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Exhibit 10(q)
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Form of Stock Option Agreement
Used in Connection with the Grant
of Non-Qualified Stock Options
Pursuant to the
X. X. Xxxxx Corporation
1994 Stock Option Plan
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STOCK OPTION AGREEMENT
(Non-Qualified Stock Options)
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THIS AGREEMENT is made to be effective as of ___________, 199_, by and
between X. X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"), and
_____________________________ (the "OPTIONEE").
WITNESSETH:
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WHEREAS, the Board of Directors of the COMPANY has adopted and the
shareholders of the COMPANY have approved the X. X. Xxxxx Corporation 1994
Stock Option Plan (the "PLAN"); and
WHEREAS, pursuant to the provisions of the PLAN, the Board of Directors
of the COMPANY has appointed a Compensation Committee (the "COMMITTEE") to
administer the PLAN and the COMMITTEE 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 _____ COMMON SHARES of the
COMPANY. 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 $____________ per share, subject to adjustment as provided in
Section 3.
(B) EXERCISE OF THE OPTION. The OPTION may not be
exercised until the OPTIONEE shall have completed twelve months of continuous
employment with the COMPANY and/or its subsidiaries immediately following the
date hereof. Thereafter, the OPTION may be exercised as follows:
(i) at any time after such twelve-month
period as to twenty percent (20%) of the COMMON SHARES subject to the OPTION;
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(ii) at any time after twenty-four months
from the date of this Agreement as to an additional twenty percent (20%) of the
COMMON SHARES subject to the OPTION;
(iii) at any time after thirty-six months
from the date of this Agreement as to an additional twenty percent (20%) of the
COMMON SHARES subject to the OPTION;
(iv) at any time after forty-eight months
from the date of this Agreement as to an additional twenty percent (20%) of the
COMMON SHARES subject to the OPTION; and
(v) at any time after sixty months from
the date of this Agreement as to the remaining twenty percent (20%) of the
COMMON SHARES subject to the OPTION.
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
COMMITTEE 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 nor limit in any way the right of the
COMPANY to terminate the employment of the OPTIONEE at any time in accordance
with law or the COMPANY's governing corporate documents.
(A) OPTION TERM. The OPTION shall in no event be
exercisable after the expiration of ten (10) years from the date of this
Agreement.
(B) METHOD OF EXERCISE. The OPTION may be exercised
by giving written notice of exercise to the COMMITTEE in care of the
Treasurer of the COMPANY stating the number of full COMMON SHARES subject to
the OPTION in respect of which it 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).
If permitted by the COMMITTEE, payment for such COMMON SHARES may be made (i)
by delivery of COMMON SHARES of the COMPANY already owned by the OPTIONEE and
having a Fair Market Value (as that term is defined in the PLAN) on the date of
delivery equal to the OPTION PRICE, or (ii) by delivery of a combination of
cash and already owned COMMON SHARES. After payment in full for the COMMON
SHARES purchased under the OPTION has been made, the COMPANY shall take all
such action as is necessary to deliver appropriate share
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certificates evidencing the COMMON SHARES purchased upon the exercise of the
OPTION as promptly thereafter as is reasonably practicable.
(E) SATISFACTION OF TAXES AND TAX WITHHOLDING
REQUIREMENTS. The COMMITTEE shall determine the appropriate arrangements for
the satisfaction by the COMPANY and the OPTIONEE of all federal, state, local
or other income, excise or employment taxes or tax withholding requirements
applicable to the exercise of the OPTION or the later disposition of the COMMON
SHARES or other property thereby acquired.
(3) ADJUSTMENTS AND CHANGES IN THE COMMON SHARES.
