EXHIBIT 10.49
STOCK OPTION AGREEMENT
(Non-Qualified Stock Option)
THIS AGREEMENT is made to be effective as of March 10, 2004,
by and between X. X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"), and
Xxxxxx X. Xxx Xxxxxx (the "OPTIONEE").
WITNESSETH:
WHEREAS, the COMPANY has offered and the OPTIONEE has accepted
employment with the COMPANY;
WHEREAS, in connection with OPTIONEE's employment with the
COMPANY, the COMPANY has agreed to grant non-qualified stock options to the
OPTIONEE; and
WHEREAS, the Board of Directors of the COMPANY (the "BOARD")
has determined that an option to acquire common shares, $1.00 par value (the
"COMMON SHARES"), of the COMPANY should be granted to the OPTIONEE upon the
terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the parties
hereto make the following agreement, intending to be legally bound thereby:
1. Grant of OPTION. The COMPANY hereby grants to the
OPTIONEE an option (the "OPTION") to purchase Fifty Thousand (50,000) COMMON
SHARES of the COMPANY (subject to adjustment as provided in Section 3). The
OPTION is not intended to qualify as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended (the "CODE").
2. Terms and Conditions of the OPTION.
(A) OPTION Price. The purchase price (the
"OPTION PRICE") to be paid by the OPTIONEE to the COMPANY upon the exercise of
the OPTION shall be $2.20 per share, which is the per share closing price of the
COMPANY's COMMON SHARES on the date hereof, subject to adjustment as provided in
Section 3.
(B) Exercise of the OPTION. Except as provided
under Section 4 hereof, the OPTION may not be exercised until September 9, 2004,
provided that the OPTIONEE is employed by the COMPANY on such day. Thereafter,
except as otherwise provided in this Agreement, the OPTION may be exercised in
full at any time.
Subject to the other provisions of this Agreement, if the
OPTION becomes exercisable as to certain COMMON SHARES, it shall remain
exercisable as to those COMMON SHARES until the date of expiration of the OPTION
term. The BOARD may, but shall not be required to (unless otherwise provided in
this Agreement), accelerate the schedule of the time or times when the OPTION
may be exercised.
The grant of the OPTION shall not confer upon the OPTIONEE any
right to continue in the employment of the COMPANY or any of its subsidiaries
nor limit in any way the
right of the COMPANY or any of its subsidiaries to terminate the employment of
the OPTIONEE at any time in accordance with applicable law or the COMPANY's or
the subsidiary's governing corporate documents.
(C) OPTION Term. The OPTION shall in no event be
exercisable after the expiration of two (2) years from the date of this
Agreement.
(D) Method of Exercise. The OPTION may be
exercised by giving written notice of exercise to the COMPANY in care of the
Treasurer of the COMPANY stating the number of COMMON SHARES subject to the
OPTION in respect of which the OPTION is being exercised. Payment for all such
COMMON SHARES shall be made to the COMPANY at the time the OPTION is exercised
in United States dollars in cash (including check, bank draft or money order).
Payment for such COMMON SHARES may also be made (i) by tender of COMMON SHARES
of the COMPANY already owned by the OPTIONEE for at least six (6) months (either
by actual delivery of the already-owned COMMON SHARES or by attestation) and
having a fair market value (based on the closing sale price of the COMMON SHARES
as reported on the New York Stock Exchange or, if the COMMON SHARES are not
traded on the New York Stock Exchange, "fair market value" as defined in the
COMPANY's 2002 Stock Incentive Plan (the "2002 PLAN"), regardless that the
OPTION is not being granted under such plan) on the date of tender equal to the
OPTION PRICE, (ii) by a combination of the delivery of cash and the tender of
already-owned COMMON SHARES, or (iii) in such other manner as may be permitted
by the BOARD, in its sole discretion. After payment in full for the COMMON
SHARES purchased under the OPTION has been made, the COMPANY shall take all such
actions as are necessary to deliver appropriate share certificates evidencing
the COMMON SHARES purchased upon the exercise of the OPTION as promptly
thereafter as is reasonably practicable.
