STOCK OPTION AGREEMENT
(Non-Assignable)
Date: Option: 91-275
March 31, 1999 Number of Shares Purchasable
25,000
To Purchase Shares of
Class B Common Stock
-of-
K-V PHARMACEUTICAL COMPANY
Issued Pursuant to the
1991 Incentive Stock Option Plan (the "Plan")
THIS CERTIFIES THAT Xxxxxx X. Xxxxxxxx is hereby granted the option to purchase,
at the option price of $15.400 per share, all or any part of that number of
fully paid and non-assessable shares of the Class B Common Stock, par value
$0.01 per share ("Class B Common Stock"), of K-V Pharmaceutical Company, a
Delaware corporation (hereinafter called the "Company") above set forth, upon
and subject to the following terms and conditions:
This Option and all rights to purchase shares hereunder shall expire
five (5) years from the date hereof (hereinafter called the "expiration date.")
This Option and all rights hereunder shall be non-assignable and
non-transferable, except to the extent that the holder's legatees, personal
representatives or distributees in the event of the holder's death may be
permitted to exercise this Option as hereinafter set forth.
Any attempted transfer, assignment, pledge, hypothecation or other
disposition of this Option except as provided herein or in accordance with the
Company's 1991 Incentive Stock Option Plan (the "Plan") shall be null and void
and without effect.
As of March 31, 1999, and prior to its expiration or earlier
termination, this Option shall be exercisable from time to time in cumulative
installments as to all or any of the shares then purchasable hereunder as
follows: During the twelve-month period commencing March 31, 1999 and ending
March 30, 2000, it may be exercised as to 20% of the shares originally subject
hereto; and during each additional consecutive twelve-month period, it may be
exercised as to an additional 20%; until the fifth twelve-month period, during
which this Option shall be exercisable as to all the shares subject hereto.
This Option may be exercised from time to time only by delivery to the
Company at its main office (attention of the Secretary) of a duly signed notice
in writing stating the number of shares with respect to which this Option is
being exercised and the time and date of delivery thereof, which time and date
of delivery shall be during the normal business hours of the Company on a
regular business day not less than fifteen (15) days after the giving of such
notice unless an earlier date has been mutually agreed upon; provided, however,
that not less than ten (10) shares may be purchased at any one time unless the
number purchased is the total number then purchasable hereunder; and provided
further that this Option may not be exercised at any time when this Option or
the granting or exercise hereof violates any law or governmental order or
regulation. At the time of delivery specified in such notice, the Company shall,
without transfer or issue tax to the holder (or other person entitled to
exercise this Option) transfer and set aside for the benefit of the holder (or
other person entitled to exercise this Option) a certificate or certificates out
of the Company's theretofore authorized but unissued or reacquired shares of
Class B Common Stock as the Company may elect (with appropriate legend thereon,
if deemed necessary by the Company, containing the representation by the person
exercising the Option that the shares purchased shall be for investment purposes
and not with a view to resale or distribution) against payment of the option
price in full for the number of shares purchased by either (i) cash (including a
certified or bank cashier's check or the equivalent thereof), or (ii) at the
discretion of the Committee, as defined in the Plan, by delivering at fair
market value, as determined by the Committee (as provided under the Plan),
Company Common Stock already owned by the Participant, or (iii) any combination
of cash and Company Common Stock, to be held by the Company and subsequently
delivered to the holder (or such other person) as hereinafter provided. If the
holder fails to pay for any part of the number of shares specified in such
notice as required, the right to purchase such shares may be terminated by the
Committee.
Except as hereinafter provided, no Option may be exercised at any time
unless the holder hereof is an employee of the Company or any of its
subsidiaries.
To the extent that this Option has not been exercised in full prior to
its termination or expiration date, whichever occurs sooner, it shall terminate
and become void and of no effect.
