Exhibit 10.4
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1996 STOCK INCENTIVE PLAN AGREEMENT
NONQUALIFIED
STOCK OPTION AWARD
You have been selected to be a Participant in the Xxxxxxxx Corporation
1996 Stock Incentive Plan (the "Plan"), as specified below:
OPTIONEE: Xxxxxxxxxxx X. Xxxxxx
DATE OF GRANT: August 14, 1996
DATE OF EXPIRATION: August 13, 2006
NUMBER OF SHARES COVERED BY THIS AWARD: 27,300
OPTION PRICE: $40.625
THIS DOCUMENT CONSTITUTES PART OF THE PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THIS AGREEMENT, effective as of the Date of Grant set forth above, is
between Xxxxxxxx Corporation, an Iowa corporation (the "Company") and the
Optionee named above pursuant to the provisions of the Plan. The parties
hereto agree as follows:
1. Grant of Stock Option. The Company hereby grants to Optionee the
Option to purchase the number of shares of Common Stock of the Company, $1.00
par value ("Common Stock") set forth above at the stated Option Price, which
is 100% of the Fair Market Value on the Date of Grant, subject to the terms
and conditions of the Plan and this Agreement.
2. Exercise of Stock Option. As long as the vesting requirements
provided herein are met and the Option has not otherwise terminated or
expired, the Optionee may exercise in whole or in part this Option at any time
six months after the Date of Grant. The vesting schedule for the dates on or
after which the Options may be exercised is as set forth below:
August 14, 1997 1/3 - 9,100
August 14, 1998 1/3 - 9,100
August 14, 1999 1/3 - 9,100
3. Procedure for Exercise of Options. This Option may be exercised by
giving written notice to the Company at its executive offices, addressed to
the attention of its Secretary. Such notice (a) shall be signed by the
Optionee, his legal representative or permitted transferee under this
Agreement; (b) shall specify the number of full shares then elected to be
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purchased with respect to the Option; (c) unless a Registration Statement
under the Securities Act of 1933 is in effect with respect to the shares to be
purchased, shall contain a representation of Optionee that the shares of
Common Stock are being acquired by him or her for investment and with no
present intention of selling or transferring them, and that he or she will not
sell or otherwise transfer the shares except in compliance with all applicable
securities laws and requirements of any stock exchange upon which the shares
of Common Stock may then be listed; (d) shall be accompanied by payment in
full of the Option Price of the shares to be purchased; and (e) Optionee's
copy of this Agreement.
The Option Price upon exercise of this Option shall be payable to the
Company in full either (a) in cash or its equivalent (acceptable cash
equivalents shall be determined at the sole discretion of the Committee); (b)
by tendering previously acquired Shares having an aggregate Fair Market Value
at the time of exercise equal to the total price of the shares for which the
Option is being exercised; (c) by a combination of (a) and (b); (d) by
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
proceeds from the option shares or loan proceeds to pay the exercise price and
withholding taxes due to Company; or (e) such other methods of payment as the
Committee at its discretion deems appropriate.
As promptly as practicable after receipt of such notice and payment, the
Company shall cause to be issued and delivered to the Optionee, his or her
legal representative or permitted transferee under this Agreement, as the case
may be, certificates for the shares so purchased, which may, if appropriate,
be endorsed with appropriate restrictive legends as determined by the
Committee. The Company shall maintain a record of all information pertaining
to Optionee's rights under this Agreement, including the number of shares for
which this Option is exercisable. If the Option shall have been exercised in
full, this Agreement shall be returned to the Company and canceled.
4. Termination of Employment by Death. If, without having fully
exercised this Option, Optionee's employment with the Company is terminated by
reason of death, any outstanding Options granted to Participant that are not
exercisable at the date of termination shall become fully exercisable.
Optionee's beneficiary (or such persons that have acquired Optionee's rights
under the Option by will or by the laws of descent and distribution) shall
have the same right to exercise this Option as Optionee had during his or her
lifetime, for a period ending on the Date of Expiration set forth above.