(A) In the event that the outstanding COMMON SHARES
of the COMPANY shall be changed into or exchanged for a different kind
of shares 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 COMMON
SHARES shall be increased through the payment of a stock dividend, then unless
such change results in the termination of all outstanding options granted
pursuant to the PLAN, there shall be substituted for or added to each COMMON
SHARE of the COMPANY subject to the OPTION, the number and kind of shares or
other securities into which each outstanding COMMON SHARE of the COMPANY shall
be changed, or for which each such COMMON SHARE shall be exchanged, or to which
the holder of each such COMMON SHARE shall be entitled, as the case may be. The
OPTION shall also be appropriately amended as to the OPTION 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
the COMPANY, or of any shares or other securities into which such shares shall
have been changed, or for which they shall have been exchanged, then if the
COMMITTEE shall, in its sole discretion, determine that such change equitably
requires an adjustment in the OPTION, such adjustment shall be made by the
COMMITTEE in accordance with such determination. 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 OPTIONS.
(A) In the event that the COMPANY or its shareholders
enter into one or more agreements to dispose of all or substantially all of the
assets or fifty percent (50%) or more of
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the outstanding capital stock of the COMPANY by means of sale (whether as a
result of a tender offer or otherwise), merger, reorganization or liquidation
in one or a series of related transactions (each, an "ACCELERATION EVENT"),
then the OPTION shall become exercisable during the fifteen (15) days
immediately prior to the scheduled consummation of the ACCELERATION EVENT with
respect to the full number of COMMON SHARES subject to the OPTION; provided,
however, that no such ACCELERATION EVENT will occur in the event that (i) the
primary purpose of the transaction is to change the COMPANY's domicile solely
within the United States, (ii) the terms of the agreement(s) require as a
prerequisite for the consummation of the transaction that each option granted
by the COMPANY pursuant to the PLAN either be assumed by the successor
corporation or parent thereof or be replaced with a comparable option to
purchase shares of capital stock of the successor corporation or parent
thereof, or (iii) the transaction is approved by a majority of the members of
the Board of Directors of the COMPANY who had either been in office for more
than twelve (12) months prior to such transaction or had been elected, or
nominated for election by the COMPANY's shareholders, by the vote of
three-fourths of the directors then still in office who were directors at the
beginning of such twelve-month period; and provided further that any exercise
of the OPTION during such fifteen (15) day period shall be conditioned upon the
consummation of such transaction and shall be effective only immediately before
such consummation, except to the extent that the OPTIONEE may indicate, in
writing, that such exercise is unconditional with regard to all or part of the
unaccelerated portion of the OPTION. Upon consummation of the ACCELERATION
EVENT, the OPTION, whether or not accelerated, shall terminate and cease to be
exercisable, unless assumed by the successor corporation or parent thereof.
(B) In the event of the occurrence of an
ACCELERATION EVENT, if the OPTIONEE is subject to the filing requirements
imposed under Section 16(a) of the Securities Exchange Act of 1934 with respect
to the COMPANY, the OPTIONEE shall receive a payment of cash equal to the
difference between the aggregate "Fair Value" of the COMMON SHARES subject to
such accelerated OPTION and the aggregate OPTION PRICE of such COMMON SHARES.
Notwithstanding the provisions of the foregoing sentence, no payment of cash
shall be made in respect of the accelerated OPTION unless a period of at least
six (6) months has elapsed from the date of grant of the OPTION. For purposes
of this Section 4(B), "Fair Value" shall mean the highest aggregate fair market
value of the subject COMMON SHARES during the 60-day period immediately
preceding the date of the consummation of the ACCELERATION EVENT. Payment of
said cash shall be made within ten (10) days after said consummation of the
ACCELERATION EVENT. The foregoing payments under this Section 4(B) shall be
made in lieu of and in full
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discharge of any and all obligations of the COMPANY in respect of the OPTION.
(C) The grant of this OPTION shall not affect
in any way the right of the COMPANY to adjust, reclassify, reorganize, or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
(1) NON-ASSIGNABILITY OF OPTION. The OPTION shall not be
assignable or otherwise transferable by the OPTIONEE except by will or by the
laws of descent and distribution. The OPTION may not be exercised during the
lifetime of the OPTIONEE except by him, his guardian or legal representative.
(2) SUBSTITUTION FOR OPTION. The COMMITTEE 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 under the PLAN covering the same or a different
number of COMMON SHARES.
(3) EXERCISE AFTER TERMINATION OF EMPLOYMENT.
