10
EXHIBIT 10.13
ACE*COMM CORPORATION
OMNIBUS STOCK PLAN
NON-QUALIFIED STOCK OPTION GRANT AGREEMENT
This Grant Agreement (the "Agreement") is entered into
effective __________ __, 19__ (the "Grant Date"), by and
between ACE*COMM Corporation, a Maryland corporation (the
"Company"), and ____________________________________
("Grantee").
By executing the Agreement, the Company and the Grantee
hereby acknowledge that, except as otherwise expressly
provided herein, the Agreement supersedes any and all prior
understandings or agreements between the Grantee and the
Company, whether written or oral, with respect to the grant
of stock options for the fiscal year ending June 30, 19__.
ARTICLE 1
GRANT OF OPTION
Section 1.1 Grant of Option. Subject to the terms and
conditions prescribed in the Agreement and pursuant to the
provisions of the Plan, the Company hereby grants to Grantee
as of the Grant Date a Non-Qualified Stock Option (the
"Option") to purchase all or any part of _______ shares of
voting common stock of the Company (the "Stock") at an
exercise price of $______ per share (the "Exercise Price").
Section 1.2 Term of Option. Unless the Option granted
pursuant to Section 1.1 hereof terminates earlier pursuant to
other provisions of the Agreement, the Option shall expire at
5:00 p.m. Eastern Time on the day following the tenth (10th)
anniversary of its Grant Date.
ARTICLE 2
VESTING
Section 2.1 Vesting. Unless the Option has earlier
terminated pursuant to the provisions of the Agreement and
except to the extent that vesting has accelerated pursuant to
Section 2.2, Grantee shall become vested in the Option in
accordance with the schedule below, provided, however, that
Grantee shall have been in the continuous, full-time employ
of the Corporation from the Grant Date through the applicable
date below:
Percentage of
Date Option Vested
(six years from grant date) 34% of any shares not
previously vested
(seven years from grant date) 33% of any shares not
previously vested
(eight years from grant date) 33% of any shares not
previously vested
Section 2.2 Acceleration of Vesting. Unless the Option
has earlier terminated pursuant to the provisions of the
Agreement, vesting of the Option shall be accelerated so that
Grantee shall become vested in up to one hundred percent
(100%) of the Option if the minimum thresholds for the
Performance Targets (described below) are achieved for the
fiscal year ending June 30, 19__, provided, however, that
Grantee shall have been in the continuous full-time employ of
the Company from the Grant Date through June 30, 19__. This
accelerated vesting, if applicable, shall be effective
October 1, 19__.
Accelerated vesting will occur only to the extent of
achievement of certain Performance Targets. The Performance
Targets are Division Revenue and Division Margin and
Corporate Revenue and Corporate Profit. One-half (1/2) of
the shares of Stock available for each category (Division and
Corporate) under the Option will be eligible for accelerated
vesting with respect to each of the Performance Targets;
however, the minimum thresholds (described below) for both
Performance Targets in each category must be achieved to
trigger any accelerated vesting. If both of the minimum
thresholds are achieved, the respective portions of the
Option which shall vest pursuant to this Section 2.2 shall be
equal to the respective percentages (not to exceed 100%) of
the Performance Targets achieved (i.e., the percentage of the
range achieved between the minimum thresholds and the maximum
performance targets). Hereinafter, the vested portion of the
Option shall be referred to as the "Vested Option Shares."
Based on the Performance Targets presented below, the
Committee shall, in its sole and absolute discretion,
determine the extent to which, if any, the Performance
Targets have been met, and the extent to which, if any, a
portion of the Option shall vest under this Section 2.2. For
purposes of this Section 2.2, the Performance Targets for the
fiscal year ending June 30, 19__ shall be:
Performance Targets
Option Minimum Maximum
Performance Criteria Shares Thresholds Performance
Division Revenue
Division Margin
Corporate Revenue
Corporate Profit
ARTICLE 3
EXERCISE OF OPTION
Section 3.1 Exercisability of Option. Except as
otherwise provided herein, no portion of the Option shall be
exercisable by Grantee prior to the time such portion of the
Option has vested. To the extent option share vesting is
accelerated under Section 2.2 of the Agreement, such option
shall become exercisable, on the third anniversary of the
date of grant provided, however, that Grantee shall have been
in the continuous, full-time employ of the Corporation from
the Grant Date through the applicable anniversary date below:
To the extent the Option vests on the sixth (6th),
seventh (7th) or eighth (8th) anniversaries of the Grant Date
under Section 2.1 of the Agreement, the Vested Option Shares
shall become exercisable on these dates such shares vest.
