EXHIBIT 10.2
STOCK OPTION AGREEMENT
(Non-Qualified Stock Option - 2002 Stock Incentive Plan)
THIS AGREEMENT is made to be effective as of ________________, by
and between X. X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"), and
Xxxxxx X. Xxx Xxxxxx (the "OPTIONEE").
WITNESSETH:
WHEREAS, pursuant to the provisions of the X. X. Xxxxx Corporation
2002 Stock Incentive Plan (the "PLAN"), the Board of Directors of the COMPANY
has appointed a Compensation Committee (the "COMMITTEE") to administer the PLAN;
WHEREAS, the COMPANY has offered and the OPTIONEE has accepted
employment with the COMPANY;
WHEREAS, in connection with OPTIONEE's employment with the COMPANY,
the COMPANY has agreed to grant non-qualified stock options to the OPTIONEE
under the PLAN; and
WHEREAS, the COMMITTEE has determined that an option to acquire
common shares, $1.00 par value (the "COMMON SHARES"), of the COMPANY should be
granted to the OPTIONEE upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto
make the following agreement, intending to be legally bound thereby:
1. Grant of OPTION. The COMPANY hereby grants to the OPTIONEE an
option (the "OPTION") to purchase______________ (_______) COMMON SHARES of the
COMPANY (subject to adjustment as provided in Section 3). The OPTION is not
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the "CODE").
2. Terms and Conditions of the OPTION.
(A) OPTION Price. The purchase price (the "OPTION PRICE") to
be paid by the OPTIONEE to the COMPANY upon the exercise of the OPTION shall be
$_____ per share, which is the per share closing price of the COMPANY's COMMON
SHARES on the date hereof, subject to adjustment as provided in Section 3.
(B) Exercise of the OPTION. Except as provided under Section 4
hereof, the OPTION may not be exercised until _______________, provided that the
OPTIONEE is employed by the COMPANY on such day. Thereafter, except as otherwise
provided in this Agreement, the OPTION may be exercised in full at any time.
Subject to the other provisions of this Agreement, if the OPTION
becomes exercisable as to certain COMMON SHARES, it shall remain exercisable as
to those COMMON SHARES until the date of expiration of the OPTION term. The
COMMITTEE may, but shall not be required to (unless otherwise provided in this
Agreement), accelerate the schedule of the time or times when the OPTION may be
exercised.
The grant of the OPTION shall not confer upon the OPTIONEE any right
to continue in the employment of the COMPANY or any of its subsidiaries nor
limit in any way the right of the COMPANY or any of its subsidiaries to
terminate the employment of the OPTIONEE at any time in accordance with
applicable law or the COMPANY's or the subsidiary's governing corporate
documents.
(C) OPTION Term. The OPTION shall in no event be exercisable
after the expiration of two (2) years from the date of this Agreement.
(D) Method of Exercise. The OPTION may be exercised by giving
written notice of exercise to the COMPANY in care of the Treasurer of the
COMPANY stating the number of COMMON SHARES subject to the OPTION in respect of
which the OPTION is being exercised. Payment for all such COMMON SHARES shall be
made to the COMPANY at the time the OPTION is exercised in United States dollars
in cash (including check, bank draft or money order). Payment for such COMMON
SHARES may also be made (i) by tender of COMMON SHARES of the COMPANY already
owned by the OPTIONEE for at least six (6) months (either by actual delivery of
the already-owned COMMON SHARES or by attestation) and having a fair market
value (based on the closing sale price of the COMMON SHARES as reported on the
New York Stock Exchange or, if the COMMON SHARES are not traded on the New York
Stock Exchange, "fair market value" as defined in the PLAN) on the date of
tender equal to the OPTION PRICE, (ii) by a combination of the delivery of cash
and the tender of already-owned COMMON SHARES, or (iii) in such other manner as
may be permitted by the COMMITTEE, in its sole discretion. After payment in full
for the COMMON SHARES purchased under the OPTION has been made, the COMPANY
shall take all such actions as are necessary to deliver appropriate share
certificates evidencing the COMMON SHARES purchased upon the exercise of the
OPTION as promptly thereafter as is reasonably practicable.
