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EXHIBIT 4.1
XXXXX INSTRUMENTS CORP.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT") dated as of
the 6th day of January, 2000 by and between Xxxxx Instruments Corp., a Delaware
corporation (the "COMPANY"), and Xxxxx Xxxxxxxxxx (the "OPTIONEE").
R E C I T A L S
WHEREAS, the Company has granted to the Optionee, effective as of the
6th day of January, 2000 (the "GRANT DATE"), a nonqualified stock option to
purchase all or any part of 25,000 shares of the Company's common stock, par
value $0.01 per share (the "COMMON STOCK"), subject to and upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
made herein and the mutual benefits to be derived herefrom and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties agree as follows:
1. GRANT OF OPTION. This Agreement evidences the Company's grant to the
Optionee of the right and option to purchase, subject to and on the
terms and conditions set forth herein, all or any part of 25,000 shares
of the Company's Common Stock (the "SHARES") at the price of $27.00 per
Share (the "OPTION"), exercisable from time to time, subject to the
provisions of this Agreement, prior to the close of business on the day
before the tenth anniversary of the Grant Date (the "EXPIRATION Date"),
unless earlier terminated pursuant to Section 9. Such price equals the
fair market value of the Common Stock as of the Grant Date.
2. EXERCISABILITY OF OPTION. The Option shall first become and remain
exercisable as to 1/4 of the shares on the first anniversary of the
Grant Date and as to an additional 1/36 of the shares on and after the
last day of each succeeding calendar month until all remaining Options
have become exercisable. If the Optionee does not in any year purchase
all or any part of the Shares to which the Optionee is entitled, the
Optionee has the right cumulatively thereafter to purchase any Shares
not so purchased and such right shall continue until the Option
terminates or expires. The Option shall only be exercisable in respect
of whole Shares, and fractional Share interests shall be disregarded.
The Option may only be exercised as to at least one-hundred (100)
Shares unless the number purchased is the total number at the time
available for purchase under the Option.
3. METHOD OF EXERCISE OF OPTION. The Option shall be exercisable by the
delivery to the Secretary of the Company of a written notice stating
the number of Shares to be purchased pursuant to the Option and
accompanied by (i) delivery of an executed EXERCISE AGREEMENT in the
form attached hereto as EXHIBIT A, (ii) payment of the full purchase
price of the Shares to be purchased, and (iii) payment in full of any
tax withholding obligation under federal, state or local law. Payment
shall be made in one or
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a combination of the following methods: (i) in cash or by electronic
funds transfer; (ii) by check payable to the order of the Company;
(iii) if authorized by the Board of Directors (the "BOARD"), by a
promissory note of the Optionee upon the terms and conditions approved
by the Board; (iv) by notice and third party payment in such manner as
may be authorized by the Board; or (v) by the delivery of shares of
Common Stock of the Company already owned by the Optionee, provided,
however, that the Board may in its absolute discretion limit the
Optionee's ability to exercise the Option by delivering such shares,
and provided further that any shares delivered which were initially
acquired upon exercise of a stock option must have been owned by the
Optionee at least six months as of the date of delivery. Shares of
Common Stock used to satisfy the exercise price of the Option shall be
valued at their fair market value on the date of exercise.
4. TAX WITHHOLDING.
4.1. CASH OR SHARES. Upon any exercise of the Option, the Company shall
have the right at its option to (i) require the Optionee (or personal
representative or beneficiary, as the case may be) to pay or provide
for payment of the amount of any taxes which the Company may be
required to withhold with respect to the Option or (ii) deduct from any
amount payable in cash the amount of any taxes which the Company may be
required to withhold with respect to such cash payment. In any case
where a tax is required to be withheld in connection with the delivery
of shares of Common Stock, the Board may in its sole discretion grant
to the Optionee the right to elect, pursuant to such rules and subject
to such conditions as the Board may establish, to have the Company
reduce the number of shares to be delivered by (or otherwise reacquire)
the appropriate number of shares valued at their then fair market value
to satisfy such withholding obligation.
4.2. TAX LOANS. The Company may, in its discretion and to the extent
permitted by law, authorize a loan to the Optionee in the amount of any
taxes which the Company may be required to withhold with respect to
shares of Common Stock received (or disposed of, as the case may be)
pursuant to a transaction described in Section 4.1. Such a loan shall
be for a term, at a rate of interest and pursuant to such other terms
and conditions as the Company, under applicable law may establish.
5. OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS. The
Board from time to time may authorize, generally or in specific cases
only, for the benefit of the Optionee any adjustment in the number of
shares subject to, the restrictions upon or the term, exercise or
purchase price or vesting schedule of the Option by cancellation of the
Option and a subsequent regranting of the Option, by amendment, by
substitution of the Option, by waiver or by other legally valid means.
Such amendment or other action may result among other changes in an
exercise or purchase price which is higher or lower than the exercise
or purchase price of the original or prior Option, provide for a
greater or lesser number of shares subject to the Option, or provide
for a longer or shorter vesting or exercise period.
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6. RESTRICTIONS ON SHARES. The Certificate of Incorporation and Bylaws of
the Company, as either of them may be amended from time to time, may
provide for restrictions with respect to the Common Stock. To the
extent that these restrictions and limitations are greater than those
set forth in this Agreement, such restrictions and limitations shall
apply to any securities acquired upon exercise of the Option and are
incorporated herein by this reference.
7. NO TRANSFERABILITY; LIMITED EXCEPTION TO TRANSFER RESTRICTIONS.
7.1. LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly
provided in (or pursuant to) this Section 7 or by applicable law (i)
the Option is non-transferable and shall not be subject in any manner
to sale, transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge; the Option shall be exercised only by the
Optionee; and (ii) amounts payable or shares issuable pursuant to the
Option shall be delivered only to (or for the account of) the Optionee.
7.2. EXCEPTIONS. The Board may permit the Option to be exercised by and
paid only to certain persons or entities related to the Optionee,
including but not limited to members of the Optionee's family,
charitable institutions, or trusts or other entities whose
beneficiaries or beneficial owners are members of the Optionee's family
and/or charitable institutions, or to such other persons or entities as
may be approved by the Board, pursuant to such conditions and
procedures as the Board may establish. Any permitted transfer shall be
subject to the condition that the Board receive evidence satisfactory
to it that the transfer is being made for estate and/or tax planning
purposes on a gratuitous or donative basis and without consideration
(other than nominal consideration).
7.3. FURTHER EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and
transfer restrictions in this Section 7 shall not apply to:
(i) transfers to the Company,
(ii) the designation of a beneficiary to receive benefits in the
event of the Optionee's death or, if the Optionee has died,
transfers to or exercise by the Optionee's beneficiary, or,
in the absence of a validly designated beneficiary,
transfers by will or the laws of descent and distribution,
(iii) transfers pursuant to a qualified domestic relations order
if approved or ratified by the Board,
(iv) if the Optionee has suffered a disability, permitted
transfers or exercises on behalf of the Optionee by his or
her legal representative, or
(v) the authorization by the Board of "cashless exercise"
procedures with third parties who provide financing for the
purpose of (or who otherwise facilitate) the exercise of the
Option consistent with applicable laws and the express
authorization of the Board.
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8. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement shall
confer upon the Optionee any right to continue in the employ or other
service of the Company or any of its subsidiaries, nor constitute any
contract or agreement of employment or other service, nor shall
interfere in any way with the right of the Company to change the
Optionee's compensation or other benefits or to terminate the
employment of the Optionee, with or without cause; provided, however,
that nothing contained in this Agreement shall adversely affect any
independent contractual right of the Optionee without his or her
consent thereto.
9. ADJUSTMENT AND TERMINATION UPON CERTAIN EVENTS.
9.1. ADJUSTMENTS. If there shall occur any extraordinary dividend or
other extraordinary distribution in respect of the Common Stock
(whether in the form of cash, Common Stock, other securities, or other
property), or any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend), reverse
stock split, reorganization, merger, combination, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Common
Stock or other securities of the Company, or there shall occur any
similar, unusual or extraordinary corporate transaction or event in
respect of the Common Stock or a sale of substantially all the assets
of the Company as an entirety, then the Board shall, in such manner and
to such extent (if any) as it deems appropriate and equitable (1)
proportionately adjust any or all of (a) the number and type of shares
of Common Stock (or other securities) which thereafter may be made the
subject of the Option, (b) the number, amount and type of shares of
Common Stock (or other securities or property) subject to the Option,
(c) the grant, purchase, or exercise price of the Option, (d) the
securities, cash or other property deliverable upon exercise of the
Option, or (e) the performance standards appropriate to the Option, or
(2) in the case of an extraordinary dividend or other distribution,
recapitalization, reclassification, merger, reorganization,
consolidation, combination, sale of assets, split up, exchange, or spin
off, make provision for a cash payment or for the substitution or
exchange of the Option or the cash, securities or property deliverable
to the Optionee based upon the distribution or consideration payable to
holders of the Common Stock of the Company upon or in respect of such
event. In any of such events, the Board may take such action
sufficiently prior to such event if necessary to permit the Optionee to
realize the benefits intended to be conveyed with respect to the
underlying shares in the same manner as is available to stockholders
generally.
