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EXHIBIT 10.4
NON-QUALIFIED STOCK OPTION AGREEMENT
SIENA HOLDINGS, INC.
1. GRANT OF OPTION. Siena Holdings, Inc., a Delaware corporation
(the "Company" or "Siena") or its Subsidiaries, hereby grants
to:
X. XXXXXX DRYER
(the "Grantee" "You" or "Your")
an option to purchase from the Company a total of 163,000 full
shares ("Stock Options") of Ordinary Shares ("Common Stock")
of the Company at $0.92 per share in the amounts, during the
periods, and upon the terms and conditions set forth in this
agreement. The Date of Grant of this Stock Option is DECEMBER
1, 1997. This is a NON-QUALIFIED STOCK OPTION.
2. SUBJECT TO PLAN. This Stock Option and its exercise are
subject to the terms and conditions of this Agreement. The
capitalized terms used in this Agreement are defined below.
This Stock Option is subject to any rules which have been or
may be made by the Board or the Committee and communicated to
you in writing.
(A) Board. The Board of Directors (or equivalent governing
authority) of the Company, as appointed by the Chairman of
Siena.
(B) Change in Control. A "Change in Control" shall mean a
change in control of a nature that would be required to be
reported in response to item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act as such
Schedule, Regulation and Act were in effect on the date of
adoption of this Plan by the Board, assuming that such
Schedule, Regulation and Act applied to the Company, provided
that such a change in control shall be deemed to have occurred
at such time as:
(I) any "person" (as that term is used in Section
13(d) and 14(d)(2) of the Exchange Act) (other than
Siena Holdings, Inc. or an affiliate of Siena
Holdings, Inc.) becomes, directly or indirectly, the
"beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) of securities representing a 30% or
more of the combined voting power for election of
members of the Board of the then outstanding voting
securities of the Company or any successor of the
Company;
(II) during any period of two (2) consecutive years
or less, individuals who at the beginning of such
period constituted the Board of the Company cease,
for any reason, to constitute at least a majority of
the Board, unless the election or nomination for
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election of each new member of the Board was approved
by a vote of at least two-thirds of the members of
the Board then still in office who were members of
the Board at the beginning of the period;
(III) the equity-holders of the Company approve any
merger or consolidation to which the Company is a
party as a result of which the persons who were
equity-holders of the Company immediately prior to
the effective date of the merger or consolidation
(and excluding, however, any shares held by any party
to such merger or consolidation and their affiliates)
shall have beneficial ownership of less than 50% of
the combined voting power for election of members of
the Board (or equivalent) of the surviving entity
following the effective date of such merger or
consolidation; or
(IV) the equity-holders of the Company approve any
merger or consolidation as a result of which the
equity interests in the Company shall be changed,
converted or exchanged (other than a merger with a
wholly-owned subsidiary of the Company) or any
liquidation of the Company or any sale or other
disposition of 50% or more of the assets or earnings
power of the Company;
(C.) Code. The Internal Revenue Code of 1986, as amended.
(D) Compensation Committee or Committee. The Committee, which
shall be comprised of three or more members who shall be
appointed by the Board to administer this Agreement, which the
Board shall have the power to fill vacancies on the Committee
arising by resignation, death, removal or otherwise. In the
absence of a Committee, reference thereto shall be to the
Board.
(E) Common Stock. Siena Holdings, Inc. Class A Common Stock,
which the Company is authorized to issue or may in the future
be authorized to issue.
(F) Company. Siena Holdings, Inc. ("Siena"), its subsidiaries
and any successor corporation.
(G) Disability. Any complete and permanent disability as
defined in Section 22(e)(3) of the Code and determined in
accordance with the procedures set forth in the regulations
thereunder.
(H) Officer. Any officer of the Company or any Parent or
Subsidiary, who, in the opinion of the Committee, is one of a
select group of executive officers, other officers or other
key management personnel of the Company or any Parent or
Subsidiary who is in a position to contribute materially to
the continued growth and development and to the continued
financial success of the Company or any Parent or Subsidiary,
including executive officers and officers who are members of
the Board.
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(I) Exchange Act. The Securities Exchange Act of 1934, as
amended.
(J) Fair Market Value. The closing sales price of the Common
Stock as reported or listed on a national securities exchange
on any relevant date for valuation, or, if there is no such
sale on such date, the applicable prices as so reported on the
nearest preceding date upon which such sale took place. In
the event the shares of Common Stock are not listed on a
national securities exchange, the Fair Market Value of such
shares shall initially; be based upon the book value of the
Company on June 30, 1997 which includes adjustments to reflect
the market value of the assets and liabilities pursuant to
generally accepted accounting principles, thereafter shall be
determined by the Committee in its sole discretion.
