EXHIBIT 10.23
STOCK OPTION AGREEMENT
[Holding Corp. Executive Non-Qualified Under Plan]
AGREEMENT, made as of ________ and between Xxxxxx Holding Corp.,
a Delaware corporation (the "Company"), and ____________ (the "Executive").
WHEREAS, on August 29, 2001 ("Grant Date"), pursuant to the terms and
conditions of the Company's 1994 Stock Plan or 1996 Stock Plan (in either case,
the "Plan") and the Company's Employment Agreement, dated August 29, 2001, the
Board of Directors of the Company authorized the grant to the Executive on the
first business day immediately following the end of each fiscal quarter during
the term of the Employment Agreement of an option to purchase that number of
shares of the authorized but unissued common stock of the Company, $.0001 par
value ("Common Stock"), equal to 0.25% of the shares of Common Stock of the
Company outstanding as of the end of such fiscal quarter, conditioned upon the
Executive's acceptance thereof upon the terms and conditions set forth in this
Agreement and subject to the terms of the Plan (capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Plan); and
WHEREAS, the Executive desires to acquire the option on the terms and
conditions set forth in this Agreement.
IT IS AGREED:
1. Grant of Stock Option. The Company hereby grants to the Executive
the right and option ("Option") to purchase all or any part of an aggregate of
_______ shares of Common Stock ("Option Shares") on the terms and conditions set
forth herein and subject to the provisions of the Plan.
2. Non-Incentive Stock Option. The Option represented hereby is not
intended to be an Option which qualifies as an "Incentive Stock Option" under
Section 422 of the Internal Revenue Code of 1986, as amended ("Code").
3. Exercise Price. The exercise price ("Exercise Price") of the
Option shall be $___ per share (the average of the last sale prices of the
Common Stock on each of the last 20 consecutive trading days during the most
recently completed fiscal quarter), subject to adjustment as provided in the
Plan.
4. Exercisability. This Option shall become exercisable, subject to
the terms and conditions of the Plan and this Agreement, immediately and it
shall remain exercisable except as otherwise provided herein, until the close of
business on the tenth anniversary of the date hereof (the "Exercise Period").
5. Effect of Termination of Employment.
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5.1 Termination Due to Death. If Executive's employment or
consultancy by the Company terminates by reason of death, the Option may
thereafter be exercised by the legal representative of the estate or by the
legatee of the Executive under the will of the Executive, for a period of two
years from the date of such death or until the expiration of the Exercise
Period, whichever period is shorter.
5.2 Termination Due to Disability. If Executive's employment or
consultancy by the Company terminates by reason of disability (as such term is
defined in the Employment Agreement), the Option may thereafter be exercised by
the Executive or legal representative for a period of two years from the date of
such termination or until the expiration of the Exercise Period, whichever
period is shorter.
5.3 Termination For Cause.
5.3.1 If Executive's employment or consultancy is
terminated for cause (as such term is defined in the Employment Agreement), the
Option shall expire on the date of termination of employment.
5.3.2 If the Executive's employment or consultancy is
terminated for "cause" as defined in the Employment Agreement, the Company may
require the Executive to return to the Company the economic benefit of any
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Option Shares purchased hereunder by the Executive within the six month period
prior to the date of termination. In such event, the Executive hereby agrees to
remit to the Company, in cash, an amount equal to the difference between the
Fair Market Value (on the date of termination) of the Option Shares so purchased
by Executive (or the sales price of such Option Shares if the Option Shares were
sold during such six month period) and the Exercise Price.
5.3.3 Other Termination. If Executive's employment or
consultancy is terminated for any reason other than (i) death, (ii) disability
or (iii) for cause, including, but not limited to a termination by Executive or
a termination by the Company other than for cause, then the Option shall
continue to be exercisable during the Exercise Period.
5.4 Competing With the Company. If Executive breaches his
obligations under Section 5.3 of the Employment Agreement, the Company, in its
sole discretion, may require such Executive to return to the Company the
economic value of any Option Shares purchased hereunder by the Executive within
the six-month period prior to the date of termination. In such event, Executive
agrees to remit the economic value to the Company in accordance with Section
5.3.2. The provisions of Section 12.3(a) of the Plan shall not apply with
respect to the Option and Option Shares reflected in this Agreement.
