EXHIBIT 10(d)
THE XXXXXX & SESSIONS CO.
FORM OF THREE-YEAR NON-QUALIFIED STOCK OPTION AGREEMENT UNDER THE COMPANY'S
1998 INCENTIVE EQUITY PLAN
This Non-Qualified Stock Option Agreement (the "Agreement")
dated as of Date of Grant (the "Grant Date") by and between The Xxxxxx &
Sessions Co., an Ohio corporation (the "Company"), and OPTIONEE'S NAME AND TITLE
(hereinafter called the "Optionee").
W I T N E S S E T H:
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WHEREAS, on April 24, 1998 the Company's shareholders approved
the 1998 Incentive Equity Plan (the "Plan"); and
WHEREAS, pursuant to the Plan, the Compensation and
Organization Committee (the "Committee") of the Board of Directors of the
Company is authorized to (i) select which key employees and officers of the
Company will receive grants of stock options under the Plan, (ii) determine the
size of such grants and (iii) determine the terms and conditions applicable to
any such grants pursuant to the Plan; and
WHEREAS, the Committee approved this grant to the Optionee on
the Grant Date.
NOW, THEREFORE, pursuant to the Plan the Company hereby grants
to the Optionee this Non-Qualified Stock Option (this "Option") to purchase
NUMBER OF SHARES (00,000) common shares, without par value ("Common Shares"), of
the Company at a purchase price of DOLLARS AND 000/1000 ($0.00) per share (the
"Option Price"), which purchase price is not less than the mean between the
highest and lowest quoted selling price, regular way, of the Common Shares on
the New York Stock Exchange on the Grant Date. The Company agrees to cause
certificates for any Common Shares purchased hereunder to be delivered to the
Optionee upon payment of the purchase price in full, all subject, however, to
the terms and conditions of the Plan and the terms and conditions hereinafter
set forth. This Option is intended to be a non-qualified stock option and shall
not be treated as an "incentive stock option" within the meaning of that term
under Section 422 of the Code, or any successor provision thereto.
1. DEFINITIONS. Defined terms not otherwise defined herein shall have
the meanings assigned to them in the Plan, unless the context clearly indicates
otherwise. For purposes of this Agreement, the following term is defined as set
forth below:
"Subsidiary" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Company has a direct or
indirect ownership or other equity interest.
2. VESTING OF OPTION. This Option (until terminated or exercised as
hereinafter provided) shall be exercisable (a) only to the extent of one-third
of the Common Shares hereinabove specified on the first anniversary of the Grant
Date if during the ensuing one year period, commencing on the Grant Date and
ending on the first anniversary thereof, the Optionee shall have been in the
continuous full-time employ of the Company or any Subsidiary; (b) to the extent
of one-third of the Common Shares on the second anniversary of the Grant Date if
the Optionee shall have been in the continuous full-time employ of the Company
or of any Subsidiary during the one year period commencing on the first
anniversary of the Grant Date and ending on the second anniversary thereof; and
(c) to the extent of the remaining one-third of the Common Shares on the third
anniversary of the Grant Date if the Optionee shall have been in the continuous
full-time employ of the Company or of any Subsidiary during the one year period
commencing on the second anniversary of the Grant Date and ending on the third
anniversary thereof. (Exercisable options in any year shall be rounded to the
nearest whole share.) To the extent then exercisable, this Option may be
exercised in whole or in part from time to time.
3. ACCELERATION OF OPTION. Notwithstanding the foregoing paragraph,
upon a "Change in Control" as defined in Section 13 of the Plan and upon
termination of employment of the Optionee by reason of the Optionee's death,
disability (as defined in Section 4 of this Agreement) or retirement (as defined
in Section 4 of this Agreement), this Option shall become immediately
exercisable and vested in full.
4. TERMINATION OF OPTION. This Option, to the extent not exercisable at
such time, shall terminate contemporaneously with the termination of the
Optionee's employment with the Company or any Subsidiary. Notwithstanding any
other provision of this Agreement, this Option, to the extent exercisable upon
the date of the termination of the Optionee's employment with the Company or any
Subsidiary, shall terminate upon the earliest to occur of the following:
(a) three months following the date of the Optionee's termination of
employment with the Company or any Subsidiary, if such termination of employment
is other than by reason of the Optionee's death, Disability or Retirement or for
Cause;
(b) three years from the date of the Optionee's termination of
employment with the Company or any Subsidiary, if such termination of employment
is by reason of the Optionee's Retirement or Disability;
(c) one year from the date of the Optionee's termination of
employment with the Company or any Subsidiary, if such termination of employment
is by reason of the Optionee's death;
(d) one year from the date of Optionee's death within the three year
period following the termination of employment with the Company or any
Subsidiary, if such termination of employment is by reason of the Optionee's
Retirement or Disability, to the extent such Option has not been previously
exercised following such termination of employment;
(e) contemporaneously with the termination of the Optionee's
employment with the Company or any Subsidiary, if such termination of employment
is for Cause; or
(f) the close of business on EXPIRATION DATE, which date is not
later than ten years from the Grant Date.
