IPC ACQUISITION CORP. NONQUALIFIED STOCK OPTION AGREEMENT
Exhibit 10.13
IPC ACQUISITION CORP.
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the h day of (the “Grant Date”), between IPC Acquisition
Corp. (the “Company”), and (the “Optionee”).
WHEREAS, the Company has adopted the IPC Acquisition Corp. 2002 Stock Option Plan as amended
and restated (the “Plan”) in order to provide additional incentive to certain employees, officers,
consultants and directors of the Company and its Subsidiaries; and
WHEREAS, the Committee responsible for administration of the Plan has determined to grant an
option to the Optionee as provided herein;
NOW, THEREFORE, the parties hereto agree as follows, subject to the approval of the
stockholders of the Company in accordance with the final regulations promulgated under Section 280G
of the Code:
1. Grant of Option.
1.1 The Company hereby grants to the Optionee the right and option (the “Option”) to purchase
all or any part of an aggregate of whole Shares subject to, and in accordance with, the terms and
conditions set forth in this Agreement and the Plan.
1.2 The Option is not intended to qualify as an “incentive stock option” within the meaning
of Section 422 of the Code.
1.3 This Agreement shall be construed in accordance and consistent with, and subject to, the
Plan (which is incorporated herein by this reference) and, except as otherwise expressly set forth
herein, the capitalized terms used in this Agreement shall have the definitions set forth in the
Plan.
2. Purchase Price.
The price at which the Optionee shall be entitled to purchase Shares upon the exercise of the
Option shall be $ per Share.
3. Duration of Option.
The Option shall be exercisable to the extent and in the manner provided herein for a period
often (10) years from the Grant Date; provided, however, that the Option may be earlier terminated
as set forth herein.
4. Vesting and Exercisability of Option.
Subject to the terms and conditions of this Agreement and the Plan, the Option shall become
vested and exercisable with respect to 25% of the total number of Shares covered by the Option on
each of the First four anniversaries of the Grant Date. Notwithstanding anything contained in this
Agreement to the contrary, upon the occurrence of an Exit Event, the Option, to the extent then
outstanding, shall become fully vested and exercisable.
5. Manner of Exercise and Payment.
5.1 Subject to the terms and conditions of this Agreement and the Plan, the Option may be
exercised by written notice delivered in person or by mail to the Secretary of the Company, at its
principal executive offices. Such notice shall state that the Optionee is electing to exercise the
Option and the number of Shares in respect of which the Option is being exercised and shall be
signed by the person or persons exercising the Option. If requested by the Committee, such person
or persons shall (i) deliver this Agreement to the Secretary of the Company who shall endorse
thereon a notation of such exercise and (ii) provide satisfactory proof as to the right of such
person or persons to exercise the Option.
5.2 The notice of exercise described in Section 5.1 hereof shall be accompanied by a cash
payment in an amount equal to the full purchase price for the Shares in respect of which the
Option is being exercised.
5.3 Upon receipt of notice of exercise and full payment for the Shares in respect of which
the Option is being exercised, the Company shall, subject to Section 17 of the Plan, take such
action as may be necessary to effect the transfer to the Optionee of the number of Shares as to
which such exercise was effective.
5.4 The Optionee shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any Shares subject to the Option until (i) the Option shall have been
exercised pursuant to the terms of this Agreement and the Optionee shall have paid the full
purchase price for the number of Shares in respect of which the Option was exercised and has made
arrangements acceptable to the Company for the payment of all applicable Withholding Taxes, (ii)
the Company shall have issued and delivered the Shares to the Optionee and (iii) the Optionee’s name
shall have been entered as a shareholder of record on the books of the Company, whereupon the
Optionee shall have full voting and other ownership rights with respect to such Shares.
6. Termination of Option. Each Option shall terminate on the date which is the tenth
anniversary of the Grant Date, unless terminated earlier as follows:
6.1 If the employment of the Optionee is terminated for any reason other than the death or
Disability of the Optionee or for Cause, the portion of the Option that is not then vested and
exercisable shall immediately terminate. To the extent the Option is vested
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and exercisable as of the date of such termination of employment, the Option shall remain
exercisable for a period of one hundred and eighty (180) days following such termination of
employment, after which time the Option shall automatically terminate in full.
6.2 If the employment of the Optionee is terminated by reason of the death or Disability of
the Optionee, the Option shall become immediately vested and exercisable with respect to an
additional number of Shares equal to fifty percent (50%) of the Shares, if any, subject to the then
unvested portion of the Option. Any portion of the Option that is not vested and exercisable after
giving effect to the immediately preceding sentence shall immediately terminate. To the extent the
Option is or becomes vested on the date of such termination of employment by reason of the death or
Disability of the Optionee, it shall remain exercisable for one year following such termination of
employment, after which time the Option shall automatically terminate in full.
6.3 If the employment of the Optionee is terminated for Cause, (i) the Option shall
immediately terminate in full whether or not the Option is then vested and exercisable and (ii) the
Company shall have the right to purchase from the Optionee and the Optionee shall be required to
sell to the Company, at the election of the Company at any time following such termination of
employment, any of the Shares acquired pursuant to the Option at a per share purchase price equal
to the lesser of (x) the Fair Market Value of a Share at the time of such purchase by the Company,
or (y) the exercise price set forth in Section 2 above.
