1
EXHIBIT 10.39
XXXXX XXXXXX INCORPORATED
NONQUALIFIED STOCK OPTION AGREEMENT
[NAME] [SHARES]
Grantee Shares Granted
Pursuant to action taken by the Compensation Committee of the Board of Directors
of Xxxxx Xxxxxx Incorporated, a Delaware corporation (the "Company"), for the
purposes of administration of the Xxxxx Xxxxxx Incorporated Long Term Incentive
Plan (the "Plan"), the above-named Grantee is hereby granted a nonqualified
stock option to purchase the above number of shares of the Company's $1 par
value per share common stock at the exercise price of $21.00 for each share
subject to this option, payable at the time of exercise. Subject to the terms of
the Plan and this Stock Option Agreement regarding exercise, this option will
vest and become exercisable with respect to increments of thirty-three and
one-third percent (33-1/3%) of the shares subject to this option on the first
day of December in each of the years 2001, 2002 and 2003, provided the Grantee
remains employed by the Company or its subsidiaries. This option may not be
exercised after December 2, 2008.
The option shall vest and become exercisable in the event of a Change in
Control, other than an event described only in clause (3) of Section 16(f) of
the Plan. In addition, this option shall vest and become exercisable upon (i)
the termination of employment of the Grantee by the Company without Cause or by
the Grantee for Good Reason within two years following an event described in
clause (3) of Section 16(f) of the Plan or (ii) the consummation of a merger or
consolidation of the Company or any direct or indirect subsidiary of the Company
with any other corporation, other than a merger or consolidation immediately
following which the individuals who comprise the Board of Directors of the
Company immediately prior thereto constitute at least a majority of the Board of
Directors of the Company, the entity surviving such merger or any parent thereof
(or a majority plus one member where such board comprises an odd number of
members). The provisions of Section 5.4 of the Severance Agreement by and
between the Company and Grantee shall not apply to this option, and vesting and
the period of exercisability of this option following a Change in Control shall
be governed by this agreement and the Plan. This agreement will control in the
event of any conflict in terms with the Plan or any other agreement or plan with
respect to vesting and excercisability following a Change in Control.
The following provisions will apply in the event of Grantee's termination of
employment:
1. If Grantee's employment is terminated for any reason (other than
fraud, theft, embezzlement, conflict of interest, death, retirement or
disability, or by the Company without Cause or by the Grantee for Good Reason
within two years following a Change in Control, which is covered by paragraphs
2, 3, 4, and 5 below), this option will wholly and completely terminate on the
date of termination of employment, to the extent it is not then exercisable;
however, to the extent the option is exercisable, Grantee shall have three
months from the date of termination of employment to exercise the option but in
no event later than December 2, 2008.
2. If Grantee's employment is terminated because of fraud, theft or
embezzlement committed against the Company or one of its subsidiaries, or for
conflict of interest as provided in the Plan, this option will wholly and
completely terminate on the date of termination of employment.
3. In the event of the retirement (such that the Grantee's age plus
years of service with the Company equals or exceeds 65) or disability of the
Grantee, all granted but unvested options shall immediately vest upon the
Grantee's retirement or disability. The Grantee shall have three years from the
date of termination of employment due to retirement or disability to exercise
this option (but in no event later than December 2, 2008).
4. Upon the death of the Grantee in active service, all granted but
unvested options shall immediately vest upon the Grantee's death and otherwise
shall be exercisable for a period of one year following Grantee's death (but in
no event later than December 2, 2008).
5. Upon the termination of employment of the Grantee by the Company
without Cause or by the Grantee for Good Reason within two years following a
Change in Control, the Grantee shall have two years from the date of termination
of employment to exercise the option but in no event later than December 2,
2008.
In the event that the Company is party to a transaction which is otherwise
intended to qualify for "pooling of interests" accounting treatment (i) the
provisions of this option shall, to the extent practicable, be interpreted so as
to permit such accounting treatment, and (ii) to the extent that application of
clause (i) of this sentence does not preserve the availability of such
accounting treatment, then, to the extent that any of the provisions of this
option disqualifies the transaction as a "pooling" transaction, the Board of
Directors of the Company may amend any provisions of this option and/or declare
this option null and void if and to the extent necessary (including declaring
such provision or provisions to be null and void as of the date hereof) so that
such transaction may be accounted for as a "pooling of interests."
Cashless exercise, in accordance with the terms of the Plan, shall be available
to Grantee for the shares subject to this option.
To the extent the exercise of this option results in taxable income to Grantee,
the Company is authorized to withhold from any remuneration payable to Grantee
any tax required to be withheld by reason of such taxable income.
This option is granted under and is subject to all of the provisions of the
Plan. Capitalized terms which are not defined herein shall have the meaning
ascribed to such terms in the Plan. This option is not transferable by the
Grantee otherwise than by will or by the laws of descent and distribution, and
is exercisable during the Grantee's lifetime only by the Grantee.
Date of Grant: December 2, 1998
XXXXX XXXXXX INCORPORATED
----------------------------
X.X. XXXXXX
SENIOR VICE PRESIDENT
Agreed and Accepted this ____ day of _________, 1999.
-------------------------------------------
[NAME]
