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EXHIBIT 10.16
NONQUALIFIED STOCK OPTION AGREEMENT
GRANTED TO: Xxxxxxx Xxxxxxxxx
DATE OF GRANT: April 1, 1999
GRANTED PURSUANT TO: Nucentrix Broadband Networks, Inc.
1999 Share Incentive Plan
NUMBER OF UNDERLYING 70,000 shares
SHARES OF COMMON
STOCK:
EXERCISE PRICE: $12.50 per share
VESTING SCHEDULE: See Section 4 below
1. This Nonqualified Stock Option Agreement (the
"Agreement") is made and entered into as of April 1, 1999, between Nucentrix
Broadband Networks, Inc., a Delaware corporation (the "Company"), and Xxxxxxx
Xxxxxxxxx ("Employee"). It is the intent of the Company and Employee that the
Option (as defined in Paragraph 2 below) will not qualify as an "incentive
stock option" under Section 422 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code").
2. Employee is granted an option by the Compensation
Committee of the Company's Board of Directors (the "Committee") to purchase
70,000 shares of Common Stock (the "Option") pursuant to the Company's 1999
Share Incentive Plan (the "Plan"). Capitalized terms not defined herein shall
have the meanings ascribed thereto in the Plan. The Option granted hereunder is
a matter of separate inducement and is not in lieu of salary or other
compensation for Employee's services.
3. The Option's exercise price is $12.50 per share, such
exercise price being in the judgment of the Committee not less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock on the date
of grant.
4. Subject to Paragraphs 5, 6 and 7 below, the Option shall
become fully exercisable in accordance with the following vesting schedule:
(a) 33.40% will vest on the date of grant;
(b) 6.66% will automatically vest on each
anniversary of the date of grant for five years after the
date of grant; and
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(c) up to 33.30% will vest as follows (such portion
hereinafter referred to as the "Contingent Portion"):
(i) if the average closing sales price of the
Common Stock equals or exceeds $16.50 per share for any
20 consecutive trading days between the date of grant
and the first anniversary of the date of grant,
one-fifth of the Contingent Portion will vest on such
20th trading day;
(ii) if the average closing sales price of the
Common Stock equals or exceeds $20.80 per share for any
20 consecutive trading days between the date of grant
and the second anniversary of the date of grant,
two-fifths of the Contingent Portion will vest on such
20th trading day;
(iii) if the average closing sales price of the
Common Stock equals or exceeds $25.00 per share for any
20 consecutive trading days between the date of grant
and the third anniversary of the date of grant,
three-fifths of the Contingent Portion will vest on such
20th trading day;
(iv) if the average closing sales price of the
Common Stock equals or exceeds $28.61 per share for any
20 consecutive trading days between the date of grant
and the fourth anniversary of the date of grant,
four-fifths of the Contingent Portion will vest on such
20th trading day; and
(v) if the average closing sales price of the
Common Stock equals or exceeds $31.10 per share for any
20 consecutive trading days between the date of grant
and the fifth anniversary of the date of grant, all of
the Contingent Portion will vest on such 20th trading
day.
As used in this Agreement, "average closing sales
price" shall mean: (i) if the Company's Common Stock is
publicly traded, the average of the closing prices as
reported by the OTC Bulletin Board, The Nasdaq Stock Market
or other applicable regional or national securities exchange
or quotation system on which the Common Stock is so traded or
quoted for any applicable period; or (ii) if there is no
public trading market for such shares, the fair value of such
shares on the applicable date of determination as determined
by the Committee after taking into consideration all factors
which it deems appropriate, including without limitation,
recent sale and offer prices of the Common Stock in private
transactions negotiated at arms' length.
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Notwithstanding anything herein to the contrary, if
the Employee is employed by the Company on the date which is
30 days immediately prior to the Expiration Date (such date
referred to herein as the "Final Vesting Date"), the unvested
portion, if any, of the Option will immediately vest and
become exercisable on such date.
5. Subject to Paragraphs 6 and 7 below, the unexercised
portion of the Option, unless sooner terminated, shall expire seven years after
the date of grant (the "Expiration Date") and, notwithstanding anything
contained herein to the contrary, no portion of the Option may be exercised
after the Expiration Date.
