EXHIBIT (d)(27)
THE EDISON PROJECT INC.
Nonstatutory Stock Option Agreement
As of June 30, 1999 (the "Modification Date"), we are hereby amending
and restating the option originally granted on [____________] (the "Grant
Date"), to provide the option with terms and conditions similar to those
provided in options granted under the 1999 Key Stock Incentive Plan of The
Edison Project Inc., a Delaware corporation (the "Company"). The amended and
restated option is as follows:
1. Grant of Option.
This agreement evidences the issuance by the Company on the Grant Date
to [____________] (the "Participant") of an option to purchase, in whole or in
part, a total of [_________] shares (the "Shares") of Series A Common Stock,
$.01 par value per share, of the Company ("Common Stock") at an exercise price
of [________] per Share, as amended and restated on June 30, 1999. Unless
earlier terminated pursuant to the terms herein, this amended and restated
option (the "Option") shall terminate on the date (the "Final Exercise Date") 10
years from the Grant Date.
It is intended that this Option shall not be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder (the "Code"). Except as otherwise
indicated by the context, the term "Participant," as used in this agreement,
shall be deemed to include any person who acquires the right to exercise the
Option validly under its terms.
2. Vesting Schedule.
The Option shall vest as follows:
(a) Of the total Shares in the Option, [________] are vested as of
the Modification Date.
(b) The remaining [________] Shares in the Option shall vest as
follows: (i) [_______] Shares shall vest at the end of each
month beginning July, 1999 and ending [___________] and (ii)
[______] Shares shall vest on the last day of [___________];
provided, however, that if Participant is no longer employed
by the Company, the balance of the Option shall cease vesting
as of the effective date of Participant's termination of
employment.
(c) The right of exercise shall be cumulative so that to the
extent the Option is not exercised in any period to the
maximum extent permissible it shall continue to be
exercisable, in whole or in part, with respect to all Shares
for which it is vested until the earlier of the Final Exercise
Date or the termination of this Option under Section 3 hereof.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this Option shall
be in writing, signed by the Participant, and received by the
Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in this
Section 3. The Participant may purchase less than the number
of shares covered hereby, provided that no partial exercise of
this Option may be for any fractional share or for fewer than
ten whole shares.
(b) Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this Option may not be
exercised unless the Participant, at the time he or she
exercises this Option, is, and has been at all times since the
Grant Date, an employee, officer or director of, or consultant
or advisor to, the Company or any parent or subsidiary of the
Company as defined in Section 424(e) or (f) of the Code (an
"Eligible Participant").
(c) Termination of Relationship with the Company. If the
Participant ceases to be an Eligible Participant for any
reason, then, except as provided in paragraphs (d) and (e)
below, the right to exercise this Option shall terminate two
years after such cessation (but in no event after the Final
Exercise Date), provided that this Option shall be exercisable
only to the extent that the Participant was entitled to
exercise this Option on the date of such cessation.
Notwithstanding the foregoing, if the Participant, prior to
the Final Exercise Date, violates the non-competition or
confidentiality provisions of this agreement, any employment
contract, confidentiality and nondisclosure agreement or other
agreement between the Participant and the Company, the right
to exercise this Option shall terminate immediately upon
written notice to the Participant from the Company describing
such violation.
(d) Exercise Period Upon Death or Disability. If the Participant
dies or becomes disabled (within the meaning of Section
22(e)(3) of the Code) prior to the Final Exercise Date while
he or she is an Eligible Participant and the Company has not
terminated such relationship for "cause" as specified in
paragraph (e) below, this Option shall be exercisable, within
the period of one year following the date of death or
disability of the Participant, by the Participant, or the
beneficiary designated, in a manner determined by the Board,
by the Participant to receive amounts due or exercise rights
of the Participant in the event of the Participant's death
(the "Designated Beneficiary"); provided that this Option
shall be exercisable only to the extent that this Option was
exercisable by the Participant on the date of his or her death
or disability, and further provided that this Option shall not
be exercisable after the Final Exercise Date. In the absence
of an effective designation by the Participant, the Designated
Beneficiary shall mean the Participant's estate.
(e) Discharge for Cause. If the Participant, prior to the Final
Exercise Date, is discharged by the Company for "cause" (as
defined below), the right to exercise this Option shall
terminate immediately upon the effective date of such
discharge. "Cause" shall mean willful misconduct by the
Participant or willful failure by the Participant to perform
his or her responsibilities to the Company (including, without
limitation, breach by the Participant of Section 6 or Section
7 of this agreement or any provision of any employment,
consulting, advisory, non-
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disclosure, non-competition or other similar agreement between
the Participant and the Company), as determined by the
Company, which determination shall be conclusive. The
Participant shall be considered to have been discharged for
"Cause" if the Company determines, within 30 days after the
Participant's resignation, that discharge for cause was
warranted.