6. Withholding Tax. Not later than the date as of which an amount
first must be included in the gross income of the Executive for Federal income
tax purposes with respect to the Option, the Executive shall pay to the Company
(or other entity identified by the Company), or make arrangements satisfactory
to the Company (or other entity identified by the Company) regarding the payment
of, any Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount ("Withholding Tax"). At the election of the
Executive, withholding obligations may be settled with Common Stock, including
Common Stock underlying the subject option, provided that any applicable
requirements under Section 16 of the Exchange Act are satisfied so as to avoid
liability thereunder. The obligations of the Company under the Plan and pursuant
to this Agreement shall be conditioned upon such payment or arrangements with
the Company and the Company shall, to the extent permitted by law, have the
right to deduct any Withholding Taxes from any payment of any kind otherwise due
to the Executive from the Company.
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7. Method of Exercise.
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7.1 Notice to the Company. The Option may be exercised in whole
or in part by written notice in the form attached hereto as Exhibit A directed
to the Company at its principal place of business accompanied by full payment as
hereinafter provided of the exercise price for the number of Option Shares
specified in the notice and of the Withholding Taxes, if any.
7.2 Delivery of Option Shares. The Company shall deliver a
certificate for the Option Shares to the Executive as soon as practicable after
payment therefor.
7.3 Payment of Purchase Price.
7.3.1 Cash Payment. The Executive shall make cash
payments of the Exercise Price by wire transfer, certified or bank check or
personal check, in each case payable to the order of the Company. The Company
shall not be required to deliver certificates for Option Shares until the
Company has confirmed the receipt of good and available funds in payment of the
purchase price thereof.
7.3.2 Payment through Bank or Broker. At the election of
the Executive, the Exercise Price for any or all Option Shares may be paid by
the Executive making arrangements reasonably satisfactory to the Company with a
bank or a broker who is member of the National Association of Securities
Dealers, Inc. to either (a) sell on the exercise date a sufficient number of the
Option Shares being purchased so that the net proceeds of the sale transaction
will at least equal the Exercise Price multiplied by the number of Option Shares
being purchased pursuant to such exercise, plus the amount of the Withholding
Tax and pursuant to which the bank or broker undertakes irrevocably to deliver
the full Exercise Price multiplied by the number of Option Shares being
purchased pursuant to such exercise, plus the amount of the Withholding Tax to
the Company on a date satisfactory to the Company, but no later than the date on
which the sale transaction would settle in the ordinary course of business or
(b) obtain a "margin commitment" from the bank or broker pursuant to which the
bank or broker undertakes irrevocably to deliver the full Exercise Price
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multiplied by the number of Option Shares being purchased pursuant to such
exercise, plus the amount of the Withholding Tax to the Company, immediately
upon receipt of the Option Shares.
7.3.3 Stock Payment. At the election of the Executive,
the Exercise Price for any or all of the Option Shares may be paid by the
Executive's surrender of shares of Common Stock of the Company owned by him
having a "value" equal to the Exercise Price multiplied by the number of Option
Shares to be purchased. If the Executive elects this option, the Executive shall
deliver stock certificates in negotiable form which are effective to transfer
good and valid title thereto to the Company, free of any liens or encumbrances.
Shares of Common Stock used for this purpose shall be valued at the Fair Market
Value.
7.3.4 Cashless Payment. At the election of the
Executive, the Exercise Price for any or all of the Option Shares to be acquired
may be paid by the surrender of any unexercised portion of the Option having a
"value" equal to the Exercise Price multiplied by the number of Option Shares to
be purchased. The "value" of a surrendered portion of the Option means, as of
the exercise date, an amount equal to the excess of the total Fair Market Value
of the shares of Common Stock underlying the surrendered portion of the Option
over the total Exercise Price of such shares of Common Stock underlying the
surrendered portion of the Option.
7.3.5 Payment of Withholding Tax. Any required
Withholding Tax may be paid in cash or with Common Stock in accordance with
Sections 7.3.1, 7.3.2 and 7.3.3, respectively, and Section 6.
7.3.6 Exchange Act Compliance. Notwithstanding the
foregoing, the Company shall have the right to reject payment in the form of
Common Stock if in the opinion of counsel for the Company, (i) it could result
in an event of "recapture" under Section 16(b) of the Securities Exchange Act of
1934; (ii) such shares of Common Stock may not be sold or transferred to the
Company; or (iii) such transfer could create legal difficulties for the Company.
