TELETECH HOLDINGS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (the "AGREEMENT") is entered into
between TELETECH HOLDINGS, INC., a Delaware corporation ("TELETECH"), and Xxxxx
Xxxxxxx ("OPTIONEE"), as of March 27, 2000 (the "GRANT DATE"). In consideration
of the mutual promises and covenants made herein, the parties hereby agree as
follows:
1. GRANT OF OPTION. Subject to the terms and conditions of the TeleTech
Holdings, Inc. 1999 Stock Option and Incentive Plan (the "PLAN"), a copy of
which is attached hereto and incorporated herein by this reference, TeleTech
grants to Optionee an option (the "OPTION") to purchase 250,000 shares (the
"SHARES") of TeleTech's common stock, $.01 par value (the "COMMON STOCK"), at a
price equal to US$30.8125 per share (the "OPTION PRICE"). The Option Price has
been determined by the Compensation Committee of the Board of Directors of
TeleTech (the "COMMITTEE"), acting in good faith, to be the fair market value of
the Common Stock on the Grant Date based upon the last sale price for Common
Stock reported by The Nasdaq Stock Market, Inc. as of the close of business on
the Grant Date.
The Option is not intended to qualify as an incentive stock option
described in Section 422 of the Internal Revenue Code of 1986, as amended (the
"CODE"). All provisions of this Agreement are to be construed in conformity with
this intention.
2. TERM: OPTION RIGHTS. Except as provided below, the Option shall be
valid for a term commencing on the Grant Date and ending 10 years after the
Grant Date (the "EXPIRATION DATE").
(a) RIGHTS UPON TERMINATION OF EMPLOYMENT. If Optionee ceases to be
employed by TeleTech or any of its subsidiaries or affiliates (collectively, the
"SUBSIDIARIES") for any reason other than (i) for "Cause" (as defined herein),
(ii) Optionee's death, or (iii) Optionee's mental, physical or emotional
disability or condition (a "DISABILITY"), the Option shall be exercisable at any
time prior to the earlier of the Expiration Date or the date three months after
the date of termination of Optionee's employment.
(b) RIGHTS UPON TERMINATION FOR CAUSE. If Optionee's employment with
TeleTech and/or its Subsidiaries is terminated for Cause, the Option shall be
immediately cancelled, no portion of the Option may be exercised thereafter and
Optionee shall forfeit all rights to the Option. The term "Cause" shall have the
meaning given to such term or to the term "For Cause" or other similar phrase in
Optionee's Employment Agreement with TeleTech or any Subsidiary; provided,
however, that (i) if at any time Optionee's employment with TeleTech or any
Subsidiary is not governed by an employment agreement, then the term "Cause"
shall have the meaning given to such term in the Plan, and (ii) "Cause" shall
exclude Optionee's death or Disability.
(c) RIGHTS UPON OPTIONEE'S DEATH OR DISABILITY. If Optionee's
employment
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with TeleTech and/or its Subsidiaries is terminated as a result of (i)
Optionee's death, the Option may be exercised at any time prior to the earlier
of the Expiration Date or the date six months after the date of Optionee's
death, or (ii) Optionee's Disability, the Option may be exercised at any time
prior to the earlier of the Expiration Date or the date six months after the
date Optionee's employment is terminated as a result of Optionee's Disability.
3. VESTING. The Option may only be exercised to the extent vested. Any
vested portion of the Option may be exercised at any time in whole or from time
to time in part. Vesting shall commence on March 27, 2001 and Optionee shall
vest in the Option according to the following schedule (each date set forth
below, a "VESTING DATE"):
Cumulative
Percentage of
Vesting Date Option Vested
------------ -------------
March 27, 2001 25%
March 27, 2002 50%
March 27, 2003 75%
March 27, 2004 100%
Optionee must be employed by TeleTech or any Subsidiary on (a) March 27, 2001 in
order to vest in any portion of the Option, and (b) on any Vesting Date, in
order to vest in the portion of the Option set forth in the chart above that
vests on such Vesting Date. No portion of the Option shall vest between Vesting
Dates; if Optionee ceases to be employed by TeleTech or any Subsidiary, then any
portion of the Option that is scheduled to vest on any Vesting Date after the
date Optionee's employment is terminated automatically shall be forfeited as of
the termination of employment. If Optionee's employment with TeleTech or any
Subsidiary is terminated for any reason, any portion of the Option which is not
then vested shall be immediately forfeited; provided, however, that a transfer
or reassignment of Optionee from TeleTech to any Subsidiary, or VICE VERSA,
shall not constitute a termination of employment for purposes of this Agreement.