(K) Grantee. Any Officer or Director of the Company who in
the opinion of the Committee performs significant services for
the benefit of the Company and who is granted a Stock Option
under this Agreement.
(L) Involuntary Termination. The termination of Grantee's
retention by Siena other than for death, Disability,
Retirement, Terminated for Cause, Terminated for Good Reason,
or in the event of a Change of Control (as defined in Section
2(B) above).
(M) Retirement. The termination of retention by the Company
or any Parent or Subsidiary constituting retirement as
determined by the Committee.
(N) Stock Option. A Non-Qualified Stock Option granted by the
Committee to a Grantee under this Agreement.
(O) Subsidiary. Any corporation (whether now or hereafter
existing) which constitutes a "subsidiary" of the Company, as
defined in Section 424(f) of the Code.
(P) Termination for Cause. An Officer shall be deemed
Terminated for Cause if he or she is terminated as a result of
a breach of his or her written retention agreement.
(Q) Termination for Good Reason. The resignation of an
Officer shall be deemed to be a Termination for Good Reason if
the Officers resignation is within two years of a Change in
Control as defined in Section 2(B) above, caused by and within
ninety (90) days of the following: (I) without the express
written consent of the Officer, any duties that are assigned
which are materially inconsistent with the Officer's position,
duties and status with Siena at the time of the Change in
Control; (ii) any action by Siena which results in a material
diminution in the position, duties or status of the Officer
with Siena at the time of the Change in Control or any
transfer or proposed transfer of the Officer for any extended
period to a location outside his principal place of retention
at the time of the Change in Control without his consent;
(iii) the base annual compensation of the Officer, as same may
be hereafter be increased from time to time, is reduced; or
(iv) without limiting the generality or effect of the
foregoing, Siena fails to comply with any of its material
obligations hereunder.
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3. VESTING: TIME OF EXERCISE. Except as specifically provided in
this Agreement and subject to certain terms, restrictions and
conditions set forth in this Agreement, this Stock Option is
exercisable in the following cumulative installments:
First installment. Up to 20% of the total Stock Options
at any time following the first
anniversary of the Date of Grant.
Second installment. Up to an additional 20% of the total
Stock Options at any time following
the second anniversary of the Date of
Grant.
Third installment. Up to an additional 20% of the total
Stock Options at any time
following the third anniversary of the
Date of Grant.
Forth installment. Up to an additional 20% of the total
Stock Options at any time following the
forth anniversary of the Date of Grant.
Fifth installment. Up to an additional 20% of the total
Stock Options at any time following the
fifth anniversary of the Date of Grant.
4. TERM; FORFEITURE. This Stock Option, and all unexercised
Stock Options granted hereunder, will terminate and be
forfeited at the first of the following to occur;
(A) 5:00 pm on December 1, 2007; or
(B) 5:00 pm on the date which is twelve (12) months following
termination of service due to death, Disability or six (6)
months after Retirement for Stock Options vested at
termination; or
(C.) 5:00 pm on the date which is twelve (12) months following
termination of service due to death, Disability or six (6)
months after Retirement for Stock Options that vest after
termination; or
(D) 5:00 pm on the 31st day after the day of any other
termination of service.
(E) For purposes of termination of service due to death or
Disability, any non-vested portion of any outstanding Stock
Option shall become vested and immediately and fully
exercisable, notwithstanding any provision therein for the
exercise in installments.
(F) For purposes of termination of service due to Retirement,
any non-vested portion of any outstanding Stock Options shall
become vested and immediately and fully exercisable,
notwithstanding any provision therein for the exercise in
installments. immediately.
(G) For purposes of termination of service as a result of
Involuntary Termination (not
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Change in Control), any non-vested portion of any outstanding
Stock Options shall vest on a pro-rata basis based upon the
number of months the terminated Officer has been retained
within the applicable vesting schedule of this Agreement.
(H) In the event of Involuntary Termination or Termination for
Good Reason within two years of a Change in Control, all Stock
Options then outstanding shall become vested and immediately
and fully exercisable, notwithstanding any provision therein
for the exercise in installments.
5. WHO MAY EXERCISE. Subject to the terms and conditions set
forth in Sections 3 and 4 above, this Stock Option may be
exercised only by Grantee. If as a result of death or
Disability prior to the termination date specified in Section
4(A) hereof and Grantee have not exercised this Stock Option
as to the maximum percentage of Stock Options set forth in
Section 3 hereof as of the date of death of Disability, the
following persons may exercise the exercisable portion of this
Stock Option on behalf of Grantee at any time prior to the
earlier of the dates specified in Sections 4(A) or (B) hereof:
(i) if Grantee is disabled, your guardian; or (ii) if Grantee
dies, the personal representative of your estate, or the
person who acquired the right to exercise this Stock Option by
bequest or inheritance or by reason of Grantees death;
provided that this Stock Option shall remain subject to the
other term of this Agreement, and applicable laws, rules, and
regulations.
