1
EXHIBIT 10.36
XXXXX XXXXXX INCORPORATED
[INCENTIVE][NONQUALIFIED] STOCK OPTION AGREEMENT
[NAME] [NO. 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, as amended (the "Plan"), the above-named Grantee is hereby granted an
[incentive][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
$_____ 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 ____ day of ____ in each of the years ____, ____ and ____,
provided the Grantee remains employed by the Company or its subsidiaries. This
option may not be exercised after _______, ____ (the "Expiration Date").
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 as
covered by the following paragraphs, or by the Company without Cause or by the
Grantee for Good Reason within two years following a Change of Control that
occurs after the Date of Grant noted 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 the Expiration Date).
2. If Grantee's employment is terminated for Cause, including but not
limited to fraud, theft, embezzlement committed against the Company or any of
its affiliated companies or a customer of the Company, or for conflict of
interest, unethical conduct, dishonesty affecting the assets, properties or
business of the Company or any of its affiliated companies, willful misconduct,
or continued material dereliction of duties, if such termination of employment
occurs prior to a Change of Control or after the second anniversary of a Change
of Control, this option will wholly and completely terminate on the date of
termination of employment, or if such termination occurs within two years
following a Change of Control, this option will wholly and completely terminate
on the date thirty days following such termination of employment (but in no
event later than the Expiration Date).
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 the Expiration Date).
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 the Expiration Date).
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 of Control occurring on or after the Date of Grant noted below, the
Grantee shall have two years from the date of termination of employment to
exercise this option (but in no event later than the Expiration Date).
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
2
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."
Notwithstanding any other provision of this Nonqualified Stock Option Agreement,
if Grantee engages in a "Prohibited Activity," as described below, while
employed by the Company or any of its affiliates or within two years after
Grantee's employment termination date, then Grantee's right to exercise any
portion of this option, to the extent still outstanding at that time, shall
immediately thereupon wholly and completely terminate. If an allegation of a
Prohibited Activity by Grantee is made to the Compensation Committee of the
Board of Directors of the Company (the "Committee"), the Committee, in its
discretion, may suspend the exercisability of this option for up to two months
to permit the investigation of such allegation, however, if it is determined
that no Prohibited Activity was engaged in by Grantee, the period of
exercisability of this option will be increased by the amount of time of such
suspension, however, in no event will this option be exercisable more than ten
(10) years from the date of grant. A "Prohibited Activity" shall be deemed to
have occurred, as determined by the Committee in its sole and absolute
discretion, if Grantee:
(i) divulges any non-public, confidential or proprietary information of
the Company or its past, present or future affiliates (collectively,
the "Xxxxx Xxxxxx Group"), but excluding information that (a) becomes
generally available to the public other than as a result of Grantee's
public use, disclosure, or fault, or (b) becomes available to Grantee
on a non-confidential basis after Grantee's employment termination date
from a source other than a member of the Xxxxx Xxxxxx Group prior to
the public use or disclosure by Grantee, provided that such source is
not bound by a confidentiality agreement or otherwise prohibited from
transmitting the information by a contractual, legal or fiduciary
obligation; or
(ii) directly or indirectly, consults or becomes affiliated with,
conducts, participates or engages in, or becomes employed by, any
business that is competitive with the business of any member of the
Xxxxx Xxxxxx Group, wherever from time to time conducted throughout the
world, including situations where Grantee solicits or participates in
or assists in any way in the solicitation or recruitment, directly or
indirectly, of any employees of any member of the Xxxxx Xxxxxx Group.
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:
---------, -----
XXXXX XXXXXX INCORPORATED
---------------------------
NAME
TITLE
