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EXHIBIT 4.2
MGC COMMUNICATIONS, INC.
SHARE OPTION AGREEMENT
THIS SHARE OPTION AGREEMENT (the "Agreement") is made and entered
into as of DATE between MGC Communications, Inc., a Nevada corporation (the
"Company") and EMPLOYEE NAME the "Optionee").
THE PARTIES AGREE AS FOLLOWS:
1. SHARE OPTION PLAN. The exercise of the Options granted under this
Agreement shall be subject to the terms, conditions and restrictions of the MGC
Communications, Inc. Stock Option Plan (the "Plan") as adopted by the Company on
June 30, 1996. A copy of the Plan is available to Optionee upon request and is
incorporated in this Agreement by this reference. Terms used in this Agreement
that are defined in the Plan shall have the same meaning as in the Plan, unless
the text of this Agreement clearly indicates otherwise.
2. GRANT OF OPTION.
A. The Company hereby grants to Optionee pursuant to the Plan an option
(the "Option") to purchase all or any part of NUMBER (#####) SHARES (the "Option
Shares") of the Company's Common Stock on the terms and conditions set forth
herein and in the Plan.
B. The options granted under this Agreement shall constitute incentive
stock options.
3. EXERCISE PRICE. The exercise price (the "Exercise Price") for each
Share covered by this Option shall be NUMBER DOLLARS AND NUMBER CENTS ($##.##)
per Share.
4. ADJUSTMENT OF OPTIONS. The Committee shall adjust the number of
Option Shares and the Exercise Price thereof in certain circumstances in
accordance with the provisions of Item 11 of the Plan.
5. EXERCISE OF OPTIONS.
A. Exercise of Option. Subject to the other terms of this Agreement,
Optionee's right to exercise the Option granted hereunder shall be subject to
the following Vesting Schedule wherein Optionee shall be entitled to exercise
his right to purchase the Option Shares at any point in time during this
Agreement only to the extent indicated below:
VESTING SCHEDULE
Date Number of Option Shares First Becoming Vested
---- ---------------------------------------------
MONTH 1, 1999 ###
MONTH 1, 2000 ###
MONTH 1, 2001 ###
MONTH 1, 2002 ###
MONTH 1, 2003 ###
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B. Partial Exercise. Subject to the terms of the Plan, this Option (to
the extent vested as provided in Paragraph 5A above) may be exercised for all or
any part of the Option Shares.
C. Method of Exercising Option. Subject to Paragraph 5A above, any
Option granted hereunder or any portion thereof may be exercised by the Optionee
by delivering to the Company at its main office (attention of its Secretary)
written notice which shall set forth the Optionee's election to exercise a
portion or all of his Options, the number of Shares with respect to which the
Option rights are being exercised and such other representations and agreements
as may be required by the Company to comply with applicable securities laws and
by paying in full the purchase price of the Shares purchased in cash or its
equivalent or, subject to the approval of the Committee, pursuant to one of the
alternative methods set forth in Paragraph 10B of the Plan.
D. Nonassignability of Option. The Option shall not be assignable or
transferable by the Optionee except by will or by the laws of descent and
distribution. Any distributee by will or by the laws of descent and distribution
shall be bound by the provisions of the Plan and this Agreement. During the life
of the Optionee, the Option shall be exercisable only by the Optionee. Any
attempt to assign, pledge, transfer, hypothecate or otherwise dispose of the
Option, and any levy of execution, attachment or similar process on the Option,
shall be null and void.
E. Termination. If Optionee ceases to be an employee of the Company and
is not otherwise actively involved in the Company's business (referred to herein
as a "termination") which termination arises for any reason whatsoever
(including death or disability), then the Option shall be exercisable only to
the extent exercisable on the date of such termination and must be exercised on
or before the date that is thirty (30) days following the date of such
termination. To the extent any portion of the Option is not exercisable on the
date of such termination, such portion of the Option shall terminate on the date
of such termination. To the extent any portion of the Option is not exercised
within the time period provided, such portion of the Option shall terminate as
of the date of expiration of such time period. Nothing in the Plan shall be
construed as imposing any obligation on the Company to continue Optionee's
employment with the Company or shall interfere with or restrict in any way the
rights of the Company to terminate Optionee's employment at any time for any
reason whatsoever, with or without cause.
F. Period to Exercise Option. The Option granted hereunder may, prior
to its expiration or termination, be exercised from time to time, in whole or in
part, up to the total number of Option Shares with respect to which it shall
have then become exercisable. An Option granted hereunder may become exercisable
in installments as determined by the Committee; provided, however, that if the
Option is exercisable in more than one installment, and if Optionee is
terminated, then the Option (or such portion thereof as shall be exercisable in
accordance with the terms of this Agreement) shall be exercisable during the
period set forth in Paragraph E.
