Exhibit 10.6

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

pursuant to the

 

ASCENDANT SOLUTIONS 1999 LONG-TERM INCENTIVE PLAN

 

This NONQUALIFIED STOCK OPTION AGREEMENT (the “Agreement”) is made and entered
into by and between ASCENDANT SOLUTIONS, INC., a Delaware corporation (the
“Company”), and David E. Bowe (the “Optionee”), effective as of March 14, 2002
(the “Date of Grant”).

 

1. Grant of Option. The Company hereby grants to the Optionee and the Optionee
hereby accepts, subject to the terms and conditions hereof, a nonqualified stock
option (the “Option”) to purchase up to 600,000 shares of Company’s Common Stock
(“Option Shares”) at the Exercise Price per share set forth in Section 4 below.

 

2. Governing Plan. This Option is granted pursuant to the Company’s 1999
Long-Term Incentive Plan (the “Plan”), a copy of which is attached to the
Prospectus supplied by the Company and relating to the Plan. Capitalized terms
used but not otherwise defined herein have the meanings as set forth in the
Plan. The Optionee agrees to be bound by the terms and conditions of the Plan,
which are incorporated herein by reference and which control in case of any
conflict with this Agreement.

 

3. Expiration of the Option. The Option (to the extent not earlier exercised or
terminated due to cessation of the Optionee’s employment or otherwise in
accordance with the Plan) will expire at the end of business on March 14, 2012,
Ten (10) years from the Date of Grant of the Option. The Option may terminate
sooner under certain circumstances, including, without limitation, termination
of the Optionee’s employment, death, retirement, disability and termination for
other reasons, as set forth in Section 5.13 of the Plan. The Option may not be
exercised after its expiration or termination.

 

4. Exercise Price. The “Exercise Price” of the Option is $0.24 per share of
Common Stock. The Exercise Price is subject to adjustment as set forth in
Section 6.2 of the Plan.

 

5. Vesting. Subject to the provisions of the Plan providing for the cessation or
acceleration of vesting, the termination or expiration of the Option and the
other provisions thereof, the Option shall vest and become exercisable as
follows:

 

Up to one-sixth ( 1/6) of the total Option Shares at any time after the first
anniversary of the Date of Grant (“Installment 1”);

 

Up to an additional one-sixth ( 1/6) of the total Option Shares at any time
after the second anniversary of the Date of Grant (“Installment 2”);

 

Up to an additional one-sixth ( 1/6) of the total Option Shares at any time
after the third anniversary of the Date of Grant (“Installment 3”);

 

Up to an additional one-sixth ( 1/6) of the total Option Shares at any time
after the fourth anniversary of the Date of Grant (“Installment 4”);

 

Up to an additional one-sixth ( 1/6) of the total Option Shares at any time
after the fifth anniversary of the Date of Grant (“Installment 5”); and

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Up to an additional one-sixth ( 1/6) of the total Option Shares at any time
after the sixth anniversary of the Date of Grant (“Installment 6”).

 

The “Vested Portion” of the Option as of any particular date shall be the
cumulative total of all shares for which the Option has become exercisable as of
that date. Notwithstanding the foregoing, in the event the Optionee’s employment
with the Company and/or its subsidiaries is terminated within one (1) year after
a “Change in Control” then, immediately prior to the effective date of such
termination, all Options which have not lapsed, shall become fully vested and
exercisable (if not already vested and exercisable) by Optionee for a period of
ninety (90) days thereafter. In addition, upon (i) a Change in Control or (ii)
termination of employment of Optionee without “Cause” (as hereinafter defined),
pursuant to Section 7.2 of the Plan, this Option shall be automatically
converted into the right to receive, and thereafter shall be exercisable for, in
accordance with the Plan and this Agreement, the securities, cash and/or other
consideration that a holder of the shares underlying the Options would have been
entitled to receive upon consummation of a Change in Control had such shares
been issued and outstanding immediately prior to the effective date and time of
the Change in Control (net of appropriate exercise prices) provided that, in
each case, the Company has consummated a Transaction (as defined below) prior to
such event. The phrase “Change in Control” used but not otherwise defined herein
has the meaning set forth in Article 8 of the Plan. “Cause” means the occurrence
of gross negligence or willful misconduct or malfeasance or the commission of an
act constituting dishonesty or other act of material misconduct by Optionee that
affects the Company, its business, Optionee’s employment or Optionee’s business
reputation.

