EXHIBIT 10(i)
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (the "Option Agreement"),
made as of this 1st day of April, 1997, by and between Xxxxxxx X. Xxxxx
(the "Participant"), and ISITOP, Inc. (the "Company"):
W I T N E S S E T H:
WHEREAS, the Participant is a key management employee of the Company,
its parent or any subsidiary of the Company, and it is important to the
Company that the Participant be encouraged to remain in the employ of the
Company, its parent or any subsidiary of the Company; and
WHEREAS, in recognition of such facts, the Company desires to provide
to the Participant an opportunity to purchase shares of the common stock of
the Company, as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for good and valuable consideration, the Participant and the
Company hereby agree as follows:
1. GRANT OF STOCK OPTION. The Company hereby grants to the
Participant a stock option (the "Stock Option") to purchase all or any part
of an aggregate of one thousand eight hundred seventy-five (1,875) shares
of its Common Stock, par value $1.00, (the "Stock") as set forth below,
under and subject to the terms and conditions of this Option Agreement.
The purchase price for each share to be purchased hereunder shall be six
dollars and forty cents ($6.40) (the "Option Price").
2. TIMES OF EXERCISE OF STOCK OPTION. The Participant shall be
eligible to exercise his Stock Option only after the Company has repaid The
Xxxxx Company ("Xxxxx") for all advances made by Xxxxx to the Company
pursuant to the Subscription Agreement attached as Exhibit "B" plus any
accrued interest and Xxxxx'x initial $32,000 investment in the Company (the
"Exercise Event"). In addition, the conditions of Section 8 hereof must be
satisfied before the Participant shall be eligible to exercise his Stock
Options. If the Participant's employment with the Company (or its parent
or of any one or more of the subsidiaries of the Company) remains full-time
and continuous at all times prior to the Exercise Event, then the
Participant shall be entitled, subject to the applicable provisions of this
Option Agreement having been satisfied, to exercise on or after the
Exercise Event, on a cumulative basis, the number of shares of Stock set
forth in the foregoing Section 1.
3. TERM OF STOCK OPTION. Stock Options shall be granted on the
following terms and conditions. Stock Options shall only be granted to key
management employees, directors or key professional employees of the
Company, its parent or any subsidiary of the Company. No Stock Option
shall be exercisable more than ten (10) years from the date of grant.
Subject to such limitations, the Committee shall have the discretion to fix
the period ("Option Period") during which Stock Options may be exercised.
Provided, notwithstanding anything in this Option Agreement to the
contrary, if the employment of the Participant is terminated for "Cause"
prior to the expiration of the Option Period, to the extent any Stock
Options under this Option Agreement have not been previously exercised,
such Stock Options shall automatically and immediately expire as of the
date of such termination of employment, regardless of the extent to which
it would have been otherwise exercisable at such time. For purposes of
this Option Agreement, termination of the Participant's employment by the
Company for Cause shall mean termination for one of the following reasons:
(i) the conviction of the Participant of a felony by a federal or state
court of competent jurisdiction; (ii) an act or acts of dishonesty taken by
the Participant and intended to result in substantial personal enrichment
for the Participant at the expense of the Company; or (iii) the
Participant's willful breach or habitual neglect of the duties which he is
required to perform under the Employment Agreement between the Company and
the Participant.
4. NONTRANSFERABILITY OF STOCK OPTIONS. Except as otherwise herein
provided, any Stock Option granted shall not be transferable otherwise than
by will or the laws of descent and distribution, and the Stock Option may
be exercised only by him. More particularly (but without limiting the
generality of the foregoing), the Stock Option may not be assigned,
transferred (except as provided above), pledged or hypothecated in any way,
shall not be assignable by operation of law and shall not be subject to
execution, attachment, or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Stock Option
contrary to the provisions hereof shall be null and void and without
effect.
5. EMPLOYMENT. So long as the Participant shall continue to be a
full-time and continuous employee of the Company, its parent or one or more
of the subsidiaries of the Company, any Stock Option granted to him shall
not be affected by any change of duties or position. Nothing in this
Option Agreement shall confer upon the Participant any right to continue in
the employ of the Company, its parent or any of the subsidiaries of the
Company, or interfere in any way with the right of the Company, its parent
or any of the subsidiaries of the Company to terminate such Participant's
employment at any time.
6. SPECIAL RULES WITH RESPECT TO STOCK OPTIONS. With respect to
Stock Options granted hereunder, the following special rules shall apply:
(a) ACCELERATION OF OTHERWISE UNEXERCISABLE STOCK OPTIONS ON
RETIREMENT, DEATH, DISABILITY OR OTHER SPECIAL CIRCUMSTANCES. The
Committee, in its sole discretion, may permit (i) a Participant who
terminates employment due to retirement, (ii) a Participant who terminates
employment due to a disability, (iii) the personal representative of a
deceased Participant, or (iv) any other Participant who terminates
employment upon the occurrence of special circumstances (as determined by
the Committee) to purchase all or any part of the shares subject to Stock
Option on the date of the Participant's retirement, disability, death, or
as the Committee otherwise so determines, notwithstanding that all
installments, if any, had not accrued on such date.