(E) Tax Withholding. The COMPANY shall withhold
from other amounts owned to the OPTIONEE, or require the OPTIONEE to remit to
the COMPANY, an amount sufficient to satisfy federal, state and local
withholding tax requirements in respect of the exercise of the OPTION. These
withholding tax requirements may be satisfied in one of several ways, including:
(i) The COMPANY may withhold the
required amount from other amounts owed to the OPTIONEE (e.g., salary);
(ii) The OPTIONEE may give the COMPANY
cash equal to the amount required to be withheld or tender COMMON SHARES of the
COMPANY already owned by the OPTIONEE for at least six (6) months (either by
actual delivery of the already-owned COMMON SHARES or by attestation) and having
a fair market value (based on the closing sale price of the COMMON SHARES as
reported on the New York Stock Exchange or, if the COMMON SHARES are not traded
on the New York Stock Exchange, "fair market value" as defined in the 2002 PLAN,
regardless that the OPTION is not being granted under such plan) on the exercise
date equal to the amount required to be withheld; or
(iii) The COMPANY may withhold COMMON
SHARES otherwise issuable upon exercise of the OPTION having a fair market value
(based on the closing sale price of the COMMON SHARES as reported on the New
York Stock Exchange or, if the COMMON SHARES are not traded on the New York
Stock Exchange, "fair market value" as defined in the 2002 PLAN, regardless that
the OPTION is not being granted under such plan) on the exercise date equal to
the amount required to be withheld (but only to the extent of the minimum
amount that must be withheld to comply with applicable state, federal and local
income, employment and wage tax laws).
(F) Limits on Exercisability. Notwithstanding
any other provision of this Agreement, the unexercised portion of the OPTION
shall be forfeited by the OPTIONEE if the OPTIONEE, before termination of the
OPTIONEE's employment with the COMPANY and its subsidiaries or after termination
of such employment but while any portion of the OPTION remains exercisable: (i)
without the BOARD's written consent, which may be withheld for any reason or for
no reason, serves (or agrees to serve) as an officer, director or employee of
any proprietorship, partnership or corporation or becomes the owner of a
business or a member of a partnership that competes with any portion of the
COMPANY's or any subsidiary of the COMPANY's business or renders any service
(including business consulting) to any entity that competes with any portion of
the COMPANY's or any subsidiary of the COMPANY's business; (ii) refuses or fails
to consult with, supply information to, or otherwise cooperate with, the COMPANY
or any subsidiary of the COMPANY after having been requested to do so; or (iii)
deliberately engages in any action that the BOARD concludes has caused
substantial harm to the interests of the COMPANY or any subsidiary of the
COMPANY.
3. Adjustments and Changes in the COMMON SHARES.
(A) If there is a share dividend or share split,
recapitalization (including payment of an extraordinary dividend), merger,
consolidation, combination, spin-off, distribution of assets to shareholders,
exchange of shares, or similar corporate change affecting the COMMON SHARES, the
BOARD shall appropriately adjust the number of COMMON SHARES subject to the
OPTION as well as the OPTION PRICE and any other limitations or terms of the
OPTION as may be necessary to reflect such event. Fractional shares resulting
from any adjustment in the OPTION pursuant to this Section 3(A) shall be rounded
down to the nearest whole number of shares.
(B) Notice of any adjustment pursuant to this
Section 3 shall be given by the COMPANY to the OPTIONEE.
4. Acceleration of OPTION. If the COMPANY undergoes a
"sale" (as such term is defined in Section 3(b) of that certain Executive
Employment Contract between the COMPANY and the OPTIONEE dated March 10, 2004)
then the unexercised portion of the OPTION (whether or not then exercisable by
its terms) shall become immediately exercisable in full and the OPTIONEE shall
receive, upon payment of the OPTION PRICE, securities or cash, or both, equal to
those the OPTIONEE would have been entitled to receive under this Agreement if
the OPTIONEE had already exercised the OPTION.
5. Non-Assignability of OPTION. Unless otherwise
permitted by the BOARD, the OPTION shall not be assignable or otherwise
transferable by the OPTIONEE except by will or by the applicable laws of descent
and distribution. During the lifetime of the OPTIONEE, the OPTION may only be
exercised by the OPTIONEE or the OPTIONEE's guardian or legal representative. If
the BOARD permits the assignment of the OPTION, the OPTION shall be assignable
only to the extent permitted by Section 10.01 of the 2002 PLAN, regardless that
the OPTION is not being granted under such plan.
6. Substitution for OPTION. The BOARD shall have the
authority to effect, at any time and from time to time, with the consent of the
OPTIONEE, the cancellation of the OPTION and the grant in substitution therefor
of one or more new options covering the same or a different number of COMMON
SHARES at an option price per share in all events not less than
100% of the closing sale price for the COMMON SHARES of the COMPANY as reported
on the New York Stock Exchange on the new grant date (or if the COMMON SHARES
are not traded on the New York Stock Exchange, 100% of the "fair market value"
as defined in the 2002 PLAN, regardless that the OPTION is not being granted
under such plan).
