Exhibit 10.26


 


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 Mark Foster
(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 11,541
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:

  
	
   

  	
   

  
	
   

  	
  Mark Foster

  
	
   

  	
   

  
	
   

  	
            /s/
  Mark Foster

  	
   

  
						



 





















 


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 Mark Foster (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 11,541 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


 





















 


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


 





















 


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 Option evidenced by this Agreement is
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 fully vest in and have the right to exercise the Option as to
all shares of Common Stock then subject thereto, including shares as to which
the Option would not otherwise be vested or exercisable. Any such Options that
are assumed or replaced (and any such Option shall be considered assumed if the
Company in a Corporate Transaction reaffirms the Option) in connection with a
Corporate Transaction and do not otherwise vest at that time shall be fully
vested and exercisable in the event the Participant’s Service with the Company
should subsequently be terminated within two (2) years 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.


 


(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 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.


 





















 


(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.


 





















 


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.


 





















 


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

  	
   

  
	
   

  	
  Name: Jeffrey
  Ganek

  
	
   

  	
  Title:  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Mark Foster

  	
   

  	
   

  
	
  Mark Foster