COOPER TIRE & RUBBER COMPANY Nonqualified Stock Option Award Agreement
Exhibit (10.3)
XXXXXX TIRE & RUBBER COMPANY
WHEREAS, [OPTIONEE NAME] (the “Optionee”) is an employee of Xxxxxx Tire & Rubber Company or a
Subsidiary (the “Company”); WHEREAS, the Compensation Committee of the Board of Xxxxxx Tire &
Rubber Company (the “Committee”) approved the terms and authorized on [DATE] the grant of an Award
of Options pursuant to Section 8 of the Xxxxxx Tire & Rubber Company 2010 Incentive Compensation
Plan (the “Plan”); and
WHEREAS, the Option is intended as a Nonqualified Stock Option and shall not be treated as an
“incentive stock option” within the meaning of that term under Section 422 of the Code.
NOW, THEREFORE, pursuant to the Plan and subject to the terms and conditions thereof and the
terms and conditions hereinafter set forth, the parties agree as follows:
Grant of Option. Subject to the terms and conditions of this Award Agreement and the
provisions of the Plan, and including the vesting provisions set forth in Section 2, the Company
hereby grants to the Optionee an Option to purchase____________ shares of the Xxxxxx Tire & Rubber
Company’s Common Shares at an exercise price of ____________ per share, which is the Fair Market
Value of a Common Share as of the Date of Grant.
Right to Exercise.
The Option (until terminated as hereinafter provided) will become exercisable to the extent of
[ ]of the total number of Common Shares underlying the Option on each of the first __________
(__) anniversaries of the Date of Grant if the Optionee remains continuously employed by the
Company until each such time. To the extent the Option is exercisable, it may be exercised in
whole or in part.
In addition to becoming exercisable as provided in Section 2(a) above, in the event of a
Change in Control during the employment of the Optionee and prior to the termination of the Option,
the Option shall become exercisable as follows:
If the Optionee is a participant in the Xxxxxx Tire & Rubber Company’s Change in
Control Severance Pay Plan (the “Severance Plan”), the Option shall become exercisable as
provided in the Severance Plan.
If the Optionee is not a participant in the Severance Plan, with respect to an
Optionee whose employment is terminated during the Severance Period by the Company and such
termination is without Cause, if upon a Change in Control, the successor to Xxxxxx Tire &
Rubber Company assumes (expressly or impliedly by operation of law) the Company’s
obligations under this Award Agreement or Plan or issues to the Optionee a substitute stock
option award of equivalent value on no less favorable terms for vesting or payment as
provided under this Option, the Option granted to the Optionee by the Company which has not
otherwise vested shall vest immediately upon the Optionee’s termination of employment during
the Severance Period, and the vested Option shall remain exercisable for a period of ninety
(90) days following the Optionee’s termination (or such longer period as set forth in this
Award Agreement or Plan) but not later than the expiration of the stated option term. If the
Optionee’s employment is terminated during the Severance Period for Cause, the Option shall
terminate pursuant to Section 4(a).
If the Optionee is not a participant in the Severance Plan, regardless of
whether or not the Optionee’s employment is terminated during the Severance Period, if upon
a Change in Control, the successor to Xxxxxx Tire & Rubber Company has not assumed
(expressly or impliedly by operation of law) the Company’s obligations under this Award
Agreement or Plan or issued to the Optionee a
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substitute stock option award of equivalent
value on no less favorable terms for vesting or payment as
provided under this Option so replaced, the Option granted to the Optionee by the
Company which has not otherwise vested shall vest immediately upon the consummation of the
Change in Control, and such vested Option, to the extent that the Common Shares underlying
the Option remain outstanding, shall remain exercisable for a period of ninety (90) days
following the Optionee’s termination (or such longer period as may be set forth in this
Award Agreement or Plan), but not later than the expiration of the stated option term. In
the event the Common Shares underlying the Option do not remain outstanding, on the date
such Common Shares cease to be outstanding, the Company shall pay to the Optionee with
respect to the Option a lump-sum cash payment equal to the excess of the per-share
consideration received by holders of the Common Shares upon the Change in Control over the
exercise price of the Option.
Exercise and Payment.
The Option may be exercised in whole or in part, subject to the vesting requirements and
limitations on exercise set forth in Section 2 above. Exercise shall be accomplished by delivery
to the Company of timely written notice of election to exercise, delivered to the principal office
of the Company and addressed to the attention of the Secretary of Xxxxxx Tire & Rubber Company or
his designate, accompanied by payment of the exercise price for the Common Shares with respect to
which the Option is exercised, or to the extent permitted by law, by the presentation of such
documentation from a stock broker acting on behalf of the Optionee as is satisfactory to the
Company and is in accordance with its procedural requirements to permit a “cashless” exercise of
the Option.
