NextWave Wireless LLC
EXHIBIT
10.6
2005
Units Plan
Reference
Number: 2005-1
SECTION
1. GRANT
OF OPTION.
(a) Option.
On the
terms and conditions set forth in this Agreement and each Notice of Option
Award
referencing this Agreement (the “Notice”),
NextWave Wireless LLC (the “Company”)
grants
to the optionee on the Date of Grant an option to purchase at the exercise
price
a number of Units, consisting of limited liability company interests of the
Company. Each Notice, together with this Agreement, shall be a separate
non-statutory option (i.e., an option that isn’t described in Sections 422(b) or
423(b) of the Internal Revenue Code).
(b) Units
Plan and Defined Terms.
This
option is granted under and subject to the terms of the NextWave Wireless LLC
2005 Units Plan (“Plan”),
which
is incorporated herein. In case of any conflict between the terms of the Plan
and this Agreement or the Notice, the terms of the Plan shall control.
Capitalized terms not defined in this Agreement or the Notice shall have the
same meaning ascribed to such term in the Plan.
(c) Duration.
This
Agreement shall apply to this option until its expiration and to the Units
acquired hereunder until all Units subject to this option have vested and the
Company’s Right of Repurchase with respect to such Units has
expired.
SECTION
2. RIGHT
TO EXERCISE.
Exercisability.
This
option will become exercisable to purchase Units, also referred to as vesting,
in the manner and pursuant to the schedule described in the Notice. The option
will become exercisable with respect to all Units covered hereby, i.e., fully
vested, upon a Change of Control consummated while optionee is employed,
effective immediately prior to the Change of Control. This option shall also
be
exercisable with respect to unvested Units; provided that if this option is
exercised as to unvested Units, such Units shall be held in escrow by the
Company subject to the Right of Repurchase described in Section 7.
SECTION
3. NO
TRANSFER OR ASSIGNMENT OF OPTION.
Transferability.
Subject
to the terms of the Amended and Restated Limited Liability Company Agreement
of
NextWave Wireless LLC, dated as of April 13, 2005 (the “LLC
Agreement”),
or
the then applicable organizational document of the Company:
(a) Except
as
provided in (c) below, this option and the rights and privileges conferred
hereby shall be exercisable only by the optionee during the
optionee’s
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lifetime,
or by the person to whom the optionee’s rights shall pass by will or the laws of
descent and distribution. Notwithstanding anything in the Plan to the contrary,
this option and the rights and privileges conferred hereby shall be transferable
pursuant to a domestic relations order.
(b) Except
as
provided in (c) below, neither this option, the rights and privileges conferred
hereby nor the Units acquired under this Agreement, may be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by an optionee
and any such purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against the Company
or
any Affiliate.
(c) This
option and the rights and privileges conferred hereby and the Units acquired
under this Agreement may be transferred for no consideration to immediate family
members or related family trusts, or similar entities on such terms and
conditions as the Committee may establish.
SECTION
4. EXERCISE
PROCEDURES.
(a) Escrow. If
Units
to be issued upon exercise of this option are subject to a Right of Repurchase,
the Company shall deposit such Units in escrow with the Company and the optionee
shall deliver to the Company, together with a Notice of Exercise and the
aggregate exercise price, a duly executed blank power (in the form provided
by
the Company). Any cash dividends paid on vested Units held in escrow shall
be
paid directly to the optionee and shall not be held in escrow. Units, together
with any other assets or securities held in escrow hereunder, shall be
(i) surrendered to the Company for repurchase and cancellation upon the
Company’s exercise of its Right of Repurchase, or (ii) released to the optionee
upon the optionee’s request, to the extent the Units are not Restricted Units
(but not more frequently than once every six (6) months). In any event, all
Units which have vested (and any other vested assets and securities attributable
thereto) shall be released within sixty (60) days of the date the
optionee’s Service terminates. Any new, substituted or additional securities or
other property described in Section 7(e) below shall be immediately delivered
to
the Company to be held in escrow, but only to the extent the Units are at the
time Restricted Units.
(b) Section
83(b) Election.
