EXHIBIT 10.25
EMPLOYMENT AGREEMENT
This Agreement is made and entered this the 10th day of March, 1997,
effective as stated herein, by and between BroadBand Technologies, Inc., a
Delaware corporation (the "Corporation"), and Xxxxx X. Xxx (the "Executive").
WHEREAS, the Executive desires to be employed by the Corporation as its
President and Chief Executive Officer ("CEO") upon the terms and conditions
provided herein; and
WHEREAS, the Corporation desires to employ the Executive as its
President and CEO upon the terms and conditions provided herein; and
WHEREAS, the Executive acknowledges that this employment agreement and
the compensation and benefits provided herein are valuable consideration to
which he is not otherwise entitled; and
WHEREAS, the Corporation desires to receive from the Executive certain
promises contained herein, including but not limited to the noncompetition and
nonsolicitation covenants set forth herein; and
WHEREAS, the Executive acknowledges that his employment with the
Corporation is conditioned, in part, upon his agreement to observe the
noncompetition and nonsolicitation covenants set forth herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Executive and the Corporation agree as follows:
EMPLOYMENT. SUBJECT TO AND UPON THE TERMS AND CONDITIONS
HEREIN PROVIDED, THE CORPORATION HEREBY AGREES TO EMPLOY THE EXECUTIVE AND THE
EXECUTIVE HEREBY AGREES TO BE EMPLOYED BY THE CORPORATION DURING THE TERM OF
AGREEMENT AS DEFINED IN SECTION 2 HEREOF.
2. Term of Agreement and Duties. The term of this Agreement shall
commence on April 1, 1997 (the "Effective Date") and shall terminate on the
first to occur of (i) the termination of this Agreement as provided herein, or
(ii) March 31, 2002; provided, however, that if neither party has given written
notice to the other, at least one (1) year prior to the expiration date then in
effect, of the intention not to renew the Agreement beyond such expiration date,
then the Term of this Agreement shall automatically extend for an additional one
(1) year at the conclusion of such expiration date. The period during which this
Agreement is in effect is referred to herein as the "Term of Agreement". If the
Executive's employment with the Corporation continues beyond the Term of
Agreement, such continued employment shall be at will and, except as
specifically noted herein, no provision or condition of this Agreement shall
govern such extended employment.
3. Position and Responsibilities. During the Term of Agreement, the
Executive shall be employed as President and CEO of the Corporation. While so
employed, the Executive agrees to devote his full time and attention to carrying
out his duties and responsibilities under this Agreement and all duties and
responsibilities directed by the Board of Directors of the Corporation (the
"Board"), and the Executive shall use his best efforts, skills and abilities to
further the interests of the Corporation. The Executive shall serve under the
direction and supervision of the Board. The Executive may not serve on the board
of directors of any other business entity unless (i) such entity is not engaged,
directly or indirectly, in competition with the business of the Corporation, as
determined by the Board in its discretion, (ii) such service would not interfere
with the Executive's obligations to the Corporation, (iii) the Executive obtains
the prior express written consent of the Board, and (iv) the Executive adheres
to such limitations as may imposed by the Board in granting such consent.
4. Director. The Corporation shall present the Executive for election
as a member of the Board as soon as possible following the Effective Date as is
reasonable in the normal course of operations of the Corporation, and the
Executive agrees to accept any such election and to serve in such capacity
during all or any part of the Term of Agreement without any additional
compensation therefor.
5. Compensation.
5.1 Base Salary. The Corporation shall pay the Executive a
base salary, in periodic installments in accordance with the
Corporation's usual payroll practice for senior management-level
employees of the Corporation as these employees are described by the
Corporation ("Senior Management"), at an annual rate of at least
$350,000, which amount may be increased by the Board as part of its
customary annual compensation review process.
5.2 Incentive Bonus. For the period beginning on the Effective
Date and ending on March 31, 1998, the Executive shall be entitled to
an incentive bonus in the amount of at least $175,000; during such
period, the Executive shall not otherwise participate in any incentive
compensation or bonus arrangements for other employees of the
Corporation. Said bonus shall be payable on or about April 1, 1998.
During the period beginning January 1, 1998 and ending on the date on
which this Agreement terminates, the Executive shall be entitled to
participate in the Corporation's incentive compensation program, if
any, in accordance with its terms, as determined by the Board in its
discretion; provided, however, that the annual target bonus for the
Executive under such program shall be at least 50% of his annual base
salary.
5.3 Signing Bonus. The Executive shall be entitled to a
signing bonus in the amount of $4,000,000 (the "Bonus"), plus income
with respect to such sum, payable as described in this Section 5.3. To
fulfill its obligations under this Section 5.3, as soon as
administratively possible after the Executive executes this Agreement
the Corporation shall pay and deliver the sum of $4,000,000 to a bank
or trust company mutually acceptable to the Executive and the
Corporation, as trustee (the "Trustee") under a written trust agreement
(the "Trust Agreement") between the Corporation and the Trustee. Such
trust shall be designed as a rabbi trust, provided that it shall
automatically convert to a secular trust upon the occurrence of certain
events as specified in the Trust Agreement. The terms of the Trust
Agreement shall be mutually agreed to by the Corporation and the
Executive as soon as administratively possible following the date of
this Agreement. All accrued income with respect to the Bonus shall be
paid to the Executive quarterly commencing three months from the
effective date of this Agreement, except as otherwise provided in the
Trust Agreement. The principal of the trust plus all income accrued and
unpaid thereon shall be paid to the Executive within the period
specified in the Trust Agreement following the first to occur of the
following events: (i) the fifth anniversary of the effective date of
this Agreement, if this Agreement has not sooner terminated (other than
as specified in clause (ii) below); or (ii) the date on which the
Corporation terminates the Executive's employment other than for Cause
(as defined in Section 8.3(a) below). Upon the Executive's Disability
prior to the fifth anniversary of the effective date of this Agreement,
a pro-rata portion of the Bonus and the income accrued and unpaid
thereon, determined on the basis of the number of full or partial
months of employment with the Corporation that the Executive has
completed on the date of such Disability, shall be paid to the
Executive within the period specified in the Trust Agreement following
the date of such Disability. The Trustee shall be charged with
investing and distributing the $4,000,000, as required by this
Agreement and the Trust Agreement, and the overriding investment
consideration shall be the preservation of principal. The rights of the
Executive to sums held under the Trust Agreement shall not be
transferable other than by will or the laws of descent and
distribution. The Corporation's obligations under this Section 5.3
shall terminate immediately in the event of the Executive's death, or
in the event that the Executive breaches this Agreement, the Executive
voluntarily terminates his employment, or the Corporation terminates
the Executive's employment for Cause (as defined in Section 8.3(a)
below).
5.4 Restricted Stock Award. The Executive shall be entitled to
a restricted stock award of shares of the Corporation's common stock
with a value equal to $1,000,000 (rounded up to the next highest number
of shares) calculated as of the last trading price of the Corporation's
common stock on the date the Executive signs this Agreement (or, if not
a business day, on the last business day prior to the date the
Executive signs this Agreement). The terms and conditions of such award
shall be substantially as set forth in the Restricted Stock Award
Agreement attached hereto as Exhibit A and incorporated herein by
reference.
5.5 Nonqualified Stock Option. The Corporation shall grant the
Executive a nonqualified stock option (the "Option") to purchase
350,000 shares of the common stock of the Corporation, which Option
shall become vested and exercisable upon the attainment of certain
performance goals. The terms and conditions of the Option shall be
substantially as set forth
in the Nonqualified Stock Option Award
Agreement attached hereto as Exhibit B and incorporated herein by
reference.