All Class B Common Stock purchased pursuant to the exercise of an
Option shall be held by the Company for a period of two years from the date of
exercise (the "Holding Period"). If the holder leaves the employ of the Company
during the Holding Period for any reason, except retirement (under normal
Company policies), death or disability, the holder's purchase thereof shall be
voidable at the Company's sole option and discretion at any time within the
Holding Period. If any purchase of Class B Common Stock is so voided, the least
of (i) the funds paid by the holder in connection with the voided transaction;
(ii) the value in cash of Common Stock used to purchase such Class B Common
Stock, determined as of the date of such purchase, less any amount which would
have been forfeited pursuant to the Plan relative to Stock used to purchase the
forfeited stock if such Stock has not been so used and the Holding Period
relative to such stock had not expired; or (iii) the fair market value per
shares, as determined on the date of termination of the holder's employment with
the Company in accordance with the provisions of the Plan, shall be returned in
full to the holder within thirty (30) days after such purchase is voided
provided, however, no payment shall be due prior to the time that the Company is
in possession of the Class B Common Stock and an executed stock power with
respect to such Stock. In order to facilitate the repurchase of Class B Common
Stock by the Company in accordance with the terms of this Paragraph, each holder
who exercises any Option or portion thereof shall, at the time of payment for
such Class B Common Stock, as provided hereinabove, deliver to the Company a
form of stock power and assignment signed by such holder in form and substance
satisfactory to the Company, rendering the certificate representing the shares
purchased negotiable to the Company. Notwithstanding the foregoing, if any
holder who exercises an Option demonstrates to the Committee of the Company a
need to obtain financing for the purchase of Class B Common Stock and indicates
his good faith intention to remain in the employ of the Company during the
Holding Period, the Committee, in its sole discretion, may permit delivery of
any Class B Common Stock purchased hereunder to a financial institution for use
as collateral security for the purchase of the Class B Common Stock, subject to
any necessary or appropriate restrictions with respect thereto as may be
required to comply with applicable federal and state securities laws and/or the
listing requirements of any national securities exchange, and the holder may use
any Class B Common Stock so held in payment of the Option Price for additional
Class B Common Stock as provided for herein.
If the holder remains in the employ of the Company throughout the
Holding Period, or is terminated by reason of death, disability or retirement
(under normal Company policies) the Company shall deliver to the holder or the
holder's personal representative, as soon as practicable thereafter,
certificates representing the Class B Common Stock purchased hereunder (the
"Certificates"), free and clear of restrictions except for the restrictions
which are necessary to assure compliance by the Company and the holder with
applicable federal and state securities laws and/or the listing requirements of
any national securities exchange. If the Company fails or declines to exercise
its right to void any purchase pursuant to the terms of the preceding paragraph
hereof, the Company shall deliver the Certificates to the holder as soon as
practicable after the expiration of two years from the date of exercise.
This Option shall not confer upon the holder any right to remain in the
employ of the Company or any subsidiary thereof and shall not confer upon the
holder any rights in the stock of the Company prior to the issuance of a stock
certificate pursuant to the exercise of this Option. No adjustment shall be made
for dividends or other rights for which the record date is prior to the date
such stock certificate is issued.
Except as provided in this paragraph, upon termination of the holder's
employment with the Company or any of its subsidiaries for any reason, this
Option shall terminate. If the employment of the Participant is terminated by
reason of retirement (under normal Company policies) any outstanding Option or
unexercised portion thereof granted to him may be fully exercised by the
Participant, his personal representative, executor, administrator, heirs or
devisees, as applicable, at any time, within three months from the date of
termination by reason of retirement. If the employment of a Participant is
terminated by reason of death or disability, any outstanding Option or
unexercised portion thereof which was granted to him may be fully exercised by
the Participant, his personal representative, executor, administrator, heirs or
devisees, as applicable, at any time within one year from the date of
termination by reason of death or disability, provided that the Participant has
completed five (5) full years of employment with the Company from the date the
Option was granted. If the Participant has not completed five (5) full years of
employment with the Company from the date the Option was granted, the Option may
be exercised only to the extent exercisable as of the date of termination of
employment. Notwithstanding any of the foregoing, no Option shall be exercisable
at any time after the expiration of employment from the Company to any Parent or
Subsidiary thereof, or vice versa, shall not be deemed a termination of
employment.
In the event that the outstanding shares of Class B Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation, or in the event that there is a "corporate transaction" as
that term is defined in the Regulations under Section 425 of the Internal
Revenue Code of 1986, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, spin-off, combination of
shares or dividend payable in capital stock, this Option shall, to the extent
that it has not been exercised, entitle the holder upon the subsequent exercise
of this Option to such number and kind of securities or other property, subject
to the terms of the Option, to which the holder would be entitled had the holder
actually owned the shares subject to the unexercised portion of this Option at
the time of the occurrence of such event, and the aggregate purchase price upon
the subsequent exercise of this Option shall be the same as if the Class B
Common Stock of the Company originally optioned were being purchased as provided
herein; provided, however, that each such adjustment in the number and kind of
shares subject to this Option, including any adjustment in the Option price,
shall be made in such manner as not to constitute a "modification" as defined in
Section 425 of the Internal Revenue Code of 1986. Any such adjustment made by
the Committee shall be conclusive.
