EXHIBIT 10.21.2
Non-Solicitation
PAETEC CORP.
INCENTIVE STOCK OPTION AGREEMENT
This sets forth the terms of the INCENTIVE STOCK OPTION AGREEMENT
("Agreement") entered into as of the day of , ("Effective
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Date"), by and between PAETEC CORP. ("Company"), and , an
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employee of the Company or one of its subsidiaries ("Optionee").
TERMS
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1. Definition of Terms. For purposes of this Agreement, all defined
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terms, as indicated by the capitalization of the first letter of such term,
shall have the meanings specified in the PaeTec Corp. 1998 Incentive
Compensation Plan ("Plan") to the extent not specified in this Agreement.
2. Grant of Option. Pursuant to the Plan and subject to the terms
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and conditions of the Plan and this Agreement, the Company hereby grants to the
Optionee the option to purchase from the Company all or any part of an aggregate
of shares of Class A Common Stock, at a purchase price of $ per
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share (the Market Value per Share as of the Effective Date). The Option Rights
granted pursuant to this Agreement are intended to qualify as Incentive Stock
Options.
3. Expiration Date. The Option Rights granted pursuant to this
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Agreement shall expire on , (no more than ten years from the
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Effective Date), unless sooner terminated or canceled under the provisions of
Paragraphs 6 or 8 below.
4. Exercise of Option.
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(a) The Optionee, provided the Optionee has remained in the
continuous employ of the Company or one of its subsidiaries from the Effective
Date, may exercise the Option Rights granted under this Agreement during the
periods described below, for the acquisition of the number of shares of Common
Stock stated.
(i) All or any part of 25 percent of the Option Rights granted
under this Agreement may be purchased at any time during the period that begins
on the first anniversary of the Effective Date and ends on the tenth anniversary
of the Effective Date;
(ii) All or any part of an additional 25 percent of the Option
Rights granted under this Agreement may be purchased at any time during the
period that begins on the second anniversary of the Effective Date and ends on
the tenth anniversary of the Effective Date;
(iii) All or any part of an additional 25 percent of the Option
Rights granted under this Agreement may be purchased at any time during the
period that begins on the third anniversary of the Effective Date and ends on
the tenth anniversary of the Effective Date; and
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(iv) All or any part of the remaining 25 percent of the Option
Rights granted under this Agreement may be purchased at any time during the
period that begins on the fourth anniversary of the Effective Date and ends on
the tenth anniversary of the Effective Date.
(b) If an anniversary described in (a) above occurs on a date that is
not a normal business day of the Company, the anniversary shall be deemed to
occur on the next ensuing normal business day of the Company.
5. Manner of Exercise.
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(a) Option Rights may be exercised on or after the applicable exercise
date and prior to the expiration date (or earlier termination or cancellation
date) at any time, and may be exercised in whole or in part as to the shares of
Common Stock then available for purchase.
(b) Option Rights may be exercised only to acquire whole shares of
Common Stock. No fractional shares shall be issued, and an exercise that would
otherwise result in the issuance of fractional shares shall be disregarded to
the extent of the fraction.
(c) Option Rights shall be exercised by delivery to the Committee (or
its designee), in person or by certified mail, return receipt requested, the
following:
(i) A written notice containing a reference to this Agreement and
a statement of the number of shares of Common Stock with respect to which Option
Rights are being exercised.
(ii) Subject to the approval of the Committee, cash in an amount
equal to the purchase price for such shares, or shares of Common Stock having an
aggregate fair market value, as of the date of exercise, equal to such purchase
price, or a combination of cash and shares of Common Stock.
(iii) Such additional documents as the Committee may require.
6. Termination or Resignation of Employment. Following the
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Optionee's termination or resignation of employment with the Company or one of
its subsidiaries, the Optionee may exercise Option Rights granted under this
Agreement, to the extent the Optionee is entitled to do so on the date of
exercise, for a period that ends on the later of (a) 30 days after the date of
the Optionee's termination or resignation of employment, or (b) 30 days after
the end of the period during which the non-competition covenant is in effect
pursuant to Paragraph 8; provided, however, that no Option Rights granted under
this Agreement may be exercised later than the expiration date described in
Paragraph 3.
7. Assignment or Transfer. Option Rights granted pursuant to this
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Agreement shall be exercisable only by the Optionee (or the Optionee's duly
appointed guardian or legal representative) during the Optionee's lifetime and
may not be sold, transferred, assigned, pledged, hypothecated or otherwise
disposed of in any other way, except by will or the laws of descent and
distribution, and shall not be subject to execution, attachment, garnishment or
similar process. All
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unexercised Option Rights granted under this Agreement shall be canceled
automatically upon any such assignment, transfer, attachment, etc. The foregoing
shall not preclude the exercise of Option Rights after the Optionee's death.
8. Confidentiality.
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(a) The Optionee acknowledges that the Company has acquired and
developed and will continue to acquire and develop techniques, plans, processes,
computer programs, equipment, and lists of customers and their particular
requirements that may pertain to Company-related services and equipment, and
related trade secrets, know-how, research and development, which are proprietary
and confidential in nature and are and will continue to be of unique value to
the Company and its business (all referred to as "Confidential Information").
