STOCK OPTION AGREEMENT
EXHIBIT
10.63
STOCK
OPTION AGREEMENT (“Agreement”)
effective as of September 8, 2008 (“Grant Date”), by and between AboveNet, Inc.
(the “Company”) and Xxxxxxx Xxxxxx (the “Optionee”).
WHEREAS,
the
Optionee is a member of the Board of Directors of the Company; and
WHEREAS,
the
Company considers it desirable and in its best interest that the Optionee be
provided an inducement to acquire an ownership interest in the Company and
an
additional incentive to advance the interest of the Company through the grant
of
an option to purchase shares of the common stock of the Company pursuant to
the
provisions of the Abovenet, Inc. 2008 Equity Incentive Plan (the
“Plan”).
NOW,
THEREFORE,
the
parties agree as follows:
1. Grant
of Option.
Pursuant
to the Plan and subject to the terms and conditions set forth herein and
therein, the Company hereby grants to the Optionee the right and option (the
“Option”) to purchase all or any part of 1,000 shares (the “Option Shares”) of
the Company’s common stock, $.01 par value per share (the “Common Stock”).
Capitalized terms that are not defined herein shall have the meaning set forth
in the Plan.
2. Exercise
Price.
The
purchase price (the “Exercise Price”) of the Option Shares shall be $60 per
share.
3. Time
of Exercise.
(a) Subject
to acceleration as expressly provided in Paragraph 5 hereof, the Option shall
vest and become exercisable on September 8, 2009 provided that the Optionee
remains in Continuous Service at all times through such date.
(b) Subject
to earlier expiration as expressly provided in Paragraph 5 hereof, the Option
shall expire and cease to have any force or effect on the end of the day
immediately preceding the tenth anniversary of the Grant Date (the “Scheduled
Expiration Date”).
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4. Method
of Exercising Option and Withholding.
(a) The
Option shall be exercised, in whole, or from time to time in part, by the
delivery of a written notice of exercise by the Optionee to the Company at
its
principal office (or at such other address as may be established by the Board
or
the Committee) stating the number of Option Shares as to which the Option is
being exercised, accompanied by payment in full of the aggregate Exercise Price
for such Option Shares. Payment for such Option Shares shall be made (i) in
U.S.
dollars by cash, personal check, bank draft or money order payable to the order
of the Company, by money transfers or direct account debits; (ii) through the
delivery or deemed delivery based on attestation to the ownership of Mature
Shares (as defined in the Plan) with a Fair Market Value (as defined in the
Plan) at least equal to the total payment due; (iii) pursuant to a
broker-assisted “cashless exercise” program if established by the Company; or
(iv) by a combination of the methods described in clauses (i) through (iii)
above.
(b) The
Company’s obligation to deliver shares of Common Stock upon the exercise of the
Option shall be subject to the payment by the Optionee of any applicable
federal, state and local withholding tax. The Company shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Optionee any federal, state or local taxes required to
be
withheld with respect to the exercise of the Option. Subject to the right of
the
Board or the Committee to disapprove any such election and require the
withholding tax in cash, the Optionee shall have the right to elect to pay
the
withholding tax with shares of Common Stock to be received upon exercise of
the
Option or which are otherwise owned by the Optionee. Any election to pay
withholding taxes with stock shall be irrevocable once made.
5. Termination
of Continuous Service; Change of Control.
(a) In
the
event of the Optionee’s death prior to the termination of his Continuous
Service, 100% of the outstanding unvested portion of the Option shall
immediately vest and become exercisable. The Option shall remain exercisable
until the earlier of: (i) end of the day on the second anniversary of the
Optionee’s death or (ii) the Scheduled Expiration Date.
(b) In
the
event of the termination of the Optionee’s Continuous Service for any reason
other than the Optionee’s death or in connection with a Change of Control, the
unvested portion of the Option shall immediately be forfeited. The vested
portion of the Option shall remain exercisable until the earlier of: (i) the
end
of the day on the second anniversary of the termination of the Optionee's
Continuous Service or (ii) the Scheduled Expiration Date.
(c) In
the
event of a Change of Control, the outstanding unvested portion of the Option
shall immediately vest and become exercisable.
(d) If
at the
time the Optionee’s Continuous Service is terminated, the underlying shares with
respect to the vested and exercisable portion of the Option are not covered
by
an effective registration statement under the 1933 Act, such portion of the
Option shall remain exercisable until the later of (i) the end of the day on
the
second anniversary of the termination of the Optionee’s Continuous Service, or
(ii) the 90th
day
after the effective date of a registration covering such shares.
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(e)
Notwithstanding anything to the foregoing, the Option may not be exercised
on or
after the Scheduled Expiration Date.
6. Transfer
of Option and Limitations on Issuance of Option
Shares.
(a) The
Option is not transferable otherwise than by will or the laws of descent and
distribution, and the Option may be exercised during the Optionee’s lifetime
only by the Optionee. Any attempt to transfer the Option in contravention of
this subparagraph (a) is void ab
initio.
The
Option shall not be subject to execution, attachment or other
process.
(b) Notwithstanding
anything herein to the contrary, the Option may not be exercised and the Company
shall not be required to issue or sell any Option Shares unless, at the time
of
exercise, (i) a registration statement under the 1933 Act relating to the Option
Shares has been filed with, and declared effective by, the Securities and
Exchange Commission, and no stop order suspending the effectiveness of such
registration statement has been issued by the Securities and Exchange Commission
or (ii) the issuance of the Options Shares is, in the opinion of counsel to
the
Company, permitted pursuant to an exemption from the registration requirements
of the 1933 Act.
7. No
Rights in Option Shares.
The
Optionee shall have none of the rights of a shareholder with respect to the
Option Shares unless and until issued to him upon exercise of the
Option.
8. Governing
Law/Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without reference to principles of conflict of
laws.
9. Miscellaneous.
This
Agreement cannot be changed or terminated orally. This Agreement and the Plan
contain the entire agreement between the parties relating to the subject matter
hereof. The paragraph headings herein are intended for reference only and shall
not affect the interpretation hereof.
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/s/
Xxxxxxx Xxxxxx
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| Xxxxxxx Xxxxxx | |
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Optionee
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ABOVENET,
INC.
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By:
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/s/
Xxxxxx Xxxxxx
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Name:
Xxxxxx Xxxxxx
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Title:
SVP
and General Counsel
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