Exhibit 10.27


 


NONQUALIFIED STOCK OPTION AGREEMENT AMENDMENT


 


This Nonqualified Stock Option Agreement Amendment dated as of June 22,
2004 (this “Amendment”) is made by and between NeuStar, Inc. a
Delaware corporation having its principal place of business in Sterling,
Virginia (the “Company”), and John Malone (the “Participant”). Capitalized
terms not otherwise defined herein shall have the meaning ascribed to such
terms in the Option Agreement (as defined below).


 


W I T N E S S E T H:


 


WHEREAS, Company granted Participant the
right and option to purchase from the Company 60,037 shares (the “Option Shares”)
of Company’s common stock, par value $.002 per share;


 


WHEREAS, Company and
Participant entered into an Nonqualified Stock Option Agreement under the NeuStar, Inc.
1999 Equity Incentive Plan (the “Option Agreement”) dated December 18, 2003;


 


WHEREAS, the Company and Participant
desire to amend the Option Agreement to revise the definitions of “Corporate
Transaction” under Section 5(d) thereof and the definition of  “Good Reason” under Section 5(e) thereof
as set forth below.


 


NOW, THEREFORE, in
consideration of the premises and further valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:


 


1.             Amendment
to Section 5 (d) and 5(e) of the Option Agreement.  Subject to the terms and conditions set forth
herein, Sections 5 (d) and 5(e) of the Option Agreement are hereby
amended and restated in their entirety as follows:


 


“(d)  For purposes of this Agreement, a “Corporate Transaction”
shall mean any of the following events:


 


(i) The consummation of any merger or consolidation of the
Company, if immediately following such merger or consolidation the holders of
the Company’s outstanding voting securities immediately prior to such merger or
consolidation do not own at least a majority of the outstanding voting
securities of the surviving corporation in approximately the same proportion as
they did immediately prior to such merger or consolidation.


 





















 


(ii) The consummation of any sale, lease, exchange or other
transfer in one transaction or a series of related transactions of all or
substantially all of the Company’s assets, other than a transfer of the Company’s
assets to a majority-owned subsidiary of the corporation, or to an entity in
which the holders of the majority of the outstanding voting securities of the
entity immediately prior to the transfer own at least the majority of the
outstanding securities immediately after such transfer in approximately the
same proportion as immediately prior to such transfer.


 


(iii) The approval by the holders of the Common Stock of any plan
or proposal for the liquidation or dissolution of the Company.


 


(iv) The acquisition by a person, within the meaning of Section 3(a)(9) or
of Section 13 (d)(3) of the Exchange Act of a majority or more of the
Company’s outstanding voting securities (whether directly or indirectly,
beneficially or of record), other than a person who held such majority on the
date of adoption of the Plan.  Ownership
of voting securities shall take into account and shall include ownership as
determined by applying Rule 13d-3(d)(1)(i) pursuant to the
Exchange Act.


 


(e)           For purposes of this
Agreement, “Good Reason” shall mean, without the Participant’s prior written
consent, any of the following events or conditions and the failure of the
Successor Corporation to cure such event or condition within thirty (30) days
after receipt of written notice from the Participant:


 


(i)                A
substantial diminution or material adverse change in the Participant’s status,
title, position, authority, duties or responsibilities (including reporting
responsibilities) as in effect immediately prior to a Corporate Transaction,
except in connection with the Participant’s termination of Service with the
Company for Cause, disability, death or by the Participant other than for Good
Reason.


 


(ii)               A
reduction in the Participant’s annual base salary, except in connection with an
across-the-board salary reduction of less than ten percent (10%) affecting all
senior executives of the Company.


 





















 


(iii)              The
Successor Corporation’s failure to cover the Participant under employee benefit
plans, programs and practices that, in the aggregate, provide substantially
comparable benefits (from an economic perspective) to the Participant relative
to the benefits and total costs under the material employee benefit plans,
programs and practices in which the Participant (and/or his family or
dependents) is participating immediately preceding the Corporate Transaction.


 


(iv)              The
Successor Corporation’s requiring the Participant to be based at any office
location that is more than fifty (50) miles further from the Participant’s
office location immediately prior to a Corporate Transaction; except for reasonable
required travel for the Successor Corporation’s business that is not materially
greater than such travel requirements prior to such Corporate Transaction.


 


(v)               A
material breach by the Successor Corporation of its obligations to the
Participant under the Plan.”


