CAI WIRELESS SYSTEMS, INC.
STOCK OPTION AGREEMENT
This Agreement, is made as of the 19th day of January, 1999, by and
between CAI Wireless Systems, Inc. (the "Company"), and the undersigned
individual (the "Optionee"), pursuant to the CAI Wireless Systems, Inc. 1998
Stock Option Plan (the "Option Plan"; defined terms used herein and not defined
herein shall have the meanings ascribed to such terms in the Option Plan).
Whereas, Optionee has been granted options previously under the Option
Plan pursuant to Paragraph 4(a) of that certain Initial Option Agreement between
the Company and Optionee, which options (the "Initial Options") Optionee has
agreed to surrender to the Company; and
Whereas, the Committee has approved the grant of Options evidenced hereby,
which options shall be granted under Paragraph 4(b) of the Option Plan to
Optionee and issued upon the surrender of the Initial Options; and
Whereas, Optionee has surrendered the Initial Options to the Company.
Now, Therefore, in consideration of the terms and conditions of this
Agreement and pursuant to the Option Plan, the parties agree as follows:
1. Grant of Options. The Company hereby grants to the Optionee the right
and option to purchase from the Company, at the exercise price set forth in
Section 3 below, all or any part of the aggregate number of common shares of the
Company, as such common shares are presently constituted (the "Common Shares"),
set forth in said Section 3. The issuance of the Options evidenced hereby is
conditioned upon the surrender to the Company of the Initial Options.
2. Terms and Conditions. It is understood and agreed that the Options
evidenced hereby are subject to the provisions of the Option Plan (which are
incorporated herein by reference) and the following terms and conditions:
(A) Vesting: The Options evidenced hereby will become vested and
exercisable on the earlier to occur of (i) on the one hundred twentieth
(120th) day following the earlier to occur of: (a) a Change of Control, as
defined on Exhibit A attached hereto; and (b)(1) the relocation of the
Company's accounting department from Chadds Ford, Pennsylvania to a
location designated by the Company's Board of Directors, which relocation
shall include the maintenance, through retention or new hiring, of an
accounting staff that, in the opinion of the Audit Committee of the
Company's Board of Directors, is sufficient to perform the day-to-day
accounting duties necessary for the operation of the business of the
Company and (2) the timely filing of the Company's Annual Report on Form
10-
K for the fiscal year ended March 31, 1999 with the Securities and
Exchange Commission; and (ii)(a) to the extent of one-half (1/2) of the
number of Options evidenced hereby from and after a Trading Event Date;
and (b) in their entirety when the average trading price of the Company's
common stock has been at or above 150% of the Bondholder Recovery Price
for forty-five consecutive trading days. -2-
Notwithstanding anything to the contrary set forth in this Paragraph 2(A), in
the event that Optionee's employment is terminated other than for cause by the
Company at any time during the 120-day period referred to in this Paragraph
2(A), such 120-day period shall be waived and the applicable number of Options
will immediately vest.
(B) Exercise of Options: From and after the vesting of the Options
evidenced hereby such Options shall be exercisable from time to time by
submitting the appropriate Notice of Exercise form referred to below ten (10)
days prior to the date of exercise specifying the number of shares for which the
Options are being exercised, addressed as follows:
CAI Wireless Systems, Inc.
18 Corporate Woods Boulevard
Third Floor
Albany, New York 12211
Attention: Chief Financial Officer
and either
(i) Cash Only Exercise -- submitting a "Notice of Cash Exercise" (in
the form attached hereto, or as modified by the Company from time to
time), accompanied by the full cash purchase price of the exercised
shares; or
(ii) Cashless Exercise -- provided the Company has adopted such a
procedure at this time, submitting a "Notice of Cashless Exercise" (in the
form attached hereto, or as modified by the Company from time to time)
authorizing the delivery for sale of the exercised Common Shares, or
(iii) Combination -- tendering a combination of (i) or (ii) above.
(C) Withholding Taxes. Without regard to the method of exercise and
payment, the Optionee shall pay to the Company, upon notice of the amount due,
any withholding taxes payable with respect to such exercise.
