OM GROUP, INC.
Exhibit 99.1
OM GROUP, INC.
1998 LONG-TERM INCENTIVE COMPENSATION PLAN
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, dated as of (being the date this option is granted)
by and between OM GROUP, INC. (the “Company”), and (the “Participant”), a Key
Employee of the Company or a subsidiary of the Company, is to evidence the non-incentive stock
option granted to the Participant as described herein. Capitalized terms used herein and not
otherwise defined have the meaning ascribed to them in the 1998 Long-Term Incentive Compensation
Plan of the Company, as adopted by the shareholders on May 5, 1998, and as it may be amended (the
“Plan”).
WITNESSETH
That the parties hereto agree as follows:
Section 1. The Company hereby grants to the Participant the option of purchasing the number
of shares of Common Stock of the Company at the option exercise price and subject to the terms and
conditions hereinafter set forth.
Section 2. The aggregate number of shares of Common Stock purchasable is .
Section 3. The option exercise price is $ per share.
Section 4. Except as otherwise provided in Sections 5, 6, 7, 8, 9, 10 and 12, the option
rights granted hereunder shall become exercisable in three equal installments on the first, second
and third annual anniversaries of the date of this option grant as set forth above.
Section 5. This option shall become exercisable as to all of the shares it covers upon the
occurrence of any Change in Control of the Company (as defined in the Plan) occurring within the
option period specified in Section 11; provided that this option shall not be exercisable prior to
the expiration of six months from the date of grant.
Section 6. To the extent not otherwise exercisable at the date of the retirement of the
Participant in accordance with a retirement plan or policy of the Company or any subsidiary, this
option shall become fully exercisable upon such retirement, and the Participant may exercise the
option rights set forth herein at any time within three years following such retirement (but only
within the option period specified in Section 11).
Section 7. If the Participant shall die while still employed by the Company or any
subsidiary, this option shall become fully exercisable to the extent not otherwise exercisable, and
the person entitled by will or the applicable laws of descent and distribution may exercise the
option rights set forth herein at any time within one year following the Participant’s death
(but only within the option period specified in Section 11).
Section 8. If the Participant ceases to be employed by the Company or a subsidiary due to the
permanent and total disability of the Participant, this option shall become fully exercisable to
the extent not otherwise exercisable, and the Participant may exercise the option rights set forth
herein at any time within the one-year period following the date of the Participant’s cessation of
employment (but only within the option period set forth in Section 11).
Section 9. If the Participant shall die following the cessation of employment with the
Company or a subsidiary but within the periods provided for in Sections 6 or 8, this option shall
become fully exercisable to the extent not otherwise exercisable, and the person entitled by will
or applicable laws of descent and distribution may exercise the option rights set forth herein at
any time within one year following the Participant’s death (but only within the option period set
forth in Section 11).
Section 10. If the Participant ceases to be employed by the Company or a subsidiary for any
reason other than retirement, permanent and total disability, or death, the Participant may
exercise the option rights set forth herein at any time within the three-month period following
such cessation of employment (but only within the option period specified in Section 11) to the
extent the Participant was entitled to exercise the same immediately prior to such cessation of
employment; provided, however, if there has been a Change in Control of the Company and the
Participant’s employment with the Company shall have terminated after such Change in Control and
prior to six months from the date of grant of this option, then this option may be exercised in
whole or in part at any time within the three-month period commencing six months from the date of
grant of this option.
Section 11. Notwithstanding any other provisions hereof, this option shall not be exercisable
after .
Section 12. Notwithstanding any other provisions hereof, if the Participant’s employment with
the Company or a subsidiary is terminated on account of a violation of the Company’s Code of
Conduct and Ethics, this option shall be forfeited upon such termination to the full extent not
exercised at the time of such termination.
Section 13. This option is not transferable by the Participant otherwise than by will or by
the laws of descent and distribution, and is exercisable, during the lifetime of the Participant,
only by the Participant or the Participant’s guardian or legal representative. Upon any attempt to
transfer, assign, pledge, hypothecate, or otherwise dispose of this option or the related option
rights contrary to the provisions of this Agreement, or upon the levy of any attachment or similar
process upon such option or rights, such option and rights shall immediately become null and void.
Section 14. If the Participant’s exercise of this option is prevented by the terms of
subsections (a), (b) or (c) of Section 18 and the Participant’s option terminates pursuant to
Section 6, 8 or 9, then the Participant may, notwithstanding the provisions of Section 6, 8 or 9
but only within the period set forth in Section 11, exercise such option to the extent it would
have been exercisable immediately prior to its termination but for the operation of Section 18 at
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any time within 30 days after such Participant is notified by the Company that such exercise
is no longer prevented by Section 18.
Section 15. In the event that at any time prior to the expiration of this option each of the
outstanding shares of Common Stock of the Company (except shares held by dissenting stockholders)
shall be changed into or exchanged for a different number or kind of shares of stock or other
securities of the Company or of another corporation, whether through reorganization,
recapitalization, stock split-up, combination of shares, merger or consolidation, then for all
purposes of this option there shall be substituted for each share of Common Stock purchasable
hereunder the number and kind of shares of stock or other securities into which each such share of
Common Stock of the Company shall be so changed, or for which each such share shall be so
exchanged, and the shares or securities so substituted for each such share of Common Stock shall be
subject to purchase at an appropriately adjusted option exercise price and subject to the terms and
conditions hereof.
In the event that the Company shall issue a stock dividend in Common Stock with respect to the
Common Stock of the Company, the number of shares then purchasable hereunder shall be adjusted by
adding to each such share the number of shares which would have been distributed as a stock
dividend thereon had such share been outstanding on the record date for payment of the stock
dividend, and each such share together with said additional shares shall be purchasable at the
option exercise price as above provided and as may be appropriately adjusted.
