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EXHIBIT 10.20
THE SHARES ISSUABLE PURSUANT TO THIS AGREEMENT ARE SUBJECT TO
AN OPTION TO REPURCHASE PROVIDED UNDER THE PROVISIONS OF THE
COMPANY'S 1998 STOCK OPTION PLAN FOR KEY EMPLOYEES AND THIS
AGREEMENT ENTERED INTO PURSUANT THERETO. A COPY OF SUCH PLAN
IS AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICES.
CLIENTLOGIC HOLDING CORPORATION
STOCK OPTION AGREEMENT
1998 STOCK OPTION PLAN, AS AMENDED
FOR KEY EMPLOYEES
The Board of Directors of ClientLogic Holding Corporation (the
"Company") has adopted the Company's 1998 Stock Option Plan, as amended
(the "Plan") for certain individuals, directors and key employees of
the Company and its Related Entities. A copy of the Plan is being
furnished to you concurrently with the execution of this Option
Agreement and shall be deemed a part of this Option Agreement as if
fully set forth herein. Unless the context otherwise requires, all
terms defined in the Plan shall have the same meaning when used herein.
1. Certain Definitions.
In addition to the terms specifically defined elsewhere herein
and in the Plan, as used herein, the following terms will have the
meanings indicated:
"Cause" shall have the meaning set forth in Section 8(d) of
the Employment Agreement.
"Common Stock" shall mean the common stock, par value $0.01
per share, of the Company.
"Permanent Disability" shall have the meaning set forth in
Section 8(b) of the Employment Agreement.
"Employment Agreement" shall mean that certain Employment
Agreement, dated as of September 30, 1998, by and between
ClientLogic Corporation (formerly CustomerONE Corporation), a
Delaware Corporation and wholly-owned subsidiary of the
Company, and you.
"First Option" shall have the meaning set forth in Section
2(a) hereof.
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"First Option Exercise Price" shall mean a price equal to
US$1.20 per share, subject to the adjustments and limitations
set forth herein and in the Plan.
"First Option Grant Date" shall have the meaning set forth in
Section 2(a) hereof.
"First Option Shares" shall have the meaning set forth in
Section 2(a) hereof.
The term "including" when used herein shall mean "including,
but not limited to".
"IRR" shall mean, as of any date, the compounded annual
pre-tax rate of return earned by LLC2 on its direct and
indirect investment in the Portfolio Company for the period
from the date of investment to such date; provided that, for
the purposes of determining the IRR, the return earned by LLC2
shall take into account the net proceeds of any disposition of
the investment (in whole or in part), dividends, returns of
capital and other distributions, whether received directly or
indirectly by LLC2, but shall specifically exclude any
management fees or remuneration payments.
"Liquidity Event" shall mean the first to occur of any of the
following:
(i) any sale of all or substantially all of the
assets of the Portfolio Company in an arm's-length
transaction;
(ii) the liquidation or winding up of the
Portfolio Company;
(iii) an initial public offering of the common
shares or other equity securities of the Portfolio Company by
way of prospectus, registration statement or similar document
where, or in connection with which, such shares or securities
are to become listed and posted for trading or quoted on at
least one of (1) the Toronto Stock Exchange, (2) the Montreal
Exchange, (3) the New York Stock Exchange, (4) the American
Stock Exchange or (5) the National Market of the National
Association of Securities Dealers Automated Quotation System,
together with any such other stock exchange or exchanges as
may be approved by the Board of Directors; or
(iv) a sale of all or substantially all of the
shares of the Portfolio Company owned, directly or indirectly,
by LLC2 (including any Affiliate of LLC2) in an arm's-length
transaction.
"LLC2" shall mean Onex CustomerONE Holdings LLC, a Delaware
limited liability company.
"Option" shall mean either of the First Option or the Second
Option.
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"Options" shall mean, collectively, the First Option and the
Second Option.
"Option Shares" shall mean the First Option Shares and/or the
Second Option Shares.
"Portfolio Company" shall mean the Company and its operating
subsidiaries taken as a whole.
"Second Option" shall have the meaning set forth in Section
2(b) hereof.
