AMERICAN NORTEL COMMUNICATIONS, INC.,
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the American
Nortel Communications, Inc. Stock Option Plan ("Plan") shall have the same
defined meanings in this Option Agreement.
A. NOTICE OF STOCK OPTION GRANT
Optionee's Name and Address: Xxxxxxx X. Xxxxxxxx, Xx., c/o American Nortel
Communications, Inc., 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx
00000.
The individual named above (the "Optionee") has been granted an option (the
"Option") to purchase Common Stock of the Company, subject to the terms and
conditions of the Plan and this Option Agreement, as follows:
Date of Grant June 8, 2000
Total Number of Shares 1,268,534
Subject to this Option
Exercise Price per Share $1.00
Scheduled Expiration Date: June 7, 2010
1. Vesting Schedule.
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This Option shall be exercisable, in whole or in part, according to the
criteria set forth in this Section 1. As soon as practicable after the end of
each fiscal year of the Company (beginning with the year ending June 30, 2000),
the Company's net pre-tax earnings (inclusive of unrealized gains and losses but
exclusive of any extraordinary items) (herein, "Net Pre-Tax Earnings") shall be
determined. Options with respect to a number of Shares shall vest as determined
by reference to the Company's Net Pre-Tax Profits during a particular fiscal
year of the Company, in accordance with Schedule A attached hereto. If during a
particular fiscal year (called a Plan Year on Schedule A) the Company shall have
Net Pre-Tax Earnings, Options shall vest with respect to the number of shares
set forth opposite the relevant Net Pre-Tax Earnings figures for such Plan Year.
For example, if in Plan Year ending June 30, 2002, the Company's Net Pre-Tax
Earnings shall be $7,000,000, then Options with respect to 169,138 Shares shall
vest (whereas, by comparison, if the Company has Net Pre-Tax Profits of
$7,000,000 in Plan Year ending June 30, 2001, Options would vest with respect to
422,854 Shares).
2. Termination. This Option shall be exercisable (with respect to
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vested shares) at any time or from time to time prior to 5:00 p.m., Phoenix,
Arizona Time, on day preceding the tenth anniversary of the Date of Grant of
this Option. In no event may Optionee or any other person exercise this Option
after the Scheduled Expiration Date as provided above.
B. AGREEMENT
Grant of Option. The Company hereby grants to the Optionee an Option to
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purchase the number of Shares set forth in Section A above, at the exercise
price per Share set forth in the said Section A (the "Exercise Price"), and
subject to the terms and conditions of the Plan, which is incorporated herein by
reference.
1 . Exercise of Option.
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a. Right to Exercise. This Option shall be exercisable during its
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term in accordance with the Vesting Schedule set out in Section A above and with
the applicable provisions of the Plan and this Option Agreement; provided,
however, that in no event shall the Option be exercised prior to the sixth
monthly anniversary of the Date of Grant of this Option.
b. Method of Exercise. This Option shall be exercisable by
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delivery of an exercise notice which shall state the election to exercise the
Option, the number of Shares with respect to which the Option is being exercised
(the "Exercised Shares"), and such other representations and agreements as may
be required by the Company. The Exercise Notice shall be accompanied by payment
of the aggregate Exercise Price as to all Exercised Shares. This Option shall
be deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by the aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Shares shall be considered transferred
to the Optionee on the date on which the Option is exercised with respect to
such Shares.
2. Optionee's Representations. In the event the Shares have not been
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registered under the Securities Act of 1933, as amended (the "Securities Act"),
at the time this Option is exercised, the Optionee shall, if required by the
Company, concurrently with the exercise of all or any portion of this Option,
deliver to the Company such investment representations as the Company may
require.
3. Method of Payment. Payment of the aggregate Exercise Price shall be
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by any of the following, or a combination thereof-.
a. cash or check; or
b. surrender of other shares of the Company's common stock which,
(i) in the case of shares acquired upon exercise of an option, have been owned
by the Optionee for more than six (6) months on the date of surrender, and (ii)
have a Fair Market Value on the date of surrender equal to the aggregate
Exercise Price of the Exercised Shares.
4. Restrictions on Exercise. This Option may not be exercised if the
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issuance of such Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any Applicable
Law.
5. Transferability of Option. Without the express written consent
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of the Committee, this Option may not be transferred in any manner otherwise
than by will or by the laws of descent or distribution and may be exercised
during the lifetime of Optionee only by Optionee. The terms of the Plan and
this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.
