STOCK OPTION AWARD AGREEMENT (EXECUTIVE)
Exhibit 10.2
STOCK OPTION AWARD AGREEMENT
(EXECUTIVE)
(EXECUTIVE)
THIS AGREEMENT CONSTITUTES PART OF THE PROSPECTUS COVERING SECURITIES REGISTERED UNDER THE
SECURITIES ACT OF 1933.
THIS STOCK OPTION AWARD AGREEMENT (hereinafter, the “Agreement”) is made as of this day of
, , by and between Xxxxxxxx Corporation, a New York corporation (the “Company”),
and (the “Optionee”). For the purposes of this Agreement, all capitalized terms not
defined herein shall have the meanings ascribed thereto under the terms of the Xxxxxxxx Corporation
2001 Equity Compensation Plan (as amended, the “Plan”), unless otherwise noted.
WHEREAS, Optionee is employed by the Company or its subsidiaries, as defined in the Plan; and
WHEREAS, the Company wishes to grant to Optionee an award of stock options under the Plan,
subject to the conditions and restrictions set forth in the Plan and this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained in this agreement, the
parties agree as follows:
1. Grant
of Options. The Committee has granted to Optionee as of ______ (the
“Grant Date”), ______ options to purchase shares of common stock, par value $5.00 per share, of
the Company (“Common Stock”), upon the terms and conditions set forth in this Agreement and the
Plan. The options granted under this Agreement are intended to be non-statutory stock options.
2. Exercise Price. The exercise price of the shares of Common Stock covered by the
option shall be ______ per share. This option price represents 100% of the Fair Market Value of
the Common Stock on the date of grant, as calculated under the Plan.
3. Term of Option. The term of the options shall be ten (10) years from the date
hereof, subject to earlier termination as provided in Section 5. The date which is ten (10) years
after the Grant Date shall be termed the “Expiration Date”.
4. Vesting of Options. The options granted hereunder will be deemed vested upon
Optionee’s continued employment with the Company or one of the Company’s subsidiaries on the dates
set forth in the following schedule:
One (1) year from the Grant Date hereof
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33 1/3% of the options | |
Two (2) years from the Grant Date hereof
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66 2/3% of the options | |
Three (3) years from the Grant Date hereof
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100% of the options |
5. Restrictions on Certain Terminations and Post-Employment Exercise of Options.
(a) Subject to the provisions of Section 5(c) hereof, if Optionee’s employment with the
Company (which, for purposes of this Section 5, includes any subsidiary of the Company) terminates
prior
to the Expiration Date, and at such time the Optionee is eligible for retirement at the
Normal Retirement Date, as defined in the Xxxxxxxx Corporation Employees’ Pension Plan (or would be eligible for
retirement at the Normal Retirement Date under such plan if Optionee was a participant in such
plan) in effect at the time of Optionee’s termination of employment, then all unvested options
shall vest immediately upon such termination and Optionee’s privilege to purchase shares may be
exercised by Optionee at any time but in no event later than either the date which is five (5)
years after the date Optionee’s employment with the Company terminates or the Expiration Date,
whichever occurs first, and thereafter shall terminate.
(b) Subject to the provisions of Section 5(c) hereof, if Optionee’s employment with the
Company terminates prior to the Expiration Date and at such time Optionee does not satisfy the
requirement set forth in Section 5(a) hereof, but (i) Optionee is at least 62 years old and (ii)
Optionee has at least five (5) years of service with the Company, then all unvested options shall
continue to vest in accordance with Section 4 hereof (provided that the requirement of Optionee’s
continued employment set forth in Section 4 will no longer apply). Optionee’s privilege to
purchase shares may be exercised by Optionee at any time but, (i) with respect to options that were
vested at the time Optionee’s employment terminated, such options must be exercised no later than
either the date that is five (5) years after the date Optionee’s employment with the Company
terminates or the Expiration Date, whichever occurs first, and thereafter shall terminate, and (ii)
with respect to options that were not vested at the time Optionee’s employment terminates, such
options must be exercised no later than either the date that is five (5) years after the date such
portion of the option vests pursuant to Section 4 hereof or the Expiration Date, whichever occurs
first, and thereafter shall terminate.