7. Exercise After Termination of Employment.
(A) Except as otherwise provided in this
Agreement, the OPTION shall be exercisable only while the OPTIONEE is employed
by the COMPANY and/or one of its subsidiaries and then only if the OPTION has
become exercisable by its terms, and if not exercisable by its terms at the time
the OPTIONEE terminates service with the COMPANY and all of its subsidiaries,
shall immediately expire on the date of termination of service.
(B) If the OPTION is exercisable by its terms at
the time the OPTIONEE terminates service with the COMPANY and all of its
subsidiaries other than by reason of the OPTIONEE's death, termination by the
OPTIONEE for "good reason" (as defined below) or termination by the COMPANY
without "cause" (as defined below), the exercisable portion of the OPTION must
be exercised on or before the earlier of (i) three (3) months after the date of
the termination of service or (ii) the fixed expiration date of the OPTION,
after which period the OPTION shall expire. Notwithstanding the foregoing, if
the OPTIONEE's service with the COMPANY and all of its subsidiaries is
terminated for "cause," the OPTION shall, to the extent not previously
exercised, expire immediately upon such termination of service. For purposes
hereof, "cause" shall have the meaning given to such term in Section 6(b) of
that certain Executive Employment Contract between the COMPANY and the OPTIONEE
dated March 10, 2004.
(C) In the event of the termination of the
OPTIONEE's service with the COMPANY and all of its subsidiaries by the COMPANY
without "cause," other than termination by reason of the expiration of that
certain Executive Employment Contract between the COMPANY and the OPTIONEE dated
March 10, 2004, pursuant to Section 6(e) thereof, the unexercised portion of the
OPTION (whether or not then exercisable by its terms) shall become immediately
exercisable in full for a period ending on the earlier of (i) six (6) months
after the OPTIONEE's termination of service or (ii) the fixed expiration date of
the OPTION, after which period the OPTION shall expire.
(D) In the event of the death of the OPTIONEE
(i) while employed by the COMPANY and/or one of its subsidiaries or (ii) within
three (3) months after the OPTIONEE's termination of service with the COMPANY
and all of its subsidiaries other than for "cause", the unexercised portion of
the OPTION (whether or not then exercisable by its terms) shall become
immediately exercisable in full by the OPTIONEE's beneficiary for a period
ending on the earlier of (x) the fixed expiration date of the OPTION or (y) six
(6) months after the OPTIONEE's termination of service, after which period the
OPTION shall expire. For purposes hereof, the beneficiary of an OPTIONEE shall
be determined in accordance with Section 10.02 of the 2002 PLAN, regardless that
the OPTION is not being granted under such plan.
(E) In the event of the termination of the
OPTIONEE's service with the COMPANY and all of its subsidiaries by the OPTIONEE
for "good reason," the unexercised portion of the OPTION (whether or not then
exercisable by its terms) shall become immediately exercisable in full for a
period ending on the earlier of (i) six (6) months after the OPTIONEE's
termination of service or (ii) the fixed expiration date of the OPTION, after
which period the OPTION shall expire. For purposes hereof, "good reason" shall
have the meaning given to such term in Section 6(c) of that certain Executive
Employment Contract between the COMPANY and OPTIONEE dated March 10, 2004.
(F) For purposes of this Agreement, the OPTIONEE
shall be deemed to have terminated service with the COMPANY and its subsidiaries
upon termination of the employee-employer relationship between the OPTIONEE and
the COMPANY and all of the subsidiaries of the COMPANY for any reason.
8. Buy Out of OPTION. At any time, the BOARD, in its
sole discretion and without the consent of the OPTIONEE, may cancel any portion
of the OPTION by providing to the OPTIONEE written notice (a "BUY OUT NOTICE")
of the COMPANY's intention to exercise the right reserved in this Section 8. If
a BUY OUT NOTICE is given, the COMPANY shall pay to the OPTIONEE, in respect of
each COMMON SHARE covered by the OPTION and subject to the BUY OUT NOTICE, the
difference between (i) the fair market value (based on the closing sale price of
the COMMON SHARES as reported on the New York Stock Exchange or if the COMMON
SHARES are not traded on the New York Stock Exchange, "fair market value" as
defined in the 2002 PLAN, regardless that the OPTION is not being granted under
such plan) on the date of the BUY OUT NOTICE and (ii) the OPTION PRICE. However,
no payment shall be made with respect to that portion of the OPTION which is not
exercisable on the date of the BUY OUT NOTICE. The COMPANY shall complete any
buy out made under this Section 8 as soon as administratively possible after the
date of the BUY OUT NOTICE. At the BOARD's option, payment of the buy out amount
may be made in cash, in whole COMMON SHARES or partly in cash and partly in
whole COMMON SHARES. The number of whole COMMON SHARES, if any, included in the
buy out amount shall be determined by dividing the amount of the payment to be
made in COMMON SHARES by the fair market value of the COMMON SHARES on the date
of the BUY OUT NOTICE.
