ADVANCED COMMUNICATIONS GROUP, INC.
STOCK OPTION AND PUT AGREEMENT
This Stock Option and Put Agreement ("Option Agreement"), dated as of
February 8, 1998, is by and between Advanced Communications Group, Inc., a
Delaware corporation (the "Company"), and ▇▇▇▇ ▇▇▇▇▇ ("Optionee"), who agree as
follows:
Section 1. Purchase Agreement; Noncompetition Covenant. This option is
granted pursuant to Schedule 6.9 of the Restated Asset Purchase Agreement dated
October 6, 1997, among the Company, Advanced Communications Corp., Switchboard
of Oklahoma City, Inc., ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇, as attorney-in-fact for ▇▇▇▇▇ ▇▇▇▇▇▇, a minor, as amended (the
"Purchase Agreement"). Notwithstanding any provision in this Option Agreement
to the contrary, this Option Agreement shall terminate in the event that the
Purchase Agreement is rescinded or in the event that the Company determines in
good faith that the Optionee has violated any of the noncompetition covenants
set forth in (a) Section 12 of the Purchase Agreement, (b) the Employment
Agreement of even date herewith between, or (c) any employment or consulting
agreement which the parties may enter into in the future.
Section 2. Option and Put. Subject to the terms and conditions
contained herein, the Company hereby grants to Optionee the right and option
("Option") to purchase from the Company Thirty-Eight Thousand Six Hundred
Thirty Five (38,635) shares of the Company's common stock, $.0001 par value
("Stock"), at a price per share equal to 331/3% of the price per share at which
the Stock is offered to the public in the Company's initial underwritten public
offering (the "Exercise Price"). Subject to the terms and conditions contained
herein, the Company grants to Optionee the right (the "Put") to require the
Company to purchase all of Optionee's right, title and interest in this Option
Agreement and the rights represented hereby for One Hundred Fifty-Five Thousand
Dollars ($155,000) (the "Put Price").
Section 3. Option and Put Period. The Option is granted on the date
first referenced above (the "Date of Grant"). The Option herein granted may be
exercised by Optionee, subject to the limitation in Section 1 above, only
between March 31, 2001 and the tenth anniversary of the Date of Grant (the
"Option Period"). The put may only be exercised during the month of April, 2001
(the "Put Period"). The Option shall expire on February 18, 2008 ("Option
Expiration Date"), and the Put shall expire May 1, 2001.
Section 4. Procedure for Exercise of Option. The Option herein granted
may be exercised during the Option Period by the delivery by Optionee of
written notice to the Secretary of the Company setting forth the number of
shares of Stock with respect to which the Option is being exercised. The notice
shall be accompanied by, at the election of the Optionee, cash, cashier's
check,
bank draft, or postal or express money order payable to the order of the
Company equal in value to the aggregate Exercise Price. Notice may also be
delivered by telecopy provided that the Exercise Price of such shares is
received by the Company via wire transfer on the same day the telecopy
transmission is received by the Company. The notice shall specify the address
to which the certificates for such shares are to be mailed. An option to
purchase shares of Stock in accordance with this Plan, shall be deemed to have
been exercised immediately prior to the close of business on the date (i)
written notice of such exercise and (ii) payment in full of the Exercise Price
for the number of share for which Options are being exercised are both received
by the Company, and Optionee shall be treated for all purposes as the record
holder of such shares of Stock as of such date.
As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to Optionee certificates for the number of
shares with respect to which such Option has been so exercised, issued in
Optionee's name; provided, however, that such delivery shall be deemed effected
for all purposes when a stock transfer agent of the Company shall have
deposited such certificates in the United States mail, addressed to Optionee at
the address specified pursuant to this Section 4.
Section 5. Procedure for Exercise of Put. Optionee may exercise the
Put during the Put Period by delivering to the Secretary of the Company (a) a
written notice, which specifically references this Option Agreement and states
that the Put is exercised and that Optionee thereby conveys to the Company this
Option Agreement and all rights represented thereby, free and clear of all
security interests, liens, claims, charges and encumbrances that contains
Optionee's agreement to indemnify and hold the Company harmless from and
against all losses, claims, liabilities, damages, and expenses, arising from
the claims and demands of any person or entity having or claiming any security
interest, lien, or encumbrance in the Option Agreement and the rights it
represents and (b) the original copy of the Option Agreement must be reasonably
satisfactory in form and substance to the Company's counsel. The Put Price
shall be paid to Optionee by cashier's check or wire transfer, as the Company
may elect, within 30 days after the valid exercise of the Put pursuant to the
provisions above.
