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Exhibit 99.1
WRITTEN COMPENSATION AGREEMENT WITH XXXXXXX XXXX
THE SECURITIES 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 CORPORATION AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED.
INCENTIVE STOCK OPTION AGREEMENT
This Stock Option Agreement is made and entered into this 12th day of
June, 1998, in full replacement of the Stock Option Agreement dated March 8,
1996 pursuant to the AboveNet Communications, Inc. 1996 Stock Option Plan (the
"Plan"). The Committee administering the Plan has selected Xxxxxxx Xxxx ("the
Optionee") to receive the following grant of an incentive stock option ("Stock
Option") to purchase shares of the common stock of AboveNet Communications, Inc.
(the "Corporation"), on the terms and conditions set forth below to which
Optionee accepts and agrees:
1. Stock Options Granted
No. of Shares Subject to Option 700,000
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Date of Grant March 8, 1996
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Vesting Commencement Date February 1, 1996
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Exercise Price Per Share $0.01
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Expiration Date March 7, 2006
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2. The Stock Option is granted pursuant to the Plan to purchase the number
of shares of authorized but unissued common stock of the Corporation specified
in Section 1 hereof (the "Shares"). The Stock Option shall expire, and all
rights to exercise it shall terminate on the Expiration Date, except that the
Stock Option may expire earlier as provided in the Plan. The number of shares,
subject to the Stock Option granted hereunder shall be adjusted as provided in
the Plan.
3. The Stock Option shall be exercisable in all respects in accordance with
the terms of the Plan which are incorporated herein by this reference. Optionee
acknowledges having received and read a copy of the Plan. All shares of the
Corporations's common stock issued pursuant to the exercise of this Stock
Option shall be subject to the Corporation's Right of First Refusal as set
forth in Sections 11 of the Plan.
4. Optionee shall have the right to exercise the Stock Option in accordance
with the following schedule:
4.1 The Stock Option may not be exercised in whole or in part at any
time prior to the end of the first semiannual calendar period (semiannual
calendar period" shall mean six (6) continuous calendar months) following the
Vesting Commencement Date.
4.2 Optionee may exercise the Stock Option as to one eighth (1/8th)
of the Shares at the end of 1st full semiannual calendar period following the
Vesting Commencement Date.
4.3 Optionee may exercise the Stock Option as to an additional one
eighth (1/8th) of the Shares at the end of each of the full semiannual calendar
period of employment which Optionee completes with the Company commencing with
the 2nd full semiannual calendar period following the Vesting Commencement Date.
4.4 The right to exercise the Stock Option shall be cumulative.
Optionee may buy all, or from time to time any part, of the maximum number of
shares which are exercisable under the Stock Option, but in no case may Optionee
exercise the Stock Option with regard to a fraction of a share, or for any share
for which the Stock Option is not exercisable.
5. The Optionee agrees to comply with all laws, rules, and regulations
applicable to the grant and exercise of the Stock Option and the sale or other
disposition of the common stock of the Corporation received pursuant to the
exercise of such Stock Option. The Stock Option shall not become exercisable
unless and until the shares exercisable under the Stock Option have been
qualified under the California Corporate Securities Law of 1968 pursuant to a
permit application filed with the California Department of Corporations or
unless the exercise is otherwise exempt from the qualification requirements of
such law. The Stock Option is conditioned upon the Optionee's representation,
which Optionee hereby confirms as of the date hereof and which Optionee must
confirm as of the date of any exercise of all or part of the Stock Option, that:
6.1 Optionee understands that both this Stock Option and any shares
purchased upon its exercise are securities, the issuance of which require
compliance with state and federal securities laws;
6.2 Optionee understands that the securities have not been
registered under the Securities Act of 1933 (the "Act") in reliance upon a
specific exemption contained in the Act which depends upon Optionee's bona fide
investment intention in acquiring these securities; that Optionee's intention is
to hold these securities for Optionee's own benefit for an indefinite period;
that Optionee has no present intention of selling or transferring any part
thereof
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(recognizing that the Stock Option is not transferable) and that certain
restrictions may exist on transfer of the shares issued upon exercise of the
Stock Option;
6.3 Optionee understands that the shares issued upon exercise of
this Stock Option, in addition to other restrictions on transfer, must be held
indefinitely unless subsequently registered under the Act, or unless an
exemption from registration is available; that Rule 701 and Rule 144, two
exemptions from registration which may be available, are only available after
the satisfaction of certain conditions and require the presence of a U.S. public
market for such shares; that no certainty exists that a U.S. public market for
the shares will exist, and that otherwise Optionee may have to sell the shares
pursuant to another exemption from registration which exemption may be difficult
to satisfy; and
6.4 The Corporation shall not be under any obligation to issue
any shares upon the exercise of this Stock Option unless and until the
Corporation has determined that:
(a) it and Optionee have taken all actions required to register
such shares under the Securities Act, or to perfect an exemption from the
registration requirements thereof;
(b) any applicable listing requirement of any F stock exchange
on which such shares are listed has been satisfied; and
(c) all other applicable provisions of state and federal law
have been satisfied.
