Document:

exv10w1

 

Exhibit 10.1

NORTEL NETWORKS CORPORATION — RESTRICTED STOCK UNITS

INSTRUMENT OF AWARD

«COUNTRY»

	 	 	 
	NAME:

	 	«NAME» («GID»)
	 
	 	 
	EFFECTIVE DATE:

	 	«AWARD_DATE»
	 
	 	 
	NUMBER OF RSUs:

	 	«AWARDED»
	 
	 	 
	VESTING SCHEDULE:

	 	«INSERT VESTING SCHEDULE»
	 
	 	 
	PLAN:

	 	NORTEL 2005 STOCK INCENTIVE PLAN

This instrument (hereinafter the “Instrument of Award”) evidences an Award to you of the number
of Restricted Stock Units (“RSUs”) indicated above, on the Effective Date indicated above,
pursuant to the Nortel 2005 Stock Incentive Plan (as may be amended from time to time, the
“Plan”). Each RSU covered by this Instrument of Award generally entitles you to receive one
common share (a “Share”) of Nortel Networks Corporation (the “Corporation”) at or as soon as
reasonably practicable following the date the RSU becomes Vested in accordance with the Vesting
schedule indicated above, or such earlier date as may be applicable pursuant to the provisions
of the Plan and this Instrument of Award. Capitalized terms not otherwise defined in this
Instrument of Award have the meanings set forth in the Plan.

1. All RSUs covered by this Instrument of Award are subject to the terms and conditions stated
in the Plan, except as specifically or additionally provided in this Instrument of Award and/or
in any rules, regulations, determinations or interpretations prescribed and/or made by the
Committee (or its delegates) under the power and authority granted under the Plan (the “Rules
and Regulations”), and all of the provisions of the Plan and the Rules and Regulations are
incorporated by reference as if expressly restated herein. Different Rules and Regulations may
apply to you and/or the RSUs covered by this Instrument of Award depending on your country work
location, residency or payroll, whether on the Effective Date of the Award, on the date of
settlement of the RSUs, or otherwise. Accordingly, you should review the Plan and the Rules and
Regulations from time to time, which are available as indicated below, in conjunction with this
Instrument of Award.

2. You will have the right to receive one Share in settlement of each RSU once the RSU has
become Vested in accordance with the Vesting schedule indicated above, provided that you have
been in the continuous employment of the Company from the Effective Date to the applicable
Vesting date.

3. Vested RSUs will be settled by transfer of Shares to you on or as soon as reasonably
practicable following the Vesting date provided that you execute any required documentation as
provided in the Plan, this Instrument of Award or the Rules and Regulations, in such form or
manner as may be specified from time to time by the Corporation.

4. In consideration of the Award of RSUs, in the event that all or any part of the RSUs become
Vested at any time subsequent to the date which is twelve (12) months prior to the date of
termination of your employment (whether wrongful or for any other reason) (the “Applicable
Period”), and:

	(i)	 	while employed or during the period of twelve (12) months following the termination of
your employment (whether wrongful or for any other reason), you accept employment with an
employer, or accept an engagement to supply services, directly or indirectly, to a third
party, that is in competition with the Company;
	 
	(ii)	 	you fail to comply with or otherwise breach the terms or conditions of any
confidentiality agreement or non-disclosure agreement with the Company;
	 
	(iii)	 	while employed or during the period of twelve (12) months following termination of
your employment (whether wrongful or for any other reason), you, on your own behalf or on
any other’s behalf, directly or indirectly recruit, induce or solicit, or attempt to
recruit, induce or solicit, any current employee or other individual who is/or was
supplying services to the Company, to terminate their employment or contractual
arrangements with the Company; or
	 
	(iv)	 	while employed or during the period of twelve (12) months following termination of your
employment (whether wrongful or for any other reason), you, on your own behalf or on any
other’s behalf, solicit, divert or take away, or attempt to divert or take away the
business of any of the customers or accounts, or prospective customers or accounts, of the
Company or any of its distributors, representatives or vendors, which you have had contact
or communication with while employed at the Company;

you agree that you will, if required by the Corporation in its sole discretion, pay to the
Corporation within ten (10) days of written demand for payment from the Corporation an amount in
cash equal to the number of RSUs that Vested during the Applicable
Period multiplied by the Market
Value on the applicable Vesting date (the “Applicable Amount”).

