EXHIBIT 4.5
INCENTIVE STOCK OPTION AGREEMENT
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THIS AGREEMENT, dated Grant Date, is made by and between CALMAT CO., a
Delaware corporation, hereinafter referred to as "Company," and Name, an
employee of the Company or a Subsidiary of the Company, hereinafter referred to
as "Employee";
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase No. of shares shares of its $1.00 par value Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Management Development and Compensation Committee of the
Company's Board of Directors (hereinafter referred to as the "Committee"),
appointed to administer said Plan, has determined that it would be to the
advantage and best interest of the Company and its shareholders to grant the
Incentive Stock Option provided for herein to the Employee as an inducement to
remain in the service of the Company or its Subsidiaries and as an incentive for
increased efforts during such service, and has advised the Company thereof and
instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
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Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary.
SECTION 1.1 - CODE
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.2 - OPTION
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"Option" shall mean the incentive stock option to purchase common
stock of the Company granted under this Agreement.
SECTION 1.3 - PARENT CORPORATION
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"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
SECTION 1.4 - PLAN
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"Plan" shall mean the Plan
SECTION 1.5 - PRONOUNS
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The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
SECTION 1.6 - SECRETARY
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"Secretary" shall mean the Secretary of the Company.
SECTION 1.7 - SUBSIDIARY
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"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
SECTION 1.8 - TERMINATION OF EMPLOYMENT
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"Termination of Employment" shall mean the time when the employee-
employer relationship between the Employee and the Company or a Subsidiary is
terminated for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death or retirement, but excluding any
termination where there is a simultaneous re-employment by the Company or a
Subsidiary. The Committee, in its absolute discretion, shall determine the
effect of all other matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination
of Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Termination of Employment;
provided, however, that a leave of absence shall constitute a
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Termination of Employment if, and to the extent that, such leave of absence
interrupts employment for purposes of Section 422A(a)(2) of the Code and the
then applicable Regulations and Revenue Rulings under said Section.
ARTICLE II
GRANT OF OPTION
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SECTION 2.1 - GRANT OF OPTION
-----------------------------
In consideration of the Employee's agreement to remain in the employ
of the Company or its Subsidiaries and for other good and valuable
consideration, on the date hereof the Company irrevocably grants to the Employee
the option to purchase any part or all of an aggregate of No. of shares shares
of its $1.00 par value Common Stock upon the terms and conditions set forth in
this Agreement.
SECTION 2.2 - PURCHASE PRICE
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The purchase price of the shares of stock covered by the Option shall
be $ Price per share without commission or other charge.
SECTION 2.3 - CONSIDERATION TO THE COMPANY
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In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement or in the Plan shall confer upon
the Employee any right to continue in the employ of the Company or any
Subsidiary, or shall interfere with or restrict in any way the rights of the
Company and its Subsidiaries, which are hereby expressly reserved, to discharge
the Employee at any time for any reason whatsoever, with or without good cause.
SECTION 2.4 - ADJUSTMENTS IN OPTION
-----------------------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which the Option, or
portions
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thereof then unexercised, shall be exercisable, to the end that after such event
Employee's proportionate interest shall be maintained as before the occurrence
of such event. Such adjustment in the Option shall be made without change in the
total price applicable to the unexercised portion of the Option (except for any
change in the aggregate price resulting from rounding-off of share quantities or
prices) and with any necessary corresponding adjustment in the Option price per
share; provided, however, that each such adjustment shall be made in such manner
as not to constitute a "modification" within the meaning of Section 425(h)(3) of
the Code. Any such adjustment made by the Committee shall be final and binding
upon the Employee, the Company and all other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
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SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
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(a) Subject to Section 3.4(b), the Option shall become
exercisable in four (4) cumulative installments as follows:
(i) The first installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the first anniversary of the date the Option is granted.
(ii) The second installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the second anniversary of the date the Option is
granted.
(iii) The third installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the third anniversary of the date the Option is granted.
(iv) The fourth installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the fourth anniversary of the date the Option is
granted.
