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Exhibit A
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SUDBURY, INC. NON-QUALIFIED STOCK OPTION AGREEMENT
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This Agreement, dated this 28th day of July, 1995, by and between
Sudbury, Inc., a Delaware corporation with an office at 00000 Xxxxxxx Xxxx.,
Xxxxx 000, Xxxxxx Xxxx, Xxxx 00000 (the "Company") and Xxxxxxx X. Xxxxxx (the
"Employee"), a full-time employee of the Company or one of its subsidiaries.
SECTION 1. Under the provisions of the Company's 1995 Stock Option Plan
(the "Plan"), the Company hereby grants to the Employee the option of
purchasing an aggregate of 200,000 shares of common stock, par value $.01, of
the Company ("Shares") at the price of $ 7.625 per share [market price],
subject to the terms and conditions as hereinafter set forth.
SECTION 2. Notwithstanding any other provisions herein, this option
shall expire no later than five (5) years from the date of this Agreement.
SECTION 3. The option granted pursuant to this Agreement shall vest on
the following schedule:
(a) options to purchase 100,000 Shares on January 13, 1996;
and
(b) options to purchase an additional 100,000 Shares on
January 13, 1997.
SECTION 4. This option is not transferable by the Employee other than
(a) by will or by the laws of descent and distribution, and is exercisable,
during the lifetime of the Employee, only by him or her, or in the event of
death, his or her estate, or in the event of disability, his or her personal
representative, or (b) pursuant to a qualified domestic relations order, as
defined in the 1986 Internal Revenue Code, as amended (the "Code") or Title 1
of the Employee Retirement Income Security Act of 1974, as amended. Except as
otherwise provided in Sections 5, 6, and 9, this option can be exercised only
if the Employee has remained in the employ of the Company continuously from
the date this option is granted.
SECTION 5. In the event of termination of employment of the Employee
for any reason other than death, permanent disability (as defined in that
certain Employment Agreement between the Company and the Employee of even date
herewith (the "Employment Agreement")) or for Cause (as defined in the
Employment Agreement), then (a) the Employee, at any time within the
three-month period following such termination of employment (but within the
term specified in Section 2), may exercise the option rights or any
unexercised portion thereof to the extent such rights were otherwise
exercisable by the Employee at the date of termination of employment, and (b)
the portion of the option not vested as of the date of Employee's termination
of employment shall automatically vest as of the date of such termination.
If, however, the Employee is terminated from employment for Cause (as defined
in the Employment Agreement), all option rights, heretofore unexercised, shall
expire.
SECTION 6. If the Employee shall die or become permanently disabled
(as defined in the Employment Agreement) while in the employ of the Company or
within the three-year
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period after termination of employment with the Company, (a) the option
rights or any unexercised portion thereof may be exercised within the
one-year period after the Employee's death or permanent disability (but
within the term specified in Section 2), by the person entitled by will or
the applicable laws of descent and distribution to the extent that the
Employee was entitled to exercise the same at the date of his or her death,
and (b) the portion of the option that has not vested as of the earlier of
the Employee's (i) death or permanent disability, as the case may be, or (ii)
termination shall automatically expire.
SECTION 7. Nothing herein contained shall confer upon the Employee any
right to continue in the employ of the Company, or limit or restrict any
right which the Company would otherwise have to terminate the employment of
the Employee with or without cause or to adjust his or her compensation.
SECTION 8. Subject to the provisions of Section 9(a) of this
Agreement, in the event that, during the term hereof and while the option as
to any of the Shares covered hereby shall remain unexercised, the number of
Shares subject to the Plan and to options granted under the Plan shall be
adjusted as follows: (a) in the event that all of the outstanding Shares are
changed by any stock dividend, stock split or recapitalization or in the
event that extraordinary cash or non-cash dividends are declared with respect
to the Shares, the number of Shares subject to the Plan and to options
granted hereunder shall be equitably adjusted; (b) in the event of any
merger, consolidation or reorganization of the Company with any other
corporation or corporations, there shall be substituted, on an equitable
basis as determined by the Compensation Committee of the Board of Directors
(the "Committee"), for each Share then subject to the Plan, whether or not
at the time subject to outstanding options, the number and kind of Shares or
other securities to which the holders of Shares of the Company will be
entitled pursuant to the transaction; and (c) subject to the provisions of
Section 9(b) of this Agreement in the event of any other relevant change in
the capitalization of the Company, the Committee shall provide for an
equitable adjustment In the number of Shares then subject to the Plan,
whether or not then subject to outstanding options.
