EXHIBIT 99.1
XXXXX.XXX, INC.
STOCK OPTION ASSUMPTION AGREEMENT
NORTH SKY, INC.
__________ STOCK PLAN
OPTIONEE: First_Name Last_Name,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the ______ day of
_______________, 1999 by Xxxxx.xxx, Inc., a __________ corporation
("Xxxxx.xxx").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of North Sky, Inc., a
__________ corporation ("North Sky"), which were granted to Optionee under the
North Sky __________ Stock Plan (the "Plan") and are each evidenced by a Stock
Option Agreement (the "Option Agreement").
WHEREAS, North Sky has been acquired by Xxxxx.xxx through the merger
of North Sky with and into Xxxxx.xxx (the "Merger") pursuant to the Agreement
and Plan of Reorganization, by and between Xxxxx.xxx and North Sky (the "Merger
Agreement").
WHEREAS, the provisions of the Merger Agreement require Xxxxx.xxx to
assume all obligations of North Sky under all outstanding options under the Plan
at the consummation of the Merger and to issue to the holder of each outstanding
option an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is ______________
shares of Xxxxx.xxx common stock ("Xxxxx.xxx Stock") for each outstanding share
of North Sky common stock ("North Sky Stock").
WHEREAS, this Agreement became effective immediately upon the
consummation of the Merger (the "Effective Time") in order to reflect certain
adjustments to Optionee's outstanding options which have become necessary by
reason of the assumption of those options by Xxxxx.xxx in connection with the
Merger.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of North Sky Stock subject to the options
held by Optionee immediately prior to the Effective Time (the "North Sky
Options") and the exercise price payable per share are set forth below.
Xxxxx.xxx hereby assumes, as of the Effective Time, all the duties and
obligations of North Sky under each of the North Sky Options. In connection
with such assumption, the number of shares of Xxxxx.xxx Stock purchasable under
each North Sky Option hereby assumed and the exercise price payable thereunder
have been adjusted to reflect the Exchange Ratio. Accordingly, the number of
shares of Xxxxx.xxx Stock subject to each North Sky Option hereby assumed shall
be as specified for that option below, and
the adjusted exercise price payable per share of Xxxxx.xxx Stock under the
assumed North Sky Option shall also be as indicated for that option below.
NORTH SKY STOCK OPTIONS XXXXX.XXX ASSUMED OPTIONS
# of Shares of North Exercise Price # of Shares of Adjusted Exercise
Sky Common Stock per Share Xxxxx.xxx Common Price per Share
Stock
North Sky_Shares $North Sky_Price Xxxxx.xxx_Shares $Xxxxx.xxx_Price
2. The intent of the foregoing adjustments to each assumed North Sky
Option is to assure that the spread between the aggregate fair market value of
the shares of Xxxxx.xxx Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this Agreement will,
immediately after the consummation of the Merger, be not less than the spread
which existed, immediately prior to the Merger, between the then aggregate fair
market value of the North Sky Stock subject to the North Sky Option and the
aggregate exercise price in effect at such time under the Option Agreement.
Such adjustments are also intended to preserve, immediately after the Merger, on
a per share basis, the same ratio of exercise price per option share to fair
market value per share which existed under the North Sky Option immediately
prior to the Merger.
3. The following provisions shall govern each North Sky Option
hereby assumed by Xxxxx.xxx:
(a) Unless the context otherwise requires, all references in
each Option Agreement and, if applicable, in the Plan (as incorporated into
such Option Agreement) (i) to the "Company" shall mean Xxxxx.xxx, (ii) to
"Share" shall mean share of Xxxxx.xxx Stock, (iii) to the "Board" shall
mean the Board of Directors of Xxxxx.xxx and (iv) to the "Committee" shall
mean the Compensation Committee of the Xxxxx.xxx Board of Directors.
(b) The grant date and the expiration date of each assumed North
Sky Option and all other provisions which govern either the exercise or the
termination of the assumed North Sky Option shall remain the same as set
forth in the Option Agreement applicable to that option, and the provisions
of the Option Agreement shall accordingly govern and control Optionee's
rights under this Agreement to purchase Xxxxx.xxx Stock.
(c) Your options assumed by Xxxxx.xxx which were originally
designated on your Notice of Grant as Incentive Options shall remain
Incentive Stock Options to the maximum extent allowed by law.
(d) Pursuant to the terms of the Option Agreement, none of your
options assumed by Xxxxx.xxx in connection with the transaction will vest
and become exercisable on an accelerated basis upon the consummation of the
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Merger. Each North Sky Option shall be assumed by Xxxxx.xxx as of the
Effective Time. Each such assumed North Sky Option shall thereafter
continue to vest for any remaining unvested shares of Xxxxx.xxx Stock
subject to that option in accordance with the same installment vesting
schedule in effect under the applicable Option Agreement immediately prior
to the Effective Time; provided, however, that the number of shares subject
to each such installment shall be adjusted to reflect the Exchange Ratio.
(e) For purposes of applying any and all provisions of the
Option Agreement and/or the Plan relating to Optionee's status as an
employee or a consultant of North Sky, Optionee shall be deemed to continue
in such status as an employee or a consultant for so long as Optionee
renders services as an employee or a consultant to Xxxxx.xxx or any present
or future Xxxxx.xxx subsidiary. Accordingly, the provisions of the Option
Agreement governing the termination of the assumed North Sky Options upon
Optionee's cessation of service as an employee or a consultant of North Sky
shall hereafter be applied on the basis of Optionee's cessation of employee
or consultant status with Xxxxx.xxx and its subsidiaries, and each assumed
North Sky Option shall accordingly terminate, within the designated time
period in effect under the Option Agreement for that option, generally a
three (3) month period, following such cessation of service as an employee
or a consultant of Xxxxx.xxx and its subsidiaries.
(f) The adjusted exercise price payable for the Xxxxx.xxx Stock
subject to each assumed North Sky Option shall be payable in any of the
forms authorized under the Option Agreement applicable to that option. For
purposes of determining the holding period of any shares of Xxxxx.xxx Stock
delivered in payment of such adjusted exercise price, the period for which
such shares were held as North Sky Stock prior to the Merger shall be taken
into account.
(g) In order to exercise each assumed North Sky Option, Optionee
must deliver to Xxxxx.xxx a written notice of exercise in which the number
of shares of Xxxxx.xxx Stock to be purchased thereunder must be indicated.
The exercise notice must be accompanied by payment of the adjusted exercise
price payable for the purchased shares of Xxxxx.xxx Stock and should be
delivered to Xxxxx.xxx at the following address:
Xxxxx.xxx, Inc.
______________________
______________________
Attention: Stock Administration
4. Except to the extent specifically modified by this Option
Assumption Agreement, all of the terms and conditions of each Option Agreement
as in effect immediately
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prior to the Merger shall continue in full force and effect and shall not in
any way be amended, revised or otherwise affected by this Stock Option
Assumption Agreement.
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IN WITNESS WHEREOF, Xxxxx.xxx, Inc. has caused this Stock Option
Assumption Agreement to be executed on its behalf by its duly-authorized officer
as of the 1st day of November, 1999.
XXXXX.XXX, INC.
By:
-----------------------------
Corporate Secretary
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her North Sky Options hereby assumed by Xxxxx.xxx are
as set forth in the Option Agreement, the Plan, as applicable, and such Stock
Option Assumption Agreement.
---------------------------------
First_Name Last_Name, OPTIONEE
DATED: __________________, ________
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