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HIGH SPEED NET SOLUTIONS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made as
of the 30th day of June, 2000, by and between High Speed Net Solutions, Inc., a
Florida corporation (the "Corporation"), and Xxxxxx X. Xxxxxx (the
"Participant").
WHEREAS, the Board granted Participant an option to purchase shares of
the Company's Stock pursuant to the High Speed Net Solutions, Inc. Equity
Compensation Plan (the "Plan"); and
WHEREAS, this Agreement evidences the grant of such option.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises set forth below and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. GRANT OF OPTION. The Board granted Participant an option to
purchase from the Company, during the period specified in Section 3 and 4 of
this Agreement, a total of One Hundred Thousand (100,000) shares of Stock, at
the purchase price of Seven Dollars and Fifty Cents ($7.50) per share (the
"Purchase Price"), in accordance with the terms and conditions stated in this
Agreement. The shares of Stock subject to the option granted hereby are referred
to below as the "Shares," and the option to purchase such Shares is referred to
below as the "Option."
2. DEFINITIONS; AUTHORITY OF BOARD AND COMMITTEE.
(a) All capitalized terms used in this Agreement shall
have the meanings set out in the Plan unless otherwise specified in this
Agreement.
(b) "Cause" shall mean that Participant's employment with
the Employer or any surviving entity following a Change in Control or Corporate
Reorganization shall have terminated principally because (i) of Participant's
breach of any employment, noncompetition or other agreement with such entity;
(ii) Participant commits any act of dishonesty toward such entity, theft of
corporate property or unethical business conduct, or is convicted of any
misdemeanor or felony involving dishonest, immoral or unethical conduct; or
(iii) Participant commits any act of insubordination, fails to comply with any
instructions of such entity's president or board of directors, or commits any
act or omission which such entity's board of directors determines, in good
faith, may materially adversely affect such entity's business or operations,
unless Participant cures such action or omission within five (5) days after
notice from such entity.
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(c) A "Change in Control" shall be deemed to have
occurred if, after the Company has consummated a public offering:
(i) any "Person" as defined in Paragraph 3(a)(9)
of the Securities Exchange Act of 1934 (the "Act"), including a "group"
(as that term is used in paragraphs 13(d)(3) and 14(d)(2) of the Act),
but excluding the Company and any employee benefit plan sponsored or
maintained by the Company, including any trustee of such plan acting as
trustee:
(A) consummates a tender or exchange
offer for any shares of the Stock pursuant to which at least fifty
percent (50%) of the outstanding shares of the Stock are purchased; or
(B) together with its "affiliates" and
"associates" (as those terms are defined in Rule 12b-2 under the Act)
becomes the "Beneficial Owner" (within the meaning of Rule 13d-3 under
the Act) of at least fifty percent (50%) of the Stock;
(ii) a merger or consolidation of the Company
with or into another corporation is consummated and the Company's
shareholders immediately prior to the transaction do not own at least
fifty percent (50%) of the surviving company's outstanding stock
immediately following the transaction, a sale or other disposition of
all or substantially all of the Company's assets, or the liquidation of
the Company;
(iii) a sale or other disposition of all or
substantially all of the Company's assets is consummated, or the
dissolution or liquidation of the Company is commenced; or
(iv) during any period of 24 consecutive months
during the existence of this Agreement, the individuals who, at the
beginning of such period, constitute the Board (the "Incumbent
Directors") cease for any reason other than death to constitute at
least a majority thereof; provided, however, that a director who was
not a director at the beginning of such 24 month period shall be deemed
to have satisfied such 24 month requirement, and be an Incumbent
Director, if such director was elected by, or on the recommendation of
or with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors either actually, because they were
directors at the beginning of such 24 month period, or by prior
operation of this subparagraph (iv).