(A) Except as otherwise provided in this
Agreement, the OPTION shall be exercisable only by the OPTIONEE, shall be
exercisable only while the OPTIONEE is in the employment of the COMPANY and
then only if the OPTION has become exercisable by its terms, and if not
exercisable by its terms at the time the OPTIONEE ceases to be in the
employment of the COMPANY, shall immediately expire on the date of termination
of employment.
(B) If the OPTION is exercisable by its
terms at the time the OPTIONEE ceases to be in the employment of the
COMPANY other than by reason of the death, permanent disability or normal
retirement of the OPTIONEE, the OPTION must be exercised on or before the
earlier of three (3) months after the date of termination of employment or the
fixed expiration date of the OPTION after which period the OPTION shall expire.
Notwithstanding the foregoing, if the OPTIONEE's employment is terminated for
willful, deliberate or gross misconduct (such as, for example, dishonesty), the
OPTION shall, to the extent not previously exercised, expire immediately upon
such termination.
(C) In the event of the death of the
OPTIONEE (i) while in the employment of the COMPANY or (ii) within three (3)
months after his termination of employment other than for willful, deliberate
or gross misconduct, the unexercised portion of the OPTION (whether or not then
exercisable by its terms) shall become immediately exercisable by his estate
for a period ending on the
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earlier of the fixed expiration date of the OPTION or twelve months after
the date of death, after which period the OPTION shall expire. For purposes
hereof, the estate of an OPTIONEE shall be defined to include the legal
representatives thereof or any person who has acquired the right to exercise
the OPTION by reason of the death of the OPTIONEE.
(D) In the event of the termination of
employment of the OPTIONEE by reason of the "permanent disability" of the
OPTIONEE, the unexercised portion of the OPTION (whether or not then
exercisable by its terms) shall become exercisable for a period ending on the
earlier of the fixed expiration date of the OPTION or twelve (12) months from
the date of termination, after which period the OPTION shall expire. For
purposes hereof, "permanent disability" shall be deemed to be the inability of
the OPTIONEE to perform the duties of his job with the COMPANY because of a
physical or mental disability as evidenced by the opinion of a COMPANY-approved
doctor of medicine licensed to practice medicine in the United States of
America.
(E) In the event of the termination of
employment of the OPTIONEE by reason of the "normal retirement" of the
OPTIONEE, the unexercised portion of the OPTION (whether or not then
exercisable by its terms) granted to the OPTIONEE on or before his 65th
birthday shall become immediately exercisable for a period ending on the
earlier of the fixed expiration date of the OPTION or twelve (12) months after
the date of death, after which period the OPTION shall expire. Also, in the
event of the "normal retirement" of the OPTIONEE, the unexercised portion of
the OPTION (whether or not then exercisable by its terms) granted to the
OPTIONEE after his 65th birthday and held for a period of at least twelve (12)
consecutive months of active employment with the COMPANY after the date of
grant shall become immediately exercisable for a period ending on the earlier
of the fixed expiration date of the OPTION or twelve (12) months after the date
of death, after which period the OPTION shall expire. For purposes hereof,
"retirement" shall be deemed to be "normal retirement" if the OPTIONEE is at
least 65 years of age and has completed at least five (5) consecutive years of
employment with the COMPANY at the date of retirement.
(8) 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
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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.
(9) RIGHTS OF OPTIONEE AS SHAREHOLDER. 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 him evidencing such COMMON SHARES.
(10) PLAN AS CONTROLLING. All terms and conditions of the
PLAN applicable to the OPTION which are not set forth in this Agreement shall
be deemed incorporated herein by reference. In the event that any term or
condition of this Agreement is inconsistent with the terms and conditions of
the PLAN, the PLAN shall be deemed controlling.
(11) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio.
(12) 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.
(13) 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.
(14) 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
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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.
(15) 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.
(16) 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.
(17) 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
COMPANY:
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X. X. XXXXX CORPORATION
By:______________________________
Its:__________________________
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OPTIONEE:
_________________________________
Signature of Optionee
_________________________________
Street Address
_________________________________
City State Zip Code
_________________________________
Telephone Number
_________________________________
Social Security Number
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