6. Employee Benefits, Perquisites and Expenses.
6.1 General Benefit Plans. Except as provided otherwise in
Section 5.2 above and in this Section 6.1, the Executive shall be
entitled to participate in all of the Corporation's health, retirement,
life insurance, stock option, and other benefit plans, programs or
practices from time to time in effect for Senior Management in
accordance with their terms; provided, however, that the Executive
shall not be entitled to participate in any severance program or
arrangement established for other employees of the Corporation;
provided, further, that, subject to satisfying underwriting
requirements, the Executive shall be entitled to participate in a
disability program comparable to that provided to the Executive by
Alcatel immediately prior to his termination of employment with Alcatel
and, assuming that the Executive is insurable, the Executive shall be
entitled to participate in an arrangement that provides term life
insurance coverage of $2 million on the life of the Executive for so
long as he is employed by the Corporation.
6.2 Nonqualified Retirement Plan. The Corporation shall
establish a nonqualified deferred compensation/trust arrangement
pursuant to which the Executive shall be entitled to defer all or a
portion of his salary and bonus on an annual basis, in accordance with
the provisions of the arrangement and the requirements of the Internal
Revenue Code of 1986, as amended. In addition, the Corporation shall
annually credit the amount of $82,000 on behalf of the Executive under
such arrangement. The trust maintained in connection with such
arrangement shall be designed as a rabbi trust, provided that it shall
automatically convert to a secular trust upon the occurrence of certain
events as specified therein. Subject to such reasonable limitations as
are necessary for the arrangement to be considered deferred
compensation, the Executive's benefits under such arrangement shall be
fully vested at all times. The corpus of the trust maintained as part
of such arrangement shall be invested as directed by the Board (or a
committee to which the Board delegates this responsibility) after
receiving input from the Executive as to his investment preferences.
Such arrangement shall contain such other terms and conditions as shall
be mutually agreed to by the Corporation and the Executive as soon as
administratively possible following the date of this Agreement.
6.3 Vacation. The Executive shall be entitled to participate
in the Corporation's holiday, sick leave and vacation policies in
effect for Senior Management as may be established from time to time;
provided, however, that in no event shall the Executive's annual
vacation entitlement be less than the maximum amount of vacation to
which any full-time member of Senior Management is entitled under such
policies (currently 4 weeks). The Executive shall receive, within
thirty (30) days after his employment terminates, a payment for any
accrued but unused vacation at the termination of the employment of the
Executive in accordance with the Corporation's vacation policy in
effect at the time of termination.
6.4 Expenses. The Corporation shall reimburse the Executive
for all reasonable and documented expenses incurred in connection with
the performance of his duties hereunder
and incurred in accordance with policies and procedures established
from time to time by the Corporation. The Executive shall keep
reasonably detailed and accurate records of expenses incurred in
connection with the performance of his duties hereunder, and
reimbursement therefor shall be made in accordance with policies and
procedures to be established from time to time by the Corporation.
6.5 Relocation Package. In connection with the commencement of
Executive's employment with the Corporation pursuant to this Agreement,
the Corporation shall provide the Executive with certain relocation
reimbursements in accordance with the Corporation relocation policy, a
copy of which is attached hereto as Exhibit C and incorporated herein
by reference. Notwithstanding the terms of such policy, (i) the
Corporation shall provide Executive with a primary residence buy-out
package comparable to that described in Exhibit D hereto; (ii) the
Executive shall be entitled to reimbursement by the Corporation for
costs incurred in connection with the acquisition of a primary
residence in the Raleigh - Durham - Chapel Hill area up to a maximum of
$15,000, which costs are limited to fees for loan origination,
appraisals, title searches and insurance, surveys, termite inspections,
attorney's fees and government-required recording charges, and (iii)
the Executive shall be entitled to reimbursement or advance payment by
the Corporation for reasonable expenses incurred in connection with
moving his boat by land to the Wilmington, North Carolina, area.
6.6 Financial Planning Allowance. The Corporation shall
reimburse the Executive for documented financial planning and legal
expenses up to a maximum amount of $20,000 total for expenses incurred
during the period commencing January 1, 1997, and ending March 31,
1998, and $10,000 total for expenses incurred during each consecutive
twelve-month period thereafter during the Term of Agreement.
7. Noncompetition and Nonsolicitation Covenants.
7.1 Need for Covenants. The Executive acknowledges that the
Corporation has expended, and is expected to expend, large amounts of
time, money and effort in researching, developing, designing and
testing its products, developing and keeping a committed management
team, and manufacturing and marketing its products. The Executive
further acknowledges that crucial to the success of the Corporation
will be its ability to continuously develop superior design and
manufacturing technologies for broadband and narrowband fiber optic
loop systems which are trade secrets of the Corporation and which are
not known to others engaged in similar businesses or
ventures. The Executive further acknowledges that he will learn a great
deal of information about the business of the Corporation, including
its trade secrets and confidential information, including, but not
limited to, customer and supplier lists, know-how, processes, and
methods of doing business, and the Executive agrees that the
Corporation is entitled to be protected from the possibility, both
during and after the Executive's employment terminates, of the
Executive becoming associated with a business which competes with the
Corporation. The Executive further acknowledges that if he did become
associated with such a business, such business would compete unfairly
with the business of the Corporation in view of the trade secrets and
confidential, proprietary information which will become known to the
Executive by reason of being employed by the Corporation. The Executive
further acknowledges that the nature of the Corporation's products are
such that its natural market will be worldwide because fiber optic loop
systems can be used worldwide wherever fiber optic cable and equipment
can be used, and the Corporation's competition in fiber optic loop
systems research and development is located throughout the world and
competes in a worldwide market. Accordingly, the Executive hereby
agrees that the time, geographic and other restrictions contained in
this Agreement are reasonable to protect the legitimate interests of
the Corporation and do not unfairly restrict or penalize the Executive.
7.2 Noncompetition Covenant. During the Restricted Period (as
defined in Section 7.4 below) the Executive shall not Compete (as
defined in Section 7.4 below), directly or indirectly, with the
Corporation or any Affiliate (as defined in Section 7.4 below) of the
Corporation by engaging in any line of business (as defined in Section
7.4 below) in which on the Termination Date (as defined in Section 7.4
below) the Corporation or any Affiliate of the Corporation is engaged
(or is planning to engage) in any Prohibited Location (as defined in
Section 7.4 below).
7.3 Nonsolicitation Covenant. During the entire Restricted
Period (as defined in Section 7.4 below), the Executive: (i) shall not
interfere with, or seek to interfere with, the relationship between the
Corporation or any Affiliate, and any of the employees of such
entities, (ii) shall not interfere with, or seek to interfere with, the
relationship between the Corporation or any Affiliate, and any of the
suppliers of such entities, (iii) shall not solicit or otherwise
encourage any employee of the Corporation or of any Affiliate to leave
the employ of the Corporation or of any Affiliate, (iv) shall not
interfere with, or seek to interfere with, the relationship between the
Corporation or any Affiliate, and any customers of such entities, and
(v) shall not utilize or disclose any personnel information about any
employee of the Corporation or of any Affiliate, including but not
limited to information regarding the employee's performance, abilities,
responsibilities or functions.
7.4 Definitions.
(a). The terms "Compete" and "Competition," as used
herein, shall be deemed to include, without limitation,
becoming or being an employee, owner, partner, consultant,
agent, stockholder, director, officer of any person,
partnership, firm, corporation or other entity (other than the
Corporation or any Affiliate) which engages directly in (i)
the business of broadband or narrowband fiber optic
residential or small business access
systems, or any systems
that perform substantially similar functions, but does not
include parts, software, components, or subsystems of said
systems that the Corporation purchases from third party
vendors for inclusion in the Corporation's systems without
modification by the Corporation and/or (ii) any other business
conducted by the Corporation or any Affiliate immediately
prior to the date of termination of Executive's employment or
in which the Corporation or any Affiliate shall at the time of
termination of the Executive's employment with the Corporation
be actively preparing to enter.