(d) A "Corporate Reorganization" means the happening of
any one of the following events prior to the time at which the Company has
consummated a public offering: (i)
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the dissolution or liquidation of the Company; (ii) a reorganization, merger, or
consolidation involving the Company unless (A) the transaction involves only the
Company and one or more of the Company's parent corporation and wholly-owned
(excluding interests held by employees, officers and directors) subsidiaries; or
(B) the shareholders who had the power to elect a majority of the board of
directors of the Company immediately prior to the transaction have the power to
elect a majority of the board of directors of the surviving entity immediately
following the transaction; (iii) the sale of all or substantially all of the
assets of the Company to another corporation, person or business entity; or (iv)
an acquisition of Company stock, unless the shareholders who had the power to
elect a majority of the board of directors of the Company immediately prior to
the acquisition have the power to elect a majority of the board of directors of
the Company immediately following the transaction.
(e) An "Involuntary Termination" is any Termination of
Employment of Participant: (i) by the Employer or any surviving entity following
a Change in Control or Corporate Reorganization for any reason other than for
Cause; or (ii) voluntarily by Participant following the assignment to
Participant by the Employer or any surviving entity following a Change in
Control or Corporate Reorganization of any duties that are significantly
incompatible with, and detract from, Participant's position, duties, titles,
responsibilities or status with the Employer or any surviving entity following a
Change in Control or Corporate Reorganization.
(f) All determinations made by the Committee with respect
to the interpretation, construction and application of any provision of this
Agreement shall be final, conclusive and binding on the parties.
3. VESTING AND EXERCISE OF OPTION. The Option shall vest and
become exercisable in increments in accordance with the three-year schedule set
forth below measured from April 4, 2000 (the "Commencement Date"), provided that
the Option shall vest and become exercisable with respect to an increment as
specified only if Participant has not incurred a Termination of Employment as of
the specified date for such increment:
(a) on the first anniversary of the Commencement Date,
the Option shall vest and become exercisable with respect to one-third (1/3) of
the Shares;
(b) on the second anniversary of the Commencement Date,
the Option shall vest and become exercisable with respect to an additional
one-third (1/3) of the Shares; and
(c) on the third anniversary of the Commencement Date,
the Option shall vest and become exercisable with respect to an additional
one-third (1/3) of the Shares.
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The schedule set forth above is cumulative, so that Shares as to which
the Option has become vested and exercisable on and after a date indicated by
the schedule may be purchased pursuant to exercise of the Option at any
subsequent date prior to termination of the Option. The Option may be exercised
at any time and from time to time to purchase up to the number of Shares as to
which it is then vested and exercisable.
Notwithstanding the foregoing, immediately prior to a Change in Control
or Corporate Reorganization the Option shall vest and become exercisable, to the
extent not already vested and exercisable, with respect to fifty percent (50%)
of the Shares that have not yet vested, provided that Participant has not
incurred a Termination of Employment prior to the effective date of such Change
in Control or Corporate Reorganization, unless the surviving entity in such
Change in Control or Corporate Reorganization assumes the Option or replaces the
Option with an option of equivalent value and with comparable terms. In such
event, the Company shall send Participant prior written notice of the
effectiveness of such event and the last day on which Participant may exercise
the Option. On or prior to the last day specified in such notice, Participant
may, upon compliance with all of the terms of this Agreement and the Plan,
exercise the Option with respect to any or all of the Shares, conditioned upon
and subject to the completion of the Change in Control or Corporate
Reorganization. To the extent the Option is not so exercised, it shall terminate
at 5:00 P.M., eastern standard time, on the last day specified in such notice,
conditioned upon and subject to the completion of the Change in Control or
Corporate Reorganization. If the surviving entity in such Change in Control or
Corporate Reorganization assumes or replaces the Option as described above, the
preceding provisions of this paragraph shall not apply; however, if there is an
Involuntary Termination of Participant's employment within the period that
commences thirty (30) days prior to such Change in Control or Corporate
Reorganization and that ends twelve (12) months following the effective date of
such Change in Control or Corporate Reorganization, the Option shall vest and
become exercisable, to the extent not already vested and exercisable, on the
date of such Involuntary Termination.
