Exhibit 10.33
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SWITCHBOARD INCORPORATED
Nonstatutory Stock Option Agreement
Granted Under 1999 Stock Incentive Plan
1. Grant of Option.
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This agreement evidences the grant by Switchboard Incorporated, a Delaware
corporation (the "Company"), on October 13, 1999 (the "Grant Date") to Xxxxxxx
X. Xxxxxxxx, an employee of the Company (the "Participant"), of an option to
purchase, in whole or in part, on the terms provided herein and in the Company's
1999 Stock Incentive Plan (the "Plan"), a total of 7,000 shares (the "Shares")
of common stock, $0.01 par value per share, of the Company ("Common Stock") at
$9.00 per Share. Unless earlier terminated, this option shall expire on October
13, 2009 (the "Final Exercise Date").
It is intended that the option evidenced by this agreement shall not be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986, as amended and any regulations promulgated thereunder (the "Code").
Except as otherwise indicated by the context, the term "Participant", as used in
this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.
2. Vesting Schedule.
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(a) This option will become exercisable ("vest") as to 100% of the original
number of Shares on the earlier of (a) the effective date of the initial
registration of the Company's Common Stock under the Securities Act of 1933, as
amended or (B) five (5) years from the date of grant.
The right of exercise shall be cumulative so that to the extent the option
is not exercised in any period to the maximum extent permissible it shall
continue to be exercisable, in whole or in part, with respect to all shares for
which it is vested until the earlier of the Final Exercise Date or the
termination of this option under Section 3 hereof or the Plan.
(b) Early Exercise Alternative. Notwithstanding the exercisability
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schedule set forth in paragraph (a), the Participant may elect to exercise this
option as to the unvested Shares (in addition to the vested Shares) if
simultaneously with such exercise the Participant enters into a Stock
Restriction Agreement with the Company in the form attached hereto as Exhibit A
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(the "Stock Restriction Agreement"). The Stock Restriction Agreement provides
that the unvested Shares shall be subject to a right of repurchase (the
"Purchase Option") in favor of the Company at the $9.00 exercise price (as
adjusted pursuant to the terms hereof) in the event that the Participant ceases
to be employed by the Company.
3. Exercise of Option.
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(a) Form of Exercise. Each election to exercise this option shall be in
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writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. The Participant may purchase less than the number of
shares covered hereby, provided that no partial exercise of this option may be
for any fractional share or for fewer than ten whole shares.
(b) Continuous Relationship with the Company Required. Except as otherwise
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provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an employee, officer or director of, or
consultant or advisor to, the Company or any parent or subsidiary of the Company
as defined in Section 424(e) or (f) of the Code (an "Eligible Participant").
(c) Termination of Relationship with the Company. If the Participant
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ceases to be an Eligible Participant for any reason, then, except as provided in
paragraphs (d) and (e) below, the right to exercise this option shall terminate
30 days after such cessation (but in no event after the Final Exercise Date),
provided, that, this option shall be exercisable only to the extent that the
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Participant was entitled to exercise this option on the date of such cessation.
Notwithstanding the foregoing, if the Participant, prior to the Final Exercise
Date, violates the non-competition or confidentiality provisions of the Plan or
any employment contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right to exercise this
option shall terminate immediately upon such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies or
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becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to
the Final Exercise Date while he or she is an Eligible Participant and the
Company has not terminated such relationship for "cause" as specified in
paragraph (e) below, this option shall be exercisable, within the period of six
months following the date of death or disability of the Participant by the
Participant, provided, that, this option shall be exercisable only to the extent
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that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Final Exercise Date.
(e) Discharge for Cause. If the Participant, prior to the Final Exercise
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Date, is discharged by the Company for "cause" (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. "Cause" shall mean, with respect to any Participant who has entered
into an employment or consulting agreement with the Company, a material breach
of such agreement by the
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Participant, or if such agreement provides for termination for cause, the
definition of "cause" set forth in such agreement. With respect to any other
Participant, "cause" shall mean (i) conviction or pleading guilty (including a
plea of nolo contendere) with respect to the commission of a felony, (ii) acts
of dishonesty or moral turpitude which are materially detrimental to the Company
and/or its affiliates as determined in good faith by the Board, (iii) failure of
the Participant to obey the reasonable and lawful orders of the Board or the
chief executive officer of the Company after written demand that the Participant
do so, (iv) gross negligence by the Participant in the performance of, or wilful
disregard by the Participant of, the Participant's obligations to the Company,
or (v) the breach by the Participant of any of the Participant's obligations of
confidentiality with respect to the Company. The Participant shall be considered
to have been discharged for "cause" if the Company determines, within 30 days
after the Participant's resignation, that discharge for cause was warranted.
