Exhibit A
NETWORK LONG DISTANCE, INC.
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT
This Stock Option Award Agreement (the "Award Agreement"), made
effective the 1st day of July, 1997 (the "Date of Grant") evidences the grant,
by Network Long Distance, Inc. (the "Company"), of a stock option to Xxxxxxx X.
Xxxxxx (the "Grantee") on the date hereof (the "Date of Grant"). By executing
this Award Agreement, the Grantee agrees to be bound by the provisions hereof.
1. Shares Optioned and Option Price. The Grantee shall have an option
to purchase 50,000 shares of the Company's Common Stock, $.001 par value (the
"Shares"), at an exercise price of $9.375 for each share (the "Option"), subject
to the terms and conditions of this Award Agreement. The Option is not, nor is
it intended to be, an Incentive Stock Option as described in section 422 of the
Internal Revenue Code of 1986.
2. Exercise Period. The Option may be exercised, from time to time, at
any time after the date hereof; provided, however, that the Grantee's right to
exercise the Option shall terminate on, and this Option shall be null and void
following, the earliest to occur of the following dates (the "Termination
Date"):
a. the fifth anniversary of the Date of Grant;
b. the first anniversary of the date of the Grantee's termination
of employment on account of death;
c. the date of the Grantee's termination of employment for any
reason whatsoever, whether voluntarily or involuntarily and
with or without cause, but other than on account of death.
3. Exercise. To the extent that the Option is exercisable hereunder, it
may be exercised in full or in part by the Grantee or, in the event of the
Grantee's death, by the person or persons to whom the Option was transferred by
will or the laws of descent and distribution, by delivering or mailing written
notice of the exercise and full payment of the purchase price to the Secretary
of the Company. The written notice shall be signed by each person entitled to
exercise the Option and shall specify the address and social security number of
each person. If any person other than the Grantee purports to be entitled to
exercise all or any portion of the Option, the written notice shall be
accompanied by proof, satisfactory to the Secretary of the Company, of that
entitlement. The written notice shall be accompanied by full payment in cash
(including personal check), in Shares represented by certificate transferring
ownership to the Company and with an aggregate value equal to the purchase price
on the date the written notice is received by the Secretary, or in any
combination of cash and Shares, provided that payment in full or part by the
transfer of Shares shall be subject to approval by the Board of Directors (the
"Board"). The written notice will be effective
and the Option shall be deemed exercised to the extent specified in the notice
on the date that the written notice (together with required accompaniments and
payment) is received by the Secretary of the Company at its then executive
offices during regular business hours.
4. Transfer of Shares Upon Exercise. As soon as practicable after
receipt of an effective written notice of exercise and full payment of the
purchase price as provided in paragraph 3, the Secretary of the Company shall
cause ownership of the appropriate number of Shares to be transferred to the
person or persons exercising the Option by having a certificate or certificates
for those Shares registered in the name of such person or persons and shall have
each certificate delivered to the appropriate person. Notwithstanding the
foregoing, if the Company or a subsidiary required reimbursement of any tax
required by law to be withheld with respect to Shares received upon exercise of
an Option, the Secretary shall not transfer ownership of those Shares until the
required payment is made.
5. Transferability of Options. The rights under this Award Agreement
may not be transferred except by will or the laws of descent and distribution.
The rights under this Award Agreement may be exercised during the lifetime of
the Grantee only by the Grantee.
6. Taxes. The Grantee will be solely responsible for any Federal, state
or local income taxes imposed in connection with the exercise of the Option or
the delivery of Shares incident thereto, and the Grantee authorizes the Company
or any subsidiary to make any withholding for taxes which the Company deems
necessary or proper in connection therewith, from any amounts due to the Grantee
by the Company. Subject to approval by the Board, the Grantee may satisfy such
withholding obligations, in whole or in part, by (a) electing to have the
Company Shares then owned by Grantee having a value equal to the amount required
to be withheld.
7. Risk of Investment. It is expressly understood and agreed that the
Grantee assumes all risks incident to any change hereafter in the applicable
laws or regulations or incident to any change in the market value of the Shares
after the exercise of this Option in whole or in part. The Grantee agrees that
the Shares acquired on exercise of this Option shall be acquired for his or her
own account for investment only and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act of 1933 (the "Securities Act") or other applicable
securities laws. If the Board so determines, any stock certificates issued upon
exercise of this Option shall bear a legend to the effect that the Shares have
been so acquired. The Company may, but in no event shall be required to, bear
any expenses of complying with the Securities Act, other applicable securities
laws or the rules and regulations of any national securities exchange or other
regulatory authority in connection with the registration, qualification, or
transfer, as the case may be, of this Option or any Shares acquired upon the
exercise thereof. The foregoing restrictions on the transfer of the Shares shall
be inoperative if (a) the Company previously shall have been furnished with an
opinion of counsel, satisfactory to it, to the effect that such transfer will
not involve any violation of the Securities Act and other applicable securities
laws or (b) the Shares shall have been duly registered in compliance with the
Securities Act and other applicable state or federal securities laws.
8. No Disclosure Obligation. The Grantee acknowledges and agrees that
neither the Company nor any of its Board members or officers has any duty or
obligation to disclose to the Grantee any material information regarding the
business of the Company or affecting the value of the Shares before or at the
time of a Grantee's Termination of Service, including, without limitation, any
information concerning plans for the Company to be acquired by or merged with or
into another firm or entity.
9. Governing Law. This Award shall be governed under the laws of the
State of Delaware.
NETWORK LONG DISTANCE, INC.
By: /s/ Xxxx X. Leaf
Xxxx X. Leaf
Title: Secretary
ACKNOWLEDGMENT
The undersigned Grantee acknowledges that he or she understands and
agrees to be bound by each of the terms and conditions of this Award Agreement.
Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
Printed Name Signature