4. TERMINATION OF OPTION. The Option shall remain exercisable as
specified in Section 3 above until the earliest to occur of the dates specified
below, upon which date the Option shall terminate:
(a) the date all of the Shares are purchased pursuant to
the terms of this Agreement;
(b) upon the expiration of three (3) months following the
Termination of Employment of Participant for any reason other than Cause, death
or Disability;
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(c) immediately upon the Termination of Employment of
Participant by the Employer for Cause;
(d) upon the expiration of one (1) year following
Participant's Termination of Employment where employment shall have terminated
as a result of death or Disability;
(e) upon the expiration of one (1) year following the
date of Participant's death, if death shall have occurred following
Participant's Termination of Employment and while the Option was still
exercisable;
(f) at 5:00 P.M., eastern standard time, on the thirtieth
(30th) day following the date that the Company files articles of dissolution
with the state in which the Company is incorporated or is otherwise dissolved
under applicable law;
(g) at 5:00 P.M., eastern standard time, on the last day
specified in the notice described in Section 3 above in the event of a Change in
Control or Corporate Reorganization; or
(h) the ten-year anniversary of the Commencement Date at
5:00 P.M., Eastern Standard Time.
Upon its termination, the Option shall have no further force or effect and
Participant shall have no further rights under the Option or to any Shares that
have not been purchased pursuant to prior exercise of the Option.
5. MANNER OF EXERCISE OF OPTION.
(a) The Option may be exercised only by (i) Participant's
completion, execution and delivery to the Company of a notice of exercise and,
if required by the Company, an "investment letter" as supplied by the Company
confirming Participant's representations and warranties in Section 20 of this
Agreement, including the representation that Participant is acquiring the Shares
for investment only and not with a view to the resale or other distribution
thereof, and (ii) the payment to the Company, pursuant to the terms of this
Agreement, of an amount equal to the Purchase Price multiplied by the number of
Shares being purchased as specified in Participant's notice of exercise.
Participant's right to exercise the Option shall be conditioned upon and subject
to satisfaction, in a manner acceptable to the Company, of any withholding
liability under any state or federal law arising in connection with exercise of
the Option. Participant must provide notice of exercise of the Option with
respect to no fewer than 100 Shares (or any lesser number of Shares with respect
to which the Option is then vested and exercisable). Participant's notice of
exercise shall be given in the manner specified in Section 16
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but any exercise of the Option shall be effective only when the items required
by the preceding sentence are actually received by the Company. The notice of
exercise and the "investment letter" may be in the form set forth in Exhibit A
attached to this Agreement. Notwithstanding anything to the contrary in this
Agreement, the Option may be exercised only if compliance with all applicable
federal and state securities laws can be effected. Payment of the aggregate
Purchase Price for Shares Participant has elected to purchase shall be made by
cash or good check.
(b) Except as otherwise provided in the Plan, upon any
exercise of the Option by Participant or as soon thereafter as is practicable,
the Company shall issue and deliver to Participant a certificate or certificates
evidencing such number of Shares as Participant has then elected to purchase.
Such certificate or certificates shall be registered in the name of Participant
and shall bear such legends as the Company deems appropriate.
6. RESTRICTIONS ON TRANSFER.
(a) Except as provided in subsection (b) below and in
Sections 7, 8 and 13 of this Agreement, the Option shall not be sold, exchanged,
delivered, assigned, bequeathed or gifted, pledged, mortgaged, hypothecated or
otherwise encumbered, transferred or permitted to be transferred, or otherwise
disposed of, whether voluntarily, involuntarily or by operation of law
(including, without limitation, the laws of bankruptcy, intestacy, descent and
distribution or succession) or on an absolute or contingent basis. For this
purpose, any reference to Participant shall (when applicable) be deemed to be
and include references to Participant's estate, executors or administrators,
personal or legal representatives and transferees (direct or indirect).
(b) In the event of the Participant's death, the Option
may be transferred to any executor, administrator, personal or legal
representative, legatee, heir or distributee of the estate of Participant;
provided, that, as a condition precedent to such transfer of any of the Option,
each and every prospective transferee shall (i) provide or cause to be provided
to the Company, at its request, sufficient evidence of the legal right and
authority of such prospective transferee to have the Option so transferred and
(ii) comply with the provisions of subsection (d) below.
