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EXHIBIT 10.18
XXXX XXXXXXXX CORPORATION
EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 5th day of April, 1999, by
and between Xxxx Xxxxxxxx Corporation, a Delaware corporation ("Xxxx Xxxxxxxx"),
and Xxxxxx Xxxxxx ("Employee").
WITNESSETH, THAT:
WHEREAS, Xxxx Xxxxxxxx wishes to grant this stock option to
Employee pursuant to its 1996 Stock Incentive Plan (as it may be amended from
time to time, the "Plan").
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto hereby agree as follows:
1. Grant of Option
Xxxx Xxxxxxxx hereby grants to Employee, on the date set forth
above, the right and option (hereinafter called "this option") to purchase all
or any part of an aggregate of 115,000 shares of Common Stock, par value $0.125
per share, at the price of $50.00 per share on the terms and conditions set
forth herein. This 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 (the
"Code").
2. Duration and Exercisability
(a) This option shall in all events terminate ten (10)
years after the date of grant. Subject to the other terms and conditions set
forth herein, this option may be exercised by Employee in cumulative
installments as follows:
Cumulative percentage
On or after each of of shares as to which
the following dates: option is exercisable:
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April 5, 2002 33 1/3%
April 5, 2003 66 2/3%
April 5, 2004 100%
(b) During the lifetime of Employee, this option shall be
exercisable only by Employee, or, in the event Employee is disabled within the
meaning of Code Section 22(e)(3), the personal respresentative(s) or guardian(s)
of Employee. This option shall not be assignable or transferable by Employee,
other than by will or the laws of descent and distribution.
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3. Effect of Termination of Employment
(a) In the event that Employee shall cease to be employed
by Xxxx Xxxxxxxx or its subsidiaries for any reason other than Employee's gross
and willful misconduct, Employee's death or disability, or Employee's retirement
(as provided in paragraphs (b), (c) and (d) of this Section 3, respectively),
Employee shall have the right to exercise this option at any time within ninety
(90) days after such termination of employment to the extent of the full number
of shares Employee was entitled to purchase under this option on the date of
termination, subject to the condition that this option shall not be exercisable
after the expiration of its term.
(b) In the event that Employee shall cease to be employed
by Xxxx Xxxxxxxx or its subsidiaries by reason of Employee's gross and willful
misconduct during the course of employment, including, but not limited to, the
wrongful appropriation of funds or the commission of a gross misdemeanor or
felony, this option shall be terminated as of the date of the misconduct.
(c) If Employee shall die while in the employ of Xxxx
Xxxxxxxx or its subsidiaries or if Employee shall become disabled within the
meaning of Code Section 22(e)(3) while in the employ of Xxxx Xxxxxxxx or its
subsidiaries and Employee shall not have fully exercised this option, this
option may be exercised at any time within twelve (12) months after Employee's
death or disability by the personal representative(s), administrator(s), or, if
applicable, guardian(s) of Employee or by any person or persons to whom this
option is transferred by will or the applicable laws of descent and
distribution, to the extent of the full number of shares then subject to this
option on the date of death or disability (i.e., the vesting of all shares which
have not vested pursuant to paragraph (a) of Section 2 hereof shall be
accelerated to such date) and subject to the condition that this option shall
not be exercisable after the expiration of its term.
