EXHIBIT 10(r)
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE
SEALRIGHT CO., INC.
1995 STOCK OPTION PLAN
THIS AGREEMENT, made effective as of the 14th day of
August, 1995 ("Date of Grant"), by and between SEALRIGHT CO., INC.,
a Delaware corporation (hereinafter called the "Company"), and
XXXXXXX X. XXXXX (hereinafter called "Optionee"),
WITNESSETH THAT:
WHEREAS, the Board of Directors of the Company ("Board of
Directors") has adopted the Sealright Co., Inc. 1995 Stock Option
Plan (the "Plan") pursuant to which options covering shares of the
Common Stock of the Company may be granted to Key Employees of the
Company and its subsidiaries; and
WHEREAS, Optionee is employed as the president and chief
executive officer of the Company and as such is a Key Employee of
the Company; and
WHEREAS, the Company has granted to Optionee the option
to purchase certain shares of its stock under the terms of the Plan
in accordance with this Agreement;
NOW, THEREFORE, in consideration of the premises, and of
the mutual agreements hereinafter set forth, it is agreed as
follows:
1. Grant Subject to Plan. This option is granted
under, and is expressly subject to, all the terms and provisions of
the Plan, which terms are incorporated herein by reference. The
Compensation Committee ("Committee") of the Board of Directors has
been appointed by the Board of Directors, and designated by it, to
make grants of options.
2. Grant and Terms of Option. As of the Date of Grant,
pursuant to action of the Committee, the Company has granted to
Optionee the option to purchase all or any part of thirty thousand
(30,000) shares of the common stock of the Company, par value $.01
per share ("Common Stock"), for a period of ten (10) years from the
Date of Grant, unless the option is sooner terminated pursuant to
Section 7 below, at the purchase price per share equal to the Fair
Market Value of the Company's Common Stock on the Date of Grant,
$16.00 per share (the "Option Price"); provided, however, that the
right to exercise such option shall be, and is hereby, restricted
as follows:
Cumulative Shares/Percentage
Commencing Exercisable (Vested)
8/14/95 (Grant Date) 0/0%
8/14/96 6,000/20%
8/14/97 12,000/40%
8/14/98 18,000/60%
8/14/99 24,000/80%
8/14/00 30,000/100%
Notwithstanding the foregoing, if a "change in control," as defined
in Section X of the Plan, occurs and if following such change of
control Optionee's employment with the Company or a Parent or
Subsidiary is voluntarily or involuntarily terminated within one
year after any such event, any portion of this option which is
unvested and has been held by Optionee for a period of at least six
months shall immediately mature and vest in full and any such
option shall be settled by the payment to Optionee of an amount
equal to the excess, if any, of the aggregate Fair Market Value of
the shares subject thereto on the Special Maturity Date over the
aggregate exercise price of such option; provided, however, that
the Board of Directors may, by unanimous resolution adopted prior
to an event described in clause (C) of Section X of the Plan,
provide that such maturity shall not result from an event in clause
(C) of Section X of the Plan. In no event may this option or any
part thereof be exercised (a) at any time unless Optionee is then
an employee of the Company or a Subsidiary and has been so employed
continuously since the granting of the option or was an employee of
the Parent of the Company at the time of grant and has been
continuously employed since that time by either such Parent or by
the Company or by a Subsidiary, except as provided in Section 7,
below or (b) after the expiration of the tenth year from the Date
of Grant. It is intended that the option shall qualify as an
"incentive stock option" as defined in Section 422A of the Internal
Revenue Code of 1986, as amended.
3. Payment of Option Price. The Option Price shall be
paid in full (a) in cash, (b) by the tender to the Company of
shares of Common Stock of the Company owned by Optionee and
registered in his name having a Fair Market Value equal to the
Option Price, or (c) by any combination of the payment methods
specified in (a) and (b).
4. Anti-Dilution Provisions. In the event that, during
the term of this Agreement, there is any change in the number of
shares of outstanding Common Stock of the Company by reason of
stock dividends, recapitalizations, mergers, consolidations, split-
ups, combinations or exchanges of shares and the like, the number
of shares covered by this option agreement and the price thereof
shall be adjusted, to the same proportionate number of shares and
price as in this original agreement so that the value of the option
to the Optionee shall remain the same, all as provided for pursuant
to the Plan.