(c) Subject to Sections 6(d), 6(e), 9 and 11 of this
Agreement, Shares acquired pursuant to exercise of the Option may be sold,
exchanged, delivered, assigned, bequeathed or gifted, pledged, mortgaged,
hypothecated or otherwise encumbered, transferred or permitted to be
transferred, or otherwise disposed of, whether voluntarily, involuntarily or by
operation of law (including, without limitation, the laws of bankruptcy,
intestacy, descent and distribution or succession) or on an absolute or
contingent basis.
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(d) In the event that, at any time or from time to time,
the Option or any Shares acquired pursuant to exercise of the Option are
transferred to any party (other than the Company) pursuant to the provisions
hereof, the transferee shall take such Option and/or Shares pursuant to all of
the provisions, conditions and obligations of the Plan and this Agreement, and,
as a condition precedent to the transfer of such Shares, the transferee shall
agree in writing, for and on behalf of such transferee and such transferee's
successors and assigns, to be bound by all provisions of the Plan and this
Agreement.
(e) Notwithstanding any provision of this Agreement to
the contrary, Shares acquired pursuant to exercise of the Option shall be
subject to the Market Stand-Off provided in Section 3.15 of the Plan.
7. OPTION OF THE COMPANY TO PURCHASE SHARES UPON TERMINATION OF
EMPLOYMENT.
(a) In the event of the Termination of Employment of the
Participant, the Company shall have the right (but shall not be obligated) to
repurchase at the price specified in subsection (c) below any or all of the
Shares owned by the Participant and the Participant's estate, executors or
administrators, personal or legal representatives, and transferees (direct or
indirect).
(b) The repurchase right may be exercised by the Company
after the Termination of Employment of the Participant by giving written notice
of such exercise to the Participant within ninety (90) days following the later
of the date of such Termination of Employment or the date on which Shares are
purchased upon exercise of the Option, specifying the time and date on which
settlement on the purchase of such Shares by the Company is to be made and the
number of Shares to be so purchased by the Company. The date specified shall not
be later than sixty (60) days after the date such notice is given. Settlement
shall be held on the purchase of Shares under this Section 7 at the principal
executive offices of the Company or at such other place as the Company shall
notify the Participant. At settlement, the Participant shall deliver to the
Company the required materials described below and, simultaneously therewith,
the Company shall deliver to the Participant a good check in the amount of the
purchase price of the Shares being purchased by the Company pursuant to this
Section 7.
(c) The per share purchase price of the Shares purchased
and sold pursuant to this Section 7 shall be as follows:
(i) If the Termination of Employment giving rise
to the purchase by the Company under this Section 7 was other than for
Cause, as determined by the
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Committee in its discretion, then the per share purchase price under
this Section 7 shall be the value of the Shares on the date of such
Termination of Employment as determined by the Committee in its sole
discretion.
(ii) If the Termination of Employment giving rise
to the purchase by the Company under this Section 7 was for Cause, as
determined by the Committee in its discretion, then the per share
purchase price under this Section 7 shall be equal to the lesser of the
Purchase Price or the value of the Shares on the date of such
Termination of Employment as determined by the Committee in its sole
discretion.
(d) The repurchase right specified in this Section 7
shall terminate when the Company has consummated a public offering.
8. RIGHT OF FIRST REFUSAL.
(a) Shares may not be sold pursuant to this Section 8
until the fourth anniversary of the Commencement Date.
(b) Following the fourth anniversary of the Commencement
Date, in the event that the Participant shall receive a Bona Fide Offer (as
defined in Section 8(c) hereof) to purchase some or all of the Shares then owned
by the Participant (assuming the Participant has purchased some or all of the
Shares), and in the further event that the Participant desires to accept such
Bona Fide Offer, the Participant shall give written notice to the Company
containing the information required by Section 8(d) and offering to sell such
Shares to the Company upon the same terms and conditions as are contained in the
Bona Fide Offer or upon such other terms to which the Participant consents. The
Company shall then have such rights and privileges, for the prescribed time
periods, as are set forth in Section 8(e) hereof.
