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Exhibit 10.4 (h)
[FORM OF 1998 EXECUTIVE OPTION AGREEMENT]
MEMORANDUM
TO: ____________________, Optionee
FROM: Wickes Inc.
RE: Grant of [Incentive/Non-Qualified] Stock Option
NUMBER OF SHARES
SUBJECT TO OPTION: _________
DATE OF GRANT: February 16, 1998
As of November 30, 1994, the Compensation and Benefits Committee of the
Board of Directors (the "Committee") of Wickes Inc. (the "Company") amended and
restated the terms of the Company's 1993 Long Term Incentive Plan (the "Plan)
for certain key employees of the Company and Related Entities. A copy of the
Plan, as amended on ______, 199_ and _____, 1998 is available at the Company's
office in Vernon Hills, Illinois for your review, and you can request a copy of
the Plan for no charge from __________, __________ [name/title].
Certain capitalized terms used herein are defined in Paragraph VII hereof.
I. The Grant
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The Company hereby grants to you, effective as of the date of grant set
forth above (the "Grant Date"), the option to purchase (the "Option") the
aggregate number of shares set forth in the caption of this Option Agreement of
Wickes Common Stock (the "Option Shares"), at an exercise price per share of
$3.41* (the "Exercise Price"), subject to the limitations set forth in this
Option Agreement and in the Plan.
II. Exercise
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Subject to the other terms and conditions of this Option Agreement, this
Option shall be exercisable for up to the number of Option Shares (less the
number of Option Shares for which this Option shall have been previously
exercised) during the periods shown in the following table:
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* The last sale price of Wickes Common Stock on the Nasdaq National
Stock Market on February 16, 1998 was $3.40.
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Period Number of Option Shares
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During 1998 0
During 1999 [1/3]
During 2000 [2/3]
January 1, 2001 and thereafter [All]
; provided, however, that notwithstanding the foregoing, subject to the other
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terms and provisions of this Option Agreement, this Option shall be exercisable
for:
(i) the full number of the Option Shares (less the number of Option
Shares for which this Option shall have been previously exercised) at any
time after there shall have occurred a Change of Control;
(ii) under the circumstances described in Paragraph III.b(iv) hereof
(with respect to termination by your employer during 1998 without cause)
the number of shares set forth therein;
(iii) under the circumstances described in Paragraph III.b(v) hereof
(with respect to termination by your employer without cause after 1998) the
number of shares set forth therein; and
(iv) under the circumstances described in Paragraph III.b.viii hereof
(with respect to termination by your employer in connection with a Change
of Control) the number of shares set forth therein.
[If this Option shall for any reason not consist entirely of incentive
stock options, shares acquired hereunder shall be deemed to have been acquired
pursuant to any then exercisable incentive stock options before being deemed to
have been acquired on exercise of any non-qualified portion of this Option.]
III. End of Exercise Period; Termination of Option
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a. Ten Year Maximum. Notwithstanding anything to the contrary in this
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Option Agreement, this Option is not exercisable after the expiration of ten
(10) years from the Grant Date and as to any unexercised portion of this Option
then terminates and becomes null and void without notice.
b. Termination of Employment. If you cease to be a Company Employee,
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this Option shall, to the extent not previously exercised, automatically
terminate and become null and void, without notice, provided that:
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(i) Death. If you cease to be a Company Employee as a result of
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your death, your estate may, until the earlier of (x) one year after
the date of death, or (y) the applicable expiration date set forth in
Paragraph III.a hereof, exercise this Option with respect to all or
any part of the Option Shares which you were entitled to purchase
immediately prior to the time of your death.
(ii) Disability. If you cease to be a Company Employee as a
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result of your Disability, you may, until the earlier of (x) one year
after the date you cease to be a Company Employee or (y) the
applicable expiration date set forth in Paragraph III.a hereof, exer
cise this Option with respect to all or any part of the Option Shares
which you were entitled to purchase immediately prior to the time you
cease to be a Company Employee.
(iii) Retirement. If you cease to be a Company Employee as a
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result of your Retirement, you may, until the earlier of (x) three
months after the date you cease to be a Company Employee or (y) the
applicable expiration date set forth in Paragraph III.a hereof, exer
cise this Option with respect to all or any part of the Option Shares
which you were entitled to purchase immediately prior to the time you
cease to be a Company Employee.
