EXHIBIT 10.14
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement) is made and entered into as
of this 27th day of July, 1989, by and between SOUTHWEST NETWORK SERVICES, INC.,
a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxx, a director of the
Company ("Optionee").
WHEREAS, in consideration and recognition of his contributions to the
Company as a director, the Company desires to afford Optionee an opportunity to
purchase shares of its Common Stock, $.01 par value per share (the "Common
Stock"), under the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the covenants herein set forth, the
parties hereto have agreed and do hereby agree as follows:
1. Grant of Option. The Company hereby grants to Optionee, pursuant to
the terms and provisions hereof, an option (the "Option") to purchase all or any
part of 40,000 shares of the Common Stock of the Company on the terms and
conditions herein set forth.
2. Purchase Price. The purchase price of each share of Common Stock
subject to this Option shall be $.06 per share. Full payment for shares
purchased upon exercise of this Option shall be made in cash, cashier's check or
by delivery of previously owned shares of Common Stock or partly in cash or such
check and partly in such stock. The value of shares of Common Stock delivered
in connection with the payment of the option price shall be the fair market
value of such shares as determined by the Board of Directors of the Company (the
"Board") and such determinations shall be binding upon the Optionee. No shares
may be issued until full payment of the purchase price therefor has been made.
3. Term of Option. The term of the Option shall be for a period of ten
(10) years from the Date of Grant, subject to earlier termination or
cancellation as provided herein.
4. Exercise of the Option. This Option shall be exercisable in full or
in part at any time, and from time to time, during the term hereof. No
fractional shares may be issued pursuant to the exercise of this Option.
Furthermore, the exercise of this Option shall be subject to the condition that
if at any time the Company shall determine in its sole discretion that the
satisfaction of withholding tax or other withholding liabilities, or that the
listing, registration, or qualification of any shares otherwise deliverable upon
such exercise upon any national securities exchange or under any state or
federal law, or that the report to, or consent or approval of, any regulatory
body,
is necessary or desirable as a condition of, or in connection with, such
exercise or the delivery or purchase of shares pursuant hereto, then in any such
event, such exercise shall not be effective unless such withholding, listing,
registration, qualification, report, consent or approval shall have been
effected or obtained free of all conditions not acceptable to the Company.
5. Notice of Election. Subject to the terms and conditions hereof,
Optionee may exercise this Option by delivering written notice to the Secretary
of the Company in person or by registered or certified mail, postage prepaid.
Such notice shall state the election to partially or totally exercise this
Option and the number of shares in respect of which it is being exercised, and
shall be signed by Optionee. Such notice shall be accompanied by payment as
provided for hereinbefore, in which event, the Company shall deliver a
certificate or certificates, as may be requested by Optionee, representing such
shares as soon as practicable after the notice and payment shall be received.
The certificate or certificates for the shares as to which the Option shall have
been exercised shall be registered as designated in the notice. In the event
the Option shall be exercised, pursuant to Paragraph 8 hereof, by any person or
persons other than the Optionee, such notice shall be accompanied by proof
deemed appropriate by the Company of the right of such person or persons to
exercise the Option. All shares that shall be purchased upon the exercise of
this Option as provided herein shall be fully paid and non-assessable.
6. Non-Transferability. During the lifetime of Optionee, this Option
shall be exercisable only by Optionee. This Option shall not be assignable or
transferable by Optionee, voluntarily or by operation of law, other than by will
or by the laws of descent and distribution. Neither this Option nor the shares
covered hereby shall be pledged or hypothecated in any way. Neither this Option
nor the shares covered hereby shall be subject to execution, attachment, or
similar process except with the prior written consent of the Board.
7. Termination of Directorship. In the event that Optionee shall at
any time hereafter cease to be a director of the Company or its subsidiaries for
any reason other than his death, retirement or permanent disability, any part of
the Option granted hereunder which has not been exercised by the date of such
cessation shall immediately terminate on the date of such cessation. In the
event that Optionee's directorship with the Company or its subsidiary shall
terminate by reason of his retirement or permanent disability, the Option may be
exercised, to the extent of the shares with respect to which the Option could
have been exercised by Optionee on the date of such termination prior to the
date of its expiration or three (3) months after the date of such termination,
whichever occurs first.
8. Death of Optionee. If Optionee dies prior to the termination of his
right to exercise the Option in accordance with the provisions hereof without
having totally exercised the Option, the Option may be exercised, to the extent
of the shares with respect to which the Option could have been exercised by
Optionee on the date of Optionee's death, by the Optionee's estate or by the
person who acquires the right to exercise the Option by bequest, inheritance, or
by reason of the death of the Optionee, provided the Option is exercised prior
to the date of its expiration or one (1) year from the date of the Optionee's
death, whichever occurs first.
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9. Adjustments. The number of shares of Common Stock covered by this
Option and the option price may be adjusted to reflect, as deemed appropriate by
the Board in its discretion, any stock dividend, stock split, share combination,
exchange of shares, recapitalization, merger, consolidation, separation,
reorganization, liquidation or the like of or by the Company. Decisions by the
Board as to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive on Optionee.
10. No Other Rights or Obligations. Optionee shall have no rights by
reason of this Option as a shareholder with respect to any shares covered hereby
until the date of the issuance of one or more stock certificates to him for such
shares pursuant to the due exercise of the Option. The granting of this Option
does not confer on Optionee any continued right of service or tenure as a
director of the Company or any additional rights other than as expressly
provided for herein. There is no obligation upon Optionee to exercise this
Option or any part thereof.
11. Non-Qualified Stock Option. This Option is not intended to qualify
as an "incentive stock option" under the Internal Revenue Code of 1986, as
amended, and applicable regulations and rulings promulgated thereunder, and
shall not be so construed. This Option is not intended to be subject to, or
granted under or pursuant to, the Company's 1988 Stock Option Plan, and shall
not be so construed.
12. Purchaser Deemed to be a Consultant. As a director of the Company,
Purchaser shall be deemed to be a consultant to the Company for purposes of
Section 6(c)(ii) of the Company's Designation of the Series A Preferred Stock,
Section 6(c)(ii) of the Company's Designation of the Series B Preferred Stock
and Section 9.5(d) of that certain Series B Preferred Stock Purchase Agreement
dated as of October 18, 1988 by and among the Company and the Investors (as
defined therein).
13. Amendment. The Board shall have the right, without the consent or
approval of the Optionee, to amend, modify, limit or terminate this Option or
any term or provision hereof; provided, however, that no such action may be
taken by the Board, not expressly provided for herein or in the Plan, in
derogation of the vested rights of the Optionee, without the consent or approval
of the Optionee. Any such action by the Board shall be final and binding on
Optionee.
14. Shareholder's Agreement. The exercise of this Option is expressly
conditioned upon the contemporaneous execution by the Optionee and the Company
of a Shareholder's Agreement, substantially in the form attached hereto as
Exhibit "A". All rights of the Optionee and Optionee's heirs, successors and
assigns shall be determined by such agreement and Optionee and Optionee and his
heirs, successors and assigns shall be bound thereby.
IN WITNESS WHEREOF, Southwest Network Services, Inc. and Xxxxxx X. Xxxxx,
Optionee, have executed this Stock Option Agreement as of the date first above
written.
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Address for Notices: SOUTHWEST NETWORK SERVICES, INC.
0000 Xxxxxxxxx Xxxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
/s/ Xxxxxx X. xxxxx
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Optionee
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