(d) If Employee shall cease to be employed by Xxxx
Xxxxxxxx or its subsidiaries (i) for any reason other than Employee's gross and
willful misconduct or Employee's death or disability (as provided in paragraphs
(b) and (c) of this Section 3, respectively), (ii) at a time when Employee shall
not have fully exercised this option and (iii) at a time when Employee has been
employed by Xxxx Xxxxxxxx or its subsidiaries for a period of at least ten (10)
years and has attained the age of 50 or greater, this option may be exercised by
Employee at any time on or prior to the earlier of the fifth anniversary of the
date Employee ceased to be employed by Xxxx Xxxxxxxx or its subsidiaries or the
expiration of the term of this option (the period ending as of the earlier of
such dates being referred to hereinafter as the "post-retirement extended
exercise period") to the extent of the full number of shares Employee shall be
entitled to purchase under this option on the date Employee ceases to be
employed by Xxxx Xxxxxxxx; subject, however, to the conditions that, during such
post-retirement extended exercise period, Employee shall not (x) breach any of
the terms of Section 4 hereof, or (y) act in any manner determined by the
committee or subcommittee of Xxxx Xxxxxxxx'x Board of Directors administering
the Plan to be adverse to the interests of Xxxx Xxxxxxxx or its subsidiaries. If
at any time during such post-retirement extended exercise period Employee shall
cease to satisfy the conditions described in the preceding proviso, Employee's
right to exercise this option pursuant to this Section 3(d) shall
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terminate immediately and Employee shall thereafter only be entitled to exercise
this option in accordance with paragraph (a) of this Section 3.
4. Certain Covenants.
(a) Noncompetition. Employee agrees that, during the
post-retirement extended exercise period, Employee will not, directly or
indirectly, anywhere in the United States, in any manner, whether as an advisor,
principal, agent, partner, officer, director, stockholder (except, as a passive
investment, being a beneficial holder of up to 1% of the outstanding shares of
capital stock of any corporation listed on a national securities exchange or
publicly traded in the over-the-counter market), employee, independent
contractor, consultant, or otherwise of any registered broker-dealer, financial
services institution or other entity, perform any services for or otherwise
participate, directly or indirectly, in any business in which Xxxx Xxxxxxxx or
any of its subsidiaries or affiliates is or may become engaged between the date
hereof and the date of Employee's termination of employment pursuant to Section
3(d) hereof, including without limitation, the retail or institutional
securities brokerage business; the equity or fixed income capital markets
businesses; the provisions of asset management or financial or investment
advisory services; and the correspondent clearing businesses.
(b) Nonsolicitation. Employee agrees that, during the
post-retirement extended exercise period, Employee will not, directly or
indirectly, in any manner solicit, assist or engage any person employed by Xxxx
Xxxxxxxx to leave the employ of Xxxx Xxxxxxxx or recruit, make an offer of
employment to or hire any person employed by Xxxx Xxxxxxxx.
(c) Confidentiality. Except as otherwise required by law
or court order, Employee agrees that Employee will not, at any time while
employed by Xxxx Xxxxxxxx or any of its subsidiaries or thereafter, divulge or
otherwise make accessible to anyone or use for any purpose any confidential or
sensitive knowledge or information concerning Xxxx Xxxxxxxx, any of its
officers, directors, employees or agents or its business, customers, strategic
plans, financial condition or profitability obtained through the performance of
Employee's job responsibilities or during the course of Employee's employment.
Employee further agrees that, except as otherwise
required under law or court order, Employee will not at any time divulge or
otherwise make accessible to anyone (other than Employee's immediate family and
any tax, financial and/or other professional advisors Employee consults
regarding Employee's personal financial affairs) the terms of this Agreement,
except that Employee may disclose the terms of the noncompetition,
nonsolicitation, and cooperation covenants contained herein to future or
potential employers or others with a need to know such information.
(d) Cooperation. Employee agrees that Employee will
cooperate with Xxxx Xxxxxxxx with respect to any claims, actions or proceedings
brought or threatened to be brought against Xxxx Xxxxxxxx or any of its
officers, directors, employees, agents, successors or assigns that relate to
Employee's employment or any transactions, decisions or actions in which
Employee was involved while an employee or officer of Xxxx Xxxxxxxx. Employee
agrees to be available
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upon reasonable notice and at mutually agreeable times to discuss issues or to
review documents with representatives of Xxxx Xxxxxxxx, and to appear without
subpoena for deposition or testimony at the request of Xxxx Xxxxxxxx in
connection with any legal or regulatory proceeding. Xxxx Xxxxxxxx will pay
Employee's reasonable expenses in connection with Employee's cooperation
requested under this agreement, including reasonable out-of-pocket travel
expenses or documented lost wages Employee incurs.