(f) Payment Upon Exercise. Common Stock purchased upon the
exercise of an Option granted herein shall be paid for as
follows:
i. in cash or by check, payable to the order of the
Company;
ii. by delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver
promptly to the Company sufficient funds to pay the
exercise price;
iii. by delivery by the Participant to the Company of a
copy of irrevocable and unconditional instructions to
a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the
exercise price;
iv. when the Common Stock is registered under the
Securities Exchange Act of 1934 as amended (the
"Exchange Act"), by delivery of shares of Common
Stock owned by the Participant valued at their fair
market value as determined by (or in a manner
approved by) the Board in good faith ("Fair Market
Value"), provided
(A) such method of payment is then permitted
under applicable law and
(B) such Common Stock was owned by the
Participant at least six months prior to
such delivery;
v. by delivery of a promissory note of the Participant
to the Company on terms determined by the Board;
vi. by payment of such other lawful consideration as the
Board may determine, in its sole discretion; or
vii. by any combination of the above permitted forms of
payment.
4. Right of First Refusal.
(a) If the Participant proposes to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or
otherwise (collectively, "transfer") any Shares acquired upon
exercise of this Option, then the Participant shall first give
written notice of the proposed transfer (the "Transfer
Notice") to the Company. The Transfer Notice shall name the
proposed transferee and state the number of such Shares the
Participant proposes to transfer (the "Offered Shares"), the
price per share and all other material terms and conditions of
the transfer.
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(b) For 30 days following its receipt of such Transfer Notice, the
Company shall have the option to purchase all (but not less
than all) of the Offered Shares at the price and upon the
terms set forth in the Transfer Notice. In the event the
Company elects to purchase all of the Offered Shares, it shall
give written notice of such election to the Participant within
such 30-day period. Within 10 days after his or her receipt of
such notice, the Participant shall tender to the Company at
its principal offices the certificate or certificates
representing the Offered Shares, duly endorsed in blank by the
Participant or with duly endorsed stock powers attached
thereto, all in a form suitable for transfer of the Offered
Shares to the Company. Promptly following receipt of such
certificate or certificates, the Company shall deliver or mail
to the Participant a check in payment of the purchase price
for the Offered Shares; provided that if the terms of payment
set forth in the Transfer Notice were other than cash against
delivery, the Company may pay for the Offered Shares on the
same terms and conditions as were set forth in the Transfer
Notice; and provided further that any delay in making such
payment shall not invalidate the Company's exercise of its
Option to purchase the Offered Shares.
(c) If the Company does not elect to acquire all of the Offered
Shares, the Participant may, within the 30-day period
following the expiration of the option granted to the Company
under subsection (b) above, transfer the Offered Shares to the
proposed transferee, provided that such transfer shall not be
on terms and conditions more favorable to the transferee than
those contained in the Transfer Notice. Notwithstanding any of
the above, all Offered Shares transferred pursuant to this
Section 4 shall remain subject to the right of first refusal
set forth in this Section 4 and such transferee shall, as a
condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by
all of the terms and conditions of this Section 4.
(d) After the time at which the Offered Shares are required to be
delivered to the Company for transfer to the Company pursuant
to subsection (b) above, the Company shall not pay any
dividend to the Participant on account of such Offered Shares
or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Offered Shares,
but shall, in so far as permitted by law, treat the Company as
the owner of such Offered Shares.
(e) The following transactions shall be exempt from the provisions
of this Section 4:
i. any transfer of Shares to or for the benefit of any
spouse, child or grandchild of the Participant, or to
a trust for their benefit;
ii. any transfer pursuant to an effective registration
statement filed by the Company under the Securities
Act of 1933, as amended (the "Securities Act"); and
iii. the sale of all or substantially all of the shares of
capital stock of the Company (including pursuant to a
merger or consolidation);
provided, however, that in the case of a transfer pursuant to
clause (i) above, such Shares shall remain subject to the
right of first refusal set forth in this Section 4 and such
transferee shall, as a condition to such transfer, deliver to
the Company
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a written instrument confirming that such transferee shall be
bound by all of the terms and conditions of this Section 4.
(f) The Company may assign its rights to purchase Offered Shares
in any particular transaction under this Section 4 to one or
more persons or entities.