8. Nonassignability. The Option shall not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner, except by will
or by the laws of descent and distribution in the event of the death of the
Executive. No transfer of the Option by the Executive by will or by the laws of
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descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
will and/or such other evidence as the Company may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees
of the terms and conditions of the Option.
9. Company Representations. The Company hereby represents and
warrants to the Executive that:
(a) the Company, by appropriate and all required action,
is duly authorized to enter into this Agreement and
consummate all of the transactions contemplated
hereunder; and
(b) the Option Shares, when issued and delivered by the
Company to the Executive in accordance with the terms
and conditions hereof, will be duly and validly
issued and fully paid and non-assessable.
10. Executive Representations. The Executive hereby represents and
warrants to the Company that:
(a) he or she is acquiring the Option and shall acquire
the Option Shares for his own account and not with a
view towards the distribution thereof;
(b) he or she has received a copy of the Plan as in effect as
of the date of this Agreement;
(c) he or she has received a copy of all reports and
documents required to be filed by the Company with
the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934, as amended,
within the last 24 months and all reports issued by
the Company to its stockholders;
(d) he or she understands that he or she is subject to
the Company's Xxxxxxx Xxxxxxx Policy and has received
a copy of such policy as of the date of this
Agreement;
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(e) he or she understands that he or she must bear the
economic risk of the investment in the Option Shares,
which cannot be sold by him unless they are
registered under the Securities Act of 1933 (the
"1933 Act") or an exemption therefrom is available
thereunder and that the Company is under no
obligation to register the Option Shares for sale
under the 1933 Act;
(f) in his or her position with the Company, he or she
has had both the opportunity to ask questions and
receive answers from the officers and directors of
the Company and all persons acting on its behalf
concerning the terms and conditions of the offer made
hereunder and to obtain any additional information to
the extent the Company possesses or may possess such
information or can acquire it without unreasonable
effort or expense necessary to verify the accuracy of
the information obtained pursuant to clause (iii)
above;
(g) he or she is aware that the Company shall place stop
transfer orders with its transfer agent against the
transfer of the Option Shares in the absence of
registration under the 1933 Act or an exemption
therefrom as provided herein; and
(h) if, at the time of issuance of the Option Shares, the
issuance of such shares have not been registered
under the 1933 Act, the certificates evidencing the
Option Shares shall bear the following legend:
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933. The shares may not
be sold or transferred in the absence of such
registration or an exemption therefrom under said
Act."
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11. Restriction on Transfer of Option Shares.
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11.1 Anything in this Agreement to the contrary
notwithstanding, Executive hereby agrees that he shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him without
registration under the 1933 Act, or in the event that they are not so
registered, unless (i) an exemption from the 1933 Act registration requirements
is available thereunder, and (ii) the Executive has furnished the Company with
notice of such proposed transfer and the Company's legal counsel, in its
reasonable opinion, shall deem such proposed transfer to be so exempt.
11.2 Anything in this Agreement to the contrary
notwithstanding, Executive hereby agrees that he shall not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by him except in
accordance with Company's Xxxxxxx Xxxxxxx Policy regarding the sale and
disposition of securities owned by employees and/or directors of the Company.
12. Adjustments. The number of shares subject to the Option, the
Exercise Price, the Exercise Period and the vesting of the Option shall all be
subject to adjustment under Section 3.2 of the Plan.
13. Miscellaneous.
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13.1 Notices. All notices, requests, deliveries, payments,
demands and other communications which are required or permitted to be given
under this Agreement shall be in writing and shall be either delivered
personally or sent by registered or certified mail, or by private courier to the
parties at their respective addresses set forth herein, or to such other address
as either shall have specified by notice in writing to the other. Notice shall
be deemed duly given hereunder when delivered or mailed as provided herein.
13.2 Plan Paramount; Conflicts with Plan. This Agreement and
the Option shall in all respects, be subject to the terms and conditions of the
Plan, whether or not stated herein. In the event of a conflict between the
provisions of the Plan and the provisions of this Agreement, the provisions of
the Plan shall in all respects be controlling.
