Exhibit 10.1
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XXXXXXXX CORPORATION
NONQUALIFIED
STOCK OPTION AWARD
You have been selected to be a Participant in the 1996 Xxxxxxxx
Corporation Stock Incentive Plan (the "Plan"), as specified below:
OPTIONEE: Xxxxxxx X. Xxxx
DATE OF GRANT: August 13, 1997
DATE OF EXPIRATION: August 12, 2007
NUMBER OF SHARES COVERED BY THIS AWARD: 85,000
OPTION PRICE: $29.875
THIS DOCUMENT CONSTITUTES PART OF THE PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THIS AGREEMENT, effective as of the Date of Grant set forth above, is
between Xxxxxxxx Corporation, an Iowa corporation (the "Company") and the
Optionee named above pursuant to the provisions of the Plan. The parties
hereto agree as follows:
1. Grant of Stock Option. The Company hereby grants to Optionee the
Option to purchase the number of shares of Common Stock of the Company, $1.00
par value ("Common Stock") set forth above at the stated Option Price, which is
100% of the Fair Market Value on the Date of Grant, subject to the terms and
conditions of the Plan and this Agreement.
2. Exercise of Stock Options. As long as the vesting requirements
provided herein are met and the Option has not otherwise terminated or expired,
the Optionee may exercise in whole or in part this Option at any time after the
passage of six months from the Date of Grant. The Option shall vest with
respect to all shares covered by this award on February 12, 2007, provided,
however, that the Option will vest prior to such date with respect to all or a
portion of the shares covered by this Grant in accordance with the attached
Exhibit A.
3. Procedure for Exercise of Options. This Option may be exercised by
giving written notice to the Company at its executive offices, addressed to the
attention of its Secretary. Such notice (a) shall be signed by the Optionee or
his legal representative; (b) shall specify the number of full shares then
elected to be purchased with respect to the Option; (c) unless a Registration
Statement under the Securities Act of 1933 is in effect with respect to the
shares to be purchased, shall contain a representation of Optionee that the
shares of Common Stock are being acquired by him or her for investment and with
no present intention of selling or transferring them, and that he or she will
not sell or otherwise transfer the shares except in compliance with all
applicable securities laws and requirements of any stock exchange upon which
the shares of Common Stock may then be listed; and (d) shall be accompanied by
payment in full of the Option Price of the shares to be purchased and
Optionee's copy of this Agreement.
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The Option Price upon exercise of this Option shall be payable to the
Company in full either (a) in cash or its equivalent (acceptable cash
equivalents shall be determined at the sole discretion of the Committee); (b)
by tendering or certifying to the ownership of previously acquired shares held
for at least six (6) months having an aggregate Fair Market Value at the time
of exercise equal to the total price of the shares for which the Option is
being exercised; (c) by a combination of (a) and (b); (d) by delivery of a
properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale proceeds from the
option shares or loan proceeds to pay the exercise price and withholding taxes
due to Company; or (e) by such other methods of payment as the Committee at its
discretion deems appropriate.
As promptly as practicable after receipt of such notice and payment, the
Company shall cause to be issued and delivered to the Optionee or his or her
legal representative, as the case may be, certificates for the shares so
purchased. The Company shall maintain a record of all information pertaining
to Optionee's rights under this Agreement, including the number of shares for
which this Option is exercisable. If the Option shall have been exercised in
full, this Agreement shall be returned to the Company and canceled.
4. Termination of Employment by Death. (a) If, without having fully
exercised this Option, Optionee's employment with the Company is terminated by
reason of death prior to August 12, 2000, this Option shall continue to be
subject to the vesting schedule described in Exhibit A, notwithstanding the
termination of employment. In such case, Optionee's beneficiary (or such
persons that have acquired Optionee's rights under the Option by will or by the
laws of descent and distribution) shall have the right to exercise this Option
following the death of Optionee for a period ending on the earlier of (i) the
Date of Expiration set forth above, or (ii) four years following the date of
death. (b) If at the date of Optionee's death, this Option is exercisable,
then Optionee's beneficiary (or such persons that have acquired Optionee's
rights under the Option by will or by the laws of descent and distribution)
shall have the same right to exercise this Option as Optionee had during his or
her lifetime, for a period ending on the Date of Expiration set forth above.
5. Termination of Employment by Disability. (a) If, without having fully
exercised this Option, Optionee's employment with the Company is terminated by
reason of Disability (as defined in the Plan) prior to August 12, 2000, this
Option shall continue to be subject to the vesting schedule described in
Exhibit A, notwithstanding the termination of employment. In which event,
Optionee (or Optionee's representative) shall have the right to exercise this
Option following his or her date of employment termination for a period ending
on the earlier of (i) the Date of Expiration set forth above, or (ii) four
years following the employment termination date. (b) If at the effective date
of Optionee's Disability this Option is exercisable, then Optionee (or
Optionee's representative) shall have the same right to exercise this Option as
Optionee had during his or her employment for a period ending on the Date of
Expiration set forth above.