(c) The term "Bona Fide Offer" as used in this Agreement
means an offer in writing, signed by an offeror or offerors (who must be a
person or persons financially capable of carrying out the terms of such Bona
Fide Offer) not affiliated in any manner with, or related to, the Participant,
in a form legally enforceable, upon its acceptance, against such nonaffiliated
and unrelated offeror or offerors.
(d) The notice from the Participant to the Company with
respect to a Bona Fide Offer under Section 8(a) shall contain a true and
complete copy of the Bona Fide Offer, setting forth the price and all of the
terms and conditions, with the name(s), address(es) and business(es) or other
occupation(s) of the nonaffiliated and unrelated offeror or offerors. Any
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notice that does not contain all such information shall not be considered
effective under Section 8(a).
(e) For a period of sixty (60) days from its receipt of
the Participant's notice under Section 8(a) the Company shall have the right, at
its sole option, to purchase the Shares so offered. Such right of the Company
may be exercised by the Company by giving written notice of such exercise to the
Participant within such sixty (60) day period. Such notice from the Company
shall specify the time and date on which settlement in connection with the
exercise of such right is to be made. The date specified shall not be later than
ninety (90) days from the date such notice is given by the Company. Settlement
shall be held on the purchase of Shares under this Section 8 at the principal
executive offices of the Company or at such other place as the Company shall
notify the Participant. At settlement, the Participant shall deliver to the
Company the materials required pursuant to Section 9 hereof and, simultaneously
therewith, the Company shall deliver to the Participant the purchase price for
such Shares in the amount, manner and form provided for in the Bona Fide Offer.
(f) If the Company shall not elect, within such sixty
(60) day period, to purchase all of the Shares covered by the Bona Fide Offer,
the Participant shall have the right to accept the Bona Fide Offer in whole (but
not in part) and to sell such Shares, subject to the provisions and restrictions
of this Agreement, but only in strict accordance with all of the provisions of
the Bona Fide Offer and only if the sale is fully consummated within ninety (90)
days after the date the Participant gives the notice required by Section 8(a).
In the event that such sale is not fully consummated within such ninety (90) day
period, the provisions of this Section 8 must again be complied with by the
Participant before the Participant may sell Shares pursuant to this Section 8.
(g) The right of first refusal specified in this Section
8 shall terminate when the Company has consummated a public offering.
(h) The right of first refusal specified in this Section
8 shall be freely assignable by the Company. The right of first refusal
specified in this Section 8 is a separate and independent obligation of the
Participant and shall survive any termination of the Participant's service with
the Employer as an employee, director or otherwise. Furthermore, such right
shall not be construed as an absolute obligation on the part of the Company to
repurchase any portion of the Shares that is tendered.
9. DELIVERY OF STOCK AND DOCUMENTS. Upon the closing of any
purchase by the Company of any Shares pursuant to Section 7 or 8 of this
Agreement, the Participant, his executor, administrator or beneficiaries shall
deliver to the Company the certificate or certificates representing the Shares
being sold, free and clear of all options, contracts, commitments, liens,
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pledges, security interests and other encumbrances, duly endorsed for transfer,
and such assignments and other documents and instruments evidencing the title of
the Participant and of the Participant's compliance with this Agreement as may
be reasonably required by the Company or by counsel for the Company, together
with appropriate duly signed stock powers transferring such Shares to the
Company, and the Company shall deliver to the Participant, his executor,
administrator or beneficiaries the Company's check in the amount of the purchase
price for the Shares being sold. Upon the closing of such repurchase, the
Participant shall be deemed to have represented and warranted to the Company
(and, if requested by the Company, shall then represent and warrant in writing)
that the Participant owns the Shares being purchased, free and clear of all
options, contracts, commitments, liens, pledges, security interests and other
encumbrances. The Participant agrees to indemnify the Company against any and
all losses, damages, liabilities, claims, actions, proceedings, judgments, costs
and expenses (including reasonable attorneys' fees) arising out of any breach of
such representation and warranty.
