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EXHIBIT 10.04
APPLIEDTHEORY COMMUNICATIONS, INC.
NON-STATUTORY STOCK OPTION CONTRACT
Optionee: XXXXXXX XXXXXXXX
Number of Optioned Shares: 100,000
Date of Grant: October 5, 1996
Option Price Per Share: $1.00
This NON-STATUTORY STOCK OPTION CONTRACT is made between AppliedTheory
Communications, Inc., a New York Corporation (hereinafter referred to as the
"Company") and the Optionee whose name is set forth above.
WITNESSETH:
1. The Company hereby grants to the Optionee an option to
purchase an aggregate of that number of shares of the One Cent ($.01) par value
Voting Common Stock of the Company set forth above (hereinafter referred to as
the "Shares"), at the price per share set forth above.
2. The period during which the option granted hereby shall be
exercisable shall commence on the date of grant set forth above and terminate on
December 31, 2005. This option may be exercised at any time and from time to
time, in whole or in part, subject to the following limitations:
(a) Until and including September 30, 1997, Optionee
may not exercise his option to purchase any of the Shares which Optionee is
entitled to purchase hereunder.
(b) Beginning on October 1, 1997, Optionee may
exercise his option to purchase not more than 25,000 of the Shares which
Optionee is entitled to purchase hereunder.
(c) The remaining 75,000 options will vest as stated
in the consulting agreement dated October 5, 1996.
If the foregoing in (c) does not occur by December 31, 2006, the remaining
75,000 options expire, ungranted.
3. In order for the options granted hereby to be exercised, in
whole or in part, the. notice by the Optionee to the Company must be accompanied
by payment in full of the option price for the Shares being purchased.
4. The option granted hereby is not transferable by the
Optionee other than by will or the laws of descent and distribution and is
exercisable, during his lifetime, only by him.
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5. The Optionee acknowledges that, in reliance on his
representations set forth herein, the option granted hereunder and the sale of
Shares to him pursuant to the exercise of all or any part of such option are and
will be granted and sold under a claim of exemption from registration under the
Securities Act of 1933, as amended (the "Act"), as transaction(s) not involving
any public offering.
6. The Optionee hereby represents and agrees that, on any
exercise of the option granted hereby,
A. He will acquire the Shares without a view to
distribution or resale;
B. The Shares purchased may not be thereafter
transferred unless (i) a registration statement with respect thereto shall then
be effective under the Act, and the Company will have complied with any other
applicable laws, or (ii) the Optionee shall have obtained an opinion of counsel,
in form and content reasonably satisfactory to the Company and to its counsel,
to the effect that the proposed transfer will be exempt from the registration
provisions of the Act, will comply with applicable state laws, and will not
result in any violation of the Act or of any other applicable law;
C. Because any Shares purchased will not have been
registered under the Act, they must be held indefinitely unless and until they
are subsequently registered under the Act or an exemption from such registration
is available;
D. Any routine sales of the Shares purchased, made in
reliance upon Rule 144 promulgated under the Act, can be made only in limited
amounts and in accordance with all the terms and conditions of that Rule, and in
case the Rule is not applicable, compliance with Regulation A or some other
disclosure exemption may be required;
E. Except as set forth in Section 8 below, the
Company has no obligation to register the Shares, to comply with any such
disclosure exemption, or to take such action as may be necessary to meet the
requirements of Rule 144;
F. Appropriate legends may be placed on any
certificate for the Shares received by him in order to give notice of the
repurchase and transfer restrictions set forth herein, and the Company may cause
stop transfer orders to be placed against such certificate(s); and
G. The Company counsel must be satisfied that the
issuance of Shares pursuant to the exercise of the option will be in compliance
with the Act and any other laws applicable thereto, and the Company shall be
entitled to receive such other information, assurances, documents,
representations or warranties as it or its counsel may reasonably require with
respect thereto.
7. Optionee and the Company agree that the option granted
hereby is not part of or governed by the terms and provisions of the Company's
1996 Incentive Stock Option Plan (the "Plan).
8. If the Company files a registration statement on Form S-8
or other applicable form covering shares of its common stock issuable pursuant
to the Plan, the Company will, at its option, either include the Shares in such
registration statement, or file a separate registration statement for the
Shares.
9. This Non-Statutory Stock Option Contract shall be binding
upon and inure to the benefit Of any successor or assignee of the Company and
any executor, administrator, legal representative, legatee or distributee
entitled by law to exercise the Optionee's rights hereunder.
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IN WITNESS WHEREOF, the Company has caused this Non-Statutory
Stock Option Contract to be executed in its behalf by its duty authorized
officer, and the Optionee has hereunto set his hand, the day and year written
below.
AppliedTheory Communications, Inc.
By: /s/ Xxxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxxxxx, President
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Xxxxxxx Xxxxxxxx, Optionee
Dated: Syracuse, New York
Dec 31, 1997
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