In the event of any such adjustment the purchase price per Share shall be
equitably adjusted. Any such adjustment or substitution may provide for the
elimination of any fractional Share which might otherwise become subject to
an option. The adjustment and manner of application of the foregoing
provisions shall be determined by the Committee in its sole discretion.
SECTION 9.
(a) If the Company shall liquidate or dissolve, or shall be
a party to a merger or consolidation or other business combination
with respect to which it shall not be the surviving corporation, the
Company shall give written notice thereof to the Employee at least
thirty days prior thereto, and notwithstanding the provisions of
Section 3, the Employee shall have the right within said thirty-day
period (but within
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the term specified in Section 2) to exercise this option in full to
the extent not previously exercised. To the extent that this option
shall not have been exercised on or prior to the effective date of
such liquidation, dissolution, merger or consolidation, it shall
terminate on said date, unless it is assumed by another corporation.
(b) Notwithstanding the provisions of Section 3, the option
granted hereby shall become exercisable in full if and when any
corporation, partnership, joint venture, person, or a group acting
together ("Acquiring Entity") for a similar purpose shall directly or
indirectly acquire or announce an intent to directly or indirectly
acquire control of the Company or any successor or assignee of the
Company for purposes of this Section, control shall mean the
acquisition of, or the formation of a group whose members beneficially
own shares of the Company, which after giving effect thereto, shall
permit the Acquiring Entity to vote 45% or more of the aggregate
voting power, as measured by all Shares then outstanding, in the
election of directors of the Company.
SECTION 10. This option shall be exercised by delivering to the
Company at the office of its Secretary (a) a written notice, signed by the
person entitled to exercise the option, stating the number of Shares to be
purchased hereunder, (b) payment in an amount equal to the full purchase
price of the Shares to be purchased, and (c) in the event the option is
exercised by a person other than the Employee, evidence satisfactory to the
Company that such person has the right to exercise the option. Payment may
be made, at the election of the Employee (a) in cash (including check, bank
draft, money order, or wire transfer), (b) by delivering, in transferable
form, that number of Shares which, on the business day preceding the date of
exercise, has an aggregate fair market value equal to such purchase price, or
(c) a combination of the foregoing. The fair market value of the Shares
shall be deemed to be (a) the closing price of the Shares on the principal
stock exchange on which the Shares are then traded on the last business day
preceding the date of exercise of the option, or (b) if no sales take place
on such day on any such exchange, the average of the last reported closing
bid and asked prices on such day as officially quoted on the principal stock
exchange on which the Shares are then traded, or (c) if the Shares are not
listed on any such exchange, the average of the last reported closing bid and
asked prices on the over-the-counter market on the day preceding the date of
exercise of the option. The National Association of Securities Dealers
Market System shall be deemed a principal stock exchange. The Employee shall
also pay, within the time period specified by the Company, any amounts
required to be withheld for federal, state, or local tax purposes as a result
of the exercise of the options. Upon due exercise of the option, the Company
shall issue in the name of the person exercising the option and deliver to
such person one or more certificates for the shares in respect of which the
option shall have been exercised. No holder of this option shall have any
rights as a stockholder in respect of any Shares as to which the option shall
not have been duly exercised and no rights as a shareholder shall arise in
respect of any Shares as to which the option shall have been duly exercised
until and except to the extent that a certificate or certificates for such
Shares shall have been issued.
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SECTION 11. This option shall not be exercisable if such exercise
would violate:
(a) Any applicable state securities law;
(b) Any applicable registration or other requirements under
the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, or the listing requirements of any stock exchange;
or
(c) Any applicable legal requirement of any other
governmental authority.
The Company agrees to make reasonable efforts to comply with the foregoing
laws and requirements so as to permit the exercise of this option.