6. Termination of Employment by Retirement. (a) If, without having fully
exercised this Option, Optionee's employment with the Company is terminated by
reason of Retirement (as defined under the then established rules of the
Company's tax-qualified retirement plans) prior to August 12, 2000, this Option
shall continue to be subject to the vesting schedule described in Exhibit A,
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notwithstanding the termination of employment. In which event, Optionee shall
have the right to exercise this Option following his or her Retirement date for
a period ending on the earlier of (i) the Date of Expiration set forth above,
or (ii) four years following the Retirement date. (b) If at the effective date
of Optionee's Retirement this Option is exercisable, then Optionee (or
Optionee's representative) shall have the same right to exercise this Option as
Optionee had during his or her employment for a period ending on the Date of
Expiration set forth above.
7. Termination of Employment for Other Reasons. If, without having fully
exercised this Option, Optionee's employment with the Company is terminated for
reasons other than his or her death, Disability or Retirement, then Optionee's
rights under this Option shall terminate. However, the Committee, in its sole
discretion, shall have the right to allow for an exercise period of up to 30
days after the date of such termination, provided that, in no event shall this
extension period continue beyond the Date of Expiration set forth above. In
addition, any such extension shall be applicable only to the extent that this
Option is exercisable at the date of termination of employment.
8. Restrictions on Transfer. This Option may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution. Notwithstanding the foregoing,
Optionee may transfer this Option, in whole or in part, to members of
Optionee's immediate family or trusts or family partnerships for the benefit of
such persons, provided, that Optionee receive the advance written permission of
the Company to make such a transfer and to further notify the Company upon the
completion of the transfer. Further, this Option shall be exercisable during
Optionee's lifetime only by Optionee, Optionee's legal representative or
permitted transferee.
9. Adjustments in Authorized Shares. If the Company shall at any time
change the number of issued shares of Common Stock without new consideration to
the Company (such as by stock dividends or stock splits), the number of shares
to be delivered under this Option and the price of the shares subject to this
Option shall be equitably adjusted so that the aggregate consideration payable
to the Company, if any, shall not be changed. In the case of any merger,
consolidation or combination of the Company with or into another corporation,
other than a merger, consolidation or combination in which the Company is the
continuing corporation and which does not result in the outstanding Common
Stock of the Company being converted into or exchanged for different
securities, cash or other property, or any combination thereof (an
"Acquisition"), the Optionee shall have the right to receive upon exercise of
this Option the Acquisition Consideration receivable upon such Acquisition by a
holder of the number of shares of Common Stock which might have been obtained
upon exercise of the Option, as the case may be, immediately prior to such
Acquisition.
The term "Acquisition Consideration" shall mean the kind and amount of
shares of the surviving or new corporation, cash, securities, evidence of
indebtedness, other property or any combination thereof receivable in respect
of one share of Common Stock of the Company upon consummation of an
Acquisition.
10. Change in Control. Immediately upon a change in control of the
Company all outstanding Options shall become exercisable. For purposes hereof,
a change in control of the Company shall be deemed to have occurred on the
first to occur of any of the following dates:
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(a) on the date the Board of Directors of the Company votes to approve
and recommends a stockholder vote to approve.
(i) any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant to
which shares of the Common Stock and Class B Stock would be
converted into cash, securities or other property, other than
any consolidation or merger of the Company in which the holders
of the Common Stock and Class B Stock immediately prior to the
consolidation or merger have at least a majority of the
ownership in and voting power of the surviving corporation
immediately after the consolidation or merger; or
(ii) any sale, lease, exchange or other transfer (in one transaction
or a series or related transactions) of all, or substantially
all, of the assets of the Company; or
(iii) any plan or proposal for the liquidation or dissolution of the
Company; or
(b) on the date any person (as such term is used in Section 13(d) of the
Securities Exchange Act of 1934, hereinafter the "1934 Act"), other
than the Company's Savings and Investment Plan or similar successor
plan, shall become the beneficial owner (within the meaning of Rule
13d-3 under the 1934 Act) of thirty percent (30%) or more of the
outstanding voting power of the Company except as a result of actions
beyond the control of such person, including, without limitation, as
a result of a shift in voting power of the Company as a result of the
conversion by other persons of their Class B Stock into Common Stock;
or
(c) on the date, during any period of twenty-four (24) consecutive months
on which individuals who at the beginning of such period constitute
the entire Board of Directors of the Company shall cease for any
reason to constitute a majority thereof unless the election of each
new director comprising the majority was approved by a vote of at
least a 2/3 majority of the Directors still in office who were
Directors at the beginning of the period.
Notwithstanding anything to the contrary contained herein, no change in
control shall be deemed to have occurred for the purpose of this Plan by virtue
of any combination or agreement among shareholders of the Company who are
descendants of E. T. Xxxxxxxx, the founder of the Company, or trusts for the
benefit of such persons.
