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EXHIBIT 10.30
THE SHARES ISSUABLE PURSUANT TO THIS AGREEMENT ARE SUBJECT TO AN OPTION TO
REPURCHASE PROVIDED UNDER THE PROVISIONS OF THIS AGREEMENT. A COPY OF THIS
AGREEMENT IS AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.
CUSTOMERONE HOLDING CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Option Agreement") is
made and entered into as of December 21, 1999, by and between CustomerONE
Holding Corporation, a Delaware corporation (the "Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇
("Employee").
1. Certain Definitions.
In addition to the terms specifically defined elsewhere herein, as
used herein, the following terms will have the meanings indicated:
"Adjustment Event" shall have the meaning set forth in Section 6
hereof.
"Affiliate" shall mean, as to any Person, a Person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person.
"Board of Directors" shall mean the board of directors of the Company.
"Cause" shall have the meaning set forth in Section 8(d) of the
Employment Agreement.
"Change of Control" shall mean the first to occur of the following
events: (i) any sale, lease, exchange, or other transfer (in one
transaction or series of related transactions) of all or substantially
all of the assets of the Company to any Person or group of related
Persons as determined pursuant to Section 13(d) of the Exchange Act
and the regulations and interpretations thereunder (a "Group") other
than one or more members of the Onex Group, (ii) a majority of the
Board of Directors shall consist of Persons who are not Continuing
Directors; or (iii) the acquisition by any Person or Group other than
one or more members of the Onex Group of the power, directly or
indirectly, to vote or to direct the voting of securities having more
than 50% of the ordinary voting power for the election of directors of
the Company.
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"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Committee" shall have the meaning set forth in Section 4 hereof.
"Common Stock" shall mean the common stock, par value $0.01 per share,
of the Company.
"Continuing Director" shall mean, as of the date of determination, any
Person who (i) was a member of the Board of Directors on the First
Option Grant Date (as defined in Section 2(a) hereof), (ii) was
nominated for election or elected to the Board of Directors of the
Company with the affirmative vote of a majority of the Continuing
Directors who were members of the Board of Directors at the time of
such nomination or election, or (iii) is a member of the Onex Group or
an appointee of the Onex Group.
"Permanent Disability" shall have the meaning set forth in Section
8(b) of the Employment Agreement.
"Employment Agreement" shall mean that certain Employment Agreement,
dated as of September 30, 1998, by and between CustomerONE
Corporation, a Delaware Corporation and wholly-owned subsidiary of the
Company, and Employee.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall, as it relates to the Common Stock, mean the
average of the high and low prices of such Common Stock as reported on
the principal national securities exchange on which the shares of
Common Stock are then listed or the NASDAQ National Market, as
applicable, on the date specified herein for such a determination; or
if there were no sales on such date, on the next preceding day on
which there were sales; or, if such Common Stock is not listed on a
national securities exchange or quoted on the NASDAQ National Market,
the last reported bid price in the over-the-counter market; or, if
such shares are not traded in the over-the-counter market, the per
share cash price for which all of the outstanding Common Stock could
be sold to a willing purchaser in an arm's-length transaction (without
regard to minority discount, absence of liquidity, or transfer
restrictions imposed by any applicable law or agreement) at the date
of the event giving rise to a need for a determination. Fair Market
Value shall be determined in good faith by the Board of Directors or a
duly appointed committee thereof.
"First Option" shall have the meaning set forth in Section 2(a)
hereof.
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"First Option Exercise Price" shall mean a price equal to US$1.20 per
share, subject to the adjustments and limitations set forth herein.
"First Option Grant Date" shall have the meaning set forth in Section
2(a) hereof.
"First Option Shares" shall have the meaning set forth in Section 2(a)
hereof.
"Grantor" shall have the meaning set forth in Section 11 hereof.
The term "including" when used herein shall mean "including, but not
limited to".
"IRR" shall mean, as of any date, the compounded annual pre-tax rate
of return earned by LLC2 on its direct and indirect investment in the
Portfolio Company for the period from the date of investment to such
date; provided that, for the purposes of determining the IRR, the
return earned by LLC2 shall take into account the net proceeds of any
disposition of the investment (in whole or in part), dividends,
returns of capital and other distributions, whether received directly
or indirectly by LLC2, but shall specifically exclude any management
fees or remuneration payments.