7. Effect of Change in Control.
Upon a Change in Control the Option shall become vested and exercisable with respect to an
additional number of Shares equal to fifty (50%) of the Shares, if any, subject to the then
unvested portion of the Option immediately prior to the Change in Control. In addition to the
foregoing, notwithstanding anything contained in Section 6 of this Agreement to the contrary, in
the event the Epitome’s employment is terminated by the Company for any reason other than Cause or
Disability within one (1) year following a Change in Control, the Option shall immediately become
fully vested and exercisable and remain exercisable following such termination for one hundred and
eighty (180) days.
8. Non-Transferability of Option.
The Option shall not be Sold, transferred or otherwise disposed of other than by will or by
the laws of descent and distribution. During the lifetime of the Optionee the Option shall be
exercisable only by the Optionee.
9. No Right to Continued Employment.
Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the
Optionee any right with respect to continuance of employment by the Company,
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nor shall this Agreement or the Plan interfere in any way with the right of the Company to
terminate the Optionee’s employment at any time.
10. Withholding of Taxes.
The Company shall have the right to deduct from any distribution of cash to the Optionee an
amount equal to the federal, state and local income taxes and other amounts as may be required by
law to be withheld (the “Withholding Taxes”) with respect to the Option. If the Optionee is
entitled to receive Shares upon exercise of the Option, the Optionee shall make arrangements
acceptable to the Company for the payment of the Withholding Taxes prior to the issuance of such
Shares.
11. Optionee Covenants.
11.1 In consideration of the acquisition of Shares hereunder, the Optionee agrees that the
Optionee will not, during the Optionee’s employment with the Company or any of its subsidiaries or
any entity that becomes a parent of the Company following the date hereof (a “Future Parent”) and
for one year thereafter (the “Non-Competition Term”), directly or indirectly, own, manage, operate,
join, control, be employed by, or participate in the ownership, management, operation or control
of, or be connected in any manner with, including but not limited to holding any position as a
shareholder, director, officer, consultant, independent contractor, employee, partner, or investor
in, any Restricted Enterprise (as defined below); provided that in no event shall ownership of less
than 1% of the outstanding equity securities of any issuer whose securities are registered under
the Exchange Act, standing alone, be prohibited by this Section 11. For purposes of this
Agreement, the term “Restricted Enterprise” shall mean any person, corporation, partnership or
other entity that is engaged, directly or indirectly, in (a) the design, manufacture, installation,
servicing, consultation and other professional services and applications of Turret Systems (as
defined below); (b) the design and implementation of the in—building cabling and infrastructure
necessary for customers do business; (c) the design, provisioning, installation or servicing of
telecommunications services for trading floors; or (d) managed services in connection with trading
organizations as provided by the Employer during the Employee’s employment with the Employer, in
each case in the United States or in any other geographic location where the Employer or any of its
affiliates do business. For purposes of this Agreement, the term “Turret Systems” shall mean
telecommunications equipment and software to enable communications (including voice, video and
data) primarily among traders, counterparties and associated support personnel. Following
termination of the Optionee’s employment with all member of the Company Group, upon request of the
Company, the Optionee shall notify the Company of the Optionee’s then current employment status.
Notwithstanding anything to the contrary contained herein, in the event of the involuntary
termination of the Optionee’s employment with the Company and its subsidiaries for any reason other
than Cause, the Non-Competition Term shall end upon the earlier of (i) one year from the date of
such termination and (ii) the date on which the cash severance benefits to which the Optionee is
eligible, as determined by the Company, whether or not such benefits are accepted by
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the Optionee, would cease to be paid if accepted; provided, however, that in the event the Optionee
is not eligible for any cash severance benefits, the Non-Competition Term shall terminate on the
date of the Optionee’s termination of employment. For purposes of the immediately preceding
sentence, any severance payable in a lump sum shall be deemed paid over a number of weeks equal to
the quotient of the amount of such lump-sum severance payment divided by the Optionee’s weekly
salary.
11.2 In consideration of the acquisition of Shares hereunder, the Optionee agrees that during
the Non-Competition Term, the Optionee shall not, and shall not cause any other person to,
interfere with or harm, or attempt to interfere with or harm, the relationship of any member of the
Company Group, or endeavor to entice away from any member of the Company Group, or hire, any
person who at any time during the Optionee’s employment with any member of the Company Group was an
employee or customer of any member of the Company Group, or otherwise had a material business
relationship with any member of the Company Group; provided, however, that the foregoing provision
will not prevent the Optionee from hiring any such person (i) who contacts the Optionee on his or
her own initiative without any direct or indirect solicitation or encouragement from the Optionee
(it being understood that a bona fide public advertisement for employment placed by the Optionee
and not specifically targeted at such persons shall not constitute direct or indirect solicitation
or encouragement) or (ii) who has been terminated by any member of the Company Group.