(b) No portion of the Option which is unexercisable at
Termination of Employment shall thereafter become exercisable.
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SECTION 3.2 - DURATION OF EXERCISABILITY
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The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 - EXPIRATION OF OPTION
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The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted; or
(b) If the Employee owned (within the meaning of Section 425(d)
of the Code), at the time the Option was granted, more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company, any Subsidiary or any Parent Corporation, the expiration of five
(5) years from the date the Option was granted; or
(c) The time of the Employees's Termination of Employment, unless
such Termination of Employment results from his death, his retirement, his
disability (within the meaning of Section 22(e)(3) of the Code) or his
being discharged not for good cause; or
(d) The expiration of three (3) months from the date of the
Employee's Termination of Employment by reason of his retirement or his
being discharged not for good cause, unless the Employee dies within said
three-month period; or
(e) The expiration of one (1) year from the date of the
Employee's Termination of Employment by reason of his disability (within
the meaning of Section 22(e)(3) of the Code); or
(f) The expiration of one (1) year from the date of the
Employee's death; or
(g) Unless the Option is assumed or an equivalent option is
substituted by a successor corporation pursuant to Section 3.4(a), the
effective date of either the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or
person of all or substantially all of the Company's assets, or eighty
percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the
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Company. At least thirty (30) days prior to the effective date of such
merger, consolidation, acquisition, liquidation or dissolution, the
Committee shall give the Employee notice of such event if the Option has
then neither been fully exercised nor become unexercisable under this
Section 3.3.
SECTION 3.4 - ASSUMPTION OR ACCELERATION OF EXERCISABILITY
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In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets, or eighty percent (80%) or
more of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, either:
(a) The Option shall be assumed or an equivalent option
substituted by any successor corporation to the Company. The Company
undertakes to make reasonable and adequate provision for such assumption or
substitution of the Option upon or in connection with such merger,
consolidation, acquisition, liquidation or dissolution; or
(b) The Committee, by means of the notice referred to in Section
3.3(g), shall provide that the Option shall become exercisable, for a
minimum of thirty (30) days prior to such event, as to all the shares
covered hereby, notwithstanding that this Option may not yet have become
fully exercisable under Section 3.1(a).
The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such assumption, substitution or acceleration of exercisability, including,
but not by way of limitation, provisions to ensure that any such acceleration
and resulting exercise shall be conditioned upon the consummation of the
contemplated corporate transaction, and determinations regarding whether
reasonable and adequate provisions for assumption or substitution have been made
as defined in subsection (a).
SECTION 3.5 - SPECIAL TAX CONSEQUENCES
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The Employee acknowledges that, to the extent that the aggregate fair
market value of stock with respect to which "incentive stock options" (within
the meaning of Section 422A of the Code, but without regard to Section 422A(d)
of the Code), including the Option, are exercisable for the first time by the
Employee during any calendar year (under the Plan and all other incentive stock
option plans of the Company, any Subsidiary and any Parent Corporation) exceeds
$100,000, such options shall be treated as not qualifying under Section 422A of
the Code but rather shall be taxed as nonqualified options. The Employee
further acknowledges that the rule set forth in the preceding sentence shall be
applied by taking options
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into account in the order in which they were granted. For purposes of these
rules, the fair market value of stock shall be determined as of the time the
option with respect to such stock is granted.
ARTICLE IV
EXERCISE OF OPTION
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SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
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During the lifetime of the Employee, only he may exercise the Option
or any portion thereof. After the death of the Employee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the Employee's will or under the then
applicable laws of descent and distribution.