 

Notwithstanding the vesting schedule set forth above, upon the consummation of a
transaction (“Transaction”) not constituting a Change in Control but involving a
merger with or into another “Person” (as hereinafter defined), an investment in,
or acquisition of, another Person, the vesting schedule above shall be
accelerated upon achieving the thresholds as set forth on Exhibit B hereto in
the manner set forth therein with the next options to vest being accelerated.
For purposes of this Section 5, Person means any individual, corporation,
partnership, limited liability company, joint venture, estate, trust,
unincorporated association, or any other entity.

 

6. Exercise of the Option. The Vested Portion (as herein defined) of the Option
may be exercised, to the extent not previously exercised, in whole or in part,
at any time or from time to time prior to the expiration or termination of the
Option, except that no Option shall be exercisable except in respect to whole
shares, and not less than one hundred (100) shares may be purchased at one time
unless the number purchased is the total number at the time available for
purchase under the terms of the Option. Exercise shall be accomplished by
providing the Company with written notice in the form of Exhibit A hereto, which
notice shall be irrevocable when delivered and effective upon payment in full of
the Option Price in accordance with Section 5.4 of the Plan and any amounts
required in accordance with Section 5.11 of the Plan for withholding taxes, and
the satisfaction of all other conditions to exercise imposed under the Plan.

 

7. Payment of Exercise Price. Upon any exercise of the Option, the exercise
price for the number of shares for which the Option is then being exercised and
the amount of any federal, state and local withholding shall be paid in full to
the Company in cash, Common Stock of the Company or through the withholding of
shares of Common Stock issuable upon exercise in accordance with Section 5.11 of
the Plan; provided that Optionee may (i) make a cashless exercise by
surrendering to the Company at the time of exercise, by a notice to such effect,
that number of Option Shares as may then equal in net value (the excess, if any,
of the value of the securities such Options represent over their exercise price)
the aggregate exercise price of those Option Shares that Optionee elects to
retain and

 

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exercise, and (ii) hypothecate the Option and the Option Shares for the sole
purpose of borrowing the funds necessary to exercise same and/or pay the taxes
attributable to such exercise and the sale of such securities, and may make
arrangements with the lender for the orderly liquidation of such securities in
the market to retire the resulting indebtedness. In the event Optionee elects a
cashless exercise, the Company will reasonably determine the net value of the
Option Shares surrendered.

 

8. Nontransferability of Option. The Option shall not be transferable or
assignable by the Optionee, other than in accordance with Section 5.9 of the
Plan or by will or the laws of descent and distribution (or as otherwise
permitted by the Administering Body in its sole discretion), and shall be
exercisable during the Optionee’s lifetime only by him or her or by his or her
legal representative(s) or guardian(s).

 

9. Administration. The Plan and this Agreement shall be administered and may be
definitively interpreted by the Administering Body, and the Optionee agrees to
accept and abide by the decisions of such Administering Body concerning
administration and interpretation of the Plan and this Agreement.

 

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IN WITNESS WHEREOF, this Agreement has been executed on behalf of the Company by
its duly authorized officer, and by the Optionee in acceptance of the
above-mentioned Option, subject to the terms and conditions of the Plan and of
this Agreement, all as of the day and year first above written.

 

ASCENDANT SOLUTIONS, INC.