(c) If after the Grant Date but prior to the end of the calendar year in which the Grant Date
occurs, and prior to the vesting of any such options, Optionee’s employment with the Company
terminates for any reason (other than permanent and total disability as provided in Section 5(d) or
death as provided in Section 5(e)), then the number of options awarded under this Agreement shall
be reduced, as of the date immediately preceding such date of termination, by multiplying the
number of options granted pursuant to Section 1 hereof by a fraction, the numerator of which shall
be the number of full or partial months of employment that Optionee has completed with the Company
between the Grant Date and the date of termination, and the denominator shall be the number of
full or partial months between the Grant Date and the end of the calendar year in which the Grant
Date occurs.
If Optionee’s employment with the Company terminates prior to the Expiration Date, and at such
time (i) the Optionee is at least 55 years old but less than 62 years old and (ii) the Optionee has
at least five (5) years of service with the Company, then the vesting of all options shall be
suspended for a six-month period following the date of the Optionee’s termination, during which
time the Committee shall have the opportunity to make one of the following determinations:
(1) The Optionee, directly, indirectly, or otherwise, has entered into a transaction such that
the Optionee owns, manages, operates, controls, serves as a consultant to, becomes employed by,
participates in, or becomes connected, in any manner, with the ownership management, operation, or
control of any business that competes with the Company or any of its affiliates, as determined by
the Committee in its sole discretion.
(2) The Optionee did not give the Company timely notification of the Optionee’s termination of
employment so as to allow the Company appropriate time for orderly succession.
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(3) The Optionee, during the term of the Optionee’s employment with the Company, engaged in
“financial malfeasance” which, for purposes of this Agreement, includes (i) any act of dishonesty
by the Optionee resulting, or intended to result, directly or indirectly, in gain or personal
enrichment at the expense of, or to the detriment of, the Company or (ii) any fraudulent or
intentional misconduct of Optionee that contributes, directly or indirectly, to a material
misstatement of the financial performance of the Company, including any material misstatement of
earnings, revenues, gains, or expenses.
If the Committee makes one or more of the above determinations, any stock options that were
not vested as of the date of Optionee’s termination of employment will be cancelled. If the
Committee does not make any of the above determinations, all unvested options shall continue to
vest in accordance with Section 4 hereof (provided that the requirement of Optionee’s continued
employment set forth in Section 4 will no longer apply) and vesting credit shall be given for the
period during which vesting was suspended. Optionee’s privilege to purchase shares may be
exercised by Optionee at any time but, (i) with respect to options that were vested at the time
Optionee’s employment terminated, such options must be exercised no later than either the date that
is five (5) years after the date Optionee’s employment with the Company terminates or the
Expiration Date, whichever occurs first, and thereafter shall terminate, and (ii) with respect to
options that were not vested at the time Optionee’s employment terminates, such options must be
exercised no later than either the date that is five (5) years after the date such portion of the
option vests pursuant to Section 4 hereof or the Expiration Date, whichever occurs first, and
thereafter shall terminate.
(d) Notwithstanding any provisions of this Agreement to the contrary, if Optionee’s employment
with the Company terminates prior to the Expiration Date by reason of permanent and total
disability, then all unvested options shall vest immediately upon such termination and Optionee’s
privilege to purchase shares may be exercised by Optionee at any time but in no event later than
either the date which is five (5) years after the date Optionee’s employment terminates or the
Expiration Date, whichever occurs first, and thereafter shall terminate.
(e) Notwithstanding any provisions of this Agreement to the contrary, if Optionee’s employment
with the Company terminates prior to the Expiration Date by reason of death, then all unvested
options shall vest immediately upon such termination and Optionee’s privilege to purchase shares
may be exercised by Optionee’s beneficiary (as defined under Section 8) at any time but in no event
later than either the date that is five (5) years after the date Optionee’s employment terminates
or the Expiration Date, whichever occurs first, and thereafter shall terminate.