4. Proxy. The Participant hereby appoints Banyan Worldwide, a Massachusetts
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corporation, and/or its designee(s) ("Banyan"), as the Participant's attorney-
in-fact and proxy, with full power of substitution, for and in the Participant's
name, to vote, express consent or disapproval, or otherwise act in such manner
(including pursuant to written consent) and upon such matters as Banyan or its
designee(s), proxy or substitute(s) shall, in its or their sole discretion, deem
proper with respect to any and all of the shares issued upon any exercise of
this option or issued in respect to such shares as a stock dividend, stock split
or otherwise (collectively, for purposes of Sections 4, 5 and 6 hereof, the
"Option Shares"). The proxy granted hereby shall be irrevocable and may be
exercised at any meeting or in respect of any written consent of stockholders.
This proxy is coupled with an interest sufficient in law to support such proxy.
This proxy shall remain in full force and effect and be enforceable against any
donee, transferee or assignee of the stock. In addition to any other applicable
limitations pursuant to the terms of this option, the Participant agrees not to
sell, assign, transfer, loan, tender, pledge, hypothecate, exchange, encumber or
otherwise dispose of, or issue an option or call with respect to, any of the
Option Shares, or impair such Option Shares, in each case unless, and as a
condition precedent thereto, the transferee of such Option Shares executes and
delivers to Banyan an agreement to be bound by the terms of this Section 4. Any
purported transfer in violation of this Section 4 shall be null and void and
shall not be recognized by the Company or reflected on the stock records of the
Company. The Participant shall cause the Company to require any certificates
representing any and all Option Shares issued upon any exercise of this option
to bear a legend referencing the restrictions on transfer set for in this
Section 4, which legend shall be subject to the approval of Banyan.
Notwithstanding anything to the contrary in the foregoing, the provisions of,
including, without limitation, the proxy appointed by, this Section 4 shall
terminate upon the closing of the Company's initial public offering,
underwritten by a nationally recognized underwriter, pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities
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Act").
5. Repurchase of Option Shares Upon Termination of Employment. The following
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repurchase provisions shall apply to any and all Option Shares;
(a) Repurchase Rights. If the Participant for any reason whatsoever
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(including without limitation death, disability, or voluntary or involuntary
termination) ceases to be employed by the Company prior to the date specified in
Section 5(d) below for the expiration of these restrictions, then during the 90-
day period following such termination the Company may elect, by written notice
delivered to the Participant, to repurchase all or any portion of the Option
Shares, at a price per share equal to the fair market value of such Option
Shares as of the close of business on the date of termination of the
Participant's employment. Such fair market value shall be determined by mutual
agreement of the Company and the Participant. Failing such agreement between
the Participant and the Company within 30 days of the date of the Company's
notice electing to repurchase such Option Shares, the fair market value of such
Option Shares shall be determined by three appraisers, one designated within
five days after the termination of said 30-day period by the Participant or his
or her legal representatives (which appraiser shall not be the Participant or
his or her legal representative), one within said period of five days by the
Company (which appraiser shall not be an officer, director or employee of the
Company) and the third within five days after said appointment last occurring by
the two appraisers so chosen. Successor appraisers, if any shall be required,
shall be appointed, within a reasonable time, as nearly as may be in the manner
provided as to the related original appointment. No appointment shall be deemed
as having been accomplished unless such appraiser shall have accepted in writing
his appointment as such within the time limited for his appointment. Notice of
each appointment of an appraiser shall be given promptly to the other parties in
interest. Any expenses relating to the appointment and service of an appraiser
shall be paid by the party appointing such appraiser or, in the case of the
appraiser appointed by the appraisers chosen by the Company and the Participant,
shall be paid by the Company. Said appraisers shall proceed promptly to
determine the fair market value of said Share or Option Shares by agreement of
any two of the appraisers, which shall be conclusive upon all parties in
interest in such Option Shares. Promptly following such determination, the
appraisers shall mail or deliver such notice of such determination to the
Participant and the Company.
(b) Repurchase Procedure. Upon notice from the Company of exercise of its
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rights under this Section 5 and determination of the purchase price for the
Option Shares so repurchased, the Participant shall transfer the Option Shares
or appropriate part thereof to the Company against payment by the Company of the
purchase price therefor. If upon the expiration of the 90-day period following
the Participant's termination of employment the Company shall have failed to
elect to repurchase all of
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the Option Shares, the repurchase rights with respect to the Option Shares not
so elected to be repurchased imposed by this Section 5 shall terminate, and the
Participant or his or her legal representatives may thereafter transfer such
Option Shares. The Participant or his or her legal representatives may in no
event transfer any Option Shares prior thereto, other than to the Company.