 


2.             Entire
Agreement.  This Amendment sets forth
the entire understanding and agreement of the parties hereto in relation to the
subject matter hereof and supersedes any prior negotiations and agreements
among the parties relating to such subject matter.  None of the terms or conditions of this
Amendment may be changed, modified, waived or canceled orally or otherwise,
except in writing.


 


3.             Full
Force and Effect of Agreement. 
Except as hereby specifically amended, modified or supplemented, the
Option Agreement is hereby confirmed and ratified in all respects and shall be
and remain in full force and effect according to their respective terms.


 


4.             Counterparts.  This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.


 


5.             Governing
Law.  This Amendment shall be
construed and interpreted in accordance with the laws of the Sate of Delaware,
without regards to the principles of conflicts of law.


 





















 


IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be made, executed and
delivered by their duly authorized officers as of the day and year first above
written.


 


	
   

  	
   

  	
  NEUSTAR,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Jeffrey E. Ganek

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Jeffrey
  E. Ganek

  
	
   

  	
   

  	
   

  	
  Title:   Chairman
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OPTIONEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  John Malone

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ John S.
  Malone

  	
   

  
								



 





















 


NONQUALIFIED
STOCK OPTION AGREEMENT


UNDER THE


NEUSTAR,
INC. 1999 EQUITY INCENTIVE PLAN


 


THIS
AGREEMENT, made as of December 18, 2003
(the “Effective Date”), by and between NeuStar, Inc., a Delaware
corporation (the “Company”), and John Malone
(the “Participant”).


 


W  I  T  N  E  S
S  E  T  H:


 


WHEREAS, the
Company desires to afford the Participant the opportunity to acquire an
ownership of the Company’s common stock, par value $.002 per share (“Common
Stock”), so that he may have a direct proprietary interest in the Company’s
success.


 


NOW,
THEREFORE, in consideration of the covenants and agreements herein contained,
the parties hereto hereby agree as follows:


 


1.                                       Grant of
Option.  Subject to the terms and
conditions set forth herein and in the Company’s 1999 Equity Incentive Plan, as
restated as of March 13, 2002 (the “Plan”), the Company hereby grants to
the Participant, during the period commencing on the date of this Agreement and
ending on December 18, 2013 (the “Expiration Date”), the right and option
(the right to purchase any one share of Common Stock hereunder being an “Option”)
to purchase from the Company 60,037
shares of Common Stock.  The Options
shall have an exercise price of $9.00
per share, which represents the Fair Market Value per share of the Common Stock
as of the date hereof.


 


2.                                       Limitations
on Exercise of Options.  Subject to
the terms and conditions set forth herein and the Plan, the Options shall vest
and become exercisable, on a cumulative basis, with respect to 40% of the
shares on December 18, 2005, and with respect to 1.667% of the shares on
the last day of each succeeding calendar month thereafter so long as the
Participant continues in the Service of the Company; provided, however, the
Participant may not exercise any Option for fractional shares of Common
Stock.  The Committee or the Board may accelerate
the vesting and exercisability of any or all of the then-unvested Options at
any time.


 


3.                                       Termination
of Service.  (a)  If prior to
the Expiration Date, the Participant’s Service with the Company shall terminate
by reason of a Normal Termination (as defined in the Plan), the Options shall
remain exercisable until the earlier of the Expiration Date or three (3) months
days after such date of termination (the “Date of Termination”) to the extent
the Options were vested and exercisable as of the Date of Termination.


 


(b)                                 If
the Participant’s Service with the Company shall cease prior to the Expiration
Date by reason of death or disability, or the Participant shall die or become
disabled while entitled to exercise any of the Options pursuant to paragraph
3(a), the Participant or the Participant’s legal representative, or, in the
case of death, the executor or administrator of the estate of the Participant
or the person or persons to whom the Options shall have been validly
transferred by the executor or administrator pursuant to will or the laws of
descent and distribution, shall have the right, until the earlier of the
Expiration Date or one year after the date of death or disability, to exercise
the Options to 


 


1





















 


the extent that the Participant was entitled
to exercise them on the date of death or disability.


 


(c)           If, prior to the Expiration Date, the
Participant’s Service with the Company is terminated for “Cause” (as defined in
the Plan), (i) unless otherwise provided by the Committee, the Options, to
the extent not exercised as of the Date of Termination, shall lapse and be
canceled, and (ii) all shares of Common Stock received pursuant to an
exercise of the Options after such termination, in contravention of subsection (i) above,
may be purchased by the Company at its discretion for the exercise price of
such shares paid by the Participant.  If
the Participant’s Service relationship with the Company is suspended pending an
investigation of whether the Participant shall be terminated for Cause, all the
Participant’s rights with respect to the Options shall be suspended during the
period of investigation.