(iv) 1998 Termination by Employer Without Cause. If you cease to
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be a Company Employee by reason of termination of your employment by
the Company or any Related Entity during calendar year 1998, other
than for Cause and not in connection with a Change of Control and not
as a result of your death, Disability or Retirement, you may, until
the date two years after the date you cease to be a Company Employee
exercise this Option with respect to all or any part the greater of
(A) the number of the Option Shares which you were entitled to
purchase immediately prior to the time you cease to be a Company
Employee or (B) 50 percent of the full number of Option Shares (less
the number of Option Shares for which this Option shall have been
previously exercised).
(v) Subsequent Termination by Employer Without Cause. If you
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cease to be a Company Employee by reason of termination of your
employment by the Company or any Related Entity after calendar year
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1998, other than for Cause and not as a result of your death,
Disability or Retirement, you may, until the earlier of (x) the date
two years after the date you cease to be a Company Employee or (y)
the applicable expiration date set forth in Paragraph III.a hereof,
exercise this Option with respect to all or any part of the full
number of Option Shares (less the number of Option Shares for which
this Option shall have been previously exercised).
(vi) Termination by Employer For Cause. If you cease to be a
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Company Employee by reason of termination of your employment by the
Company or any Related Entity for Cause, this Option shall, to the
extent not previously exercised, automatically terminate and become
null and void, without notice, provided that if such termination of
employment occurs after there shall have occurred a Change of Control,
you may, until the earlier of (x) the date two years after the date
you cease to be a Company Employee or (y) the applicable expiration
date set forth in Paragraph III. a hereof, exercise this Option with
respect to all or any part of the Option Shares which you were
entitled to purchase immediately prior to the time you cease to be a
Company Employee.
(vii) Resignation. If you cease to be a Company Employee as a
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result of any reason other than death, Disability, Retirement or
termination of employment by the Company or any Related Entity, this
Option shall, to the extent not previously exercised, automatically
terminate and become null and void, without notice, provided that if
such termination of employment occurs after there shall have occurred
a Change of Control, you may until the earlier of (x) the date two
years after the date you cease to be a Company Employee or (y) the
applicable expiration date set forth in Paragraph III.a hereof, exer
cise this Option with respect to all or any part of the Option Shares
which you were entitled to purchase immediately prior to the time you
cease to be a Company Employee.
(viii) Termination by Employer in Connection With Change of
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Control. If you cease to be a Company Employee by reason of
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termination of your employment by the Company or any Related Entity
not for Cause in connection with a Change of Control, you may until
the earlier of (x) the date two years after you cease to be a Company
Employee or (y) the applicable expiration date set forth in paragraph
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III.a hereof, exercise this Option with respect to the full number of
Option Shares (less the number of Option Shares for which this Option
shall have been previously exercised).
c. Constructive Termination. Your employment shall be treated as having
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been terminated by the Company or a Related Entity other than for Cause if you
voluntarily cease to be a Company Employee: (i) at any time when, without your
consent, you shall have been assigned any duties materially inconsistent with
your (including status, offices, titles and reporting requirements), authority,
duties or responsibilities as in effect on the date hereof, or any other action
shall have been taken by the Company or a Related Entity that results in a
material diminution in such position, authority, duties or responsibilities,
excluding an isolated, insubstantial and inadvertent action not taken in bad
faith and that is remedied by the Company or Related entity promptly after
receipt of notice thereof given by you, (ii) at any time when there shall have
been a reduction by the Company or a Related Entity in your compensation and
benefits as in effect on the date hereof or as the same may be increased from
time to time, unless a similar reduction is made with respect to similarly-
situated employees, (iii) at any time when the Company or a Related Entity shall
have required you to be based at any office or location other than in the
greater metropolitan area in which you are based on the date hereof or (iv) at
any time when the Company or a Related Entity shall have required you to travel
on Company business to a substantially greater extent that required immediately
prior to the date hereof.
