EXHIBIT 10.6
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NONQUALIFIED
STOCK OPTION AGREEMENT
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This Agreement, effective as of the 15th day of July, 1998 is made by
and between Samsonite Corporation, a Delaware corporation (the "Company"), and
D. Xxxxxxx Xxxxxxx (the "Employee").
The Company desires to grant to the Employee the right to acquire
shares of common stock, par value $.01 per share of the Company ("Common
Stock"), according to the terms and conditions provided herein, and thereby
provide additional incentives to the Employee to increase the long-term value of
the Company, and to further align the Employee's interests with those of the
stockholders of the Company.
This stock option is being awarded pursuant to the Company's FY 1999
Stock Award Program (the "Award Program"). It is contemplated that, under the
Award Program, in addition to the present grant of stock options, certain
additional target grants may be made in subsequent years. The stock options
awarded in FY 1999 under the Award Program (including this stock option) are
granted pursuant to the Company's 1995 Stock Option and Incentive Award Plan and
future stock option grants, if any, will be made pursuant to the Company's FY
1999 Stock Option and Incentive Award Plan.
In consideration of the promises and covenants contained in this
Agreement, and other good valuable consideration, the Company and the Employee
hereby agrees as follows:
1. CONFIRMATION OF GRANT OF OPTION. Pursuant to a determination by
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the compensation committee of the Board of Directors of the Company (the
"Committee"), on July 15, 1998, and pursuant to the Company's 1995 Stock Option
and Incentive Award Plan (the "1995 Plan"), the Company, subject to the terms
and conditions of this Agreement and the 1995 Plan, hereby confirms that the
Employee has been granted, effective July 15, 1998 (the "Date of Grant"), as a
separate inducement and Agreement, and in addition to and not in lieu of salary
or other compensation for services, the right to purchase from the Company an
aggregate of 3,000 shares of Common Stock (the "Options"). The Options shall
vest as provided in Section 4 hereof and shall be subject to adjustment as
provided in Section 6 hereof.
2. EXERCISE PRICE. The initial exercise price per share (the
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"Exercise Price") for the Options shall be $9.375.
3. NON-TRANSFERABILITY OF OPTIONS. The Options may not be
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assigned, transferred or otherwise disposed of, or pledged or hypothecated in
any way, and shall not be subject to execution, attachment or other process
otherwise than by will or by the laws of descent and distribution. The Options
may be exercised during the lifetime of the Employee only by the Employee.
4. TERM AND EXERCISE OF OPTIONS. The Options shall remain
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outstanding (subject to the vesting and exercisability provisions provided
herein) for a period of ten (10) years beginning on the Date of Grant (the
"Option Term"). Twenty percent (20.0%) of the Options shall vest on the Date of
Grant and an additional twenty percent (20.0%) shall vest on each of the first,
second, third and fourth anniversaries of the Date of Grant, so long as the
Employee remains continually employed by the Company from the effective date of
this Agreement through such date of vesting. Except as otherwise provided in
Section 5 hereof, Options that have vested shall be exercisable in whole or in
part at any time, and from time to time, until the earlier to occur of the
expiration of the Option Term and the expiration of ninety (90) days after the
date of the termination of the Employee's employment with the Company. The
Employee shall not have any right to dividends or any other rights of a
stockholder of the Company with respect to any shares of Common Stock underlying
the Options until such shares have been issued to him or her upon the exercise
of the Options.
5. TERMINATION. The Employee's rights with respect to the Options
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upon termination of his or her employment with the Company or death are as
follows:
(a) Cause. If the Employee is terminated from employment with the
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Company or a subsidiary for Cause (as defined below), then all the Options
(whether vested or unvested) shall automatically terminate and be cancelled
(without any action on the part of the Company) on the date of termination of
employment.
