DSL.net, Inc. Wallingford, CT 06492 June 2, 2006
EXHIBIT
10.07
XXX.xxx,
Inc.
00
Xxxxxx
Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx,
XX 00000
June
2,
2006
Xx.
Xxxxx
X. Xxxxxxx
Chief
Executive Officer
XXX.xxx,
Inc.
00
Xxxxxx
Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx,
XX 00000
Dear
Xx.
Xxxxxxx:
This
letter agreement (this “Agreement”) is being entered into between you and
XXX.xxx, Inc., a Delaware corporation (the “Company”), in connection with
certain stock options granted to you pursuant to the Company’s qualified stock
option plans, including its Amended & Restated 2001 Stock Option and
Incentive Plan (the “Plans”).
1.
Background.
On May
17, 2006, the Board of Directors of the Company, including those directors
constituting all of the members of the Board’s Compensation Committee (the
“Board”), determined to fully accelerate (effective as of the Effective Date, as
hereinafter defined) the vesting of each otherwise unvested stock option under
the Plans outstanding immediately preceding the Effective Date and held by
a
then-current option holder. The foregoing Board action was effected in order
to
ease the Company’s accounting burden resulting from the impact of the Company’s
adoption and compliance with SFAS 123R, in recognition of the fact that the
overwhelming majority of the Company’s outstanding stock options are at exercise
prices well above the highest reported market price of the Company’s common
stock over the past several fiscal quarters, and not with the design of
providing any potential short-term windfall for any option holder. For purposes
of determining the acceleration date for the vesting of otherwise unvested
options under the Plans, the Board determined that the “Effective Date” be
defined as the date, if any, that the Company enters into agreements providing
for 3-month extensions of the respective maturity dates of the Company’s notes
owing to Laurus Master Fund, Ltd., DunKnight Telecom Partners LLC and Knight
Vision Foundation, the Company’s current senior secured lenders. The Company
entered into such agreements as of June 2, 2006 and, accordingly, the Effective
Date, for purposes of this Agreement, is June 2, 2006.
In
the
case of the acceleration of any unvested options as of the date immediately
preceding the Effective Date held by any director or “executive officer” of the
Company for purposes of Section 16 of the Securities Exchange Act of 1934,
as
amended, that have an exercise price at or below $0.06 per share, the Board
conditioned such acceleration upon such individuals’ signing and delivering an
agreement pursuant to which he or she
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agrees
to
refrain from selling, transferring, pledging, or otherwise disposing of any
shares acquired upon the exercise of options so accelerated until the earliest
of:
(i)
the
date on which the exercise would have been permitted under the applicable
accelerated options’ pre-acceleration vesting terms;
(ii)
in
the case of an executive officer, the day after the executive officer’s last day
of employment with the Company, if such employment ceased for any reason other
than “cause” or the executive officer’s voluntary resignation for any reason
other than “good reason,” each as defined under the Plans or an applicable
agreement between the Company and such individual (and in the case of a
director, the day after the director ceased serving on the Company’s Board as a
result of the Company’s stockholders not re-electing such individual to the
Board at a meeting convened for the purpose of electing directors, including
such director);
(iii)
the
occurrence of a “change in control” of the Company as defined in any agreement
between the Company and the executive officer or director, but only to the
extent the accelerated options, absent this acceleration, would have otherwise
been accelerated under the terms of such an agreement; and
(iv)
one
(1) year from the Effective Date.
The
earliest of the foregoing dates that occurs shall be referred to herein as
the
“Release Date.” This Agreement is presented for your signature in order to
satisfy the foregoing conditions.
2.
Lock-up
Agreement.
In
consideration of the acceleration of the vesting on the Effective Date of your
unvested options outstanding and held by you as of the date immediately
preceding the Effective Date that are exercisable at or below $0.06 per share,
you agree to refrain from selling, transferring, pledging, or otherwise
disposing of any shares acquired upon the exercise of any such accelerated
options until the Release Date applicable to such shares. For avoidance of
doubt, and without limiting any other provisions herein, the parties acknowledge
and agree that the restrictions in this Agreement apply, at a minimum, to those
options granted to you under your respective option agreements dated November
3,
2005 and January 4, 2006 that remained unvested immediately preceding the
Effective Date.
3.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one in the
same instrument.
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If
this
Agreement correctly sets forth our agreement on the subject matter hereof,
please confirm your agreement by signing and returning the enclosed copy of
this
Agreement to the Company.
Sincerely, | ||
By
order of the Board of Directors,
|
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XXX.XXX, INC. | ||
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/s/ Xxxx X. Xxxxxxxx | ||
Name: Xxxx X. Xxxxxxxx |
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Title: S.V.P. - Corporate Affairs, General Counsel & Secretary |
I,
the undersigned, acknowledge my receipt and understanding of this Agreement,
and
agree with the foregoing terms and conditions.
/s/ Xxxxx X. Xxxxxxx | |||
Name:
Xxxxx X. Xxxxxxx
|
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