EXHIBIT 4.2
(Non-Employee Director)
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement") made and entered into
as of the 11th day of March, 1997, by and between Xxxxxxx Financial Corp., a New
York corporation (the "Company"), and Xxxx X. Xxxxx (the "Optionee").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company (the "Board")
has approved the issuance of stock options to its non-employee directors, at a
meeting of the Board in which the form and content of this Agreement was
approved by a vote of those directors not receiving the stock options
contemplated by this Agreement;
WHEREAS, the Company, recognizing the value to it of the
continued services of the Optionee as a director of the Company, desires to
furnish added inducements and incentives for the Optionee to continue with the
Company, and desires to develop a larger personal and financial interest on the
part of the Optionee in the success of the Company; and
WHEREAS, the Board with power and authority to grant the stock
options to non-employee has decided to grant to the Optionee an option to
purchase shares of common stock, par value $.01 per share (the "Common Stock"),
of the Company in the amount and at the price stated below, subject to all the
terms and conditions contained in this Agreement.
NOW, THEREFORE, it is agreed by and between the parties hereto
as follows:
1. The Company hereby evidences and confirms its grant to the
Optionee on March 11, 1997 (the "Date of Grant") of an option (the "Option") to
purchase 10,000 shares of Common Stock (the "Option Shares") at an option price
of $9.25 per share. The Option shall expire on the fifth anniversary of the Date
of Grant (the "Expiration Date"), subject to earlier termination as provided in
this Agreement.
2. Subject to the other provisions of this Agreement regarding
the exercisability of the Option, this Option may be exercised as provided in
this paragraph 2. The Optionee shall have the right to purchase one hundred
percent (100%) of the Option Shares on and after the six month anniversary of
the date of grant.
3. In the event of a termination of the Optionee's
directorship while any portion of the Option remains unexercised, his rights to
exercise the Option shall be only as follows:
RETIREMENT. If the Optionee's directorship terminates
by reason of retirement at or after age 65, the Optionee's
Option may, within 90 days following retirement, be exercised
with respect to all or any part of the shares of Common Stock
subject
thereto regardless of whether the Option was otherwise
exercisable at the time the Optionee's directorship
terminates.
DEATH OR DISABILITY. If the Optionee ceases to be a
director of the Company by reason of death or permanent
disability, the Optionee's options may be exercised within 90
days of such death or disability, with respect to all or any
part of the shares of Common Stock subject thereto regardless
of whether the Option was otherwise exercisable at the time
the Optionee's employment terminates.
TERMINATION FOR CAUSE. No Options may be exercised
following the Optionee's termination by the Company for Cause.
OTHER CIRCUMSTANCES. If the Optionee's directorship
terminates under circumstances other than those described
above, the Optionee's Options must be exercised within 30 days
following the date of such termination and only with respect
to such number of shares as to which the right of exercise had
accrued at the time of termination of directorship.
In no event may the Option be exercised in whole or in part after the Expiration
Date.
4. The Option is not transferable by the Optionee other than
by will or the laws of descent and distribution and is exercisable, during the
Optionee's lifetime, only by the Optionee.
5. In order to exercise the Option, in whole or in part, the
Optionee shall give written notice to the Company, specifying the number of
shares to be purchased and the purchase price to be paid, and accompanied by the
payment of the purchase price. Such purchase price may be paid in cash or in
shares of Common Stock evidenced by negotiable certificates, valued at their
fair market value on the date of exercise. Alternatively, payment may be made by
the Optionee delivering a properly executed exercise notice together with
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds necessary to pay the purchase price in full, and
such other documents as the Board may determine. Upon receipt of payment, the
Company shall deliver to the Optionee (or such other person entitled to exercise
the Option) a certificate or certificates for such Option Shares. If
certificates representing shares of Common Stock are used to pay all or part of
the purchase price of the Option, separate certificates shall be delivered by
the Company representing the same number of shares as each certificate so used
and an additional certificate shall be delivered representing the additional
shares to which the Optionee is entitled as a result of the exercise of the
Option after deducting the number of shares required to be applied to such
purchase price.
6. The Option shall be exercised only with respect to full
shares of Common Stock; no fractional shares shall be issued.
7. As a condition to the issuance of Option Shares, the
Optionee agrees to remit to the Company, no later than the date as of which an
amount first becomes includible in the Optionee's gross income for Federal
income tax purposes with respect to the Option Shares, any taxes required to be
withheld by the Company under the applicable laws or other regulations of any
governmental authority, whether Federal, state or local, and whether domestic or
foreign. Unless otherwise determined by the Committee, the withholding
obligations may be settled with Common Stock. The Company's obligations under
this Agreement are conditional on receiving such payment and the Company has the
right to deduct such taxes from any payment due to the Optionee.
8. The Option granted hereunder does not qualify as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended.
9. This Agreement shall be binding upon and inure to the
benefit of any successor or assignee of the Company and to any executor,
administrator, legal representative, legatee or distributes entitled by law to
the Optionee's rights hereunder.
10. In the event that the shares of Common Stock, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise) or if the number of such shares
shall be increased through the payment of a stock dividend, or a dividend on
shares of Common Stock of rights or warrants to purchase securities of the
Company shall be made, then there shall be substituted for or added to each
share of Common Stock subject to the Option the number and kind of shares of
stock or other securities into which each outstanding share of Common Stock
shall be so changed, or for which each such share shall be exchanged, or to
which each such share shall be entitled, as the case may be, and references
herein to share of Common Stock shall be deemed to be references to any such
stock or other securities as appropriate. The Option shall also be appropriately
amended as to price and other terms as may be necessary to reflect the foregoing
events. In the event there shall be any other change in the number or kind of
the outstanding shares of Common Stock or any stock or other securities into
which such shares shall have been changed or for which they shall have been
exchanged, then if the Company shall, in its sole discretion, determine that
such change equitably requires an adjustment in the Option, such adjustment
shall be made in accordance with such determination. Fractional shares resulting
from any adjustment in the Option pursuant to this paragraph 15 may be settled
in cash or otherwise as the Company shall determine. Notice of any adjustment
shall be given by the Company to the Optionee and such adjustment (whether or
not such notice is given) shall be effective and binding for the purposes of
this Agreement.
11. This Agreement constitutes the entire agreement and
understanding among the parties with respect to the subject matter hereof and
supersedes all prior agreements with respect to the subject matter hereof.
12. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officers and the Optionee has duly executed
this Agreement as of the date first above written.
XXXXXXX FINANCIAL CORP.
By: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Title: President
/s/ XXXX X. XXXXX
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Optionee