(e) Reasonableness of Restrictions. Employee agrees that
the foregoing covenants and limitations on Employee's post-retirement activities
are reasonable and appropriate under the circumstances, and that forfeiture of
unvested options for violation of any of the foregoing covenants is a reasonable
and appropriate remedy.
(f) Severability. To the extent any provision of this
Agreement shall be determined to be invalid or unenforceable in any
jurisdiction, such provision shall be deemed to be deleted from this Agreement
as to such jurisdiction only, and the validity and enforceability of the
remainder of such provision and of this Agreement shall be unaffected. In
furtherance of and not in limitation of the foregoing, Employee expressly agrees
that should the duration of, geographical extent of, or business activities
covered by, any provision of this Agreement be in excess of that which is valid
or enforceable under applicable law in a given jurisdiction, then such
provision, as to such jurisdiction only, shall be construed to cover only that
duration, extent or activities that may validly or enforceably be covered.
Employee acknowledges that uncertainty of the law in this respect and expressly
stipulates that this Agreement shall be construed in a manner that renders its
provisions valid and enforceable to the maximum extent (not exceeding its
express terms) possible under applicable law in each applicable jurisdiction.
5. Manner of Exercise
(a) This option can be exercised only by Employee or
other proper party by delivering within the option period written notice to Xxxx
Xxxxxxxx at its principal office. The notice shall state the number of shares as
to which this option is being exercised and be accompanied by payment in full of
the option price for all shares designated in the notice.
(b) Employee may pay the option price (i) by check (bank
check, certified check or personal check) or (ii) with the approval of Xxxx
Xxxxxxxx, by delivering to Xxxx Xxxxxxxx for cancellation shares of Xxxx
Xxxxxxxx'x Common Stock having a Fair Market Value (as defined in the Plan) on
the date of exercise equal to the option price; provided, however, that Employee
shall not be entitled to tender shares of Xxxx Xxxxxxxx'x Common Stock pursuant
to successive, substantially simultaneous exercises of this option or any other
stock option of Xxxx Xxxxxxxx.
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6. Acceleration of Exercisability Upon Change in Control
Notwithstanding any installment or delayed exercise provision
contained in this Agreement, this option may be exercised in full immediately at
or anytime after the occurrence of a "Change in Control" (as hereinafter
defined). For purposes hereof, the following terms shall have the definitions
set forth below:
(a) "Change in Control" shall mean:
(i) the public announcement (which, for purposes of this
definition, shall include, without limitation, a report
filed pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
that any person, entity or "group", within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act,
other than Xxxx Xxxxxxxx or any of its subsidiaries, or
the Xxxx Xxxxxxxx Retirement Plan or any other employee
benefit plan of Xxxx Xxxxxxxx or any of its
subsidiaries, or any entity holding shares of Xxxx
Xxxxxxxx'x Common Stock organized, appointed or
established for, or pursuant to the terms of, any such
plan, has become the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange
Act) of 35% or more of the combined voting power of Xxxx
Xxxxxxxx'x then outstanding voting securities in a
transaction or series of transactions;
(ii) the Continuing Directors cease to constitute a
majority of Xxxx Xxxxxxxx'x Board of Directors;
(iii) the shareholders of Xxxx Xxxxxxxx approve (1) any
consolidation or merger of Xxxx Xxxxxxxx in which Xxxx
Xxxxxxxx is not the continuing or surviving corporation
or pursuant to which shares of Xxxx Xxxxxxxx'x stock
would be converted into cash, securities or other
property, other than a merger of Xxxx Xxxxxxxx in which
shareholders immediately prior to the merger have the
same proportionate ownership of stock of the surviving
corporation immediately after the merger; (2) any sale,
lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or
substantially all of the assets of Xxxx Xxxxxxxx; or (3)
any plan of liquidation or dissolution of Xxxx Xxxxxxxx;
or
(iv) the majority of the Continuing Directors determine
in their sole and absolute discretion that there has
been a change in control of Xxxx Xxxxxxxx.
