EXHIBIT 2.I.21
DATE OF EXERCISE: 3/13/01
OPTION PRICE: $18.750
COVERED SHARES: 8,900
AMERICAN CAPITAL STRATEGIES, LTD.
1997 STOCK OPTION PLAN
2000 EMPLOYEE STOCK OPTION PLAN
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STOCK OPTION EXERCISE AGREEMENT
1. DEFINITIONS. In this Agreement, except where the context otherwise
indicates, the following definitions apply:
1.1. "AFFILIATE" means parent or subsidiary corporations of
the Company, as defined in Sections 424(e) and (f) of the Code (but substituting
"the Company" for "employer corporation").
1.2. "AGGREGATE PURCHASE PRICE" shall have the meaning set
forth in Section 4.
1.3. "AGREEMENT" means this Stock Option Exercise Agreement.
1.4. "BOARD" means the Board of Directors of the Company.
1.5. "CODE" means the Internal Revenue Code of 1986, as
amended.
1.6. "COLLATERAL" has the meaning set forth in Section 5.3(b).
1.7. "COLLATERAL VALUE" has the meaning set forth in Section
5.3(b).
1.8. "COMMITTEE" means the committee charged, pursuant to the
provisions of the Plan, with the administration of the Plan. Unless otherwise
determined by the Board, the Compensation Committee of the Board shall be the
Committee.
1.9. "COMMON STOCK" means the common stock, par value $0.01
per share, of the Company.
1.10. "COMPANY" means American Capital Strategies, Ltd., a
Delaware corporation.
1.11. "COVERED SHARES" means the number of Shares subject to
the Option set forth as the "Covered Shares" on page 1 of this Agreement.
1.12. "DATE OF EXERCISE" means the date hereof.
1.13. "EMPLOYMENT" means the Optionee's employment with the
Company and its Affiliates.
1.14. "EVENTS OF DEFAULT". An Event of Default shall mean the
occurrence of one or more of the following described events:
(a) The Optionee shall default in the payment of (i)
interest on the Purchase Note within five (5) days of its due date or (ii)
principal on the Purchase Note within five (5) days of its due date whether at
maturity, upon any scheduled payment date or by acceleration or otherwise;
(b) The principal amount of the Purchase Note shall,
at any time, exceed 105% of the aggregate Collateral Value of all of the
Collateral; and
(c) an Event of Default shall exist under any other
Stock Option Exercise Agreement between the Optionee and the Company related to
the purchase of Common Stock under a stock option plan of the Company.
1.15. "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
1.16. "EXERCISE SHARES" shall have the meaning set forth in
Section 2.
1.17. "FAIR MARKET VALUE" means, as of any particular date,
the average of the closing prices for a Share for the 20 trading days
immediately preceding such date on the NASDAQ National Market System as reported
by such sources the Committee may select or, if such price is not so reported,
then the Fair Market Value of a Share as determined by the Committee pursuant to
reasonable method adopted in good faith for such purpose.
1.18. "INVESTMENT COMPANY ACT" means the Investment Company
Act of 1940, as amended.
1.19. "NET AGGREGATE PURCHASE PRICE" shall have the meaning
set forth in Section 4.
1.20. "NET ASSET VALUE" means the net asset value of a Share,
as determined by the Company for purposes of the Exchange Act and the Investment
Company Act.
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1.21. "NOTE INTEREST RATE" shall have the meaning set forth in
Section 5.1.
1.22. "OPTION" means the stock options granted to the Optionee
pursuant to the Plan.
1.23. "OPTION PRICE" means the dollar amount per Share set
forth as the "Option Price" on page 1 of this Agreement.
1.24. "OPTIONEE" means the person identified as the "Optionee"
on page 1 of this Agreement.
1.25. "PLAN" means, as applicable, the American Capital
Strategies, Ltd., 1997 Stock Option Plan and/or the American Capital Strategies,
Ltd. 2000 Employee Stock Option Plan.
1.26. "PURCHASE NOTE" means the promissory note substantially
in the form of Exhibit A hereto subject to the terms and conditions set forth in
this Agreement.
1.27. "SECURITIES ACT" means the Securities Act of 1933, as
amended.
1.28. "SHARE" means a share of Common Stock.
1.29. "UCC" means the Uniform Commercial Code as in effect at
any time in the State of Maryland.
