This Nonqualified Stock Option Agreement (the "Agreement"), effective as of
August 17, 2000 (the "Date of Grant"), is made by and between The Xxxxx Group
Inc., a New York corporation (the "Company"), and Xxxxxx Xxxxxx (the
"Recipient").
Background
The Company has established the Xxxxx Group Inc. Stock Incentive Plan (the
"Plan"). The Company wishes to grant to the Recipient a Nonqualified Stock
Option pursuant to the terms of the Plan.
Therefore, in consideration of the mutual covenants contained in this
Agreement and other good and valuable consideration, the Company and the
Recipient agree as follows:
1. Grant of Option. In consideration of service to the Company and for
other good and valuable consideration, the Company grants to the Recipient a
Nonqualified Stock Option (the "Option") to purchase 187,500 Shares in
accordance with the terms and conditions of the Plan and this Agreement. The
Option is granted in accordance with the terms and conditions of the Plan,
the terms of which are incorporated herein by reference, and the Agreement
shall in all respects be interpreted in accordance with the Plan. Any term
used in the Agreement that is not otherwise defined in the Agreement shall
have the meaning assigned to it by the Plan.
2. Option Price. The purchase price of the Shares subject to the Option
shall be the par value $.01 per Share.
3. Adjustments in Option. If a reorganization, merger, consolidation,
reclassification, recapitalization, combination or exchange of shares, stock
split, stock dividend, rights offering, or other expansion or contraction of
the Common Stock occurs, the Committee will equitably adjust the number and
class of Shares then subject to the Option, and the price per Share payable
upon exercise of the Option. To the extent deemed equitable and appropriate
by the Board, subject to any required action by shareholders, the Option
will pertain to the securities and other property to which a holder of the
number of Shares covered by the Option would have been entitled to receive in
connection with any merger, consolidation, reorganization, liquidation or
dissolution. Any adjustment in the Option pursuant to this Section 3 shall
be made without change in the total price applicable to the unexercised
portion of the Option (except for any change in the aggregate price resulting
from rounding-off of share quantities or prices) and with any necessary
corresponding adjustment in the Option price per share. Any such adjustment
made by the Committee shall be final and binding upon the Recipient, the
Company and all other interested persons.
4. Person Eligible to Exercise Option. During the lifetime of the
Recipient, only the Recipient may exercise the Option or any portion of the
Option. After the death of the Recipient, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under the
terms of the Plan, be exercised by the Recipient's personal representative or
by any other person empowered to do so under the Recipient's will, trust or
under then applicable laws of descent and distribution.
5. Manner of Exercise. The Option, or any portion of the Option, shall
be exercised only in accordance with the provisions of the Plan and this
Agreement. The person exercising the Option shall give to the Company a
written notice that shall: (i) state the number of Shares with respect to
which the Option is being exercised; and (ii) specify a date (other than a
Saturday, Sunday or legal holiday) not more than ten days after the date of
such written notice, as the date on which the Shares will be purchased.
Such tender and conveyance shall take place at the principal office of the
Company during ordinary business hours, or at such other hour and place
agreed upon by the Company and the person or persons exercising the Option.
On the date specified in such written notice, the Company shall accept payment
for the Option Shares in cash, by bank or certified check, by wire transfer,
by delivery of a notice instructing the Company to deliver the Shares to a
broker subject to the broker's delivery of cash to the Company equal to the
exercise price, or by such other means as may be approved by the Committee,
and shall deliver to the person or persons exercising the Option in exchange
therefor an appropriate certificate or certificates for fully paid
nonassessable Shares or undertake to deliver certificates within a reasonable
period of time. In the event of any failure to take up and pay for the
number of Shares specified in such written notice on the date set forth
therein (or on the extended date as above provided), the right to exercise
the Option shall terminate with respect to such number of Shares, but shall
continue with respect to the remaining Shares covered by the Option and not
yet acquired pursuant thereto.