Notwithstanding the foregoing, the following shall
not constitute competition with the Corporation (i) ownership
of five (5%) percent or less of any class of securities of any
entity whose securities are publicly traded, or (ii)
employment by a person or entity engaged in the business
described above if all the following conditions are met: (1)
the business described above constitutes less than five (5%)
percent of the gross sales of the new employer on a
consolidated basis, (2) the employer's stock or the stock of a
parent company is publicly traded, (3) Executive shows to the
satisfaction of the Corporation that Executive is employed in
a division or department not engaged in the business described
above and the duties of Executive do not require contact with
the division or department engaged in the business described
above, and (4) prior to the date of such employment Executive
and Executive's new employer execute and deliver to the
Corporation an agreement in form and substance reasonably
satisfactory to the Corporation in which (x) Executive and his
new employer represent that the conditions set forth in
clauses (1), (2), and (3) above have been satisfied, (y) the
new employer agrees not to obtain from Executive any
proprietary information of the Corporation or to use, retain
or disclose any such proprietary information of the
Corporation which Executive may willfully or inadvertently
disclose to such new employer in violation of any agreement
between Executive and the Corporation, and (z) Executive
reaffirms to the Corporation all obligations of Executive with
respect to proprietary information of the Corporation
contained in any agreement between the Corporation and
Executive.
(b). The phrases "engage in a business" or "engage in
a line of business" and similar phrases shall be deemed to
include marketing or otherwise selling products or
researching, developing, designing, testing or manufacturing
products or services or otherwise preparing to market or sell
products or services.
(c). The term "Affiliate" shall mean any corporation,
partnership or other entity (i) which owns more than 50% of
the voting securities of the Corporation, or (ii) in which the
Corporation owns more than 50% of its voting securities, or
(iii) more than 50% of the voting securities of which are
owned by a person or entity that owns more than 50% of the
voting securities of the Corporation.
(d). The term "Prohibited Location" means the
following:
(i). Any location within the United
States;
(ii). Any location within Canada;
(iii). Any location within England;
(iv). Any location within France;
(v). Any location within Italy;
(vi). Any location within Germany;
(vii). Any location within Taiwan; and
(viii). Any location within Korea.
A competitor located outside a Prohibited Location shall be
deemed to be competing in a Prohibited Location if the
competitor either (i) Competes in the Prohibited Location by
selling products in Competition in the Prohibited Location, or
(ii) is actively preparing to Compete in the Prohibited
Location.
With respect to the covenant contained in Section 7.2 above,
it is acknowledged by the Executive that the Corporation's
competition in fiber optic loop systems research, development,
marketing and sales is located throughout the world and
competes in a worldwide market, and that unfair competition
can only be prevented by enforcing this specific covenant in
these prohibited locations specifically set forth in Section
7.4(d) above.
(e). The term "Restricted Period" shall mean the
period commencing on the date of this Agreement and ending
upon the second anniversary of the Termination Date.
(f). The term "Termination Date" means the date
on which the Executive's employment with the Corporation and
its Affiliates terminates for any reason or no reason.
7.5 Benefits Conditioned upon Enforceability. Notwithstanding
anything to the contrary contained in this Agreement, in the event that
Sections 7.2 and/or 7.3 of this Agreement are determined to be
unenforceable, to any extent, by a court or arbitration panel, whether
by preliminary or final adjudication, the Corporation shall not be
liable for any payments or benefits under Sections 8.1(c), 8.1(d), 9.3,
9.4 and/or 9.5.
8. Payment to the Executive Upon Termination of Employment.
8.1 Termination Without Cause. The Corporation shall have the
right to terminate Executive's employment at any time with or without cause. If
the Corporation terminates the employment of the Executive without Cause (as
defined in Section 8.3(a) below) other than during the three year period
commencing on the effective date of a Change in Control (as defined in Section
11 below), the Term of Agreement shall terminate immediately thereafter and:
(a). the Corporation shall pay the Executive the
portion of his base salary in effect at the time of
termination as he may be entitled to receive for services
rendered prior to the date of such termination;
(b). the Corporation shall pay the Executive for any
accrued but unused vacation as set forth in Section 6.2;
(c). subject to the restrictions set forth in
Sections 7.5 and 10, the Corporation shall pay the Executive,
at the end of each month for the first twenty-four (24) months
following the date on which the Executive executes the release
described in Section 10 below (the "Release Date"), an amount
equal to one twelfth (1/12) of the sum of (x) his annual base
salary in effect at the time of termination, plus (y) his
target bonus for the year in which the termination occurs (as
determined by the Board in its discretion).
If the Executive has foregone receiving all or a portion of
his regular salary as authorized by the Board, any committee
thereof or any officer authorized to determine salaries,
payment to the Executive under this subsection (c) shall
constitute full payment of all such amounts.
(d). subject to the restrictions set forth in
Sections 7.5 and 10, the forfeiture provisions applicable upon
a termination of employment under the restricted stock award
described in Section 5.4 shall lapse as of the date of the
termination of the Executive's employment.
8.2 Termination with Cause, Death or Disability. The
Corporation shall have the right to terminate the Executive's
employment and this Agreement at any time with Cause (as defined in
Section 8.3(a) below). If the Corporation terminates the employment of
the Executive with Cause (as defined in Section 8.3(a) below), or upon
the death or Disability (as defined in Section 8.3(b) below) of the
Executive, the Term of Agreement shall terminate immediately thereafter
and the Corporation shall pay the Executive or his beneficiary such
compensation as is set forth in Sections 8.1(a) and 8.1(b) above and
shall cause the payments to which the Executive is entitled under
Section 5.3 above, if any, to be paid to the Executive in accordance
with Section 5.3.
8.3 Definitions.
(a). For purposes of the Agreement, the term "Cause"
shall be limited to the following events: (i) drug abuse by
the Executive; (ii) alcohol abuse by the Executive if it
interferes with the efficient conduct of business by the
Executive; (iii) theft, embezzlement or other similar act by
the Executive of any tangible or intangible asset of the
Corporation or any customer, supplier or investor of the
Corporation; (iv) commission of any other criminal act by the
Executive (whether or not the Executive is
prosecuted and convicted) if such act causes or is likely to
cause damage to the business of the Corporation; (v) a
material breach by the Executive of any written agreement
between the Corporation and the Executive, including, without
limitation, this Agreement, the Proprietary Information and
Inventions Agreement, or any written policy of the Corporation
known by and applicable to all its employees, if the Executive
fails to cure his breach within ten (10) days after notice of
breach is given to the Executive by the Corporation; (vi)
gross negligence or willful misconduct by the Executive in his
conduct of the business of the Corporation, but a mere mistake
in business judgment shall not constitute cause unless it is
part of a continuing pattern of bad judgment that has caused
actual damage to the Corporation or its business, and (vii)
willful failure by the Executive to follow the instructions of
the Board, to the extent such instructions are reasonably
related to the business of the Corporation, are given in good
faith to promote the interest of the Corporation, would not
require the Executive to commit any illegal act and are not
given to provide the Corporation with cause for terminating
the Executive. This definition of cause shall not create in
the Executive any right to employment or cause of action on
account of termination of the Executive's employment with the
Corporation without Cause.
(b). For purposes of this Agreement, the Executive's
employment with the Corporation shall be deemed to have
terminated on account of "Disability" on the date on which the
Executive is eligible for and commences benefits under the
Corporation's program of long-term disability insurance.
