Option Agreement - Global Discount Travel Services LLC and Russell Glass
OPTION AGREEMENT
Amended and Restated Option Agreement dated as of May 26, 1998, between
Russell Glass Exhibit 10.12 ("Optionee") and Global Discount Travel Services LLC
(the "Company").
WHEREAS, Optionee executed an option agreement effective May 26, 1998
(the "Original Agreement"), setting forth the terms upon which Optionee may
acquire equity interests in the Company (the "Original Agreement"); and
WHEREAS, the parties hereto wish to amend and restate the Original
Agreement to clarify certain terms thereof.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Grant of Option.
(a) Optionee is granted an option to purchase a membership
interest in the Company entitling Optionee to a four tenths of one percent
(0.4%) interest in the profits and distributions of the Company for a total cash
price of $800,000. Such option shall vest on May 26, 2004, provided that
Optionee remains employed with the Company through such date, and such option
may be exercised by Optionee for a period of ninety (90) days following such
vesting date. In the event of Optionee's termination of employment for any
reason (including, without limitation, involuntary termination by the Company,
resignation by the Optionee or death) prior to an IPO (as defined below) and
prior to May 26, 2004, such option to purchase a membership interest in the
Company shall terminate and be of no further effect.
(b) If the Company (or an entity which owns substantially all
of the assets of or membership interests in the Company) completes an initial
public offering (the "IPO") of common stock ("Common Stock") during Optionee's
employment with the Company, any outstanding option to purchase a membership
interest in the Company shall be converted into and be deemed to constitute a
non-qualified stock option to purchase 157,733 shares of Common Stock for a cash
exercise price of $5.0719 per share (with the number of shares and exercise
price being subject to equitable adjustment in the event of a stock split, stock
dividend, recapitalization or other similar change in capitalization affecting
the Common Stock). Optionee and the Company acknowledge and agree that the
foregoing number of shares of Common Stock subject to such option and exercise
price are calculated based upon an assumed capitalization of 39,433,263 shares
of Common Stock outstanding upon completion of the IPO, which includes shares
issuable upon exercise of the underwriters' over-allotment option and options
issued to employees as of the IPO date.
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(c) Stock options to purchase shares of Common Stock shall
vest in equal semi-annual installments over a period of four years, with the
first installment vesting on the six-month anniversary of the IPO date. Vested
stock options may be exercised starting on the six-month anniversary of the IPO
and ending five years from the date of the IPO.
(d) If, following an IPO, the Company (i) ceases operation,
(ii) consummates a "going private" transaction, (iii) is sold to a private
company or (iv) is sold to a public company, any unvested options to purchase
Common Stock shall become vested immediately prior to the effective date of any
such transaction. Upon any such transaction, Optionee shall receive for all
outstanding options to purchase Common Stock such consideration per share as
shareholders of Common Stock are entitled to receive pursuant to such
transaction unless, in the case of a sale to a public company, provisions are
made in the transaction for the assumption of the outstanding options or the
substitution of the outstanding options for options of a publicly-traded
successor corporation or a publicly-traded parent thereof (with appropriate
adjustments as to the number and kind of shares and exercise price as to prevent
dilution or enlargement of rights).
(e) Stock options to purchase shares of Common Stock may be
exercised through the use of a broker-dealer sale and remittance procedure
pursuant to which Optionee (i) shall provide written instructions to a
Company-designated brokerage firm to effect the immediate sale of some or all of
the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares and (ii) shall provide written
directives to the Company to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale transaction.
2. Termination.
(a) In the event that Optionee's employment is terminated
other than (i) by reason of Optionee's resignation or death or (ii) by the
Company for "Cause", (A) Optionee's unvested stock options to purchase Common
Stock shall become immediately vested, and (B) all vested stock options to
purchase Common Stock shall be exercisable for 12 months after termination of
employment. For purposes of this Agreement, "Cause" is defined as Optionee's (1)
willful misconduct, (2) gross neglect of Optionee's obligation to the business
of the Company, (3) Optionee's conviction of a crime involving moral turpitude
or dishonesty or (4) Optionee's disability that prevents him from performing the
essential functions of Optionee's job for in excess of six (6) months.
(b) In the event that Optionee dies, (i) Optionee's vested
stock options to purchase Common Stock shall be exercisable for 12 months after
death and (ii) all unvested stock options to purchase Common Stock shall expire
on the date of death.
(c) In the event that Optionee resigns, (i) at any time before
the first anniversary
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of the IPO, Optionee agrees to forfeit all vested stock options and unvested
stock options to purchase Common Stock and (ii) at any time after the first
anniversary of the IPO, (A) Optionee's unvested stock options to purchase Common
Stock shall expire on the date Optionee notifies the Company of Optionee's
resignation and (B) Optionee's vested stock options to purchase Common Stock
shall expire three months after the date Optionee notifies the Company of
Optionee's resignation.
(d) In the event that Optionee is terminated by the Company
for Cause, (i) at any time before the first anniversary of the IPO, Optionee
agrees to forfeit all vested stock options and unvested stock options to
purchase Common Stock and (ii) at any time after the first anniversary of the
IPO, (A) Optionee's unvested stock options to purchase Common Stock shall expire
on the date of termination and (B) Optionee's vested stock options to purchase
Common Stock shall expire three months after the date of termination.
3. Miscellaneous.
(a) This agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all
previous written, and all previous or contemporaneous oral, negotiations,
understandings, arrangements, and agreements.
(b) The headings in this Agreement are for convenience of
reference only and are not part of the substance of this Agreement.
(c) This Agreement and all of the provisions hereof shall
inure to the benefit of and be binding upon the legal representatives, heirs,
distributees, successors and assigns of the parties hereto; provided, however,
that Optionee may not delegate any of Optionee's duties hereunder, and may not
assign any of Optionee's rights hereunder, without the prior written consent of
the Company.
(d) This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
(e) If any section, paragraph, term or provision of this
Agreement shall be held or determined to be unenforceable, the balance of this
Agreement shall nevertheless continue in full force and effect unaffected by
such holding or determination. In addition, in any such event, the parties agree
that it is their intention and agreement that any such section, paragraph, term
or provision which is held or determined to be unenforceable, as written, shall
nonetheless be in force and binding to the fullest extent permitted by law as
though such section, paragraph, term or provision had been written in such a
manner and to such an extent as to be enforceable under the circumstances.
(f) This Agreement will be interpreted and the rights of the
parties determined in accordance with the laws of the United States applicable
thereto and the internal laws of the State
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of New York applicable to an agreement executed, delivered and performed therein
without giving effect to the choice-of-law rules thereof or any other principle
that could require the application of the substantive law of any other
jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GLOBAL DISCOUNT TRAVEL SERVICES LLC
By: Global Partner, Inc., Manager
By: ______________________________
Gail Golden
Vice President
______________________________
Russell Glass
SS# _______________
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