(g) The provisions of this Section 4 shall terminate upon the
earlier of the following events:
i. the closing of the sale of shares of Common Stock in
an underwritten public offering pursuant to an
effective registration statement filed by the Company
under the Securities Act; or
ii. the sale of all or substantially all of the capital
stock, assets or business of the Company, by merger,
consolidation, sale of assets or otherwise (other
than a merger or consolidation in which all or
substantially all of the individuals and entities who
were beneficial owners of the Common Stock
immediately prior to such transaction beneficially
own, directly or indirectly, more than 75% of the
outstanding securities entitled to vote generally in
the election of directors of the resulting, surviving
or acquiring corporation in such transaction).
(h) The Company shall not be required
i. to transfer on its books any of the Shares which
shall have been sold or transferred in violation of
any of the provisions set forth in this Section 4, or
ii. to treat as owner of such Shares or to pay dividends
to any transferee to whom any such Shares shall have
been so sold or transferred.
5. Adjustments for Changes in Common Stock and Certain Other Events.
(a) Changes in Capitalization. In the event of any stock split,
reverse stock split, stock dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any
distribution to holders of Common Stock other than a normal
cash dividend, the number and class of securities and exercise
price per share subject to this Option shall be appropriately
adjusted by the Company to the extent the Board shall
determine, in good faith, that such an adjustment is necessary
and appropriate. If this Section 5(a) applies and Section 5(c)
also applies to any event, Section 5(c) shall be applicable to
such event, and this Section 5(a) shall not be applicable.
(b) Liquidation or Dissolution. In the event of a proposed
liquidation or dissolution of the Company, the Board shall
upon written notice to the Participant provide that this
Option, to the extent then unexercised, will
i. become exercisable in full as of a specified time at
least 10 business days prior to the effective date of
such liquidation or dissolution, and
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ii. terminate effective upon such liquidation or
dissolution, except to the extent exercised before
such effective date.
(c) Acquisition Events.
i. Definition. An "Acquisition Event" shall mean:
(A) any merger or consolidation of the Company
with or into another entity as a result of
which the Common Stock is converted into or
exchanged for the right to receive cash,
securities or other property, or
(B) any exchange of shares of the Company for
cash, securities or other property pursuant
to a statutory share exchange transaction.
ii. Consequences of an Acquisition Event. Upon the
occurrence of an Acquisition Event, or the execution
by the Company of any agreement with respect to an
Acquisition Event, the Board shall provide that this
Option shall be assumed, or an equivalent option
shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof). For purposes
hereof, this Option shall be considered to be assumed
if, following consummation of the Acquisition Event,
the Option confers the right to purchase, for each
share of Common Stock subject to the Option
immediately prior to the consummation of the
Acquisition Event, the consideration (whether cash,
securities or other property) received as a result of
the Acquisition Event by holders of Common Stock for
each share of Common Stock held immediately prior to
the consummation of the Acquisition Event (and if
holders were offered a choice of consideration, the
type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock);
provided, however, that if the consideration received
as a result of the Acquisition Event is not solely
common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company
may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be
received upon the exercise of this Option to consist
solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in
fair market value to the per share consideration
received by holders of outstanding shares of Common
Stock as a result of the Acquisition Event.
Notwithstanding the foregoing, if the acquiring or
succeeding corporation (or an affiliate thereof) does
not agree to assume, or substitute for this Option,
then the Board shall, upon written notice to the
Participant, provide that all this Option, to the
extent then unexercised, will become exercisable in
full as of a specified time prior to the Acquisition
Event and will terminate immediately prior to the
consummation of such Acquisition Event, except to the
extent exercised by the Participant before the
consummation of such Acquisition Event; provided,
however, that in the event of an Acquisition Event
under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for
each share of Common Stock
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surrendered pursuant to such Acquisition Event (the
"Acquisition Price"), then the Board may instead
provide that this Option shall terminate upon
consummation of such Acquisition Event and that the
Participant shall receive, in exchange therefor, a
cash payment equal to the amount (if any) by which
(A) the Acquisition Price multiplied by the
number of shares of Common Stock subject to
this Option (whether or not then
exercisable) exceeds
(B) the aggregate exercise price of such this
Option.
6. Confidentiality.
To the extent Participant acquires non-public information with respect
to the Company, including without limitation, technical, financial, competitive,
marketing, sales, and business information, documents and tangible items
(collectively, the "Information"), Participant shall keep such Information
strictly confidential and not at any time hereafter disclose or divulge such
Information to any person, firm or corporation or otherwise use such Information
for any such purpose (other than for the purposes of the Company) without the
prior written consent of the Company.