9. Change in Control. If a Change in Control occurs during the Term of
Agreement and the Corporation terminates the Executive's employment other than
for Cause (as defined in Section 8.3(a) above) during the three year period
commencing on the effective date of the Change of Control, the Term of Agreement
shall terminate immediately following such termination of the Executive's
employment and the Executive shall be entitled to the following in lieu of the
benefits described in Section 8:
9.1 Salary. The Corporation shall pay the Executive the
portion of his base salary in effect at the time of termination as he may be
entitled to receive for services rendered prior to the date of such termination.
9.2 Vacation. The Corporation shall pay the Executive
for any accrued but unused vacation as set forth in Section 6.2.
9.3. Stock Option. The Corporation shall provide one of
the following two benefits to the Executive with respect to the Option to the
extent the Option is not already fully vested and exercisable on the date of the
termination of the Executive's employment:
(a). the Corporation shall take all action necessary
to provide that the Option is fully vested and exercisable as of the date of the
termination of the Executive's employment; or
(b). the Corporation shall make a lump sum payment to
the Executive in an amount equal to the value lost under the
Option, payable as soon as administratively possible after the
date of the termination of the Executive's employment.
The Corporation shall determine which benefit described in
this Section 9.3 shall be provided to the Executive in its
sole discretion. For purposes of subsection (b) above, the
value lost under an Option shall be determined by calculating
the net benefit lost by the Executive under the Option,
exclusive of taxes, assuming that the Option was fully vested
and exercisable on the date of the termination of the
Executive's employment, that the Executive exercised the
Option as of the date of the termination of the Executive's
employment, and that Executive sold the shares of Corporation
stock acquired by exercise of the Option on the date of the
termination of the Executive's employment.
9.4 Lump Sum Payments. Subject to the restrictions set forth
in Sections 7.5 and 10, the Executive shall be entitled to three lump sum
payments by the Corporation, each in an amount equal to his base salary in
effect on the date of the termination of the Executive's employment and his
target bonus for the year in which such termination occurs. The first such
payment shall be made as of the date of the termination of the Executive's
employment, the second such payment shall be made as of the first anniversary of
the date of the termination of the Executive's employment, and the third such
payment shall be made as of the second anniversary of the date of the
termination of the Executive's employment.
9.5 Restricted Stock. Subject to the restrictions set forth in
Sections 7.5 and 10, the forfeiture provisions applicable upon a termination of
employment under the restricted stock award described in Section 5.4 shall lapse
as of the effective date of the termination of the Executive's employment.
10. Condition on Payment of Benefits: The Executive agrees that he
shall be entitled to payments and benefits under the terms of Sections 8.1(c),
8.1(d), 9.3, 9.4 and/or 9.5 above, as applicable, only if he executes a complete
and general release in a form substantially comparable to the release set forth
in Exhibit E hereto and incorporated herein by reference or in such other form
as is determined to be necessary or desirable by the Corporation in its
discretion, which release shall at least contain a release by the Executive and
any beneficiary of the Executive entitled to receive all or any portion of the
benefits specified in such Sections of any claims arising from the Executive's
employment or associations with the Corporation or otherwise existing against
the Corporation and its officers, directors, agents, employees, shareholders,
and representatives at the time of execution of the release. Notwithstanding any
other provision set forth herein, if the Executive elects not to execute such a
general release, then the Executive's benefits under Section 8.1(c), 8.1(d),
9.3, 9.4, and/or 9.5 above, as applicable, shall consist solely of an amount
equal to one-half (1/2) of the Executive's base salary in effect at the time of
the termination.
11. Change in Control: For purposes of this Agreement, "Change in
Control" shall be deemed to have occurred if:
11.1 Tender Offer or Acquisition. Any "person" as defined in
section 3(a)(9) of the Securities Exchange Act of 1934 (the "Act"),
including a "group" (as that term is used in sections 13(d)(3) and
14(d)(2) of the Act), but excluding the Corporation and any employee
benefit plan sponsored or maintained by the Corporation, including any
trustee of such plan acting as trustee, who:
(a). makes a tender or exchange offer for any shares
of the Corporation's stock pursuant to which at least fifty
percent (50%) of the Corporation's stock is purchased; or
(b). together with its "affiliates" and "associates"
(as those terms are defined in Rule 12b-2 under the Act)
becomes the "beneficial owner" (within the meaning of Rule
13d-3 under the Act) of at least fifty percent (50%) of the
Corporation's stock;
11.2 Merger or Consolidation. The shareholders of the
Corporation approve a definitive agreement or plan to merge or
consolidate the Corporation with or into another corporation, to sell
or otherwise dispose of all or substantially all of its assets, or to
liquidate the Corporation; or
11.3 Change in Board. When, during the Term of Agreement, the
individuals who, at the beginning of such period, constitute the Board
(the "Incumbent Directors") cease for any reason other than death or
retirement to constitute at least a majority thereof; provided,
however, that a director who was not a director at the beginning of the
Term of Agreement shall be deemed to have satisfied such requirement,
and be an Incumbent Director, if such director was elected by, or on
the recommendation of or with the approval of, at least two-thirds of
the directors who then qualified as Incumbent Directors either
actually, because they were directors at the beginning of the Term of
Agreement, or by prior operation of this Section 11.
12. No Conflicting Obligations. Executive represents and warrants that
he is under no contract, agreement or understanding with any third party which
would conflict with the terms and conditions of this Agreement or otherwise
impair his ability to perform fully his duties hereunder.
13. Investments. During the term of this Agreement, the Executive may
without limitation purchase and divest passive interests in public or privately
held incorporated or unincorporated business entities, provided such an interest
does not constitute Competition within the meaning of Section 7.4(a) above or
otherwise breach his obligations to the Corporation.
14. Necessity of Agreement. The Executive acknowledges and agrees that
the covenants and provisions set forth in Sections 7.2 and 7.3 of this Agreement
are reasonably necessary for the protection of the Corporation and its
Affiliates and that such covenants and provisions are reasonably limited with
respect to the activities prohibited, the duration thereof, the geographical
area thereof, the scope thereof and the effect on the Executive and the general
public. The Executive further acknowledges and agrees that the purpose and
effect of such restrictive covenants and provisions is solely to protect the
Corporation and its Affiliates for a limited period of time from unfair
competition by the Executive, and that the issuance of securities of the
Corporation to the Executive, the
employment of the Executive hereunder, and the
enhanced provisions contained in this revised Agreement are conditioned upon the
Executive agreeing to abide by and be bound by all of the covenants and
provisions contained in this Agreement.
15. Irreparable Damage. The Executive acknowledges and agrees that any
breach of Sections 7.2 and/or 7.3 of this Agreement will result in irreparable
damage and continuing injury to the Corporation. Therefore, in the event of any
breach or threatened breach of any of the foregoing provisions of this Agreement
by the Executive, the Executive acknowledges and agrees that the Corporation or
any Affiliate shall be entitled, without limiting any other available legal or
equitable remedy (whether conferred by statute or otherwise), to an injunction
to be issued by any court of competent jurisdiction enjoining and restraining
the Executive from committing any violation or threatened violation of this
Agreement, and the Executive hereby consents to the issuance of such injunction.
The Corporation shall not be required to post any bond to obtain any such
injunction. The Executive agrees that all remedies available to the Corporation
or any Affiliate (or any of them) by reason of a breach of any of the foregoing
provisions of this Agreement are cumulative and that none is exclusive and that
all remedies may be exercised concurrently or consecutively at the option of the
Corporation or any Affiliate, as the case may be.
16. Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any provision (or part
thereof) of this Agreement shall in no way affect the validity or enforceability
of any other provisions (or remaining part thereof). If any part of any covenant
or provision contained in this Agreement is determined by a court of competent
jurisdiction, or by any arbitration panel to which a dispute is submitted, to be
invalid, illegal or incapable of being enforced, then the court or arbitration
panel so deciding shall interpret such provisions in a manner so as to enforce
them to the fullest extent of the law. Without limiting the foregoing, in the
event the restrictions on interference and solicitation as set forth in Section
7 or the geographic scope as set forth in Section 7.4 are determined to be
invalid or unenforceable, the provisions of these Sections shall be deemed
severable, and the invalidity or unenforceability of any provision (or part
thereof) shall in no way effect the validity or enforceability of any other
provision (or remaining part thereof).