5. Termination of Employment by Disability. If, without having fully
exercised this Option, Optionee's employment with the Company is terminated by
reason of Disability (as defined in the Plan), any outstanding Options granted
to Participant that are not exercisable at the date of termination shall
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become fully exercisable. Optionee shall have the same right to exercise this
Option as Optionee had during his or her employment for a period ending on the
Date of Expiration set forth above.
6. Termination of Employment by Retirement. If, without having fully
exercised this Option, Optionee's employment with the Company is terminated by
reason of Retirement (as defined under the then established rules of the
Company's tax-qualified retirement plans), any outstanding options granted to
Participant that are not exercisable at the date of termination shall become
fully exercisable. Optionee shall have the same right to exercise this Option
as Optionee had during his or her employment for a period ending on the Date
of Expiration set forth above.
7. Termination of Employment for Other Reasons. If, without having
fully exercised this Option, Optionee's employment with the Company is
terminated for reasons other than his or her death, Disability or Retirement
then Optionee's rights under this Option shall terminate. However, the
Committee, in its sole discretion, shall have the right to allow for an
exercise period of up to 30 days after the date of such termination, provided
that, in no event shall this extension period continue beyond the expiration
of the term of this Option. In addition, any such extension shall be
applicable only to the extent that this Option is exercisable at the date of
termination of employment.
8. Restrictions on Transfer. This Option may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution. Notwithstanding the foregoing,
Optionee may transfer this Option, in whole or in part, to members of
Optionee's immediate family or trusts or family partnerships for the benefit
of such persons, provided, that Optionee receive the advance written
permission of the Company to make such a transfer and to further notify the
Company upon the completion of the transfer. Further, this Option shall be
exercisable during Optionee's lifetime only by Optionee, Optionee's legal
representative or permitted transferee.
9. Adjustments in Authorized Shares. If the Company shall at any time
change the number of issued shares of Common Stock without new consideration
to the Company (such as by stock dividends or stock splits), the number of
shares to be delivered under this Option and the price of the shares subject
to this Option shall be equitably adjusted so that the aggregate consideration
payable to the Company, if any, shall not be changed. In the case of any
merger, consolidation or combination of the Company with or into another
corporation, other than a merger, consolidation or combination in which the
Company is the continuing corporation and which does not result in the
outstanding Common Stock of the Company being converted into or exchanged for
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different securities, cash or other property, or any combination thereof (an
"Acquisition"), the Option shall have the right to receive upon exercise of
this Option the Acquisition Consideration receivable upon such Acquisition by
a holder of the number of shares of Common Stock which might have been
obtained upon exercise of the Option, as the case may be, immediately prior to
such Acquisition.
The term "Acquisition Consideration" shall mean the kind and amount of shares
of the surviving or new corporation, cash, securities, evidence of indebted-
ness, other property or any combination thereof receivable in respect of one
share of Common Stock of the Company upon consummation of an Acquisition.
10. Change in Control. Immediately upon a change in control of the
Company all outstanding Options shall become exercisable. For purposes
hereof, a change in control of the Company shall be deemed to have occurred on
the first to occur of any of the following dates:
(a) on the date the Board of Directors of the Company votes to
approve and recommends a stockholder vote to approve:
(I) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant
to which shares of the Common Stock and Class B Stock would be
converted into cash, securities or other property, other than any
consolidation or merger of the Company in which the holders of the
Common Stock and Class B Stock immediately prior to the
consolidation or merger have at least a majority of the ownership in
and voting power of the surviving corporation immediately after the
consolidation or merger; or
(ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company; or
(iii) any plan or proposal for the liquidation or dissolution of
the Company; or
(b) on the date any person (as such term is used in Section 13(d)
of the Securities Exchange Act of 1934, hereinafter the "1934 Act"),
other than the Company's Savings and Investment Plan or similar successor
plan, shall become the beneficial owner (within the meaning of Rule 13d3
under the 0000 Xxx) of thirty percent (30%) or more of the outstanding
voting power of the Company except as a result of actions beyond the
control of such person, including, without limitation, as a result of a
shift in voting power of the Company as a result of the conversion by
other persons of their Class B Stock into Common Stock; or
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(c) on the date, during any period of twenty-four (24) consecutive
months on which individuals who at the beginning of such period
constitute the entire Board of Directors of the Company shall cease for
any reason to constitute a majority thereof unless the election of each
new director comprising the majority was approved by a vote of at least a
2/3 majority of the Directors still in office who were Directors at the
beginning of the period.