"Liquidity Event" shall mean the first to occur of any of the
following:
(i) any sale of all or substantially all of the assets of the
Portfolio Company in an arm's-length transaction;
(ii) the liquidation or winding up of the Portfolio Company;
(iii) an initial public offering of the common shares or other
equity securities of the Portfolio Company by way of prospectus,
registration statement or similar document where, or in connection
with which, such shares or securities are to become listed and posted
for trading or quoted on at least one of (1) the Toronto Stock
Exchange, (2) the Montreal Exchange, (3) the New York Stock Exchange,
(4) the American Stock Exchange or (5) the National Market of the
National Association of Securities Dealers Automated Quotation System,
together with any such other stock exchange or exchanges as may be
approved by the Board of Directors; or
(iv) a sale of all or substantially all of the shares of the
Portfolio Company owned, directly or indirectly, by LLC2 (including
any Affiliate of LLC2) in an arm's-length transaction.
"LLC2" shall mean Onex CustomerONE Holdings LLC, a Delaware limited
liability company.
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"Non-Qualified Options" shall mean those Options which do not qualify
for the tax treatment described under Sections 421 and 422 of the
Code.
"Option" shall mean either of the First Option or the Second Option.
"Options" shall mean, collectively, the First Option and the Second
Option.
"Option Shares" shall mean the First Option Shares and/or the Second
Option Shares.
"Onex Group" shall mean LLC2, its Affiliates, and their respective
employees, officers, members, partners and directors (and members of
their respective families and trusts for the primary benefit of such
family members), including, without limitation, Onex Corporation, a
corporation organized under the laws of the Province of Ontario,
Canada.
"Person" shall mean any person or entity of any nature whatsoever,
specifically including an individual, a firm, a company, a
corporation, a partnership, a trust or other entity.
"Portfolio Company" shall mean the Company or its operating
subsidiaries taken as a whole.
"Purchase Option" shall have the meaning set forth in Section 11
hereof.
"Qualifying Public Offering" shall mean the completion of a firm
commitment underwritten public offering of Common Stock the result of
which is that the Onex Group shall own less than 10% of the fully
diluted Common Stock of the Company.
"Related Entity" shall mean any direct or indirect subsidiary or
parent of the Company now existing or hereafter formed or acquired.
"Second Option" shall have the meaning set forth in Section 2(b)
hereof.
"Second Option Exercise Price" shall mean a price equal to US$1.50 per
share, subject to the adjustments and limitations set forth herein.
"Second Option Grant Date" shall have the meaning set forth in Section
2(b) hereof.
"Second Option Shares" shall have the meaning set forth in Section
2(b) hereof.
"Securities Act" shall mean the U.S. Securities Act of 1933, as
amended.
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2. The Grants.
(a) Subject to the conditions set forth herein, the Company hereby
grants to Employee, effective as of January 27, 1999 (the "First Option Grant
Date"), as a matter of separate inducement and not in lieu of any salary or
other compensation for Employee's services, the right and option to purchase
(the "First Option"), in accordance with the terms and conditions set forth
herein, an aggregate of 583,333 shares of Common Stock (the "First Option
Shares"), at the First Option Exercise Price. The First Option is intended to
constitute a Non-Qualified Stock Option; however, Employee should consult with
Employee's tax advisor concerning the proper reporting of any federal, state or
foreign tax liability that may arise as a result of the grant or exercise of the
First Option.
(b) Subject to the conditions set forth herein, the Company hereby
grants to Employee, effective as of March 19, 1999 (the "Second Option Grant
Date"), as a matter of separate inducement and not in lieu of any salary or
other compensation for Employee's services, the right and option to purchase
(the "Second Option"), in accordance with the terms and conditions set forth
herein, an aggregate of 2,868 shares of Common Stock (the "Second Option
Shares"), at the Second Option Exercise Price. The Second Option is intended to
constitute a Non-Qualified Stock Option; however, Employee should consult with
Employee's tax advisor concerning the proper reporting of any federal, state or
foreign tax liability that may arise as a result of the grant or exercise of the
Second Option.