"Second Option Exercise Price" shall mean a price equal to
US$1.50 per share, subject to the adjustments and limitations
set forth herein and in the Plan.
"Second Option Grant Date" shall have the meaning set forth in
Section 2(b) hereof.
"Second Option Shares" shall have the meaning set forth in
Section 2(b) hereof.
2. The Grants.
(a) Subject to the conditions set forth herein, the
Company hereby grants to you, effective as of January 27, 1999 (the "First
Option Grant Date"), as a matter of separate inducement and not in lieu of any
salary or other compensation for your services, the right and option to purchase
(the "First Option"), in accordance with the terms and conditions set forth
herein and in the Plan, an aggregate of 583,333 shares of Common Stock (the
"First Option Shares"), at the First Option Exercise Price. You should consult
with your tax advisor concerning the proper reporting of any federal, state or
foreign tax liability that may arise as a result of the grant or exercise of the
First Option.
(b) Subject to the conditions set forth herein, the
Company hereby grants to you, effective as of March 19, 1999 (the "Second Option
Grant Date"), as a matter of separate inducement and not in lieu of any salary
or other compensation for your services, the right and option to purchase (the
"Second Option"), in accordance with the terms and conditions set forth herein
and in the Plan, an aggregate of 2,868 shares of Common Stock (the "Second
Option Shares"), at the Second Option Exercise Price. You should consult with
your tax advisor concerning the proper reporting of any federal, state or
foreign tax liability that may arise as a result of the grant or exercise of the
Second Option.
3. Exercise.
(a) For purposes of this Option Agreement, the First
Option Shares shall be deemed "Nonvested Shares" unless and until they have
become "Vested Shares" as described in this subsection. Twenty-five percent
(25%) of the First Option Shares
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shall become "Vested Shares" on the second annual anniversary of the First
Option Grant Date and seventy-five percent (75%) of the First Option Shares
shall become "Vested Shares" on the third annual anniversary of the First Option
Grant Date in accordance with the terms of the Plan. Only upon the occurrence of
a Liquidity Event that results in LLC2 achieving an overall compounded IRR of
15% on its investment in the Portfolio Company as at such time, will any such
"Vested Shares" become "Exercisable Shares." Until such time, you will not have
the right to exercise all or any portion of the First Option, whether or not
vested.
(b) For purposes of this Option Agreement, the Second
Option Shares shall be deemed "Nonvested Shares" unless and until they have
become "Vested Shares" as described in this subsection. Twenty-five percent
(25%) of the Second Option Shares shall become "Vested Shares" on the second
annual anniversary of the Second Option Grant Date and seventy-five percent
(75%) of the Second Option Shares shall become "Vested Shares" on the third
annual anniversary of the Second Option Grant Date in accordance with the terms
of the Plan. Only upon the occurrence of a Liquidity Event that results in LLC2
achieving an overall compounded IRR of 15% on its investment in the Portfolio
Company as at such time, will any such "Vested Shares" become "Exercisable
Shares." Until such time, you will not have the right to exercise all or any
portion of the Second Option, whether or not vested.
(c) Subject to the relevant provisions and limitations
contained herein and in the Plan, you may exercise an Option to purchase all or
a portion of the applicable number of Exercisable Shares underlying such Option
at any time prior to the termination of such Option pursuant to this Option
Agreement. In no event shall you be entitled to exercise an Option for any
Nonvested Shares, Vested Shares that are not Exercisable Shares or for a
fraction of an Exercisable Share.
(d) The unexercised portion of the First Option, if any,
will automatically, and without notice, terminate and become null and void upon
the expiration of ten (10) years from the First Option Grant Date.
(e) The unexercised portion of the Second Option, if any,
will automatically, and without notice, terminate and become null and void upon
the expiration of ten (10) years from the Second Option Grant Date.
(f) Any exercise by you of an Option must be in writing
addressed to the Treasurer of the Company at its principal place of business (a
copy of the form of exercise to be used will be available upon written request
to the Treasurer), and must be accompanied by a certified or bank check payable
to the order of the Company in the full amount of the relevant exercise price of
the shares so purchased, or in such other manner as described in the Plan and
approved by the Committee.