(f) If Optionee’s employment with the Company terminates for any reason other than death or
permanent and total disability or at a time when Optionee is not eligible for retirement, in each
case as referred to above in Sections 5 (a)-(e), then Optionee’s privilege to purchase shares
pursuant to options that are vested as of the date of termination may be exercised by Optionee at
any time within ninety (90) days of the termination of Optionee’s employment, but in no event later
than the Expiration Date, and thereafter shall terminate. All options that are not vested as of
the date of termination shall be cancelled as of such date.
(g) In the event of a Change in Control, the options granted under this Agreement shall vest
immediately upon such Change in Control and shall remain exercisable by Optionee until the earlier
of (i) the date two years after the Change in Control effective date or (ii) the Expiration Date.
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(h) Notwithstanding any provisions of this Agreement to the contrary, if Optionee’s employment
with the Company or any of its subsidiaries is terminated for Cause, as defined herein, the
Committee may, in its sole discretion, immediately terminate the options granted under this
Agreement that have not yet become vested as of any date prior to the date of such termination.
For the purpose of this Agreement, “Cause” shall mean a termination of employment by the Company
due to (i) the violation by the Optionee of any rule, regulation, or policy of the Company,
including the Company’s Business Code of Conduct; (ii) the failure by the Optionee to meet any
requirement reasonably imposed upon such employee by the Company as a condition of continued
employment; (iii) the violation by the Optionee of any Federal, State or local law or regulation;
(iv) the commission by the Optionee of an act of fraud, theft, misappropriation of funds,
dishonesty, bad faith or disloyalty; (v) the failure by the Optionee to perform consistently the
duties of the position held by such employee in a manner which satisfies the expectations of the
Company after such Optionee has been provided written notice of performance deficiencies and a
reasonable opportunity to correct those deficiencies; or (vi) the dereliction or neglect by the
Optionee in the performance of such employee’s job duties.
6. Method of Exercising Option. The option hereby granted may be exercised at any
time as to all or any of the shares then purchasable in accordance with this Agreement by payment
in full therefor, at the corporate offices of the Company, either in (a) cash (including check,
bank draft money order, or wire transfer) or (b) by delivering Common Stock owned of record by
Optionee, or a combination of cash and Common Stock owned of record by Optionee. The fair market
value of the Common Stock so delivered shall be the arithmetic mean of the high and low price of
the Common Stock on the New York Stock Exchange-Composite Transactions listing on the exercise date
(as of 4:00 p.m. Eastern Time). The utilization of Common Stock to pay all or any part of the
option price shall be subject to any rules and conditions issued by the Board or the Committee.
Upon receipt of such payment and payment of any required withholding taxes, the Company will issue,
sell, and deliver fully paid and nonassessable shares of Common Stock in the amount for which
payment is so made. As soon as practicable after such payment, the Company shall either transfer
physical possession of a certificate or certificates representing the shares of Common Stock so
purchased or provide for book entry transfer of such shares to the Optionee.
7. Optionee’s Alternative to Exercising Options.
(a) In the event of a Change in Control, and as an alternative to the exercise provisions
contained above, Optionee may, under certain limited conditions hereinafter set forth, elect to
surrender and terminate the option granted herein as to all or any of the shares then purchasable
in accordance with this Agreement and receive cash from the Company.
(b) A written application containing an election to exercise this Section 7 alternative must
be submitted to the Secretary of the Company, or his or her designee, during the period that
commences on the date on which a Change in Control occurs and ends on the 60th day
thereafter.
(c) The amount of cash paid upon exercise of this Section 7 alternative shall equal the total
number of option shares surrendered multiplied by the amount by which the fair market value of a
share of the
Company’s Common Stock on the date of exercise exceeds the option price. The fair market
value of Common Stock, for purposes of this paragraph, shall be the arithmetic mean of the high and
low prices of the Common Stock as reported on the New York Stock Exchange-Composite Transactions
listing (or
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similar report) on the exercise date (as of 4:00 p.m. Eastern Time) as determined in
this Section 7(c), or, if no sale was made on such date, then on the next preceding day on which a
sale was made.