(b) NUMBER OF STOCK OPTIONS GRANTED. Participants may be
granted more than one Stock Option. In making any such determination, the
Committee shall obtain the advice and recommendation of the officers of the
Company, its parent, or a subsidiary of the Company which have supervisory
authority over such Participants. Further, the granting of a Stock Option
under this Option Agreement shall not affect any outstanding Stock Option
previously granted to a Participant under the Plan.
(c) ASSUMPTION OF OUTSTANDING STOCK OPTIONS. To the extent
permitted by the applicable provisions of the Code, any successor to the
Company succeeding to, or assigned the business of, the Company as the
result of or in connection with a corporate merger, consolidation,
combination, reorganization or liquidation transaction shall assume Stock
Options outstanding under this Option Agreement or issue new Stock Options
in place of such outstanding Stock Options. Provided, such assumption of
outstanding Stock Options is to be made on a fair and equivalent basis in
accordance with the applicable provisions of Section 424(a) of the Code;
provided, further, in no event will such assumption result in a
modification of any Stock Option as defined in Section 424(h) of the Code.
(d) ADJUSTMENTS UNDER CHANGES IN CAPITALIZATION. The aggregate
number of shares of Stock under Stock Options granted under this Option
Agreement, the Option Price and the total number of shares of Stock which
may be purchased by a Participant on exercise of the Stock Option shall be
appropriately adjusted or modified by the Committee to reflect any
recapitalization, stock split, merger, consolidation, reorganization,
combination, liquidation, stock dividend or similar transaction involving
the Company. Provided, any such adjustment shall be made in such a manner
as to not constitute a modification as defined in Section 424(h) of the
Code.
7. METHOD OF EXERCISING STOCK OPTION.
(a) PROCEDURES FOR EXERCISE. The manner of exercising the Stock
Option herein granted shall be by written notice to the Secretary or
Personnel Manager of the Company prior to the date the Stock Option, or
part thereof, is to be exercised, and in any event prior to the expiration
of the Option Period. Such notice shall state the election to exercise the
Stock Option and the number of shares of Stock with respect to that portion
of the Stock Option being exercised, and shall be signed by the person or
persons so exercising the Stock Option.
(b) FORM OF PAYMENT. Payment for shares of Stock purchased
under this Option Agreement shall be made in full and in cash or by check,
Stock of the Company or a combination thereof, at the time of exercise of
the Stock Options as a condition thereof, and no loan or advance shall be
made by the Company for the purpose of financing, in whole or in part, the
purchase of Stock. In the event that common stock of the Company is
utilized as consideration for the purchase of Stock upon the exercise of a
Stock Option, then, such common stock shall be valued at "fair market
value". For all purposes of effecting the exercise of a Stock Option, the
date on which the Participant gives the notice of exercise to the Company
will be the date he becomes bound contractually to take and pay for the
shares of Stock underlying the Stock Option. The Committee may also adopt
such other procedures which it desires for the payment of the purchase
price upon the exercise of a Stock Option which are not inconsistent with
the applicable provisions of the Code which relate to Stock Options.
(c) PAYMENT OF WITHHOLDING TAXES. No exercise of any Stock
Option shall be permitted nor shall any Stock be issued to the Participant
until the Company receives full payment for the Stock purchased which shall
include any required state and federal withholding taxes. Further, upon
the exercise of any Stock Option, the Participant may direct the Company to
retain from the shares of Stock to be issued upon exercise of the Stock
Option that number of initial shares of Stock (based on fair market value)
that would be necessary to satisfy the requirements for withholding any
amounts of taxes due upon the exercise of such Stock Option.
8. SECURITIES LAW RESTRICTIONS. Stock Options shall be exercised
and Stock issued only upon compliance with the Securities Act of 1933, as
amended (the "Act"), and any other applicable securities law, or pursuant
to an exemption therefrom.
9. SHAREHOLDER RIGHTS. The Participant shall have no rights as a
shareholder with respect to any shares of Stock subject to a Stock Option
prior to the purchase of such shares of Stock by exercise of the Stock
Option.
10. NOTICES. All notices or other communications relating to the
Plan and this Option Agreement as it relates to the Participant shall be in
writing and shall be mailed (U.S. Mail) by the Company to the Participant
at the then current address as maintained by the Company or such other
address as the Participant may advise the Company in writing.
IN WITNESS WHEREOF, the Company has caused this Option Agreement
to be duly executed by its officers thereunto duly authorized, and the
Participant has hereunto set his hand and seal, all on the day and year
first above written.
ISITOP, INC., an Oklahoma corporation
By XXXXX X. XXXX
Xxxxx X. Xxxx, Vice President
"COMPANY"
XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx, an individual
"PARTICIPANT"