The person who exercises the Option shall warrant to the Company that,
at the time of such exercise, such person is acquiring his or her Option
Shares for investment and not with a view to, or for or in connection with,
the distribution of any such Shares, and shall make such other representations,
warranties, acknowledgments, and affirmations, if any, as the Committee may
require. In such event, the person acquiring such Shares shall be bound by
the provisions of an appropriate legend which shall be endorsed upon the
certificate(s) evidencing his or her Option Shares issued pursuant to such
exercise. The Company may delay issuance of the Shares until completion of
any action or obtaining any consent that the Company deem necessary under any
applicable law (including without limitation state securities or "blue sky"
laws).
6. Conditions to Issuance of Stock Certificates. The shares of stock
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares or issued shares which have
been reacquired by the Company. Such shares shall be fully paid and
nonassessable.
7. Rights of Shareholders. The Recipient shall not be, nor have any of
the rights or privileges of, a shareholder of the Company in respect of any
shares purchasable upon the exercise of any part of the Option unless and
until certificates representing such shares shall have been issued by the
Company to the Recipient.
8. Vesting and Exercisability. A Recipient's interest in the
Option shall vest according to the provisions of this Section 8 and shall be
exercisable as to not more than the vested percentage of the shares subject
to the Option at any point in time. Furthermore, the Option is exercisable
only if the issuance of Shares upon exercise would comply with applicable
securities laws. To the extent the Option is either unexercisable or
unexercised, the unexercised portion shall accumulate until the Option both
becomes exercisable and is exercised, subject to the provisions of Section 9
of the Agreement. The Option shall become vested as follows:
Anniversary of Date of Grant
Date of Grant
August 17, 2001 - August 16, 2002
After August 16, 2003
Vested Percentage of Option
50%
75%
100%
The Committee, in its sole and absolute discretion, may accelerate
the vesting of the Option at any time. The Option shall automatically become
100% vested upon the occurrence of a Change of Control.
(b) A Change of Control means the occurrence of one or more of
the following events: (i) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all or substantially
all of the assets of the Company and its Subsidiaries, taken as a whole, to
any Person or group of related Persons, as defined in Section 13(d) of the
Exchange Act (a "Group"), other than to Permitted Holders; (ii) the approval
by the holders of Capital Stock of the Company of any plan or proposal for
the liquidation or dissolution of the Company; (iii) any Person or Group
(other than Permitted Holders) shall become the owner, directly or indirectly,
beneficially or of record, of shares representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
Voting Stock of the Company or any successor to all or substantially all of
its assets; or (iv) the first day on which a majority of the members of the
board of directors of the Company are not Continuing Directors.
(c) For purposes of Section 8(b) above, the following terms
shall have the following meanings:
(i) "Capital Stock" of any Person means any and all
shares, interests, participation or other equivalents (however designated) of
corporate stock or other equity participations, including partnership
interests, whether general or limited, of such Person.
(ii) "Continuing Directors" means, as of any date of
determination, any member of the board of directors of the Company who
(A) was a member of such board of directors on August 16, 2000 or (B) was
nominated for election or elected to such board of directors by any of the
Permitted Holders or with the approval of a majority of the Continuing
Directors who were members of such board of directors at the time of such
nomination or election.
(iii) "Exchange Act" refers to the Securities
Exchange Act of 1934 as it may be amended and any successor act thereto.
(iv) "Permitted Holder" means as of the date of
determination (A) Xxxxxx Xxxxxx, Xxxxxx Xxxxxxxx or Xxxx Xxxxxx and any of
their respective spouses, estates, lineal descendants (including adoptive
children), heirs, executors, personal representatives, administrators and
trusts for any of their benefit and (B) any other Person, the majority of
whose Voting Stock is directly or indirectly owned by any Person described in
clause (A) above.
(v) "Person" means any individual, corporation,
partnership, joint venture, trust, unincorporated organization or government
or any agency or political subdivision thereof.
(vi) "Subsidiary" of any Person means (A) a corporation
more than 50% of the combined voting power of the outstanding Voting Stock of
which is owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or (B) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of
such Person or such Person and one or more other Subsidiaries thereof,
directly or indirectly, has at least a majority ownership and power to direct
the policies, management and affairs thereof.
(vii) "Voting Stock" of any Person means Capital
Stock of such Person which ordinarily has voting power for the election of
directors (or persons performing similar functions) of such Person, whether
at all times or only so long as no senior class of securities has such voting
power by reason of any contingency.