(d) This Section 7 alternative shall not be available more than six months after (i)
Optionee’s retirement from the Company or one of its subsidiaries, or (ii) Optionee ceases to be
considered an “executive officer” of the Company and therefore subject to Section 16(b) of the
Exchange Act.
8. Assignability/Beneficiary. The rights of Optionee, contingent or otherwise, in the
options cannot and shall not be sold, assigned or pledged or otherwise transferred or encumbered
other than by will or by the laws of descent and distribution. Optionee may designate a
beneficiary or beneficiaries to exercise any rights or receive any benefits that are due under
Section 5(f) following Optionee’s death. To be effective, such designation must be made in
accordance with such rules and on such form as prescribed by the Company’s corporate compensation
group for such purpose the completed form must be received by the Company’s corporate compensation
group or its designee before Optionee’s death. If Optionee fails to designate a beneficiary, or if
no designated beneficiary survives Optionee’s death, Optionee’s estate shall be deemed Optionee’s
beneficiary.
9. Rights as a Shareholder. Neither Optionee nor his/her beneficiary or legal
representative shall be, or have any rights of, a shareholder of the Company or have any right to
notice of meetings of shareholders or of any other proceedings of the Company prior to the transfer
of shares to such Optionee pursuant to the exercise of an option.
10. Changes in Capital Structure. The number of options covered by this Agreement and
the exercise price thereof will be adjusted appropriately in the event of any stock split, stock
dividend, combination of shares, merger, consolidation, reorganization, or other change in the
nature of the shares of Common Stock in the same manner in which other outstanding shares of Common
Stock not subject to the Plan are adjusted.
11. Governing Law. The grant and exercise of this option is subject to the condition
that this option, together with any other options granted on the Grant Date, will conform with any
applicable provisions of any State or Federal law or regulation in force either at the time of
grant of the option or the exercise thereof. The Committee and the Board reserve the right
pursuant to the condition mentioned in this Section 11 to terminate all or a portion of this option
if, in the opinion of the Committee and the Board, this option or the exercise thereof does not
conform with any such applicable State or Federal law or regulation and such nonconformance shall
cause material harm to the Company.
This option shall not be exercisable if such exercise would violate:
| (a) | Any applicable State securities law; | ||
| (b) | Any applicable registration or other requirements under the Securities Act of 1933, as amended (the “Act”), the Securities Exchange Act of 1934, as amended, or applicable listing requirements of any stock exchange; or | ||
| (c) | Any applicable legal requirement of any other governmental authority. |
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The Company agrees to make reasonable efforts to comply with the foregoing laws and
requirements so as to permit the exercise of this option. Furthermore, if a registration statement
with respect to the shares to be issued upon the exercise of this option is not in effect or if
counsel for the Company deems it necessary or desirable in order to avoid possible violation of the
Act, the Company may require, as a condition to its issuance and delivery of certificates for the
shares, the delivery to the Company of a commitment in writing by the person exercising the option
that at the time of such exercise it is such person’s intention to acquire such shares for such
person’s own account for investment only and not with a view to, or for resale in connection with,
the distribution thereof; that such person understands the shares may be “restricted securities” as
defined in Rule 144 of the Securities and Exchange Commission; and that any resale, transfer or
other disposition of such shares will be accomplished only in compliance with Rule 144, the Act, or
the other rules and regulations thereunder. The Company may place on the certificates evidencing
such shares an appropriate legend reflecting the aforesaid commitment and the Company may refuse to
permit transfer of such certificates until it has been furnished evidence satisfactory to it that
no violation of the Act or the rules and regulations thereunder would be involved in such transfer.
This Agreement is to be governed by the laws of the State of New York, without regard to
conflicts of laws principles thereof.