11. Rights as a Stockholder. Optionee shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock subject
to this Agreement until such time as the purchase price has been paid and the
shares have been issued and delivered to him or her.
12. Continuation of Employment. This Agreement shall not confer upon
Optionee any right to continuation of employment by the Company, nor shall this
Agreement interfere in any way with the Company's right to terminate his or her
employment at any time.
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13. Fair Market Value. For the purposes of this Agreement, Fair Market
Value shall mean the average of the high and low market prices at which a share
of the Company common stock shall have traded on the valuation date or on the
next preceding trading date if the valuation date is not a trading day as
reported in the Midwest edition of The Wall Street Journal.
14. Miscellaneous.
(a) This Agreement and the rights of Optionee hereunder are subject to
all the terms and conditions of the Plan, as the same may be amended
from time to time, as well as to such rules and regulations as the
Committee may adopt for administration of the Plan. The Committee
shall have the right to impose such restrictions on any shares
acquired pursuant to the exercise of this Option, as it may deem
advisable, including, without limitation, restrictions under
applicable Federal securities laws, under the requirements of any
stock exchange or market upon which such shares are then listed
and/or traded, and under any blue sky or state securities laws
applicable to such shares.
(b) It is expressly understood that the Committee is authorized to
administer, construe, and make all determinations necessary or
appropriate to the administration of the Plan and this Agreement, all
of which shall be binding upon Optionee. Any inconsistency between
this Agreement and the Plan shall be resolved in favor of the Plan.
All terms used herein shall have the same meaning as in the Plan
document.
(c) With the approval of the Board, the Committee may terminate, amend,
or modify the Plan; provided, however, that no such termination,
amendment, or modification of the Plan may in any way adversely
affect Optionee's rights under this Agreement.
(d) (i) The Company shall have the authority to deduct or withhold, or
require Optionee to remit to the Company, an amount sufficient
to satisfy Federal, state, and local taxes (including Optionee's
FICA obligation) required by law to be withheld with respect to
any exercise of Optionee's rights under this Agreement without
Optionee's written consent.
(ii) Optionee may elect, subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by
having the Company withhold shares of Common Stock having an
aggregate Fair Market Value, on the date the tax is to be
determined, equal to the amount required to be withheld. All
elections shall be irrevocable and in writing, and shall be
signed by Optionee in advance of the day that the transaction
becomes taxable.
(e) Optionee agrees to take all steps necessary to comply with all
applicable provisions of Federal and state securities law in
exercising Optionee's rights under this Agreement.
(f) The Plan and this Agreement are not intended to qualify for treatment
under the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
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(g) This Agreement shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
(h) To the extent not preempted by Federal law, this Agreement shall be
governed by, and construed in accordance with the laws of the State
of Iowa.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the Date of Xxxxx.
XXXXXXXX CORPORATION
By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Its: Chairman of the Board
/s/ Xxxxxxx X. Xxxx
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Optionee, Xxxxxxx X. Xxxx
000 Xxxxxx, #0000
Xxx Xxxxxx, XX 00000
Social Security Number: ###-##-####
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EXHIBIT A
The vesting of the Options, or a portion thereof, will accelerate to August 12,
2000, in the event:
A. The compounded annual growth Company's Earnings Per Share (EPS) from the
fiscal year ended June 30, 1997, to the fiscal year ended June 30, 2000, is
at the level identified in the following chart:
EPS GROWTH(1) NUMBER OF VESTED
OPTIONS (2)
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0 - 12.99% 0
13.0% - 13.99% 28,400
14.0% - 14.99% 56,700
15.0% - 85,000
(1) The Company's EPS compounded annual growth rate over the three-year
period ending June 30, 2000.
The Company's Earnings Per Share is calculated as follows:
Company's Earnings for the fiscal year = Earnings Per Share (EPS)
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Average outstanding shares (including common,
Class B and dilutive effect of all outstanding options)
The "Company's Earnings" for the fiscal year shall be defined as
net earnings from continuing operations prior to special items.
For example, to achieve a 15.0% compounded annual growth rate of
15%, the Company's EPS for fiscal year 2000 must equal or exceed
$1.86.
(2) The number of Options granted under this Agreement, which vesting
will accelerate to August 12, 2000, if the Company achieves the
corresponding EPS compounded annual growth rate and the other
conditions of this Agreement, including this Exhibit A, are met.
AND
B. The Company maintains an average Return on Equity (XXX) of 15% over the
Company's three fiscal years ending June 30, 2000, as follows:
The Company's XXX for each of the three fiscal years ending June 30, 1998,
June 30, 1999, and June 30, 2000, are calculated by the following formula:
Company's Earnings (as defined above) for the fiscal year = XXX
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Shareholder's Equity (amount of shareholders'
investment in Company as of the applicable June 30)
The Company's XXX for the three fiscal years are then averaged together to
determine the average XXX for the three-year period ending June 30, 2000.
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