6. RESTRICTIONS. This Stock Option may be exercised only with
respect to full shares and no fractional share of stock shall
be issued.
7. MANNER OF EXERCISE. Subject to such rules as the Board or the
Committee may from time to time adopt, this Stock Option may
be exercised by the delivery of written notice to the
Secretary of the Company setting forth the number of shares of
Common Stock with respect to which the Stock Option is to be
exercised and the date of exercise thereof (the "Exercise
Date") which shall be at least three (3) days after giving
such notice unless an earlier time shall have been mutually
agreed upon.
On the Exercise Date, Grantee shall deliver to the Company
consideration with a value equal to the total Option Price of
the shares to be purchased, payable as follows: (i) cash,
certified check, bank draft, or money order payable to the
order of the Company, and/or (ii) any other form of payment
which is acceptable to the Committee.
Common Stock which is acquired by Grantee pursuant to the
exercise of this Stock Option may not be used to exercise a
subsequent option until and unless such shares have been held
for a period of six months.
Upon payment of all amounts due, the Company shall cause
certificates for the Common Stock then being purchased to be
delivered to Grantee (or the person exercising Stock Option in
the event of your death of Disability) at its principal
business office promptly after the
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Exercise date. The obligation of the Company to deliver
shares of Common Stock shall, however, be subject to the
condition that if at any time the Committee shall determine in
its sole discretion that the listing, registration, or
qualification of the Stock Option or the Common Stock upon any
securities exchange or under any state of federal law, or the
consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection
with, the Stock Option or the issuance or purchase of shares
of Common Stock thereunder, then the Stock Option may not be
exercised in whole or in part unless such, listing,
registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not
acceptable to the Committee.
If Grantee fails to pay for any of the Common Stock specified
in such notice or fail to accept delivery thereof, then your
right to purchase such Common Stock may be terminated by the
Company.
8. TAX WITHHOLDING. The Company shall have the right to deduct
from all amounts hereunder paid in cash or other form, any
Federal, state or local taxes required by law to be deducted.
As a requirement for receiving shares of Common Stock issued
under this Stock Option, Grantee will be required to pay the
Company the amount of any taxes which the Company is required
to withhold with respect to such shares of Common Stock. Such
payments shall be required to be made before the delivery of
any certificate representing such shares of Common Stock will
be issued. The Committee may determine such payment can be
made in cash, by check, or through the delivery of shares of
Common Stock owned by Grantee (which may be effected by the
actual delivery of shares of Common Stock by Grantee or if
Grantee is not an insider (as defined by the Securities and
Exchange Commission), by the Company's withholding a number of
shares to be issued upon exercise of this Stock Option, if
applicable), which shares have an aggregate Fair Market Value
equal to the required minimum withholding payment , or any
combination thereof.
9. NON-ASSIGNABILITY. This Stock Option is not assignable or
transferable except by will or the laws of descent and
distribution or pursuant to a qualified domestic relations
order as defined in the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended. However,
after Grantee has shown reasonable evidence of tax and/or
financial advice from a third-party, Grantee may make an
irrevocable gift of the Stock Option to a family member or
trust.
10. RIGHTS AS STOCKHOLDER. You will have no rights as a
stockholder with respect to any shares covered by this Stock
Option until the issuance of a certificate or certificates to
Grantee for the shares. No adjustment shall be made for
dividends or other rights for which the record date is prior
to the issuance of such certificate of certificates.
11. ADJUSTMENT OF NUMBER OF SHARES AND RELATED MATTERS. The
number of shares of Common Stock covered by this Stock Option,
and the Option Price thereof, shall be subject to adjustment
in accordance with change in capitalization of Siena Holdings,
Inc. or a
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combination, merger, or reorganization of Siena Holdings, Inc.
into or with any other corporation or any other transaction
with similar effects.
12. GRANTEE'S REPRESENTATIONS. Notwithstanding any of the
provisions hereof, Grantee hereby agrees that Grantee will not
exercise the Stock Option granted hereby, and that the Company
will not be obligated to issue any shares to Grantee
hereunder, if the exercise thereof or the issuance of such
shares shall constitute a violation by Grantee or the Company
of any provision of any law or regulation of any governmental
authority. Any determination in this connection by the
Committee shall be final, binding and conclusive. The
obligations of the Company and your rights are subject to all
applicable laws, rules and regulations.
Furthermore, if Grantee is an "insider" (as defined by the
Securities Exchange Commission), Grantee agrees that Grantee
will not exercise this Stock Option during the six (6) months
following the Date of Grant.
