STOCK OPTION AGREEMENT
This Option Agreement (the "Agreement") is made as of the 7th day of
May, 1997, between Xxxxxxx Industries, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. X'Xxxxx (the "Optionee").
WHEREAS, the Company desires to afford the Optionee the opportunity
to purchase shares of Common Stock, par value $.01 per share (the "Common
Stock"), of the Company.
NOW, THEREFORE, in connection with the mutual covenants hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Option. By action of its Board of Directors dated May
7, 1997, the Company hereby grants to the Optionee the right and option
(the "Option") to purchase up to, but not exceeding in the aggregate,
90,000 shares of Common Stock, on the terms and conditions herein set
forth. Provided that the Compensation Committee gives its prior written
approval, Optionee shall have the right to transfer all or part of the
options granted hereunder to family members or family trusts.
2. Definitions; Conflicts. The Option is not being granted
pursuant to the Xxxxxxx Industries, Inc. 1994 Stock Option Plan (the
"Plan"), and shall be exercisable only for shares of Common Stock held in
treasury by the Company. The Company shall at all times maintain a
sufficient number of treasury shares to allow for the exercise of the
vested and exercisable portion of the Option. Notwithstanding that the
Option is not being granted under the Plan, the terms and provisions of
the Plan are incorporated herein by reference as if it had been so
granted, except for the provisions of Sections 3, 5(h) and 8 thereof.
3. Purchase Price. The purchase price of each share of Common
Stock covered by the Option shall be $39.75 (the "Purchase Price").
4. Term of Options. The term of the Option shall be ten (10) years
from the date hereof, subject to earlier termination as provided in
Section 6 hereof.
5. Vesting of Options. The Option, subject to the terms,
conditions and limitations contained herein, shall vest and become
exercisable with respect to the shares of Common Stock in accordance with
the following installments: 20% on the first anniversary of the date
hereof, and an additional 20% on each of the succeeding four anniversaries
of the date hereof; provided that, with respect to each such installment,
the Optionee has remained in continuous employment with the Company from
the date hereof through the date such installment is designated to vest.
Notwithstanding the foregoing, if there is a "Change in Control," as such
term is defined in the Amendment, effective as of August 10, 1995, in the
Employment Agreement between Optionee and the Company, all remaining
options shall become exercisable as provided in said Employment Agreement,
as amended.
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6. Termination of Employment. Except as otherwise provided in
Optionee's existing employment agreement with the Company:
(a) In the event the Optionee's employment with the Company is
terminated for any reason other than death or disability (within the
meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended (the "Code")), the Option shall immediately lapse as of the date of
such termination whether or not exercisable on such date.
(b) In the event the Optionee's employment with the Company is
terminated by reason of the Optionee's death or disability (within the
meaning of Section 22(e)(3) of the Code), the Option shall remain exercisable
for a period of up to twelve months after termination of employment, to the
extent exercisable at the time of termination of employment, and shall lapse
as to any shares of Common Stock for which it has yet to become exercisable
as of the date of such termination of employment.
7. No Rights as a Shareholder. The Optionee shall have no rights
as a shareholder with respect to any shares of Common Stock issuable upon
the exercise of the Option until the date of issuance to the Optionee of a
certificate evidencing such shares of Common Stock. No adjustments, other
than as provided in Section 7 of the Plan, shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property)
or distributions for which the record date is prior to the date the
certificate for such shares of Common Stock issued.
8. Method of Exercising Option. Subject to the terms and
conditions of this Agreement, the Option may be exercised by written
notice to the Company at its principal executive offices, presently
located at 0000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000-0000, Attn:
General Counsel. Such notice shall state the election to exercise the
Option and the number of shares of Common Stock in respect of which the
Option is being exercised, shall be signed by the person or persons so
exercising the Option and shall either:
(a) be accompanied by payment in full of the Purchase Price for
such shares of Common Stock; or
(b) fix a date, not less than five (5) nor more than ten (10)
business days from the date such notice shall be delivered to the Company,
for the payment in full of the Purchase Price for such shares of Common
Stock.
Payment of such Purchase Price shall be made in United States dollars
by certified check or bank cashier's check payable to the order of the
Company. Subject to such procedures and rules as may be adopted from time
to time by the Option Plan Committee of the Board of Directors, the
Optionee may also pay such Purchase Price by (i) tendering to the Company
shares of Common Stock with an aggregate Fair Market Value (as defined in
the Plan) on the date of exercise equal to such Purchase Price, (ii)
delivery to the Company of a copy of irrevocable instructions to a
stockbroker to sell shares of Common Stock and to deliver promptly to the
Company an amount sufficient to pay such Purchase Price, or (iii) any
combination of the methods of payment described in clauses (i) and (ii)
and in the preceding sentence. The certificate for shares of Common Stock
as to which the Option shall have been so exercised shall be registered in
the name of the person or persons so exercising the Option. All shares of
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Common Stock purchased upon the exercise of the Option as provided herein
shall be fully paid and non-assessable.
9. Income Tax Withholding. The Company may make such provisions
and take such steps as it may deem necessary or appropriate for the
withholding of all federal, state, local and other taxes required by law
to be withheld with respect to the exercise of the Option and the issuance
of the shares of Common Stock, including, but not limited to, deducting
the amount of any such withholding taxes from any other amount then or
thereafter payable by the Company, or any subsidiary thereof, to the
Optionee, or requiring the Optionee, or the beneficiary or legal
representative of the Optionee, to pay to the Company the amount required
to be withheld or to execute such documents as the Company deems necessary
or desirable to enable it to satisfy its withholding obligations.
10. Non-Incentive Stock Option. The Option granted hereunder is not
intended to be an "incentive stock option" within the meaning of Section
422 of the Code.
11. Registration. The Company shall file a registration statement
on Form S-8 under the Securities Act of 1933, as amended (the "Act"), with
respect to the sale of shares of Common Stock subject to the Option and
shall take such other action as may be required to complete the
registration of such shares under the Act and to comply with applicable
blue sky laws.
12. Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators and successors of the parties hereto.
13. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such State.
14. Headings. Headings are for the convenience of the parties and
are not deemed to be part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date and year first written above.
XXXXXXX INDUSTRIES, INC.
By: /S/XXXXXX X. XXXX
Name: Xxxxxx X. Xxxx
Title: Chairman of Board
OPTIONEE
/S/XXXXXXX X. X'XXXXX
Xxxxxxx X. X'Xxxxx
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