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Exhibit 10(D)(5)(b)
SERVOTRONICS, INC.
STOCK OPTION AGREEMENT
FOR
XXXXXXXX X. XXXXXXXX, XX.
DATED MARCH 24, 1998
1. Definitions.
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As used in this Agreement:
(a) "Company" means Servotronics, Inc.
(b) "Common Stock" means the common stock, $.20 par value, of the
Company.
(c) "Fair Market Value" of a share of Common Stock on a given date
means the average of the highest and lowest quoted sales prices of a share of
Common Stock on the American Stock Exchange on that date or, if no such shares
were traded on the American Stock Exchange on that date, on the next preceding
date on which such shares were so traded. However, if shares of Common Stock
have not been traded on the American Stock exchange for more than ten days
immediately preceding the given date, the Fair Market Value of a share of Common
Stock shall be determined by the Committee in such manner as it may deem
appropriate.
(d) "Option" means the option granted pursuant to this Agreement to
purchase 5,800 shares of Common Stock, which option is intended to be a
non-qualified stock option.
(e) "Committee" means the Board of Directors of the Company or any
committee of the Board that the Board has appointed to administer the Plan.
(f) "Date of Grant" means March 24, 1998.
(g) "Optionee" means Xxxxxxxx X. Xxxxxxxx, Xx.
(h) "Plan" means the Servotronics, Inc. 1989 Employees Stock Option
Plan.
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2. Administration.
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The Committee shall have all the powers vested in it by the terms of
the Plan to administer this Agreement. The Committee is authorized to interpret
this Agreement and the Plan.
3. Grant of Option.
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The Company grants to Optionee an option to purchase 5,800 shares of
Common Stock pursuant to this Agreement.
4. Terms of Option.
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(a) The purchase price of each share of Common Stock subject to the
Option is the Fair Market Value of a share of Common Stock on the Date of Grant
of the Option, which is $8.50.
(b) The Option may be exercised in whole or in part from time to time
on or after March 24, 1999, provided that the Option shall not be exercisable
later than the day preceding the tenth anniversary of the Date of Grant.
(c) By executing this Agreement, the Optionee agrees on behalf of
himself, his executor, administrator, heirs and distributees that any shares of
Common Stock purchased pursuant to the Option are being acquired for investment
and not with a view to distribution.
(d) To exercise the Option, written notice should be given to the
Secretary of the Company in the form attached to this Agreement.
(e) The purchase price of any shares with respect to which the Option
is exercised is payable in full on the date the Option is exercised, in cash or
in shares of Common Stock or in a combination of cash and such shares. The value
of a share of Common Stock delivered in payment of the purchase price shall be
its Fair Market Value on the date the Option is exercised.
(f) The Option is not assignable or transferable by the Optionee
except by will or the laws of descent and distribution and is exercisable,
during the Optionee's lifetime, only by him.
(g) If the Option has not already expired, it shall expire upon the
termination of the Optionee's employment with the Company, whether by death or
otherwise,
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and no shares of Common Stock may thereafter be purchased pursuant to the
Option, except that:
(1) The Optionee may, within three months after the date of the
termination of his employment, purchase any shares of Common Stock that the
Optionee was entitled to purchase under the Option on the date of the
termination of his employment.
(2) Upon the death of any Optionee while employed by the Company
or within the three-month period referred to in Section 4(g)(1) above, the
Optionee's estate or the person to whom such Optionee's rights under the Option
are transferred by will or the laws of descent and distribution may, within one
year after the date of the Optionee's death, purchase any shares of Common Stock
that the Optionee was entitled to purchase under the Option on the date of his
death.
Nothing in this subsection shall allow the exercise of the Option
later than the day before the tenth anniversary of the Date of Grant of the
Option.
5. Adjustment of Shares Available.
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If there is any change in the number of outstanding shares of Common
Stock of the Company through the declaration of stock dividends or through stock
splits, then the number of shares subject to the Option and the purchase price
of the shares subject to the Option shall be automatically adjusted. If there is
any change in the number of outstanding shares of Common Stock of the Company
through any change in the capital account of the Company or through any other
transaction referred to in section 424(a) of the Internal Revenue Code, then the
number of shares subject to the Option and the purchase price of the shares
subject to the Option shall be appropriately adjusted by the Committee, except
to the extent the Committee takes other action pursuant to the following
paragraph.
Notwithstanding the provision of any other Section of this Agreement,
if the Company shall not be the surviving corporation in any merger or
consolidation, or if the Company is to sell all or substantially all of its
assets, or if the ownership of more than 25 percent of the outstanding shares of
Common Stock shall change as the result of a concerted action by one or more
persons or corporations or if an attempt is so made to effect such a change of
ownership, or if the Company is to be dissolved and liquidated (each such event
shall be referred to in this paragraph as a "Corporate Change"), then the Option
shall become exercisable in full as of the Change in Control, and the Committee
in its sole discretion may (i) further accelerate the time at which the Option
may be exercised so that the Option may be exercised in full on or before a date
fixed by the Committee, (ii) provide for the purchase of the Option to the
extent then outstanding for an amount of cash equal to the excess of the Fair
Market Value of the shares subject to the Option (which in the event of a change
in the
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ownership of more than 25 percent of the outstanding shares of Common Stock
shall not be less than the amount of cash and the fair market value of other
consideration tendered for such outstanding shares) over the aggregate purchase
price of the shares subject to the Option, (iii) make such adjustments to the
Option as the Committee finds appropriate to reflect such Corporate Change, or
(iv) cause any surviving corporation in such Corporate Change to assume the
Option or substitute a new option for such Option.
6. No Right to Continue as Employee.
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Nothing in this Agreement shall confer upon the Optionee the right to
continue in the employ of the Company.
7. Rights as Stockholder.
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No person shall have the rights of a stockholder with respect to
shares of Common Stock subject to the Option until the date of issuance, if any,
of a stock certificate pursuant to the exercise of the Option.
8. Regulatory Approvals and Listing.
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The Company shall not be required to issue any certificate or
certificates for shares of Common Stock upon the exercise of the Option prior to
(a) the obtaining of any approval from any government agency that the Company
shall, in its sole discretion, determine to be necessary, and (b) the completion
of any registration or other qualification of such shares under any state or
Federal law or rulings or regulations of any governmental body that the Company
shall, in its sole discretion, determine to be necessary or advisable.
9. Satisfaction of Tax Liabilities.
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The Company shall not be required to issue any certificate for shares
of Common Stock upon the exercise of the Option unless any Federal, state, or
local tax withholding obligation incurred by the Company in connection with the
exercise of the Option has been provided for by the Optionee through the
Optionee's delivery of a sufficient amount of cash or shares of Common Stock to
the Company or through the Company's retention of shares of Common Stock
otherwise issuable on the exercise of the Option.
The value of a share of Common Stock delivered or retained to provide
for the tax withholding obligation incurred by the Company shall be its Fair
Market Value on the date the Option is exercised.
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10. Agreement Subject to Plan.
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Notwithstanding any provision to the contrary herein, this Agreement
is subject to the provisions of the Plan, and if there shall be any conflict
between the provisions of the Agreement and the Plan, then the provisions of the
Plan shall take precedence.
11. Construction.
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This Agreement shall be construed in accordance with the law of the
State of Delaware.
SERVOTRONICS, INC.
By
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Xxxxxxxx X. Xxxxxxxx
President
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Xxxxxxxx X. Xxxxxxxx, Xx.
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