(E) Tax Withholding. The COMPANY shall withhold from other
amounts owned to the OPTIONEE, or require the OPTIONEE to remit to the COMPANY,
an amount sufficient to satisfy federal, state and local withholding tax
requirements in respect of the exercise of the OPTION. These withholding tax
requirements may be satisfied in one of several ways, including:
(i) The COMPANY may withhold the required amount from
other amounts owed to the OPTIONEE (e.g., salary);
(ii) The OPTIONEE may give the COMPANY cash equal to the
amount required to be withheld or tender COMMON SHARES of the COMPANY already
owned by the OPTIONEE for at least six (6) months (either by actual delivery of
the already-owned COMMON SHARES or by attestation) and having a fair market
value (based on the closing sale price of the COMMON SHARES as reported on the
New York Stock Exchange or, if the COMMON SHARES are not traded on the New York
Stock Exchange, "fair market value" as defined in the PLAN) on the exercise date
equal to the amount required to be withheld; or
(iii) The COMPANY may withhold COMMON SHARES otherwise
issuable upon exercise of the OPTION having a fair market value (based on the
closing sale price of the COMMON SHARES as reported on the New York Stock
Exchange or, if the COMMON SHARES are not traded on the New York Stock Exchange,
"fair market value" as defined in the PLAN) on the exercise date equal to the
amount required to be withheld (but only to the extent of the minimum amount
that must be withheld to comply with applicable state, federal and local income,
employment and wage tax laws).
(F) Limits on Exercisability. Notwithstanding any other
provision of this Agreement, the unexercised portion of the OPTION shall be
forfeited by the OPTIONEE if the OPTIONEE, before termination of the OPTIONEE's
employment with the COMPANY and its subsidiaries or after termination of such
employment but while any portion of the OPTION remains exercisable: (i) without
the COMMITTEE's written consent, which may be withheld for any reason or for no
reason, serves (or agrees to serve) as an officer, director or employee of any
proprietorship, partnership or corporation or becomes the owner of a business or
a member of a partnership that competes with any portion of the COMPANY's or any
subsidiary of the COMPANY's business or renders any service (including business
consulting) to any entity that competes with any portion of the COMPANY's or any
subsidiary of the COMPANY's business; (ii) refuses or fails to consult with,
supply information to, or otherwise cooperate with, the COMPANY or any
subsidiary of the COMPANY after having been requested to do so; or (iii)
deliberately engages in any action that the COMMITTEE concludes has caused
substantial harm to the interests of the COMPANY or any subsidiary of the
COMPANY.
3. Adjustments and Changes in the COMMON SHARES.
(A) If there is a share dividend or share split,
recapitalization (including payment of an extraordinary dividend), merger,
consolidation, combination, spin-off, distribution of assets to shareholders,
exchange of shares, or similar corporate change affecting the COMMON SHARES, the
COMMITTEE shall appropriately adjust the number of COMMON SHARES subject to the
OPTION as well as the OPTION PRICE and any other limitations or terms of the
OPTION as may be necessary to reflect such event. Fractional shares resulting
from any adjustment in the OPTION pursuant to this Section 3(A) shall be rounded
down to the nearest whole number of shares.
(B) Notice of any adjustment pursuant to this Section 3 shall
be given by the COMPANY to the OPTIONEE.
4. Acceleration of OPTION. If the COMPANY undergoes a "sale" (as
such term is defined in Section 3(b) of that certain Executive Employment
Contract between the COMPANY and the OPTIONEE dated March 10, 2004) then the
unexercised portion of the OPTION (whether or not then exercisable by its terms)
shall become immediately exercisable in full and the OPTIONEE shall receive,
upon payment of the OPTION PRICE, securities or cash, or both, equal to those
the OPTIONEE would have been entitled to receive under the PLAN or this
Agreement if the OPTIONEE had already exercised the OPTION.
5. Non-Assignability of OPTION. Unless otherwise permitted by the
COMMITTEE, the OPTION shall not be assignable or otherwise transferable by the
OPTIONEE except by will or by the applicable laws of descent and distribution.
During the lifetime of the OPTIONEE, the OPTION may only be exercised by the
OPTIONEE or the OPTIONEE's guardian or legal representative. If the COMMITTEE
permits the assignment of the OPTION, the OPTION shall be assignable only to the
extent permitted by Section 10.01 of the PLAN.
