Exhibit 99.1
SYNET SERVICE CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made this 27th day of March 2000, by and between SYNET SERVICE
CORPORATION, a Minnesota corporation (the "Company") and _______________________
an employee of the Company (the "Participant").
WHEREAS, Participant is a valuable and trusted employee of the Company and
the Company considers it desirable and in its best interest that Participant be
given an inducement to acquire a proprietary interest in the Company and an
added incentive to advance the interests of the Company; and
WHEREAS, the Company desires to accomplish such objectives by granting
Participant the right and option to purchase shares of the Company's Class B
non-voting common stock, par value $.01 per share (the "Class B Common Stock")
pursuant to the Company's 1996 Stock Option Plan (the "Plan"); and
WHEREAS, Participant desires to receive the stock option contained in this
Agreement and agrees to abide by the terms and conditions of the Plan and this
Agreement; and
NOW, THEREFORE, in consideration of the foregoing premises and the
agreements and covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Grant of Option. The Company hereby grants to Participant the right and
option to purchase all or any part of an aggregate of __________________________
shares of Class B Common Stock (the "Option") on the terms and conditions stated
herein. Unless otherwise stated in this Agreement, the Option shall be subject
to the terms and conditions of, and administered in accordance with, the Plan.
Participant acknowledges that Participant has received a copy of the Plan and is
familiar with its terms and conditions.
2. Exercise Price. The exercise price of the Option shall be $____ per share,
which is the fair market value of a share of Class B Common Stock on the date
hereof.
3. Vesting Schedule. The Option shall vest and become exercisable over _________
period in accordance with the following schedule:
No. of Shares Subject to Option Date Vested
------------------------------- -----------
Optional Language (Not in every option grant)
[In the event an Extraordinary Corporate Transaction (including any
consolidation, merger, or other transaction or series of transactions) is
consummated by the Company, it being understood that the Extraordinary Corporate
Transaction is not a transaction in which the Company is the surviving
corporation or maintains majority control, this entire option will vest
immediatley upon consummation of the Extraordinary Corporate Transaction.]
Participant acknowledges and agrees that the grant of the Option herein does not
make Participant a shareholder of the Company and Participant shall have no
rights whatsoever with respect to dividends or other rights of any kind related
to or associated with the Class B Common Stock until such shares shall have
been issued to Participant as evidenced by the appropriate entry in the stock
ledger books of the Company.
4. Manner of Exercise. Once vested, Participant may exercise the vested Option
at any time, in whole or in part, by providing written notice to the Company
which states the number of shares of Class B Common Stock with respect to which
the Option is being exercised and is accompanied by cash, bank draft, or money
order made payable to the Company in an amount equal to the number of shares of
Class B Common Stock being purchased times the exercise price as stated in
Section 2 above. The Option may also be exercised, if approved by the Board of
Directors of the Company, in whole or in part, by delivery to the Company of
unencumbered shares of Class B Common Stock having an aggregate fair market
value, as determined by the Board, equal to the total exercise price of the
Option being exercised. Within thirty (30) days after the Company receives such
notice and payment, it shall deliver to Participant a certificate evidencing the
shares of Class B Common Stock so purchased, registered in Participant's name.
As a condition to the exercise of the Option, Participant shall be required to
execute and be bound by the terms and conditions of a buy-sell, or similar stock
repurchase agreement by and among the Company and its shareholders.
5. Termination of Options. The Option provided by this Agreement shall terminate
at 5:00 p.m., Central Time, on the tenth anniversary of the date of this
Agreement.
6. Certain Adjustments. If the outstanding shares of Class B Common Stock of the
Company are hereafter are increased or decreased by reason of a stock split-up,
reverse stock split, combination of shares, or other similar transaction, the
Company shall make the same adjustment in the number and kind of shares which
are purchasable pursuant to the Option hereunder.
7. Compliance with Securities Laws. Participant acknowledges that neither the
Option granted hereunder nor the shares of Class B Common Stock purchasable in
accordance therewith are or will be registered under the Securities Act of 1933,
as amended (the "Act") or the applicable securities laws of any state.