(D) Expiration of Options. Notwithstanding anything in the Option Plan to
the contrary, the Options evidenced hereby shall not expire prior to the tenth
(10)
anniversary of the date of grant of the Options evidenced hereby, provided that
all or a portion of such Options shall lapse and expire earlier as follows:
(i) Timed Lapse. The unvested portion of the Options evidenced
hereby shall lapse and cease to be exercisable in their entirety after the
twenty-four (24) month anniversary of the date of grant of the Options
evidenced hereby.
(ii) Employment Termination. All Options that have vested as of the
date of the termination of Optionee's employment with the Company, other
than a termination of employment for cause, shall expire and lapse on the
date on which the Options would otherwise expire by their terms. Options
that have not vested as of the date of the termination for any reason of
Optionee's employment with the Company and Options that have vested as of
the date of the termination of Optionee's employment for cause, shall
expire and lapse coincident with the effective date of the termination of
employment.
(E) Compliance with Laws and Regulations. The Options evidenced hereby are
subject to restrictions imposed at any time on the exercise or delivery of
shares in violation of the By-Laws of the Company or of any law or governmental
regulation that the Company may find to be valid and applicable.
(F) Interpretation. Optionee hereby acknowledges that this Agreement is
governed by the Option Plan, a copy of which Optionee hereby acknowledges having
received, and by such administrative rules and regulations relative to the
Option Plan and not inconsistent therewith as may be adopted and amended from
time by the Committee (the "Rules"). Optionee agrees to be bound by the terms
and provisions of the Option Plan and the Rules to the extent not inconsistent
with the terms of this Agreement.
(G) Transfer Restrictions. In addition to the restrictions on
transferability imposed by the Option Plan, the Options evidenced hereby are not
transferable other than by will or the laws of descent and distribution.
3. Option Data Optionee's Name: George Parise
Number of Common Shares
Subject to Options: 80,000
Grant Date: January 19, 1999
Exercise Price per
Share: $0.875
Expiration Date: January 19, 2009
In Witness Whereof, the Company has caused this instrument to be executed
by its authorized officer, as of the 19th day of January, 1999.
Agreed to: CAI Wireless Systems, Inc.
/s/ George Parise By: /s/ James P. Ashman
- -------------------------------- ---------------------------------
Optionee: George Parise Name: James P. Ashman
Title: Executive Vice President
Exhibit A
For purposes of this Stock Option Agreement, a `Change of Control" of the
Company shall be deemed to have occurred if, after the date hereof, (i) any
person or two or more persons acting in concert, other than the Company or any
employee benefit plan sponsored by the Company, acquires beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act
of 1934, as amended (the "'34 Act") directly or indirectly of thirty-five
percent (35%) or more of the total voting power represented by the Company's
then outstanding voting securities (calculated as provided in paragraph (d) of
Rule 13d-3 under the '34 Act in the case of rights to acquire voting
securities); or (ii) any person or two or more persons acting in concert, other
than the Company or any employee benefit plan sponsored by the Company, shall
purchase shares of the Company pursuant to a tender offer or exchange offer to
acquire any voting securities of the Company (or securities convertible into
such voting securities) for cash, securities or any other consideration,
provided that after the consummation of the offer, the person or persons in
question has beneficial ownership directly or indirectly of thirty-five percent
(35%) or more of the total voting power represented by the Company's then
outstanding voting securities (all as calculated under clause (i) above)); or
(iii) the shareholders of the Company shall approve (A) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation (other than a merger of the Company in which holder of the Common
Shares of the Company immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger as immediately before), or pursuant to which Common Shares of
the Company would be converted into cash, securities or other property, or (B)
any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company;
or (iv) a change in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
'34 Act, whether or not the Company is then subject to such reporting
requirement; or (v) there shall have been a change in the composition of the
Board of Directors of the Company at any time during any consecutive twenty-four
(24) month period such that "continuing directors" cease for any reason to
constitute at least a 70% majority of the Board. For purposes of this clause,
"continuing directors" means those members of the Board who either were
directors at the beginning of such twenty-four month period or were elected by
or on the nomination or recommendation of at least a 70% majority of the
then-existing "continuing directors." So long as there has not been a "change of
control" within the meaning of clause (v), the Board of Directors may adopt by a
70% majority of the "continuing directors" a resolution to the effect that an
event described in clauses (i) or (ii) shall not constitute a "change of
control."