4. Termination of Employment.
In the case of termination of your employment with the Company
or any Related Entity for Cause, as defined pursuant to Section 8(d) of the
Employment
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Agreement, you shall immediately forfeit your rights under the Options,
including rights in any Vested Shares and/or Exercisable Shares, except as to
those Option Shares already purchased.
5. Transferability.
Except as provided in Section 8 hereof, the Options and any
rights or interests therein are not assignable or transferable by you except by
will or the laws of descent and distribution, and during your lifetime, each
Option shall be exercisable only by you or, in the event that a legal
representative has been appointed in connection with your Permanent Disability,
such legal representative.
6. Registration.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act or any applicable securities
laws of any other jurisdiction to permit exercise of either Option or to issue
any Common Stock in violation of the Securities Act or any applicable securities
laws of any other jurisdiction. You (or in the event of your death or, in the
event a legal representative has been appointed in connection with your
Permanent Disability, the Person exercising an Option) must, as a condition to
your right to exercise an Option, deliver to the Company an agreement or
certificate containing such representations, warranties and covenants as the
Company may deem necessary or appropriate to ensure that the issuance of the
Option Shares pursuant to such exercise is not required to be registered under
the Securities Act or any applicable securities laws of any other jurisdiction.
Certificates for Option Shares, when issued, will have
substantially the following legend, or statements of other applicable
restrictions, endorsed thereon (or any other legend that may be required for
issuance to a Person outside the United States), and may not be immediately
transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY SECURITIES LAWS OF ANY OTHER JURISDICTION. THE SHARES
MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED OR
OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES
EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION
OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR
OTHER DISPOSITION WILL NOT VIOLATE APPLICABLE FEDERAL, STATE
OR OTHER LAWS.
The foregoing legend will not be required for Option Shares
issued pursuant to an effective registration statement under the Securities Act
and in accordance with applicable state securities laws.
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7. Withholding Taxes.
By acceptance hereof, you hereby (i) agree to reimburse the
Company or any Related Entity by which you are employed for any Canadian or U.S.
federal, provincial, state, local or foreign taxes required by any government to
be withheld or otherwise deducted by such corporation in respect of your
exercise of all or a portion of an Option; (ii) authorize the Company or any
Related Entity by which you are employed to withhold from any cash compensation
paid to you or on your behalf, an amount sufficient to discharge any Canadian or
U.S. federal, provincial, state, local or foreign taxes imposed on the Company,
or the Related Entity by which you are employed, and which otherwise has not
been reimbursed by you, in respect of your exercise of all or a portion of an
Option; and (iii) agree that the Company may, in its discretion, hold the stock
certificate to which you are entitled upon exercise of an Option as security for
the payment of the aforementioned withholding tax liability, until cash
sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by retaining shares issuable upon the
exercise of such Option having a Fair Market Value on the date of exercise which
is equal to the amount to be withheld.
8. Purchase Option.
(a) If (i) your employment with the Company or a Related
Entity terminates for any reason at any time or (ii) a Change of Control occurs,
the Company and/or its designee(s) shall have the option (the "Purchase Option")
to purchase, and if the Purchase Option is exercised, you (or your executor or
the administrator of your estate or the Person who acquired the right to
exercise an Option by bequest or inheritance in the event of your death, or your
legal representative in the event of your incapacity (hereinafter, collectively
with such optionee, the "Grantor")) shall sell to the Company and/or its
assignee(s), all or any portion (at the Company's option) of the Option Shares
and/or the Option or Options held by the Grantor (such Option Shares and Option
or Options collectively being referred to as the "Purchasable Shares").
(b) The Company shall give notice in writing to the
Grantor of the exercise of the Purchase Option within one (1) year from the date
of the termination of your employment or engagement or such Change of Control.
Such notice shall state the number of Purchasable Shares to be purchased and the
determination of the Board of Directors of the Fair Market Value per share of
such Purchasable Shares. If no notice is given within the time limit specified
above, the Purchase Option shall terminate.