Vested Option Shares that have become exercisable shall
remain exercisable throughout the term of this Option, except
as otherwise set forth in this Agreement, including Article
4.
Section 3.2 Acceleration of Exercisability. Unless the
Option has earlier terminated pursuant to the provisions of
the Agreement, the exercisability of the Option granted to
Grantee hereunder shall be accelerated so that the Vested
Option Shares shall become one hundred percent (100%)
exercisable if there is a Change in Control, provided that
Grantee has been in the continuous, full-time employ of the
Company from the Grant Date until such Change in Control.
For purposes of this Section 3.2, a "Change in Control" shall
occur if (i) there is any sale, exchange or other disposition
of substantially all of the Company's assets; (ii) there is
any merger, share exchange, consolidation or other
reorganization or business combination in which the Company
is not the surviving or continuing corporation, or in which
the Company's stockholders become entitled to receive cash,
securities of the Company other than voting common stock, or
securities of another issuer; or (iii) any person or group as
such terms are defined in the Securities Exchange Act of 1934
becomes the beneficial owner, as defined in the Exchange Act,
directly or indirectly, whether by purchase or acquisition or
agreement to act in concert or otherwise, in the aggregate of
securities of the Company representing more than fifty
percent (50%) of the total combined voting power of all
classes of the Company's then outstanding securities.
Section 3.3 Manner of Exercise. The exercisable
portion of the Option shares may be exercised, in whole or in
part, by delivering written notice to the Committee in
accordance with Section 5.8 hereof in such form as the
Committee may require from time to time; provided, however,
that the Option may not be exercised at any one time as to
fewer than one hundred (100) shares (or such number of shares
as to which the Option is then exercisable if such number of
shares then exercisable is less than one hundred (100)).
Such notice shall specify the number of shares of Stock
subject to the Option as to which the Option is being
exercised, and shall be accompanied by full payment of the
Exercise Price of the shares of Stock as to which the Option
is being exercised and any applicable withholding taxes which
may be due. Payment of the Exercise Price and any
withholding tax obligations shall be made in cash (or cash
equivalents acceptable to the Committee in the Committee's
discretion). In the Committee's sole and absolute
discretion, the Committee may authorize payment of the
Exercise Price and any withholding tax obligations to be
made, in whole or in part, by such other means as the
Committee may prescribe. The Option may be exercised only in
multiples of whole shares and no partial shares shall be
issued.
The Committee, subject to such limitations as it may
determine, may authorize payment of the Exercise Price and
any withholding tax obligations in whole or in part, by
delivery of a properly executed exercise notice, together
with irrevocable instructions: (i) to a brokerage firm
approved by the Company to deliver promptly to the Company
the aggregate amount of sale or loan proceeds to pay the
exercise price and any withholding tax obligations that may
arise in connection with the exercise, and (ii) to the
Company to deliver the certificates for such purchased shares
directly to such brokerage firm.
Section 3.4 Issuance of Shares and Payment of Cash upon
Exercise. Upon exercise of the Option, in whole or in part,
in accordance with the terms of the Agreement and upon
payment of the Exercise Price and any withholding tax
obligations for the shares of Stock as to which the Option is
exercised, the Company shall issue to Grantee or Grantee's
permitted transferee, as the case may be, the number of
shares of Stock so paid for, in the form of fully paid and
nonassessable Stock.
ARTICLE 4
TERMINATION OF OPTION
Section 4.1 Termination of Employment or Affiliation
for Reasons Other Than Death. Unless the Option has earlier
terminated pursuant to the provisions of the Agreement, the
Option granted to Grantee shall terminate in its entirety,
regardless of whether the Option is exercisable in whole or
in part, three (3) months after the date Grantee is no longer
employed full-time by the Company and its affiliates for any
reason other than Grantee's death, but not later than the end
of the stated term of the Option.
Notwithstanding the foregoing, the Option granted to
Grantee shall terminate in its entirety, regardless of
whether the Option is exercisable in whole or in part, upon
termination of the employment of Grantee by the Company or an
affiliate for "Cause", as defined hereinafter. For purposes
of this Section 4.1, "Cause" means the termination of
Grantee's service with the Company or an affiliate because of
(i) a felony conviction of Grantee; (ii) the commission by
Grantee of an act of fraud or embezzlement against the
Company; (iii) willful misconduct by Grantee which is
materially detrimental to the Company; (iv) Grantee's
continued failure to implement reasonable requests or
directions from his or her direct supervisor after written
notice to Grantee; (v) Grantee's wrongful dissemination of
confidential or proprietary information; (vi) the intentional
and habitual neglect by Grantee of his or her duties to the
Company; or (vii) Grantee's breach of any contract or
agreement with the Company. The good faith determination by
the Committee of whether Grantee's employment was terminated
by the Company for "Cause" shall be final and binding for all
purposes hereunder.