9.2. ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. Unless the Board
determines, prior to the occurrence of any of the following (each of
which shall be hereafter referred to as a "Change in Control Event"):
(i) Approval by the stockholders of the Company of the
dissolution or liquidation of the Company;
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(ii) Approval by the stockholders of the Company of an agreement
to merge or consolidate, or otherwise reorganize, with or
into one or more entities that are not subsidiaries or other
affiliates, as a result of which less than 50% of the
outstanding voting securities of the surviving or resulting
entity immediately after the reorganization are, or will be,
owned, directly or indirectly, by stockholders of the
Company immediately before such reorganization (assuming for
purposes of such determination that there is no change in
the record ownership of the Company's securities from the
record date for such approval until such reorganization and
that such record owners hold no securities of the other
parties to such reorganization, but including in such
determination any securities of the other parties to such
reorganization held by affiliates of the Company);
(iii) Approval by the stockholders of the Company of the sale of
substantially all of the Company's business and/or assets to
a person or entity which is not a subsidiary or other
affiliate;
(iv) Any `person' (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended
from time to time (the "EXCHANGE ACT") but excluding any
person described in and satisfying the conditions of Rule
13d-1(b)(1) thereunder) becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then
outstanding securities entitled to then vote generally in
the election of directors of the Company; or
(v) During any period not longer than two consecutive years,
individuals who at the beginning of such period constituted
the Board cease to constitute at least a majority thereof,
unless the election, or the nomination for election by the
Company's stockholders, of each new Board member was
approved by a vote of at least three-fourths of the Board
members then still in office who were Board members at the
beginning of such period (including for these purposes, new
members whose election or nomination was so approved),
that, upon the occurrence of a Change in Control Event, there shall be
no acceleration of benefits under the Option or determines that only
certain or limited benefits under the Option shall be accelerated and
the extent to which they shall be accelerated, and/or establishes a
different time in respect of such Change in Control Event for such
acceleration, then upon the occurrence of a Change in Control Event the
Option shall become immediately exercisable. The Board may override the
limitations on acceleration in this Section 9.2 and may accord the
Optionee a right to refuse any acceleration, in such circumstances as
the Board may approve. Any acceleration of the Option shall comply with
applicable regulatory requirements, including, without limitation,
Section 422 of the Internal Revenue Code of 1986, as amended from time
to time (the "CODE").
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9.3. POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If the Option
has been fully accelerated as permitted by Section 9.2 but is not
exercised prior to (i) a dissolution of the Company, or (ii) an event
described in Section 9.2 that the Company does not survive, or (iii)
the consummation of an event described in Section 9.2 that results in a
change of control approved by the Board, the Option shall thereupon
terminate, subject to any provision that has been expressly made by the
Board for the survival, substitution, exchange or other settlement of
the Option.
9.4. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) Resignation or Dismissal. If the Optionee's employment by
the Company or any of its subsidiaries terminates for any reason (the
date of such termination being referred to as the "SEVERANCE DATE")
other than retirement, a "permanent and total disability" within the
meaning of Section 22(e)(3) of the Code and such other disabilities,
infirmities, afflictions or conditions as the Board by rule may include
("TOTAL DISABILITY") or death, or "for cause" (as determined in the
discretion of the Board), the Optionee shall have, subject to earlier
termination pursuant to or as contemplated by Section 1 or 9.2 hereof,
three months after the Severance Date to exercise the Option to the
extent it shall have become exercisable on the Severance Date. In the
case of a termination "for cause", the Option shall terminate on the
Severance Date. In other cases, the Option, to the extent not
exercisable on the Severance Date, shall terminate.