17. Other Agreements. This Agreement supersedes all prior agreements
and understandings, oral or written, between the Corporation and the Executive
with respect to the subject matter hereof.
18. Amendment. No change, modification, termination or attempted
waiver of any of the provisions of this Agreement shall be binding upon any
party hereto unless reduced to writing and signed by the party against whom
enforcement is sought.
19. Counterparts. Any number of counterparts of this Agreement may be
signed and delivered, each of which shall be considered an original and all of
which, together, shall constitute one and the same instrument.
20. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of North Carolina, without reference to
its conflict of law provisions.
21. Venue. Any litigation under this Agreement may be brought by the
Corporation in the State of North Carolina, notwithstanding that the Executive
is not at that time a resident of the State of North Carolina and cannot be
served process within that state. The Executive hereby irrevocably consents to
the jurisdiction of the courts of North Carolina (whether federal or state
courts) over his or her person.
22. Binding Effect. The provisions of this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their heirs,
assigns and successors in interest. The Corporation shall have the right to
assign this Agreement to an affiliate or subsidiary or surviving entity
(including in the event of a Change in Control, and all covenants and agreements
hereunder shall inure to the benefit of and be enforceable by any such assignee.
The Executive's rights and obligations under this Agreement shall not be
transferable by assignment or otherwise by the Executive, such rights shall not
be subject to commutation, encumbrance, or the claims of the Executive's
creditors, and any attempt to do any of the foregoing shall be null and void.
23. Withholding of Taxes. The Corporation may withhold from any
compensation payable under this Agreement all federal, state, city, or other
taxes as shall be required pursuant to any law, regulation or ruling.
24. Headings. The headings contained in this Agreement are for
reference purposes only and shall not be deemed interpretation of this
Agreement.
25. Representation. The Executive represents and warrants that he has
consulted with and received advice from his own counsel (Xxxxxxxx, Xxxxxx &
Xxxxx of Pittsburgh, PA) in electing to enter into this Agreement.
26. Notices. Any notice given to either party hereto shall be in
writing and shall be deemed to have been given when delivered personally or sent
by certified or registered mail, postage prepaid, return receipt requested, duly
and properly addressed to the party concerned at the address indicated below or
to such changed address as party may subsequently give notice of:
If to the Corporation:
BroadBand Technologies, Inc.
0000 Xxxxxxx Xxxxx Xxxxx
P. O. Box 13737
Research Xxxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000-0000
If to the Executive:
Xxxxx X. Xxx
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000
27. Survival. The Executive and the Corporation agree that the
provisions of Section 7 and Sections 14-27 herein shall survive the termination
of this Agreement and the termination of the Executive's employment hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
The Executive:
XXXXX X. XXX
(Seal)
(Signature)
The Corporation:
BROADBAND TECHNOLOGIES, INC.
ATTEST: By:
(Signature)
[Corporate Seal]
Name:
Title:
Secretary
EXHIBIT A
BROADBAND TECHNOLOGIES, INC.
RESTRICTED STOCK AWARD AGREEMENT
THIS AGREEMENT, made and entered into this ____ day of March, 1997, by
and between BroadBand Technologies, Inc., a Delaware corporation (the
"Company"), and Xxxxx X. Xxx (the "Executive").
WHEREAS, the Executive and the Company have entered into an employment
agreement (the "Employment Agreement") pursuant to which he will become entitled
to a salary and other benefits in exchange for his services as President and
Chief Executive Officer of the Company and for his compliance with
noncompetition and nonsolicitation covenants set forth in the Employment
Agreement; and
WHEREAS, one of the benefits to which the Executive is entitled under
the Employment Agreement is a restricted stock award of shares of the Company's
common stock; and
WHEREAS, this Agreement evidences the terms and conditions of the
restricted stock award described in the Employment Agreement; and
WHEREAS, the Executive desires to accept this award of restricted stock
in full satisfaction of the Company's obligations with respect to the restricted
stock award described in the Employment Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises contained herein, the parties hereby agree as follows:
1. AWARD. SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN,
THE COMPANY HEREBY AWARDS TO THE EXECUTIVE, IN THE FORM OF RESTRICTED STOCK,
EIGHTY THOUSAND (80,000) SHARES OF THE COMMON STOCK OF THE COMPANY, PAR VALUE
$.01 (THE "STOCK"). THE SHARES AND ALL DISTRIBUTIONS WITH RESPECT TO THE SHARES
SHALL BE SUBJECT TO THE RESTRICTIONS SET FORTH IN SECTION 2 HEREOF.
2. Restrictions. The Shares and any ownership interest in the
Shares may not be sold, transferred, exchanged, pledged, hypothecated or
otherwise disposed of to the extent that the Shares are subject to forfeiture
as described below.
(a) Except as provided in subsections (b) and (c) below, if
the Executive's employment with the Company shall terminate, for any reason, as
determined by the Company in its discretion, prior to the fifth anniversary of
the Award Date (such five year period is referred to herein as the "Restriction
Period"), the Executive shall forfeit the Stock. The Executive may not sell,
transfer, exchange, pledge, hypothecate or otherwise dispose of all or any
portion of the Stock or any ownership interest therein during the Restriction
Period.
(b) In the event that the Company terminates the Executive's
employment without Cause (as defined in Section 8.3(a) of the Employment
Agreement) during the Term of Agreement (as defined in Section 2 of the
Employment Agreement), as determined by the Company in its discretion, prior to
the fifth anniversary of the Award Date, and subject to the restrictions set
forth in Section 7.5 and 10 of the Employment Agreement, the Restriction Period
shall terminate and the Stock shall no longer be subject to forfeiture pursuant
to subsection (a) as of the effective date of such termination of the
Executive's employment.
(c) In the event that a Change in Control (as defined in
Section 11 of the Employment Agreement) occurs during the Term of Agreement (as
defined in Section 2 of the Employment Agreement and the Company terminates the
Executive's employment other than for Cause (as defined in Section 8.6(a) of the
Employment Agreement) during the three year period commencing on the effective
date of the Change in Control, and subject to the restrictions set forth in
Sections 7.5 and 10 of the Employment Agreement, the Restriction Period shall
terminate and the Stock shall no longer be subject to forfeiture pursuant to
subsection (a) as of the effective date of such termination of the Executive's
employment.
3. Documentation of Restricted Stock Award. The Executive's right to
receive the Shares is conditioned upon his execution and delivery of this
Agreement, and such other agreement, receipts and other documents as the Company
may request, within thirty (30) days after request by the Company.
4. Stock Certificates.
(a) The Company shall retain, in a custodial capacity, stock
certificates representing the Shares until forfeiture or lapse of the
restrictions applicable to the Shares, whichever first occurs. Upon delivery to
the Company of the executed Stock Power attached hereto and incorporated herein
by reference, the Company shall register stock certificates representing the
Shares in the name of the Executive, which stock certificates shall bear such
legends as the Company deems appropriate.
(b) As soon as administratively possible following the
expiration of the Restriction Period, the Company shall deliver to the Executive
unrestricted stock certificates for the Stock, unless the Stock has been
forfeited prior to such date.
(c) Upon forfeiture of the Stock pursuant to Section 2 above,
the stock certificates held on behalf of the Executive shall be transferred to
the Company pursuant to the executed Stock Power described in subparagraph (a)
above.
