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EXHIBIT 10.10
NETWORK PLUS CORP.
Stock Option Agreement
1998 Director Stock Option Plan
1. Grant of Option.
This agreement evidences the grant by Network Plus Corp., a Delaware
corporation (the "Company"), on [DATE OF GRANT] to [NAME OF DIRECTOR], a
director of the Company (the "Participant"), of an option to purchase, in whole
or in part, on the terms provided herein and in the Company's 1998 Director
Stock Option Plan (the "Plan"), a total of [NUMBER OF SHARES] shares of common
stock, $.01 par value per share, of the Company ("Common Stock") (the "Shares")
at [PRICE PER SHARE] per Share. Unless earlier terminated, this option shall
expire on [THE TENTH ANNIVERSARY OF THE DATE OF GRANT] (the "Final Exercise
Date").
It is intended that the option evidenced by this agreement shall not be
an incentive stock option as defined in Section 422 of the Internal Revenue Code
of 1986, as amended, and any regulations promulgated thereunder (the "Code").
Except as otherwise indicated by the context, the term "Participant", as used in
this option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.
2. Vesting Schedule.
(a) Vesting. This option will be exercisable ("vest") in full on the
date of the grant of the option. This option shall expire upon, and will not be
exercisable after, the Final Exercise Date.
(b) Right of Exercise Cumulative. The right of exercise shall be
cumulative so that, to the extent the option is not exercised in any period to
the maximum extent permissible, it shall continue to be exercisable, in whole or
in part, with respect to all shares for which it is vested until the earlier of
the Final Exercise Date or the termination of this option under Section 3 hereof
or the Plan.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. The Participant may purchase less than the number of
shares covered hereby, provided that no partial exercise of this option may be
for any fractional share or for fewer than ten whole shares.
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(b) Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Participant, at the time he or she exercises this option, is, and has been
at all times since the date of grant of this option, a director of the Company
(an "Eligible Participant").
(c) Termination of Relationship with the Company.
(1) If the Participant ceases to be an Eligible Participant
for any reason prior to the closing of an initial underwritten public offering
of the Company's equity securities pursuant to a registration statement under
the Securities Act of 1933, as amended (the "Securities Act") (an "Initial
Public Offering"), then the right to exercise this option shall terminate
immediately.
(2) If the Participant ceases to be an Eligible Participant
for any reason after the closing of an Initial Public Offering, then, except as
provided in paragraph (d) below, the right to exercise this option shall
terminate three months after such cessation (but in no event after the Final
Exercise Date), provided that this option shall be exercisable only to the
extent that the Participant was entitled to exercise this option on the date of
such cessation. Notwithstanding the foregoing, if the Participant, prior to the
Final Exercise Date, violates the non-competition or confidentiality provisions
of any confidentiality and nondisclosure agreement or other agreement between
the Participant and the Company, the right to exercise this option shall
terminate immediately upon written notice to the Participant from the Company
describing such violation.
(d) Exercise Period Upon Death or Disability. If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the Code): (1)
after the closing of an Initial Public Offering, (2) prior to the Final Exercise
Date, and (3) while he or she is an Eligible Participant, this option shall be
exercisable, within the period of one year following the date of death or
disability of the Participant by the Participant, provided that this option
shall be exercisable only to the extent that this option was exercisable by the
Participant on the date of his or her death or disability, and further provided
that this option shall not be exercisable after the Final Exercise Date.
4. Right of First Refusal.
(a) If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively, "transfer") any Shares acquired upon exercise of this option,
then the Participant shall first give written notice of the proposed transfer
(the "Transfer Notice") to the Company. The
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Transfer Notice shall name the proposed transferee and state the number of such
Shares the Participant proposes to transfer (the "Offered Shares"), the price
per share and all other material terms and conditions of the transfer.
(b) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less than all) of the
Offered Shares at the price and upon the terms set forth in the Transfer Notice.
In the event the Company elects to purchase all of the Offered Shares, it shall
give written notice of such election to the Participant within such 30-day
period. Within 10 days after his or her receipt of such notice, the Participant
shall tender to the Company at its principal offices the certificate or
certificates representing the Offered Shares, duly endorsed in blank by the
Participant or with duly endorsed stock powers attached thereto, all in a form
suitable for transfer of the Offered Shares to the Company. Upon receipt of such
certificate or certificates, the Company shall deliver or mail to the
Participant a check or wire transfer in payment of the purchase price for the
Offered Shares; provided that if the terms of payment set forth in the Transfer
Notice were other than cash against delivery, the Company may pay for the
Offered Shares on the same terms and conditions as were set forth in the
Transfer Notice.
(c) At and after the time at which the Offered Shares are required to
be delivered to the Company for transfer to the Company pursuant to subsection
(b) above, the Company shall not pay any dividend to the Participant on account
of such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares, but shall, in so
far as permitted by law, treat the Company as the owner of such Offered Shares.
(d) If the Company does not elect to acquire all of the Offered Shares,
the Participant may, within the 30-day period following the expiration of the
option granted to the Company under subsection (b) above, transfer the Offered
Shares to the proposed transferee, provided that such transfer shall not be on
terms and conditions more favorable to the transferee than those contained in
the Transfer Notice. Notwithstanding any of the above, all Offered Shares
transferred pursuant to this Section 4 shall remain subject to the right of
first refusal set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written instrument
confirming that such transferee shall be bound by all of the terms and
conditions of this Section 4.
(e) The following transactions shall be exempt from the provisions of
this Section 4:
(1) any transfer of Shares to or for the benefit of any
spouse, child or grandchild of the Participant, or to a trust for their benefit;
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(2) any transfer pursuant to an effective registration
statement filed by the Company under the Securities Act; and
(3) any transfer of the Shares pursuant to the sale of all or
substantially all of the capital stock, assets or business of the Company, by
merger, consolidation or otherwise;
provided, however, that in the case of a transfer pursuant to clause (1) above,
such Shares shall remain subject to the right of first refusal set forth in this
Section 4 and such transferee shall, as a condition to such transfer, deliver to
the Company a written instrument confirming that such transferee shall be bound
by all of the terms and conditions of this Section 4.
(f) The Company may assign its rights to purchase Offered Shares in any
particular transaction under this Section 4 to one or more persons or entities.
(g) The provisions of this Section 4 shall terminate upon the earlier
of the following events:
(1) the closing of an Initial Public Offering; or
(2) the closing of the sale of all or substantially all of the
capital stock, assets or business of the Company, by merger, consolidation, sale
of assets or otherwise.
(h) The Company shall not be required (i) to transfer on its books any
of the Shares which shall have been sold or transferred in violation of any of
the provisions set forth in this Section 4, or (ii) to treat as owner of such
Shares or to pay dividends to any transferee to whom any such Shares shall have
been so sold or transferred.
5. Repurchase Rights.
(a) Repurchase. Upon any termination of service of the Participant as a
director of the Company for any reason, the Company shall have the right to
purchase, for cash, any or all of the Shares issued upon exercise of this
option, at a price equal to the fair market value of such Shares, as determined
in good faith by the Board of Directors of the Company.
(b) Termination. The repurchase rights of the Company set forth in
Section 5(a) shall terminate upon the earlier of the following events:
(1) the closing of an Initial Public Offering; or
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(2) the closing of the sale of all or substantially all of the
capital stock, assets or business of the Company, by merger, consolidation, sale
of assets or otherwise.
(c) Exercise. The Company must exercise its repurchase rights under
this Section 5, by written notice to the Participant, within 90 days after the
termination of this option. The closing of any purchase pursuant to this Section
5 shall take place as soon as reasonably practicable at the principal office of
the Company, or at such other time and location as the parties to such purchase
may mutually determine. At the closing, the holder of the Shares to be sold
shall deliver to the Company an instrument representing such Shares, duly
endorsed for transfer, and, upon receipt thereof, the Company shall pay the
purchase price therefor, by check or wire transfer.
(d) Legend. The Company may require that each certificate representing
Shares of Common Stock subject to the rights set forth in Section 4 above and
this Section 5 shall bear a legend referencing such rights.
6. Agreement in Connection with Public Offering.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration statement
under the Securities Act, (i) not to sell, make short sale of, loan, grant any
options for the purchase of, or otherwise dispose of any shares of Common Stock
held by the Participant (other than those shares included in the offering)
without the prior written consent of the Company or the underwriters managing
such initial underwritten public offering of the Company's securities for a
period of 180 days from the effective date of such registration statement, and
(ii) to execute any agreement reflecting clause (i) above as may be requested by
the Company or the managing underwriters at the time of such offering.
7. Withholding.
No Shares will be issued pursuant to the exercise of this option unless
and until the Participant pays to the Company, or makes provision satisfactory
to the Company for payment of, any federal, state or local withholding taxes
required by law to be withheld in respect of this option.
8. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or
otherwise encumbered by the Participant, either voluntarily or by operation of
law, except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, this option shall be exercisable only by the
Participant.
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9. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which
is furnished to the Participant with this option.
IN WITNESS WHEREOF, the Company has caused this option to be executed
under its corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
NETWORK PLUS CORP.
Dated as of
_______________ By:
_______________________
Xxxxxx X. Xxxx, Xx.
President
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PARTICIPANT'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the
terms and conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company's 1998 Director Stock Option Plan.
PARTICIPANT:
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Address: -----------------
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