7. Non-Competition and Non-Solicitation.
(a) Participant agrees that until the latter of (x) one year after
the expiration of the Option, or (y) such time as Participant
ceases to own the Shares, Participant shall not at any time
engage in or participate as an executive officer, employee,
director, agent, consultant, representative, stockholder or
partner, or have any financial interest, in any business which
competes with the business of the Company, or any subsidiary
of the Company (collectively "Edison"). For the purposes
hereof, a competing business shall mean any business which
directly competes with any of the businesses of Edison, as
such businesses shall exist during Participant's ownership of
the Option, or the Shares, for example, the business of
managing public and/or private schools for profit, but a
competing business shall not include the traditional
non-profit education business, so long as such activities do
not violate the confidentiality provisions of this agreement.
Ownership by Participant of publicly traded stock of any
corporation conducting such competing business, as defined
herein, shall not be deemed a violation of the preceding two
sentences, provided that the Participant does not own more
than three percent (3%) of the stock of any such corporation.
(b) Participant agrees that until the latter of (x) one year after
the expiration of the Option, or (y) such time as Participant
ceases to own the Shares, Participant shall not, directly or
indirectly, solicit the employment or other services of any
executive employee of the Company. For the purposes of the
foregoing, any executive employee who within twelve months of
terminating his or her employment with the Company becomes
employed by any person or entity in which Participant is an
officer or director or owner of more than an aggregate of
three percent (3%) of the outstanding stock or equity therein
shall be deemed, prima facie, to have been so solicited.
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8. Agreement in Connection with Public Offering.
The Participant agrees, in connection with the initial underwritten
public offering of the Company's securities pursuant to a registration statement
under the Securities Act:
i. Not to sell, make a short sale of, grant any options
for the purchase of, or otherwise dispose of any
shares of Common Stock held by the Participant (other
than those shares included in the offering) without
the prior written consent of the Company or the
underwriters managing such initial underwritten
public offering of the Company's securities for a
period of 180 days from the effective date of such
registration statement; and
ii. To execute any agreement reflecting clause (i) above
as may be requested by the Company or the managing
underwriters at the time of such offering.
9. Miscellaneous.
(a) No Right To Employment or Other Status. The grant of this
Option shall not be construed as giving the Participant the
right to continued employment or any other relationship with
the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with
the Participant free from any liability or claim under this
agreement, except as expressly provided in this agreement.
(b) No Rights As Stockholder. Subject to the provisions of this
agreement, no Participant or Designated Beneficiary shall have
any rights as a stockholder with respect to any Shares to be
distributed with respect to this Option until becoming the
record holder of such Shares. Notwithstanding the foregoing,
in the event the Company effects a split of the Common Stock
by means of a stock dividend and the exercise price of and the
number of Shares subject to this Option are adjusted as of the
date of the distribution of the dividend (rather than as of
the record date for such dividend), then the Participant, if
exercising this Option between the record date and the
distribution date for such stock dividend, shall be entitled
to receive, on the distribution date, the stock dividend with
respect to the shares of Common Stock acquired upon such
Option exercise, notwithstanding the fact that such shares
were not outstanding as of the close of business on the record
date for such stock dividend.
(c) Transferability of this Option. Except as the Board may from
time to time otherwise determine or provide, this Option shall
not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, either voluntarily or by
operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall
be exercisable only by the Participant. References to the
Participant, to the extent relevant in the context, shall
include references to authorized transferees.
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(d) Amendment of Agreement. Except as otherwise provided herein,
this agreement may be amended only by a writing signed by the
Company and the Participant or the Designated Beneficiary.
(e) Withholding. The Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes
required by law to be withheld in connection with this Option
no later than the date of the event creating the tax
liability. When the Common Stock is registered under the
Exchange Act, the Participant may, to the extent then
permitted under applicable law, satisfy such tax obligations
in whole or in part by delivery of shares of Common Stock,
including shares retained from this Option, valued at their
Fair Market Value. The Company may, to the extent permitted by
law, deduct any such tax obligations from any payment of any
kind otherwise due to the Participant.
(f) Conditions on Delivery of Shares. The Company will not be
obligated to deliver any Shares pursuant to this Option until
(i) all conditions of this Option have been met the
satisfaction of the Company,
(ii) in the opinion of the Company's counsel, all other
legal matters in connection with the issuance and
delivery of such Shares have been satisfied,
including any applicable securities laws and any
applicable stock exchange or stock market rules and
regulations, and
(iii) the Participant has executed and delivered to the
Company such representations or agreements as the
Company may consider appropriate to satisfy the
requirements of any applicable laws, rules or
regulations.
(g) Governing Law. The provisions of this agreement shall be
governed by and interpreted in accordance with the laws of the
State of New York, without regard to any applicable conflicts
of law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
agreement or caused this agreement to be executed and delivered by their
authorized representatives as of the date first set forth above.
PARTICIPANT THE EDISON PROJECT INC.
________________________ By: _________________________
Name: H. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
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