3. Exercise.
(a) For purposes of this Option Agreement, the First Option Shares
shall be deemed "Nonvested Shares" unless and until they have become "Vested
Shares" as described in this subsection. Twenty-five percent (25%) of the First
Option Shares shall become "Vested Shares" on the second anniversary of the
First Option Grant Date and seventy-five percent (75%) of the First Option
Shares shall become "Vested Shares" on the third anniversary of the First Option
Grant Date in accordance with the terms of this Option Agreement. Only upon the
occurrence of a Liquidity Event that results in LLC2 achieving an overall
compounded IRR of 15% on its investment in the Portfolio Company as at such
time, will any such "Vested Shares" become "Exercisable Shares." Until such
time, Employee will not have the right to exercise all or any portion of the
First Option, whether or not vested.
(b) For purposes of this Option Agreement, the Second Option Shares
shall be deemed "Nonvested Shares" unless and until they have become "Vested
Shares" as described in this subsection. Twenty-five percent (25%) of the Second
Option Shares shall become "Vested Shares" on the second anniversary of the
Second Option Grant Date and seventy-five percent (75%) of the Second Option
Shares shall become "Vested Shares" on the third anniversary of the Second
Option Grant Date in accordance with the terms of this Option Agreement. Only
upon the occurrence of a Liquidity Event that results in LLC2 achieving an
overall compounded IRR of 15% on its investment in the Portfolio Company as at
such time, will any such "Vested Shares" become "Exercisable
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Shares." Until such time, Employee will not have the right to exercise all or
any portion of the Second Option, whether or not vested.
(c) Subject to the relevant provisions and limitations contained
herein, Employee may exercise an Option to purchase all or a portion of the
applicable number of Exercisable Shares underlying such Option at any time prior
to the termination of such Option pursuant to this Option Agreement. In no event
shall Employee be entitled to exercise an Option for any Nonvested Shares,
Vested Shares that are not Exercisable Shares or for a fraction of an
Exercisable Share.
(d) The unexercised portion of the First Option, if any, will
automatically, and without notice, terminate and become null and void upon the
expiration of ten (10) years from the First Option Grant Date.
(e) The unexercised portion of the Second Option, if any, will
automatically, and without notice, terminate and become null and void upon the
expiration of ten (10) years from the Second Option Grant Date.
(f) Any exercise by Employee of an Option must be in writing addressed
to the Treasurer of the Company at its principal place of business (a copy of
the form of exercise to be used will be available upon written request to the
Treasurer), and must be accompanied by a certified or bank check payable to the
order of the Company in the full amount of the relevant exercise price of the
shares so purchased, or in such other manner as approved by the Board of
Directors or a committee thereof.
4. Administration.
This Option Agreement shall be administered by the Board of Directors,
or by any committee appointed by the Board of Directors to administer this
Option Agreement (the "Committee"); provided, however, that the entire Board of
Directors may act as the Committee if it chooses to do so.
5. Termination of Employment.
In the case of termination of Employee's employment with the Company
or any Related Entity for Cause pursuant to Section 8(d) of the Employment
Agreement, Employee shall immediately forfeit Employee's rights under the
Options, including rights in any Vested Shares and/or Exercisable Shares, except
as to those Option Shares already purchased.
6. Adjustment of Shares.
In the event that, by reason of any merger, consolidation,
combination, liquidation, stock dividend, stock split, split-up, split-off,
spin-off, combination of shares, exchange of shares or other like change in
capital structure of the Company (collectively, an "Adjustment Event"), the
Common Stock is substituted, combined, or changed into any cash, property, or
other securities, or the shares of Common Stock are changed into a greater or
lesser number of shares of Common Stock, the number and/or kind of shares
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and/or interests subject to this Option Agreement and the per share price or
value thereof shall be appropriately and equitably adjusted by the Committee to
give appropriate effect to such Adjustment Event. Any fractional shares or
interests resulting from such adjustment shall be eliminated. Notwithstanding
the foregoing, no adjustment shall be made under this Section 6 as a result of
the issuance of shares of Common Stock for consideration in cash or in property.
In the event the Company is not the surviving entity of an Adjustment
Event and, following such Adjustment Event, Employee will continue to hold an
Option (or Options) which has (or have) not theretofore been fully exercised,
cancelled, or terminated in connection therewith, the Company shall cause such
Option (or Options) to be assumed (or cancelled and a replacement Option or
Options issued) by the surviving entity or a Related Entity. In the event of any
perceived conflict between the provisions of Section 10 and this Section 6, the
Committee's determinations under Section 10 shall control.
7. Transferability.
Except as provided in Section 11 hereof, the Options and any rights or
interests therein are not assignable or transferable by Employee except by will
or the laws of descent and distribution, and during Employee's lifetime, each
Option shall be exercisable only by Employee or, in the event that a legal
representative has been appointed in connection with Employee's Permanent
Disability, such legal representative.
8. Registration.
The Company shall not in any event be obligated to file any
registration statement under the Securities Act or any applicable securities
laws of any other jurisdiction to permit exercise of either Option or to issue
any Common Stock in violation of the Securities Act or any applicable securities
laws of any other jurisdiction. Employee (or in the event of Employee's death
or, in the event a legal representative has been appointed in connection with
Employee's Permanent Disability, the Person exercising an Option) must, as a
condition to Employee's right to exercise an Option, deliver to the Company an
agreement or certificate containing such representations, warranties and
covenants as the Company may deem necessary or appropriate to ensure that the
issuance of the Option Shares pursuant to such exercise is not required to be
registered under the Securities Act or any applicable securities laws of any
other jurisdiction.
Certificates for Option Shares, when issued, will have substantially
the following legend, or statements of other applicable restrictions, endorsed
thereon (or any other legend that may be required for issuance to a Person
outside the United States), and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE
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SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY
OTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF
PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION
OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR OTHER DISPOSITION
WILL NOT VIOLATE APPLICABLE FEDERAL, STATE OR OTHER LAWS.
The foregoing legend will not be required for Option Shares issued
pursuant to an effective registration statement under the Securities Act and in
accordance with applicable state securities laws.
9. Withholding Taxes.
By acceptance hereof, Employee hereby (i) agrees to reimburse the
Company or any Related Entity by which Employee is employed for any Canadian or
U.S. federal, provincial, state, local or foreign taxes required by any
government to be withheld or otherwise deducted by such corporation in respect
of Employee's exercise of all or a portion of an Option; (ii) authorizes the
Company or any Related Entity by which Employee is employed to withhold from any
cash compensation paid to Employee or on Employee's behalf, an amount sufficient
to discharge any Canadian or U.S. federal, provincial, state, local or foreign
taxes imposed on the Company, or the Related Entity by which Employee is
employed, and which otherwise has not been reimbursed by Employee, in respect of
Employee's exercise of all or a portion of an Option; and (iii) agrees that the
Company may, in its discretion, hold the stock certificate to which Employee is
entitled upon exercise of an Option as security for the payment of the
aforementioned withholding tax liability, until cash sufficient to pay that
liability has been accumulated, and may, in its discretion, effect such
withholding by retaining shares issuable upon the exercise of such Option having
a Fair Market Value on the date of exercise which is equal to the amount to be
withheld.
10. Change of Control.
If (i) a Change of Control shall occur, (ii) the Company shall enter
into an agreement providing for a Change of Control, or (iii) any member of the
Onex Group shall enter into an agreement providing for a Change of Control, then
the Committee may, but shall not be obligated to, declare either Option or both
Options to be exercisable in full at such time or times as the Committee shall
determine, and under such conditions as the Committee shall determine,
notwithstanding the express provisions of this Option Agreement. In the event
that either Option is (or both Options are) accelerated by the Committee
pursuant to the preceding sentence, such Option (or Options) shall terminate,
notwithstanding any express provision hereof, on such date (not later than the
stated exercise date) as the Committee shall determine.
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11. Purchase Option.
(a) If (i) Employee's employment with the Company or a Related Entity
terminates for any reason at any time or (ii) a Change of Control occurs, the
Company and/or its designee(s) shall have the option (the "Purchase Option") to
purchase, and if the Purchase Option is exercised, Employee (or Employee's
executor or the administrator of Employee's estate or the Person who acquired
the right to exercise an Option by bequest or inheritance in the event of
Employee's death, or Employee's legal representative in the event of Employee's
incapacity (hereinafter, collectively with such optionee, the "Grantor")) shall
sell to the Company and/or its assignee(s), all or any portion (at the Company's
option) of the Option Shares and/or the Option or Options held by the Grantor
(such Option Shares and Option or Options collectively being referred to as the
"Purchasable Shares").