To the
extent the optionee is permitted by the Notice to exercise this option as to
unvested Units, Section 83 of the Code provides that the optionee is not subject
to federal income tax upon such exercise until the Right of Repurchase with
respect to the Units lapses. If the optionee chooses, the optionee may make
an
election under Section 83(b) of the Code, which would cause the optionee to
recognize income for federal income tax purposes in the amount of the excess
(if
any) of the fair market value of the Units acquired (determined as of the date
the option is exercised) over the exercise price paid in connection with such
acquisition. A Section 83(b) election must be filed with the Internal Revenue
Service within thirty (30) days
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after
the
date of exercise - even if no tax is payable payable
because
the fair market value of the Restricted Units on the date of the option is
exercised equals the exercise price paid. The optionee acknowledges that it
is
the optionee’s sole responsibility to timely file the Section 83(b) election and
that failure to file a Section 83(b) election within the applicable thirty
(30)
day period may result in the recognition of ordinary income when the Right
of
Repurchase lapses.
(c) Withholding
Requirements.
The
Company may withhold any tax (or other governmental obligation) as a result
of
the exercise of this option and/or the filing of a Section 83(b) election,
as a
condition to the exercise of this option, and the optionee shall make
arrangements satisfactory to the Company to enable it to satisfy all such
withholding requirements. The optionee shall also make arrangements satisfactory
to the Company to enable it to satisfy any withholding requirements that may
arise in connection with the vesting or disposition of Units purchased by
exercising this option.
(d) No
Assurances of Tax Consequences.
This
option is intended to be treated as incentive compensation and not as an equity
interest in the Company prior to the date it is exercised. However, each
optionee shall consult with his or her own tax counsel regarding tax treatment
of this option, and the Company provides no assurances regarding such treatment,
including the treatment of this award as an option and not as an equity interest
in the Company.
SECTION
5. PAYMENT
FOR UNITS.
(a) Wire
Transfer or Check.
All or
part of the Exercise Price may be paid in U.S. Dollars by wire transfer or
check.
(b) Other
Methods of Payment for Units.
At the
sole discretion of the Board of Directors, all or any part of the exercise
price
and any applicable withholding requirements may be paid by any other method
permissible under the terms of the Plan. The Company shall notify the optionee
if and when it shall make such other payment method available to the
optionee.
SECTION
6. TERM
AND EXPIRATION.
(a) Basic
Term.
Subject
to earlier termination in accordance with subsection (b) below, this option
shall expire on the expiration date set forth in the Notice.
(b) Termination
of Service.
If the
optionee’s Service terminates for any reason, then this option shall expire on
the earliest of the following occasions:
(i) The
expiration date determined pursuant to Subsection (a) above;
(ii) The
date
three (3) months after the termination of the optionee’s Service for any reason
other than Cause, death or Disability (or such later date as the Board of
Directors may determine);
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(iii) The
date
six (6) months after the termination of the optionee’s Service by reason of
Disability (or such later date as the Board of Directors may determine) or
retirement pursuant to any then current formal retirement policy of the Company;
(iv) The
date
twelve (12) months after the optionee’s death; or
(v) The
date
of termination of the optionee’s Service if such termination is for Cause or if
Cause exists on such date.
The
optionee (or in the case of the optionee’s death or disability, the optionee’s
representative) may exercise all or part of this option at any time before
its
expiration under the preceding sentence, but only to the extent that this option
had become exercisable for vested Units on or before the date the optionee’s
Service terminates. When the optionee’s Service terminates, this option shall
expire immediately with respect to the number of Units for which this option
is
not yet vested. The Company shall also have the right not to deliver Units
upon
the exercise of this option if, after the exercise of this option, the
optionee’s Service is terminated for Cause or it is determined that Cause
existed on such date.
(c) Leaves
of Absence.
For any
purpose under this Agreement, Service shall be deemed to continue while the
optionee is on a bona fide leave of absence, if such leave was approved by
the
Company in writing or if continued crediting of Service for such purpose is
expressly required by the terms of such leave or by applicable law (as
determined by the Company).
SECTION
7. RIGHT
OF REPURCHASE.
(a) Right
of Repurchase.
To the
extent this Option is exercised for unvested Units, the Units so acquired
initially shall be Restricted Units and shall be subject to a right (but not
an
obligation) of repurchase by the Company. If the optionee transfers any
Restricted Units to the extent permitted under Section 3, then this Section
7
shall apply to the Transferee to the same extent as to the
optionee.
(b) Exercise
Notice.
If
the
Company wishes to exercise its Right of Repurchase, the Company shall provide
the optionee with written notice of its intent to exercise its right. Exercise
will be effective upon the Company’s delivery of the repurchase price to
optionee. The Right of Repurchase may be exercised no later than ninety (90)
days following the date the optionee’s Service terminates. Such
notice shall contain the price per Share which shall be the repurchase price,
described in Subsection (d) below, and all other terms and conditions of the
offer (including, without limitation, the proposed consummation date of the
repurchase). The repurchase price shall be paid in cash or by canceling of
indebtedness as the Company, in its sole discretion, shall
determine.