In the event that there shall be any other change in the number or kind of outstanding shares
of Common Stock or other securities of the Company, or of any shares of stock or other securities
into which such shares of Common Stock shall have been changed or for which they shall have been
exchanged, or the Company shall make an Extraordinary Distribution or a Prorata Repurchase, then
the Compensation Committee shall make such adjustment in the number or kind of shares of stock or
other securities covered by this option and in the number or kind of shares of stock or other
securities subject to purchase at the option exercise price as above provided and with any such
adjustment in the option exercise price to reflect the effect of such Extraordinary Distribution or
Prorata Repurchase as the Compensation Committee, in its sole discretion may determine is equitably
required by such change, and such adjustment so made shall be effective and binding for all
purposes of this option.
Anything to the contrary herein contained notwithstanding, the Participant shall not be
entitled to purchase a fraction of a share under this option.
Section 16. If the Company shall liquidate or dissolve, or shall be a party to a merger or
consolidation with respect to which the Company shall not be the surviving corporation, the Company
shall give written notice thereof to the Participant at least 30 days prior thereto. The
Participant shall have the right within said 30-day period (but only within the period specified in
Section 11) to exercise this option to the extent such Participant was entitled to exercise the
option on the date of the notice; provided, however, that if the Participant is employed by the
Company on the date of the notice, then notwithstanding the provisions of Section 4, the
Participant shall have the right to exercise this option in full to the extent not previously
exercised. To the extent that this option shall not have been exercised on or prior to the
effective date of such liquidation, dissolution, merger or consolidation, then notwithstanding any
other provisions hereof, it shall terminate on said date, unless it is assumed by another
corporation
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within the meaning of Section 425(a) of the Internal Revenue Code of 1986, as amended.
Section 17. Subject to the terms and conditions hereof, this option may be exercised in whole
or in part by delivering to the Company at its principal place of business a written notice, signed
by the person entitled to exercise the option, of the election to exercise the option and stating
the number of shares to be purchased. Such notice shall, as an essential part thereof, be
accompanied by the payment of the full option exercise price of the shares then to be purchased,
except as provided below. Payment of the full option exercise price may be made, at the election
of the Participant, in (a) cash, (b) Common Stock of the Company, or (c) any combination of cash or
Common Stock of the Company; provided, however, that the Participant may not use Common Stock of
the Company in payment of the purchase price unless such Common Stock has been held by the
Participant for at least six months. A Participant using Common Stock of the Company to pay the
purchase price of shares being purchased may do so either by actual delivery of share certificates
for such Common Stock or by attesting as to the ownership of such Common Stock. Shares of Common
Stock used in payment of the purchase price shall be valued at their closing price on the New York
Stock Exchange on the trading day immediately preceding the date of exercise. The Participant may
elect to pay the purchase price upon the exercise of this option by authorizing a third party to
sell all the shares (or a sufficient portion of the shares) acquired upon the exercise of the
option and to remit to the Company a sufficient portion of the sale proceeds to pay the entire
purchase price and any tax withholding resulting from such exercise. Upon the proper exercise of
this option, the Company shall issue in the name of the person exercising the option, and deliver
to such person, a certificate or certificates for the shares purchased, provided that if any
applicable law or regulation requires the Company to take any action with respect to the shares
specified in such notice before the issuance thereof, the date of delivery of such shares shall be
extended for the period necessary to take such action. The Participant agrees that as holder of
this option, the Participant shall have no rights as a stockholder or otherwise in respect of any
of the option shares until the option is effectively exercised as herein provided. The Participant
agrees to pay in cash, within the time period specified by the Company, the amount (if any)
required to be withheld for federal, state and local tax purposes on account of the exercise of the
option or to make such arrangements to satisfy such withholding requirements as the Company deems
appropriate.
Section 18. This option shall not be exercisable if such exercise would violate:
| (a) | Any applicable state securities law; | ||
| (b) | Any applicable registration or other requirements under the Securities Act of 1933, as amended (the “Act”), the Securities Exchange Act of 1934, as amended, or applicable listing requirements of any stock exchange; or | ||
| (c) | Any applicable legal requirement of any other governmental authority. |
The Company agrees to make reasonable efforts to comply with the foregoing laws and
requirements so as to permit the exercise of this option. Furthermore, if a registration statement
with respect to the shares to be issued upon the exercise of this option is not in effect or if
counsel for the Company deems it necessary or desirable in order to avoid possible violation of the
Act, the Company may require, as a condition to its issuance and delivery of certificates for the
shares, the delivery to the Company of a commitment in writing by the person exercising the option
that at the time of such exercise it is such person’s intention to acquire such shares for
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such person’s own account for investment only and not with a view to, or for resale in
connection with, the distribution thereof; that such person understands the shares may be
“restricted securities” as defined in Rule 144 of the Securities and Exchange Commission; and that
any resale, transfer or other disposition of said shares will be accomplished only in compliance
with Rule 144, the Act, or the other rules and regulations thereunder. The Company may place on
the certificates evidencing such shares an appropriate legend reflecting the aforesaid commitment
and the Company may refuse to permit transfer of such certificates until it has been furnished
evidence satisfactory to it that no violation of the Act or the rules and regulations thereunder
would be involved in such transfer.
Section 19. This Agreement is subject to the terms of the Plan. If there is any
inconsistency between this Agreement and the Plan, the Plan shall govern.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate as of the day
and year first above written.
| “PARTICIPANT” | OM GROUP, INC. | |||||||||
By:
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By: | |||||||||
Title:
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Title: | |||||||||
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