(c) Failure of Participant to Comply. If the Participant fails to comply
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with any of the provisions of this Section 5, the Company, at its option and in
addition to its other remedies, may suspend the rights of the Participant to
vote and to receive dividends on the Option Shares, or may refuse to register on
its books any transfer or change in the ownership of the Option Shares or in the
right to vote thereon, until the provisions of this Section 5 are complied with
to the satisfaction of the Company.
(d) Expiration. The restriction contained in this Section 5 shall expire
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upon the closing of the Company's initial public offering, underwritten by a
nationally recognized underwriter, pursuant to an effective registration
statement under the Securities Act (such expiration date shall be referred to
herein as the "Expiration Date").
(e) Safekeeping. The Participant acknowledges that the Company may, in its
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discretion, retain for safekeeping stock certificates representing all Option
Shares purchased hereunder by the Participant. The Participant further
acknowledges that the Company may, to insure that the Participant complies with
the restriction of this Section 5, continue to retain such stock certificates
until the earlier of the Expiration Date or the date of expiration of these
repurchase rights under Section 5(b) above. At the time of any exercise of this
option, in whole or in part, the Participant shall execute such further
agreement as the Company may require to implement the foregoing.
6. Right of First Refusal.
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(a) General. The Participant shall not sell, assign, pledge, or in any
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manner transfer any of the Option Shares or any right or interest therein,
whether voluntarily or by operation of law, or by gift or otherwise, except by a
transfer which meets the requirements of the provisions of this Section 6.
(b) Restrictions on Transfer. If at any time or from time to time the
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Participant intends to sell or transfer any Option Shares to a third party, the
Participant shall provide notice thereof to the Company prior to such transfer
(which in the case of a sale shall include a bona fide purchase agreement with a
viable purchaser). The Company shall have an option for 30 days following the
date of receipt of the Participant's notice to purchase such Option Shares on
the terms upon which the Option Shares were to be purchased by or transferred to
the third party by the Participant. If the Company does not exercise its right
of first refusal under this Section
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6(b) with respect to such proposed sale or transfer within such 30-day period,
the Participant shall be free to sell or transfer such Option Shares to the
third party identified in the Participant's notice for a period of 45 days after
the expiration of the 30-day period following the date of receipt of the
Participant's notice. Such sale or transfer must be on terms no more favorable
to the recipient than those set forth in the Participant's notice. In no event
may Option Shares be sold or transferred to any then-current competitor of the
Company. Any transfer or sale of Option Shares by the Participant will be
conditional upon the recipient acknowledging in writing the option set forth in
this Section 6(b) and the other restrictions to which the Option Shares are
subject.
(c) Failure of Participant to Comply. If the Participant's notice in
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respect of any Option Shares is not received by the Company as provided in
Section 6(b) above, or if the Participant fails to comply with the provisions of
Section 6(b) above in respect of any such Option Shares in any other regard, the
Company, at its option and in addition to its other remedies, may suspend the
rights to vote or to receive dividends on said Option Shares, or may refuse to
register on its books any transfer or change in ownership of said Option Shares
or in the right to vote thereon, until the provisions of Section 6(b) are
complied with to the satisfaction of the Company; and if the required
Participant's notice is not received by the Company after written demand by the
Company, the Company may also independently proceed as though a proper
Participant's notice has been received at the expiration of ten days after
mailing such demand, and, if the Company exercises its rights under Section 6(b)
with respect to said Option Shares or any of them, the Option Shares specified
shall be transferred accordingly.
(d) Expiration. The Company's right of first refusal contained in this
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Section 6 with respect to any sale or transfer of Option Shares shall expire
upon the Expiration Date.
7. Withholding.
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No Shares will be issued pursuant to the exercise of this option unless and
until the Participant pays to the Company, or makes provision satisfactory to
the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
8. Nontransferability of Option.
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This option may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will
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or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.
9. Provisions of the Plan.
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This option is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this option.
IN WITNESS WHEREOF, the Company has caused this option to be executed under
its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
SWITCHBOARD INCORPORATED
Dated: October 13, 1999 By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
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PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy
of the Company's 1999 Stock Incentive Plan.
PARTICIPANT:
/s/ Xxxxxxx X. Xxxxxxxx
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Print Name: Xxxxxxx X. Xxxxxxxx
Address: __________________________
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