11.3 The Optionee agrees and understands that in the Optionee’s position with the Company, the
Optionee has been and will be exposed to and has and will receive information relating to the
confidential affairs of the Company, its subsidiaries and-affiliates, including but not limited to
technical information, intellectual property, business and marketing plans, strategies, customer
information, other information concerning the products, promotions, development, financing,
expansion plans, business policies and practices of the Company, its subsidiaries and affiliates,
and other forms of information considered by the Company to be confidential and in the nature of
trade secrets (“Confidential Information”). Notwithstanding anything contained herein to the
contrary, Confidential Information shall not include information that is now publicly available or
that subsequently becomes publicly available other than as a direct or indirect result of a breach
of this Agreement. The Optionee agrees that the Optionee will not disclose such Confidential
Information, either directly or indirectly, to any third person or entity without the prior written
consent of the Company. This confidentiality covenant has no temporal, geographical or territorial
restriction. Upon termination of the Optionee’s employment with the Company and its subsidiaries
the Optionee will promptly supply to the Company all property, keys, notes, memoranda, writings,
lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs,
machines, technical data or any other tangible product or document which has been produced by,
received by or otherwise submitted to the Optionee in the course or otherwise as a result o the
Optionee’s employment with the Company or its subsidiaries.
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11.4 The Optionee agrees that any breach of the terms of this Section 11 would result in
irreparable injury and damage to the Company Group for which the Company Group would have no
adequate remedy at law; the Optionee therefore also agrees that in the event of said breach or any
threat of breach, one or more members of the Company Group, as applicable, shall be entitled to an
immediate injunction and restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Optionee and/or any and all persons and/or entities acting for and/or with
the Optionee, without having to prove damages, in addition to any other remedies to which the
members of the Company Group may be entitled at law or in equity. The terms of this Section 11
shall not prevent the members of the Company Group from pursuing any other available remedies for
any breach or threatened breach hereof, including but not limited to the recovery of damages from
the Optionee. The Optionee and the Company further agree that the provisions of the covenants
contained in this Section 11 are reasonable and necessary to protect the businesses of the Company
Group because of the Optionee’s access to confidential information and his material participation
in the operation of such businesses. Should a court, arbitrator or other similar authority
determine, however, that any provision of the covenants contained in this Section 11 are not
reasonable or valid, either in period of time, geographical area, or otherwise, the parties hereto
agree that such covenants should be interpreted and enforced to the maximum extent to which such
court or arbitrator deems reasonable or valid.
The existence of any claim or cause of action by the Optionee against one or more members of
the Company Group, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of the covenants contained in this Section 11.
12. Restrictions on Sales of Shares by Optionees
12.1 No Optionee shall Sell any Shares acquired upon exercise of the Option prior to the
earlier of (i) three (3) years from the Grant Date and (ii) one hundred eighty (180) days following
an IPO, other than to a Permitted Transferee or where such Sale is first approved by the Board, or
is made pursuant to Section 12 or 13.4 of the Plan. In addition, to the extent applicable, before
the Optionee may Sell Shares acquired upon exercise of the Option, the Shares must first be offered
to the Company in accordance with Section 14 of the Plan.
12.2 For any transfer to a Permitted Transferee to be effective hereunder, the Permitted
Transferee shall agree in writing to be bound by all the terms of this Agreement and the Plan
applicable to the Optionee as if the Permitted Transferee originally had been a party hereto; and
provided, further, that all of the partners of any Permitted Transferee that is a partnership shall
agree in writing not to transfer any partnership interests they then own or may hereafter acquire
in the partnership Permitted Transferee except to a Permitted Transferee that has made the same
agreement in writing to the Company, so long as the partnership Permitted Transferee shall own any
Shares. Any reference herein to the Optionee shall be to the
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Permitted Transferee from and after the date the transfer is effected in accordance with this
Section 12.
12.3 Any Sale or attempted Sale of Shares in violation of any provision of this Agreement
shall be void, and the Company shall not record such Sale on its books or treat any purported
transferee of such Shares as the owner of such Shares for any purpose.
12.4 Each stock certificate representing Shares issuable upon the exercise of the Option
shall bear a legend in substantially the following form;
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR BLUE SKY LAWS
AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1)
PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES THAT IS EFFECTIVE
UNDER THE ACT OR (2} PURSUANT TO ANY AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT
RELATING TO THE DISPOSITION OF SECURITIES AND (3) IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES AND BLUE SKY LAWS.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF THE IPC ACQUISITION
CORP. 2002 STOCK OPTION PLAN AS AMENDED AND RESTATED (THE “PLAN”) AND A NONQUALIFIED STOCK
OPTION AGREEMENT (THE “AGREEMENT”) DATED AS OF , WHICH INCLUDES CERTAIN RESTRICTIONS ON
TRANSFER. COMPLETE AND CORRECT COPIES OF THE PLAN AND THIS AGREEMENT ARE AVAILABLE FOR
INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN
REQUEST AND WITHOUT CHARGE.
13. Optionee Bound by the Plan.
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions thereof.
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