(c) Lapse
of Repurchase Right.
The
Right of Repurchase shall lapse with respect to the Units in accordance with
the
vesting schedule described in the
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Notice.
In addition, the Right of Repurchase shall lapse and all of the remaining
Restricted Units shall become vested if the Company is subject to a Change
in
Control before the optionee’s Service terminates.
(d) Repurchase
Price.
If the
Company exercises the Right of Repurchase, it shall pay the optionee an amount
for each of the Restricted Units being repurchased equal to the
exercise price.
(e) Additional
Units or Substituted Securities.
In the
event of the declaration of a stock dividend, the declaration of an
extraordinary dividend payable in a form other than stock, a spin-off, a stock
split, an adjustment in conversion ratio, a recapitalization or a similar
transaction affecting the Company’s outstanding securities without receipt of
consideration, any new, substituted or additional securities or other property
(including money paid other than as an ordinary cash dividend) which are by
reason of such transaction distributed with respect to any Units subject to
this
Section 7, or into which such Units thereby become convertible, shall
immediately be subject to this Section 7.
(f) Termination
of Rights as Shareholder.
If the
Company makes available, at the time and place and in the amount and form
provided in this Agreement, the consideration for the Units to be purchased
in
accordance with this Section 7, then after such time the person from whom such
Units are to be purchased shall no longer have any rights as a holder of such
Units (other than the right to receive payment of such consideration in
accordance with this Agreement). Such Units shall be deemed to have been
purchased in accordance with the applicable provisions hereof, whether or not
the certificate(s) therefor have been delivered as required by this
Agreement.
SECTION
8. LEGALITY
OF INITIAL ISSUANCE.
No
Units
shall be issued upon the exercise of this option unless and until the Company
has determined that:
(a) The
Company and the optionee have taken any actions required to register the Units
under the Securities Act or to perfect an exemption from the registration
requirements thereof;
(b) Any
applicable listing requirement of any stock exchange or other securities market
on which Stock is listed has been satisfied; and
(c) Any
other
applicable provision of state or federal law has been satisfied.
SECTION
9.
REGISTRATION RIGHTS.
The
Company may, but shall not be obligated to, register or qualify the sale of
Units under the Securities Act or any other applicable law. The Company shall
not be obligated to take any affirmative action in order to cause the sale
of
Units under this Agreement to comply with any law.
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SECTION
10. RESTRICTIONS ON TRANSFER.
(a) Permitted
Transfers.
Sections 7(a) shall not apply to any of the following “Permitted Transfers”:
(i) a transfer by beneficiary designation, will or intestate succession or
(ii) a transfer to the optionee’s spouse, children or grandchildren (or
their issue) or to a trust established by the optionee for the benefit of the
optionee or the optionee’s spouse, children or grandchildren (or their issue),
provided in either case that the Transferee agrees in writing on a form
prescribed by the Company to be bound by all provisions of this Agreement.
If
the optionee transfers any Units acquired under this Agreement, either under
this Subsection or after the Company has failed to exercise the Right of
Repurchase, then such rights shall be applicable to the Transferee to the same
extent as to the optionee.
(b) Securities
Law Restrictions.
Regardless of whether the offering and sale of Units under the Plan have been
registered under the Securities Act or have been registered or qualified under
the securities laws of any state, the Company at its discretion may impose
restrictions upon the sale, pledge or other transfer of such Units (including
the placement of appropriate legends on stock certificates or the imposition
of
stop-transfer instructions) if, in the judgment of the Company, such
restrictions are necessary or desirable in order to achieve compliance with
the
Securities Act or the securities laws of any state or any other
law.
(c) LLC
Agreement Restrictions.
Upon
exercise of the option, the optionee agrees that he or she shall hold the Units
subject to the terms and conditions of the LLC Agreement (or the then applicable
organizational document of the Company), including without limitation the
restrictions on transferability set forth therein.
(d) Market
Stand-Off.