5. Investment Purpose. Optionee represents that, in
the event of the exercise by him of the option hereby granted, or
any part thereof, he intends to purchase the shares acquired on
such exercise for investment and not with a view to resale or other
distribution and Optionee agrees to execute and deliver to the
Company a letter or certificate containing such investment
representations, agreements restricting sale (including, without
limitation, provision for stop transfer orders and restrictive
legend on stock certificates) and confirmation of other relevant
facts to support any exemption from the registration requirements
under the Securities Act of 1933 and such state securities laws on
which the Company intends to rely, all as shall be deemed
reasonably necessary by counsel for the Company and in such form as
such counsel shall determine; except that the Company, at its
election, may waive or release this condition in the event the
shares acquired on exercise of the option are registered under the
Securities Act of 1933, or upon the happening of any other
contingency which the Company shall determine warrants the waiver
or release of this condition. Optionee agrees that the
certificates evidencing the shares acquired by him on exercise of
all or any part of this option, may bear a restrictive legend, if
appropriate, indicating that the shares have not been registered
under said Act and are subject to restrictions on the transfer
thereof, which legend may be in the following form (or such other
form as the Company shall determine to be proper), to-wit:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, but have been
issued or transferred to the registered owner pursuant to the
exemption afforded by Section 4(2) of said Act. No transfer
or assignment of these shares by the registered owner shall be
valid or effective, and the issuer of these shares shall not
be required to give any effect to any transfer or attempted
transfer of these shares, including without limitation, a
transfer by operation of law, unless (a) the issuer shall have
received an opinion of its counsel that the shares may be
transferred without requirement of registration under said
Act, or (b) there shall have been delivered to the issuer a
'no-action' letter from the staff of the Securities and
Exchange Commission, or (c) the shares are registered under
said Act."
6. Non-Transferability. Neither the option hereby
granted nor any rights thereunder or under this Agreement may be
assigned, transferred or in any manner encumbered except by will or
the laws of descent and distribution, and any attempted assignment,
transfer, mortgage, pledge or encumbrance, shall be void and of no
effect. The option hereby granted may be exercised, during the
lifetime of Optionee, only be Optionee.
7. Termination of Employment.
(a) If Optionee voluntarily or involuntarily
terminates employment with the Company, a Parent, or any of
its Subsidiaries, this option shall terminate three (3) months
after the date of such termination of employment, with respect
to all vested or unvested options, unless such termination is
due to the death or Disability of Optionee, as provided for in
Section 7(b), below. The Committee shall determine in each
case, subject to applicable law, whether a leave of absence
shall constitute a termination of employment. Any such
determination of the Committee shall be final and conclusive,
unless overruled by the Board.
(b) If Optionee's employment is terminated by
reason of Optionee's death or Disability, the Optionee, or his
personal representative, may exercise any or all of Optionee's
unexercised unexpired vested options, if otherwise eligible
for immediate exercise by the terms of this Agreement on the
date of such termination, provided such exercise is within
twelve (12) months of the date of Optionee's employment
termination but not after the expiration of the option on the
tenth anniversary of its grant.
8. Shares Issued on Exercise of Option. Upon any
exercise of this option, the Company will transfer to Optionee
shares of its Common Stock to satisfy its obligations to deliver
shares on any exercise hereof.
9. Committee Administration. This option has been
granted pursuant to a determination made by the Committee or the
Board of Directors, and such Committee or any successor or
substitute committee authorized by the Board of Directors or the
Board of Directors itself, subject to the express terms of this
option, shall have plenary authority to interpret any provision of
this option and to make any determinations necessary or advisable
for the administration of this option and the exercise of the
rights herein granted, and may waive or amend any provisions hereof
in any manner not adversely affecting the rights granted to
Optionee by the express terms hereof.
10. Non-Waiver of Rights. The failure to enforce at any
time any of the provisions of this Agreement or to require at any
time performance by the other party of any of the provisions hereof
shall in no way be construed as a waiver of such provisions or to
affect either the validity of this Agreement, or any part hereof,
or the right of either party thereafter to enforce each and every
provision in accordance with the terms of this Agreement.
11. Invalidity of Provisions. If any provision of this
Agreement is declared invalid by any tribunal, then such provision
shall be deemed automatically adjusted to the minimum extent
necessary to conform to the requirements for validity as declared
at such time and, as so adjusted, shall be deemed a provision of
this Agreement as though originally included herein. In the event
that the provision invalidated is of such a nature that it cannot
be so adjusted, the provision shall be deemed deleted from this
Agreement as though such provision had never been included herein.
In either case, the remaining provisions of this Agreement shall
remain in effect.
12. Assignments. This Agreement shall be assignable
without Optionee's consent by the Company to, and upon such
assignment shall be binding upon and inure to the benefit of, any
other entity which shall succeed to the business presently being
operated by the Company.
13. Amendments. No modification, amendment or waiver of
any of the provisions of this Agreement shall be effective unless
in writing specifically referring hereto, and signed by the parties
hereto.
14. Governing Law. This Agreement shall be interpreted
in accordance with and governed by the laws of the State of Kansas
as applied to contracts to be wholly performed within such state.
15. Definitions. Unless otherwise defined herein, all
capitalized terms shall be defined as set forth in the Plan.
IN WITNESS WHEREOF, the Company has caused this Agreement
to be executed on its behalf, pursuant to due authorization, and
Optionee has signed this Agreement to evidence his acceptance of
the option herein granted and of the terms hereof, effective as of
the Date of Grant.
SEALRIGHT CO., INC.
By /s/ Xxxx X. Xxxxxx 8-21-95
Xxxx X. Xxxxxx, Vice President-
Finance
/s/ Xxxxxxx X. Xxxxx 8-21-95
Xxxxxxx X. Xxxxx