Section 6. Transferability. Neither this Option nor the Put may be
transferred by Optionee. The shares of Stock issuable upon exercise of the
Option will not be registered under the Securities Act of 1933, as amended, or
any state securities laws (collectively, the "Acts") and may not be sold,
pledged or otherwise transferred except pursuant to an effective registration
statement pursuant to the Acts or in reliance on an opinion, reasonably
satisfactory in form and substance to the Company and its counsel, that such
sale, pledge or other transfer is being made in reliance on an exemption from
the Acts. Any purported sale, pledge or other transfer in violation of this
Section shall be void.
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Section 7. No Rights as Shareholder. Optionee shall have no rights as
a shareholder with respect to any shares of Stock covered by this Option
Agreement until the Option is exercised as provided in Section 4 of this Option
Agreement.
Section 8. Extraordinary Corporate Transactions. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of debt or equity securities ahead of or affecting Stock or the
rights thereof, or the dissolution or liquidation of the Company, or any sale,
lease, exchange or other disposition of all or any part of its assets or
business, or any other corporate act or proceedings, whether of a similar
character or otherwise.
Section 9. Anti-dilutions Adjustments. The shares of Stock purchasable
on exercise of the Option evidenced by this Option Agreement are shares of
Stock as constituted as of the Date of Grant. The number and kind of securities
purchasable on the exercise of the Option evidenced by this Option Agreement,
and the Exercise Price, shall be subject to adjustment from time to time upon
the happening of certain events, as follows:
a. Mergers, Consolidations and Reclassifications. In case of
any reclassification or change of outstanding securities issuable upon exercise
of the Options evidenced by this Option Agreement (other than a change in par
value, or from par value to no par value, or from no par value to par value or
as a result of a subdivision or combination to which paragraph (b) of this
Section applies), or in case of any consolidation or merger of the Company with
or into another corporation (other than a merger with another corporation in
which the Company is the surviving corporation and which does not result in any
reclassification or change [other than a change in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision or combination to which paragraph (b) of this Section applies] in
the securities issuable upon exercise of this Option), the holder of the
Options evidenced by this Option Agreement shall have, and the Company, or such
successor corporation or other entity, shall covenant in the constituent
documents effecting any of the foregoing transactions that such holder does
have, the right to obtain upon the exercise of the Options evidenced by this
Option Agreement, in lieu of each share of Common Stock, theretofore issuable
upon exercise of a Option, the kind and amount of shares of stock, other
securities, money or other property receivable upon such reclassification,
change, consolidation or merger by a holder of one share of Common Stock had
the Options evidenced by this Option Agreement been exercised immediately prior
to such reclassification, change, consolidation or merger. The constituent
documents effecting any such reclassification, change, consolidation or merger
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Section. The provisions of
paragraph (a) of this Section shall similarly apply to successive
reclassifications, changes, consolidations or mergers.
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b. Subdivisions and Combinations. If the Company, at any time
after the Date of Grant, shall subdivide its shares of Common Stock into a
greater number of shares (or pay to any holders of securities of the Company a
dividend payable in, or make any other distribution of, Stock), the Exercise
Price in effect immediately prior to such subdivision shall be proportionately
reduced, and the number of shares of Stock purchasable upon exercise of the
Options evidenced by this Option Agreement shall be proportionately increased,
as at the effective date of such subdivision, dividend or distribution or if
the Company shall take a record of holders of its Stock for such purpose, as at
such record date, whichever is earlier. If the Company at any time shall
combine its shares of Stock into a smaller number of shares, the Exercise Price
in effect immediately prior to such combination shall be proportionately
increased, and the number of shares of Stock purchasable upon exercise of the
Options evidenced by this Option Agreement shall be proportionately reduced, as
at the effective date of such combination, or if the Company shall take a
record of holders of its Stock for purposes of such combination, as at such
record date, whichever is earlier.
c. Calculation of Exercise Price. The Exercise Price in effect
from time to time shall be calculated to four decimal places and rounded to the
nearest thousandth.
Section 10. Notice of Adjustment to Exercise Price. Whenever the
Exercise Price is required to be adjusted as provided in Section 9, the Company
shall forthwith compute the adjusted Exercise Price and shall prepare and mail
to the holder hereof a certificate setting forth such adjusted Exercise Price
and showing in reasonable detail the facts upon which such adjustment is based.