10. SHAREHOLDERS AGREEMENT. AS a condition to receipt of any
Shares upon exercise of the Option, upon request by the Company, Participant,
(and any transferees, the successors and assigns of the Participant or any
transferee) shall become a party to any agreement between the Company and any of
its shareholders existing at the time of exercise of the Option and shall sign a
copy of such agreement.
11. TERMINATION OF RESTRICTIONS. Any or all restrictions on
transferability of the Shares under Section 6 of this Agreement shall terminate
upon the adoption of resolutions by the Committee expressly terminating such
restrictions and provisions; provided, however, that no termination under this
Section 11 shall be deemed to affect any restrictions imposed by any applicable
federal or state securities law, rule, regulation or order with respect to the
ownership, sale or disposition by Participant of any of the Shares.
12. RIGHTS PRIOR TO EXERCISE. Participant will have no rights as a
shareholder with respect to the Shares except to the extent that Participant has
exercised the Option and has been issued and received delivery of a certificate
or certificates evidencing the Shares so purchased.
13. SALE OR OTHER DISPOSITION BY MAJORITY INTEREST. Participant
hereby irrevocably appoints the Company and its President, or either of them, as
Participant's agents and attorneys-in-fact, with full power of substitution for
and in Participant's name, to sell, exchange, transfer or otherwise dispose of
all or a portion of Participant's Shares and to do any and all things and to
execute any and all documents and instruments (including, without limitation,
any stock transfer powers) in connection therewith, such powers of attorney to
become operable only in connection with a Change in Control or Corporate
Reorganization. Any sale, exchange, transfer or other disposition of all or a
portion of Participant's Shares pursuant to the foregoing powers of attorney
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shall be made upon substantially the same terms and conditions (including sale
price per share) applicable to a sale, exchange, transfer or other disposition
of shares of Stock owned by the holder or holders of a majority of the issued
and outstanding shares of Stock. For purposes of determining the sale price per
share of the Shares under this Section 13, there shall be excluded the
consideration (if any) paid or payable to the holder or holders of a majority of
the issued and outstanding shares of Stock in connection with any employment,
consulting, noncompetition or similar agreements which such holder or holders
may enter into in connection with or subsequent to such sale, transfer, exchange
or other disposition. The foregoing power of attorney shall not impose or be
deemed to impose any fiduciary duty or any other duty (except as set forth in
this Section 13) or obligation on either the Company or its President, shall be
irrevocable and coupled with an interest and shall not terminate by operation of
law, whether by the death, bankruptcy or adjudication of incompetency or
insanity of Participant or the occurrence of any other event.
14. ENGAGEMENT OF PARTICIPANT. Nothing in this Agreement shall be
construed as constituting a commitment, guarantee, agreement or understanding of
any kind or nature that the Employer shall continue to employ Participant, nor
shall this Agreement affect in any way the right of the Employer to terminate
the employment of Participant at any time and for any reason. By Participant's
execution of this Agreement, Participant acknowledges and agrees that
Participant's employment is "at will." No change of Participant's duties as an
employee of the Employer shall result in, or be deemed to be, a modification of
any of the terms of this Agreement.
15. BURDEN AND BENEFIT; COMPANY. This Agreement shall be binding
upon, and shall inure to the benefit of, the Company and Participant, and their
respective heirs, personal and legal representatives, successors and assigns. As
used in this Section 15, the term the "Company" shall also include any
corporation which is the parent or a subsidiary of the Company or any
corporation or entity which is an affiliate of the Company by virtue of common
(although not identical) ownership, and for which Participant is providing
services in any form during Participant's employment with the Company or any
such other corporation or entity. Participant hereby consents to the enforcement
of any and all of the provisions of this Agreement by or for the benefit of the
Company and any such other corporation or entity.