9. Duration of Option. Except as specified below, the Option shall
expire on August 16, 2010. Notwithstanding the foregoing, the Option may
expire prior to August 16, 2010, in the following circumstances:
a. In the case of the Recipient's death, the Option shall expire
on the one-year anniversary of the Recipient's death.
b. If the Recipient's employment or affiliation with the Company
terminates as a result of his total and permanent Disability, the Option
shall expire on the one-year anniversary of the Recipient's last day of
employment.
c. If the Recipient ceases employment or affiliation with the
Company as a result of his retirement in accordance with the Company's normal
retirement policies, or if the Company terminates the Recipient's employment
other than for Cause, the Option shall expire 90 days following the last day
of the Recipient's employment.
d. If the Recipient ceases employment or affiliation with the
Company for any reason other than the reasons described in Sections 9.a, 9.b.
or 9.c. of this Agreement, the Option shall expire 30 days following the last
day that the Recipient is employed by the Company.
e. During the period following the last day that the Recipient
is employed by the Company (whether or not employment is terminated as
referenced in Sections 9.a, 9.b, 9.c or 9.d of this Agreement), the Option
will be exercisable only to the extent the Recipient's interest in the Option
is vested on the date the Recipient's employment terminates.
f. Notwithstanding any provisions set forth above in this
Section 9, if the Company terminates the Recipient's employment for Cause,
any unexercised part of the Option shall expire immediately upon the earlier
of the occurrence that constitutes Cause or the last day the Recipient is
employed by the Company.
10. Administration. The Committee shall have the power to interpret
this Agreement and to adopt such rules for the administration, interpretation
and application of the Agreement as are consistent herewith and to interpret
or revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Recipient, the Company and all other interested persons. No member
of the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to this Agreement or any
similar agreement to which the Company is a party.
11. Transfer of Option. Unless otherwise permitted by applicable laws
and approved in advance by the Committee, the Option shall not be transferable
by the Recipient and shall be exercisable, during the Recipient's lifetime,
only by such Recipient or, in the event of the Recipient's incapacity, his
guardianor legal representative. Except as otherwise permitted herein, the
Option shall not be assigned, pledged, or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment, or similar process and any attempted transfer, assignment, pledge,
hypothecation or other disposition of the Option or of any rights granted
thereunder contrary to the provisions of this Section 11, or the levy of any
attachment or similar process upon an option or such rights, shall be
null and void. This Section 11 shall not prevent transfers by will or by the
applicable laws of descent and distribution.
12. Shares to be Reserved. The Company shall at all times during the
term of the Option reserve and keep available such number of shares of stock
as will be sufficient to satisfy the requirements of this Agreement.
13. Termination. Without the consent of Recipient or the holder
currently entitled to exercise the Option, the Board may establish a date or
event upon which the Plan and the unexercised portion of the Option will
terminate; provided, however, that the Board must provide to the Recipient or
the holder currently entitled to exercise the Option written notice of the
termination of the Plan and the Option no less than 30 days prior to the date
or event upon which the Plan and the unexercised portion of the Option will
terminate.
14. Notices. Any notice to be given under the terms of this Agreement
to the Company shall be addressed to the Company in care of its President (or
the President's delegate, in the President's absence). Any notice to be
given to the Recipient shall be addressed to him at the address given beneath
his signature below. By a notice given pursuant to this Section 14, either
party may hereafter designate a different address for notices to be given to
him. Any notice which is required to be given to the Recipient shall, if the
Recipient is then deceased, be given to the Recipient's personal
representative if such representative has previously informed the Company of
his status and address by written notice under this Section 14. Any notice
shall have been deemed duly given when enclosed in a properly sealed envelope
addressed as aforesaid, deposited (with postage prepaid) in a United States
postal receptacle.
15. Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.
The Company and the Recipient have executed this Agreement effective as of the
date first written above.
THE XXXXX GROUP INC.
/s/ Xxxxxx X. Xxxxx
________________________________
Xxxxxx X. Xxxxx, President
/s/ ____________________________________
Signature of Recipient
____________________________________
Address of Recipient
