares of Class A Common Stock, Class C Common Stock or Class D Common
Stock of Holdings, are changed into or exchanged for a different number or kind
of shares or securities, as the result of any one or more reorganizations,
recapitalizations, mergers, acquisitions, stock splits, reverse stock splits,
stock dividends or similar events, an appropriate adjustment shall be made in
the number and kind of shares or other securities subject to the Option, and the
price for each share or other unit of any securities subject to this Agreement,
in accordance with Section 13 of the Plan. No fractional interests shall be
issued on account of any such adjustment unless the Committee specifically
determines to the contrary; provided, however, that in lieu of fractional
interests, the Optionee, upon the exercise of the Option in whole or part, shall
receive cash in an amount by which the fair market value (as determined in good
faith by the Board of Directors) of such fractional interests exceeds the
Exercise Price attributable to such fractional interests.
7. Exercise of the Option. Prior to the expiration thereof, the Optionee may
exercise the exercisable portion of the Option from time to time in whole or in
part. Upon electing to exercise the Option, the Optionee shall deliver to the
Secretary of Holdings a written and signed notice of such election setting forth
the number of Option Shares the Optionee has elected to purchase and shall at
the time of delivery of such notice tender cash or a cashier's or certified bank
check to the order of Holdings for the full Exercise Price of such Option Shares
and any amount required pursuant to Section 15 hereof. Alternatively, if
Holdings is not at the time prohibited from purchasing or acquiring shares of
its capital stock by applicable law or under the terms of any debt or lease
facility, the Exercise Price may at the option of the Optionee be paid in whole
or in part by delivery of shares of the Class B Common Stock owned by the
Optionee, provided that Optionee has owned such shares for at least six (6)
months. The value of any such shares delivered or withheld as payment of the
Exercise Price shall be such shares' Fair Market Value. In addition, Holdings
shall cooperate with Optionee to facilitate a sale of Option Shares through a
broker to pay the exercise price provided such sale is otherwise permitted under
this Agreement, the Certificate of Incorporation or the Stockholders Agreement
or under applicable
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law. The Committee further may, in its discretion, permit payment of the
Exercise Price in such other form or in such other manner as may be permissible
under the Plan and under any applicable law.
8. Stockholders Agreement. The Option Shares are subject to the terms and
provisions of the Stockholders Agreement (the "Stockholders Agreement") by and
between Holdings and the Stockholders, as such term is defined in the
Stockholder Agreement, and the Optionee shall be treated as a Class B
Stockholder under the Stockholders Agreement with Option Shares. Optionee
further acknowledges that if the issuance of the Option Shares is registered on
a registration statement on Form S-8 that has become effective under the Act,
the Option Shares shall not constitute "Registrable Stock" for purposes of the
Stockholders Agreement. Section 6 of the Stockholders Agreement shall not apply
to any surrender of Option Shares to Holdings in connection with Optionee's
exercise of this Option as contemplated by Sections 7 and 15 hereof.
9. Compliance with Legal Requirements.
(a) No Option Shares shall be issued or transferred pursuant to this Agreement
unless and until all legal requirements applicable to such issuance or transfer
have, in the opinion of counsel to Holdings, been satisfied. Such requirements
may include, but are not limited to, registering or qualifying such Option
Shares under any state or federal law, satisfying any applicable law relating to
the transfer of unregistered securities or demonstrating the availability of an
exemption from applicable laws, placing a legend on the Option Shares to the
effect that they were issued in reliance upon an exemption from registration
under the Securities Act of 1933, as amended (the "Act"), and may not be
transferred other than in reliance upon Rule 144 or Rule 701 promulgated under
the Act, if available, or upon another exemption from the fact, or obtaining the
consent or approval of any governmental regulatory body.
(b) The Optionee understands that Holdings intends for the offering and sale of
Option Shares to be effected in reliance upon Rule 701 or another available
exemption from registration under the Act and intends to file a Form 701 as
appropriate, and that Holdings is under no obligation to register for resale the
Option Shares issued upon exercise of the Option, subject to other applicable
agreements or the Certificate of Incorporation. In connection with any such
issuance or transfer, the person acquiring the Option Shares shall, if requested
by Holdings, provide information and assurances satisfactory to counsel to
Holdings with respect to such matters as Holdings reasonably may deem desirable
to assure compliance with all applicable legal requirements. Holdings shall use
its best efforts to register the exercise of the Option under a registration
statement on Form S-8 within a reasonable time following the closing of an
Initial Public Offering. Holdings shall take reasonable steps to cause this
Agreement and the exercise of the Option granted hereunder to comply with the
exemption from Section 16 of the Exchange Act provided under Securities and
Exchange Commission Rule 16b-3 or any successor rule, as it may be amended from
time to time.
10. Subject to Certificate of Incorporation. The Optionee acknowledges that the
Option Shares are subject to the terms of the Certificate of Incorporation.