The exercise price shall be payable (i) in cash or by check or by wire transfer of immediately
available funds, as acceptable to the Company, (ii) by actual or constructive transfer to the
Company of nonforfeitable, unrestricted Common Shares; or (iii) by a combination of such methods of
payment. The requirement of payment in cash shall be deemed satisfied if the Optionee shall have
made arrangements satisfactory to the Company in accordance with its procedural requirements to
permit a cashless exercise as provided in Section 3(a) above.
Termination. Notwithstanding Section 2 above, the Option shall terminate on the earliest of
the following dates:
The date on which the Optionee ceases to be an employee of the Company, if the Optionee’s
employment with the Company is terminated for Cause;
Thirty (30) days after the Optionee ceases to be an employee of the Company by reason of a
voluntary quit (in which case, the Option is exercisable during such 30 day period only to the
extent the Option was exercisable on the date of termination of employment);
Ninety (90) days after the Optionee ceases to be an employee of the Company by reason of an
involuntary termination by the Company, other than for Cause (in which case, the Option is
exercisable during such 90 day period only to the extent the Option was exercisable on the date of
termination of employment);
One (1) year after the death of the Optionee if the Optionee dies while an employee of the
Company (in which case the Option becomes immediately exercisable in full by the designated
beneficiary of the Optionee, or if there is no designated beneficiary or such beneficiary does not
survive the Optionee, by the estate of the Optionee. The Optionee shall have the right to designate
a beneficiary for the purposes of exercising the Option at any time by furnishing the Company with
a beneficiary designation form. The Optionee may change or revoke a beneficiary designation at any
time by furnishing a revised beneficiary designation form to the Company.);
One (1) year after the Optionee’s employment terminates due to the Optionee’s Disability while
an employee of the Company (in which case the Option becomes immediately exercisable in full);
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Five (5) years after Optionee’s employment terminates other than for Cause by reason of the
Optionee’s Retirement (in which case the Option shall remain exercisable pursuant to Section 2(a)
during such five (5) year period); and
Ten (10) years from the Date of Grant which is the close of business on ___________.
Option Nontransferable. The Option is not transferable by the Optionee except by will or the
laws of descent and distribution. During the lifetime of the Optionee, the Option may be exercised
only by the Optionee.
Compliance with Laws and Regulations. The Option and the obligation of the Company to sell
and deliver Common Shares shall be subject to all applicable governmental laws, rules and
regulations. Xxxxxx Tire & Rubber Company shall not be required to issue or deliver any
certificates for Common Shares prior to (a) the listing of such Common Shares on any stock exchange
on which the Common Shares may then be listed and (b) the completion of any registration or
qualification of such Common Shares under any governmental law, or any rule or regulation of any
government body or stock exchange which the Company shall determine to be necessary or desirable.
No Dividend Equivalents. The Optionee shall not be entitled to dividend equivalents.
Taxes and Withholding. Upon exercise of an Option, the Company will notify the Optionee of
the amount of tax (if any) which must be withheld by the Company under all applicable U.S. or
foreign federal, state and local tax laws. If the Optionee is subject to any U.S. or foreign
federal, state or local tax withholding requirements at the time of the exercise, the Optionee
agrees to make arrangements with the Company to (a) remit the required amount to the Company, (b)
authorize the Company to withhold a portion of the Common Shares otherwise issuable upon the
exercise with a value equal to such tax, however, in no event shall the Company accept Common
Shares for payment of taxes in excess of the minimum amount of taxes required to be withheld, (c)
authorize the deduction of such amounts from the Optionee’s other payments from the Company, or (d)
otherwise satisfy the applicable tax withholding requirement in a manner satisfactory to the
Company.
17. No Right to Continuation of Employment. Neither this Award Agreement nor any action taken
hereunder shall be construed as giving the Optionee any right to continued employment with the
Company and neither this Award Agreement nor any action taken hereunder shall be construed as
entitling the Company to the services of the Optionee for any period of time. For purposes of this
Award Agreement, the continuous employment of the Optionee with the Company shall not be deemed
interrupted, and the Optionee shall not be deemed to have ceased to be employed by the Company, by
reason of (a) the transfer of his employment among the Company or (b) a leave of absence approved
by the Committee in its sole discretion. The Option is a voluntary, discretionary Award being made
on a one-time basis and it does not constitute a commitment to make any future Awards. This Option
and any payments made hereunder will not be considered salary or other compensation for purposes of
any severance pay or similar allowance, except as otherwise required by law.