16. NOTICES. Any and all notices under this Agreement shall be in
writing, and sent by hand delivery or by certified or registered mail (return
receipt requested and first-class postage prepaid), in the case of the Company,
to its principal executive offices to the attention of the President, and, in
the case of Participant, to Participant's address as shown on the Company's
records.
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17. SPECIFIC PERFORMANCE. Strict compliance by Participant shall
be required with each and every provision of this Agreement. The parties hereto
agree that the Shares are unique, that Participant's failure to perform the
obligations provided by this Agreement will result in irreparable damage to the
Company and that specific performance of Participant's obligations may be
obtained by suit in equity.
18. MODIFICATIONS. No change or modification of this Agreement
shall be valid unless the same is in writing and signed by the parties hereto.
19. TERMS AND CONDITIONS OF PLAN. The terms and conditions
included in the Plan, the receipt of a copy of which Participant hereby
acknowledges by execution of this Agreement, are incorporated by reference
herein, and to the extent that any conflict may exist between any term or
provision of this Agreement and any term or provision of the Plan, such term or
provision of the Plan shall control.
20. COVENANTS AND REPRESENTATIONS OF PARTICIPANT. Participant
represents, warrants, covenants and agrees with the Company as follows:
(a) The Option is being received for Participant's own
account without the participation of any other person, with the intent of
holding the Option and the Shares issuable pursuant thereto for investment and
without the intent of participating, directly or indirectly, in a distribution
of the Shares and not with a view to, or for resale in connection with, any
distribution of the Shares or any portion thereof.
(b) Participant is not acquiring the Option or any Shares
based upon any representation, oral or written, by any person with respect to
the future value of, or income from, the Shares, but rather upon an independent
examination and judgment as to the prospects of the Company.
(c) Participant has had the opportunity to ask questions
of and receive answers from the Company and its executive officers and to obtain
all information necessary for Participant to make an informed decision with
respect to the investment in the Company represented by the Option and any
Shares issued upon its exercise.
(d) Participant is able to bear the economic risk of any
investment in the Shares, including the risk of a complete loss of the
investment, and Participant acknowledges that Participant must continue to bear
the economic risk of any investment in Shares received upon exercise of the
Option for an indefinite period.
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(e) Participant understands and agrees that the Shares
subject to the Option may be issued and sold to Participant without registration
under any state or federal laws relating to the registration of securities and
in that event will be issued and sold in reliance on exemptions from
registration under appropriate state and federal laws.
(f) Shares issued to Participant upon exercise of the
Option will not be offered for sale, sold or transferred by Participant other
than pursuant to: (i) an effective registration under applicable state
securities laws or in a transaction which is otherwise in compliance with those
laws; (ii) an effective registration under the Securities Act of 1933, or a
transaction otherwise in compliance with such Act; and (iii) evidence
satisfactory to the Company of compliance with all applicable state and federal
securities laws. The Company shall be entitled to rely upon an opinion of
counsel satisfactory to it with respect to compliance with the foregoing laws.
(g) The Company will be under no obligation to register
the Shares issuable pursuant to the Option or to comply with any exemption
available for sale of the Shares by Participant without registration, and the
Company is under no obligation to act in any manner so as to make Rule 144
promulgated under the Securities Act of 1933 available with respect to any sale
of the Shares by Participant.
(h) Participant shall, during the entire period of his
employment with the Employer and for a period of ninety (90) days following
Termination of Employment, observe the Company's securities trading policies in
effect from time to time during such period of employment and/or during such
post-employment period.
(i) Participant has not relied upon the Company with
respect to any tax consequences related to the grant or exercise of this Option,
or the disposition of Shares purchased pursuant to its exercise. Participant
acknowledges that, as a result of the grant and/or exercise of the Option,
Participant may incur a substantial tax liability. Participant assumes full
responsibility for all such consequences and the filing of all tax returns and
elections Participant may be required or find desirable to file in connection
therewith. In the event any valuation of the Option or Shares purchased pursuant
to its exercise must be made under federal or state tax laws and such valuation
affects any return or election of the Employer, Participant agrees that the
Employer may determine such value and that Participant will observe any
determination so made by the Employer in all returns and elections filed by
Participant. In the event the Employer is required by applicable law to collect
any withholding, payroll or similar taxes by reason of the grant or any exercise
of the Option, Participant agrees that the Employer may withhold such taxes from
any monetary amounts otherwise payable by the Employer to Participant and that,
if
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such amounts are insufficient to cover the taxes required to be collected by the
Employer, Participant will pay to the Employer such additional amounts as are
required.