All Confidential Information known or in the possession of the Optionee shall be
kept and maintained by him/her as confidential and proprietary to the Company.
(b) The Optionee shall not (i) disclose any Confidential Information
at any time directly or indirectly, in any manner to any person or firm, except
to other employees of the Company on a "need to know" basis, or (ii) solicit any
officer, director, employee or agent of the Company or any affiliate of the
Company to become an officer, director, employee or agent of the Optionee,
his/her respective affiliates or anyone else. The obligations of this Paragraph
8 shall survive the termination of this Agreement indefinitely.
(c) Upon termination or resignation of his/her employment for any
reason, the Optionee agrees that (I) he/she shall without demand therefore
deliver to the Company all Confidential Information in his/her possession and
(ii) for a period of 2 years following Optionee's termination of employment,
Optionee will not call upon any customer of the Company for the purpose of
soliciting or providing to such customer any product or service which is the
same as or substantially similar to any product or service provided to customers
by the Company.
(d) The Optionee acknowledges that his/her services are unique and
extraordinary and are not readily replaceable, and hereby expressly agrees that,
in the event of a violation of the confidentiality covenant set forth in this
Paragraph 8, the Company and its affiliates will be irreparably harmed and the
remedy of damages or other remedy at law will be inadequate. Therefore, the
Optionee agrees that, in the event of a threatened or actual violation of the
confidentiality covenant, the Company shall be entitled to obtain from any court
of competent jurisdiction, an injunction restraining the Optionee from
committing the violation, without the necessity of proving actual damage and in
addition to any other relief available under this Agreement or at law.
(e) The Company and the Optionee believe that the covenants of this
Paragraph 8 are reasonable. However, if at any time it shall be determined by
any court of competent jurisdiction that this Paragraph 8 or any portion of it
as written, is unenforceable because the restrictions are unreasonable, the
Company and the Optionee agree that such portions as shall have been determined
to be unreasonably restrictive shall be deemed so amended as to make such
restrictions reasonable in the determination of such court, and the covenants,
as so modified, shall be enforceable to the same extent as if such amendments
had been made prior to the date of any alleged breach of said covenants.
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9. No Right To Continued Employment. This Agreement shall not confer
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upon the Optionee any right to continued employment with the Company or any of
its subsidiaries nor shall it interfere, in any way, with the right of the
Company to modify the Optionee's compensation, duties, and responsibilities, or
the Company's authority to terminate the Optionee's employment.
10. No Rights as a Shareholder. The granting of Option Rights shall
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not confer upon the Optionee any rights as an owner of shares of Common Stock
until the Optionee exercises Option Rights and the Company issues stock
certificate(s) to the Optionee.
11. Withholding. The Company shall have the right to deduct any sums
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that federal, state or local tax laws require to be withheld upon the grant or
exercise of Option Rights. In the alternative, the Committee may require as a
condition to either granting Option Rights or issuing shares of Common Stock
that the Optionee (or other person exercising Option Rights) pay to the Company
for deposit with the appropriate taxing authority, any amounts that federal,
state or local tax laws require to be withheld.
12. Notices. All notices and communications under this Agreement
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shall be in writing and shall be given by personal delivery or by registered or
certified mail, return receipt requested, addressed to the residence of the
Optionee and to the principal office of the Company, or such other address as
may be designated by the Company or the Optionee. Notice shall be deemed given
upon personal delivery or upon receipt.
13. Successors and Assigns. This Agreement shall be binding upon and
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shall inure to the benefit of the successors and assigns of the Company, and the
heirs, successors and assigns of the Optionee.
14. Governing Law. This Agreement shall be construed in accordance
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with the laws of the State of New York. The Optionee agrees to accept as
binding, conclusive and final all decisions and interpretations of the Committee
with respect to any questions that may arise under the Plan and this Agreement.
15. Acknowledgments by Optionee. Optionee acknowledges that he/she
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has been advised, and that he/she understands, that:
(a) Option Rights and any shares issued pursuant to the exercise of
Option Rights have not been registered under the Securities Act of 1933;
(b) the grant of Option Rights and the issuance of any shares pursuant
to the exercise of Option Rights may be subject to, or may become subject to,
applicable reporting, disclosure and holding period restrictions imposed by Rule
144 under the Securities Act of 1933 ("Rule 144") and Section 16 of the
Securities Exchange Act of 1934 ("Section 16");
(c) pursuant to Rule 144, Optionee may have to hold any shares issued
for a period of one year from the option exercise date; and
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(d) shares acquired could be subject to Section 16(a) reporting
requirements as well as the short swing trading prohibition contained in Section
16(b) which precludes any profit taking with respect to any stock transactions
which occur within any six-month period.
The Optionee further acknowledges receipt of a copy of the Plan.
The Company has caused this Agreement to be executed by its duly
authorized officer, and the Optionee has executed this Agreement, both as of the
day and year first written above.
PAETEC CORP.
By:
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Title:
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OPTIONEE
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Employee
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