18. Data Privacy. Information about the Optionee and the Optionee’s participation in the Plan
may be collected, recorded, and held, used and disclosed for any purpose related to the
administration of the Plan. The Optionee understands that such processing of this information may
need to be carried out by the Company and by third-party administrators whether such persons are
located within the Optionee’s country or elsewhere, including the United States of America. The
Optionee consents to the processing of information relating to the Optionee and the Optionee’s
participation in the Plan in any one or more of the ways referred to above.
19. No Rights as Stockholder. The Optionee shall have no rights as a stockholder with respect
to any Common Shares subject to the Option prior to the date of issuance to the Optionee of a
certificate or certificates for such Common Shares.
20. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Award
Agreement to the extent that the amendment is applicable hereto; provided, however, that no
amendment shall adversely affect the rights of the Optionee hereunder without the Optionee’s
consent.
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21. Severability. In the event that one or more of the provisions of this Award Agreement
shall be invalidated for any reason by a court of competent jurisdiction, any provision so
invalidated shall be deemed to be separable from the other provisions hereof, and the remaining
provisions hereof shall continue to be valid and fully enforceable.
22. Binding Effect. Optionee acknowledges the receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof. The terms of the Plan as it presently exists, and as
it may be amended, are deemed incorporated herein by reference, and any conflict between the terms
of the Award Agreement and the provisions of the Plan shall be resolved by the Committee, whose
determination shall be final and binding on all parties. In general, and except as otherwise
determined by the Committee, the provisions of the Plan shall be deemed to supersede the provisions
of this Award Agreement to the extent of any conflict between the Plan and this Award Agreement. In
addition, notwithstanding the terms set forth herein, the Committee shall have the right to grant
Options upon such terms as it deems appropriate, so long as such provisions are within the terms of
the Plan.
23. Notices. Any notice pursuant to this Award Agreement to the Company shall be addressed to
it at its office at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxx 00000, Attention: Secretary of Xxxxxx Tire &
Rubber Company. Any notice pursuant to the Award Agreement to Optionee shall be addressed to the
Optionee at the address as set forth below. Either party shall have the right to designate at any
time hereafter in writing a different address.
24. Governing Law. This Award Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio and shall in all respects be interpreted, enforced and governed under
the internal and domestic laws of such state. Any claims or legal actions by one party against the
other arising out of the relationship between the parties contemplated herein (whether or not
arising under this Award Agreement) shall be governed by the laws of the State of Ohio.
25. Option Subject to the Company’s Clawback Policy. Notwithstanding anything in this Award
Agreement to the contrary, the Option shall be subject to the Company’s clawback policy, as it may
be in effect from time to time, including, without limitation, the provisions of such clawback
policy required by Section 10D of the Exchange Act and any applicable rules or regulations issued
by the U.S. Securities and Exchange Commission or any national securities exchange or national
securities association on which the Common Shares may be traded.
26. Defined Terms.
For the purposes of this Award Agreement:
“Affiliated Employer” means any corporation, partnership, limited liability company, joint
venture, unincorporated association or other entity in which Xxxxxx Tire & Rubber Company has a
direct or indirect ownership or other equity interest.
“Cause” means that prior to any termination of employment, the Optionee shall have committed:
any act or omission constituting a material breach by the Optionee of any of his
significant obligations to or agreements with the Company or the continued failure or
refusal of the Optionee to adequately perform the duties reasonably required by the Company
which, in each case, is materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company, after notification by
the Board of such breach, failure or refusal and failure of the Optionee to correct such
breach, failure or refusal within thirty (30) days of such notification (other than by
reason of the incapacity of the Optionee due to physical or mental illness); or
any other willful act or omission which is materially injurious to the financial
condition or business reputation of, or is otherwise materially injurious to the Company,
and failure of the Optionee
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to correct such act or omission within thirty (30) days after
notification by the Board of any such act or omission (other than by reason of the
incapacity of the Optionee due to physical or mental illness); or
the Optionee is found guilty of, or pleads guilty or nolo contendere to, a felony or
any criminal act involving fraud, embezzlement, or theft.
For purposes of this Award Agreement, no act, or failure to act, on the Optionee’s part shall
be deemed “willful” if done, or omitted to be done, by the Optionee in good faith and with a
reasonable belief that the Optionee’s action or omission was in the best interest of the Company.
