EXHIBIT 10.21.5
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PAETEC CORP.
NONQUALIFIED STOCK OPTION AGREEMENT
This sets forth the terms of the NONQUALIFIED STOCK OPTION AGREEMENT
("Agreement") entered into as of the ___ day of _____, ____ ("Effective Date"),
by and between PAETEC CORP. ("Company") and __________________, an employee of
the Company or one of its subsidiaries ("Optionee").
TERMS
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1. Definition of Terms. For purposes of this Agreement, all defined
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terms, as indicated by the capitalization of the first letter of such term,
shall have the meanings specified in the PaeTec Corp. 1998 Incentive
Compensation Plan ("Plan") to the extent not specified in this Agreement.
2. Grant of Option. Pursuant to the Plan and subject to the terms
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and conditions of the Plan and this Agreement, the Company hereby grants to the
Optionee the option to purchase from the Company all or any part of an aggregate
of ______ shares of Class A Common Stock, at a purchase price of $_____ per
share. The Option Rights granted pursuant to this Agreement are not intended to
qualify as Incentive Stock Options.
3. Expiration Date and the Vesting Start Date. The Option Rights
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granted pursuant to this Agreement shall expire on ______, ____ [insert date
that is ten years after Vesting Start Date], unless sooner terminated or
canceled under the provisions of Paragraph 6. The Vesting Start Date shall be
_______ __, _____ [insert date of initial grant of option being exchanged].
4. Exercise of Option.
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(a) The Optionee, provided the Optionee has remained in the continuous
employ of the Company or one of its subsidiaries from the Vesting Start Date,
may exercise the Option Rights granted under this Agreement during the periods
described below, for the acquisition of the number of shares of Common Stock
stated.
(i) All or any part of 25 percent of the Option Rights granted under
this Agreement may be purchased at any time during the period that begins on the
first anniversary of the Vesting Start Date and ends on the tenth anniversary of
the Vesting Start Date;
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(ii) All or any part of an additional 25 percent of the Option Rights
granted under this Agreement may be purchased at any time during the period that
begins on the second anniversary of the Vesting Start Date and ends on the tenth
anniversary of the Vesting Start Date;
(iii) All or any part of an additional 25 percent of the Option
Rights granted under this Agreement may be purchased at any time during the
period that begins on the third anniversary of the Vesting Start Date and ends
on the tenth anniversary of the Vesting Start Date; and
(iv) All or any part of the remaining 25 percent of the Option Rights
granted under this Agreement may be purchased at any time during the period that
begins on the fourth anniversary of the Vesting Start Date and ends on the tenth
anniversary of the Vesting Start Date.
(b) If an anniversary described in (a) above occurs on a date that is
not a normal business day of the Company, the anniversary shall be deemed to
occur on the next ensuing normal business day of the Company.
5. Manner of Exercise.
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(a) Option Rights may be exercised on or after the applicable exercise
date and prior to the expiration date (or earlier termination or cancellation
date) at any time, and may be exercised in whole or in part as to the shares of
Common Stock then available for purchase.
(b) Option Rights may be exercised only to acquire whole shares of
Common Stock. No fractional shares shall be issued, and an exercise that would
otherwise result in the issuance of fractional shares shall be disregarded to
the extent of the fraction.
(c) Option Rights shall be exercised by delivery to the Committee (or
its designee), in person or by certified mail, return receipt requested, the
following:
(i) A written notice containing a reference to this Agreement and a
statement of the number of shares of Common Stock with respect to which Option
Rights are being exercised.
(ii) Subject to the approval of the Committee, cash in an amount equal
to the purchase price for such shares, or shares of Common Stock having an
aggregate fair market value, as of the date of exercise, equal to such purchase
price, or a combination of cash and shares of Common Stock (which shares, if
originally acquired from the Company
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shall have been held by the Optionee for at least six months). To the extent the
Common Stock is publicly traded, payment may also be made by means of broker-
assisted cashless exercise.
(iii) Such additional documents as the Committee may require.
6. Termination or Resignation of Employment. Following the
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Optionee's termination or resignation of employment with the Company or one of
its subsidiaries (other than by reason of the Optionee's death or disability,
the Optionee may exercise Option Rights granted under this Agreement, to the
extent the Optionee is entitled to do so on the date of exercise, for a period
that ends 30 days after the date of the Optionee's termination of employment.
Following the Optionee's termination of employment with the Company or one of
its subsidiaries as a result of the Optionee's death or disability, the Optionee
(or the Optionee's legal representative) may exercise Option Rights granted
under this Agreement, to the extent the Optionee is entitled to do so on the
date of termination, for a period of 12 months following the date of the
Optionee's termination of employment. Notwithstanding the foregoing of this
Paragraph 6, no Option Rights granted under this Agreement may be exercised
later than the expiration date described in Paragraph 3.
7. Assignment or Transfer. Option Rights granted pursuant to this
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Agreement shall be exercisable only by the Optionee (or the Optionee's duly
appointed guardian or legal representative) during the Optionee's lifetime and
may not be sold, transferred, assigned, pledged, hypothecated or otherwise
disposed of in any other way, except by will or the laws of descent and
distribution, and shall not be subject to execution, attachment, garnishment or
similar process. All unexercised Option Rights granted under this Agreement
shall be canceled automatically upon any such assignment, transfer, attachment,
etc. The foregoing shall not preclude the exercise of Option Rights after the
Optionee's death.