Section 11. Notices to Warrant Holder. In the event that, after the
Date of Grant:
a. of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is required, or
of the conveyance or sale of all or substantially all of the assets of the
Company, or of any reclassification or change of the Stock or other securities
issuable upon exercise of the Options (other than a change in par value, or
from par value to no par value, or from no par value to par value or as a
result of a subdivision or combination), or a tender offer or exchange offer
for shares of Stock (or other securities issuable upon the exercise of the
Options); or
b. the Company shall declare any dividend (or any other
distribution) on the Stock, other than regular cash dividends; or
c. the Company shall authorize the granting to the holders of
Stock of rights or warrants to subscribe for or purchase any shares of any
class or series of capital stock; or
d. of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
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then the Company shall cause to be sent to the holder hereof, at least
5 days prior to the applicable record date hereinafter specified, or promptly
in the case of events for which there is no record date, a written notice
stating (x) the date for the determination of the holders of record of shares
of Stock (or other securities issuable upon the exercise of the Options)
entitled to receive any such dividends or other distribution, (y) the initial
expiration date set forth in any tender offer or exchange offer for shares of
Stock (or other securities issuable upon the exercise of the Options), or (z)
the date on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of record of
shares of Stock (or other securities issuable upon the exercise of the Options)
shall be entitled to exchange such shares for securities or other property, if
any, deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. Failure to give such notice
or any defect therein shall not affect the legality or validity of any
distribution, right, option, warrant, issuance, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
Section 12. Covenants of the Company. The Company covenants and agrees
that:
a. Prior to thirty (30) days after the Date of Grant and until
the Option Expiration Date, the Company shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Stock (and other securities), for the purpose of enabling it to
satisfy any obligation to issue shares of Stock (and other securities) upon the
exercise of the Options evidenced by this Option Certificate, the number of
shares of Stock (and other securities) issuable upon the exercise of such
Options.
b. All Stock (and other securities) which may be issued upon
exercise of the Options evidenced by this Option Agreement shall upon issuance
be validly issued, fully paid, non-assessable and free from all taxes, liens
and charges with respect to the issuance thereof.
Section 13. Compliance With Securities Laws. Prior to the acquisition
of any shares pursuant to the exercise of the Option herein granted, Optionee
will enter into such written representations, warranties and agreements as the
Company may reasonably request in order to comply with applicable securities
laws or with this Option Agreement.
Section 14. Compliance With Laws. Notwithstanding any of the other
provisions hereof, Optionee agrees that he will not exercise the Option granted
hereby, and that the Company will not be obligated to issue any shares pursuant
to this Option Agreement, if the exercise of the Option or the issuance of such
shares of Stock would constitute a violation by Optionee or by the Company of
any provision of any law or regulation of any governmental authority.
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Section 15. Withholding of Tax. To the extent that the exercise of
this Option results in compensation income to Optionee for federal or state
income tax purposes, Optionee shall pay to the Company at the time of such
exercise or disposition such amount of money as the Company may require to meet
its obligation under applicable tax laws or regulations; and, if Optionee fails
to do so, the Company is authorized to withhold from any cash remuneration then
or thereafter payable to Optionee any tax required to be withheld by reason of
such resulting compensation income or the Company may otherwise refuse to issue
any shares otherwise required to be issued pursuant to the terms hereof.
Section 16. Legends on Certificate. The certificates representing the
shares of Stock purchased by exercise of the Option will be stamped or
otherwise imprinted with legends in such form as the Company or its counsel may
require with respect to any applicable restrictions on sale or transfer and the
stock transfer records of the Company will reflect stop-transfer instructions
with respect to such shares.
Section 17. Notices. Every notice hereunder shall be in writing and
shall be given by registered or certified mail. All notices of the exercise of
any Option hereunder shall be directed to Advanced Communications Group, Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Secretary. Any notice given by the Company to Optionee directed to Optionee at
the address on file with the Company. The Company shall be under no obligation
whatsoever to advise Optionee of the existence, maturity or termination of any
of Optionee's rights hereunder and Optionee shall be deemed to have
familiarized himself or herself with all matters contained herein.
Section 18. Binding Effect. This Option Agreement shall be binding
upon and inure to the benefit of any successors to the Company and all persons
lawfully claiming under Optionee as provided herein.
Section 19. Governing Law. This Option Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, this Nonqualified Stock Option and Put Agreement
has been executed as of the 18th day of February, 1998.
ADVANCED COMMUNICATIONS GROUP, INC.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
OPTIONEE
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