 


(d)                                 If,
prior to the Expiration Date, the Participant’s Service with the Company is
terminated other than for Cause, a Normal Termination, death or disability, the
Options, to the extent then vested and exercisable as of the Date of
Termination, shall remain exercisable until the earlier of the Expiration Date
or thirty (30) days after the Date of Termination.


 


(e)                                  After
the expiration of any exercise period described in any of Sections 3(a) - (d) hereof,
or otherwise upon the Expiration Date, the Options shall terminate together
with all of the Participant’s rights hereunder, to the extent not previously
exercised.


 


4.                                       Non-Transferable.  Except as specifically authorized by the
Committee, the Participant may not transfer the Options except by will or the
laws of descent and distribution and the Options shall be exercisable during
the Participant’s lifetime only by the Participant or, in the event of the
Participant’s legal incapacity, his guardian or legal representative.  Except as so authorized, no purported
assignment or transfer of the Options, or of the rights represented thereby,
whether voluntary or involuntary, by operation of law or otherwise (except by
will or the laws of descent and distribution), shall vest in the assignee or
transferee any interest or right herein whatsoever.


 


5.                                       Adjustments
and Corporate Reorganizations; Changes in Organization.


 


(a)           In
accordance with and subject to the applicable terms of the Plan and this
Agreement, the Options shall be subject to adjustment or substitution, as
determined by the Committee in its sole discretion, as to the number, price or
kind of Common Stock or other consideration subject to such Options or as
otherwise determined by the Committee in its sole discretion to be equitable (i) in
the event of changes in the outstanding Common Stock or in the capital
structure of the Company by reason of stock dividends, stock splits, reverse
stock splits, recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in capitalization occurring
after the date hereof or (ii) in the event of any change in applicable
laws or any change in circumstances which results in or would result in any
substantial dilution or 


 


2





















 


enlargement of the rights granted to, or available for, the
Participant.  The Committee shall give
the Participant written notice of an adjustment hereunder.


 


(b)                                 In
the event that the Company undertakes a change in its organization, including
but not limited to a combination of business units, the creation of a new
business unit, the elimination of a business unit, or the acquisition, sale or
transfer of an interest in a business unit, the Options shall be subject to
adjustment or substitution (including but not limited to the substitution of
common stock of or other ownership interest in a Related Entity, other
consideration or another Award under the Plan), as to the number, price or kind
of Common Stock or other consideration subject to such Options or as otherwise
determined by the Committee in its sole discretion to be equitable.  For purposes of this Agreement, a “business
unit” shall mean any Related Entity or any division or other unit or group
within the Company that the Committee designates as a “business unit”.


 


(c) 
Subject to the provisions of Section 13(b) of the Plan, in the event
of a Corporate Transaction (as defined below), if the Options evidenced by this
Agreement are not assumed or continued or a substantially equivalent option or
right is not substituted by the surviving corporation, the successor
corporation or its parent corporation, as applicable (the “Successor
Corporation”), the Participant shall, as of the date of the Corporate
Transaction, fully vest in and have the right to exercise such Options as to
all shares of Common Stock then subject thereto that would otherwise have
vested and become exercisable during the twelve-month period commencing on the
date of the Corporate Transaction and, subject to the next sentence, unvested
Options with respect to any other shares of Common Stock shall continue to vest
as set forth in Section 2.   If any
Options evidenced by this Agreement are assumed or replaced (and any such
Options shall be considered assumed if the Company in a Corporate Transaction
reaffirms the Options) in connection with a Corporate Transaction and do not
otherwise vest at that time, and if Participant’s Service with the Company is
subsequently terminated within one (1) year following such Corporate
Transaction, unless such Service is terminated by the Successor Corporation for
Cause or by the Participant voluntarily without Good Reason (as defined below),
the Participant shall fully vest in and have the right to exercise the Options
as to all shares of Common Stock then subject thereto that, but for such
termination, would have otherwise vested and become exercisable during the
twelve-month period commencing on the effective date of such termination, and
unvested Options with respect to any other shares of Common Stock shall
continue to vest as set forth in Section 2.


 


(d)                                 For
purposes of this Agreement, a “Corporate Transaction” shall mean any of the
following events:


 


(i)                                     The
consummation of any merger or consolidation of the Company in which the Company
is not the continuing or surviving corporation, or pursuant to which shares of
Common Stock are converted into cash, securities or other property, if
following such merger or consolidation the holders of the Company’s 


 


3





















 


outstanding voting securities immediately
prior to such merger or consolidation own less than a majority of the
outstanding voting securities of the surviving corporation.


 


(ii)                                  The
consummation of any sale, lease, exchange or other transfer in one transaction
or a series of related transactions of all or substantially all of the Company’s
assets, other than a transfer of the Company’s assets to a majority-owned
subsidiary of the corporation.


 


(iii)                               The
approval by the holders of the Common Stock of any plan or proposal for the
liquidation or dissolution of the Company.


 


(iv)                              The
acquisition by a person, within the meaning of Section 3(a)(9) or of Section 13
(d)(3) (as in effect on the date of adoption of the Plan) of the Exchange
Act of a majority or more of the Company’s outstanding voting securities
(whether directly or indirectly, beneficially or of record), other than a
person who held such majority on the date of adoption of the Plan.  Ownership of voting securities shall take
into account and shall include ownership as determined by applying Rule 13d-3(d)(1)(i) (as
in effect on the date of adoption of the Plan) pursuant to the Exchange Act.


 


(e)                                  For
purposes of this Agreement, “Good Reason” shall mean, without the Participant’s
prior written consent, any of the following events or conditions and the
failure of the Successor Corporation to cure such event or condition within
thirty (30) days after receipt of written notice from the Participant:


 


(i)                                     A
substantial diminution or material adverse change in the Participant’s status,
title, position, authority, duties or responsibilities (including reporting
responsibilities) as in effect immediately prior to a Corporate Transaction,
except in connection with the Participant’s termination of Service with the
Company for Cause, disability, death or by the Participant other than for Good
Reason.


 


(ii)                                  A
reduction in the Participant’s annual base salary.


 


(iii)                               The
Successor Corporation’s failure to cover the Participant under employee benefit
plans, programs and practices that, in the aggregate, provide substantially
comparable benefits (from an economic perspective) to the Participant relative
to the benefits and total costs under the material employee benefit plans,
programs and practices in which the Participant (and/or his family or
dependents) is participating immediately preceding the Corporate Transaction.


 


(iv)                              The
Successor Corporation’s requiring the Participant to be based at any office
location that is more than fifty (50) miles further from the Participant’s
office location immediately prior to a Corporate Transaction; except for
reasonable required travel for the Successor Corporation’s business that is not
materially greater than such travel requirements prior to such Corporate
Transaction.


 


4





















 


(v)                                 A
material breach by the Successor Corporation of its obligations to the
Participant under the Plan.


 


6.                                       Exercise:  Payment For and Delivery of Common Stock.  The Options shall be exercised by delivering
written notice to the Committee stating the number of whole shares of Common
Stock to be purchased, the person or persons in whose name the shares of Common
Stock are to be registered and each such person’s address and social security
number.  Such notice shall not be
effective unless accompanied by the full purchase price for all shares to be
purchased, and any applicable withholding (as described below).  The purchase price shall be payable in cash,
in shares of Common Stock, any combination of cash or shares of Common Stock or
such other method of payment as is authorized by the Plan with the consent of
the Committee; provided, however, that the Participant may use
Common Stock in payment of the exercise price only if the shares so used are
considered “mature” for purposes of generally accepted accounting principles (i.e.,
(i) been held by the Participant free and clear for at least six (6) months
prior to the use thereof to pay part of an Option exercise price, (ii) been
purchased by the Participant in other than a compensatory transaction, or (iii) meet
any other requirements for “mature” shares as may exist on the date of the use
thereof to pay part of an Option exercise price).  In the event that all or part of the purchase
price is paid in shares of Common Stock, the shares used in payment shall be
valued at their Fair Market Value on the date of exercise of the Options.  At the time of exercise, the Participant
shall pay to the Company, in cash, or by having the Company withhold upon
exercise of the Option a sufficient number of shares of Common Stock otherwise
deliverable to the Participant based on the Fair Market Value of the Common
Stock on the date of exercise, at the election of the Participant, such minimum
amount as the Company deems necessary to satisfy its obligation to withhold
Federal, state or local income or other taxes incurred by reason of the exercise
or the transfer of shares thereupon. 
Payment in currency or by certified or cashier’s check shall be
considered payment in cash.