SECTION 4.2 - PARTIAL EXERCISE
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Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
twenty-five (25) shares (or minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
SECTION 4.3 - MANNER OF EXERCISE
--------------------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Employee or the other person
then entitled to exercise the Option or portion, stating that the Option or
portion is thereby exercised, such notice complying with all applicable
rules established by the Committee; and
(b) Full payment for the shares with respect to which such Option
or portion is thereby exercised:
(1) In cash or by check; or
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(2) By delivery of shares of the Company's Common Stock owned
by the Optionee duly endorsed for transfer to the Company with a fair
market value (as determinable under Section 4.2(b) of the Plan) on the
date of delivery equal to the aggregate Option price of the shares with
respect to which such Option or portion is thereby exercised; or
(3) With the consent of the Committee, by delivery of a full
recourse promissory note bearing interest (at at least such rate as
shall then preclude the imputation of interest under the Code or any
successor provision) and payable upon such terms as may be prescribed
by the Committee. The Committee may also prescribe the form of such
note and the security to be given for such note. No Option may,
however, be exercised by delivery of a promissory note or by a loan
from the Company when or where such loan or other extension of credit
is prohibited by law; or
(4) By means of any combination of the consideration provided
in the foregoing subsections (1), (2) and (3); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of
stock are being acquired for his own account, for investment and without
any present intention of distributing or reselling said shares or any of
them except as may be permitted under the Securities Act of 1933, as
amended (the "Act"), and then applicable rules and regulations thereunder,
and that the Employee or other person then entitled to exercise such Option
or portion will indemnify the Company against and hold it free and harmless
from any loss, damage, expense or liability resulting to the Company if any
sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate
to ensure the observance and performance of such representation and
agreement and to effect compliance with the Act and any other federal or
state securities laws or regulations. Without limiting the generality of
the foregoing, the Committee may require an opinion of counsel acceptable
to it to the effect that any subsequent transfer of shares acquired on an
Option exercise does not violate the Act, and may issue stop-transfer
orders covering such shares. Share certificates evidencing stock issued on
exercise of this Option may bear an appropriate legend referring to the
provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Act, and such
registration is then effective in respect of such shares; and
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(d) In the event the Option or portion shall be exercised
pursuant to Section 4.1 by any person or persons other than the Employee,
appropriate proof of the right of such person or persons to exercise the
Option.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
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The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations
of the Securities and Exchange Commission or of any other governmental
regulatory body, which the Committee shall, in its absolute discretion,
deem necessary or advisable; and
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its
absolute discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish for
reasons of administrative convenience.
SECTION 4.5 - RIGHTS AS SHAREHOLDER
-----------------------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company with respect to any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
SECTION 4.6 - PAYMENTS TO OPTIONEES
-----------------------------------
In its sole and absolute discretion, the Committee may, but shall
not be obligated to, direct that the Company pay to an Employee exercising, or
disposing of stock acquired under an Incentive Stock Option, an amount of cash
(subject to payroll tax withholding) representing
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all or a portion of the tax savings, if any, realized by the Company in
connection with such exercise or disposition. Any such payment may, but need
not, be made in order to reduce or eliminate differences in taxation to the
Employee between an Incentive Stock Option and a Nonqualified Stock Option with
equivalent terms.
ARTICLE V
MISCELLANEOUS
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SECTION 5.1 - ADMINISTRATION
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The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee in good faith shall be final and binding upon the
Employee, the Company and all other interested persons. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. In
its absolute discretion, the Board may, at any time and from time to time,
exercise any and all rights and duties of the Committee under the Plan and this
Agreement.
SECTION 5.2 - OPTION NOT TRANSFERABLE
-------------------------------------
Neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Employee
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means,
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
SECTION 5.3 - SHARES TO BE RESERVED
-----------------------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
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SECTION 5.4 - NOTICES
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Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Employee shall be addressed to him at the address
given beneath his signature thereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Employee shall,
if the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall
be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
SECTION 5.5 - TITLES
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Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
SECTION 5.6 - NOTIFICATION OF DISPOSITION
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The Employee shall give prompt notice to the Company of any
disposition or other transfer of any shares of stock acquired under this
Agreement if such disposition or transfer is made (a) within two (2) years from
the date of granting the Option with respect to such shares or (b) within one
(1) year after the transfer of such shares to him. Such notice shall specify
the date of such disposition or other transfer and the amount realized, in cash,
other property, assumption of indebtedness or other consideration, by the
Employee in such disposition or other transfer.
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