By:

 

 

/s/    James C. Leslie

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Name:

 

James C. Leslie

Title:

 

Chairman of the Board

 

OPTIONEE

 

/s/     David E. Bowe

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David E. Bowe

 

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NOTICE OF EXERCISE

under

NONQUALIFIED STOCK OPTION AGREEMENT

pursuant to the

ASCENDANT SOLUTIONS 1999 LONG-TERM INCENTIVE PLAN

 

To: ASCENDANT SOLUTIONS (the “Company”)

 

From:

  

 

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Date:

  

 

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Pursuant to the Ascendant Solutions 1999 Long-Term Incentive Plan (the “Plan”)
and the Nonqualified Stock Option Agreement (the “Agreement”) between the
Company and myself effective                , I hereby exercise my Option as
follows:

 

Number of shares of Common Stock I wish to purchase under the Option

      

Exercise Price per share

    

$

Total Exercise Price

    

$

“Vested Portion” of Option (see definition in Section 5 of the Agreement)

      

Number of shares I have previously purchased by exercising the Option

      

Expiration Date of the Option

      

 

I hereby represent, warrant, and covenant to the Company that:

 

a. I am acquiring the Common Stock for my own account, for investment, and not
for distribution or resale, and I will make no transfer of such Common Stock
except in compliance with applicable federal and state securities laws and in
accordance with the provisions of the Plan.

 

b. I can bear the economic risk of the investment in the Common Stock resulting
from this exercise of the Option, including a total loss of my investment.

 

c. I am experienced in business and financial matters and am capable of (i)
evaluating the merits and risks of an investment in the Company Stock; (ii)
making an informed investment decision regarding exercise of the Option; and
(iii) protecting my interests in connection therewith.

 

I acknowledge that I must pay the Exercise Price in full and make appropriate
arrangements for the payment of all federal, state and local tax withholdings
due with respect to the Option exercised herein, before the stock certificate
evidencing the shares of Common Stock resulting from this exercise of the Option
will be issued to me.

 

Attached in full payment of the exercise price for the Option exercised herein
is (    ) a check made payable to the Company in the amount of $                
and/or (    ) a stock certificate for              shares of Common Stock that
have been owned for at least six months with a duly completed stock power
attached.

 

OPTIONEE

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(Signature)

   

Name:

 

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Address:

 

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EXHIBIT B

 

Vesting Performance Schedule

 

Vesting Schedule:

 

Within 90 days following the occurrence of a Transaction and each anniversary
date thereafter, the Company shall prepare a report setting forth the
calculations described below and present it to the Optionee.

 

The vesting of options shall accelerate upon:

 

(i)   the consummation of a Transaction by the Company such that if the earnings
before income taxes, depreciation and amortization as calculated for financial
reporting purposes in accordance with generally accepted occurring principles
consistently applied (“EBITDA”) of the Company were calculated on a pro forma
basis (“Pro Forma EBITDA”) for the twelve (12) months preceding such Transaction
to include the Person, the per share EBITDA of the Company based upon the number
of shares of common stock of the Company outstanding immediately after the
Transaction would have increased by at least $0.05 per share. For each such
Transaction, 150,000 of unvested options shall vest. For each $0.01 per share of
Pro Forma EBITDA above $0.05 per share, an additional 18,000 of unvested options
shall vest;

 

(ii)   the increase in EBITDA of the Company over the Pro Forma EBITDA by at
least $0.01 per share for each year, following a Transaction. For each such
$0.01 per share increase in EBITDA, an incremental 18,000 of unvested options
shall vest.

 

The acceleration of vesting of the Option Shares shall apply in reverse order so
that Installment 6 shall be accelerated first followed by Installments 5, 4, 3,
2 and 1. After such acceleration the annual installment schedule shall continue
until accelerated again, or the termination or expiration of the Option so that
Option Shares set forth in each Installment that have not vested shall continue
to vest on each anniversary until they have all been vested, terminated or
expired.

 

EBITDA Per Share Achieved

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# of Options Vested

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$0.05 per share

  

150,000 Option Shares

for each incremental $0.01 EBITDA Per Share

  

an incremental 18,000 Option Shares vest

until $0.30 EBITDA Per Share

  

entire 600,000 Option Shares vest