EXHIBIT 10.2
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XXXXX XXXXX HOLDINGS, INC.
MANAGEMENT STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "AGREEMENT"), dated as of November 21,
2005 (the "GRANT DATE"), is made by and between Xxxxx Xxxxx Holdings, Inc., a
Delaware corporation (the "COMPANY"), and Xxxxxxx X. Xxxxxxxx (the "OPTIONEE").
WHEREAS, the Company adopted the Xxxxx Xxxxx Holdings, Inc. Management
Stock Option Plan, effective as of July 30, 2004 (the "PLAN"), pursuant to which
stock options may be granted to purchase Common Stock of the Company; and
WHEREAS, the Optionee and Xxxxx Xxxxx, Inc., a wholly owned subsidiary
of the Company ("DRI"), have entered into an employment agreement, dated as of
November 21, 2005 (as may be amended from time to time, the "EMPLOYMENT
AGREEMENT"), pursuant to which the Company has agreed to grant the Optionee a
Nonqualified Stock Option to purchase the number of shares of the Common Stock
provided for herein.
NOW, THEREFORE, in consideration of the recitals and the mutual
agreements herein contained, the parties hereto agree as follows:
1. GRANT OF OPTION.
(a) The Company hereby grants to the Optionee an option (the
"OPTION") to purchase 150,363 shares of Common Stock of the Company (such
shares, the "OPTION SHARES"), on the terms and conditions set forth in this
Agreement and as otherwise provided in the Plan. This Option is not intended to
be treated as an Incentive Stock Option, as such term is defined in Section 422
of the Internal Revenue Code of 1986, as amended. This grant is subject to the
Optionee becoming a party to the Stockholders Agreement (as defined in the
Plan).
(b) INCORPORATION BY REFERENCE, ETC. The provisions of the
Plan are hereby incorporated herein by reference. Except as otherwise expressly
set forth herein, this Agreement shall be construed in accordance with the
provisions of the Plan and any capitalized terms not otherwise defined in this
Agreement shall have the meaning set forth in the Plan.
2. TERMS AND CONDITIONS.
(a) OPTION PRICE. The price at which the Optionee shall be
entitled to purchase Option Shares upon the exercise of all or any portion of
this Option shall be $100.00 per Option Share (the "Option Price"). The Company
represents that the Option Price is greater than or equal to the Fair Market
Value of a share of Common Stock on the Grant Date.
(b) EXPIRATION DATE. Except as otherwise provided herein, the
Option shall expire at 11:59 p.m. Eastern Standard Time on the tenth anniversary
of the Grant Date (the "EXPIRATION DATE").
(c) EXERCISABILITY OF OPTION.
(i) SERVICE-BASED OPTION. The Option shall become
vested and exercisable as to sixty percent (60%) of the shares subject
thereto (the "SERVICE-BASED OPTION") in four equal installments on each
of the first, second, third and fourth anniversaries of the Grant Date
(each such anniversary hereafter referred to as a "VESTING DATE"), such
that one hundred percent (100%) of the Service-Based Option shall be
vested and exercisable on the fourth anniversary of the Grant Date;
PROVIDED that, except as otherwise provided in Sections 2(e) and 2(f)
hereof, the Optionee remains employed by the Company and its Affiliates
on each such Vesting Date.
(ii) PERFORMANCE-BASED OPTION. The Option as to forty
percent (40%) of the shares subject thereto (the "PERFORMANCE-BASED
OPTION") shall NOT become vested and exercisable UNTIL AND UNLESS the
conditions described in Section 2(c)(ii)(A) or 2(c)(ii)(B), as
applicable, have been attained (each such condition, a "PERFORMANCE
CONDITION") and, except as otherwise provided in Section 2(e)(i)
hereof, subject to the Optionee's continued employment by the Company
and its Affiliates through the date the applicable Performance
Condition is attained:
A. With respect to fifty percent (50%) of the
shares subject to the Performance-Based Option, the Performance
Condition shall be the actual or deemed occurrence of a 1.5X
Option Vesting Event.
B. With respect to one-hundred percent (100%) of
the shares subject to the Performance-Based Option, the
Performance Condition shall be the actual or deemed occurrence
of a 2X Option Vesting Event.
C. For purposes of this Agreement, the following
terms shall have the following meanings:
(1) "1.5X OH INVESTOR GROUP EQUITY VALUE"
shall mean (X) 1.5 times the OH Investor Group
Investment MINUS (Y) the aggregate amount of cash and
Fair Market Value of Marketable Securities received by
the OH Investor Group in respect of the OH Investor
Group Equity prior to or coincident with the time of
determination. For purposes of the preceding sentence,
(I) "Fair Market Value" shall have the meaning set forth
in clauses (i) and (ii) of Section 2(p) of the Plan,
without regard to whether the subject securities are
Stock, and (II) the Fair Market
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Value of Marketable Securities shall be determined at
the time of receipt by the OH Investor Group or, if
later, the time that securities held by the OH Investor
Group first become Marketable Securities.
(2) "2X OH INVESTOR GROUP EQUITY VALUE" has
the same meaning as 1.5X OH Investor Group Equity Value,
except that the number "1.5" each time it appears in the
definition of "1.5X OH Investor Group Equity Value"
shall be replaced with the number "2."
(3) "1.5X OPTION VESTING EVENT" shall mean
the occurrence of any event (E.G., a leveraged
recapitalization in which the proceeds are paid out to
the Investors as dividends and/or redemptions) in which
consideration is paid to the OH Investor Group in
respect of the OH Investor Group Equity in the form of
cash and/or Marketable Securities, which results in cash
and/or Marketable Securities being paid or provided to
the OH Investor Group of at least the 1.5X OH Investor
Group Equity Value. For purposes of the preceding
sentence, an "event" shall be deemed to have occurred at
each time that securities held by the OH Investor Group
which are not Marketable Securities first become
Marketable Securities, and such securities shall be
deemed to have been "paid" to the OH Investor Group at
such time.
(4) "2X OPTION VESTING EVENT" has the same
meaning as a 1.5X Option Vesting Event, except that the
term "1.5X OH Investor Group Equity Value" each time it
appears in the definition of "1.5X Option Vesting Event"
shall be replaced with "2X OH Investor Group Equity
Value."
(5) "MARKETABLE SECURITIES" shall mean
equity securities which (i) are registered under all
applicable Federal and state securities laws, or as to
which the sale would be exempt from such registration,
(ii) are listed for trading on a national securities
exchange, or quoted on the National Market System of the
National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), (iii) are not subject to
any legal or contractual restriction as to sale and (iv)
represent less than 20% of the equity securities of the
same class which are listed for trading on a national
securities exchange or available for trading over
NASDAQ.
(6) "OH INVESTOR GROUP EQUITY" shall mean
all equity securities of the Company held, directly or
indirectly (including, but not limited to, through
ownership of membership interests in DRS, LLC), by all
members of OH Investor Group,
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including common and preferred stock and warrants,
options and other instruments convertible or exercisable
into, or redeemable for, common or preferred stock,
purchased or otherwise received by the OH Investor Group
on or after July 30, 2004.
(7) "OH INVESTOR GROUP INVESTMENT" means the
aggregate investment by the OH Investor Group in the
equity securities of the Company or any of its
subsidiaries on and after July 30, 2004, which on July
30, 2004 was $243.7 million.
(d) METHOD OF EXERCISE. The Option may be exercised only by
written notice, in a form to be provided by the Committee, and delivered by the
Optionee in person or sent by mail in accordance with Section 4(a) hereof and,
in either case, accompanied by payment therefor. The Option Price shall be
payable (i) in cash and/or shares of Stock valued at the Fair Market Value at
the time the Option is exercised (including by means of attestation of ownership
of a sufficient number of shares of Stock in lieu of actual delivery of such
shares to the Company); PROVIDED, HOWEVER, that such shares are not subject to
any pledge or other security interest and meet such other requirements, if any,
as the Committee may determine necessary in order to avoid an additional
accounting earnings charge in respect of the Option, (ii) by means of a cashless
exercise whereby the number of shares of Common Stock of the Company to be
received by the Optionee shall equal the excess, if any, of (A) the number of
shares of Common Stock that would be received by the Optionee upon such exercise
had the Optionee paid the Option Price in respect of the underlying shares in
cash over (B) a number of shares of Common Stock of the Company, the aggregate
Fair Market Value of which is equal to the aggregate Option Price that would
have been paid as determined pursuant to the immediately preceding clause (A)
(PROVIDED, HOWEVER, that this clause (ii) shall only apply in connection with an
IPO, or the exercise of a Tag-Along Right or Drag-Along Right, unless the
Company has adopted FAS 123(R)), (iii) in the discretion of the Committee,
either (A) in other property having a fair market value on the date of exercise
equal to the Option Price or (B) if there shall be a public market for the
Stock, by delivering to the Committee a copy of irrevocable instructions to a
stockbroker to deliver promptly to the Company an amount of loan proceeds, or
proceeds of the sale of the Stock subject to the Option, sufficient to pay the
Option Price or (iv) by such other method as the Committee may allow.
(e) TERMINATION OF EMPLOYMENT. In the event that the Optionee
ceases to be employed by the Company and its Affiliates, the Service-Based
Option and the Performance-Based Option held by the Optionee (to the extent then
unexercised and outstanding) shall terminate as follows:
(i) WITHOUT CAUSE OR FOR GOOD REASON. If the Company or
its Affiliates terminates the Optionee's employment without "CAUSE" or
the Optionee resigns for "GOOD REASON" (each as defined below) at any
time prior to the fourth anniversary of the Grant Date, then the
Service-Based Option, to the extent not previously vested, shall become
immediately vested and exercisable as to that number of shares as to
which it would have become vested
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and exercisable pursuant to Section 2(c)(i) on the Vesting Date
immediately following the date of such termination of employment had
the Optionee's employment by the Company and its Affiliates not so
terminated (such portion of the Service-Based Option is hereafter
referred to as the "NEXT TRANCHE"). To the extent vested and
exercisable as of the date of such termination (after taking into
account the provisions of this Section 2(e)(i)), the Service-Based
Option and the Performance-Based Option shall remain exercisable
through the earlier of (i) the first anniversary of such termination of
employment or (ii) the Expiration Date, and shall thereafter terminate
without further consideration to the Optionee. To the extent not vested
and exercisable (after taking into account the provisions of this
Section 2(e)(i)) as of the date of such termination of employment, the
Service-Based Option shall terminate and expire on the date of such
termination of employment without further consideration to the
Optionee. The portion of Performance-Based Option as to which the
Performance Condition has not been attained as of the date of such
termination shall remain outstanding until the six-month anniversary of
such termination, and to the extent that the applicable Performance
Condition has not been attained as of such six-month anniversary shall
thereafter terminate and expire without further consideration to the
Optionee. For purposes of this Agreement, the terms "CAUSE" and "GOOD
REASON" have the meanings set forth in the Employment Agreement.
(ii) FOR CAUSE. If the Optionee's employment is
terminated by the Company or its Affiliates for Cause, then any and all
of the Service-Based Option and Performance-Based Option whether or not
vested and exercisable at the time of the Optionee's termination of
employment shall immediately terminate and expire on the date of such
termination of employment, without further consideration to the
Optionee.
(iii) WITHOUT GOOD REASON. If the Optionee terminates his
employment with the Company and its Affiliates without Good Reason,
then any portion of the Option which is not vested and exercisable at
the time of the Optionee's termination of employment shall immediately
terminate and expire on the date of such termination of employment,
without further consideration to the Optionee. Any portion of the
Option which is vested and exercisable as of the date of such
termination of employment shall remain exercisable through the earlier
of (i) ninety (90) days after such termination of employment or (ii)
the Expiration Date, and shall thereafter terminate and expire without
further consideration to the Optionee.
(iv) DEATH OR DISABILITY. If the Optionee's employment
with the Company and its Affiliates is terminated by reason of the
Optionee's death or "DISABILITY" (as defined in the Employment
Agreement), then the Service-Based Option to the extent not vested and
exercisable at the time of such termination shall become vested and
exercisable on a pro-rated basis as to such number of shares of Common
Stock underlying the Next Tranche equal to (A) the total number of
shares of Common Stock underlying the Next Tranche MULTIPLIED by (B) a
fraction, the numerator which is the number of full months of service
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performed by the Optionee for the Company and its Affiliates subsequent
to the Vesting Date immediately preceding the date of such termination
and the denominator which is twelve. The Service-Based Option and the
Performance-Based Option to the extent not vested and exercisable as of
the date of such termination (after taking into account the provisions
of this Section 2(e)(iv)) shall terminate and expire on the date of
such termination without further consideration to the Optionee's
estate. The Service-Based Option and Performance-Based Option to the
extent vested and exercisable (after taking into account the provisions
of this Section 2(e)(iv)) as of the date of such termination shall
remain exercisable through the earlier of (i) the first anniversary of
the date of such termination or (ii) the Expiration Date, and shall
thereafter terminate and expire without further consideration to the
Optionee.
(v) Notwithstanding anything to the contrary herein,
any benefits provided with respect to the vesting and exercisability of
the Option pursuant to this Section 2(e) are conditioned upon and
subject to the Optionee's compliance with Sections 10(h) (Release) and
11(e) (Restrictive Covenants; Enforcement) of the Employment Agreement.
(f) CHANGE IN CONTROL.
(i) Immediately prior to a Change in Control (as
defined below), occurring prior to the IPO:
A. Notwithstanding Section 2(c) hereof, subject
to the Optionee's continued employment with the Company and its
Affiliates through the consummation date of the Change in
Control event, the Service-Based Option shall become vested and
exercisable to the extent necessary for the Optionee (i) to
exercise his rights pursuant to a "Tag-Along Sale" (as defined
in the Stockholders Agreement) and (ii) to satisfy the Company's
rights with respect to a "Drag-Along Sale" (as defined in the
Stockholders Agreement), in each case, as provided in this
Section 2(f) and in the Stockholders Agreement. Accordingly, the
Service-Based Option shall vest (in addition to the portion
vested pursuant to Section 2(c)(i) hereof) in the case of a
Drag-Along Sale in an amount such that after giving effect to
such acceleration, the Service-Based Option shall be vested in
the aggregate (including for this purpose shares as to which the
Performance-Based Option is vested at the time of the Drag-Along
Sale) as to the same percent as the Parent Transfer Percentage
Interest proposed to be transferred pursuant to such Drag-Along
Sale. Similarly, the Service-Based Option shall vest (in
addition to the portion vested pursuant to Section 2(c)(i)
hereof) in the case of a Tag-Along Sale in an additional amount
such that after giving effect to such acceleration, the
Service-Based Option shall be vested in the aggregate as to the
EXCESS, if any, of (A) the number of shares of Common Stock to
be acquired through the exercise of the Service-Based Option
equal to the product of (x) the Optionee's Percentage Interest
as of such date (the numerator of such
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Percentage Interest to be calculated as to both the Optionee's
Service-Based Option and Performance-Based Option and not shares
of Common Stock held by the Optionee) MULTIPLIED by (y) the
number of shares of Common Stock proposed to be transferred by
the Parent Stockholders (or the Parent Transfer Units in the
case of a Parent Tag-Along Sale) OVER (B) the number of shares
of Common Stock underlying the vested portion of the
Service-Based Option (without regard to this section) as of the
date of such Tag-Along Sale. For purposes of this Agreement, the
terms "Parent Stockholders," "Percentage Interest," "Parent
Transfer Percentage Interest," "Parent Transfer Units" and
"Parent Tag-Along Sale" shall have the meaning ascribed such
terms in the Stockholders Agreement; and
B. If and only if the Change in Control will
result in either a 1.5X Option Vesting Event or a 2X Option
Vesting Event, the Performance-Based Option shall vest and
become exercisable in accordance with Sections 2(c)(ii)(A) and
2(c)(ii)(B), as applicable, subject to Optionee's continued
employment by the Company and its Affiliates through the date of
the consummation of the Change in Control event, except as
otherwise provided in Section 2(e)(i) hereof.
(ii) For purposes of this Agreement the term "CHANGE IN
CONTROL" shall mean the first of any of the following events to occur
after the Grant Date:
A. any independent third party (which shall
EXCLUDE, without limitation, the OH Affiliates, DRS, LLC and any
Subsidiary of DRS, LLC) (x) by merger or otherwise is or becomes
the beneficial owner directly or indirectly, of securities of
DRI, representing 50% or more of the combined voting power of
DRI's then outstanding securities, and (y) has the right to
appoint a majority of the members of the Board in each case
other than by a merger or other transaction in which the
shareholders of DRI immediately prior to the merger own a
majority of the surviving entity or its parent;
B. any stockholder of DRI (other than DRS, LLC or
any Subsidiary of DRS, LLC) (x) acquires a greater voting
interest in DRI's outstanding Common Stock than the OH Investor
Group and (y) has the authority to appoint a majority of the
members of the Board; or
C. DRI adopts a plan of complete liquidation
(other than a liquidation into DRS, LLC or any Subsidiary of
DRS, LLC) of DRI or consummates an agreement for the sale or
disposition by DRI of all or substantially all of DRI's assets
to an independent third party.
(g) TRANSFERABILITY. Other than as provided in Section 2.2 of
the Stockholders Agreement or Section 8(h) of the Plan, the Option may not be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Optionee
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other than by will or by the laws of descent and distribution, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company; PROVIDED, THAT,
the designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of
the Option to heirs or legatees of the Optionee shall be effective to bind the
Company unless the Committee shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions hereof. During the Optionee's lifetime,
the Option is exercisable only by the Optionee, his or her legal representative
or a Permitted Transferee. For purposes of this Agreement, Permitted Transferee
shall have the meaning set forth in both the Plan and Section 2.2 of the
Stockholders Agreement.
(h) RIGHTS AS STOCKHOLDER. The Optionee shall not be deemed
for any purpose to be the owner of any of the Option Shares subject to this
Option unless, until and to the extent that (i) the Option shall have been
exercised pursuant to its terms and (ii) the Company shall have issued and
delivered to the Optionee the Option Shares. The Option Shares shall be subject
to the terms and conditions set forth in the Stockholders Agreement.
(i) DRAG-ALONG, TAG ALONG, REGISTRATION AND RELATED RIGHTS.
Notwithstanding anything herein to the contrary, the vested portion of the
Option and all of the Option Shares acquired upon the exercise of the Option
shall be subject to all applicable provisions of the Stockholders Agreement and
the Preemptive Rights Agreement, dated as of July 30, 2004, by and among OH,
DRS, LLC, the Company and certain members of the management of DRI (the
"PREEMPTIVE RIGHTS AGREEMENT").
(i) In connection with the IPO, the Option shall be
converted into an option to purchase an Equity Security of the IPO
Entity, with the terms of such Option (including its Option Price)
being equitably adjusted by the Committee in accordance with Section 9
of the Plan (the "CONVERTED OPTION").
(ii) Within a reasonable time following the IPO, the IPO
Entity shall use its commercially reasonable efforts to register under
the Securities Act the Equity Securities of the IPO Entity to be
acquired upon the exercise of the Converted Option, or the shares of
Common Stock sufficient to cover the Option, as applicable, by filing a
Registration Statement on Form S-8 (or any successor or similar forms
thereto); unless in the reasonable judgment of the Board or the Board
of Directors of the IPO Entity (or of the managing underwriter in the
IPO) such a registration could reasonable be expected to have an
adverse effect on the market for the securities being registered in the
IPO; PROVIDED, HOWEVER, that the resale of any shares of Common Stock
distributed pursuant to an Award shall be restricted as if the volume
and manner of sale restrictions of Rule 144 (without regard to Rule 144
(k)) were applicable.
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(iii) In connection with a Drag-Along Sale, the Company
may require the Optionee to, and the Optionee in such event shall,
exercise (pursuant to the method or methods that may be elected by the
Optionee pursuant to Section 2(d) hereof) the vested portion of the
Option (after giving effect to Section 2(f) hereof) to the extent
necessary to satisfy the Company's Drag-Along Right as set forth in
Sections 2.3 and 2.6(a) of the Stockholders Agreement.
(iv) In connection with a Tag-Along Sale, if the
Optionee delivers the "Tag-Along Exercise Notice" (as defined in the
Stockholders Agreement) then he shall exercise (pursuant to the method
or methods he so elects pursuant to Section 2(d) hereof) the vested
portion of the Option (after giving effect to Section 2(f) hereof) to
the extent necessary to satisfy his participation in the Tag-Along Sale
as provided in Sections 2.4 and 2.6(b) of the Stockholders Agreement.
(j) WITHHOLDING TAXES. Prior to the delivery of a certificate
or certificates representing the Option Shares, and immediately following the
exercise of the Option, the Optionee must pay to the Company any minimum amount
that the Company determines it is required to withhold under applicable federal,
state or local tax laws in respect of the exercise of the Option or the transfer
of Option Shares. Notwithstanding the foregoing, the Optionee may satisfy such
withholding obligation by any other method described in Section 8(d) of the Plan
or any combination of methods described in Section 8(d) of the Plan; PROVIDED,
HOWEVER, that such other method does not violate the terms of any credit
agreement to which the Company, or any of its Affiliates is a party or cause a
default thereunder.
3. PURCHASE FOR INVESTMENT; OTHER REPRESENTATIONS OF OPTIONEE.
(a) INVESTMENT INTENT. In the event that the offering of
Option Shares with respect to which the Option is being
exercised is not registered under the Securities Act, but
an exemption is available that requires an investment
representation or other representation, the Optionee, if
electing to purchase Option Shares, will be required to
represent that such Option Shares are being acquired for
investment and not with a view to distribution thereof,
and to make such other reasonable and customary
representations regarding matters relevant to compliance
with applicable securities laws as are deemed necessary by
counsel to the Company. Stock certificates evidencing such
unregistered Option Shares that are acquired upon exercise
of the Option shall bear restrictive legends as are
required or advisable under the provisions of any
applicable laws or in the Stockholders Agreement.
(b) OTHER REPRESENTATIONS. The Optionee hereby represents and
warrants to the Company as follows:
(i) ACCESS TO INFORMATION. Because of the Optionee's
business relationship with the Company and with the management of the
Company, the Optionee has had access to all material and relevant
information concerning the Company, thereby enabling the Optionee to
make an informed
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investment decision with respect to his investment in the Company, and
all pertinent data and information requested by the Optionee from the
Company or its representatives concerning the business and financial
condition of the Company and the terms and conditions of this Agreement
have been furnished. The Optionee acknowledges that the Optionee has
had the opportunity to ask questions of and receive answers from and to
obtain additional information from the Company and its representatives
concerning the present and proposed business and financial condition of
the Company.
(ii) FINANCIAL SOPHISTICATION. The Optionee has such
knowledge and experience in financial and business matters that the
Optionee is capable of evaluating the merits and risks of investing in
the Option Shares.
(iii) UNDERSTANDING THE INVESTMENT RISKS. The Optionee
understands that:
A. An investment in the Option Shares represents
a highly speculative investment, and there can be no assurance
as to the success of the Company in its business; and
B. There is at present no market for the Option
Shares and there can be no assurance that a market will develop
in the future.
(iv) UNDERSTANDING OF THE NATURE OF THE OPTION SHARES.
The Optionee understands and agrees that:
A. Other than as reflected herein or in the
Stockholders Agreement, there can be no assurance that the
Option Shares will be registered under the Securities Act or any
state securities laws and if they are not so registered, they
will only be issued and sold in reliance upon certain exemptions
contained in the Securities Act and applicable state securities
laws, and the representations and warranties of the Optionee
contained herein, which will have to be renewed as to the Option
Shares at the times of exercise of the Option, are essential to
any claim of exemption by the Company under the Securities Act
and such state laws. It is understood that the Company's intent
is that the purchase of the Option Shares pursuant to an
exercise of the Option NOT be covered by Rule 701 under the
Securities Act, and that another exemption, if necessary, will
need to be found in respect of the exercise of the Option;
provided that the Company may determine at time of the exercise
of the Option (which determination must be in writing) that Rule
701 does apply to such exercise;
B. If the Option Shares are not so registered,
the Option Shares will be "restricted securities" as that term
is defined in Rule 144 promulgated under the Securities Act;
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C. The Option cannot be exercised and the Option
Shares will not be sold to the Optionee and the Optionee cannot
resell or transfer the Option Shares without registration under
the Securities Act and applicable state securities laws unless
the Company receives an opinion of counsel acceptable to it (as
to both counsel and the opinion) that such registration is not
necessary, the cost of such opinion to be borne by the Company;
D. Only the Company can register the Option
Shares under the Securities Act and applicable state securities
laws;
E. Other than as provided in the Stockholders
Agreement and Section 2(i) hereof, the Company has not made any
representations to the Optionee that the Company will register
the Option Shares under the Securities Act or any applicable
state securities laws, or with respect to compliance with any
exemption therefrom;
F. The Optionee is aware of the conditions for
the Optionee's obtaining an exemption for the resale of the
Option Shares under the Securities Act and any applicable state
securities laws; and
G. The Company may, from time to time, make stop
transfer notations in its transfer records to ensure compliance
with the Securities Act and any applicable state securities
laws, and any additional restrictions imposed by state
securities administrators.
4. MISCELLANEOUS.
(a) NOTICES. Any and all notices, designations, consents,
offers, acceptances and any other communications provided for herein shall be
given in writing and shall be delivered either personally or by registered or
certified mail, postage prepaid, which shall be addressed, in the case of the
Company to the Secretary of the Company at the principal office of the Company
and, in the case of the Optionee, to Optionee's address appearing on the books
of the Company or to Optionee's residence or to such other address as may be
designated in writing by the Optionee.
(b) NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in the Plan or
in this Agreement shall confer upon the Optionee any right to continue in the
employ of the Company or its Affiliates shall interfere with or restrict in any
way the right of the Company or its Affiliates, which are hereby expressly
reserved, to remove, terminate or discharge the Optionee at any time for any
reason whatsoever.
(c) BOUND BY PLAN. By signing this Agreement, the Optionee
acknowledges that he has received a copy of the Plan and has had an opportunity
to review the Plan and agrees to be bound by all the terms and provisions of the
Plan.
(d) ADJUSTMENT. Notwithstanding any provision of the Plan or
this Agreement to the contrary, in connection with a dividend or distribution
prior to an IPO, the Option Price shall be equitably reduced to the extent
appropriate and, if not
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appropriate, then such Option shall be equitably adjusted by such other means as
reasonably determined by the Committee in accordance with to Section 9 of the
Plan.
(e) SUCCESSORS. The terms of this Agreement shall be binding
upon and inure to the benefit of the Company, its successors and assigns, and of
the Optionee and the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
(f) INVALID PROVISION. The invalidity or unenforceability of
any particular provision hereof shall not affect the other provisions hereof,
and this Agreement shall be construed in all respects as if such invalid or
unenforceable provision had been omitted.
(g) MODIFICATIONS. No change, modification or waiver of any
provision of this Agreement shall be valid unless the same be in writing and
signed by the parties hereto.
(h) ENTIRE AGREEMENT. This Agreement, the Plan, the
Stockholders Agreement and the Preemptive Rights Agreement, including all
exhibits thereto, contain the entire agreement and understanding of the parties
hereto with respect to the subject matter contained herein and therein and
supersede all prior communications, representations and negotiations in respect
thereto.
(i) GOVERNING LAW. This Agreement and the rights of the
Optionee hereunder shall be construed and determined in accordance with the laws
of the State of New York.
(j) HEADINGS. The headings of the Sections hereof are provided
for convenience only and are not to serve as a basis for interpretation or
construction, and shall not constitute a part, of this Agreement.
(k) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto on the first set forth above.
XXXXX XXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------
Name:
Title:
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------
XXXXXXX X. XXXXXXXX
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