5. Authority of Compensation Committee.
(a) Except as provided in subsection (b) below, the
Compensation Committee of the Company (the "Committee") shall have the exclusive
right to (i) interpret and construe the terms of this Agreement and any
amendment hereto, and (ii) amend this Agreement, including but not limited to
amendments in recognition of unusual or nonrecurring events affecting the
Company or its financial statements or changes in applicable laws, regulations
or accounting principles or amendments intended to correct any defect, supply
any omission or reconcile any inconsistency in this Agreement in the manner and
to the extent it shall deem desirable to carry it into effect. Except as
provided in subsection (b) below, all acts, determinations and decisions of the
Committee made or taken pursuant to this Agreement or with respect to any
questions arising in connection with the interpretation of this Agreement,
including the severability of any and all of the provisions thereof, shall be
conclusive, final and binding upon all parties.
(b) If the Executive shall provide to the Committee, within
thirty (30) days after the date of any action taken by the Committee with
respect to this Agreement, written notice of his objection to such action, such
action shall be referred to a third party for review. The identity of such third
party shall be agreed in writing by the Committee and the Executive. The
decision of such third party on review shall be conclusive, final and binding
upon all parties.
(c) If any reorganization, recapitalization, reclassification,
stock split-up, stock dividend, or consolidation of the Stock, merger or
consolidation of the Company or sale or other disposition by the Company of all
or a portion of its assets, any other change in the Company's corporate
structure, or any distribution to shareholders other than a cash dividend
results in the outstanding shares of Stock, or any securities exchanged therefor
or received in their place, being exchanged for a different number or class of
shares of stock or other securities of the Company, or for shares of stock or
other securities of any other corporation; or new, different or additional
shares or other securities of the Company or of any other corporation being
received by the holders of outstanding shares of Stock, then equitable
adjustments may be made by the Committee in its sole discretion in the terms,
conditions or restrictions of this Agreement.
6. Rights as a Shareholder. Except as otherwise provided in this
Agreement, the Executive shall have all of the rights of a shareholder of the
Company with respect to the Stock, including the right to vote the Stock to the
extent the Stock has voting rights.
7. Compliance with Securities Laws. The Executive agrees that he will
not distribute or resell all or any portion of the Stock in violation of the
Securities Act of 1933, as amended, that he will indemnify and hold the Company
harmless against all liability for any such violation, that upon request he (i)
will furnish a letter agreement containing any representations and/or
undertakings which the Company shall request, and (ii) will accept a certificate
representing share of the Company bearing any legend restricting transferability
as the Company shall request to ensure compliance with securities laws. The
Stock shall not be transferable except in compliance with the conditions
indicated in such legends. Notwithstanding anything in this Agreement to the
contrary, the restrictions applicable to the Stock set forth in Section 2 above
shall not lapse if the Company reasonably believes, as determined by the Company
in its discretion, that as a result of such lapse the Company will not be in
compliance with all applicable federal and state securities laws.
8. Stop Transfer Instructions. The Company shall have the right to have
stop transfer instructions placed on or removed from the stock records of the
Company with respect to the Shares until such time as the restrictions set forth
in Section 2 above have lapsed, under the rules, regulations, and other
requirements of the Securities and Exchange Commission, NASDAQ or any stock
exchange upon which the Stock is then listed and any applicable federal or state
laws, and the Company may cause a legend or legends to
be placed on any such certificates to make appropriate reference to such
restrictions. In making such determination, the Company may rely upon an opinion
of counsel for the Company.
9. Other Consideration. If additional shares of common stock of the
Company, shares of stock in another corporation, or other consideration
(including but not limited to dividends) is issued in connection with the Shares
at a time at which the restrictions specified in Section 2 above have not
lapsed, the Executive shall execute and deliver to the Company one or more
additional Stock Powers with respect to any such stock, deliver to the Company
the stock certificates representing any such stock, and forward to the Company
any such other consideration. Such stock certificates and/or other consideration
shall be retained by the Company and shall be credited to the account of the
Executive and shall be distributed to the Executive, subject to forfeiture and
the other terms and conditions of this Agreement, at the same time as the Shares
are to be distributed free and clear of all restrictions.
10. Taxes.
(a) The Company shall have the right to withhold from any
transfer or payment made to the Executive under this Agreement, in cash or
stock, all Federal, state, city or other taxes as shall be required pursuant to
any statute or governmental regulation or ruling. In connection with such
withholding the Company shall be entitled to make any arrangement for
withholding which is consistent with this Agreement.
(b) The Executive agrees to give the Company prompt written
notice of any election made by the Executive under section 83(b) of the Internal
Revenue Code of 1986, as amended.
11. Administrative Costs. All costs and expenses in connection
with the administration of this Agreement shall be borne by the Company.
12. Limitation of Liability. The liability of the Company, its Board of
Directors, the Committee, and their officers, employees and agents, under this
Agreement and in the award of the Shares hereunder, is limited to the
obligations set forth with respect to such award, and nothing herein contained
shall be interpreted as imposing any liability in favor of the Executive with
respect to any loss, cost or expense which such recipient may incur in
connection with or arising out of any transaction involving the Shares that is
subject to the provisions of this Agreement.
13. No Right to Employment. Nothing in this Agreement shall be
construed to confer upon the Executive any right to continue in the employ of
the Company or to serve as an officer or director thereof, or interfere in any
way with the right of the Company to terminate the Executive's employment at any
time. Any rights of the Executive hereunder shall, except as otherwise provided
by the Company, be no greater than the right of an unsecured general creditor of
the Company. Any payments to be made hereunder shall be paid from the general
funds of the Company, and no special or separate fund shall be established and
no segregation of assets shall be made to assure payment of such amounts, except
as provided in Section 5(a) above.
14. Governing Law. The validity, construction, interpretation
and enforceability of this Agreement shall be determined and governed by
the laws of the State of North Carolina, except with respect to its choice of
law provisions.
15. Integration. The parties hereto agree that this Agreement sets
forth all of the promises, agreements, conditions, understandings, warranties,
and representations between the parties with respect to the Shares and that
there are no promises, agreements, conditions, understandings, warranties, or
representations, oral or written, express or implied between the parties with
respect to the Shares other than as set forth in this Agreement. Any
modifications or any waiver of any provision contained in this Agreement shall
not be valid unless made in writing and signed by the person or persons sought
to be bound by such waiver or modifications.
16. Severability. The provisions of the Agreement are severable
and if any one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any
partially unenforceable provision to the extent enforceable in any jurisdiction,
shall nevertheless be binding and enforceable.
17. Waiver. The waiver by the Company of a breach of any
provision of this Agreement by the Executive shall not operate or be
construed as a waiver of any subsequent breach by the Executive.
18. Binding Agreement. The terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
successors and permitted assigns, including, without limitation, the estate of
the Executive, and the executors, administrators, or trustees of such estate and
any receiver, trustee in bankruptcy or representative of the creditors of the
Executive.
19. Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, addressed as follows: to the Secretary
of the Company at 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx Xxxxxxxx
00000, or at such other address as the Company, by notice to the Executive, may
designate in writing from time to time; to Executive at Executive's address as
shown on the records of the Company, or at such other address as Executive, by
notice to the Company, may designate in writing from time to time.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
ATTEST: COMPANY:
BROADBAND TECHNOLOGIES, INC.
___________________________ By:________________________________
Secretary
(Corporate Seal)
EXECUTIVE:
XXXXX X. XXX
____________________________(SEAL)
EXHIBIT B
BROADBAND TECHNOLOGIES, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, is made and entered into as of the 10th day of
March, 1997 (the "Grant Date"), by and between BroadBand Technologies, Inc., a
Delaware corporation (the "Corporation"), and Xxxxx X. Xxx (the "Optionee").