6. Substitution for OPTION. The COMMITTEE shall have the authority
to effect, at any time and from time to time, with the consent of the OPTIONEE,
the cancellation of the OPTION and the grant in substitution therefor of one or
more new options under the PLAN covering the same or a different number of
COMMON SHARES at an option price per share in all events not less than 100% of
the closing sale price for the COMMON SHARES of the COMPANY as reported on the
New York Stock Exchange on the new grant date (or if the COMMON SHARES are not
traded on the New York Stock Exchange, 100% of the "fair market value" as
defined in the PLAN).
7. Exercise After Termination of Employment.
(A) Except as otherwise provided in this Agreement, the OPTION
shall be exercisable only while the OPTIONEE is employed by the COMPANY and/or
one of its subsidiaries and then only if the OPTION has become exercisable by
its terms, and if not exercisable by its terms at the time the OPTIONEE
terminates service with the COMPANY and all of its subsidiaries, shall
immediately expire on the date of termination of service.
(B) If the OPTION is exercisable by its terms at the time the
OPTIONEE terminates service with the COMPANY and all of its subsidiaries other
than by reason of OPTIONEE's death, termination by the OPTIONEE for "good
reason" (as defined below) or termination by the COMPANY without "cause" (as
defined below), the exercisable portion of the OPTION must be exercised on or
before the earlier of (i) three (3) months after the date of the termination of
service or (ii) the fixed expiration date of the OPTION, after which period the
OPTION shall expire. Notwithstanding the foregoing, if the OPTIONEE's service
with the COMPANY and all of its subsidiaries is terminated for "cause," the
OPTION shall, to the extent not previously exercised, expire immediately upon
such termination of service. For purposes hereof, "cause" shall have the meaning
given to such term in Section 6(b) of that certain Executive Employment Contract
between the COMPANY and the OPTIONEE dated March 10, 2004.
(C) In the event of the termination of the OPTIONEE's service
with the COMPANY and all of its subsidiaries by the COMPANY without "cause,"
other than termination by reason of the expiration of that certain Executive
Employment Contract between the COMPANY and the OPTIONEE dated March 10, 2004,
pursuant to Section 6(e) thereof, the unexercised portion of the OPTION (whether
or not then exercisable by its terms) shall
become immediately exercisable in full for a period ending on the earlier of (i)
six (6) months after the OPTIONEE's termination of service or (ii) the fixed
expiration date of the OPTION, after which period the OPTION shall expire.
(D) In the event of the death of the OPTIONEE (i) while
employed by the COMPANY and/or one of its subsidiaries or (ii) within three (3)
months after the OPTIONEE's termination of service with the COMPANY and all of
its subsidiaries other than for "cause", the unexercised portion of the OPTION
(whether or not then exercisable by its terms) shall become immediately
exercisable in full by the OPTIONEE's beneficiary for a period ending on the
earlier of (x) the fixed expiration date of the OPTION or (y) six (6) months
after the OPTIONEE's termination of service, after which period the OPTION shall
expire. For purposes hereof, the beneficiary of an OPTIONEE shall be determined
in accordance with Section 10.02 of the PLAN.
(E) In the event of the termination of the OPTIONEE's service
with the COMPANY and all of its subsidiaries by the OPTIONEE for "good reason,"
the unexercised portion of the OPTION (whether or not then exercisable by its
terms) shall become immediately exercisable in full for a period ending on the
earlier of (i) six (6) months after the OPTIONEE's termination of service or
(ii) the fixed expiration date of the OPTION, after which period the OPTION
shall expire. For purposes hereof, "good reason" shall have the meaning given to
such term in Section 6(c) of that certain Executive Employment Contract between
the COMPANY and OPTIONEE dated March 10, 2004.
(F) For purposes of this Agreement, the OPTIONEE shall be
deemed to have terminated service with the COMPANY and its subsidiaries upon
termination of the employee-employer relationship between the OPTIONEE and the
COMPANY and all of the subsidiaries of the COMPANY for any reason.