(c) The purchase price to be paid for the Purchasable
Shares purchased pursuant to the Purchase Option shall be, in the case of any
Option Shares, the Fair Market Value per share as of the date of notice of
exercise of the Purchase Option times the number of shares being purchased, in
the case of the First Option, the Fair Market Value per share less the
applicable per share First Option Exercise Price, times the number of
Exercisable Shares subject to such First Option which are being purchased, and
in the case of the Second Option, the Fair Market Value per share less the
applicable per share Second Option Exercise Price, times the number of
Exercisable Shares subject to such Second Option which are being purchased. The
purchase price shall be paid in
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cash. The closing of such purchase shall take place at the Company's principal
executive offices within ten (10) days after the purchase price has been
determined. At such closing, the Grantor shall deliver to the purchaser(s) the
certificates or instruments evidencing the Purchasable Shares being purchased,
duly endorsed (or accompanied by duly executed stock powers) and otherwise in
good form for delivery, against payment of the purchase price by check of the
purchaser(s). In the event that, notwithstanding the foregoing, the Grantor
shall have failed to obtain the release of any pledge or other encumbrance on
any Purchasable Shares by the scheduled closing date, at the option of the
purchaser(s) the closing shall nevertheless occur on such scheduled closing
date, with the cash purchase price being reduced to the extent of all unpaid
indebtedness for which such Purchasable Shares are then pledged or encumbered.
(d) To assure the enforceability of the Company's
rights under this Section 8, each certificate or instrument representing Option
Shares subject to this Option Agreement shall bear a conspicuous legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
OPTION TO REPURCHASE PROVIDED UNDER THE PROVISIONS OF THE
COMPANY'S 1998 STOCK OPTION PLAN, AS AMENDED, AND A STOCK
OPTION AGREEMENT ENTERED INTO PURSUANT THERETO. A COPY OF SUCH
OPTION PLAN AND OPTION AGREEMENT ARE AVAILABLE UPON WRITTEN
REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES."
9. Stockholders Agreement.
You acknowledge and agree that upon exercise of an Option, you
will enter into and become bound by the Stockholders Agreement among the Company
and the other parties thereto, substantially in the form made available to you
concurrently herewith, as such Stockholders Agreement may be subsequently
modified or amended.
To the extent required by the Stockholders Agreement,
certificates for Option Shares, when issued, will have substantially the
following legend:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER, VOTING
AND OTHER TERMS AND CONDITIONS SET FORTH IN THE STOCKHOLDERS
AGREEMENT DATED AS OF OCTOBER 1, 1998, A COPY OF WHICH MAY BE
OBTAINED FROM CLIENTLOGIC HOLDING CORPORATION AT ITS PRINCIPAL
EXECUTIVE OFFICES.
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10. Multiple Classes and Series of Stock.
Certificates for Option Shares, when issued, will have
substantially the following legend:
THE ISSUER IS AUTHORIZED TO ISSUE SHARES OF MORE THAN ONE
CLASS AND TO ISSUE SHARES IN MORE THAN ONE SERIES OF AT LEAST
ONE CLASS. THE ISSUER WILL FURNISH WITHOUT CHARGE TO EACH
STOCKHOLDER WHO SO REQUESTS A STATEMENT OF THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR
SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
11. Miscellaneous.
(a) This Option Agreement is subject to all the terms,
conditions, limitations and restrictions contained in the Plan. In the event of
any conflict or inconsistency between the terms hereof and the terms of the
Plan, the terms of the Plan shall be controlling.
(b) This Option Agreement is not a contract of
employment and the terms of your employment shall not be affected by, or
construed to be affected by, this Option Agreement, except to the extent
specifically provided herein. Nothing herein shall impose, or be construed as
imposing, any obligation (i) on the part of the Company or any Related Entity to
continue your employment, or (ii) on your part to remain in the employ of the
Company or any Related Entity.
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Please indicate your acceptance of all the terms and
conditions of the Option and the Plan by signing and returning a copy of this
Option Agreement.
Very truly yours,
CLIENTLOGIC HOLDING CORPORATION
By: /s/ XXXX XXXXXXX
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Its:
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ACCEPTED:
/s/ XXXX XXXXXX
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Signature of Optionee
Xxxx Xxxxxx
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Name of Optionee (Please Print)
Date:
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