Upon the occurrence of: (i) the dissolution or liquidation of the
Company, (ii) a reorganization, merger or consolidation of the Company with one
or more corporations in which the Company is not the surviving corporation,
(iii) a sale of substantially all of the assets of the Company or (iv) the
transfer of more than 80% of the then outstanding Stock of the Company to
another entity or person in a single transaction or series of transactions, the
Plan shall terminate, and any outstanding Options granted under the Plan shall
terminate on the day before the consummation of the transaction; provided that
the Board of Directors shall have the right, but shall not be obligated, to
accelerate the time in which any Options may be exercised prior to such a
termination. However, the termination of such Options shall not occur if the
Board of Directors takes certain actions as provided in the Plan. In addition,
the Board of Directors has the authority to amend the Plan to require that a
successor corporation assume any outstanding Options.
The Company may postpone the issuance and delivery of shares upon any
exercise of this Option, if necessary, until admission of such shares to listing
on any stock exchange and completion of registration and qualification of such
shares under any applicable state or federal law, rule or regulation.
The holder hereof shall make such representations and furnish such
information to the Company as may be appropriate to permit the Company to issue
such shares in compliance with the provisions of the Security Act of 1933, as
amended (the "Securities Act"), or any other applicable law, including state
securities laws. Without limiting the generality of the foregoing, if requested
by the Company, the holder will represent, in form acceptable to the Company,
that the holder is purchasing any shares issued pursuant hereto for investment
purposes and not with a view to resale or distribution. The holder, by
acceptance of this Option, hereby consents to the placing of restrictive legend
on any stock certificate for shares purchased hereunder, setting forth the
restrictions applicable to the further resale, transfer or other conveyance
thereof without registration under the Securities Act of other applicable law or
the availability of an exemption from registration thereunder and to the placing
of transfer restrictions on the records of the transfer agent for such shares.
In addition, the holder hereof will not thereafter resell, transfer or otherwise
convey any shares purchased hereunder without compliance with one of the
following three conditions: (1) an opinion of the holder's counsel is received,
in form and substance satisfactory to counsel for the Company, that registration
under the Security Act and applicable state securities laws is not required; or
(2) such shares have been registered for sale under the Securities Act and any
applicable state securities laws; or (3) a "no-action" letter is received from
the staff of the Securities and Exchange Commission and from applicable state
securities agencies, based on an opinion of the holder's counsel in form and
substance reasonably satisfactory to counsel for the Company, advising that
registration under the Securities Act is not required.
This Option is issued pursuant to the provisions of the Company's 1991
Incentive Stock Option Plan, the receipt of a copy of which the holder
acknowledges by virtue of the acceptance hereof, and is subject to all the terms
and conditions of said Plan.
A determination by the Committee of any question which may arise with
respect to the interpretation and construction of the provisions of this Option
or of said Plan shall be final. The Committee may authorize and establish such
rules, regulations and revisions thereof not inconsistent with the provisions of
said Plan as it may deem advisable.
WITNESS the seal of the Company and the signatures of its duly
authorized officers or agents.
Dated: Xxxxx 00, 0000
X-X PHARMACEUTICAL COMPANY
By /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Vice President, Finance
ACCEPTED:
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx
POWER OF ATTORNEY
FOR VALUE RECEIVED I, Xxxxxx X. Xxxxxxxx, do hereby sell, assign and
transfer unto K-V PHARMACEUTICAL COMPANY all shares of the Capital Stock of K-V
PHARMACEUTICAL COMPANY standing in my name on the books of said K-V
PHARMACEUTICAL COMPANY represented by Certificate Number(s) ______________
herewith and do hereby irrevocably constitute and appoint K-V PHARMACEUTICAL
COMPANY'S Controller as attorney to transfer the said stock on the books of the
within named K-V PHARMACEUTICAL COMPANY with full power of substitution in the
premises.
DATED:____________________________________
IN PRESENCE OF: SIGNED:
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx
