Exhibit 10.34
STOCK OPTION AGREEMENT
(Non-Qualified Stock Options)
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THIS AGREEMENT is made to be effective as of February 19, 2001, by and
between X. X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"), and
XXXXXXX XXXXXX (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 1,325 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
$2.65 per share, subject to adjustment as provided in Section 3.
(B) Exercise of the OPTION. Except as provided in Section 4,
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
265 of the COMMON SHARES subject to the OPTION;
(ii) at any time after twenty-four months from the
date of this Agreement as to an additional 265 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 265 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 265 of the COMMON SHARES subject to
the OPTION; and
(iv) at any time after sixty months from the date of
this Agreement as to the remaining 265 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.
(C) OPTION Term. The OPTION shall in no event be exercisable
after the expiration of ten (10) years from the date of this Agreement.
(D) 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 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 or for any other
property (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 a1l outstanding
options granted
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pursuant to the PLAN, then except as provided in Section (4), 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 or other property 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. The number of COMMON SHARES that will
vest on the dates set forth in Section 2(B) shall be appropriately adjusted to
reflect any such change in the outstanding COMMON SHARES. 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 or other property 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. The OPTION will be fully exercisable upon
the occurrence of any of the following events:
(A) Termination of the OPTIONEE'S employment by COMPANY
without "cause," as defined in the employment agreement between COMPANY and
OPTIONEE dated February 19, 2001 (a copy of which is attached to this agreement
- "Employment Agreement"), whether or not the Employment Agreement has expired
by its terms or been superceded when the acceleration event occurs.
(B) Termination of employment by OPTIONEE for "good reason,"
as defined in the Employment Agreement, but only if all of the procedures
described in that employment agreement are followed.
(C) Upon a "change in control" or a "special change in
control," as defined in the Employment Agreement.
(D) 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 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
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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.
(E) 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
discharge of any and all obligations of the COMPANY in respect of the OPTION.
(E) Termination of employment by the OPTIONEE because of death
or Disability, as defined in the Employment Agreement.
(F) 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.
(5) Non-Assignabilitv of OPTION. The OPTION shall not be assignable or
otherwise transferab1e 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.
(6) 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.
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(7) 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 "cause" as defined in the Employment Agreement, 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 other than "cause" as defined in the Employment
Agreement, 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 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
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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 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) Government 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
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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.
(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 (and attachments to it)
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.
[Remainder of page intentionally left blank;
signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
COMPANY:
X. X. XXXXX CORPORATION
By: /s/ Xxxxxx Xxxxx
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Its: Chairman and Chief Executive Officer
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XXXXXXX XXXXXX:
/s/ Xxxxxxx Xxxxxx
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Signature of Optionee
X X X X X X X X X X X X X X X X X X X X
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Street Address
X X X X X X X X X X X X X X X X X X X X
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City State Zip Code
X X X X X X X X X X X X X X X X X X X X
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Telephone Number
X X X X X X X X X X X X X X X X X X X X
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Social Security Number
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STOCK OPTION AGREEMENT
(Incentive Stock Option)
THIS AGREEMENT is made to be effective as of February 19, 2001, by and
between X. X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"), and
Xxxxxxx Xxxxxx (the "OPTIONEE").
WITNESSETH:
WHEREAS, pursuant to the provisions of the X. X. Xxxxx Corporation 1997
Incentive Stock Plan (as amended, 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 100,000 COMMON SHARES of the COMPANY (subject
to adjustment as provided in Section (3)). The OPTION is 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
$2.65 per share, subject to adjustment as provided in Section (3).
(B) Exercise of the OPTION. Except as provided under Section
4, 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, except as otherwise provided
in this Agreement, the OPTION may be exercised as follows:
(i) at any time after such twelve-month period as to
20% of the COMMON SHARES subject to the OPTION (subject to adjustment as
provided in Section (3));
(ii) at any time after twenty-four months from the
date of this Agreement as to an additional 20% of the COMMON SHARES subject to
the OPTION (subject to adjustment as provided in Section (3));
(iii) at any time after thirty-six-months as to an
additional 20% of the COMMON SHARES subject to the OPTION (subject to adjustment
as provided in Section (3));
(iv) at any time after forty-eight months from the
date of this Agreement as to an additional 20% of the COMMON SHARES subject to
the OPTION (subject to adjustment as provided in Section (3)) and
(v) at any time after sixty months from the date of
this Agreement as to the remaining 20% of the COMMON SHARES subject to the
OPTION (subject to adjustment as provided in Section (3)).