For purposes of this Agreement, the Company shall have "Cause" to
terminate the Employee's employment upon (A) the engaging by the Employee in
willful misconduct that is injurious to the Company or its subsidiaries, (B)
the embezzlement or misappropriation of funds or property of the
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Company or its subsidiaries by the Employee or the conviction of the Employee of
a felony or the entrance of a plea of guilty or nolo contendere by the Employee
to a felony or (C) the willful failure or refusal by the Employee to
substantially perform his or her duties or responsibilities that continues after
being brought to the attention of the Employee (other than any such failure
resulting from the Employee's incapacity due to disability). For purposes of
this paragraph, no act, or failure to act, on the Employee's part shall be
considered "willful" unless done, or omitted to be done, by him or her, not in
good faith, and without reasonable belief that his action or omission was in the
best interest of the Company. Determination of Cause shall be made by the
Committee established to administer the Plan in its sole discretion. Any such
determination shall be final and binding on the Employee. The Employee will be
provided promptly with the facts and circumstances which form the basis for
termination for Cause, set forth in reasonable detail, in writing.
(b) Disability. If the Employee is terminated from his or her
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employment with the Company or a subsidiary by reason of disability (as defined
below), then all unvested Options shall automatically terminate and be canceled
(without any action on the part of the Company) on the date of such termination.
All Options that have vested prior to such date shall remain exercisable for a
period of one year following such date.
For the purposes of this Agreement, "disability" shall mean a
disability that would qualify as such under the Company's then current long-term
disability plan.
(c) Death. If the Employee dies while employed by the Company or a
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subsidiary, then all unvested Options shall automatically terminate and be
cancelled (without any action on the part of the Company) on the date of death.
Following the Employee's death, his executors, administrators, legatees or
distributees may exercise the Options that have vested prior to the date of
death for a period of one year following the date of death.
(d) Other Terminations of Employment. If the Employee's employment
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is terminated for any reason other than as set forth in Sections 5(a), (b) and
(c), all unvested Options shall automatically terminate and be cancelled
(without any action on the part of the Company) on the date of such termination.
6. CERTAIN ADJUSTMENTS. In the event that the Committee shall
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determine that any dividend or other distribution (whether in the form of cash,
Stock or other property), recapitalization, Stock split, reverse Stock split,
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reorganization, merger, consolidation, spin-off, combination, repurchase, share
exchange or other corporate transaction or event affects the Common Stock such
that an adjustment is appropriate in order to prevent dilution or enlargement
of the rights of the Employee with respect to the Options, then the Committee
shall make such equitable changes or adjustments as it deems necessary or
appropriate to any or all of (i) the number and kind of shares of Common Stock
or other property (including cash) that may thereafter be issued in connection
with the Options, and (ii) the Exercise Price.
7. METHOD OF EXERCISE OF OPTIONS. Subject to the terms and
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conditions of this Agreement, the Options shall be exercisable by notice (an
"Exercise Notice") and payment to the Company in accordance with the procedure
set forth herein; provided, that the aggregate Exercise Price with respect to
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any one such exercise shall not be less than $10,000, unless such exercise
represents an exercise of all Options that are vested and exercisable as of the
date of such exercise. Partial shares may not be exercised. If the Employee
fails to accept delivery of and pay for all or any part of the number of shares
specified in the Exercise Notice upon tender or delivery thereof, his or her
right to exercise the Options with respect to such undelivered shares may be
terminated, in the sole discretion of the Committee.
(a) Each Exercise Notice shall: (i) state the number of shares in
respect of which the Options are being exercised, (ii) be accompanied by
payment as provided in paragraph (c) below, and (iii) be signed by the person or
persons entitled to exercise such Options. If such Options are being exercised
by any person or persons other than the Employee, the Exercise Notice shall be
accompanied by proof, satisfactory to the Company and its counsel, of the right
of such person or persons to exercise such Options.