7. By signing this agreement, Optionee hereby declares under
penalties of perjury that to the best of his/her knowledge and belief, the
following is correct and complete:
7.1 Optionee is the holder of a stock option (the "Option")
granted to Optionee described above in this agreement.
7.2 Optionee hereby certifies that the Stock Option Agreement
evidencing the Option (the "Agreement") was issued but contained an error in the
vesting schedule. Optionee hereby agrees to immediately deliver the Agreement to
the Company.
7.3 Optionee agrees that the Agreement will be deemed to have
been surrendered for cancellation on the date hereof and releases the Company
from any and all liability under the Agreement.
7.4 Optionee further agrees to defend and indemnify the Company
and hold the Company harmless from any damage or loss caused by or in any way
relating to the loss of the Agreement or the issuance of a new agreement
replacing the Agreement.
7.5 Optionee further certifies that Optionee has not assigned or
transferred the Option or any rights thereunder to any other person.
7.6 Optionee hereby authorizes any officer of the Company to
issue this new agreement evidencing the Option to Optionee in order to replace
the inaccurate Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Stock Option Agreement, in the case of the Corporation by its duly authorized
officer, as of the date and year written above.
OPTIONEE AboveNet Communications, Inc.
/s/ XXXXXXX XXXX By: /s/ XXXXXX X. XXXXXX
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(signature) (signature)
Address: Its: President & COO
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0000 Xxxxxxxxxx Xx.
Xxxxxxxx, XX 00000
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NOTICE OF EXERCISE
AboveNet Communications Inc.
Corporate Secretary
Date of Exercise: 6/30/98
Dear Corporate Secretary:
This constitutes notice under my stock option that I elect to
purchase the number of shares for the price set forth below.
Type of option: Nonstatutory Stock Option
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Incentive Stock Option X
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(Please check your option type)
Stock option granted: March 8, 1996
(See your stock option agreement)
Number of shares as to which option
is exercised: 350,000
Certificates to be issued in name of: Xxxxxxx Xxxx
Total exercise price: $0.01/share
Cash payment delivered herewith: $3,500
By this exercise, I agree (i) to sign the Common Stock Purchase
Agreement with the Company (ii) to provide such additional documents as you may
require pursuant to the terms of the 1996 Stock Option Plan, and (iii) to
provide for the payment by me to you (in the manner designated by you) of your
withholding obligation, if any, relating to the exercise of this Option.
I hereby make the following certifications and representations
with respect to the number of shares of Common Stock of the Company listed above
(the "Shares"), which are being acquired by me for my own account upon exercise
of the Option as set forth above:
I acknowledge that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are deemed to constitute
"restricted securities" under Rule 701 and "control securities" under Rule 144
promulgated under the Act. I warrant and represent to the Company that I have no
present intention of distributing or selling said Shares, except as permitted
under the Act and any applicable state securities laws.
I further acknowledge that the Shares I receive through the
exercise of my stock option is subject to the restriction of First Right of
Refusal as provided in the Common Stock Purchase Agreement between myself and
the Company.
I further acknowledge that I will not be able to resell the
Shares for at least ninety days after the stock of the Company becomes publicly
traded (i.e., subject to the reporting requirements of Section 13 or l5(d) of
the Securities Exchange Act of 1934) under Rule 701 and that more restrictive
conditions apply to affiliates of the Company under Rule 144.
I further acknowledge that all certificates representing any of
the Shares subject to the provisions of the Option shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any
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legends reflecting restrictions pursuant to the Company's Articles of
Incorporation, Bylaws and/or applicable securities laws.
I further agree that, if required by the Company (or a
representative of the underwriters) in connection with the first underwritten
registration of the offering of any securities of the Company under the Act, I
will not sell or otherwise transfer or dispose of any shares of Common Stock or
other securities of the Company during such period (not to exceed one hundred
eighty (180) days) following the effective date of the registration statement of
the Company filed under the Act (the "Effective Date") as may be requested by
the Company or the representative of the underwriters. For purposes of this
restriction I will be deemed to own securities that (i) are owned directly or
indirectly by me, including securities held for my benefit by nominees,
custodians, brokers or pledgees; (ii) may be acquired by me within sixty (60)
days of the Effective Date; (iii) are owned directly or indirectly, by or for my
brothers or sisters (whether by whole or half blood), spouse, ancestors and
lineal descendants; or (iv) are owned, directly or indirectly, by or for a
corporation, partnership, estate or trust of which I am a shareholder, partner
or beneficiary, but only to the extent of my proportionate interest therein as a
shareholder, partner or beneficiary thereof I further agree that the Company may
impose stop-transfer instructions with respect to securities subject to the
foregoing restrictions until the end of such period.
Very truly yours,
OPTIONEE
/s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
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(Type or Print Name)
