EXHIBIT 10.58
READING & XXXXX CORPORATION
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") between Reading & Xxxxx
Corporation, a Delaware corporation ("Company") and Xxxxx X. Xxxxxx
("Optionee"),
WITNESSETH:
WHEREAS, the Compensation Committee which administers the Reading
& Xxxxx Corporation 1997 Long-Term Incentive Plan ("Plan") has selected the
Optionee, who is the Sr. V.P., General Counsel and Secretary of the
Company, to receive a nonqualified stock option under the terms of the Plan
as an incentive to the Optionee to remain in the employ of the Company and
contribute to the performance of the Company, on the terms and subject to
the conditions provided herein;
NOW THEREFORE, for and in consideration of these premises, it is
hereby agreed as follows:
1. The Option is issued in accordance with and subject to all
of the terms, conditions and provisions of the Plan and administrative
interpretations thereunder, if any, which have been adopted by the
Committee and are in effect on the date hereof. Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the
Plan.
2. On the terms and subject to the conditions contained herein,
the Committee hereby grants to the Optionee an option for a term of ten
years ending on April 24, 2007 ("Option Period") to purchase from the
Company 5,100 shares ("Option Shares") of the Company's Common Stock, at a
price equal to $23.75 per share.
3. This Option shall not be exercisable, except upon the death
or disability of the Optionee, until after 6 months immediately following
the date this Option is granted, and thereafter shall be exercisable for
Common Stock as follows:
(a) After one year following the effective date of grant,
this Option shall be exercisable for any number of shares up to and
including, but not in excess of, 33-1/3% of the aggregate number of shares
subject to this Option; and
(b) After two years following the effective date of grant,
this Option shall be exercisable for any number of shares up to and
including, but not in excess of, 66-2/3% of the aggregate number of shares
subject to this Option; and
(c) After three years following the effective date of
grant, this Option shall be exercisable for any number of shares of Common
Stock up to and including, but not in excess of, 100% of the aggregate
number of shares subject to this Option;
provided the number of shares as to which this Option becomes exercisable
shall, in each case, be reduced by the number of shares theretofore
purchased pursuant to the terms hereof.
4. The option herein granted may be exercised by the Optionee
by giving written notice to the Secretary of the Company setting forth the
number of Option Shares with respect to which the option is to be
exercised, accompanied by payment for the shares to be purchased and any
appropriate withholding taxes, and specifying the address to which the
certificate for such shares is to be mailed. Payment shall be by means of
cash, certified check, bank draft or postal money order payable to the
order of the Company. As promptly as practicable after receipt of such
written notification and payment, the Company shall deliver to the Optionee
certificates for the number of Option Shares with respect to which such
option has been so exercised.
5. Subject to approval of the Committee, which shall not be
unreasonably withheld, the Optionee may pay for any Option Shares with
respect to which the option herein granted is exercised by tendering to the
Company other shares of Common Stock at the time of the exercise or partial
exercise hereof. The certificates representing such other shares of Common
Stock must be accompanied by a stock power duly executed with signature
guaranteed. The value of the Common Stock so tendered shall be its Fair
Market Value.
6. If the Optionee's employment with the Company is terminated
during the Option Period by the Company for Cause, as defined in that
certain Employment Agreement between the Company and Optionee dated as of
November 1, 1991, as amended (the "Employment Agreement"), or by the
Executive for any reason other than (i) death or disability or (ii) "Good
Reason" or during a "Window Period" (in each case as "Good Reason" and
"Window Period" are defined in the Employment Agreement) whether during or
after the Employment Period (as defined in the Employment Agreement), then
(a) the options herein granted to him that are not exercisable on the date
of his termination of employment shall thereupon terminate, and (b) any
options herein granted to him that are exercisable on the date of his
termination of employment may be exercised by the Optionee during a three-
month period beginning on such date, unless the Option Period shall expire
prior to such date, and shall thereafter terminate.
7. If the Optionee's employment with the Company is terminated
(whether during or after the Employment Period, as defined above) (i) by
the Optionee for Good Reason or during a Window Period; (ii) for any reason
by the Company other than for "Cause" (as defined in the Employment
Agreement) or (iii) by reason of death or disability, then (a) the options
granted to him that are not exercisable on the date of such termination of
employment shall be thereupon be fully exercisable, and (b) all options
then held by the Optionee, whether theretofore exercisable or exercisable
by reason of the termination of employment may be exercised by the Optionee
during the full remaining term of this option; provided, however, that all
options granted hereunder shall expire and not be exercisable on the first
anniversary of the Optionee's death.
8. The option herein granted shall not be transferable by the
Optionee otherwise than as permitted by Section 13 of the Plan. During the
lifetime of the Optionee, such option shall be exercisable only by him. No
transfer of the Option herein granted shall be effective to bind the
Company unless the Company 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.
9. The Optionee shall have no rights as a stockholder with
respect to any Option Shares until the date of issuance of a certificate
for Option Shares purchased pursuant to this Agreement. Until such time,
the Optionee shall not be entitled to dividends or to vote at meetings of
the stockholders of the Company.
10. The Company may make such provisions as it may deem
appropriate for the withholding of any taxes which it determines is
required in connection with the option herein granted. The Optionee may
pay all or any portion of the taxes required to be withheld by the Company
or paid by the Optionee in connection with the exercise of all or any
portion of the option herein granted by electing to have the Company
withhold shares of Common Stock, or by delivering previously owned shares
of Common Stock, having a Fair Market Value equal to the amount required to
be withheld or paid. The Optionee must make the foregoing election on or
before the date that the amount of tax to be withheld is determined ("Tax
Date"). Any such election is irrevocable and subject to disapproval by the
Committee. If the Optionee is subject to the short-swing profits recapture
provisions of Section 16(b) of the Exchange Act, any such election shall be
subject to the following additional restrictions:
(a) Such election may not be made within six months of the
grant of this option, provided that this limitation shall not apply in the
event of death or disability.
(b) Such election must be made either in an Election Window
(as hereinafter defined) or at such other time as may be consistent with
Section 16(b)(3) of the Exchange Act. Where the Tax Date in respect of the
exercise of all or any portion of this Option is deferred until after such
exercise and the Optionee elects stock withholding, the full amount of
shares of Common Stock will be issued or transferred to the Optionee upon
exercise of this Option, but the Optionee shall be unconditionally
obligated to tender back to the Company on the Tax Date the number of
shares necessary to discharge with respect to such Option exercise the
greater of (i) the Company's withholding obligation and (ii) all or any
portion of the holder's federal and state tax obligation attributable to
the Option exercise. An Election Window is any period commencing on the
third business day following the Company's release of a quarterly or annual
summary statement of sales and earnings and ending on the twelfth business
day following such release.
11. Upon the acquisition of any shares pursuant to the exercise
of the option herein granted, the Optionee will enter into such written
representations, warranties and agreements as the Company may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
12. The certificates representing the Option Shares purchased by
exercise of an option will be stamped or otherwise imprinted with a legend
in such form as the Company or its counsel may require with respect to any
applicable restrictions on sale or transfer, and the stock transfer records
of the Company will reflect stop-transfer instructions, as appropriate,
with respect to such shares.
13. Unless otherwise provided herein, every notice hereunder
shall be in writing and shall be given by registered or certified mail.
All notices of the exercise by the Optionee of any option hereunder shall
be directed to Reading & Xxxxx Corporation, Attention: Secretary, at the
Company's current address. Any notice given by the Company to the Optionee
directed to him at his address on file with the Company shall be effective
to bind any other person who shall acquire rights hereunder. The Company
shall be under no obligation whatsoever to advise the Optionee of the
existence, maturity or termination of any of the Optionee's rights
hereunder and the Optionee shall be deemed to have familiarized himself
with all matters contained herein and in the Plan which may affect any of
the Optionee's rights or privileges hereunder.
14. Whenever the term "Optionee" is used herein under
circumstances applicable to any other person or persons to whom this award,
in accordance with the provisions of Paragraph 8, may be transferred, the
word "Optionee" shall be deemed to include such person or persons.
References to the masculine gender herein also include the feminine gender
for all purposes.
15. Notwithstanding any of the other provisions hereof, the
Optionee agrees that he will not exercise the option herein granted, and
that the Company will not be obligated to issue any shares pursuant to this
Agreement, if the exercise of the option or the issuance of such shares of
Common Stock would constitute a violation by the Optionee or by the Company
of any provision of any law or regulation of any governmental authority or
any national securities exchange.
16. The option to purchase Option Shares evidenced by this
Agreement shall be fully and immediately exercisable upon a Change of
Control of the Company as defined in the Employment Agreement.
17. This Agreement is subject to the Plan, a copy of which has
been provided the Optionee and for which the Optionee acknowledges receipt.
The terms and provisions of the Plan (including any subsequent amendments
thereto) are incorporated herein by reference. In the event of a conflict
between any term or provision contained herein and a term or provision of
the Plan, the applicable terms and provisions of the Plan will govern and
prevail. All definitions of words and terms contained in the Plan shall be
applicable to this Agreement.
18. In the event of a corporate merger or other business
combination in which the Company is not the surviving entity, the economic
equivalent number of the voting shares of common stock of, or participating
interests in, the surviving entity, based on the terms of such merger or
other business combination, shall be substituted for the Option Shares
hereunder, and the price per share set out in Section 2 hereof shall be
adjusted to reflect substantially the same economic equivalent value of the
Option Shares to the Optionee immediately prior to any such merger or other
business combination.
IN WITNESS WHEREOF, this Agreement is executed this day of
, 1997, effective as of the 24th day of April, 1997.
READING & XXXXX CORPORATION
By: _______________________
Xxxx X. Xxxx, Xx.
OPTIONEE
___________________________
Xxxxx X. Xxxxxx