(b) Payment of the Exercise Price and estimated taxes and fees shall
be made by delivering to the Company any one, or a combination of, the
following: (i) a certified or bank cashier's check payable to the Company or
its order, or a wire transfer directly to an account specified by the Company,
(ii) one or more certificates evidencing shares of Common Stock owned by the
Employee immediately prior to such exercise, together with a duly executed stock
power, having an aggregate Fair Market Value (as defined in the Plan) on the
date on which the Exercise Notice is given equal to the aggregate Exercise Price
and estimated taxes and fees or (iii) a copy of irrevocable instructions to a
registered broker/dealer (which shall have been countersigned and agreed to by
such registered broker/dealer) to promptly deliver to the Company an amount of
proceeds from the sale of shares of Common Stock to be issued pursuant to the
Options being exercised or of a loan made with respect to
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shares of Common Stock to be issued pursuant to the Options being exercised
sufficient, in either case, to pay the Exercise Price ("Cashless Exercise"). All
exercise instructions must be submitted by the Employee on designated Company
forms or through designated Company computer programs (Company intranet
processes).
(c) The certificate or certificates representing shares of Common
Stock to be issued upon exercise of the Options shall be registered in the name
of the person or persons exercising such Options (or, if such Options are
exercised by the Employee and if the Employee so requests in the applicable
Exercise Notice, shall be registered in the name of the Employee and his or her
spouse jointly, with the right of survivorship) but only upon compliance with
all the provisions of this Agreement, and such certificate(s) shall be delivered
within 10 days after receipt of payment and completion by the Employee;
provided, that in case of clause (iii) of the first sentence of Section 7(c),
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the Company shall not be required to make delivery of the certificate(s) until
payment is actually received from such broker/dealer.
(d) The Company shall have no obligation to issue or deliver
fractional shares of Common Stock upon exercise of the Options but may, in its
sole discretion, elect to do so. In lieu of issuing any such fractional share,
the Company shall pay to the person exercising the Options, promptly following
such exercise, an amount in cash equal to the Fair Market Value of such fraction
of a share on the date of exercise.
8. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this Agreement
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shall confer upon the Employee the right to continue in the employ of the
Company or to be entitled to any right or benefit not set forth in this
Agreement or to interfere with or limit in any way the right of the Company to
terminate the Employee's employment.
9. WITHHOLDING TAXES. The Company shall have the right to require
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the Employee (or such other person, if any, who has the right to exercise the
Options) to pay to the Company in cash the amount of any federal, state, local
and foreign income and other taxes that the Company may be required to withhold
before delivering to the Employee (or such other person) a certificate or
certificates representing shares of Common Stock issuable hereunder.
10. APPROVAL OF COUNSEL. Any exercise of the Options and the
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issuance and delivery of shares of Common Stock pursuant thereto shall be
subject to approval, by the Company's counsel, of all legal matters in
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connection therewith, including compliance with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, the
requirements of any stock exchange upon which the Common Stock may then be
listed and any applicable state securities or "blue sky" laws.
11. NON-COMPETITION. Employee agrees that during employment with the
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Company, and for a period of one year thereafter, Employee shall not, directly
or indirectly, as a principal, officer, director, employee, or in any other
capacity whatsoever, without prior written consent of the Company, engage in any
activity with, or provide services to, any person or entity engaged in, or about
to engage in, any business activity that is competitive with the business then
engaged in by the Company, in the geographic areas within which Employee's work
has been concerned during the twelve months preceding the termination Employee's
employment with the Company.
However, nothing in this Agreement shall prevent Employee from making
or holding any investment in any amount in securities of a competitive business
traded on a national securities exchange or traded in the over the counter
market, provided said investments do not exceed one percent (1%) of the issued
and outstanding stock of any such competitive business.