IV. Adjustment; Recapitalization; Change of Control, etc.
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a. The existence of the Plan and this Option shall not affect in any way
the right or power of the Board of Directors or the stockholders of the Company
to make or authorize any adjustment, recapitalization, reorganization or other
change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities ahead of or
affecting Wickes Common Stock or the rights thereof, the dissolution or
liquidation of the Company or any sale, lease, exchange or other disposition of
all or any part of its assets or business or any other corporate act or
proceeding.
b. The Option Shares are shares of Wickes Common Stock as presently
constituted, but if, and whenever, prior to the expiration of this Option, the
Company shall effect a subdivision or consolidation of shares of Wickes Common
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Stock or the payment of a stock dividend on Wickes Common Stock without receipt
of consideration by the Company, the number of shares of Wickes Common Stock
with respect to which this Option may thereafter be exercised (i) in the event
of an increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
c. If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise of this Option you shall be entitled to
purchase under this Option, in lieu of the number and class of shares of the
Company's stock as to which this Option shall then be exercisable, the number
and class of shares of stock and securities to which you would have been
entitled pursuant to the terms of the recapitalization, if, immediately prior to
such recapitalization, you had been the holder of record of the number of shares
of the Company's stock as to which this Option is then exercisable.
d. If there shall occur a Permissive Acceleration Change of Control, then,
effective as of such date selected by the Committee (a) after the approval by
the stockholders of the Company of such Permissive Acceleration Change of
Control that requires such approval or (b) before or after any other Permissive
Acceleration Change of Control, the Committee, acting in its sole discretion
without your consent or approval, shall effect one or more of the following
alternatives, which may vary among various holders of options and other awards
granted under the Plan and which may be effected conditionally or revocably (so
long as ultimately one alternative is effected): (1) accelerate the time that
this Option may be exercised so that this Option may be exercised in full for a
limited period of time on or before a specified date (before or after such
Permissive Acceleration Change of Control) fixed by the Committee, after which
specified date the unexercised portion of this Option and all your rights
thereunder shall terminate, (2) require the mandatory surrender to the Company
by you of this Option (irrespective of whether this Option is then exercisable)
as of a date (before or after such Permissive Acceleration Change of Control)
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specified by the Committee, in which event the Committee shall thereupon cancel
this Option and pay to you an amount of cash per share equal to the excess of
the amount calculated in subparagraph e below (the "Permissive Acceleration
Change of Control Value") of the Option Shares over the Exercise Price, (3) make
such adjustments to this Option as the Committee deems appropriate to reflect
such Permissive Acceleration Change of Control (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary
to this Option) or (4) provide that thereafter upon any exercise of this Option
you shall be entitled to purchase under this Option, in lieu of the number of
shares of the Wickes Common Stock as to which this Option shall then be
exercisable, the number and class of shares of stock or other securities or
property to which you would have been entitled pursuant to the terms of the
Permissive Acceleration Change of Control if, immediately prior to such
Permissive Acceleration Change of Control you had been the holder of record of
the number of shares of the Wickes Common Stock as to which this Option is then
exercisable.
e. For the purposes of clause (2) in subparagraph d above, the "Permissive
Acceleration Change of Control Value" shall equal the amount determined in
clause (i), (ii) or (iii), whichever is applicable, as follows: (i) the per
share price offered to stockholders of the Company in any such Permissive
Acceleration Change of Control transaction, (ii) the price per share offered to
stockholders of the Company in any tender offer or exchange offer whereby a
Permissive Acceleration Change of Control takes place, or (iii) if such
Permissive Acceleration Change of Control occurs other than pursuant to a merger
or tender or exchange offer, the fair market value per share of the shares into
which this Option is exercisable, as determined by the Committee as of the date
determined by the Committee to be the date of cancellation and surrender of this
Option. In the event that the consideration offered to stockholders of the
Company in any transaction described in this subparagraph e or subparagraph d
above consists of anything other than cash, the Committee shall in its sole
discretion determine the fair cash equivalent of the portion of the
consideration offered which is other than cash.