(b) The Company shall give notice in writing to the Grantor of the
exercise of the Purchase Option within one (1) year from the date of the
termination of Employee's employment or engagement or such Change of Control.
Such notice shall state the number of Purchasable Shares to be purchased and the
determination of the Board of Directors of the Fair Market Value per share of
such Purchasable Shares. If no notice is given within the time limit specified
above, the Purchase Option shall terminate.
(c) The purchase price to be paid for the Purchasable Shares purchased
pursuant to the Purchase Option shall be, in the case of any Option Shares, the
Fair Market Value per share as of the date of notice of exercise of the Purchase
Option times the number of shares being purchased, in the case of the First
Option, the Fair Market Value per share less the applicable per share First
Option Exercise Price, times the number of Exercisable Shares subject to such
First Option which are being purchased, and in the case of the Second Option,
the Fair Market Value per share less the applicable per share Second Option
Exercise Price, times the number of Exercisable Shares subject to such Second
Option which are being purchased. The purchase price shall be paid in cash. The
closing of such purchase shall take place at the Company's principal executive
offices within ten (10) days after the purchase price has been determined. At
such closing, the Grantor shall deliver to the purchaser(s) the certificates or
instruments evidencing the Purchasable Shares being purchased, duly endorsed (or
accompanied by duly executed stock powers) and otherwise in good form for
delivery, against payment of the purchase price by check of the purchaser(s). In
the event that, notwithstanding the foregoing, the Grantor shall have failed to
obtain the release of any pledge or other encumbrance on any Purchasable Shares
by the scheduled closing date, at the option of the purchaser(s) the closing
shall nevertheless occur on such scheduled closing date, with the cash purchase
price being reduced to the extent of all unpaid indebtedness for which such
Purchasable Shares are then pledged or encumbered.
(d) To assure the enforceability of the Company's rights under this
Section 11, each certificate or instrument representing Option Shares subject to
this Option Agreement shall bear a conspicuous legend in substantially the
following form:
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"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION TO
REPURCHASE PROVIDED UNDER THE PROVISIONS OF A STOCK OPTION AGREEMENT
ENTERED INTO BY AND BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THIS
CERTIFICATE. A COPY OF SUCH OPTION AGREEMENT IS AVAILABLE UPON WRITTEN
REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES."
12. Stockholders Agreement.
Employee acknowledges and agrees that upon exercise of an Option,
Employee will enter into and become bound by the Stockholders Agreement among
the Company and the other parties thereto, substantially in the form made
available to Employee concurrently herewith, as such Stockholders Agreement may
be subsequently modified or amended.
To the extent required by the Stockholders Agreement, certificates for
Option Shares, when issued, will have substantially the following legend:
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER, VOTING AND OTHER
TERMS AND CONDITIONS SET FORTH IN THE STOCKHOLDERS AGREEMENT DATED AS
OF OCTOBER 1, 1998, A COPY OF WHICH MAY BE OBTAINED FROM CUSTOMERONE
HOLDING CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICES.
13. Multiple Classes and Series of Stock.
Certificates for Option Shares, when issued, will have substantially
the following legend:
THE ISSUER IS AUTHORIZED TO ISSUE SHARES OF MORE THAN ONE CLASS AND TO
ISSUE SHARES IN MORE THAN ONE SERIES OF AT LEAST ONE CLASS. THE ISSUER
WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS A
STATEMENT OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK
OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
OF SUCH PREFERENCES AND/OR RIGHTS.
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14. Effect on Employment.
This Option Agreement is not a contract of employment and the terms of
Employee's employment shall not be affected by, or construed to be affected by,
this Option Agreement, except to the extent specifically provided herein.
Nothing herein shall impose, or be construed as imposing, any obligation (i) on
the part of the Company or any Related Entity to continue Employee's employment,
or (ii) on the part of Employee to remain in the employ of the Company or any
Related Entity.
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IN WITNESS WHEREOF, the parties have caused this Option Agreement to
be executed as of the date first set forth above.
CLIENTLOGIC HOLDING CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Its: CFO
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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