6. If prior to the Expiration Date, Employee's employment
with the Company or any subsidiary corporation terminates, the Option will
terminate on the applicable date as described below, provided, however, that
none of the events described below shall extend the period of exercisability
beyond the Expiration Date:
(a) If the employment of Employee is terminated by reason of
Employee's death while in the employ of the Company or any subsidiary
corporation, the Option shall immediately become fully exercisable and remain
exercisable for twelve (12) months after Employee's death and shall be
exercisable by the executor or administrator of the estate of the deceased
Employee or the person or persons to whom the deceased Employee's rights under
the Option shall pass by will or the laws of descent or distribution;
(b) If the employment of Employee is terminated by the
Company or any subsidiary corporation for reason of Employee's "Permanent
Disability" (as defined below), the Option shall immediately become fully
exercisable on the date of such termination and shall remain exercisable for
six (6) months after such date; provided, however, that if Employee dies during
the six month period following such date and Employee has not exercised the
Option, the Option shall remain exercisable for an additional twelve (12)
months after Employee's death and shall be exercisable by the executor or
administrator of the estate of the deceased Employee or the person or persons
to whom the deceased Employee's rights under the Option shall pass by will or
the laws of descent or distribution;
(c) If the employment of Employee is terminated by the
Company or any subsidiary corporation for "cause" (as defined below), the
Option shall, to the extent not theretofore exercised, immediately become null
and void on the date of such termination;
(d) If the employment of Employee is terminated by the
Company or any subsidiary corporation other than (X) for "cause" or (Y) for
reason of Employee's death or "Permanent Disability", the Option, to the extent
vested and not theretofore exercised, shall immediately become fully
exercisable on the date of such termination and shall remain exercisable for
thirty (30) days after such date and the unvested portion of the Option shall
be canceled;
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(e) If the employment of Employee is terminated by the
Employee prior to the Final Vesting Date, the unvested portion of the Option
shall immediately become null and void on the date of such termination and the
vested portion of the Option shall, to the extent not theretofore exercised,
remain exercisable for thirty (30) days after the date of such termination; or
(f) If the employment of Employee is terminated by the
Employee on or after the Final Vesting Date, the Option shall, to the extent
not theretofore exercised, remain exercisable for thirty (30) days after the
date of such termination.
For purposes of this Agreement, the terms "Permanent
Disability" and "cause" shall have the meanings ascribed to such terms in the
Employee's employment agreement with the Company, as amended from time to time
(the "Employment Agreement"), or any successor agreement, or if Employee does
not have an employment agreement with the Company, such terms shall have the
meanings ascribed to them on Annex A attached hereto.
7. Upon the occurrence of a "Change in Control" (as defined
in the Plan), the Option shall immediately become fully exercisable and shall
terminate thirty (30) days after the occurrence of the Change in Control. Upon
such termination, Employee shall receive, with respect to the unexercised
portion of the Option, an amount in cash, in one or more kinds of property
(including the property, if any, payable in the transaction) or in a
combination thereof, as the Committee, in its discretion, shall determine,
equal to the product of (X) the amount, if any, by which the Fair Market Value
of a share of Common Stock immediately prior to the occurrence of such Change
in Control exceeds the exercise price per share specified in Paragraph 3 hereof
and (Y) the number of shares with respect to which the Option remained
exercisable on the date of such termination; provided, however, that the
apportionment and kind of property, if any, to be received by the Employee
shall not differ in any material respect from the property to be received by
the holders of Common Stock.
8. Employee may exercise the Option regardless of whether
any other option that Employee has been granted by the Company remains
unexercised. In no event may Employee exercise the Option for a fraction of a
share or for less than 100 shares unless such number is the remaining balance
for which the Option is then exercisable.
9. The Option's exercise price shall be paid by Employee on
the date the Option is exercised, in full in cash or, in the sole discretion of
the Committee, in shares of Common Stock or any other method that the Committee
shall prescribe, including, without limitation, by the withholding of shares or
the delivery of an executed promissory note to the Company on such terms and
conditions as the Committee shall determine in its sole discretion.
10. The Company or any subsidiary corporation may withhold
from sums due or to become due to Employee from the Company or any subsidiary
corporation an amount necessary to satisfy its obligation to withhold taxes
incurred by
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reason of the issuance or disposition of shares pursuant to the Option, or may
require Employee to reimburse the Company or any subsidiary corporation in such
amount. The exercise of the Option shall not be effective until the withholding
tax liability associated with the exercise of the Option has been satisfied.
11. Employee shall not have any of the rights of a
stockholder with respect to the shares of Common Stock underlying the Option
while the Option is unexercised.
12. Any exercise of this Option shall be in writing
addressed to the Corporate Secretary of the Company at the principal place of
business of the Company, specifying the Option being exercised and the number
of shares to be purchased, accompanied by payment therefor.
13. This Option shall not be transferable otherwise than by
will or the laws of descent and distribution, and shall be exercisable, during
Employee's lifetime, only by Employee. Notwithstanding the foregoing, but
subject to the approval of the form of the transfer by the Committee which
approval shall not be unreasonably withheld, this Option may be transferred by
Employee solely to Employee's spouse, siblings, parents, children and
grandchildren or trusts for the benefit of such persons, subject to any
restriction included in this Agreement.
14. If the Company, in its sole discretion, shall determine
that it is necessary, to comply with applicable securities laws, the
certificate or certificates representing the shares purchased pursuant to the
exercise of the Option shall bear an appropriate legend in form and substance,
as determined by the Company, giving notice of applicable restrictions on
transfer under or in respect of such laws.
15. The Company agrees that at the time of exercise of the
Option it will use reasonable efforts in good faith to have an effective
Registration Statement on Form S-8 under the Securities Act of 1933, as amended
(the "Act"), which includes a prospectus that is current with respect to the
shares subject to the Option. Employee covenants and agrees with the Company
that if, at the time of exercise of the Option, there does not exist a
Registration Statement on an appropriate form under the Act, which Registration
Statement shall have become effective and shall include a prospectus that is
current with respect to the shares subject to the Option, (i) that he or she is
purchasing the shares for his or her own account and not with a view to the
resale or distribution thereof, (ii) that any subsequent offer for sale or sale
of any such shares shall be made either pursuant to (x) a Registration
Statement on an appropriate form under the Act, which Registration Statement
shall have become effective and shall be current with respect to the shares
being offered and sold, or (y) a specific exemption from the registration
requirements of the Act and applicable state securities laws, but in claiming
such exemption, Employee shall, prior to any offer for sale or sale of such
shares, obtain a favorable written opinion from counsel for or approved by the
Company as to the applicability of such exemption and (iii) that Employee
agrees that the certificates evidencing such shares shall bear a legend to the
effect of the foregoing.
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16. This Agreement is subject to all terms, conditions,
limitations and restrictions contained in the Plan, which shall be controlling
in the event of any conflicting or inconsistent provisions.
17. This Agreement is not a contract of employment and the
terms of Employee's employment shall not be affected hereby or by any agreement
referred to herein except to the extent specifically so provided herein or
therein. Nothing herein shall be construed to impose any obligation on the
Company or any subsidiary corporation to continue Employee's employment, and it
shall not impose any obligation on Employee's part to remain in the employ of
the Company or any subsidiary corporation.
18. Employee acknowledges and agrees that neither the
Company, its stockholders nor its directors and officers, has any duty or
obligation to disclose to the Employee any material information regarding the
business of the Company or any subsidiary corporation or affecting the value of
the Common Stock before or at the time of a termination of the employment of
Employee by the Company or any subsidiary corporation, including, without
limitation, any information concerning plans for the Company or any subsidiary
corporation to make a public offering of its securities or to be acquired by or
merged with or into another firm or entity.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
NUCENTRIX BROADBAND NETWORKS, INC.
By: /s/ Xxxxxxx X. XxXxxxx
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Xxxxxxx X. XxXxxxx
President and Chief Executive Officer
ACCEPTED:
/s/ Xxxxxxx Xxxxxxxxx
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Printed Name: Xxxxxxx Xxxxxxxxx
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