V. Tax Status; Release
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[Except as described in Paragraph II hereof, this Option is intended to be
an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). However, you agree that the
Company is not liable to you if this Option or any other option granted to you
by the Company does not so qualify, and you hereby release the Company from any
liability or claim related thereto. Furthermore, you acknowledge and agree:
(i) that even if this Option so qualifies that you may not receive the tax
benefits thereof; (ii) the Company is not making any representations or
warranties regarding tax matters.]
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VI. Manner of Exercise; Fractional Shares
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a. Manner of Exercise. Any exercise by you of this Option shall be in
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writing addressed to the Corporate Secretary of the Company at its principal
place of business (a copy of the form of exercise to be used will be available
upon written request to the Secretary), and shall be accompanied or preceded by
a bank wire transfer to a bank account designated by Employer, or a certified or
bank check to the order of the Company in the amount of the aggregate Exercise
Price for the shares to be purchased.
b. Fractional Shares. This Option is not exercisable for a fraction of
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an Option Share.
VII. Definitions
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For the purpose of this Option Agreement, the following terms shall have
the meanings:
Affiliate. As defined in the rules and regulations adopted by the
Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended.
Cause. As defined in the Plan.
Change of Control. The occurrence of after the date hereof of any one
of the following:
(i) individuals who, as of December 1, 1997, constitute the
Board of Directors of the Company (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board of
Directors of the Company; provided, however, that any individual
becoming a director subsequent to December 1, 1997 whose
election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding for this propose, any such
individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors of the Company;
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(ii) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), other than in a transaction with Riverside, in
each case, unless, following such Business Combination, (a) no
Person beneficially owns, directly or indirectly, 50% or more of
the combined voting power of the then outstanding voting
securities of the Company or the corporation resulting from such
Business Combination (including, without limitation, a
corporation that as a result of such transaction owns all or
substantially all of the Company's assets) and (b) at least a
majority of the members of the board of directors of the Company
or such corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board of Directors
of the Company, providing for such Business Combination; or
(iii) the acquisition or gaining of ownership or control
(including, without limitation, power to vote) of more than 50%
of the Company's then outstanding voting securities entitled to
vote on a regular basis for a majority of the Company's Board of
Directors, by any Person (other than Riverside).
Committee. As defined in the introductory paragraph hereof.
Company. Wickes Inc.
Company Employee. A person who is an employee of the Company, one or
more Related Entities, or the Company and one or more Related
Entities.
Disability. As defined in the Plan.
Exercise Price. As defined in Paragraph I hereof.
Grant Date. As defined in Paragraph I hereof.
Option. As defined in Paragraph I hereof.
Option Shares. As defined in Paragraph I hereof.
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Permissive Acceleration Change of Control. A Business Combination (as
defined in Clause (ii) of the definition of Change of Control),
including without limitation of any Business Combination with
Riverside.
Person. An individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended.
Plan. As defined in the introductory paragraph hereof.
Related Entity. As defined in the Plan.
Retirement. As defined in the Plan.
Riverside. Riverside Group, Inc. or any of its Affiliates.
Wickes Common Stock. Common Stock of the Company, par value $0.01 per
share.
VIII. Miscellaneous
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a. Securities Law Matters. Unless there is in effect a registration
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statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the issuance of the Option Shares (and, if required, there is
available for delivery a prospectus meeting the requirements of Section 10(a)(3)
of the Securities Act), you will, upon the exercise of this Option (i) represent
and warrant in writing to the Corporate Secretary of the Company that the Option
Shares then being purchased by you pursuant to this Option are being acquired
for investment only and not with a view to the resale or distribution thereof,
(ii) acknowledge and confirm that the Option Shares purchased may not be sold
unless registered for sale under the Securities Act or pursuant to an exemption
from such registration and (iii) agree that the certificates evidencing such
Option Shares shall bear a legend to the effect of the foregoing. As more fully
set forth in Section X. of the Plan, the Company may require the delivery of
additional documents, including, without limitation, an opinion of counsel,
prior to the exercise or sale of shares upon exercise of this Option.