G. No Exercise after Ten Years. The Option shall in no event be
exercisable after ten (10) years from the date hereof.
H. Issuance of Share Certificates Upon Exercise. Subject to the
provisions of Item 6 of this Agreement, upon receipt of the Exercise Price for
any Option Shares, the Company will issue to Optionee Shares equal to the number
of such Option Shares; provided, however, that no share certificate shall be
issued to the Optionee pursuant to the exercise of any Option granted herein, in
whole or in part, unless and until the Option Shares have been registered in
accordance with the rules of the SEC or Optionee signs an Investment Letter in a
form provided by the Company.
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6. RESTRICTION ON ISSUANCE OF SHARES; OPTIONEE'S REPRESENTATIONS.
A. Securities Laws - Restrictions on Issuance of Shares. No Shares
shall be issued or sold upon the exercise of any portion of the Option unless
and until (i) the full amount of the Exercise Price has been paid as provided in
Item 5C hereof, and (ii) the then applicable requirements of the Securities Act
of 1933, and the applicable securities laws of any state, the rules and
regulations of the Securities and Exchange Commission and any other regulations
of any securities exchange on which the Shares may be listed, shall have been
fully complied with and satisfied.
B. Purchase for Investment; Other Representations of Optionee. In the
event the offering of Shares with respect to which the Option is being exercised
is not registered under the Securities Act of 1933, but an exemption is
available which requires an investment representation or other representation,
the Optionee shall, as a condition to exercise of this Option, be required to
execute such documents as may be necessary or advisable in the opinion of
counsel for the Company to comply with any federal securities laws or any
applicable state securities laws. Share certificates evidencing such
unregistered Shares acquired upon exercise of the Option shall bear a
restrictive legend in substantially the following form and such other
restrictive legends as are required or advisable under the provisions of any
applicable laws:
This share certificate and the Shares represented hereby have not been
registered under the Securities Act of 1933, as amended (the "Act") nor
under the securities laws of any state and shall not be transferred at
any time in the absence of (i) an effective registration statement
under the Act and any other applicable state law with respect to such
Shares at such time; or (ii) an opinion of counsel satisfactory to the
Company and its counsel to the effect that such transfer at such time
will not violate the Act or any applicable state securities laws; or
(iii) a "no action" letter from the Securities and Exchange Commission
and a comparable ruling from any applicable state agency with respect
to such state's securities laws.
C. Holding Period Before Sale of Option Shares. If the Optionee is an
insider subject to the SEC's rules under Section 16(b) of the Securities and
Exchange Act of 1934, then the Optionee shall be restricted from selling any
Option Shares acquired by him through exercise of the Options or any portion
thereof during the six (6) month period following the date of grant of the
Option.
7. NO RIGHTS AS A STOCKHOLDER. The Optionee shall not have any rights
as a stockholder with respect to any Option Shares covered by the Option granted
hereunder until the issuance of a share certificate for such Shares. No
adjustment shall be made on the issuance of a share certificate to the Optionee
as to any distributions or other rights for which the record date occurred prior
to the date of issuance of such certificate.
8. BINDING EFFECT. This Agreement shall be binding upon the executors,
administrators, heirs, legal representatives and successors of the parties
hereto.
9. NO EMPLOYMENT RIGHTS. This Agreement shall not confer upon Optionee
any right with respect to the continuance of employment by the Company, nor
shall it interfere in any way with the right of the Company to terminate such
employment at any time.
10. GOVERNING LAW. This Share Option Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada.
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11. NOTICES. All notices and other communications under this Agreement
shall be in writing, and shall be deemed to have been duly given on the date of
delivery if delivered personally or three days after being mailed to the party
to whom notice is to be given, by certified mail, return receipt requested,
postage prepaid, and addressed as follows, until any such address is changed by
notice duly given:
To Optionee at: The address indicated below Optionee's signature
To Company at: MGC Communications, Inc.
0000 X. Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn.: Corporate Secretary
12. ENFORCEMENT. If any portion of this Agreement shall be determined
to be invalid or unenforceable, the remainder shall be valid and enforceable to
the extent possible.
IN WITNESS WHEREOF, this Agreement has been duly executed on the date
first above written.
OPTIONEE: MGC COMMUNICATIONS, INC.
Signature ------------------------ By: ---------------------------
Name: ---------------------------- Title: President
Address: ------------------------- (SEAL)
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