Exhibit 10.2
NON-STATUTORY STOCK OPTION AGREEMENT
AGREEMENT dated February 25, 2005 (hereinafter sometimes called the
Grant Date) between Xxxxxx Industries, Inc., a Delaware corporation having its
principal executive offices at 0000 X. Xxx Xxxxx Xxxx., Xxxxx, Xxxxxxx 00000
(hereinafter called the Company), and <> <>. <>
(hereinafter called the Employee).
WHEREAS, the Employee is a key employee of the Company and the Company,
in consideration of the Employee's continued employment by the Company or a
subsidiary corporation, desires to grant the Employee the right and option to
purchase shares of common stock, par value $.01 per share, of the Company
(hereinafter called Common Stock) on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, it is agreed hereby as follows:
1. (a) The Company hereby grants to the Employee the right and
option (hereinafter called the Option) to purchase from the Company at a price
of $38.72 per share an aggregate number of <> shares of
Common Stock (hereinafter called the Option Shares). The Option shall be
exercisable only in accordance with the terms and conditions set forth in this
Agreement.
(b) The Option may not be exercised at any time for a fractional
share nor for fewer than 100 shares, unless fewer than 100 shares remain subject
to the Option at such time, in which case the Option may be exercised for the
full balance of the shares which remain subject to the Option at such time.
2. (a) In no event shall the Option be exercisable after the tenth
anniversary of the Grant Date (the ten year period extending from the Grant Date
to (and including) the tenth anniversary of the Grant Date being hereinafter
called the Option Term).
(b) Subject to subparagraph 2(a) and the other provisions of
this Agreement, the Option may be exercised at any time or from time to time
during the Option Term, provided that (i) the Employee shall have been in the
continuous employ of the Company or a subsidiary during the entire period
extending from the Grant Date to (and including) the date of exercise, and (ii)
the Option may not be exercised with respect to (A) any of the Option Shares
until the first anniversary of the Grant Date, nor (B) more than one-third of
the Option Shares prior to the second anniversary of the Grant Date, nor (C)
more than two-thirds of the Option Shares prior to the third anniversary of the
Grant Date.
3. (a) If the Employee's employment with the Company and its
subsidiaries shall terminate within the Option Term for cause, the Option shall
terminate in all respects coincident with such termination of employment.
(b) (i) If the Employee's employment with the Company and its
subsidiaries shall terminate during the Option Term as a result of the
Employee's "Retirement" (as defined in subparagraph 3(d) hereof), death or
disability, then (A) the Employee or the person or persons to whom the Option
shall have been transferred by will or the laws of descent and distribution, or
the Employee's legal representative, shall have the right, subject to the
provisions of subparagraph 3(e) below, within three years from the date on which
the Employee's employment with the Company and its subsidiaries terminated as a
result of Retirement, death or disability, to exercise the unexercised portion
of the Option, but only to the extent, if any, that the Employee was entitled to
exercise it pursuant to subparagraph 2(b) above immediately prior to such
termination of employment, and (B) the Option shall terminate in all respects at
the expiration of such three year period or, if sooner, at the expiration of the
Option Term.
(ii) If the Employee shall die during the three year period
following the termination of the Employee's employment as a result of Retirement
or disability, or during the three-months' period following the termination of
the Employee's employment for any reason other than cause, Retirement, death or
disability, then (A) the person or persons to whom the Option shall have been
transferred by will or the laws of descent and distribution, or the legal
representative of the Employee's estate, shall have the right, subject to the
provisions of subparagraph 3(e) below, within three years from the date of the
Employee's death, to exercise the unexercised portion of the Option, but only to
the extent, if any, that the Employee was entitled to exercise it pursuant to
subparagraph 3(b)(i) above or subparagraph 3(c) below immediately prior to the
Employee's death, and (B) the Option shall terminate in all respects at the
expiration of such three year period or, if sooner, at the expiration of the
Option Term.
(c) If the Employee's employment with the Company and its
subsidiaries shall terminate during the Option Term for any reason not covered
by the preceding provisions of this paragraph 3 (i.e., for any reason other than
cause, Retirement, death or disability), (i) the Employee, subject to the
provisions of subparagraphs 2(a) and 3(b)(ii), shall have the right, at any time
during the three months' period ending at the close of the 90th day after the
Employee's last day of employment with the Company and its subsidiaries, to
exercise the unexercised portion of the Option to the extent, if any, that the
Employee was entitled to do so pursuant to subparagraph 2(b) above immediately
prior to such termination of employment, and (ii) the Option shall terminate in
all respects at the expiration of such three months' period or, if sooner, at
the expiration of the Option Term.
(d) Whether the Employee's absence from employment by reason
of illness, military or government service or other causes shall constitute
termination of employment, and whether the termination of Employee's employment
shall be for cause or disability, shall be determined by, and in the sole
discretion of, the Compensation Committee (as defined in subparagraph 13(b)
hereof), whose determination shall be final, binding and conclusive on the
Employee, on any person or entity claiming under or through the Employee, and on
all other interested parties, including the Company. For all purposes of this
paragraph 3, "Retirement" shall mean termination of the
- 2 -
Employee's employment with the Company and its subsidiaries (i) other than for
cause, and (ii) either (A) on or after the date on which the Employee attains
the age of sixty (60), or (B) on a date on which the sum of the Employee's age
and completed years of employment with the Company and its subsidiaries is at
least eighty (80).