Section 4.2 Upon Grantee's Death. Unless the Option
has earlier terminated pursuant to the provisions of the
Agreement, upon Grantee's death Grantee's executor, personal
representative, the person to whom the Option shall have been
transferred by will or the laws of descent and distribution,
or such other permitted transferee, as the case may be, may
exercise all or any portion of the Vested Option Shares which
are exercisable as of the Grantee's date of death, provided
such exercise occurs within one (1) year after the date of
Grantee's death, but not later than the end of the stated
term of the Option.
ARTICLE 5
MISCELLANEOUS
Section 5.1 Non-Guarantee of Employment or Other
Relationship. Nothing in the Plan or the Agreement shall be
construed as a contract of employment or for services between
the Company (or an affiliate) and Grantee, or as a
contractual right of Grantee to continued employment or
affiliation with the Company or an affiliate, or as a
limitation of the right of the Company or an affiliate to
terminate its relationship with Grantee at any time.
Section 5.2 No Rights of Stockholder. Grantee shall
not have any of the rights of a stockholder with respect to
the shares of Stock that may be issued upon the exercise of
the Option until such shares of Stock have been issued to him
upon the due exercise of the Option.
Section 5.3 Withholding of Taxes. The Company or any
affiliate shall have the right to deduct from any
compensation or any other payment of any kind (including
withholding the issuance of shares of Stock) due Grantee the
amount of any federal, state or local taxes required by law
to be withheld as the result of the exercise of the Option;
provided, however, that the value of the shares of Stock
withheld may not exceed the statutory minimum withholding
amount required by law. In lieu of such deduction, the
Committee may require Grantee to make a cash payment to the
Company or an affiliate equal to the amount required to be
withheld. If Grantee does not make such payment when
requested, the Company may refuse to issue any Stock
certificate under the Plan until arrangements satisfactory to
the Committee for such payment have been made.
Section 5.4 Nontransferability of Option. Except as
expressly authorized by the Committee in writing, the Option
shall be nontransferable otherwise than by will or the laws
of descent and distribution, and during the lifetime of
Grantee, the Option may be exercised only by Grantee or,
during the period Grantee is under a legal disability, by
Grantee's guardian or legal representative.
Section 5.5 Agreement Subject to Charter, By-Laws and
Governing Laws. This Agreement is subject to the Charter and
By-Laws of the Company, and any applicable Federal or state
laws, rules or regulations, including without limitation, the
laws, rules, and regulations of the State of Maryland, other
than the conflict of laws principles thereof.
Section 5.6 Gender. As used herein the masculine shall
include the feminine as the circumstances may require.
Section 5.7 Headings. The headings in the Agreement
are for reference purposes only and shall not affect the
meaning or interpretation of the Agreement.
Section 5.8 Notices. All notices and other communications
made or given pursuant to the Agreement shall be in writing
and shall be sufficiently made or given if hand delivered or
mailed by certified mail, addressed to Grantee at the address
contained in the records of the Company, or addressed to the
Committee, care of the Company for the attention of its
Secretary at its principal office or, if the receiving party
consents in advance, transmitted and received via telecopy or
via such other electronic transmission mechanism as may be
available to the parties.
Section 5.9 Entire Agreement; Modification. The
Agreement contains the entire agreement between the parties
with respect to the subject matter contained herein and may
not be modified, except as provided in the Plan or in a
written document signed by each of the parties hereto.
Section 5.10 Conformity with Plan. This Agreement is
intended to conform in all respects with, and is subject to
all applicable provisions of, the Plan, which is incorporated
herein by reference. Unless stated otherwise herein,
capitalized terms in this Agreement shall have the same
meaning as defined in the Plan. Inconsistencies between this
Agreement and the Plan shall be resolved in accordance with
the terms of the Plan. In the event of any ambiguity in the
Agreement or any matters as to which the Agreement is silent,
the Plan shall govern, as interpreted by the Committee in
good faith.
IN WITNESS WHEREOF, the parties have executed the
Agreement as of the date first above written.
ATTEST: ACE*COMM CORPORATION
By:
WITNESS: GRANTEE