3A. VESTING FOLLOWING A CHANGE IN CONTROL.
(a) Accelerated Vesting. Notwithstanding the vesting schedule contained in
Section 3,
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(i) upon a Change in Control (as hereinafter defined), any unvested
portion of the Option that is scheduled to vest (pursuant to Section 3)
within 24 months following the date the Change of Control becomes effective
shall vest and become immediately exercisable as of the effective date of
the Change of Control, with the remainder of the unvested portion of the
Option vesting pursuant to Section 3, as accelerated by this Section 3A and
clarified by the following example:
For example, assume that on June 1, 1999 an optionee was granted an
option to acquire 10,000 shares of Common Stock, which option vests
over five years, pro rata, on each anniversary of the grant date. On
June 5, 2000, a Change of Control is consummated. As of June 5, 2000,
the optionee will be fully vested in the option with respect to 6,000
shares (i.e., the 2,000 shares that vested on June 1, 2000, plus an
additional 4,000 shares that vested on June 5, 2000 in accordance with
the accelerated vesting provisions of this Section 3A), and the
remaining unvested portion of the option would vest (assuming all
other conditions to vesting are satisfied) with respect to the
remaining 4,000 shares on each of June 1, 2001 (2,000 shares) and June
2, 2002 (2,000 shares).
(ii) if Optionee's employment with TeleTech or any Subsidiary is
terminated within 24 months following a Change in Control, then the entire
amount of the Option shall become 100% vested and immediately exercisable
as of Optionee's Termination Date (as defined herein); PROVIDED, HOWEVER,
that the accelerated vesting described in the foregoing clause (ii) shall
not apply if Optionee's employment with TeleTech is terminated (A) by
Optionee for any reason other than for "Good Reason" (as defined herein),
or (B) by TeleTech for "Cause" (as defined herein).
(b) DEFINITION OF "CHANGE IN CONTROL". For purposes of this Agreement,
"CHANGE IN CONTROL" means the occurrence of any one of the following events:
(i) any consolidation, merger or other similar transaction (A)
involving TeleTech, if TeleTech is not the continuing or surviving
corporation, or (B) which contemplates that all or substantially all of the
business and/or assets of TeleTech will be controlled by another
corporation;
(ii) any sale, lease, exchange or transfer (in one transaction or
series of related transactions) of all or substantially all of the assets
of TeleTech (a "DISPOSITION"); PROVIDED, HOWEVER, that the foregoing shall
not apply to any Disposition to a corporation with respect to which,
following such Disposition, more than 51% of the combined voting power of
the then outstanding voting securities of such corporation is then
beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners of at least 51%
of the then outstanding Common Stock and/or other voting securities of
TeleTech immediately prior to such Disposition,
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in substantially the same proportion as their ownership immediately prior
to such Disposition;
(iii) approval by the stockholders of TeleTech of any plan or proposal
for the liquidation or dissolution of TeleTech, unless such plan or
proposal is abandoned within 60 days following such approval;
(iv) the acquisition by any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended), or
two or more persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of
1934, as amended) of 51% or more of the outstanding shares of voting stock
of TeleTech; PROVIDED, HOWEVER, that for purposes of the foregoing,
"person" excludes Xxxxxxx X. Xxxxxxx and his affiliates; PROVIDED, FURTHER
that the foregoing shall exclude any such acquisition (A) by any person
made directly from TeleTech, (B) made by TeleTech or any Subsidiary, or (C)
made by an employee benefit plan (or related trust) sponsored or maintained
by TeleTech or any Subsidiary; or
(v) if, during any period of 15 consecutive calendar months
commencing at any time on or after September 1, 1999, those individuals
(the "CONTINUING DIRECTORS") who either (A) were directors of TeleTech on
the first day of each such 15-month period, or (B) subsequently became
directors of TeleTech and whose actual election or initial nomination for
election subsequent to that date was approved by a majority of the
Continuing Directors then on the board of directors of TeleTech, cease to
constitute a majority of the board of directors of TeleTech.