(e) No provision of this Agreement, including but not limited
to this paragraph 3, shall be deemed to extend the Option Term. Any provision of
this Agreement to the contrary notwithstanding, (i) in no event shall the Option
be exercisable after the expiration of the Option Term, and (ii) in no event
shall the Option be exercisable more than three months after termination of the
Employee's employment with the Company and its subsidiaries, except in the event
of the Retirement, death or disability of the Employee, as provided in
subparagraph 3(b) above.
4. Any provision of this Agreement to the contrary notwithstanding,
in no event (whether before or after termination of employment) shall the
Employee be entitled to exercise the Option unless the Employee shall have
refrained, at all times prior to such exercise, from conduct which the
Compensation Committee determines in its sole discretion is contrary to the best
interests of the Company, including but not limited to competition with the
Company.
5. The Option may be exercised by written notice signed by the
Employee or, in the event of the Employee's death, by the person or persons
entitled to exercise the same under this Agreement, and delivered to the
Secretary of the Company at the Company's principal executive offices at the
address set forth above, specifying the number of Option Shares in respect of
which the Option is being exercised. Upon such exercise, payment of the full
purchase price for the shares so specified shall be made by tendering to the
Company cash, certified check, bank draft, postal or express money order,
personal check (subject to collection), whole shares of Common Stock already
owned by the Employee, or a combination of the foregoing forms of payment, or by
delivering to the Company a properly executed exercise notice together with
irrevocable instructions to a stockbroker that the Company determines satisfies
the provisions of section 220.3(e)(4) (or a successor provision) of Regulation T
promulgated by the Board of Governors of the Federal Reserve System (hereinafter
referred to as Regulation T) and such other criteria as the Company may in its
sole discretion establish, provided that (a) in no event shall the sum of the
cash, certified check, bank draft, postal or express money order, personal check
(subject to collection) and the fair market value on the date of such exercise
of any shares with which such purchase price is paid be less than the full
purchase price, and (b) the Committee may, but need not, at any time or from
time to time, without advance notice to the Employee, direct (or rescind any
direction) that shares of Common Stock tendered in payment of all or part of the
purchase price of the Option shall have been owned by the Employee for a
specified period of time prior to such tender. Neither the Employee nor the
Employee's legal representative, legatee(s) or distributee(s), as the case may
be, will be, or will be deemed to be a holder of any shares pursuant to the
exercise of an Option until the date of the issuance of a stock certificate for
such shares. Notice of exercise shall be deemed to have been delivered and the
Option duly exercised in respect of the shares specified in the notice if and
when such notice is received by the Secretary of the
- 3 -
Company and payment in cash or in the form of a certified check, bank draft or
postal or express money order, or in the form of a personal check subject to
collection, or in the form of a certificate or certificates, properly endorsed,
for whole shares of Common Stock that have been held for such period of time, if
any, prior to the delivery as the Committee may direct, or in a combination of
the foregoing forms of payment, shall have been mailed by registered or
certified mail to the executive offices of the Company, attention of the
Secretary of the Company, or shall have been received by the Secretary of the
Company, or when the properly executed exercise notice and irrevocable
instructions to a stockbroker that the Company determines satisfies the
provisions of Regulation T and such other criteria as the Company may establish
have been received by the Secretary of the Company. It shall be a condition of
the delivery by the Company of the certificate for the shares in respect of
which the Option shall have been exercised that provision shall have been made
for payment of any taxes that the Company determines are required to be
withheld.
6. The Employee agrees that if, in the opinion of counsel for the
Company, such representation(s), or evidence may be required by law, there shall
be delivered to the Company (a) a representation in writing signed by the person
or persons who shall exercise the Option, and such other evidence as may
reasonably be required by counsel for the Company, that such shares of stock are
being acquired for investment and not for resale or distribution, and (b) such
other representation(s) or evidence as in the opinion of counsel is necessary to
satisfy the requirements of any federal or state law at the time in effect
relating to the acquisition of shares to which the Option relates.
7. The Option is not transferable by the Employee otherwise than by
will or the laws of descent and distribution and is exercisable, during the
Employee's lifetime, only by the Employee. Once transferred by will or by the
laws of descent and distribution, the Option shall not be further transferable.
Any transferee of the Option must take the Option subject to the terms and
conditions of this Agreement. No such transfer of the Option shall be effective
to bind the Company unless the Company shall have been furnished with written
notice thereof, if by will, with a copy of the Employee's will, and with such
evidence as counsel for the Company may deem necessary to establish the validity
of the transfer and the acceptance by the transferee(s) of the terms and
conditions of this Agreement. No sale, assignment, transfer or other disposition
of the Option, whether voluntary or involuntary, by operation of law or
otherwise, except a transfer by the Employee by will or by the laws of descent
and distribution, shall vest in the purported assignee or transferee any
interest or right hereunder whatsoever.