In
connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act, including the Company’s Initial Public Offering, the optionee
shall not directly or indirectly sell, make any short sale of, loan,
hypothecate, pledge, offer, grant or sell any option or other contract for
the
purchase of, purchase any option or other contract for the sale of, or otherwise
dispose of or transfer, or agree to engage in any of the foregoing transactions
with respect to, any Units acquired under this Agreement without the prior
written consent of the Company or its underwriters. Such restriction (the
“Market Stand-Off”) shall be in effect for such period of time following the
date of the final prospectus for the offering as may be requested by the Company
or such underwriters. In no event, however, shall such period exceed one hundred
eighty (180) days. The Market Stand-Off shall in any event terminate two (2)
years after the date of the Company’s Initial Public Offering. In the event of
the declaration of a stock dividend, a spin-off, a stock split, an adjustment
in
conversion ratio, a recapitalization or a similar transaction affecting the
Company’s outstanding securities without receipt of consideration,
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any
new,
substituted or additional securities which are by reason of such transaction
distributed with respect to any Units subject to the Market Stand-Off, or into
which such Units thereby become convertible, shall immediately be subject to
the
Market Stand-Off. In order to enforce the Market Stand-Off, the Company may
impose stop-transfer instructions with respect to the Units acquired under
this
Agreement until the end of the applicable stand-off period. The Company’s
underwriters shall be beneficiaries of the agreement set forth in this
Subsection (d). This Subsection (d) shall not apply to Units registered in
the public offering under the Securities Act, and the optionee shall be subject
to this Subsection (d) only if the directors and officers of the Company are
subject to similar arrangements.
(e) Undertaking.
The
optionee agrees to take whatever additional action and execute whatever
additional documents the Company may deem necessary or advisable to carry out
or
effect one or more of the obligations or restrictions imposed on either the
optionee or upon the Restricted Units pursuant to the provisions of this
Agreement.
(f) Investment
Intent. The
optionee represents and agrees that as of the Date of Xxxxx, the Units to be
acquired upon exercising this option will be acquired for investment, and not
with a view to the sale or distribution thereof. If the sale of Units under
the
Plan is not registered under the Securities Act but an exemption is available
which requires an investment representation or other representation, the
optionee shall represent and agree at the time of exercise that the Units being
acquired upon exercising this option are being acquired for investment, and
not
with a view to the sale or distribution thereof, and shall make such other
representations as are deemed necessary or appropriate by the Company and its
counsel.
(g) Legends.
All
certificates evidencing Units purchased under this Agreement shall bear the
following legends:
“The
Units represented hereby may not be sold, assigned, transferred, encumbered
or
in any manner disposed of, except in compliance with the terms of a written
agreement between the company and the registered holder of the shares (or the
predecessor in interest to the Units). Such agreement grants to the Company
certain repurchase rights. The Secretary of the Company will upon written
request furnish a copy of such agreement to the holder hereof without
charge.”
“The
Units represented hereby have not been registered under the Securities Act
of
1933, as amended, and may not be sold, pledged, or otherwise transferred without
an effective registration thereof under such act or an opinion of counsel,
satisfactory to the Company and its counsel, that such registration is not
required.”
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“The
Units represented by this certificate are subject to certain restrictions on
transfer and conditions set forth in the Amended And Restated Limited Liability
Company Agreement, dated as of April 13, 2005, by and among the members of
NextWave Wireless LLC. A copy of such agreement may be obtained from NextWave
Wireless at its principal executive offices. Any transferee of the interests
represented by this certificate shall be deemed to agree to be bound by the
terms of the agreement.”
(h) Removal
of Legends.
If, in
the opinion of the Company, any legend placed on a certificate representing
Units sold under this Agreement is no longer required, the holder of such
certificate shall be entitled to exchange such certificate for a certificate
representing the same number of Units but without such legend.
(i) Administration.
Any
determination by the Company in connection with any of the matters set forth
in
this Section 11 shall be conclusive and binding on the optionee and all other
persons.
SECTION
11.
ADJUSTMENT OF UNITS.
In
the
event of a subdivision of the outstanding Units, a declaration of a dividend
payable in Units, a declaration of an extraordinary dividend payable in a form
other than Units in an amount that has a material effect on the Fair Market
Value of the Units, a combination or consolidation of the outstanding Units
into
a lesser number of Units, a recapitalization, a spin-off, a reclassification,
or
a change in corporate structure or a similar occurrence that results in a change
in the Units subject to the Plan, the terms of this option (including, without
limitation, the number and kind of Units subject to this option and the Exercise
Price) shall be adjusted as set forth in Section 8(a) of the Plan. In the
event that the Company is a party to a merger or consolidation, this option
shall be subject to the agreement of merger or consolidation, as provided in
Section 8(b) of the Plan.
SECTION
12.
MISCELLANEOUS PROVISIONS.
(a) Rights
as a Shareholder.
Neither
the optionee nor the optionee’s representative shall have any rights as an
equity owner with respect to any Units subject to this option until the optionee
or the optionee’s representative becomes entitled to receive such Units by (i)
filing a notice of exercise, and (ii) paying the exercise price as provided
in
this Agreement.