(b) "Continuing Director" shall mean any person who is a
member of the Board of Directors of Xxxx Xxxxxxxx, while such a person is a
member of the Board of Directors, who is not an Acquiring Person (as hereinafter
defined) or an Affiliate or Associate (as hereinafter defined) of an Acquiring
Person, or a representative of an Acquiring Person or of any such Affiliate or
Associate, and who (i) was a member of the Board of Directors on the date of
this Agreement or (ii) subsequently becomes a member of the Board of Directors,
if such person's
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initial nomination for election or initial election to the Board of Directors is
recommended or approved by a majority of the Continuing Directors. For purposes
of this paragraph (b), "Acquiring Person" shall mean any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together
with all Affiliates and Associates of such person, is the "beneficial owner" (as
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of Xxxx Xxxxxxxx representing 35% or more of the
combined voting power of Xxxx Xxxxxxxx'x then outstanding securities, but shall
not include Xxxx Xxxxxxxx, any subsidiary of Xxxx Xxxxxxxx or any employee
benefit plan of Xxxx Xxxxxxxx or of any subsidiary of Xxxx Xxxxxxxx or any
entity holding shares of Xxxx Xxxxxxxx'x Common Stock organized, appointed or
established for, or pursuant to the terms of, any such plan; and "Affiliate" and
"Associate" shall have the respective meanings ascribed to such terms in Rule
12b-2 promulgated under the Exchange Act.
(c) If a Change in Control shall occur, then the Board of
Directors or the Committee (if authority is delegated by the Board of
Directors), in its sole discretion, and without the consent of Employee, may
determine that Employee shall receive, with respect to some or all of the shares
of Common Stock subject to this option, as of the effective date of any such
Change in Control, cash in an amount equal to the excess of the Fair Market
Value of such shares immediately prior to the effective date of such Change in
Control over the exercise price per share of this option.
7. Miscellaneous
(a) This option is issued pursuant to the Plan, and is
subject to its terms. The terms of the Plan are available for inspection during
business hours at the principal offices of Xxxx Xxxxxxxx.
(b) This Agreement shall not confer on Employee any right
with respect to continuance of employment by Xxxx Xxxxxxxx or any of its
subsidiaries, nor will it interfere in any way with the right of Xxxx Xxxxxxxx
to terminate such employment at any time. Employee shall have none of the rights
of a shareholder with respect to shares subject to this option until such shares
shall have been issued to Employee upon exercise of this option.
(c) The exercise of all or any part of this option shall
only be effective at such time as the sale of Common Stock pursuant to such
exercise will not violate any state or federal securities or other laws.
(d) If Employee exercises all or any portion of this
option subsequent to any change in the number or character of the outstanding
shares of Xxxx Xxxxxxxx'x Common Stock (through merger, consolidation,
reorganization, recapitalization, stock dividend or otherwise), Employee shall
then receive for the aggregate price paid by Employee on such exercise of this
option, the number and type of securities or other consideration which Employee
would have received if such option had been exercised prior to the event
changing the number or character of outstanding shares.
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(e) Xxxx Xxxxxxxx shall at all times during the term of
this option reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.
(f) In order to provide Xxxx Xxxxxxxx with the
opportunity to claim the benefit of any income tax deduction which may be
available to it upon the exercise of the option, and in order to comply with all
applicable federal or state income tax laws or regulations, the Company may take
such action as it deems appropriate to insure that, if necessary, all applicable
federal or state payroll, withholding, income or other taxes are withheld or
collected from Employee. Employee may elect to satisfy his federal and state
income tax withholding obligations upon exercise of this option by (i) having
the Company withhold a portion of the shares of Common Stock otherwise to be
delivered upon exercise of such option having a fair market value equal to the
amount of federal and state income tax required to be withheld upon such
exercise, in accordance with the rules of the Committee, or (ii) delivering to
the Company shares of its Common Stock other than the shares issuable upon
exercise of such option with a fair market value equal to such taxes, in
accordance with the rules of the Committee.
(g) This option shall be governed by the internal laws of
the State of Delaware, without regard to any conflict of laws principles.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the day and year first above written.
XXXX XXXXXXXX CORPORATION
By____________________________________
_____________________________________
Xxxxxx Xxxxxx
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