Employee acknowledges and agrees that (1) breach of this Section 11 is
appropriately remedied by injunctive relief, including interim or temporary
relief, and Employee hereby consents thereto; and (2) the Company may refuse to
allow the exercise of any otherwise vested Options in the event of an alleged
breach of Employee of this Section 11, and such Options shall be terminated and
canceled upon determination of such breach; and (3) the Company is not liable
for the gain or loss by the Employee due to the increase or decrease of the Fair
Market Value of the Company stock during period in which the Company may have
refused to accept exercise instructions pending final determination of the
Employee's breach of this Agreement.
12. NOTICES. For the purposes of this Agreement, notices, demands
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and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given (i) when hand delivered, (ii) when
sent, if sent by overnight mail, overnight courier or facsimile transmission or
(iii) (unless otherwise specified) when mailed by United States registered mail,
return receipt requested, postage prepaid, addressed as follows:
Samsonite Corporation
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00000 Xxxx Xxxxx-Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
c/o General Counsel
with a copy to each member of the Committee who is not an officer or an employee
of the Company, at the Company's address, or to such other address as any party
may have furnished to the others in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
All notices to the Employee or other person or persons then entitled
to exercise the Options shall be addressed to the Employee or such other person
or persons at the then current address of the Employee contained in the employee
payroll records of the Company.
Anyone to whom a notice may be given under this Agreement may
designate a new address by notice to that effect.
13. BENEFITS OF AGREEMENT. This Agreement shall inure to the benefit
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of and be binding upon each successor and assign of the Company. All
obligations imposed upon the Employee and all rights granted to the Company
under this Agreement shall be binding upon the Employee and, to the limited
extent set forth herein, the Employee's heirs, legal representatives and
successors. No other person shall have any rights under this Agreement.
14. SEVERABILITY. If any one or more provisions of this Agreement is
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deemed to be illegal or unenforceable, such illegality or un-enforceability
shall not affect the validity or enforceability of the remaining legal and
enforceable provisions herein, which shall be construed as if such illegal or
unenforceable provision or provisions had not been inserted.
15. ENTIRE AGREEMENT. This Agreement contains the entire
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understanding and agreement between the parties hereto, and supersedes all prior
understandings and agreements between them respecting the subject matter hereof.
The provisions of this Agreement may not be modified, waived nor discharged
unless such waiver, modification or discharge is agreed to in writing, signed by
the parties hereto.
16. WAIVER. No waiver by either party hereto, at any time, of any
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breach by the other party of, or compliance with, any condition or provision of
this Agreement to be performed by such other party, shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
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17. GOVERNING LAW. This Agreement shall be construed and governed in
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accordance with the laws of the State of Delaware without regard to the
conflicts of law principles thereof.
18. INCORPORATION BY REFERENCE. The incorporation herein of any
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terms, by reference to another document, shall not be affected by the
termination of any agreement contained in such other document, nor by the
invalidity of any provision hereof.
19. TIME PERIODS. Any action required to be taken under this
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Agreement within a certain number of days shall be taken within that number of
calendar days; provided, that if the last day for taking such action falls on a
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weekend or a holiday, the period during which such action may be taken shall be
automatically extended to the next business day.
20. COUNTERPARTS. This Agreement may be executed in counterparts,
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each of which shall be deemed to be an original, but both of which together
shall constitute one and the same instrument.
21. MISCELLANEOUS. Employee agrees to abide by the laws and
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regulations governing Xxxxxxx Xxxxxxx, the terms of this Stock Option Agreement,
and the policies and decisions of the management of the Company
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in all matters concerning this stock option grant July 15, 1998 and acknowl
edges receipt of the following documents:
Received Documents:
a. Stock Option Agreement
b. Stock Option Questions & Answers
c. Avoiding Xxxxxxx Xxxxxxx Brochure
UNDERSTOOD AND AGREED TO:
Employee:
/s/ D. Xxxxxxx Xxxxxxx
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(Signature)
SAMSONITE CORPORATION
By: /s/ Xxx Xxx Xxxxx
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Name: Xxx Xxx Xxxxx
Title: Chief Executive Officer, President
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