1

 

     Provided you are not entitled to any Corresponding Tax Benefit, the Applicable Amount shall
be reduced by the amount of Tax paid by you or on your behalf (or required to be paid by you or
on your behalf as of a future Tax due date) in respect of the Vesting of the RSUs or your
receipt of Shares upon the settlement of Vested RSUs during the Applicable Period (and, where
applicable, in respect of the Award of such RSUs).

     If you are entitled to a Corresponding Tax Benefit which is equal to or less than the
amount of Tax paid by you or on your behalf (or required to be paid by you or on your behalf as
of a future Tax due date) in respect of the Vesting of the RSUs or your receipt of Shares upon
the settlement of Vested RSUs during the Applicable Period (such difference between the
Corresponding Tax Benefit and Tax, if any, is referred to herein as the “Tax Benefit
Deficiency”), the Applicable Amount shall be reduced by an amount equal to the Tax Benefit
Deficiency.

     For the purposes of this paragraph 4:

	 	 	“Corresponding Tax Benefit” means the amount of any deduction from or reduction or credit
to the amount of Taxes paid or payable by you or on your behalf in accordance with the
laws of the tax jurisdiction applicable to you as a result of or in connection with the
payment to the Corporation of all or any portion of the Applicable Amount by you; and
	 
	 	 	“Tax” means any income tax, capital gains tax, statutory pension plan contributions
and/or other social security tax or applicable social security charge levied in
accordance with the laws of the jurisdiction to which you are subject at the time of
Vesting of the RSUs or at the time you receive the Shares in settlement of the RSUs,
whichever is applicable (and, where applicable, at the time of the Effective Date of the
Award of such RSUs).

5. The Company may withhold from any amount payable to you, either under the Plan or this
Instrument of Award or otherwise, such amount as may be necessary so as to ensure that the
Company will be able to comply with the applicable provisions of any federal, provincial, state
or local law relating to the withholding of tax (collectively
referred to herein as “taxes”) or
to ensure that any other required deductions are paid or otherwise satisfied, including
withholding of the amount, if any, includable in your income. The Company shall also have the
right in its discretion to satisfy any such liability for withholding or other required
deduction amounts by retaining or acquiring any Shares, or retaining any amount payable, which
would otherwise be issued or delivered, provided or paid to you hereunder. The Company may
require you, as a condition to the settlement of a RSU, to pay or reimburse the Company for any
such withholding or other required deduction amounts related to the settlement of the RSUs.

     The Corporation may require, as a condition of settlement of Vested RSUs, that you: (i) pay
any taxes which are required to be paid by you; (ii) reimburse any taxes which are required to
be withheld and remitted by the Company; (iii) complete any forms or provide any additional
documents in connection with taxes; and (iv) otherwise comply with all applicable tax laws; in
each case in connection with the Award of the RSUs, the Vesting of the RSUs, the exercise of the
RSUs, and/or the forfeiture of the RSUs, and as may be specified in this Instrument of Award,
the Rules and Regulations or otherwise in accordance with the Plan. The Corporation may also
require, as a condition of the settlement of Vested RSUs, that all or a portion of the related
Shares be sold by you or on your behalf to generate proceeds sufficient to cover any tax
withholdings made by the Company on account of applicable taxes (hereinafter “tax
withholdings”), if you do not pay such tax withholdings within the designated time periods as
may be specified in this Instrument of Award, the Rules and Regulations or otherwise in
accordance with the Plan. You further acknowledge and agree that conditions or restrictions on
the transferability of the Shares received by you upon the settlement of the Vested RSUs may be
imposed on such Shares on account of taxes or tax withholdings in connection with the Award of
the RSUs, the Vesting of the RSUs, the settlement of the RSUs, and/or the forfeiture of the
RSUs, in each case as may be specified in this Instrument of Award, the Rules and Regulations or
otherwise in accordance with the Plan.

6. In the event of your Termination prior to the date that all of the RSUs awarded to you
pursuant to this Instrument of Award have become Vested, (i) if such Termination is a Qualifying
Termination Without Cause, all then outstanding unvested RSUs awarded to you pursuant to this
Instrument of Award shall remain outstanding, shall continue to Vest in accordance with the
Vesting schedule indicated above during the Extension Period and, once Vested, shall be settled
in accordance with the terms of the Plan and this Instrument of Award; (ii) if such Termination
is due to your Retirement or death, a “pro rata portion” of the then outstanding unvested RSUs
awarded to you shall become immediately Vested and, in accordance with the terms of the Plan and
this Instrument of Award, settled and the remaining portion of such RSUs shall be forfeited and
cancelled for no consideration as of the Date of Termination; (iii) if such Termination is a
Qualifying Termination Without Cause and, immediately following the end of the Extension Period,
you commence Retirement, a “pro rata portion” of the unvested RSUs awarded to you that are
outstanding as of the end of the Extension Period shall become immediately Vested and, in
accordance with the terms of the Plan and this Instrument of Award, settled and the remaining
portion of any RSUs then outstanding shall be forfeited and cancelled for no consideration as of
the date you commence Retirement and (iv) if such Termination is for any other reason
(including by your employer for Cause or by reason of your resignation for any reason), all then
outstanding unvested RSUs awarded to you pursuant to this Instrument of Award shall immediately
be forfeited and cancelled for no consideration.