(c) OTHER DEFINITIONS. For purposes of this Section 3A, the following
terms have the meanings ascribed to them below:
(i) "CAUSE" has the meaning given to such term, or to the term "For
Cause" or other similar phrase, in Optionee's Employment Agreement with
TeleTech or any Subsidiary, if any; PROVIDED, HOWEVER, that if at any time
Optionee's employment with TeleTech or any Subsidiary is not governed by an
employment agreement, then the term "Cause" shall have the meaning given to
such term in the Plan; PROVIDED, FURTHER, that, notwithstanding the
provisions of Optionee's Employment Agreement or of the Plan, for purposes
of this Agreement, TeleTech shall have the burden to prove that Optionee's
employment was terminated for "Cause."
(ii) "TERMINATION DATE" means the latest day on which Optionee is
expected to report to work and is responsible for the performance of
services to or on behalf of TeleTech or any Subsidiary, notwithstanding
that Optionee may be entitled to receive payments from TeleTech (e.g., for
unused vacation or sick time, severance payments, deferred compensation or
otherwise) after such date; and
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(iii) "GOOD REASON" means (A) any reduction in Optionee's base salary;
PROVIDED THAT a reduction in Optionee's base salary of 10% or less does not
constitute "Good Reason" if such reduction is effected in connection with a
reduction in compensation that is applicable generally to officers and
senior management of TeleTech; (B) Optionee's responsibilities or areas of
supervision within TeleTech or its Subsidiaries are substantially reduced;
or (C) Optionee's principal office is relocated outside the metropolitan
area in which Optionee's office was located immediately prior to the Change
in Control; PROVIDED, HOWEVER, that temporary assignments made for the good
of TeleTech's business shall not constitute such a move of office location.
(d) VESTING FOLLOWING TERMINATION BY TELETECH OTHER THAN FOR CAUSE. In the
event that Optionee's employment with TeleTech is terminated for any reason
other than for "Cause" (as defined above) within two years of the Grant Date,
the unvested portion of the option that would otherwise vest at the next Vesting
Date shall vest and become immediately exercisable as of the day after
Optionee's Termination Date.
4. PROCEDURE FOR EXERCISE. Exercise of the Option or a portion thereof
shall be effected by the giving of written notice to TeleTech in accordance with
the Plan and payment of the aggregate Option Price for the number of Shares to
be acquired pursuant to such exercise.
5. PAYMENT FOR SHARES. Payment of the Option Price (or portion thereof)
shall be made in cash or by such other method as may be permitted by the
Committee in accordance with the provisions of the Plan. No Shares shall be
delivered upon exercise of the Option until full payment has been made and all
applicable withholding requirements satisfied.
6. OPTIONS NOT TRANSFERABLE AND SUBJECT TO CERTAIN RESTRICTIONS. The
Option may not be sold, pledged, assigned or transferred in any manner other
than by will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined in Section 414(p) of the Code. During
Optionee's lifetime, the Option may be exercised only by the Optionee or by a
legally authorized representative. In the event of Optionee's death, the Option
may be exercised by the distributee to whom Optionee's rights under the Option
shall pass by will or by the laws of descent and distribution.
7. ACCEPTANCE OF PLAN. Optionee hereby accepts and agrees to be bound by
all the terms and conditions of the Plan.
8. NO RIGHT TO EMPLOYMENT. Nothing herein contained shall confer upon
Optionee any right to continuation of employment by TeleTech or any Subsidiary,
or interfere with the right of TeleTech or any Subsidiary to terminate at any
time the employment of Optionee. Nothing contained herein shall confer any
rights upon Optionee as a stockholder of TeleTech, unless and until Optionee
actually receives Shares.
9. COMPLIANCE WITH SECURITIES LAWS. The Option shall not be
exercisable and Shares shall not be issued pursuant to exercise of the Option
unless the exercise of the Option and the
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issuance and delivery of Shares pursuant thereto shall comply with all
relevant provisions of law including, without limitation, the Securities Act
of 1933, as amended (the "SECURITIES ACT"), the Securities Exchange Act of
1934, as amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which Common Stock may then be
listed, and shall be further subject to the approval of counsel for TeleTech
with respect to such compliance. If, in the opinion of counsel for TeleTech,
a representation is required to be made by Optionee in order to satisfy any
of the foregoing relevant provisions of law, TeleTech may, as a condition to
the exercise of the Option, require Optionee to represent and warrant at the
time of exercise that the Shares to be delivered as a result of such exercise
are being acquired solely for investment and without any present intention to
sell or distribute such Shares.