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For the purpose of this Section 4, (i) "Cause" means a felony conviction of the
Optionee or the failure of Optionee to contest prosecution for a felony, or
Optionee's willful misconduct or dishonesty, any of which is directly and
materially harmful to the business or reputation of the Company or any
Subsidiary, (ii) "Disability" means permanent and total disability as determined
under the Company's long term disability program, and (iii) "Retirement" means
retirement from active employment with the Company or any Subsidiary on or after
the normal retirement date specified in the applicable pension plan of such
employer, or retirement, with the consent for purposes of the Plan, of the
Committee at or prior to the time of retirement, from active employment with the
Company or any Subsidiary pursuant to the early retirement provisions of the
applicable pension plan of such employer.
5. TRANSFERABILITY OF OPTION.
(a) Except as provided in Section 5(b) below, this Option is not
transferable by the Optionee otherwise than by will or the laws of descent and
distribution, and is exercisable, during the lifetime of the Optionee, only by
the Optionee, or in the event of the Optionee's legal incapacity, by the
Optionees's guardian or legal representative acting in a fiduciary capacity on
behalf of the Optionee under state law and court supervision, subject to the
provisions of Section 4 hereof.
(b) Notwithstanding Section 5(a) above, this Option is transferable
by the Optionee, without payment of consideration therefor by the transferee, to
any one or more members of the immediate family of the Optionee (as defined in
Rule 16a-1(e) of the Securities and Exchange Commission promulgated under
Section 16 of the Exchange Act (or any successor rule to the same effect) (the
"Optionee's Immediate Family"), or to one or more trusts established solely for
the benefit of one or more members of the Optionee's Immediate Family or to one
or more partnerships in which the only partners are members of the Optionee's
Immediate Family, except that (i) no such transfer will be effective unless
reasonable prior notice of such transfer is delivered to the Company and such
transfer is thereafter effected in accordance with any terms and conditions that
have been made applicable to such transfer by the Company or the Committee and
(ii) any such transferee shall be subject to the same terms and conditions under
the Plan and this Agreement as the Optionee.
6. CONTINUITY OF EMPLOYMENT. For purposes of this Agreement, the
continuous employ of the Optionee with the Company or any Subsidiary shall not
be deemed interrupted, and the Optionee shall not be deemed to have ceased to be
an employee of the Company or any Subsidiary, by reason of the transfer of his
employment among the Company and any Subsidiary, or by reason of a leave of
absence approved by the Committee for illness, military or governmental service,
or other cause.
7. NOTICE AND MANNER OF PAYMENT.
(a) This Option may be exercised by giving written notice to the
Company specifying the number of Common Shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price, either by
certified or official bank check, or in full or in part in the form of
unrestricted Common Shares already owned by the Optionee for at least 6 months
or Restricted Shares or Deferred Shares subject to an award under the Plan. If
payment of the purchase price is made in the form of Restricted Shares or
Deferred Shares subject to an award under the Plan, the Common Shares received
by the Optionee upon the exercise of the Option Rights will be subject to the
same risks of forfeiture or restrictions on transfer as those that applied to
the consideration surrendered by the Optionee except that such risks of
forfeiture and restrictions on transfer will apply only to the same number of
Common Shares received by the Optionee as applied to the forfeitable or
restricted Common Shares surrendered by the Optionee.
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(b) Any notice to the Company provided for herein shall be in
writing to the Company, marked Attention: Corporate Secretary at The Xxxxxx &
Sessions Co., 00000 Xxxxxxx Xxxx Xxxxx, Xxxxxxxxx, Xxxx 00000, and any notice to
the Optionee shall be addressed to said Optionee at his or her address currently
on file with the Company. Except as otherwise provided herein, any written
notice shall be deemed to be duly given if and when hand delivered, or five (5)
business days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid, or three (3) business days
after having been sent by a nationally recognized overnight courier service such
as Federal Express, UPS or DHL, addressed as aforesaid. Any party may change the
address to which notices are to be given hereunder by written notice to the
other party as herein specified, except that notices of changes of address shall
be effective only upon receipt.