2. EXERCISE OF OPTION. Pursuant to the Plan and subject to the terms of
this Agreement, the Optionee hereby exercises the Option to purchase 13,333
Covered Shares (the "Exercise Shares"). This exercise shall not affect the other
Covered Shares subject to the Option.
3. EARLY EXERCISE. The Optionee acknowledges that this is an early
exercise of the Option with regard to 13,333 Shares and that in the event that
the Optionee should terminate Employment prior to the dates indicated below,
notwithstanding any other provisions hereto, the Company shall have the option
to purchase such Shares at the Option Price. The Company may pay such purchase
price by offsetting such amount against the amount then due under the Purchase
Note. The Company may exercise such option at any time within thirty days
following such termination of Employment.
THROUGH DATE SHARES SUBJECT TO COMPANY REPURCHASE OPTION
6/8/01 13,333
6/8/02 6,667
4. PAYMENT OF EXERCISE PRICE. The "Aggregate Purchase Price" for the
Exercise Shares shall be the Option Price multiplied by the Exercise Shares. The
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Aggregate Purchase Price shall be payable by the cash payment to the Company of
the aggregate par value of the Exercise Shares and by the delivery of the
Purchase Note for the balance of the Aggregate Purchase Price (the "Net
Aggregate Purchase Price").
5. PURCHASE NOTE. The Purchase Note shall have the terms and conditions
as set forth in this Section 5.
5.1. PRINCIPAL AMOUNT AND TERMS. The principal amount of the
Purchase Note shall be $175,006.43, which shall equal the Net Aggregate Purchase
Price plus $2,967 for the payment of taxes associated with the exercise of the
Option. Optionee will provide an affidavit or other evidence reasonably
satisfactory to the Committee of the basis for computing the amount set forth in
clause (ii) of the preceding sentence. Following consultation with the Optionee,
the Company shall be entitled to withhold from the loan proceeds (and if
sufficient loan proceeds in excess of the Net Aggregate Purchase Price do not
exist, from Optionee's salary) and to deliver to taxing authorities such tax
withholding amounts as may be required by law. The Purchase Note shall accrue
interest at the rate of 4.980% per annum (the "Note Interest Rate"), payable in
cash, quarterly in arrears, on each March 31, June 30, September 30 and December
31, beginning June 30, 2001, until the principal amount and all other amounts
due under the Purchase Note are paid in full. Interest shall be computed on the
basis of a year with twelve 30-day months, and the actual days elapsed. The
principal amount of the Purchase Note, together with all accrued but unpaid
interest and all other amounts due thereunder, shall be payable in full on March
13, 2010 unless earlier accelerated in accordance with the terms of this
Agreement or the Purchase Note. Upon the request of the Optionee, and at the
sole and absolute discretion of the Committee, such date may be extended, but
shall not in any case be extended beyond the tenth anniversary of the Date of
Exercise hereof. The payment of the Purchase Note shall be accelerated and all
amounts due thereunder shall be immediately payable (i) sixty days following the
termination of the Optionee's Employment or (ii) in the event the Fair Market
Value of the Exercise Shares shall, for twenty consecutive trading days, equal
or exceed $50.00 per share, as adjusted for stock splits, stock dividends or
similar occurrences, as determined by the Committee, after the date hereof.
5.2. ACCELERATION. If an Event of Default shall occur, the
unpaid balance of the Purchase Note and interest accrued thereon and all other
liabilities of the Optionee to the Company hereunder and thereunder shall be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived.
5.3. COLLATERAL. The Purchase Note shall be secured by the
Collateral as provided in this Section 5.3.
(a) In order to secure the full and timely payment in
full of the Purchase Note and all other obligations of the Optionee under this
Agreement and the full and timely payment in full of all other purchase notes
issued pursuant to and all other obligations created under all other stock
option exercise agreements delivered by the Optionee to the Company, the
Optionee hereby grants, assigns and conveys unto the
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Company a lien on and continuing security interest in and to, the Collateral
together with all products, proceeds, dividends, distributions, or returns of
capital or other moneys and other rights, moneys, property or securities of any
nature (including, without limitation, rights, voting rights, moneys or
securities arising from consolidation or subdivision of capital, redemption or
conversion of shares, reduction of capital, liquidation or a similar plan or
arrangement), all of which at any time (whether now or in the future) are
attributable to or are arising from the Collateral.