b. Withholding Taxes. By your acceptance hereof, and in accordance with
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Section X of the Plan, you agree that (i) in the case of issuance of common
stock or other securities hereunder, the Company, as a condition of such
issuance may require the payment (through withholding from any payment otherwise
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due you from the Company or any parent corporation or subsidiary corporation of
the Company, by requiring the payment of cash, through reduction of the number
of shares of common stock or other securities to be issued hereunder, or
otherwise) of any federal, state, local or foreign taxes required by law to be
withheld with respect to such issuance, and (ii) the Company shall have the
right to establish such other procedures as it may determine in its sole
discretion with respect to such issuances.
c. Plan Prevails. This Option Agreement is subject to all the terms,
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conditions, limitations and restrictions contained in the Plan. In the event of
any conflict or inconsistency between the terms hereof and the terms of the
Plan, the terms of the Plan shall be controlling.
d. No Effect on Employment. This Option Agreement is not a contract of
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employment and the terms of your employment shall not be affected hereby or by
any agreement referred to herein except to the extent specifically so provided
herein or therein. Nothing herein shall be construed to impose any obligation
on the Company or on any parent corporation or subsidiary corporation of the
Company to continue your employment, and it shall not impose any obligation on
your part to remain in the employ of the Company or any parent corporation or
subsidiary corporation of the Company.
e. No Third-Party Beneficiaries. This Option Agreement shall not confer
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any rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.
f. Entire Agreement. This Option Agreement (together with the Plan)
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constitutes the entire agreement among the parties and supersedes any prior
understandings, agreements, or representations by or among the parties, written
or oral, to the extent they related in any way to the subject matter hereof.
However, this Option Agreement is not intended to affect any other option
agreement, if any, that may have been entered into by you and the Company (i.e.,
that is not the subject matter of this Option Agreement).
g. Transfer. This Option is not transferable by you otherwise than by
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will or the laws of descent and distribution and is exercisable, during your
lifetime, only by you. This Option may not be assigned, transferred (except by
will or the laws of descent and distribution), pledged or hypothecated in any
way by you (whether by operation of law or otherwise) and shall not be subject
to execution, attachment or similar proceeding. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of this Option contrary to
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the provisions hereof or of the Plan and the levy of any attachment or similar
proceeding upon this Option, shall be null and void and without effect.
h. Counterparts. This Option Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
i. Headings. The descriptive headings of this Option Agreement are
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intended for reference only and shall not affect the construction or
interpretation of this Option Agreement.
j. Illinois Law, Jurisdiction, Venue and Service of Process. This Option
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Agreement shall be governed by, interpreted, and enforced in accordance with
Illinois law without giving effect to the principles of conflicts of laws
thereof. The parties agree that the courts of the State of Illinois and the
federal courts of the United States located in the State of Illinois shall have
sole and exclusive jurisdiction over any dispute, claim or controversy which may
arise involving this Option Agreement or its subject matter. The parties
irrevocably submit and consent to such jurisdiction and venue and waive any
right they may have to seek any change of jurisdiction or venue.
k. WAIVER OF JURY TRIAL. THE PARTIES HEREBY AGREE THAT ANY CONTROVERSY
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WHICH MAY ARISE UNDER THIS OPTION AGREEMENT OR OUT OF THE RELATIONSHIP
ESTABLISHED BY THIS OPTION AGREEMENT WOULD INVOLVE COMPLICATED AND DIFFICULT
FACTUAL AND LEGAL ISSUES AND THAT, THEREFORE, ANY ACTION BROUGHT BY EITHER PARTY
AGAINST THE OTHER, WHETHER ALONE OR IN COMBINATION WITH OTHERS, WHETHER ARISING
OUT OF THIS OPTION AGREEMENT OR OTHERWISE, SHALL BE DETERMINED BY A JUDGE
SITTING WITHOUT A JURY.
l. Amendments and Waivers. No amendment of any provision of this Option
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Agreement shall be valid unless the same shall be in writing and signed by the
Company and you. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
m. Severability. Any term or provision of this Option Agreement that is
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invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
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the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
VII. Effective Date.
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This Option Agreement shall become effective as of ____________________.
Please indicate your acceptance of and agreement to all of the terms and
conditions of this Option, this Option Agreement and the Plan by signing and
returning a copy of this Option Agreement.
Very truly yours,
WICKES INC.
By:
ACCEPTED AND AGREED TO:
____________________, Individually
Date: ___________, 1998
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