8. The Employee shall have no rights as a stockholder with respect to
any share subject to the Option until the Employee shall have become the holder
of record of such share and, subject to the provisions of paragraph 10 hereof,
no adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash or securities or other property) or other distributions or other rights in
respect of such share as to which the record date therefor is prior to the date
upon which the Employee shall become the holder of record of such share.
- 4 -
9. The existence of the Option shall not affect in any way the right
or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
10. If all or any portion of the Option shall be exercised subsequent
to any stock dividend, split-up, spin-off, recapitalization, merger,
consolidation, combination or exchange of shares, reorganization or liquidation
occurring after the date hereof, as a result of which shares of any class or
other property shall be issued in respect of outstanding shares of Common Stock,
or shares of Common Stock shall be changed into the same or a different number
of shares of the same or another class or classes, the person(s) so exercising
the Option shall receive, for the aggregate price paid upon such exercise, the
aggregate number and class of shares and amount of property which, if shares of
Common Stock (as authorized at the date hereof) had been purchased at the date
hereof for the same aggregate price (on the basis of the price per share set
forth in paragraph 1(a) hereof) and had not been disposed of, such person(s)
would be holding, at the time of such exercise, as a result of such purchase and
all such stock dividends, split-ups, spin-offs, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, reorganizations or
liquidations; provided, however, that no fractional shares shall be issued upon
any such exercise, and the aggregate price paid shall be appropriately reduced
on account of any fractional share not issued. No adjustment shall be made in
the minimum number of shares which may be purchased at any one time, as fixed by
paragraph 1(b) hereof.
11. Neither this Agreement nor any provision hereof shall be deemed to
create any limitation or restriction upon the right of the Company to terminate
the employment of the Employee at any time with or without cause.
12. The exercise of the Option shall be subject to all requirements as
to (a) the listing, registration or qualification of the Option Shares for
trading on any securities exchange or securities trading system on which shares
of the Common Stock are listed or traded or under any applicable federal or
state law, and (b) the consent or approval of any governmental regulatory body
determined by the Compensation Committee, in its sole discretion, to be
necessary or desirable, and anything in this Agreement to the contrary
notwithstanding, the Option may not be exercised in whole or in part unless and
until the Company has been able to comply with all such requirements free of any
conditions not acceptable to the Committee. The Company shall make reasonable
efforts at its own cost to comply with all such requirements.
- 5 -
13. As used in this Agreement:
(a) With reference to employment with the Company, the term
"Company" shall be deemed to include any successor to the Company, whether by
merger, consolidation or otherwise, including any entity which acquires all or
substantially all of the assets of the Company, and any corporation now or
hereafter a subsidiary corporation of the Company, as that term is used in
Section 424 of the Internal Revenue Code of 1986, as amended, as well as any
entity in which the Company or its subsidiaries owns 50% or more of the equity;
and
(b) The term "Compensation Committee" shall mean the
Compensation Committee of the Board of Directors of the Company or such other
committee as such Board may appoint to administer the plan under which the
Option was granted.
14. Any dispute or disagreement which shall arise under or as a result
of this Agreement shall be determined by the Compensation Committee in its sole
discretion. The Compensation Committee shall have the power to administer,
interpret and construe all the provisions of this Agreement. Any such
determination by the Compensation Committee, and any administration,
interpretation or construction of the provisions of this Agreement by the
Compensation Committee shall be final, binding and conclusive on all interested
parties.
15. This Agreement shall be binding upon and inure to the benefit of
any successor(s) of the Company and the person(s) to whom the Option may have
been transferred by will or the laws of descent and distribution. All agreements
by the Employee hereunder shall, in the event of the Employee's death, be deemed
to refer to, and be binding upon, such last-mentioned person(s).
16. The Option has been granted pursuant to and subject to the
provisions of the Amended 1995 Long-Term Incentive Stock Plan of the Company
(the Plan), which is enclosed with this Agreement and hereby incorporated herein
by this reference. Any provision of this Agreement to the contrary
notwithstanding, each and every provision of this Agreement shall be subject to
the terms and conditions of the Plan.
17. The Option is not intended to be an incentive stock option within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
Each and every provision of this Agreement shall be administered, construed and
interpreted so that the Option shall not be treated for Federal income tax
purposes as such an incentive stock option, and any provision of this Agreement
that cannot be so administered, construed and interpreted shall be disregarded.
18. This Agreement may only be amended in writing signed by the
Employee and an officer of the Company duly authorized to do so.
- 6 -
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its corporate name by one of its officers thereunto duly authorized
and its seal to be hereunto affixed and to be duly attested, and the Employee
has executed this Agreement as of the day and year first above written.
XXXXXX INDUSTRIES, INC.
XXX XXXXXXXX
-----------------------
Chairman, President and
Chief Executive Officer
-----------------------
Employee
Plan enclosed
- 7 -