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.
(C) OPTION Term. The OPTION shall in no event be exercisable
after the expiration of ten (10) 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 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). Payment for such COMMON SHARES
also 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 certificates
evidencing the COMMON SHARES purchased upon the exercise of the OPTION as
promptly thereafter as is reasonably practicable.
(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 or for any other type
of property (whether by reason of
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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, then except as provided in Section (4) hereof, 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 or other property 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. The number of COMMON SHARES that will vest on
the dates set forth in Section (2)(B) shall be appropriately adjusted to reflect
any such change in the outstanding COMMON SHARES. 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 or other property 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) Notwithstanding the foregoing, any and all adjustments in
connection with the OPTION shall comply in all respects with Section 422 of the
CODE, and the regulations promulgated thereunder.
(C) Notice of any adjustment pursuant to this Section (3)
shall be given by the COMPANY to the OPTIONEE.
(D) 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.
(4) Acceleration of OPTION. The OPTION will be fully exercisable upon
the occurrence of any of the following events:
(A) Termination of the OPTIONEE'S employment by COMPANY
without "cause," as defined in the employment agreement between COMPANY and
OPTIONEE dated February 19, 2001 (a copy of which is attached to this agreement
- "Employment Agreement"), whether or not the Employment Agreement has expired
by its terms or been superceded when the acceleration event occurs.
(B) Termination of employment by OPTIONEE for "good reason,"
as defined in the Employment Agreement, but only if all of the procedures
described in that employment agreement are followed.
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(C) Upon a "change in control" or a "special change in
control," as defined in the Employment Agreement.
(D) 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 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. Upon consummation of the ACCELERATION EVENT, the OPTION, whether or
not accelerated, will terminate and cease to be exercisable, unless assumed by
the successor corporation or parent thereof.
(E) Termination of employment by OPTIONEE because of death or
Disability, as defined in the Employment Agreement.
(5) 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.
(6) 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 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 shown on the New York
Stock Exchange - Composite Transactions on the new grant date.
(7) Exercise After Termination of Employment.
(A) Except as otherwise provided in this Agreement, the OPTION
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
OPTIONEE's death, permanent disability or normal retirement (as defined in
Section (7)(D) below), it must be exercised on or before the earlier of three
(3) months after the date of the termination of employment of the OPTIONEE 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 "cause" as defined in the Employment Agreement,, the OPTION
shall, to the extent not previously exercised, expire immediately upon such
termination.
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(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 "cause" as defined in the Employment Agreement, 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
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" or "normal retirement" of the
OPTIONEE, 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 three (3) months after the termination of employment or the
fixed expiration date of the OPTION, after which period the OPTION shall expire;
provided, however, that if such termination of employment occurs by reason of
"disability" within the meaning of Section 22(e)(3) of the CODE, said
three-month period shall be extended to twelve months. 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 and "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 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. 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.
- 5 -
(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 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 (and attachments to it)
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.
- 6 -
(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.
[Remainder of page intentionally left blank;
signatures on following page.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date first above written.
COMPANY:
X. X. XXXXX CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Its: Chairman and Chief Executive Officer
-------------------------------------
XXXXXXX XXXXXX:
/s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name
X X X X X X X X X X X X X X X X X X X X
-----------------------------------------
Street Address
X X X X X X X X X X X X X X X X X X X X
-----------------------------------------
City, State, Zip Code
X X X X X X X X X X X X X X X X X X X X
-----------------------------------------
Social Security Number
- 8 -
STOCK OPTION AGREEMENT
(Incentive Stock Options)
THIS AGREEMENT is made to be effective as of February 19, 2001, by and
between X. X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"), and
XXXXXXX XXXXXX (the "OPTIONEE").
WITNESSETH:
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 88,675 COMMON SHARES of the COMPANY. The
OPTION is 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
$2.65 per share, being 100% of the closing sale price for the COMMON SHARES of
the COMPANY as shown on the New York Stock Exchange on February 16, 2001,
subject to adjustment as provided in Section 3.
(B) Exercise of the OPTION. Except as provided in Section 4,
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
17,735 of the COMMON SHARES subject to the OPTION;
(ii) at any time after twenty-four months from the
date of this Agreement as to an additional 17,735 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 17, 735 of the COMMON SHARES subject
to the OPTION; and
(iv) at any time after forty-eight months from the
date of this Agreement as to an additional 17,735 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 17,735 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.
(C) OPTION Term. The OPTION shall in no event be exercisable
after the expiration of ten (10) years from the date of this Agreement.
(D) 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 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.
- 2 -
(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, or for any other
property, (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, then except as provided in Section (4)
hereof, 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
or other property 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. The number of COMMON
SHARES that will vest on the dates set forth in Section 2(B) shall be
appropriately adjusted to reflect any such change in the outstanding COMMON
SHARES. 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 or
other property 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) Notwithstanding the foregoing, any and all adjustments in
connection with the OPTION shall comply in all respects with Section 422 of the
CODE, and the regulations promulgated thereunder.
(C) Notice of any adjustment pursuant to this Section 3 shall
be given by the COMPANY to the OPTIONEE.
(4) Acceleration of OPTIONS. The OPTION will be fully exercisable upon
the occurrence of any of the following events:
(A) Termination of the OPTIONEE'S employment by COMPANY
without "cause," as defined in the employment agreement between COMPANY and
OPTIONEE dated February 19, 2001 (a copy of which is attached to this agreement
- "Employment Agreement"), whether or not the Employment Agreement has expired
by its terms or been superceded when the acceleration event occurs.
(B) Termination of employment by OPTIONEE for "good reason,"
as defined in the Employment Agreement, but only if all of the procedures
described in that employment agreement are followed.
- 3 -
(C) Upon a "change in control" or a "special change in
control," as defined in the Employment Agreement.
(D) 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 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 exorcise 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.
(E) Termination of employment by OPTIONEE because of death or
Disability, as defined in the Employment Agreement.
(F) 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.
(5) 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.
(6) 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 at an option price per share in all events not less than 100% of the
closing sale price for the COMMON SNARES of the
- 4 -
COMPANY as shown on the New York Stock Exchange - Composite Transactions on
the new grant date.
(7) 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, it must be
exercised on or before the earlier of three (3) months after the date of the
termination of employment of the OPTIONEE 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 "cause" as defined in
the Employment Agreement, 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 "cause" as defined in the Employment Agreement, 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
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, 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" or "normal retirement" of the
OPTIONEE, the OPTION shall become fully exercisable for a period ending on the
earlier of three (3) months after the termination of employment or the fixed
expiration date of the OPTION; provided, however, that if such termination of
employment occurs by reason of "disability" within the meaning of Section
22(e)(3) of the CODE, said three-month period shall be extended to twelve
months. 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 and "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.
- 5 -
(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 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 the provision enforceable and the
other or others of which would
- 6 -
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 (and attachments to it)
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 successor; and assigns (including successive, as well
as immediate, successors and assigns) of the COMPANY.
[Remainder of page intentionally left blank;
signatures on following page]
- 7 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date first above written.
COMPANY:
X. X. XXXXX CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Its: Chairman and Chief Executive Officer
-------------------------------------
XXXXXXX XXXXXX:
/s/ Xxxxxxx Xxxxxx
-----------------------------------------
Signature of Optionee
X X X X X X X X X X X X X X X X X X X X
-----------------------------------------
Street Address
X X X X X X X X X X X X X X X X X X X X
-----------------------------------------
City State Zip Code
X X X X X X X X X X X X X X X X X X X X
-----------------------------------------
Telephone Number
X X X X X X X X X X X X X X X X X X X X
-----------------------------------------
Social Security Number
- 8 -