     For purposes of this section 6, “pro rata portion” shall mean the product of one-third of
the RSUs awarded to you pursuant to the Plan and this Instrument of Award multiplied by a
fraction, the numerator of which equals the number of days which have elapsed at the relevant
date since the later of (i) the Effective Date of Award of the RSUs, (ii) the date 33 percent
of the RSUs became Vested; and (iii) the date 66 percent of the RSUs became Vested; and the
denominator of which is 365.

     For the purposes of this section 6, the following shall be excluded from the definition of
“Extension Period” in the Plan: “the earlier of (x) the twenty-four month anniversary of the
Participant’s Date of Termination and (y)”.

2

 

7. In the event you are a Specified Executive (as defined under the Nortel Networks Corporation
Executive Retention and Termination Plan (the “ERTP Plan”)) and are subject to a Termination Due
to Change in Control (as defined in the ERTP Plan), the RSUs awarded to you in accordance with
this Instrument of Award shall be included as RSUs (as defined under the ERTP Plan) and receive
all of the benefits provided to RSUs under the ERTP Plan in the event of a Termination Due to
Change in Control.

8. This Instrument of Award: (i) shall be binding upon and inure to the benefit of any successor
of the Corporation; (ii) shall be governed by the laws of the Province of Ontario, and any
applicable laws of Canada; and (iii) may not be amended except in writing or as otherwise
provided in the Plan. In the event of a conflict between the provisions of this Instrument of
Award and those of the Plan or the Rules and Regulations, the provisions of the Plan or the
Rules and Regulations, as the case may be, shall govern, except to the extent that the terms and
conditions of the Award of RSUs evidenced by this Instrument of Award are specifically recorded
as a variation from the terms and conditions of the Plan or the Rules and Regulations, as the
case may be.

     You acknowledge that a copy of the Plan and the Rules and Regulations, if any, have been
delivered to you with this Instrument of Award.

9. You acknowledge that: (i) the Plan is discretionary and may be suspended or terminated by the
Corporation at any time; (ii) the Award of RSUs does not create any right to receive future
Awards of RSUs, or benefits in lieu of RSUs, and the terms and conditions of any future Awards
of RSUs, if any, will be communicated if and when new Awards of RSUs are to be made; (iii) the
value of the RSUs is outside the scope of your employment contract, if any, and the Award of
RSUs is not for labour performed; (iv) participation in the Plan is voluntary; (v) the future
value of the Shares is unknown and cannot be predicted with certainty; (vi) the RSUs are not
part of remuneration for purposes of any compensation on termination of employment, severance
payments, indemnities or end of service payments or benefits of any nature; (vii) the Vesting of
the RSUs ceases upon termination of employment, whether lawful or otherwise, except as provided
in the Plan and this Instrument of Award, and neither the Corporation nor any of its
subsidiaries is required to compensate you for any financial loss (including taxes, social
security premiums and lost capital gain) as a result of the forfeiture of RSUs or the early
settlement thereof on any such termination of employment; and (viii) the Award of the RSUs does
not give rise to additional obligations for any subsidiary which employs you. If,
notwithstanding the foregoing, any contractual or statutory (employment or otherwise) claim is
found to have arisen, then you, by accepting this Instrument of Award or the RSUs, shall, to the
extent permitted by applicable law, be deemed irrevocably to have waived your entitlement to
pursue such claim.

10. The various provisions and sub-provisions of this Instrument of Award are severable and if
any provision or identifiable part thereof is held to be unenforceable by any court of competent
jurisdiction then such unenforceability shall not affect the enforceability of the remaining
provisions or identifiable parts thereof in this Instrument of Award, the Plan, the Rules and
Regulations, or any documents related to the Plan.