(b) No
Retention Rights.
Nothing
in this option or in the Plan shall confer upon the optionee any right to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Company (or any Parent or
Subsidiary employing or retaining the optionee) or of the optionee, which rights
are hereby expressly reserved by each, to terminate his or her Service at any
time and for any reason, with or without cause.
(c) Notification.
Any
notice required by this Agreement shall be given in writing and shall be deemed
effective upon personal delivery or upon deposit
-8-
with
the
United States Postal Service, by registered or certified mail, with postage
and
fees prepaid. A notice shall be addressed to the Company at its principal
executive office and to the optionee at the address that he or she most recently
provided to the Company.
(d) Entire
Agreement.
The
Notice, this Agreement and the Plan constitute the entire contract between
the
parties hereto with regard to the subject matter hereof. They supersede any
other agreements, representations or understandings (whether oral or written
and
whether express or implied) which relate to the subject matter
hereof.
(e) Waiver.
The
failure of the Company in any instance to exercise the Right of Repurchase
shall
not constitute a waiver of any other repurchase rights that may subsequently
arise under the provisions of this Agreement or any other agreement between
the
Company and the optionee. No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other or subsequent breach or condition
whether of like or different nature.
(f) Assignment.
The
Company may assign the Right of Repurchase to any person or entity selected
by
the Board of Directors, including, without limitation, one or more shareholders
of the Company.
(g) Successors
and Assigns.
The
provisions of this Agreement shall inure to the benefit of, and be binding
upon,
the Company and its successors and assigns and upon the optionee, the optionee’s
assigns and the legal representatives, heirs and legatees of the optionee’s
estate, whether or not any such person shall have become a party to this
Agreement and have agreed in writing to be join herein and be bound by the
terms
hereof.
(h) Choice
of Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Delaware, as such laws are applied to contracts entered into and
performed in such State.
SECTION
13. DEFINITIONS.
“Cause”
shall
mean with respect to the optionee, “Cause” as defined in any employment
agreement between the Company and the optionee or, if there is no such
agreement, the following with respect to the optionee:
(i) any
conviction or plea of guilty or nolo contendere to a felony,
(ii) any
fraud, embezzlement, theft, willful misconduct, breach of fiduciary duty or
gross negligence with respect to the Company or any of its
affiliates,
(iii) any
willful breach of any written policy, which breach has a material and adverse
impact on the Company’s reputation or business or any confidential or
proprietary information, non-compete or non-solicitation covenant for the
benefit of the Company or any of its affiliates, or
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(iv) any
willful failure to substantially perform the optionee’s material
responsibilities (it being understood that any failure to perform for reasons
beyond the control of the optionee, such as disability, inadequate resources,
impossibility, or the like shall not be treated as a “willful
failure”).
“Change
in Control”
shall
have the meaning provided in the Plan.
“Date
of Grant”
shall
mean the date specified in the Notice.
“Disability”
shall
mean that the optionee is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment as
determined by the Board of Directors in its sole discretion.
“Exercise
Price”
shall
mean the amount for which one Share may be purchased upon exercise of this
option, as specified in the Notice.
“Fair
Market Value”
shall
mean, with respect to Units, the closing sales price of a Unit on the applicable
date (or if there is no trading in the Units on such date, on the next preceding
date on which there was trading) as reported in The Wall Street Journal (or
other reporting service approved by the Committee). In the event the Units
are
not publicly traded at the time a determination of its fair market value is
required to be made hereunder,
the
determination of fair
market
value shall be made in good faith by the Committee.
“Initial
Public Offering”
shall
mean a firm commitment underwritten public offering of Units or other event
the
result of which is that Units are tradable on the New York Stock Exchange,
American Stock Exchange, NASDAQ National Market or similar market
system.
“Restricted
Unit”
shall
mean a Unit that is subject to a Right of Repurchase.
“Securities
Act”
shall
mean the Securities Act of 1933, as amended.
“Service”
shall
mean service as a common-law employee, member of the board of directors or
as a
consultant of the Company, a Parent or a Subsidiary.
“Unit”
shall
mean one common unit of the Company, as adjusted in accordance with
Section 8 of the Plan (if applicable).
“Subsidiary”
shall
mean any entity that the Company owns fifty percent (50%) or more of the total
outstanding equity interests.
“Transferee”
shall
mean any person to whom the optionee has directly or indirectly transferred
any
Unit acquired under this Agreement.
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