(b) The "Collateral" shall be deemed to consist of
the sum of (i) the Exercise Shares, and (ii) any other property designated by
the Optionee and accepted by the Company as Collateral hereunder. In determining
the "Collateral Value" of the Collateral, the Company shall consider the value
(i) of the Exercise Shares at any time to be the greater of their Fair Market
Value and their Net Asset Value, (ii) of any other Collateral to be that
determined in good faith from time to time by the Committee.
(c) Upon execution and delivery of this Agreement,
the Company will instruct its transfer agent to issue stock certificates
evidencing the Exercise Shares (which shall contain appropriate legends
regarding the restrictions set forth in this Agreement) and the Optionee shall
deliver to the Company or its designated agent such certificates with a transfer
executed in blank. If at any time the Company shall issue any additional or
substitute shares of stock or stock certificates, or any other instruments
evidencing an interest in such entity or an obligation of such entity, the
Optionee shall promptly pledge, mortgage and deposit (or cause to be pledged,
mortgaged or deposited) in favor of or with the Company such additional
certificates, instruments or documents as additional Collateral.
(d) Unless an Event of Default shall have occurred
and be continuing (and in such case, all dividends and distributions described
herein shall be Collateral), notwithstanding Section 5.3(a), the Optionee shall
have the right to receive and to retain cash dividends and other cash
distributions that are paid on account of the Exercise Shares; provided,
however, that if at any time the aggregate Collateral Value is 105% or less of
the principal amount of the Purchase Note, all such dividends and other
distributions shall be delivered directly to the Company for application: first,
to any interest then accrued and unpaid under the Purchase Note; second, for the
payment of any income taxes then owed by the Optionee as a result of such
dividend; and third, at the direction of the Optionee, for the payment of
principal on the Purchase Note. If any such dividends or other distributions are
paid to the Optionee following an Event of Default or in circumstances subject
to the proviso in the preceding sentence, such dividends or other distributions
shall be held in trust by the Optionee for the benefit of the Company, and the
Optionee shall immediately notify the Company in writing, and shall, if the
Company so instructs, immediately pay over such dividends or other distributions
to the Company as Collateral.
(e) Upon the occurrence of and during the
continuation of any Event of Default:
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(i) The Company shall have all rights and
remedies of a secured creditor under the UCC and other applicable laws including
the right to sell, use, utilize or otherwise dispose of the Collateral as
permitted thereunder; provided, however, that in any foreclosure of the
Optionee's interest of the Exercise Shares, the proceeds realized by the Company
therefrom shall be deemed to be not less than the greater of the Fair Market
Value and the Net Asset Value as of the date of foreclosure.
(ii) The Company, in its discretion, and
without notice to the Optionee, may take any one or more of the following
actions without liability except to account for property actually received by
it: (A) transfer to or register in its name or the name of its nominee any stock
certificates or any other evidence of the Collateral, with or without indication
of the security interest herein created, and whether or not so transferred or
registered, receive the income, dividends and other distributions thereon and
hold them as additional Collateral or apply them to the obligations of the
Optionee secured hereby in any order of priority; (B) exercise or cause to be
exercised all voting and corporate powers with respect to any of the Collateral,
including (1) all rights to call or require stockholders meetings and to remove
or elect directors, and (2) all rights of proxy appointments, conversion,
exchange, subscription or any other rights, privileges or options pertaining to
such Collateral, as if the absolute owner thereof; (C) exchange any of the
Collateral for other property upon a reorganization, recapitalization,
reclassification or other readjustment and, in connection therewith, deposit any
of the Collateral with any depository upon such terms as the Company may
determine; and (D) in its name or in the name of the Optionee, demand, sue for,
collect or receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral, and Company further shall
have the right during any time to sign and endorse the name of the Optionee upon
any such stock certificate, stock power, check, draft, money order, or any other
documents of title or evidence of payment with respect to the Collateral, in the
name of the Optionee, it being the intention of the Optionee to grant to the
Company the right to sell any portion or all of the Collateral and the proceeds
therefrom, upon the occurrence of an Event of Default hereunder.