11. Nortel and its third party service providers may need to collect and use information about
employees for the purpose of the Award and/or settlement of RSUs, administering the Plan, and to
comply with tax, reporting and disclosure obligations under applicable laws and regulations.
Such information may be communicated to any person deemed necessary for the administration of
the Plan, even if it requires such information to be transferred or communicated to persons
based outside your country of employment. Such information is from time to time transferred
between companies within the group and to such third party service providers, to achieve these
objectives. Nortel and its third party service providers will hold your “Plan participation
file” at any location deemed necessary, on the understanding that you will be given access
without constraint at reasonable intervals and without excessive delay or expense to examine and
correct such information. By accepting the Instrument of Award or the RSUs, you are affirming
your consent to the collection, processing, storage, disclosure and transfer of your personal
information for these purposes.

12. By accepting this Instrument of Award or the RSUs, you expressly consent that the Plan, the
Rules and Regulations and any other document relating thereto, including this Instrument of
Award, be drawn up and/or available in English only. Par votre acceptation de la présente
Entente ou des RSUs, vous consentez expressément à ce que
le Régime, les
Règlements et tout autre document connexe, y compris la
présente Entente soient rédigés et/ou
disponibles en anglais seulement.

13. By accepting this Instrument of Award or the RSUs, you (i) acknowledge and confirm that you
have read and understood the Plan, the Rules and Regulations and this Instrument of Award, and
that you have had an opportunity to seek separate fiscal, legal and taxation advice in relation
thereto; and (ii) agree to be bound by the terms and conditions stated in this Instrument of
Award, including without limitation the terms and conditions of the Plan and the Rules and
Regulations incorporated by reference herein.

     If you accept the terms and conditions of this Award of RSUs as described in this
Instrument of Award, please confirm your acceptance by signing where indicated below and
returning it to Nortel Stock Option Administration at the address indicated below.

Signature of Employee: ___________________________

Nortel Stock Option Administration Department

8200 Dixie Road, Suite 100

Brampton, Ontario, Canada L6T 5P6

Fax# : 905-863-8273 (ESN 333)

3EXHIBIT 4.1

 

PROMISSORY NOTE

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED (THE "FEDERAL ACT"), THE GEORGIA SECURITIES ACT OF 1973, AS AMENDED, OR ANY OTHER STATE SECURITIES LAW.  THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, HYPOTHECATED, SOLD, OR TRANSFERRED, NOR WILL ANY ASSIGNEE OR TRANSFEREE HEREOF BE RECOGNIZED BY THE MAKER HEREOF AS HAVING ANY INTEREST IN THIS PROMISSORY NOTE, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THIS PROMISSORY NOTE UNDER ANY APPLICABLE STATE LAW AND THE FEDERAL ACT OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE MAKER THAT SUCH REGISTRATION IS NOT REQUIRED BY REASON OF AN EXEMPTION FROM REGISTRATION UNDER ANY APPLICABLE STATE LAW AND THE FEDERAL ACT.

Atlanta, Georgia

September 6, 2005

For value received, SPECTRX, INC., a Delaware corporation (the "Company"), promises to pay to the order of William D. Arthur, III, an individual resident with an address of 2010 Tavistock Court, Alpharetta, GA   30022 and Mark A. Samuels an individual resident with an address of  4400 Missendell Lane, Norcross, GA 30092  (the "Noteholders"), the principal sum of FIFTY THOUSANDAND NO/100 DOLLARS ($50,000) each (for a total of $100,000), plus interest on the dates and in the amounts described below.  

The Company promises to pay interest monthly in arrears (on the first business day of each month, commencing October, 2005), such interest calculated at an annual  rate of fifteen percent (15%), and to pay any remaining principal and interest  due under this Note, on the earlier  to occur of  (a) January 15, 2006  or  (b) 10 days after the closing and funding of any  financing in which the Company receives at least $500,000 in net proceeds.  All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds to each Noteholder at SpectRx, Inc., 4955 Avalon Ridge Parkway, Suite 300, Norcross, GA  30071, or such other address as may be specified from time to time as the Noteholders hereof may designate in writing.  All payments shall be paid 50% to each Noteholder.  Any payments received hereunder by a Noteholder other than in accordance with the immediately preceding sentence shall be deemed held by such Noteholder in trust ratably for the benefit of each Noteholder.