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11. No Interest in Shares Subject to Option. Neither the Optionee (individually
or as a member of a group) nor any beneficiary or other person claiming under or
through Optionee shall have any right, title, interest, or privilege in or to
any shares of stock allocated or reserved for the purpose of the Plan or subject
to this Agreement except as to such Option Shares, if any, as shall have been
issued to such person upon exercise of an Option or any part thereof.
12. Plan Controls. The Option hereby granted is subject to, and Holdings and the
Optionee agree to be bound by, all of the terms and conditions of the Plan as
the same may be amended from time to time in accordance with the terms thereof,
but no such amendment shall be effective as to the Option without the Optionee's
consent insofar as it may adversely affect the Optionee's rights under this
Agreement.
13. Not an Employment Contract. Nothing in the Plan, in this Agreement or any
other instrument executed pursuant thereto shall confer upon the Optionee any
right to continue in the employ of Holdings or any Subsidiary or shall affect
the right of Holdings or any Subsidiary to terminate the employment of the
Optionee with or without Cause.
14. Governing Law. All terms of and rights under this Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York, without giving effect to principles of conflicts of law.
15. Taxes. The Committee may, in its discretion, make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the issuance or exercise of the Option including, but not limited to,
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Optionee, requiring the Optionee to pay to Holdings
the amount required to be withheld or to execute such documents as the Committee
deems necessary or desirable to enable it to satisfy its withholding
obligations, or any other means provided in the Plan; provided further that the
Optionee may satisfy all aforesaid withholding tax obligations by directing
Holdings to withhold that number of Shares with an aggregate Fair Market Value
equal to the amount of all federal, state, local and other taxes required to be
withheld, or delivering to Holdings such number of previously held shares of
capital stock of Holdings, which shares have been owned by the Optionee for at
least six (6) months with an aggregate Fair Market Value equal to the minimum
statutory amount of the federal, state, local and other taxes required to be
withheld.
16. Transfer Notice. Holdings will provide the Optionee with the Transfer Notice
(as defined in the Certificate of Incorporation) delivered to Class B
Stockholders pursuant to Section 4 or 5 of the Certificate of Incorporation in
accordance with the terms thereof.
17. Notices. All notices, requests, demands and other communications pursuant to
this Agreement shall be in writing and shall be deemed to have been duly given
if personally delivered, telexed or telecopied to, or, if mailed, when received
by, the other party at the following addresses (or at such other address as
shall be given in writing by either party to the other):
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If to Holdings to:
IWO Holdings, Inc.
c/o Gibson, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: E. Xxxxxxx Xxxxxxx, Esq.
With a copy to:
Independent Wireless One
000 Xxxxxx Xxxx Xxxx.
Xxxxxx, Xxx Xxxx 00000-0000
Attention: General Counsel
If to the Optionee to the address set forth below the Optionee's signature
below.
18. Amendments and Waivers. This Agreement may be amended, and any provision
hereof may be waived, only by a writing signed by the party to be charged.
19. Entire Agreement. This Agreement, together with the Plan and the
Stockholders Agreement, sets forth the entire agreement and understanding
between the parties as to the subject matter hereof and supersedes all prior
oral and written and all contemporaneous oral discussions, agreements and
understandings of any kind or nature including, without limitation, Section 3(e)
of the Employment Agreement.
20. Separability. In the event that any provision of this Agreement is declared
to be illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, such provision shall be reformed, if possible, to the extent
necessary to render it legal, valid and enforceable, or otherwise deleted, and
the remainder of this Agreement shall not be affected except to the extent
necessary to reform or delete such illegal, invalid or unenforceable provision.
21. Headings. The headings preceding the text of the sections hereof are
inserted solely for convenience of reference, and shall not constitute a part of
this Agreement, nor shall they affect its meaning, construction or effect.
22. Counterparts. This Agreement may be executed in two counterparts, each of
which shall be deemed an original, but which together shall constitute one and
the same instrument.
23. Further Assurances. Each party shall cooperate and take such action as may
be reasonably requested by another party in order to carry out the provisions
and purposes of this Agreement.
24. Remedies. In the event of a breach by any party to this Agreement of its
obligations under this Agreement, any party injured by such breach, in addition
to being entitled to exercise all rights granted by law, including recovery of
damages, shall be entitled to specific
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performance of its rights under this Agreement. The parties agree that the
provisions of this Agreement shall be specifically enforceable, it being agreed
by the parties that the remedy at law, including monetary damages, for breach of
any such provision will be inadequate compensation for any loss and that any
defense in any action for specific performance that a remedy at law would be
adequate is hereby waived.
25. Binding Effect. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective permitted successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
IWO HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer
"OPTIONEE"
/s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Address: 0000 Xxxxx Xxxxxxxx Xxxx, XX,
Xxxxxxxx, Xxxxxxxxxx 00000
Number of Time Vesting Option Shares: 7,022.4720 Number of Performance Vesting
Option Shares: 4,213.4832
Total Number of Option Shares: 11,235.9551
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