13. INVESTMENT REPRESENTATION. Unless the Common Stock is issued
to Grantee in a transaction registered under applicable
Federal and state securities laws, by Grantees execution
hereof, Grantee represents and warrants to the Company that
all Common Stock which may be purchased hereunder will be
acquired by Grantee for investment purposes for your own
account and not with any intent for resale or distribution in
violation of Federal or state securities laws. Unless the
Common Stock is issued to you in a transaction registered
under the applicable Federal and state securities laws, all
certificates issued with respect to the Common Stock shall
bear an appropriate restrictive investment legend.
14. PARTICIPANT'S ACKNOWLEDGMENTS. As a Grantee under this
Agreement, Grantee acknowledges receipt of a copy of this
Agreement, and represents that Grantee is familiar with the
terms and provisions of this Agreement. By signing this
Agreement, Grantee hereby accepts as binding, conclusive, and
final all decisions or interpretations of the Committee, as
that term is defined in this Agreement, upon any questions
arising under this Agreement. Any disagreement by Grantee as
to any decision or interpretation of the Committee shall be
settled exclusively by the terms of this Agreement.
15. LAW GOVERNING. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the
State of Delaware (excluding any conflict of laws rule or
principle of Delaware law that might refer the governance,
construction, or interpretation of this agreement to the laws
of another state).
In the event of any change in applicable laws or any change in
circumstances which results in or would result in any dilution
of the rights granted under this Agreement, or which otherwise
warrants equitable adjustment because it interferers with the
intended operation of this Agreement, then if the Committee
shall, in its sole discretion, determine that such change
requires an adjustment in the number or kind of shares of
stock or other securities or property theretofore subject, or
which may become subject, to issuance or transfer under this
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Agreement or in the terms and conditions of this Agreement,
such adjustment shall be made in accordance with such
determination. The Committee shall give notice to each
Grantee, and upon notice such adjustment shall be effective
and binding for all purposes of this Agreement.
16. NO RIGHT TO CONTINUE RETENTION. Nothing herein shall be
construed to confer upon Grantee the right to continue in the
retention of the Company or any Subsidiary or interfere with
or restrict in any way the right of the Company or any
Subsidiary to discharge Grantee at any time (subject to any
contract rights Grantee might have).
17. LEGAL CONSTRUCTION. In the event that any one or more of the
terms, provisions or agreements that are contained in this
Agreement shall be held by a Court of competent jurisdiction
to be invalid, illegal or unenforceable in any respect for any
reason, the invalid, illegal or unenforceable term, provision
or agreement shall not affect any other term, provision or
agreement that is contained in this Agreement and this
Agreement shall be construed in all respects as if the
invalid, illegal or unenforceable term, provision or agreement
had never been contained herein.
18. ENTIRE AGREEMENT. This Agreement supersede any and all other
prior understandings and agreements, either oral or in
writing, between the parties with respect to the subject
matter hereof and constitute the sole and only agreements
between the parties with respect to the said subject matter.
All prior negotiations and agreements between the parties with
respect to the subject matter hereof are merged into this
Agreement. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, orally
or otherwise, have been made by any party or by anyone acting
on behalf of any party, which are not embodied in this
Agreement and that any agreement, statement or promise that is
not contained in this Agreement shall not be valid or binding
or of any force or effect.
19. PARTIES BOUND. The terms, provisions, representations,
warranties, covenants, and agreements that are contained in
this Agreement shall apply to, be binding upon, and inure to
the benefit of the parties and their respective heirs,
executors, administrators, legal representatives, and
permitted successors and assigns.
20. MODIFICATION. No change or modification of this Agreement
shall be valid or binding upon the parties unless the change
or modification is in writing and signed by the parties.
Notwithstanding the preceding sentence, the Company may amend
this Agreement or revoke this Stock Option to the extent
permitted in this Agreement.
21. HEADINGS. The headings that are used in this Agreement are
used for reference and convenience purposes only and do not
constitute substantive matters to be considered in construing
the terms and provisions of this Agreement.
22. NOTICE. Any notice required or permitted to be delivered
hereunder shall be deemed to be
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delivered only when actually received by the Company or by
Grantee, as the case may be, at the addresses set forth below,
or at such other addresses as they have theretofore specified
by written notice delivered in accordance herewith.
(A) Notice to the Company shall be addressed and
delivered as follows:
Siena Holdings, Inc.
Attention: Chairman
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
(B) Notice to Grantee shall be addressed and
delivered as follows:
X. Xxxxxx Dryer
0000 XxxxXxxxx Xxxxx
Xxxxx, XX 00000
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and Grantee, to evidence Grantees consent and approval
of all the terms hereof, has duly executed this Agreement, as of the date
specified in Section 1 hereof.
SIENA HOLDINGS, INC.
BY:
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TITLE:
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GRANTEE:
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