Any notification to be given by the Board in accordance with Section 18(a)(i) or 18(a)(ii) shall be
in writing and shall specifically identify the breach, failure, refusal, act, omission or injury to
which the notification relates and, in the case of Section 18(a)(i) or Section 18(a)(ii) shall
describe the injury to the Company, and such notification must be given within twelve (12) months
of the Board becoming aware of the breach, failure, refusal, act, omission or injury identified in
the notification. Failure to notify the Optionee within any such twelve (12) month period shall be
deemed to be a waiver by the Board of any such breach, failure, refusal, act or omission by the
Optionee and any such breach, failure, refusal, act or omission by the Optionee shall not then be
determined to be a breach of this Award Agreement. For the avoidance of doubt and for the purpose
of determining Cause, the exercise of business judgment by the Optionee shall not be determined to
be Cause, even if such business judgment materially injures the financial condition or business
reputation of, or is otherwise materially injurious to, the Company, unless such business judgment
by the Optionee was not made in good faith, or constitutes willful or wanton misconduct, or was an
intentional violation of state or federal law.
“Change in Control” means the occurrence of any of the following events:
Xxxxxx Tire & Rubber Company merges into itself, or is merged or consolidated with,
another entity and as a result of such merger or consolidation less than 51% of the voting
power of the then-outstanding voting securities of the surviving or resulting entity
immediately after such transaction are directly or indirectly beneficially owned in the
aggregate by the former stockholders of Xxxxxx Tire & Rubber Company immediately prior to
such transaction;
all or substantially all the assets accounted for on the consolidated balance sheet of
Xxxxxx Tire & Rubber Company are sold or transferred to one or more entities or persons, and
as a result of such sale or transfer less than 51% of the voting power of the
then-outstanding voting securities of such entity or person immediately after such sale or
transfer is directly or indirectly beneficially held in the aggregate by the stockholders of
Xxxxxx Tire & Rubber Company immediately prior to such transaction or series of
transactions;
a person, within the meaning of Section 3(a)(9) or 13(d)(3) (as in effect on the
effective date of the Severance Plan) of the Securities Exchange Act of 1934, (the “Exchange
Act”) (a “Person”) becomes the beneficial owner (as defined in Rule 13d-3 of the Securities
and Exchange Commission pursuant to the Exchange Act) (a “Beneficial Owner”) of 35% or more
of the voting power of the then-outstanding voting securities of Xxxxxx Tire & Rubber
Company; provided, however, that the foregoing does not apply to any such acquisition that
is made by (w) any Affiliated Employer; (x) any employee benefit plan of Xxxxxx Tire &
Rubber Company or any Affiliated Employer; or (y) any person or group of which employees of
Xxxxxx Tire & Rubber Company or of any Affiliated Employer control a greater than 25%
interest unless the Board determines that such person or group is making a “hostile
acquisition;” or (z) any person or group that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, the Optionee;
or
a majority of the members of the Board are not Continuing Directors, where a
“Continuing Director” is any member of the Board who (x) was a member of the Board on the
effective date of the Severance Plan or (y) was nominated for election or elected to such
Board with the affirmative vote of a majority of the Continuing Directors who were members
of such Board at the time of such nomination or election, provided that any director
appointed or elected to the Board to avoid or settle a
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threatened or actual proxy contest
(including but not limited to a consent solicitation) shall in no event be deemed to be a
Continuing Director.
“Disability” means the Optionee becomes disabled and qualifies, or would have qualified, to
receive disability benefits pursuant to the Company’s long-term disability plan in effect, provided
the Optionee is eligible to participate in such long-term disability plan (regardless of whether or
not the Optionee has elected to participate in such long-term disability plan).
“Retirement” means termination of employment with the Company after the sum of the Optionee’s
years of continuous employment with the Company and the Optionee’s age equal at least 75 years.
“Severance Period” means the period of time commencing on the date of the first occurrence of
a Change in Control and continuing until the earlier of (i) the second anniversary of the
occurrence of the Change in Control; (ii) the Optionee’s death; or (iii) the date the Optionee’s
employment is terminated due to Disability.
Capitalized terms that are used but not defined herein are as defined in the Plan.
The undersigned Optionee hereby acknowledges receipt of this Award Agreement and accepts the
Option granted thereunder, subject to the terms and conditions of the Plan and the terms and
conditions hereinabove set forth.
Date: |
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| [OPTIONEE NAME] | ||||
| Signature | ||||
| Social Security No./Tax Identification No. | ||||
| Home Address | ||||
| City State Zip |
This undersigned officer executes this Award Agreement on behalf of Xxxxxx Tire & Rubber
Company.
| XXXXXX TIRE & RUBBER COMPANY |
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| By: | ||||
| [Name] | ||||
| [Title] | ||||
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