10. ADJUSTMENTS. Subject to the sole discretion of the Board of Directors,
TeleTech may, with respect to any unexercised portion of the Option, make any
adjustments necessary to prevent accretion, or to protect against dilution, in
the number and kind of shares covered by the Option and in the applicable
exercise price thereof in the event of a change in the corporate structure or
shares of TeleTech; provided, however, that no adjustment shall be made for the
issuance of preferred stock of TeleTech or the conversion of convertible
preferred stock of TeleTech. For purposes of this Section 10, a change in the
corporate structure or shares of TeleTech includes, without limitation, any
change resulting from a recapitalization, stock split, stock dividend,
consolidation, rights offering, spin-off, reorganization or liquidation, and any
transaction in which shares of Common Stock are changed into or exchanged for a
different number or kind of shares of stock or other securities of TeleTech or
another entity.
11. NO OTHER RIGHTS. Optionee hereby acknowledges and agrees that, except
as set forth herein, no other representations or promises, either oral or
written, have been made by TeleTech, any Subsidiary or anyone acting on their
behalf with respect to Optionee's right to acquire any shares of Common Stock,
stock options or awards under the Plan, and Optionee hereby releases, acquits
and forever discharges TeleTech, the Subsidiaries and anyone acting on their
behalf of and from all claims, demands or causes of action whatsoever relating
to any such representations or promises and waives forever any claim, demand or
action against TeleTech, any Subsidiary or anyone acting on their behalf with
respect thereto.
12. CONFIDENTIALITY. OPTIONEE AGREES NOT TO DISCLOSE, DIRECTLY OR
INDIRECTLY, TO ANY OTHER EMPLOYEE OF TELETECH AND TO KEEP CONFIDENTIAL ALL
INFORMATION RELATING TO ANY OPTIONS OR OTHER AWARDS GRANTED TO OPTIONEE,
PURSUANT TO THE PLAN OR OTHERWISE, INCLUDING THE AMOUNT OF ANY SUCH AWARD, THE
EXERCISE PRICE AND THE RATE OF VESTING THEREOF; PROVIDED THAT OPTIONEE SHALL BE
ENTITLED TO DISCLOSE SUCH INFORMATION TO SUCH OF OPTIONEE'S ADVISORS,
REPRESENTATIVES OR AGENTS, OR TO SUCH OF TELETECH'S OFFICERS, ADVISORS,
REPRESENTATIVES OR AGENTS (INCLUDING LEGAL AND ACCOUNTING ADVISORS), WHO HAVE A
NEED TO KNOW SUCH INFORMATION FOR LEGITIMATE TAX, FINANCIAL PLANNING OR OTHER
SUCH PURPOSES.
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13. SEVERABILITY. Any provision of this Agreement (or portion thereof)
that is deemed invalid, illegal or unenforceable in any jurisdiction shall, as
to that jurisdiction and subject to this Section 13, be ineffective to the
extent of such invalidity, illegality or unenforceability, without affecting in
any way the remaining provisions thereof in such jurisdiction or rendering that
or any other provisions of this Agreement invalid, illegal, or unenforceable in
any other jurisdiction.
14. REFERENCES. Capitalized terms not otherwise defined herein shall have
the same meaning ascribed to them in the Plan.
15. ENTIRE AGREEMENT. This Agreement (including the Plan, which is
incorporated herein) constitutes the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior and
contemporaneous agreements, oral or written, between TeleTech and Optionee
relating to Optionee's entitlement to stock options, Common Stock or similar
benefits, under the Plan or otherwise.
16. AMENDMENT. This Agreement may be amended and/or terminated at any time
by mutual written agreement of TeleTech and Optionee.
17. NO THIRD PARTY BENEFICIARY. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than Optionee and Optionee's
respective successors and assigns expressly permitted herein, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
18. GOVERNING LAW. The construction and operation of this Agreement are
governed by the laws of the State of Delaware (without regard to its conflict of
laws provisions).
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Executed as of the date first written above.
TELETECH HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxx
-----------------------------
Xxxxxxx Xxxx,
Chief Financial Officer
/s/ Xxxxx Xxxxxxx
--------------------------------
Signature of Xxxxx Xxxxxxx ("Optionee")
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