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13.3 Executive and Stockholder Rights. The Executive shall not
have any of the rights of a stockholder with respect to the Option Shares until
such shares have been issued after the due exercise of the Option. Nothing
contained in this Agreement shall be deemed to confer upon Executive any right
to continued employment with the Company or any subsidiary thereof, nor shall it
interfere in any way with the right of the Company to terminate Executive in
accordance with the provisions regarding such termination set forth in
Executive's written employment agreement with the Company, or if there exists no
such agreement, to terminate Executive at will.
13.4 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other or subsequent breach.
13.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supercedes any and all prior agreements with respect to the Option. This
Agreement may not be amended except by writing executed by the Executive and the
Company.
13.6 Binding Effect; Successors. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and, to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives. Nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto and as provided above, their
respective heirs, successors, assigns and representatives any rights, remedies,
obligations or liabilities.
13.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (without regard
to choice of law provisions).
13.8 Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written:
Xxxxxx Holding Corp. Address: 0000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
By:________________________________________
Xxxxx Xxxxxxx, Chief Financial Officer
EXECUTIVE: Address: _____________________
_____________________
_____________________
___________________________________________
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EXHIBIT A
FORM OF NOTICE OF EXERCISE OF OPTION
____________________________
DATE
Xxxxxx Holding Corp.
Attention: Stock Option Committee of
the Board of Directors
Re: Purchase of Option Shares
-------------------------
Gentlemen:
In accordance with my Stock Option Agreement dated as of
___________ with Xxxxxx Holding Corp. (the "Company"), I hereby irrevocably
elect to exercise the right to purchase _________ shares of the Company's common
stock, par value $.0001 per share ("Common Stock"), which are being purchased
for investment and not resale.
As payment for my shares, enclosed is (check and complete
applicable box[es]):
|_| a [personal check] [certified check] [bank check]
payable to the order of the Company in the sum of
$_________;
|_| confirmation of wire transfer in the amount of
$_____________;
|_| a certificate for __________ shares of the Company's
Common Stock, free and clear of any encumbrances,
duly endorsed, having a Fair Market Value (as such
term is defined in the Agreement of $_________;
|_| through broker payment as provided in Section 7.3.2
(see broker letter attached); and/or
|_| I hereby surrender the portion of the unexercised,
but exercisable, portion of the Option have a value
equal to the Exercise Price multiplied by the number
of shares of common stock being purchase hereunder,
to wit: the Option to purchase ____ Option Shares.
(i) I am acquiring the Option and shall acquire the
Option Shares for my own account, for investment, and not with a view towards
the distribution thereof;
(ii) I have received a copy of the Plan and all
reports and documents required to be filed by the Company with the Commission
pursuant to the Exchange Act within the last 24 months and all reports issued by
the Company to its stockholders;
(iii) I understand that I must bear the economic risk
of the investment in the Option Shares, which cannot be sold by me unless they
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are registered under the Securities Act of 1933 (the "1933 Act") or an exemption
therefrom is available thereunder and that the Company is under no obligation to
register the Option Shares for sale under the 1933 Act;
(iv) I understand I am subject to the Company's
Xxxxxxx Xxxxxxx Policy and have received a copy of such policy as of the date of
this Agreement;
(v) I agree that I will not sell, transfer by any
means or otherwise dispose of the Option Shares acquired by me hereby except in
accordance with Company's policy, if any, regarding the sale and disposition of
securities owned by employees and/or directors of the Company;
(vi) in my position with the Company, I have had both
the opportunity to ask questions and receive answers from the officers and
directors of the Company and all persons acting on its behalf concerning the
terms and conditions of the offer made hereunder and to obtain any additional
information to the extent the Company possesses or may possess such information
or can acquire it without unreasonable effort or expense necessary to verify the
accuracy of the information obtained pursuant to clause (ii) above;
(vii) I am aware that the Company shall place stop
transfer orders with its transfer agent against the transfer of the Option
Shares in the absence of registration under the 1933 Act or an exemption
therefrom as provided herein; and
(viii) My rights with respect to the Option Shares,
in all respects, be subject to the terms and conditions of this Company's
applicable Stock Plan and this Agreement; and
(ix) if, at the time of issuance of the Option
Shares, the issuance of such shares have not been registered under the 1933 Act,
the certificates evidencing the Option Shares shall bear the following legend:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the
Securities Act of 1933. The shares may not be sold or
transferred in the absence of such registration or an
exemption therefrom under said Act."
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Kindly forward to me my certificate at your earliest convenience.
Very truly yours,
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(Signature) (Address)
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(Print Name)