8. Buy Out of OPTION. At any time, the COMMITTEE, in its sole
discretion and without the consent of the OPTIONEE, may cancel any portion of
the OPTION by providing to the OPTIONEE written notice (a "BUY OUT NOTICE") of
the COMPANY's intention to exercise the right reserved in this Section 8. If a
BUY OUT NOTICE is given, the COMPANY shall pay to the OPTIONEE, in respect of
each COMMON SHARE covered by the OPTION and subject to the BUY OUT NOTICE, the
difference between (i) the fair market value (based on the closing sale price of
the COMMON SHARES as reported on the New York Stock Exchange or if the COMMON
SHARES are not traded on the New York Stock Exchange, "fair market value" as
defined in the PLAN) on the date of the BUY OUT NOTICE and (ii) the OPTION
PRICE. However, no payment shall be made with respect to that portion of the
OPTION which is not exercisable on the date of the BUY OUT NOTICE. The COMPANY
shall complete any buy out made under this Section 8 as soon as administratively
possible after the date of the BUY OUT NOTICE. At the COMMITTEE's option,
payment of the buy out amount may be made in cash, in whole COMMON SHARES or
partly in cash and partly in whole COMMON SHARES. The number of whole COMMON
SHARES, if any, included in the buy out amount shall be determined by dividing
the amount of the payment to be made in COMMON SHARES by the fair market value
of the COMMON SHARES on the date of the BUY OUT NOTICE.
9. Restrictions on Transfers of COMMON SHARES. Anything contained in
this Agreement or elsewhere to the contrary notwithstanding, the COMPANY may
postpone the issuance and delivery of COMMON SHARES upon any exercise of the
OPTION until completion of any stock exchange listing or registration or other
qualification of such COMMON SHARES under any state or federal law, rule or
regulation as the COMPANY may consider appropriate; and may require the OPTIONEE
when exercising the OPTION to make such representations and furnish such
information as the COMPANY may consider appropriate in connection with the
issuance of the COMMON SHARES in compliance with applicable law.
COMMON SHARES issued and delivered upon exercise of the OPTION shall
be subject to such restrictions on trading, including appropriate legending of
certificates to that effect, as the COMPANY, in its discretion, shall determine
are necessary to satisfy applicable legal requirements and obligations.
10. Rights of the OPTIONEE. The OPTIONEE shall have no rights as a
shareholder of the COMPANY with respect to any COMMON SHARES of the COMPANY
covered by the OPTION until the date of issuance of a certificate to the
OPTIONEE evidencing such COMMON SHARES.
11. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio.
12. Rights and Remedies Cumulative. All rights and remedies of the
COMPANY and of the OPTIONEE enumerated in this Agreement shall be cumulative
and, except as expressly provided otherwise in this Agreement, none shall
exclude any other rights or remedies allowed by law or in equity, and each of
said rights or remedies may be exercised and enforced concurrently.
13. Captions. The captions contained in this Agreement are included
only for convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretation, construction or meaning and are in no way
to be construed as a part of this Agreement.
14. Severability. If any provision of this Agreement or the
application of any provision hereof to any person or any circumstance shall be
determined to be invalid or unenforceable, then such determination shall not
affect any other provision of this Agreement or the application of said
provision to any other person or circumstance, all of which other provisions
shall remain in full force and effect, and it is the intention of each party to
this Agreement that if any provision of this Agreement is susceptible of two or
more constructions, one of which would render the provision enforceable and the
other or others of which would render the provision unenforceable, then the
provision shall have the meaning which renders it enforceable.
15. Number and Gender. When used in this Agreement, the number and
gender of each pronoun shall be construed to be such number and gender as the
context, circumstances or its antecedent may required.
16. Entire Agreement. This Agreement constitutes the entire
agreement between the COMPANY and the OPTIONEE in respect of the subject matter
of this Agreement, and this Agreement supersedes all prior and contemporaneous
agreements between the parties hereto in connection with the subject matter of
this Agreement. No officer, employee or other servant or agent of the COMPANY,
and no servant or agent of the OPTIONEE, is authorized to make any
representation, warranty or other promise not contained in this Agreement. No
change, termination or attempted waiver of any of the provisions of this
Agreement shall be binding upon any party hereto unless contained in a writing
signed by the party to be charged.
17. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns (including successive,
as well as immediate, successors and assigns) of the COMPANY.
IN WITNESS WHEREOF, the OPTIONEE has executed this Agreement, and
the COMPANY has caused this Agreement to be executed, to be effective as of the
date first above written.
COMPANY:
X. X. XXXXX CORPORATION
By:______________________________________
Xxxxxx X. Xxxxx
Senior Vice President-Finance, Chief
Financial Office, Secretary and
Treasurer
OPTIONEE:
_________________________________________
Xxxxxx X. Xxx Xxxxxx
Address:
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