WHEREAS, Optionee and the Corporation have entered into an
employment agreement (the "Employment Agreement") pursuant to which Optionee
will become entitled to a salary and other benefits in exchange for his services
as President and Chief Executive Officer of the Corporation and for his
compliance with noncompetition and nonsolicitation covenants set forth in the
Employment Agreement; and
WHEREAS, One of the benefits to which Optionee is entitled
under the Employment Agreement is a nonqualified stock option award with respect
to the Corporation's common stock; and
WHEREAS, this Agreement evidences the terms and conditions of
the nonqualified stock option award described in the Employment Agreement; and
WHEREAS, Optionee desires to accept the nonqualified stock
option award evidenced by this Agreement in full satisfaction of the
Corporation's obligations with respect to the nonqualified stock option award
described in the Employment Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, the parties hereto
mutually covenant and agree as follows:
1. Grant of Option. Subject to the terms and conditions set
forth herein, the Corporation grants to Optionee the option to purchase from the
Corporation up to but not exceeding in the aggregate 350,000 shares of the
Corporation's Common Stock, par value $.01 per share (Common Stock), at a price
of Twelve Dollars and Fifty Cents ($12.50) per share. Vested options may be
exercised, in whole or in part, at any time and from time to time during the
Option Period as hereinafter defined. Unvested options may not be exercised. The
Option Period shall commence six (6) months following the first date of this
Agreement and shall terminate upon the earlier to occur of (i) March 10, 2007,
the tenth anniversary of the date of grant of the option, or (ii) the
termination of the following grace periods after Optionee ceases to be an
employee of the Corporation or any of its Subsidiaries: (x) in the case of
termination on account of the permanent disability of Optionee, twelve (12)
months after the date of termination, (y) in the case of termination on account
of the death of Optionee, twelve (12) months after the date of death and (z) in
the case of termination on account of any reason other than the permanent
disability or death of Optionee, thirty (30) days after the date of termination.
2. Exercise of Option.
(a) The option hereby granted shall be exercised by
Optionee delivering to the Secretary of the Corporation, from time to time, on
any business day, written notice specifying the whole number of shares Optionee
then desires to purchase. Payment in full of the option price of such shares
must be made at the time the option is exercised. Payment may be made in cash or
by certified or official bank check payable to the order of the Corporation for
an amount in U.S. dollars equal to the option
price of such shares. Payment may also be made in shares of Common Stock of the
Corporation previously held by Optionee. Payment may also be made by combining
cash and shares previously held. To the extent that shares previously held are
used in making full or partial payment of the option price, each such share will
be valued at the fair market value (as defined in subsection (b) below) thereof
as of the date of exercise. Any overpayment will be promptly refunded, and any
underpayment will be deemed an exercise of such lesser whole number of shares as
the amount paid is sufficient to purchase.
(b) For purposes of this Agreement, the "fair market
value" of shares of Common Stock shall be determined as
follows:
(i) For so long as the Common Stock is not traded in
any established securities market and no broker-dealer makes a
market in the Common Stock, fair market value shall be
determined in good faith by the Board of Directors of the
Company (the "Board"). If a broker-dealer is making a market
in the Common Stock, then the fair market value of the Common
Stock on a given date shall be the mean between the highest
and lowest quoted selling prices of the Common Stock on that
date, said mean to be based on the sale of a minimum of 100
shares of Common Stock; provided, however, that if fewer than
100 shares of Common Stock are traded on such date or if no
sales prices are quoted, then, in either such event, the fair
market value of the Common Stock on such date shall be the
mean between the lowest asked and the highest bid price in
such market on such date.
(ii) If the Common Stock is traded on a national
securities exchange, then the fair market value of the Common
Stock on a given date shall be the closing price of the Common
Stock on such exchange based on the sales of a minimum of 100
shares of Common Stock; provided, however, that if fewer than
100 shares of Common Stock are traded on such date or if not
sales prices are quoted, then fair market value of the Common
Stock on such date shall be the closing price of the Common
Stock on such exchange on the last prior date on which at
least 100 shares were sold.
3. Restrictions on Transfer of Option and Option Shares
(a) This option is not transferable by Optionee
otherwise than by will or the laws of descent and distribution and is
exercisable during Optionee's lifetime only by Optionee. No assignment or
transfer of this option or of the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise, except by will or the laws of
descent and distribution, shall vest in the assignee or transferee any interest
or right herein whatsoever, but immediately upon any attempt to assign or
transfer this option the same shall terminate and be of no force or effect.
(b) Optionee agrees that Optionee will not distribute
or resell any shares (or other securities) issuable upon exercise of the option
granted hereby in violation of the Securities Act of 1933, as amended, that
Optionee will indemnify and hold the Corporation harmless against all liability
for any such violation, that upon request Optionee (i) will furnish a letter
agreement in connection with any exercise of this option containing any
representations and/or undertakings which the Corporation shall request, and
(ii) Optionee will accept a certificate representing shares of the Corporation
bearing any legend restricting transferability as the Corporation shall request
to ensure compliance
with securities laws. The shares shall not be transferable
except in compliance with the conditions indicated in the legend.
(c) The Corporation may impose stop-transfer
instructions with respect to any shares (or other securities) subject to any
restriction set forth in this Paragraph 3 until the restriction has been
satisfied or terminates.
4. Expiration; Vesting
(a) The option granted hereby shall expire and
be of no further force and effect on the tenth annual anniversary of the date
the option was granted, notwithstanding that Optionee remains employed by the
Corporation or any of its Subsidiaries.
(b) Any unvested option granted hereby shall
expire immediately upon Optionee ceasing to be an employee of the Corporation or
any of its Subsidiaries without regard to reason or lack thereof.
(c) The options hereby granted shall vest as
follows:
(i) 50,000 shares when the fair market
value of a share of the Corporation's Common Stock (A) remains at or above
$19.00 for 20 consecutive trading days; or (B) remains at or above $15.00 for 60
consecutive trading days;
(ii) an additional 50,000 shares when the
fair market value of a share of the Corporation's Common Stock (A) remains at or
above $23.00 for 20 consecutive trading days; or (B) remains at or above $19.00
for 60 consecutive trading days;
(iii) an additional 50,000 shares when the
fair market value of a shares of the Corporation's Common Stock remains at or
above $30.00 for 20 consecutive trading days;
(iv) an additional 50,000 shares when the
fair market value of a share of the Corporation's Common Stock remains at or
$38.00 above for 20 consecutive trading days;
(v) an additional 75,000 shares when the
fair market value of a share of the Corporation's Common Stock remains at or
above $57.00 for 20 consecutive trading days; and
(vi) an additional 75,000 shares when the
fair market value of a share of the Corporation's Common Stock remains at or
above $76.00 for 20 consecutive trading days.
Notwithstanding any other provision of this Agreement, the Option shall become
fully vested and exercisable, to the extent not already fully vested and
exercisable, on the fifth anniversary of the Grant Date.
5. Optionee. Whenever the word "Optionee" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the estate, personal representative, or
beneficiary to whom this option may be transferred by will or by the laws of
descent and distribution, it shall be deemed to include such person.
6. Optionee Not A Shareholder. Optionee shall not be deemed
for any purpose to be a shareholder of the Corporation with respect to any
shares as to which this option shall not have been exercised and payment made as
hereby provided and a stock certificate for such shares actually issued to
Optionee. No adjustment will be made for dividends or other rights for which the
record date is prior to the date of such issuance.