6. Term of Option. This Option may be exercised only within the term
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set
out in Section A above, and may be exercised during such term only in accordance
with the Plan and the terms of this Option.
7. Entire Agreement, Governing Law. The Plan is incorporated herein by
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reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the laws of the State of Arizona.
8. Arbitration.
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a. Any controversy, claim or dispute arising out of or relating to
this Option Agreement or the Option, or any act or occurrence relating, to the
foregoing, or any decision of the Administrator relating to an option or its
forfeiture shall be determined and resolved by binding arbitration in accordance
with Title IX of The United States Code and The Commercial Arbitration Rules
(the "Rules") of the American Arbitration Association ("AAA") in effect on the
date the arbitration is commenced in accordance herewith. In the event of any
inconsistency between such Rules of the AAA and the ten-ns of this Agreement,
this Agreement shall supersede the Rules of the AAA. Judgment upon any award
rendered in the arbitration may be entered in any court having jurisdiction and
shall be final, binding, non-appealable and conclusive. The provisions of this
Agreement shall govern the rights of all parties hereto, including but not
limited to any party claiming for or on behalf of Optionee, including Optionee's
heirs, successors, assigns, personal representatives and bankruptcy trustees.
b. Any party may commence arbitration by serving upon all other
parties a written demand for arbitration sent to the appropriate address of the
party to be served as set forth in Section 9 hereof and by First Class United
States mail to the AAA Office in Phoenix, Arizona, or in the absence of such an
office, to the AAA Region in which Arizona is located.
c. The AAA shall administer the arbitration. The AAA shall
appoint a single arbitrator to conduct the arbitration within thirty (30) days
of the AAA's receipt of a demand for arbitration in accordance with this Section
13. The arbitrator shall, by virtue of background, similar experience, be
knowledgeable in matters pertaining to stock option agreements and employment
relationships. There shall be no n'-ht of discovery in connection with the
arbitration except in accordance with the AAA's Rules. Not earlier than thirty
(30) nor more than forty-five (45) days after appointment, the arbitrator shall
conduct a preliminary hearing in accordance with the AAA "Guidelines for
Expediting Large, Complex Commercial Arbitrations." Not less than five (5) days
prior to the preliminary hearing, all parties to the arbitration shall serve
upon all other parties to the arbitration a written list of witnesses and
exhibits to be used in the arbitration hearing. Except for good cause shown, no
witness or exhibit may be utilized at the arbitration hearing other than those
set forth on such list.
d. The arbitrator shall receive evidence in a single hearing which
shall be conducted in the Phoenix, Arizona metropolitan area, at a site
determined by the arbitrator. The hearing shall be commenced not more than
sixty (60) days after the appointment of the arbitrator.
e. The arbitrator shall award reasonable attorneys fees and costs
in favor of the prevailing party. The arbitrator shall issue a final award not
more than twenty (20) days following the conclusion of the hearing. The
arbitrator shall have the power to hear and decide, by documents only or with
the hearing (at the arbitrator's sole discretion) any pre-hearing motions which
are in the nature of pre-trial motions to dismiss or for summary judgment. The
arbitrator shall be entitled to receive reasonable compensation at an hourly
rate to be established by agreement between the arbitrator and the AAA.
9. Notices. All notices and other communications under this Agreement
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("Notices") shall be in writing and shall be deemed to have been duly given (i)
on the date of service if served personally on the party to whom notice is to be
given, or (ii) when dispatched, during the normal business hours of the
addressee, by customary means of telefacsimile, on the date dispatched or, if
dispatched after the recipient's normal business hours, at the opening of
business on the next business day, or (iii) on the third business day after
mailing if mailed to the party to whom notice to be given, by first class mail
registered or certified, postage prepaid; provided, however, that Notices to the
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Company concerning the exercise of an Option shall be deemed to have been duly
given only on the date actually received by the Company. Notices to (i) the
Company shall be addressed to its corporate headquarters, and (ii) the Optionee
at its address in the Company's records.
10. Potential Conflicts With Employment Agreement. If the Company
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and Optionee shall be parties to an employment agreement that includes terms
or provisions relating to stock options, the terms and provisions of that
employment agreement shall govern in the event of any discrepancies,
inconsistencies or conflicts between the terms and provisions of this Agreement
and those of such employment agreement.
OPTIONEE: AMERICAN NORTEL
COMMUNICATIONS, INC.