(j) The agreements, representations, warranties and
covenants made by Participant herein with respect to the Option shall also
extend to and apply to all of the Shares issued to Participant from time to time
pursuant to exercise of the Option. Acceptance by Participant of any certificate
representing Shares shall constitute a confirmation by Participant that all such
agreements, representations, warranties and covenants made herein shall be true
and correct at that time.
21. LIMITATION OF LIABILITY. The liability of the Company, the
Board, and their officers, employees and agents, under this Agreement and in the
award of the Shares hereunder is limited to the obligations set forth with
respect to such award, and nothing herein contained shall be interpreted as
imposing any liability in favor of the Participant with respect to any loss,
cost or expense which such recipient may incur in connection with or arising out
of any transaction involving the Shares that is subject to the provisions of
this Agreement.
22. UNSECURED AND UNFUNDED AGREEMENT. Any rights of the
Participant hereunder shall be no greater than the right of an unsecured general
creditor of the Company. Any payments to be made hereunder shall be paid from
the general funds of the Company, and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such
amounts.
23. ENTIRE AGREEMENT. The parties hereto agree that this Agreement
sets forth all of the promises, agreements, conditions, understandings,
warranties, and representations between the parties with respect to the Option
and Shares and that there are no promises, agreements, conditions,
understandings, warranties, or representations, oral or written, express or
implied between the parties with respect to the Option and Shares other than as
set forth in this Agreement. Participant accepts the Option in full satisfaction
of any and all obligations of the Company with respect to options granted or to
be granted to Participant, pursuant to the Plan or otherwise. Any modifications
or any waiver of any provision contained in this Agreement shall not be valid
unless made in writing and signed by the person or persons sought to be bound by
such waiver or modifications.
24. SEVERABILITY. The provisions of the Agreement are severable
and if any one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provision to the extent enforceable in any jurisdiction, shall
nevertheless be binding and enforceable.
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25. WAIVER. The waiver by the Company of a breach of any provision
of this Agreement by the Participant shall not operate or be construed as a
waiver of any subsequent breach by the Participant.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company and Participant have executed this
Agreement and affixed their seals hereto as of the day and year first above
written.
ATTEST: HIGH SPEED NET SOLUTIONS, INC.
/s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxxx Xxx
------------------------------------ -----------------------------------
Secretary President
[CORPORATE SEAL]
WITNESS: PARTICIPANT
(SEAL)
------------------------------------ -----------------------------
[NAME]
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EXHIBIT A
High Speed Net Solutions, Inc.
000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: President
Re: Exercise of Nonqualified Stock Option under the High Speed Net
Solutions, Inc. Equity Compensation Plan
Dear Sir:
Pursuant to the terms and conditions of that certain High Speed Net
Solutions, Inc. Nonqualified Stock Option Agreement, dated __________________
______________________ (the "Agreement"), I hereby provide notice of my desire
to exercise the stock option evidenced by the Agreement (the "Option") and
thereby purchase _____________ shares [MUST BE AT LEAST 100 SHARES OR ANY
SMALLER NUMBER OF SHARES AS TO WHICH THE OPTION IS VESTED AND EXERCISABLE] of
the common stock of High Speed Net Solutions, Inc. and I hereby tender payment
in full for such shares in accordance with the terms of the Agreement.
I hereby reaffirm that the representations and warranties made in
Section 20 of the Agreement are true and correct as of the date of exercising
this option.
[I hereby agree to sign the Shareholders Agreement referenced in
Section 10 of the Agreement.]
Very truly yours,
-----------------------------------
Name:
------------------------------
Date:
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