Should any installment not be paid when due, then the entire unpaid principal sum evidenced by this note, with all accrued interest, shall, at the option of the Noteholders, and with 10 days notice to the undersigned, become due and may be collected forthwith, time being of the essence of this contract.  It is further agreed that failure of the Noteholders to exercise this right of accelerating the maturity of the debt, or any indulgence granted from time to time, shall in no event be considered as a waiver of such right of acceleration or estop the Noteholders from exercising such right.

At the option of the Company, all or any portion of the unpaid principal sum of, or accrued interest on, the indebtedness represented hereby may be prepaid  from time to time without premium, penalty or payment of unaccrued interest.

A Security Agreement of even date herewith has been executed in conjunction with this Note to provide security and collateral for this Note. 

In case this Note is collected by action at law, or through an attorney at law, all costs of collection, including reasonable attorney's fees, shall be paid by the Company.

The Company hereby waives and renounces any and all exemption rights it may have under or by virtue of the Constitution or laws of Georgia, or any other State, or the United States, as against this debt or any renewal thereof; and further waives demand, protest and notice of demand, protest and non-payment.

In case of default in the payment after demand therefor, and in case the Noteholders of this note should elect, on account of such default, to declare the unpaid balance of the principal sum due and payable, said principal sum, or so much thereof as may remain unpaid at the time of such default, shall bear interest at the rate of  eighteen  percent  (18%) per annum from the date of such default. 

Any waiver of a right hereunder by a Noteholder shall be effective only against such Noteholder.

This contract is to be construed in all respects and enforced according to the laws of the State of Georgia.

 

[SIGNATURE ON FOLLOWING PAGES]

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed, under seal, by its duly authorized officer as of the day and year first above written.

SPECTRX, INC.     (Corporate SEAL)

BY: 

      /s/ Siraj Noorani

TITLE:    Controller and Principal Accounting  Officer

 

SECURITY AGREEMENT

 

 

This SECURITY AGREEMENT is made on this 6nd day of  September, 2005 between  SpectRx, Inc. ("Debtor"),  and  Mark A. Samuels and William D. Arthur, III (together the "Secured Parties"). 

1.  SECURITY INTEREST.  Debtor hereby grants to the Secured Parties a security interest in the right of Debtor to receive payments after the date hereof pursuant to Sections 2.3 and 2.4 of that certain Asset Purchase Agreement, dated March 6, 2003, between Debtor and Respironics, Inc., a Delaware corporation ("Respironics"), but excluding for the avoidance of doubt any amounts previously advanced by Respironics against such payments, whether pursuant to that certain agreement, dated June 27, 2005, between Debtor and Respironics or otherwise.

The Security Interest shall secure the payment and performance of Debtor's promissory note of even date herewith in the aggregate principal amount of One Hundred Thousand ($100,000) Dollars ($50,000 owed to each of the Secured Parties) (the "Note") and the payment and performance of all other liabilities and obligations of Debtor to the Secured Parties of every kind and description, direct or indirect, absolute or contingent, due or to become due now existing or hereafter arising under the Note.

 

2.  COVENANTS. Debtor hereby warrants and covenants:  (a) the Debtor will not sell, dispose, or otherwise transfer the Collateral, or any interest therein, without the prior written consent of each Secured Party, and the Debtor shall keep the collateral free from unpaid charges (including rent), taxes, and liens; (b) the Debtor shall execute alone or with the Secured Parties a Uniform Commercial Code financing statement and pay the cost of filing the same in all public offices wherever filing is deemed by a Secured Party to be necessary. 

 

3.  DEFAULT. The Debtor shall be in default under this Agreement upon the happening of any of the following: (a) any noncompliance with or nonperformance of the Debtor's obligations under the Note or this Agreement, or (b) an assignment of assets is made by the Company for the benefit of creditors, or (c) an attachment or receivership of the Company's assets not dissolved within ninety (90) days, or (d) the institution of bankruptcy proceedings in respect of the Company, whether voluntary or involuntary, which is not dismissed within ninety (90) days from the date on which it is filed. Upon default and at any time thereafter, either Secured Party may declare all obligations secured hereby immediately due and payable and shall have the remedies of a Secured Party under the Uniform Commercial Code.  Any waiver by the Secured Parties of any right hereunder shall require the consent of both Secured Parties, and no waiver by the Secured Parties of any default shall operate as a waiver of any other default or of the same default on a future occasion. This Agreement shall inure to the benefit up and bind the heirs, executors, administrators, successors, and assigns of the parties. This Agreement shall have the effect of an instrument under seal. 

SPECTRX, INC.

___/s/ Siraj Noorani_______________

Controller and Principal Accounting Officer

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