___________________________ ______________________________
Signature By
___________________________ ______________________________
Print Name Title
___________________________
___________________________
Residence Address
[Signature page to Stock Option Agreement with Xxxxxxx X. Xxxxxxxx, Xx.]
SCHEDULE A
Performance Criteria for Vesting
# of Shares
Vested(1)
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For Plan Year ending June 30, 2000:
If Net Pre-Tax Earnings are less than $4,204,927: 0
If Net Pre-Tax Earnings are at least $4,204,927 but less than $4,555,338: 169,138
If Net Pre-Tax Earnings are at least $4,555,338 but less than $4,936,417: 338,276
If Net Pre-Tax Earnings are equal to or greater than $4,936,417: 422,845
For Plan Year ending June 30, 2001:
If Net Pre-Tax Earnings are less than $5,045,913: 0
If Net Pre-Tax Earnings are at least $5,045,913 but less than $5,921,939: 169,138
If Net Pre-Tax Earnings are at least $5,921,939 but less than $6,417,342: 338,276
If Net Pre-Tax Earnings are equal to or greater than $6,417,342: 422,845
For Plan Year ending June 30, 2002:
If Net Pre-Tax Earnings are less than $6,055,095: 0
If Net Pre-Tax Earnings are at least $6,055,095 but less than $7,698,521: 169,138
If Net Pre-Tax Earnings are at least $7,698,521 but less than $8,342,544: 338,276
If Net Pre-Tax Earnings are equal to or greater than $8,342,544: 422,845
For Plan Year ending June 30, 2003:
If Net Pre-Tax Earnings are less than $7,266,114: 0
If Net Pre-Tax Earnings are at least $7,266,114 but less than $10,008,077: 169,138
If Net Pre-Tax Earnings are at least $10,008,077 but less than $10,845,308: 338,276
If Net Pre-Tax Earnings are equal to or greater than $10,845,308: 422,845
For Plan Year ending June 30, 2004:
If Net Pre-Tax Earnings are less than $8,719,337: 0
If Net Pre-Tax Earnings are at least $8,719,337 but less than $13,010,500: 169,138
If Net Pre-Tax Earnings are at least $13,010,500 but less than $14,098,900: 338,276
If Net Pre-Tax Earnings are equal to or greater than $14,098,900: 422,845
For Plan Year ending June 30, 2005:
If Net Pre-Tax Earnings are less than $10,463,204: 0
If Net Pre-Tax Earnings are at least $10,463,204 but less than $16,913,650: 169,138
If Net Pre-Tax Earnings are at least $16,913,650 but less than $18,328,570: 338,276
If Net Pre-Tax Earnings are equal to or greater than $18,328,570: 422,845
For Plan Year ending June 30, 2006:
If Net Pre-Tax Earnings are less than $12,555,845: 0
If Net Pre-Tax Earnings are at least $12,555,845 but less than $21,987,745: 169,138
If Net Pre-Tax Earnings are at least $21,987,745 but less than $23,827,141: 338,276
If Net Pre-Tax Earnings are equal to or greater than $23,827,14 1: 422,845
For Plan Year ending June 30, 2007:
If Net Pre-Tax Earnings are less than $15,067,014: 0
If Net Pre-Tax Earnings are at least $15,067,014 but less than $28,584,069: 169,138
If Net Pre-Tax Earnings are at least $28,584,069 but less than $30,975,284: 338,276
If Net Pre-Tax Earnings are equal to or greater than $30,975,284: 422,845
For Plan Year ending June 30, 2008:
If Net Pre-Tax Earnings are less than $18,080,417: 0
If Net Pre-Tax Earnings are at least $18,080,417 but less than $37,159,290: 169,138
If Net Pre-Tax Earnings are at least $37,159,290 but less than $40,267,869: 338,276
If Net Pre-Tax Earnings are equal to or greater than $40,267,869: 422,845
For Plan Year ending June 30, 2009:
If Net Pre-Tax Earnings are less than $21,696,501: 0
If Net Pre-Tax Earnings are at least $21,696,501 but less than $48,307,077: 169,138
If Net Pre-Tax Earnings are at least $48,307,077 but less than $52,348,229: 338,276
If Net Pre-Tax Earnings are equal to or greater than $52,348,229: 422,845
(1) # of Shares Vested annually is the lesser of the Optionee's remaining unvested
shares or the number of shares shown.