Participant represents, warrants, and covenants that he or she is acquiring the
Option, and will acquire the shares upon exercise thereof, for investment only
and not with a view to, or for resale in connection with, any distribution or
public offering of the Option or the share within the meaning of the Act or any
applicable state securities laws. Participant acknowledges that the Option and
the shares which may be acquired upon exercise of the Option may not be
transferred or resold without registration under the Act and any applicable
state securities laws or the existence of an exemption from such registration
requirements. Participant agrees that the Company may place a stop transfer
order on the Company's books barring the transfer of the shares to be acquired
upon exercise of the Option until there is compliance with the registration
requirements of the Act and any applicable state securities laws or until the
Company is satisfied that an exemption from such registration requirements is
applicable to any proposed transfer. All certificates issued to Participant
evidencing shares purchased will bear a legend describing the existence of the
restrictions on the transfer of the shares imposed as a result of the
registration requirements of the Act and applicable state securities laws. As a
result of these restrictions, the Participant may have to hold the shares
-2-
indefinitely, and confirms that he or she is capable of bearing the economic
risks of an investment in shares of the Company and by reason of his or her
knowledge and experience in financial and business matters in general, and
investments in particular, has evaluated the merits and risks of an investment
therein.
8. Limitations on Transfer of Options. No right or Interest of Participant in
the Option prior to its exercise shall be assignable or transferable by
Participant, whether voluntarily or involuntarily, directly or indirectly, by
operation of law or otherwise, including execution, levy, garnishment,
attachment, pledge, divorce or bankruptcy, except by will or the laws of descent
and distribution subject to the other provisions hereof.
9. Death and Termination of Employment.
9.1 Death and Disability. In the event of the death or disability of
Participant while an employee of the Company, the Option, to the extent vested
and not theretofore exercised, and as hereinafter limited, may be exercised in
full or in part by (i) the estate of Participant or by a person who acquired
the right to distribution from Participant in the event of death, or (ii) the
Participant in the event of disability, in each case at any time, or from time
to time, with (and in no event after) three (3) months after the date of
Participant's death or disability, as the case may be, but not later than the
date on which the Option would otherwise expire. For purposes of this provision
"disability" shall mean the physical or mental inability of Participant to
perform his duties for a period of three (3) months as determined by an
independent physician approved by the Company.
9.2 Termination without Cause. If the Participant's employment is
terminated by the Company without cause or by the Participant by reason of
registration, the Option held by Participant, to the extent vested and not
therefore exercised and as hereinafter limited, may be exercised in full or in
part at any time or from time to time, within one hundred eighty (180) days
after the effective date of such termination or such later date as the Committee
may determine but in either case not later than the date on which the Option
would otherwise expire.
9.3 Termination for Cause. If the Participant's employment is terminated
for "Cause," as such term is defined in the Plan, the Participant shall, upon
such termination, cease to have any right to exercise the Option. In addition,
the Company shall have the right and option to buy back from Participant all
shares of Common Stock issued to Participant upon Participant's exercise of the
Option at a price equal to the lower of (i) the fair market value of such stock
on the date of such termination determined by the Board in its sole discretion,
or (ii) as set forth in a buy-sell agreement between Participant, the Company
and its other shareholders.
9.4 Board Modification. The Board shall have the unilateral right to modify
any of the foregoing provisions to grant the Participant a longer period of time
in which to exercise the Option, in its sole discretion.
10. Participant's Covenants Re-Affirmed. In consideration of the other
provisions of this Agreement, Participant hereby re-affirms to the Company, the
covenants made by Participant in that certain Employment Agreement dated
____________________ between Participant and the Company, the existence,
validity and substance of which Participant hereby acknowledges. The
-3-
Company agrees that the restrictions contained in such agreement shall not apply
to the Participant's purchases of stock in a publicly held company.
11. No Offer of Employment. This Agreement does not constitute any offer of
employment to Participant for any period of time.
12. Miscellaneous. This Agreement shall not be altered or amended by a writing
signed by the parties hereto. If any of the covenants or provisions of this
Agreement are held to be invalid or unenforceable, the remaining parts will
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included. In the event that any provision
relating to time periods and/or areas of restriction shall be declared by a
court of competent jurisdiction to exceed the maximum time period and/or areas
such court deems reasonable and enforceable, said time periods and/or areas of
restriction shall be deemed to become and thereafter be the maximum time periods
and/or areas which such court deems reasonable and enforceable. This Agreement
shall be subject to, and governed by, the laws of the State of Minnesota
irrespective of the fact that Participant is, or may become, a resident of a
different state.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
COMPANY: SYNET SERVICE CORPORATION
By:
Xxxxxxx X. Xxxxxxxxxx
President
PARTICIPANT:
-4-