8. Confidentiality.
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(a) The Optionee acknowledges that the Company and its subsidiaries
have acquired and developed and will continue to acquire and develop techniques,
plans, processes, computer programs, equipment, and lists of customers and their
particular requirements that may pertain to Company-and / or subsidiary related
services and equipment, and related trade secrets, know-how, research and
development, which are proprietary and confidential in nature and are and will
continue to be of unique value to the Company and its business and its
subsidiaries and their businesses (all referred to as "Confidential
Information"). All Confidential Information known or in the possession of the
Optionee shall be kept and maintained by him/her as confidential and proprietary
to the Company and its subsidiaries.
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(b) The Optionee shall not (i) disclose any Confidential Information
at any time directly or indirectly, in any manner to any person or firm, except
to other employees of the Company or its subsidiaries on a "need to know" basis,
or (ii) solicit any officer, director, employee or agent of the Company or any
affiliate of the Company to become an officer, director, employee or agent of
the Optionee, his/her respective affiliates or anyone else.
(c) Upon termination of his/her employment for any reason, the
Optionee shall without demand therefore deliver to the Company or the relevant
subsidiary all Confidential Information in his/her possession. The obligations
of this Paragraph 8 shall survive the termination of this Agreement
indefinitely.
(d) The Optionee acknowledges that his/her services are unique and
extraordinary and are not readily replaceable, and hereby expressly agrees that,
in the event of a violation of the confidentiality covenant set forth in this
Paragraph 8, the Company and its affiliates will be irreparably harmed and the
remedy of damages or other remedy at law will be inadequate. Therefore, the
Optionee agrees that, in the event of a threatened or actual violation of the
confidentiality covenant, the Company shall be entitled to obtain from any court
of competent jurisdiction, an injunction restraining the Optionee from
committing the violation, without the necessity of proving actual damage and in
addition to any other relief available under this Agreement or at law.
(e) The Company and the Optionee believe that the covenants of this
Paragraph 8 are reasonable. However, if at any time it shall be determined by
any court of competent jurisdiction that this Paragraph 8 or any portion of it
as written, is unenforceable because the restrictions are unreasonable, the
Company and the Optionee agree that such portions as shall have been determined
to be unreasonably restrictive shall be deemed so amended as to make such
restrictions reasonable in the determination of such court, and the covenants,
as so modified, shall be enforceable to the same extent as if such amendments
had been made prior to the date of any alleged breach of said covenants.
9. No Right To Continued Employment. This Agreement shall not confer
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upon the Optionee any right to continued employment with the Company or any of
its subsidiaries nor shall it interfere, in any way, with the right of the
Company to modify the Optionee's compensation, duties, and responsibilities, or
the Company's authority to terminate the Optionee's employment.
10. No Rights as a Shareholder. The granting of Option Rights shall
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not confer upon the Optionee any rights as an owner of shares of Common Stock
until the Optionee exercises Option Rights and the Company issues stock
certificate(s) to the Optionee.
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11. Withholding. The Company shall have the right to deduct any sums
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that federal, state or local tax laws require to be withheld upon the grant or
exercise of Option Rights. In the alternative, the Committee may require as a
condition to either granting Option Rights or issuing shares of Common Stock
that the Optionee (or other person exercising Option Rights) pay to the Company
for deposit with the appropriate taxing authority, any amounts that federal,
state or local tax laws require to be withheld.
12. Notices. All notices and communications under this Agreement
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shall be in writing and shall be given by personal delivery or by registered or
certified mail, return receipt requested, addressed to the residence of the
Optionee and to the principal office of the Company, or such other address as
may be designated by the Company or the Optionee. Notice shall be deemed given
upon personal delivery or upon receipt.
13. Successors and Assigns. This Agreement shall be binding upon and
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shall inure to the benefit of the successors and assigns of the Company, and the
heirs, successors and assigns of the Optionee.
14. Governing Law. This Agreement shall be construed in accordance
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with the laws of the State of New York. The Optionee agrees to accept as
binding, conclusive and final all decisions and interpretations of the Committee
with respect to any questions that may arise under the Plan and this Agreement.
15. Acknowledgments by Optionee. Optionee acknowledges that he has
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been advised, and that he/she understands, that:
(a) Option Rights and any shares issued pursuant to the exercise of
Option Rights have not been registered under the Securities Act of 1933;
(b) the grant of Option Rights and the issuance of any shares pursuant
to the exercise of Option Rights may be subject to, or may become subject to,
applicable reporting, disclosure and holding period restrictions imposed by Rule
144 under the Securities Act of 1933 ("Rule 144") and Section 16 of the
Securities Exchange Act of 1934 ("Section 16");
(c) pursuant to Rule 144, Optionee may have to hold any shares issued
for a period of one year from the option exercise date; and
(d) shares acquired could be subject to Section 16(a) reporting
requirements as well as the short swing trading prohibition contained in Section
16(b) which precludes any profit taking with respect to any stock transactions
which occur within any six-month period. The Optionee further acknowledges
receipt of a copy of the Plan.
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The Company has caused this Agreement to be executed by its duly
authorized officer, and the Optionee has executed this Agreement, both as of the
day and year first written above.
PAETEC CORP.
By:__________________________
Title:_________________________
OPTIONEE
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Employee Name
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