12. Tax Reporting and Withholding. Optionee’s ability to exercise Optionee’s options
and to receive the benefits of such exercise is contingent upon Optionee’s agreement that Optionee
will remit to the Company any taxes that the Company is required by law to collect from Optionee.
The Company reserves the right to deduct from the total number of shares purchased by Optionee
pursuant to the exercise of the options the number of shares the fair market value (as defined in
Section 6 hereof) of which equals any tax withholding obligation that the Company has upon
Optionee’s exercise of the option. The Company also reserves the right to require that any such
taxes be remitted to the Company from the proceeds of the sale of any stock acquired by Optionee
through exercise of the option by any stock broker effecting such sale. The Company and its
subsidiaries reserve the right to report such income in connection with the exercise of this option
as they determine in their sole discretion to be appropriate under applicable laws.
13. Continued Employment. Nothing contained herein shall be construed as conferring
upon the Optionee the right to continue in the employ of the Company or any of its subsidiaries as
an executive or in any other capacity.
14. Parties to Agreement. This Agreement and the terms and conditions herein set
forth are subject in all respects to the terms and conditions of the Plan, which are controlling.
All decisions or interpretations of the Board and of the Committee shall be binding and conclusive
upon Optionee or upon Optionee’s executors or administrators or beneficiary upon any question
arising hereunder or under the Plan. This Agreement will constitute an agreement between the
Company and the Optionee as of the date first above written, which shall bind and inure to the
benefit of their respective executors, administrators, beneficiaries, successors and assigns.
15. Modification. No change, termination, waiver or modification of this Agreement
will be valid unless in writing and signed by all of the parties to this Agreement.
16. Consent to Jurisdiction. Optionee hereby consents to the jurisdiction of any
State or Federal court located in the county in which the principal executive office of the Company
is then located
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for purposes of the enforcement of this Agreement and waives personal service of any and all
process upon Optionee. The Optionee waives any objection to venue of any action instituted under
this Agreement.
17. Notices. All notices, designations, consents, offers or any other communications
provided for in this Agreement must be given in writing, personally delivered, or by facsimile
transmission with an appropriate written confirmation of receipt, by nationally recognized
overnight courier or by U.S. mail. Notice to the Company is to be addressed to its then principal
office. Notice to the Optionee or any transferee is to be addressed to his/her/its respective
address as it appears in the records of the Company, or to such other address as may be designated
by the receiving party by notice in writing to the Secretary of the Company.
18. Further Assurances. At any time, and from time to time after executing this
Agreement, the Optionee will execute such additional instruments and take such actions as may be
reasonably requested by the Company to confirm or perfect or otherwise to carry out the intent and
purpose of this Agreement.
19. Provisions Severable. If any provision of this Agreement is invalid or
unenforceable, it shall not affect the other provisions, and this Agreement shall remain in effect
as though the invalid or unenforceable provisions were omitted. Upon a determination that any term
or other provision is invalid or unenforceable, the Company shall in good faith modify this
Agreement so as to effect the original intent of the parties as closely as possible.
20. Exemption From Liability. Neither the Company, any subsidiary, the Board, the
Committee, nor any of their delegates shall be held liable for any taxes, penalties, or other
monetary amounts owed by Optionee, his executors, administrators, or beneficiaries, or any other
person, as a result of the grant, modification, amendment, or exercise of an option, or the
adoption, modification, amendment, or administration of the Plan.
21. Captions. Captions herein are for convenience of reference only and shall not be
considered in construing this Agreement.
22. Entire Agreement. This Agreement represents the parties’ entire understanding and
agreement with respect to the issuance of the option, and each of the parties acknowledges that it
has not made any, and makes no promises, representations or undertakings, other than those
expressly set forth or referred to therein.
IN WITNESS WHEREOF, the parties agree to the terms and conditions stated herein by signing and
returning to the Company the attached copy hereof.
XXXXXXXX CORPORATION |
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| By: | ||||
| Vice President | ||||
Accepted by: |
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