Furthermore, if a Registration Statement with respect to the Shares to be
issued upon the exercise of this option is not in effect or if counsel for
the Company deems it necessary or desirable in order to avoid possible
violation of the Securities Act of 1933, as amended (the "Act"), the Company
may require, as a condition to its issuance and delivery of certificates for
the Shares, the delivery to the Company of a commitment in writing by the
person exercising the option that at the time of such exercise it is his or
her intention to acquire such Shares for his or her own account for
investment only and not with a view to, or for resale in connection with, the
distribution thereof; that such person understands the Shares may be
"restricted securities" as defined in Rule 144 of the Securities and Exchange
Commission; and that any resale, transfer or other disposition of said
Shares will be accomplished only in compliance with Rule 144, of the Act, or
the other Rules and Regulations thereunder. The Company may place on the
certificates evidencing such shares an appropriate legend reflecting the
aforesaid commitment and may refuse to permit transfer of such certificates
until it has been furnished evidence satisfactory to it that no violation of
the Act or the Rules and Regulations thereunder would be involved in such
transfer.
SECTION 12. References herein to the Company shall include all
parents and subsidiaries of the Company, and shall be determined consistently
with the definitions of parent and subsidiary in the Code and all relevant
Treasury Department Regulations.
SECTION 13. This option is a non-qualified stock option within the
meaning of Section 422 of the Code and shall not be treated or interpreted
for federal income tax purposes as an Incentive stock option as defined in
the Code.
SECTION 14. The Committee shall have authority, subject to the
express provisions of the plan, to construe and interpret this Agreement and
the Plan, to establish, and to make all other determinations in the judgment
of the Committee necessary or desirable for the administration of the Plan.
All determinations of the Committee shall be final and binding upon all
persons. The Board of Directors may at any time or from time to time grant
to the Committee such further powers and authority as the Board shall
determine to be necessary or desirable.
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SECTION 15. All of the provisions of the Plan are incorporated herein
by reference and are made a part of this Agreement. To the extent any
conflict shall arise between this Agreement and the terms of the Plan, the
Plan shall control.
SECTION 16. This Agreement shall be governed by the laws of the state
of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate as of the day and year first written above.
SUDBURY, INC.
By:/s/Xxxx X. Xxxxx
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EMPLOYEE:
/s/Xxxxxxx X. Xxxxxx
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FORM OF EXERCISE OF OPTION
Granted Under the Sudbury, Inc.
1995 Stock Option Plan
Date:
Sudbury, Inc.
00000 Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attention: Secretary
Referring to the Stock Option Agreement dated as of______________,19_____
between Sudbury, Inc. (the "Company") and the undersigned, granting to me the
right to purchase a total of 200,000 shares of Common Stock of the Company at
$_________ per share, I hereby exercise my right to purchase pursuant to said
Agreement ___________ shares of such Common Stock.
In payment of the aggregate purchase price of $__________,I have
enclosed herewith a check, bank draft or money order in the amount of $_______,
and/or (if shares of Common Stock of the Company are being used in partial or
full payment of the purchase price) the following certificates for shares of
Common Stock.*
Certificate Nos. Shares Certificate Nos. Shares
__________________ _______ ________________ _______
__________________ _______ ________________ _______
__________________ _______ ________________ _______
________________________
* When this Exercise of Option is signed by the sole registered owner of
the certificate(s) listed and transmitted hereby, no endorsement of the
certificate(s) or separate stock powers is required. If this Form of
Exercise of Option is signed by a person other than the registered
owner of the certificate(s) listed, or if the certificate(s)
transmitted hereby is/are owned by two or more joint owners, such
certificate(s) must be endorsed or accompanied by appropriate stock
powers.
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The stock certificate(s) representing the shares purchased as
aforesaid, together with such additional shares, if any, as may be required to
adjust for stock splits or stock dividends subsequent to the date of the
option, and shares, if any, represented by a certificate tendered herewith in
excess of the number of shares required for payment of the purchase price,
should be issued and delivered to me as follows:
______ By delivery to me in person at the above office of the Company
______ By mailing the same to me at the address shown below my
signature hereto.
I understand that this exercise of stock option is subject to federal,
state, and local withholding requirements and I will comply, prior to the
issuance of the shares hereunder, with whatever arrangements the Company deems
necessary.
Please issue the stock certificate(s) in the following denominations:
____________________________________
____________________________________
Very truly yours,
___________________________
(Signature)
Street Address:____________________
___________________________
{City, State, Zip}
Social Security No.:_____________