 


7.                                       Rights as
Common Stockholder.  (a)  The
Participant or a transferee of the Options shall have no rights as a stockholder
with respect to any shares covered by the Options until he shall have become
the holder of record of such shares (and the Company shall use its reasonable
best efforts to cause the Participant promptly to become the holder of record
of such shares), and, except as provided in Section 5 hereof, no
adjustment shall be made for dividends or distributions or other rights in
respect of such shares for which the record date is prior to the date upon
which he shall become the holder or record thereof.


 


8.                                       Company;
Participant.  (a)  The term “Company”
as used in this Agreement with reference to employment shall include the
Company and its affiliates.


 


(b)                                 Whenever
the word “Participant” is used in any provision of this Agreement under
circumstances where the provision should logically be construed to apply to the
executors, the administrators, legal representatives or the person or persons
to whom the Options may be transferred by will or by the laws of descent and
distribution, the word “Participant” shall be deemed to include such person or
persons.


 


5





















 


9.                                       Requirements
of Law.  (a)  By accepting the
Options, the Participant represents and agrees for himself and his transferees
(whether by will or the laws of descent and distribution) that, unless a
registration statement under the Securities Act of 1933, as amended (the “Act”),
is in effect as to shares purchased upon any exercise of the Options, (i) any
and all shares so purchased shall be acquired for his personal account and not
with a view to or for sale in connection with any distribution, and (ii) each
notice of the exercise of any portion of this Option shall be accompanied by a
representation and warranty in writing, signed by the person entitled to
exercise the same, that the shares are being so acquired in good faith for his
personal account and not with a view to or for sale in connection with any
distribution.


 


(b)                                 No
certificate or certificates for shares of Common Stock may be purchased, issued
or transferred if the exercise hereof or the issuance or transfer of such
shares shall constitute a violation by the Company or the Participant of any (i) provision
of any Federal, state or other securities law, (ii) requirement of any
securities exchange listing agreement to which the Company may be a party, or (iii) other
requirement of law or of any regulatory body having jurisdiction over the
Company.  Any reasonable determination in
this connection by the Board or the Committee, upon notice given to the Participant,
shall be final, binding and conclusive.


 


(c)                                  The
certificates representing shares of Common Stock acquired pursuant to the
exercise of options shall carry such appropriate legend, and such written
instructions shall be given to the Company’s transfer agent, as may be deemed
necessary or advisable by counsel to the Company in order to comply with the
requirements of the Act or any state securities laws.


 


10.                                 Notices.  Any notice to be given to either party shall
be in writing and shall be given by hand delivery to such party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company in care of its Secretary at its principal office, and
to the Participant at the address given beneath his signature hereto, or at
such other address as either party shall have furnished to the other in writing
in accordance herewith.  Notice and
communications shall be effective when actually received by the addressee.


 


11.                                 Disposition of
Common Stock.  The Participant agrees
to notify the Company, in writing, within thirty (30) days of any disposition
(whether by sale, exchange, gift or otherwise) of shares of Common Stock
purchased under this Agreement.


 


12.                                 Binding Effect.  Subject to Section 4 hereof, this
Agreement shall be binding upon the heirs, executors, administrators,
successors and permitted assigns of the parties hereto.


 


13.                                 Plan.  The terms and provisions of the Plan are
incorporated herein by reference and made a part hereof as though fully set
forth herein.  In the event of any
conflict or inconsistency between discretionary terms and provisions of this
Agreement, this Agreement shall govern and control.  In all other instances of conflicts or
inconsistencies or omissions, the terms and provisions of the Plan shall govern
and control.  All capitalized terms not
otherwise expressly defined in this Agreement shall have the meaning ascribed
to them in the Plan.


 


6





















 


14.                                 Governing Law.  This Agreement
shall be construed and interpreted in accordance with the laws of the State of
Delaware, without regard to the principles of conflicts of law thereof.


 


15.                                 Entire Agreement.  This Agreement, together with the Plan,
contains the entire agreement and understanding between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.


 


IN WITNESS WHEREOF, the Company has granted
this Option on the date of grant specified above.


 


This instrument may be executed in any number
of counterparts, each of which shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument.


 


	
   

  	
  NEUSTAR, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  E. Ganek

  	
   

  
	
   

  	
   

  	
  Jeffrey Ganek

  
	
   

  	
   

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED:

  
	
   

  
	
   

  
	
  /s/ John
  Malone

  	
   

  
	
  John Malone

  
					



 


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