(iii) If Company in good faith believes that
the Securities Act, or any other state or federal law prohibits or restricts the
customary manner of sale or distribution of any of the Collateral, the Company
may sell such Collateral privately or in any other manner deemed advisable by
the Company at such price or prices as the Company determines in its sole
discretion. The Optionee recognizes that such prohibition or restriction may
cause the Collateral to have less value than it otherwise would have and that,
consequently, such sale or disposition by the Company may result in a lower
sales price than if the sale were otherwise held. The Company may sell the
Collateral in Bethesda, Maryland or elsewhere, in one or more sales or parcels,
for cash, credit or future delivery, and with or without the use of a
stockbroker, as the Company may deem advisable. The Company may be the purchaser
of any or all of the Collateral.
6. RESTRICTIONS ON TRANSFER. Except by will or the laws of descent and
distribution, for so long as the Purchase Note is outstanding, neither the
Exercise Shares nor any other Collateral may be sold, transferred, assigned,
pledged or otherwise disposed of or encumbered by the Optionee, and any attempt
to do so shall be null and
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void. The Optionee agrees that he is acquiring the Purchased Shares for
investment only and not with a view to resale, and that he will not sell, pledge
or otherwise dispose of such shares so issued unless and until (a) the Purchased
Shares have been registered for resale under the Securities Act and registered
or qualified for resale under all other applicable state and federal laws or (b)
exemptions from such registration and qualification exist; provided, however,
that the Company may request an opinion of counsel to the Optionee or other
reasonable evidence of such exemptions. The Company agrees to take such steps as
are reasonably necessary to maintain adequate public information with regard to
the Company as contemplated by Rule 144(c) under the Securities Act or similar
provisions of any replacement rule. The Company has filed a registration
statement on Form S-8 under the Securities Act with regard to the Exercise
Shares and to the extent legally necessary to allow for resale of the Exercise
Shares by Optionee, the Company agrees to take reasonable steps to keep such
registration statement effective. Other than as specified in the preceding two
sentences, the Company is not obligated hereby to file any such registrations or
applicable notifications with regard to the Exercise Shares or their
disposition. The Optionee further agrees that under such circumstances the
Company may place a legend embodying such restriction on the certificates
evidencing such shares.
7. EMPLOYMENT. The exercise of the Option as contemplated by this
Agreement, the acceptance of the Purchase Note by the Company or any term or
provision of this Agreement shall not constitute or, except as is specifically
provided in a Supplemental Employment Agreement, be evidence of any
understanding, express or implied, on the part of the Company or any of its
Affiliates to employ the Optionee (or have the Optionee serve as a director) for
any period.
8. NOTICE. All notices or other communications that are required or
permitted hereunder shall be in writing and sufficient if delivered personally,
by facsimile or sent by overnight express or by registered or certified mail,
postage prepaid, addressed as follows:
If to the Company to:
American Capital Strategies, Ltd.
0 Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Compliance Officer
Facsimile: 000-000-0000
If to the Optionee, to the address set forth beneath the Optionee's signature on
the signature page hereof.
All deliveries of notice shall be deemed effective when received by the
person entitled to such receipt or when delivery has been attempted but refused
by such person. Any party may change the person or address to which such
deliveries shall be made with respect to such party by delivering notice thereof
to the other party hereto in accordance with this Section 7.
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9. TERMINATION. This Agreement shall terminate and the security
interest of the Company in the Collateral shall be released upon the payment and
satisfaction in full of the Optionee's obligations relating to the Purchase
Notes.
10. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and the
Purchase Note shall be governed by and construed and interpreted in accordance
with the laws of the State of Maryland, without regard to its conflict of laws
principles. All judicial actions, suits or proceedings brought against the
Optionee with respect to its obligations, liabilities or any other matter under
or arising out of or in connection with this Agreement or any transaction
contemplated hereby or for recognition or enforcement of any judgment rendered
in any such proceedings may be brought in a state or federal court of competent
jurisdiction in the State of Maryland. By execution and delivery of this
Agreement, the Optionee accepts, generally and unconditionally, the jurisdiction
of the aforesaid courts and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Agreement or any transaction
contemplated hereby from which no appeal has been taken or is available. The
Optionee irrevocably agrees that all process in any proceeding or any court
arising out of or in connection with this Agreement may be effected by mailing a
copy thereof by registered or certified mail or any substantially similar form
of mail, postage prepaid, to the Optionee at the addresses referred to in
Section 7 or such other address of which the Company shall have been notified
pursuant to said paragraph. Such service shall be effective five (5) days after
such mailing. The Optionee hereby acknowledges that such service will be
effective and binding service in every respect.