7. Corporate Transactions. The existence of this option shall
not affect in any way the right or power of the Corporation or its shareholders
to make or authorize any or all adjustments, recapitalization, reorganizations
or other changes in the Corporation's capital structure or its business, or any
merger or consolidation of the Corporation, or any issue of bonds, debentures,
preferred or prior preference stocks ahead of or convertible into, or otherwise
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Corporation or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
8. Antidilution. The shares with respect to which this option
is granted are shares of the Common Stock of the Corporation as constituted on
the date of this Agreement but if, and whenever, prior to the delivery by the
Corporation of all the shares of Common Stock with respect to which this option
is granted, the Corporation shall effect a subdivision or consolidation of
shares, or other capital readjustment, or the payment of a stock dividend, or
other increase or reduction of the number of shares of Common Stock outstanding,
without receiving any compensation therefor in money, services or property, then
(a) in the event of any increase in the number of such shares outstanding
without receiving any compensation therefor, the number of shares of Common
Stock then remaining subject to option hereunder shall be proportionately
increased (except that any fraction of a share resulting from any such
adjustment shall be excluded from the operation of this Agreement), and the cash
consideration payable per share shall be proportionately reduced, and (b) in the
event of a reduction in the number of such shares outstanding, the number of
shares of Common Stock then remaining subject to option hereunder shall be
proportionately reduced (except that any fractional share resulting from any
such adjustment shall be excluded from the operation of this Agreement), and the
cash consideration payable per share shall be proportionately increased.
9. Deferral of Issuance of Shares. Anything in this Agreement
to the contrary notwithstanding, if, at any time specified herein for the issue
of shares to Optionee, any law, or any regulation or requirement of the
Securities and Exchange Commission or other governmental authority having
jurisdiction in the premises shall require either the Corporation or Optionee to
take any action in connection with the shares then to be issued, the issue of
such shares shall be deferred until such action shall have been taken; the
Corporation shall be under no obligation to take such action; and the
Corporation shall have no liability whatsoever as a result of the non-issuance
of such shares, except to refund to Optionee any consideration tendered in
respect of the exercise price.
10. Issuance of Shares. Shares of Common Stock issued pursuant
to the exercise of this option will be issued only in the name of Optionee and
may not be transferred into the name of any agent of or nominee for Optionee
until such time as Optionee has complied with the terms of this Agreement.
11. Authority of Compensation Committee.
(a) Except as provided in subsection (b) below, the
Compensation Committee of the Company (the "Committee") shall have the exclusive
right to (i) interpret and construe the terms of this Agreement and any
amendment hereto, and (ii) amend this Agreement, including but not limited to
amendments
in recognition of unusual or nonrecurring events affecting the Company or its
financial statements or changes in applicable laws, regulations or accounting
principles or amendments intended to correct any defect, supply any omission or
reconcile any inconsistency in this Agreement in the manner and to the extent it
shall deem desirable to carry it into effect. Except as provided in subsection
(b) below, all acts, determinations and decisions of the Committee made or taken
pursuant to this Agreement or with respect to any questions arising in
connection with the interpretation of this Agreement, including the severability
of any and all of the provisions thereof, shall be conclusive, final and binding
upon all parties.
(b) If the Optionee shall provide to the Committee, within
thirty (30) days after the date of any action taken by the Committee with
respect to this Agreement, written notice of his objection to such action, such
action shall be referred to a third party for review. The identity of such third
party shall be agreed in writing by the Committee and the Optionee. The decision
of such third party on review shall be conclusive, final and binding upon all
parties.
(c) If any reorganization, recapitalization, reclassification,
stock split-up, stock dividend, or consolidation of the Stock, merger or
consolidation of the Corporation or sale or other disposition by the Corporation
of all or a portion of its assets, any other change in the Corporation's
corporate structure, or any distribution to shareholders other than a cash
dividend results in the outstanding shares of Stock, or any securities exchanged
therefor or received in their place, being exchanged for a different number or
class of shares of stock or other securities of the Corporation, or for shares
of stock or other securities of any other corporation; or new, different or
additional shares or other securities of the Corporation or of any other
corporation being received by the holders of outstanding shares of Stock, then
equitable adjustments may be made by the Corporation in its sole discretion in
the terms, conditions or restrictions of this Agreement.
12. Taxes. The Corporation shall have the right to withhold from any
transfer or payment made to the Optionee under this Agreement, in cash or stock,
all Federal, state, city or other taxes as shall be required pursuant to any
statute or governmental regulation or ruling. In connection with such
withholding the Corporation shall be entitled to make any arrangement for
withholding which is consistent with this Agreement.
13. Administrative Costs. All costs and expenses in connection with
the administration of this Agreement shall be borne by the Corporation.
14. Limitation of Liability. The liability of the Corporation, the
Board, the Committee, and their officers, employees and agents, under this
Agreement and in the award of the Shares hereunder is limited to the obligations
set forth with respect to such award, and nothing herein contained shall be
interpreted as imposing any liability in favor of the Optionee with respect to
any loss, cost or expense which such recipient may incur in connection with or
arising out of any transaction involving the Shares that is subject to the
provisions of this Agreement.
15. No Right to Employment. Nothing in this Agreement shall be
construed to confer upon the Optionee any right to continue in the employ of the
Corporation or to serve as an officer or director thereof, or interfere in any
way with the right of the Corporation to terminate the Optionee's employment at
any time. Any rights of the Optionee hereunder shall, except as otherwise
provided by the Corporation, be no greater than the right of an unsecured
general creditor of the Corporation. Any payments to be made hereunder shall be
paid from the general funds of the Corporation, and no
special or separate fund shall be established and no segregation of assets shall
be made to assure payment of such amounts, except as provided in Section 5(a)
above.
16. Governing Law. The validity, construction, interpretation and
enforceability of this Agreement shall be determined and governed by the laws
of the State of North Carolina, except with respect to its choice of law
provisions.
17. Integration. The parties hereto agree that this Agreement sets
forth all of the promises, agreements, conditions, understandings, warranties,
and representations between the parties with respect to the Shares and that
there are no promises, agreements, conditions, understandings, warranties, or
representations, oral or written, express or implied between the parties with
respect to the Shares other than as set forth in this Agreement. Any
modifications or any waiver of any provision contained in this Agreement shall
not be valid unless made in writing and signed by the person or persons sought
to be bound by such waiver or modifications.
18. Severability. The provisions of the Agreement are severable and if
any one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provision to the extent enforceable in any jurisdiction, shall
nevertheless be binding and enforceable.
19. Waiver. The waiver by the Corporation of a breach of any provision
of this Agreement by the Optionee shall not operate or be construed as a waiver
of any subsequent breach by the Optionee.
20. Binding Agreement. The terms and provisions of this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
successors and permitted assigns, including, without limitation, the estate of
the Optionee, and the executors, administrators, or trustees of such estate and
any receiver, trustee in bankruptcy or representative of the creditors of the
Optionee.
21. Notices. Any notice which either party hereto may be required or
permitted to give to the other shall be in writing, and may be delivered
personally or by mail, postage prepaid, addressed as follows: to the Secretary
of the Corporation at 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx
Xxxxxxxx 00000, or at such other address as the Corporation, by notice to the
Optionee, may designate in writing from time to time; to Optionee at Optionee's
address as shown on the records of the Corporation, or at such other address as
Optionee, by notice to the Corporation, may designate in writing from time to
time.
IN WITNESS WHEREOF, the Corporation has caused this Agreement
to be executed by its duly authorized officer, and Optionee has hereunto set
Optionee's hand and seal, all on the day and year first above written.
BROADBAND TECHNOLOGIES, INC.
By: ATTEST:
Title:
Title: Secretary
XXXXX X. XXX
(SEAL)
ADDRESS:
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
Eighty Thousand (80,000) shares of the common stock of BroadBand Technologies,
Inc. (the "Corporation"), par value $.01, standing in the name of the
undersigned on the books of the Corporation represented by Certificate No. , and
does hereby irrevocably constitute and appoint attorney to transfer said stock
on the books of the Corporation, with full power of substitution in the
premises.
DATED: ______________________
___________________________(SEAL)
Xxxxx X. Xxx
GUARANTEE:
