EXHIBIT 10(d)(8)
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") dated as of
the 2nd day of November, 1999, by and between Inter*Act Electronic Marketing,
Inc., a North Carolina corporation (the "Company"), and Stephen R. Leeolou, the
Chief Executive Officer of the Company (the "Optionee");
W I T N E S S E T H:
WHEREAS, the Company desires to provide an incentive to the Optionee to
continue his efforts on behalf of the Company as the Company's Chief Executive
Officer and to align his interests with those of the Company's shareholders by
granting to him a nonqualified option to purchase shares of the Company's common
stock, without par value ("Common Stock"), and the Optionee desires to accept
such option in accordance with the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and intending to be legally bound hereby, the
parties agree as follows:
1. Grant of Option. The Company hereby grants to the Optionee an option
(the "Option") to purchase all or any portion of four hundred seventy-five
thousand (475,000) shares of the Company's Common Stock at an exercise price of
Eight and One Half Dollars ($8.50) per share (the "Exercise Price"). This Option
is a "Nonqualified Option" and is not intended to be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. Term of Option. Unless sooner terminated in accordance with Section
12 hereof, the Option shall terminate and be no longer exercisable after ten
years from the date hereof. The Option shall vest and be exercisable to the
extent of 158,333 shares on and after the first anniversary date of this Option,
to the extent of 316,667 shares on and after the second anniversary date of this
Option (to the extent not previously exercised) and to the extent of all shares
subject to this Option on and after the third anniversary date of this Option
(to the extent not previously exercised); provided, however, that the Option may
not be exercised until (i) the completion of an initial public offering by the
Company, or (ii) the occurrence of a "Sale Transaction," which is the sale of
all or substantially all of the Company, by means of a merger, share exchange,
sale of assets or otherwise, for an aggregate equity value (excluding debt) of
not less than $200 million. In the event of a Sale Transaction, the Option shall
become immediately exercisable in full. Subject to the foregoing, the Option may
be exercised from time to time in whole or in part during the term of the
Option; provided, however, that not less than 1,000 shares may be purchased at
any one time pursuant to any exercise of this Option unless the number of shares
purchased is the total number that may be purchased under this Option at that
time or unless the Company shall otherwise consent. No fractional shares of
Common Stock shall be issued upon any exercise of this Option.
3. Transfer of Option. This Option may be transferred, in whole or in
part, with or without payment of consideration, to immediate family members of
the Optionee, to trusts for the benefit of the Optionee or his immediate family
members, or to a partnership or limited liability company whose only partners or
members are the Optionee and his immediate family members. For purposes of this
Section, the phrase "immediate family members" shall mean spouse, parents,
siblings, children and grandchildren of the Optionee. The limitations on the
exercise of the Option contained in this Agreement, including, without
limitation, those set forth in Section 12 hereof relating to termination of the
Option following the termination of the Optionee's employment with the Company,
shall not be affected by and shall continue to apply following a transfer.
4. Method of Exercise. The Option shall be exercised by the tender of
payment and delivery to the Company at its principal place of business of a
written notice, at least five days prior to the proposed date of exercise, which
notice shall:
(a) State the election to exercise the Option, the number of
shares of Common Stock with respect to which the Option is being
exercised, and the name, address, and social security number of the
person in whose name the stock certificate or certificates for such
shares of Common Stock is to be registered.
(b) Contain any such representations and agreements as to
Optionee's investment interest with respect to such shares of Common
Stock as shall be satisfactory to the Company.
(c) Be signed by the person entitled to exercise the Option,
and if the Option is being exercised by any person or persons other
than the Optionee, be accompanied by proof, satisfactory to the
Company, of the right of such person or persons to exercise the Option.
Payment of the exercise price may be made in cash or by certified,
cashiers or official bank check or, at the option of the Company, by personal
check. Payment may also be made by surrendering shares of Common Stock
(including any shares of Common Stock received upon a prior or simultaneous
exercise of the Option) at the then fair market value of such shares. Payment
may also be made by combining cash or check and shares of Common Stock. For
purposes of this Agreement, the fair market value of shares of Common Stock as
of a given date shall be determined based on the closing sales price per share
of the Common Stock, as reported on the national securities exchange (including
the Nasdaq Stock Market, Inc.) on which the Common Stock is principally traded
on the most recent trading day preceding the day on which the shares are to be
valued; provided, however, that if at the time of valuation the Company's Common
Stock is not admitted to trading on a national securities exchange for which
sales prices are regularly reported, the fair market value of the shares shall
be determined by the Company's Board of Directors in good faith on the basis of
such factors as it deems appropriate but without regard to any restriction on
the shares other than a restriction that, by its terms, shall never lapse.
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After receipt of such notice in a form satisfactory to the Company and
the acceptance of payment, the Company shall deliver to the Optionee a
certificate or certificates representing the shares purchased hereunder;
provided, however, that if any law or regulation requires the Company to take
any action with respect to the shares specified in such notice before the
issuance thereof, the date of delivery of such shares shall be extended for the
period necessary to take such action.
5. Tax Withholding. The exercise of the Option granted hereunder is
subject to the condition that, if the Company shall determine in its discretion
that the satisfaction of withholding tax or other withholding liabilities under
any state or federal law is necessary or desirable as a condition of, or in any
connection with, such exercise or the delivery or purchase of shares pursuant
thereto, the Optionee will pay, or make arrangements to pay, to the Company an
amount equal to such tax or liabilities that the Company is required to withhold
as a result of the exercise of the Option. If for any reason such payment or
arrangement to pay is not made, the Company shall be entitled to withhold from
other sums payable to the Optionee the amount of such withholding and other
liabilities.
6. Adjustments. If the shares of Common Stock of the Company are
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities through merger, consolidation, combination, exchange of
shares, other reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, an appropriate and proportionate
adjustment shall be made in the number or kind of shares allocated to the
unexercised portion of the Option. Any such adjustment to the unexercised
portion of the Option shall be made without change in the aggregate purchase
price applicable to such portion, but with a corresponding adjustment in the
price for each share covered by the Option. In making any adjustment pursuant to
this Section 6, any fractional shares shall be disregarded.
7. Rights of a Shareholder. The Optionee shall not be deemed for any
purpose to be a shareholder of the Company with respect to any shares covered by
this Option unless this Option shall have been exercised and the Exercise Price
paid in the manner provided herein. No adjustment will be made for dividends or
other rights where the record date for such dividends or other rights is prior
to the date of exercise and payment. Upon the exercise of the Option and the
payment of the Exercise Price for the shares subject to such exercise, the
Optionee shall have all the rights of a shareholder of the Company including the
rights to receive all dividends or other distributions paid or made with respect
to such shares.
8. Compliance with Securities Laws. The Option granted hereunder and the
shares issuable upon the exercise of the Option have not been registered under
applicable federal and state securities laws and the Company has no obligation
to undertake any such registrations until such time as the Company is eligible
to do so pursuant to a registration statement on Form S-3 under the Securities
Act of 1933 as amended (or any equivalent successor form). This Option may not
be exercised unless the issuance and delivery of those shares of Common Stock
pursuant to such exercise shall comply with all relevant federal and state
securities laws including, without limitation, the Securities Act of 1933, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock
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exchange upon which such shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance. If
required by the Board of Directors, the Optionee shall furnish evidence
satisfactory to the Company, including a written and signed representation
letter and consent to be bound by any transfer restrictions imposed by law,
legend, condition, or otherwise, that the shares are being purchased only for
investment and without any present intention to sell or distribute the shares in
violation of any federal or state law, rule, or regulation.
9. Registration Rights. From and after the time the Company is eligible
to register shares of its Common Stock pursuant to a registration statement on
Form S-3 under the Securities Act of 1933, as amended (or any equivalent
successor form), the Optionee may submit a written request to the Company to
register under the Securities Act of 1933, as amended, all or part of the shares
of Common Stock held by or issuable to the Optionee upon exercise of the Option,
specifying the intended method or methods of disposition of such shares. Upon
receipt by the Company of such written request, the Company will use its best
efforts to register such shares at the earliest possible date under the
Securities Act of 1933, as amended, to permit the disposition of such shares in
accordance with the intended method or methods of disposition stated in the
Optionee's written request. A registration requested pursuant to this Section 9
shall be effected by filing a registration statement on Form S-3 (or any
equivalent successor form) and, if qualified and agreed to in writing by the
Optionee, filed pursuant to Rule 415 under the Securities Act of 1933, as
amended, or any successor provision. The Company will pay all expenses
associated with a registration under this Section 9 except for underwriting
discounts or commissions, brokers' fees, applicable transfer taxes, and the fees
and expenses of the Optionee's counsel. In connection with any registration
under this Section 9, the Company and the Optionee will provide each other and
the underwriter, if any, with customary representations, warranties, covenants,
indemnification and contribution. The Company shall not be required to effect
more than one registration under this Section 9.
10. Shareholders' Agreement. The Optionee understands and agrees that
the shares of Common Stock issuable upon exercise of this Option shall also be
subject to the restrictions on transfer and other provisions of the
shareholders' agreement, if any, that may be in effect among the Company and all
its shareholders as of the date of any exercise of this Option. As a condition
to the exercise of this Option, the Optionee agrees that he will become a party
to any such shareholders' agreement by executing a joinder agreement or other
appropriate document. In the event that the Shareholders' Agreement dated as of
April 16, 1993, as amended by Amendment No. 1 thereto dated as of June 17, 1994,
has terminated as a result of a public offering of capital stock of the Company
prior to the exercise of this Option, the Optionee nevertheless agrees to be
bound by the lock-up agreement contained in Section 23 thereof or any similar
lock-up agreement then in effect with respect to the Company's shareholders.
11. Legends. Until the shares of Common Stock issued upon exercise of
this Option are registered under the Securities Act of 1933, as amended, the
certificate or certificates evidencing such shares shall bear substantially the
following legend:
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The shares evidenced by this certificate have not been registered under
the Securities Act of 1933, as amended, or under the securities laws of
any state. The shares may not be sold, transferred, pledged or
hypothecated in the absence of an effective registration statement under
the Securities Act of 1933, as amended, and such registration or
qualification as may be necessary under the securities laws of any
state, or an opinion of counsel satisfactory to the Company that such
registration or qualification is not required.
Such certificate or certificates shall also bear any legend required by the
Shareholders' Agreement.
12. Termination of Option. The Option shall terminate and be no longer
exercisable (a) immediately upon the termination for Cause (as hereinafter
defined) of Optionee's employment with the Company or (b) three years after the
effective date of termination of the Optionee's employment for any other reason
(including but not limited to termination by the Company other than for Cause or
termination by the Optionee voluntarily or as a result of the Optionee's death
or disability (within the meaning of Section 22(e)(3) of the Code)).
Notwithstanding the foregoing, in no event shall this Option be exercisable
after ten years from the date hereof.
For purposes of this Agreement, "Cause" shall mean termination due to
(i) continued willful or gross neglect of duties for thirty days following
receipt by the Optionee of one or more written warnings from the Board of
Directors of the Company specifying in detail the duties neglected, (ii)
incapacity due to continuing alcohol or drug addiction, (iii) continued
intentional refusal to perform the duties for which employed thirty days
following receipt by the Optionee of one or more written warnings from the Board
of Directors of the Company specifying in detail the Optionee's misconduct, (iv)
fraud or embezzlement committed against the Company, or (v) the Optionee's
conviction for a felony.
13. Specific Performance. If the Optionee violates any provision of this
Agreement, the Company may commence an action for such preliminary and permanent
injunctive relief and other equitable relief it deems appropriate in any court
of competent jurisdiction in the State of North Carolina or in any other court
of competent jurisdiction. The Optionee hereby waives any objections on the
grounds of improper jurisdiction or venue to the commencement of an action in
the State of North Carolina and agrees that effective service of process may be
made upon him by mail under the notice provisions contained in Section 18
hereof.
14. Construction. Whenever the word "Optionee" is used in any provision
of this Agreement under circumstances where the provision should logically be
construed to apply to (i) the estate, personal representative, or beneficiary to
whom this Option may be transferred by will or by the laws of descent and
distribution, (ii) the guardian or legal representative of the Optionee acting
pursuant to a valid power of attorney or the decree of a court of competent
jurisdiction, or (iii) a permitted transferee under Section 3, then the term
"Optionee" shall be construed to include such estate, personal representative,
beneficiary, guardian, legal representative or transferee.
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15. Severability. The provisions of this Agreement shall be severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereto
16. Notices. Notices under this Agreement shall be in writing and shall
be deemed to have been duly given (i) when personally delivered, (ii) when
forwarded by Federal Express, Airborne, or another private carrier which
maintains records showing delivery information, (iii) when sent via facsimile
but only if a written facsimile acknowledgment of receipt is received by the
sending party, or (iv) when placed in the United States Mail and forwarded by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the party to whom such notice is being given.
17. Modification. This Agreement is the entire agreement and
understanding of the parties hereto with respect to the Option granted herein
and supersedes any and all prior and contemporaneous negotiations,
understandings and agreements with regard to the Option and the matters set
forth herein, whether oral or written. No representation, inducement, agreement,
promise or understanding altering, modifying, taking from or adding to the terms
and conditions hereof shall have any force or effect unless the same is in
writing and validity executed by the parties hereto.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.
19. Multiple Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
ATTEST: INTER*ACT ELECTRONIC MARKETING, INC.
/s/ Dan T. Barker, Jr. By: /s/ Lee D. Armbuster
Assistant Secretary President
[Corporate Seal]
OPTIONEE:
/s/ Stephen R. Leeolou (SEAL)
Stephen R. Leeolou
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