(b) Death or Disability. If the Optionee's employment by the
Company or any of its subsidiaries terminates as a result of Total
Disability or death, the Optionee, the Optionee's personal
representative or his or her beneficiary, as the case may be, shall
have, subject to earlier termination pursuant to or as contemplated by
Section 1 or 9.2 hereof, until 12 months after the Severance Date to
exercise the Option to the extent it shall have become exercisable by
the Severance Date. The Option to the extent not exercisable on the
Severance Date shall terminate.
(c) Retirement. If the Optionee's employment by the Company or
any of its subsidiaries terminates as a result of retirement with the
consent of the Company or from active service as an employee or officer
of the Company on or after attaining age 55 with 10 or more years of
service or after age 65, the Optionee, the Optionee's personal
representative or his or her beneficiary, as the case may be, shall
have, subject to earlier termination pursuant to or as contemplated by
Section 1 or 9.2 hereof, until 12 months after the Severance Date to
exercise the Option to the extent it shall have become exercisable by
the Severance Date. The Option, to the extent not exercisable on the
Severance Date, shall terminate.
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(d) Board Discretion. Notwithstanding the foregoing provisions of this
Section 9.4, in the event, or in anticipation, of a termination of
employment with the Company or any of its subsidiaries for any reason,
other than discharge for cause, the Board may, in its discretion,
increase the portion of the Option available to the Optionee, or the
Optionee's beneficiary or personal representative, as the case may be,
or, subject to the provisions of Section 1 hereof, extend the
exercisability period upon such terms as the Board shall determine and
expressly set forth in or by amendment to this Agreement.
9.5. EFFECT OF CHANGE OF SUBSIDIARY STATUS. If an entity ceases to be a
subsidiary of the Company a termination of employment and service shall
be deemed to have occurred with respect to each employee of such
subsidiary who does not continue as an employee of another entity
within the Company.
10. 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
Common Stock as will be sufficient to satisfy the requirements of this
Agreement.
11. ASSIGNMENT. This Agreement cannot be directly or indirectly assigned or
transferred by the Optionee in whole or in part without the prior
written consent of the Company.
12. NOTICES. Any notices, demands or requests of any kind whatsoever
hereunder shall be given in writing and sent to the addresses set forth
below or to such other address as either party may from time to time in
writing designate. Each such notice or other communication shall be
effective (i) if given by telecommunication, when transmitted to the
applicable number so specified in (or pursuant to) this Section 12 and
a verification of receipt is received, (ii) if given by mail, three
days after such communication is deposited in the mail with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other
means, when actually delivered at such address.
13. WAIVER. The parties reserve the right to waive by mutual written
consent for a specific period and under specific conditions any
provision of this Agreement, provided that such waiver shall be limited
to the period and conditions specified by mutual written consent and
shall in no way constitute a general waiver, or be considered as
evidence of any given interpretation of any provision so waived.
14. GOVERNING LAW. This Agreement, and the legal relations between the
parties, shall be governed by and construed in accordance with the laws
of the State of California, without regard to conflicts of law
doctrines. All actions or proceedings under or relating to this
Agreement will be resolved in a state or federal court located in
Orange County, California; provided, however, that in the Company's
discretion, such an action may be heard in some other place designated
by it if necessary to acquire jurisdiction over third persons so that
the dispute can be resolved in one action. Each party hereby (i) agrees
to submit to the jurisdiction of the federal and state courts located
in Orange County, California, (ii) agrees to appear in any such action,
(iii) consents to the jurisdiction of such courts and (iv) waives any
objections it might have as to venue in any such court. Service of
process may be made in any action, suit or proceeding by mailing or
delivering a copy of such process to a party at its address and in the
manner set forth in Section 12 hereof.
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15. TITLES. Titles and paragraph headings are for reference purposes only
and are not to be considered a part of this Agreement.
16. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided,
if possible, to achieve the intent of the parties to the extent
possible. In any event, all other provisions of this Agreement shall be
deemed valid and enforceable to the extent possible.
17. ENTIRE AGREEMENT. The parties hereto acknowledge that each has read
this Agreement, understands it, and agrees to be bound by its terms.
The parties further agree that this Agreement and any modifications
made pursuant to it constitute the complete and exclusive written
expression of the terms of the agreement between the parties, and
supercede all prior or contemporaneous proposals, oral or written,
understandings, representations, conditions, warranties, covenants, and
all other communications between the parties relating to the subject
matter of this Agreement. The parties further agree that this Agreement
may not in any way be explained or supplemented by a prior or existing
course of dealings between the parties, by any usage of trade or
custom, or by any prior performance between the parties pursuant to
this Agreement or otherwise.
18. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument.
19. ATTORNEY'S FEES. In the event that any action or proceeding is brought
in connection with this Agreement the prevailing party therein shall be
entitled to recover its costs and reasonable attorney's fees.
20. COMPLIANCE WITH LAWS. Notwithstanding anything else contained herein to
the contrary, this Agreement, the granting and vesting of the Option
and the offer, issuance and delivery of Shares under this Agreement are
subject to compliance with all applicable federal and state laws, rules
and regulations (including but not limited to state and federal
securities laws and federal margin requirements) and to such approvals
by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered in respect of this
Agreement will be subject to such restrictions, and to any restrictions
the Company may require to preserve a pooling of interests under
generally accepted accounting principles, and the person acquiring such
securities will, if requested by the Company, provide such assurances
and representations to the Company as the Company may deem necessary or
desirable to assure compliance with all applicable legal requirements.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Optionee has
hereunto set his or her hand.
XXXXX INSTRUMENTS CORP.,
a Delaware corporation
By: /s/ XXXX XXXXXXXX
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Name: Xxxx Xxxxxxxx
Its: Vice President and
General Counsel
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
OPTIONEE
/s/ XXXXX XXXXXXXXXX
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Signature
Xxxxx Xxxxxxxxxx
------------------------------------
Print Name
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CONSENT OF SPOUSE
In consideration of the execution of the foregoing Nonqualified Stock
Option Agreement by Xxxxx Instruments Corp., I, ___________________________, the
spouse of the Optionee herein named, do hereby agree to be bound by all of the
terms and provisions thereof.
DATED:
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Signature of Spouse
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EXHIBIT A
XXXXX INSTRUMENTS CORP.
EXERCISE AGREEMENT
THIS EXERCISE AGREEMENT (this "AGREEMENT") dated as of the ____ day of
______________, _____, by and between Xxxxx Instruments Corp., a Delaware
corporation (the "COMPANY"), and ______________________ (the "PURCHASER").
R E C I T A L S
WHEREAS, the Company has granted to the Purchaser a nonqualified stock
option (the "OPTION") to purchase all or any part of a designated amount of
authorized but unissued shares of common stock of the Company and, in connection
therewith, the Company and the Purchaser entered into that certain Nonqualified
Stock Option Agreement dated as of the 6th of January, 2000 (the "OPTION
AGREEMENT") of which this Agreement is a part and into which this Agreement is
incorporated;
WHEREAS, the Purchaser desires to exercise the Option and purchase from
the Company and the Company wishes to issue and sell to the Purchaser _______
shares of its common stock, par value $0.01 per share (the "COMMON STOCK"), to
be sold at a price of $27.00 per share, in accordance with and subject to the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the above premises and the
representations, warranties, covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK. The Company shall deliver to the
Purchaser a stock certificate representing the shares of Common Stock
against delivery to the Company by the Purchaser of the purchase price
in the sum of $____________ (which represents the product of the $27.00
price per share and the number of shares, the "PURCHASE PRICE").
2. RESTRICTIONS ON SHARES. The shares of Common Stock acquired pursuant to
Section 1 hereof are subject to, and the Purchaser agrees to be bound
by, the provisions of Sections 6, 7 and 20 of the Option Agreement,
incorporated herein by this reference.
3. MISCELLANEOUS. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the state of California. This
Agreement and the Option Agreement together constitute the entire
agreement and supersede all prior understandings and agreements,
written or oral, of the parties hereto with respect
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to the subject matter hereof. This Agreement may be amended by mutual
agreement of the parties. Such amendment must be in writing and signed
by the Company. The Company may, however, unilaterally waive any
provision hereof in writing to the extent such waiver does not
adversely affect the interests of the Purchaser hereunder, but no such
waiver shall operate as or be construed to be a subsequent waiver of
the same provision or a waiver of any other provision hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
XXXXX INSTRUMENTS CORP.,
a Delaware corporation
By:
--------------------------------
Its:
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PURCHASER
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Signature
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Print Name
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CONSENT OF SPOUSE
In consideration of the execution of the foregoing Exercise Agreement
by Xxxxx Instruments Corp., I, ___________________________, the spouse of the
Purchaser herein named, do hereby agree to be bound by all of the terms and
provisions thereof.
DATED:
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Signature of Spouse
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