9. Restrictions on Transfers of COMMON SHARES. Anything
contained in this Agreement or elsewhere to the contrary notwithstanding, the
COMPANY may postpone the issuance and delivery of COMMON SHARES upon any
exercise of the OPTION until completion of any stock exchange listing or
registration or other qualification of such COMMON SHARES under any state or
federal law, rule or regulation as the COMPANY may consider appropriate; and may
require the OPTIONEE when exercising the OPTION to make such representations and
furnish such information as the COMPANY may consider appropriate in connection
with the issuance of the COMMON SHARES in compliance with applicable law.
COMMON SHARES issued and delivered upon exercise of the OPTION
shall be subject to such restrictions on trading, including appropriate
legending of certificates to that effect, as the COMPANY, in its discretion,
shall determine are necessary to satisfy applicable legal requirements and
obligations.
10. Rights of the OPTIONEE. The OPTIONEE shall have no
rights as a shareholder of the COMPANY with respect to any COMMON SHARES of the
COMPANY covered by the OPTION until the date of issuance of a certificate to the
OPTIONEE evidencing such COMMON SHARES.
11. No Registration of the OPTION or COMMON SHARES. The
OPTIONEE understands and acknowledges this Agreement and the issuance of the
OPTION and the underlying COMMON SHARES have not been approved by the COMPANY's
shareholders. The OPTIONEE Further understands and acknowledges that neither the
OPTION nor the COMMON SHARES issuable upon exercise of the OPTION have been nor
will be registered under the Securities Act of 1933, as amended (the "1933
ACT"), in reliance upon an exemption from registration which may impose trading
restrictions on the OPTION and the underlying COMMON SHARES. The OPTIONEE
further agrees that the COMPANY has no obligation to register the
OPTION or the underlying COMMON SHARES under the 1933 ACT, although it may
choose to do so in its sole discretion. The OPTIONEE also understands and
acknowledges that the rules and regulations of the New York Stock Exchange or
any other securities exchange or system or over-the-counter market may require
certain disclosures or actions regarding this Agreement and the OPTION granted
hereby.
12. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio.
13. Rights and Remedies Cumulative. All rights and
remedies of the COMPANY and of the OPTIONEE enumerated in this Agreement shall
be cumulative and, except as expressly provided otherwise in this Agreement,
none shall exclude any other rights or remedies allowed by law or in equity, and
each of said rights or remedies may be exercised and enforced concurrently.
14. Captions. The captions contained in this Agreement
are included only for convenience of reference and do not define, limit, explain
or modify this Agreement or its interpretation, construction or meaning and are
in no way to be construed as a part of this Agreement.
15. Severability. If any provision of this Agreement or
the application of any provision hereof to any person or any circumstance shall
be determined to be invalid or unenforceable, then such determination shall not
affect any other provision of this Agreement or the application of said
provision to any other person or circumstance, all of which other provisions
shall remain in full force and effect, and it is the intention of each party to
this Agreement that if any provision of this Agreement is susceptible of two or
more constructions, one of which would render the provision enforceable and the
other or others of which would render the provision unenforceable, then the
provision shall have the meaning which renders it enforceable.
16. Number and Gender. When used in this Agreement, the
number and gender of each pronoun shall be construed to be such number and
gender as the context, circumstances or its antecedent may required.
17. Entire Agreement. This Agreement constitutes the
entire agreement between the COMPANY and the OPTIONEE in respect of the subject
matter of this Agreement, and this Agreement supersedes all prior and
contemporaneous agreements between the parties hereto in connection with the
subject matter of this Agreement. No officer, employee or other servant or agent
of the COMPANY, and no servant or agent of the OPTIONEE, is authorized to make
any representation, warranty or other promise not contained in this Agreement.
No change, termination or attempted waiver of any of the provisions of this
Agreement shall be binding upon any party hereto unless contained in a writing
signed by the party to be charged.
18. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns (including
successive, as well as immediate, successors and assigns) of the COMPANY.
[Remainder of page intentionally left blank;
signatures on following page.]
IN WITNESS WHEREOF, the OPTIONEE has executed this Agreement,
and the COMPANY has caused this Agreement to be executed, to be effective as of
the date first above written.
COMPANY:
X. X. XXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
Senior Vice President-Finance, Chief
Financial Officer, Secretary and Treasurer
OPTIONEE:
/s/ Xxxxxx X. Xxx Xxxxxx
------------------------------------------------
Xxxxxx X. Xxx Xxxxxx
Address:
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