8. AMENDMENT, INTERPRETATION AND ADMINISTRATION OF THE PLAN. The
Committee shall have authority to interpret the provisions of this Agreement and
the Plan, to adopt, alter and repeal such administrative rules, guidelines, and
practices governing the Plan as it shall, from time to time, deem advisable, and
to otherwise supervise the administration of the Plan. All decisions made in
good faith by the Committee pursuant to the provisions hereof shall be made in
the Committee's sole discretion and shall be final and binding on all persons.
9. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement shall
confer upon the Optionee any right with respect to continuance of employment by
the Company or a Subsidiary, nor limit or affect in any manner the right of the
Company or a Subsidiary to terminate the employment or adjust the compensation
of the Optionee.
10. TAXES AND WITHHOLDING. If the Company or any Subsidiary shall be
required to withhold any federal, state, local or foreign tax in connection with
the exercise of this Option, and the amounts available to the Company or such
Subsidiary for such withholding are insufficient, the Optionee shall pay the tax
or make provisions that are satisfactory to the Company or such Subsidiary for
the payment thereof. The Optionee may elect to satisfy all or any part of any
such withholding obligation by surrendering to the Company a portion of the
Common Shares that are issuable or transferable to the Optionee upon the
exercise of this Option, and the Common Shares so surrendered by the Optionee
shall be credited against any such withholding obligation at a price per Common
Share so surrendered which shall not be less than the mean between the highest
and lowest quoted selling price, regular way, of the Common Shares on the New
York Stock Exchange on the date of such surrender. The Company will pay any and
all issue and other taxes in the nature thereof which may be payable by the
Company in respect of any issue or delivery upon a purchase pursuant to this
Option.
11. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; PROVIDED, HOWEVER,
that notwithstanding any other provision of this Agreement, this Option shall
not be exercisable if the exercise thereof would result in a violation of any
such law.
12. ADJUSTMENTS. The Committee shall make or provide for such
adjustments in the number of Common Shares covered by this Option, in the Option
Price applicable to such Option, and in the kind of shares covered thereby, as
the Committee may determine is equitably required to prevent dilution or
enlargement of the Optionee's rights that otherwise would result from (a) any
stock dividend, stock split,
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combination of shares, recapitalization, or other change in the capital
structure of the Company, (b) any merger, consolidation, spin-off, split-off,
spin-out, split-up, reorganization, partial or complete liquidation, or other
distribution of assets or issuance of rights or warrants to purchase securities,
or (c) any other corporate transaction or event having an effect similar to any
of the foregoing. In the event of any such transaction or event, the Committee
may provide in substitution for this Option such alternative consideration as it
may determine to be equitable in the circumstances and may require in connection
therewith the surrender of this Option.
13. AVAILABLE SHARES. The Company shall at all times until the
expiration of this Option, reserve and keep available, either in its treasury or
out of its authorized but unissued shares of Common Stock, the full number of
Common Shares deliverable upon the exercise of this Option.
14. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Optionee under this Agreement shall not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Company or a
Subsidiary and shall not affect the amount of any life insurance coverage
available to any beneficiary under any life insurance plan covering employees of
the Company or a Subsidiary.
15. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; PROVIDED, HOWEVER, that no amendment shall adversely affect the rights
of the Optionee under this Agreement without the Optionee's consent.
16. RIGHTS AS A STOCKHOLDER. The Optionee shall have none of the rights
of a stockholder with respect to the shares of Common Stock subject to this
Option until such shares are issued to the Optionee upon exercise of this
Option.
17. SEVERABILITY. In the event that one or more of the provisions of
this Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
18. RELATION TO PLAN. This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistent provisions between this
Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to
the Plan, as constituted from time to time, shall, except as expressly provided
otherwise herein, have the right to determine any questions that arise in
connection with this Option or its exercise.
19. SUCCESSORS AND ASSIGNS. Without limiting Section 5 hereof, the
provisions of this Agreement shall inure to the benefit of, and be binding upon,
the successors, administrators, heirs, legal representatives and assigns of the
Optionee, and the successors and assigns of the Company.
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20. GOVERNING LAW. The interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of Ohio, without
giving effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer as of the day and year
first above written.
THE XXXXXX & SESSIONS CO.
By:
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Xxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
The undersigned Optionee hereby acknowledges receipt of an
executed original of this Agreement and accepts this Option granted thereunder,
and the terms and conditions set forth in this Agreement.
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Optionee's Name
Dated:
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Revised: July 19, 2001
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