11. COMPLETE AGREEMENT; CONFLICTS. This Agreement, the Plan and the
Employment Agreement contain the entire agreement between the parties hereto
with respect to the transactions contemplated herein and supersede all previous
oral and written and all contemporaneous oral negotiations, commitments,
writings and understandings. In the event of a conflict between the terms of
this Agreement and the Plan or the Employment Agreement, the terms of this
Agreement shall control.
12. AMENDMENTS AND WAIVERS. This Agreement may be amended only by a
writing signed by the Optionee and the Company. No delay or omission on the part
of any party hereto in exercising any right hereunder shall operate as a waiver
of such right or any other right hereunder or operate to constrain the rights of
any other parties hereunder. No waiver of any one right shall operate as a
waiver of any subsequent right.
13. INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid, illegal or unenforceable in any material respect, such provision
shall be replaced with a provision which is as close as possible in effect to
such invalid, illegal or unenforceable provision, and still be valid, legal and
enforceable, and the validity, legality and enforceability of the remainder of
this Agreement shall not in any way be affected or impaired thereby, unless the
parties otherwise so provide.
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15. FURTHER ASSURANCES. The parties agree to execute and deliver promptly such
further instruments and documents and to take such other actions as reasonably
necessary to implement the terms of this Agreement. Without limiting the
foregoing, the Optionee agrees, from time to time, at the Company's expense, to
execute and deliver promptly all further instruments and documents as the
Company may reasonably require in order to perfect, confirm and ratify the
security interests granted hereby, including, without limitation, the execution
and delivery of such financing statements or continuation statements, and
amendments thereto, as may be necessary or desirable, or as the Company may
request in order to perfect and preserve the security interests granted hereby.
The Optionee hereby authorizes the Company or its agent to file such financing
statements and/or such continuation statements and amendments thereto relating
to all or any part of the Collateral without its signature, where permitted by
law. A carbon, photographic or other reproduction of this Agreement or any
financing statement covering the collateral granted hereby or any part thereof
shall be sufficient as a financing statement where permitted by law.
IN WITNESS WHEREOF, the Optionee and the Company have caused this
Agreement to be signed on its behalf effective as of the Date of Exercise.
AMERICAN CAPITAL STRATEGIES, LTD.
By:
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OPTIONEE
Address:
Facsimile:
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EXHIBIT A
PURCHASE NOTE
March 13, 2001
$175,006.43
FOR VALUE RECEIVED, the undersigned, Xxxxxx Xxxxx (the "Optionee"),
hereby promises to pay to AMERICAN CAPITAL STRATEGIES, LTD., and its successors
and assigns (the "Holder"), the principal sum of ONE HUNDRED SEVENTY-FIVE
THOUSAND SIX AND 43/100 DOLLARS ($175,006.43), with interest thereon, on the
terms and conditions set forth in the Exercise Agreement (as defined herein).
Payments of the principal of and interest on this Note are to be made
in lawful money of the United States of America by check mailed and addressed to
the Holder hereof at the address shown in the Exercise Agreement or such other
address as may be provided thereunder.
Notwithstanding any provision to the contrary in this Note, the
Exercise Agreement or any other agreement, the Optionee shall not be required to
pay, and the Holder shall not be permitted to contract for, take, reserve,
charge or receive, any compensation which constitutes interest under applicable
law in excess of the maximum amount of interest permitted by law.
This Note is the Purchase Note (herein called the "Note") issued
pursuant to the Stock Option Exercise Agreement, dated as of March 13, 2001 (as
from time to time amended, the "Exercise Agreement"), between the Holder and the
Optionee and is entitled to the benefits thereof. All terms used herein shall
have the meanings ascribed to them in the Exercise Agreement.
If an Event of Default as defined in the Exercise Agreement occurs and
is continuing, the unpaid principal of this Note shall become due and payable in
the manner, at the price and with the effect provided in the Exercise Agreement.
This Note and the rights and obligations of the parties hereto shall be
deemed to be contracts under the laws of the State of Maryland and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said State, except for its rules relating to the conflict of laws.
IN WITNESS WHEREOF, this Note is delivered as of the date set forth
above.
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