Notwithstanding anything to the contrary contained herein, no change in
control shall be deemed to have occurred for the purpose of this Plan by
virtue of any combination or agreement among shareholders of the Company who
are descendants of E.T. Xxxxxxxx, the founder of the Company, or trusts for
the benefit of such persons.
11. Rights as a Stockholder. Optionee shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock subject
to this Agreement until such time as the purchase price has been paid and the
shares have been issued and delivered to him or her.
12. Continuation of Employment. This Agreement shall not confer upon
Optionee any right to continuation of employment by the Company, nor shall
this Agreement interfere in any way with the Company's right to terminate his
or her employment at any time.
13. Fair Market Value. For the purposes of this Agreement, Fair Market
Value shall mean the average of the high and low market prices at which a
share of the Company common stock shall have traded on the valuation date or
on the next preceding trading date if the valuation date is not a trading day
as reported in the Midwest edition of The Wall Street Journal.
14. Miscellaneous.
(a) This Agreement and the rights of Optionee hereunder are subject
to all the terms and conditions (including Shareholder approval) of the
Plan, as the same may be amended from time to time, as well as to such
rules and regulations as the Committee may adopt for administration of
the Plan. The Committee shall have the right to impose such restrictions
on any shares acquired pursuant to the exercise of this Option, as it may
deem advisable, including, without limitation, restrictions under
applicable Federal securities laws, under the requirements of any stock
exchange or market upon which such shares are then listed and/or traded,
and under any blue sky or state securities laws applicable to such
shares.
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(b) It is expressly understood that the Committee is authorized to
administer, construe, and make all determinations necessary or
appropriate to the administration of the Plan and this Agreement, all of
which shall be binding upon Optionee. Any inconsistency between this
Agreement and the Plan shall be resolved in favor of the Plan. All terms
used herein shall have the same meaning as in the Plan document.
(c) With the approval of the Board, the Committee may terminate,
amend, or modify the Plan; provided, however, that no such termination,
amendment, or modification of the Plan may in any way adversely affect
Optionee's rights under this Agreement.
(d) (I) The Company shall have the authority to deduct or
withhold, or require Optionee to remit to the Company, an
amount sufficient to satisfy Federal, state, and local taxes
(including Optionee's FICA obligation) required by law to be
withheld with respect to any exercise of Optionee's rights
under this Agreement without Optionee's written consent.
(ii) Optionee may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or
in part, with respect to a Nonqualified Stock Option, by having
the Company withhold shares of Common Stock having an aggregate
Fair Market Value, on the date the tax is to be determined,
equal to the amount required to be withheld. All elections
shall be irrevocable and in writing, and shall be signed by
Optionee in advance of the day that the transaction becomes
taxable.
(e) Optionee agrees to take all steps necessary to comply with all
applicable provisions of Federal and state securities law in exercising
Optionee's rights under this Agreement.
(f) The Plan and this Agreement are not intended to qualify for
treatment under the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
(g) This Agreement shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.
(h) To the extent not preempted by Federal law, this Agreement
shall be governed by, and construed in accordance with the laws of the
State of Iowa.
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15. Effectiveness. The effectiveness of this Agreement and the grant of
the Options hereunder is contingent upon the approval of the Plan by the
stockholders of the Company.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the Date of Grant.
XXXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Its: Vice President-General
Counsel and Secretary
/s/ Xxxxxxxxxxx X. Xxxxxx
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Optionee, Xxxxxxxxxxx X. Xxxxxx
000 00xx Xxxxxx
Xxx Xxxxxx, XX 00000
Social Security number: ###-##-####
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