EXHIBIT 10(c)
THE XXXXXX & SESSIONS CO.
FORM OF TWO-YEAR NON-QUALIFIED STOCK OPTION AGREEMENT UNDER THE COMPANY'S
1998 INCENTIVE EQUITY PLAN
This Non-Qualified Stock Option Agreement (the "Agreement")
dated as of Date of Grant by and between The Xxxxxx & Sessions Co., an Ohio
corporation (the "Company"), and OPTIONEE'S NAME AND TITLE of the Company
(hereinafter called the "Optionee").
W I T N E S S E T H:
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WHEREAS, on April 24, 1998 the Company's shareholders approved
the 1998 Incentive Equity Plan (the "Plan"); and
WHEREAS, pursuant to the Plan, the Compensation and
Organization Committee (the "Committee") of the Board of Directors of the
Company is authorized to (i) select which key employees and officers of the
Company will receive grants of stock options under the Plan, (ii) determine the
size of such grants and (iii) determine the terms and conditions applicable to
any such grants pursuant to the Plan; and
WHEREAS, the Committee approved this grant to the Optionee on
the Grant Date.
NOW, THEREFORE, pursuant to the Plan the Company hereby grants
to the Optionee this Non-Qualified Stock Option (this "Option") to purchase
NUMBER OF SHARES (0,000) common shares, without par value ("Common Shares"), of
the Company at a purchase price of DOLLARS AND 000/1000 ($0.00) per share (the
"Option Price"), which purchase price is not less than the mean between the
highest and lowest quoted selling price, regular way, of the Common Shares on
the New York Stock Exchange on the Grant Date. The Company agrees to cause
certificates for any Common Shares purchased hereunder to be delivered to the
Optionee upon payment of the purchase price in full, all subject, however, to
the terms and conditions of the Plan and the terms and conditions hereinafter
set forth. This Option is intended to be a non-qualified stock option and shall
not be treated as an "incentive stock option" within the meaning of that term
under Section 422 of the Code, or any successor provision thereto.
1. DEFINITIONS. Defined terms not otherwise defined herein shall
have the meanings assigned to them in the Plan, unless the context
clearly indicates otherwise. For purposes of this Agreement, the
following term is defined as set forth below:
"Subsidiary" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Company has a direct or
indirect ownership or other equity interest.
2. VESTING OF OPTION. This Option (until terminated or exercised
as hereinafter provided) shall be exercisable (a) only to the extent of
one-half of the Common Shares hereinabove specified on the first
anniversary of the Grant Date if during the ensuing one year period
commencing on the Grant Date and ending on the first anniversary
thereof, the Optionee shall have been in the continuous full-time
employ of the Company or any Subsidiary and (b) to the extent of the
remaining one-half of such Common Shares on the second anniversary of
the Grant Date if the Optionee shall have been in the continuous
full-time employ of the Company or of any Subsidiary during the one
year period commencing on the first anniversary of the Grant Date and
ending on the second anniversary thereof. To the extent then
exercisable, this Option may be exercised in whole or in part from time
to time.
3. ACCELERATION OF OPTION. Notwithstanding the foregoing
paragraph, upon a "Change in Control" as defined in Section 13 of the
Plan and upon termination of employment of the Optionee by reason of
the Optionee's death, disability (as defined in Section 4 of this
Agreement) or retirement (as defined in Section 4 of this Agreement),
this Option shall become immediately exercisable and vested in full.
4. TERMINATION OF OPTION. This Option, to the extent not
exercisable at such time, shall terminate contemporaneously with the
termination of the Optionee's employment with the Company or any
Subsidiary. Notwithstanding any other provision of this Agreement, this
Option, to the extent exercisable upon the date of the termination of
the Optionee's employment with the Company, or any Subsidiary, shall
terminate upon the earliest to occur of the following:
(a) three months following the date of the Optionee's termination
of employment with the Company or any Subsidiary, if such
termination of employment is other than by reason of the
Optionee's death, Disability or Retirement or for Cause;
(b) three years from the date of the Optionee's termination of
employment with the Company or any Subsidiary, if such
termination of employment is by reason of the Optionee's
Retirement or Disability;
(c) one year from the date of the Optionee's termination of
employment with the Company or any Subsidiary, if such
termination of employment is by reason of the Optionee's
death;
(d) one year from the date of Optionee's death within the three
year period following the termination of employment with the
Company or any Subsidiary, if such termination of employment
is by reason of the Optionee's Retirement or Disability, to
the extent such Option has not been previously exercised
following such termination of employment;
(e) contemporaneously with the termination of the Optionee's
employment with the Company or any Subsidiary, if such
termination of employment is for Cause; or
(f) the close of business on EXPIRATION DATE which date is not
later than ten years from the Grant Date.
For the purpose of this Section 4, (i) "Cause" means a felony conviction of the
Optionee or the failure of Optionee to contest prosecution for a felony, or
Optionee's willful misconduct or dishonesty, any of which is directly and
materially harmful to the business or reputation of the Company or any
Subsidiary, (ii) "Disability" means permanent and total disability as determined
under the Company's long term disability program, and (iii) "Retirement" means
retirement from active employment with the Company or any Subsidiary on or after
the normal retirement date specified in the applicable pension plan of such
employer, or retirement, with the consent for purposes of the Plan, of the
Committee at or prior to the time of retirement, from active employment with the
Company or any Subsidiary pursuant to the early retirement provisions of the
applicable pension plan of such employer.
5. TRANSFERABILITY OF OPTION. This Option is not transferable by
the Optionee otherwise than by will or the laws of descent and
distribution, and is exercisable, during the lifetime of the Optionee,
only by the Optionee, or in the event of the Optionee's legal
incapacity, by the Optionees's guardian or legal representative acting
in a fiduciary capacity on behalf of the Optionee under state law and
court supervision, subject to the provisions of Section 4 hereof.
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6. CONTINUITY OF EMPLOYMENT. For purposes of this Agreement, the
continuous employ of the Optionee with the Company or any Subsidiary
shall not be deemed interrupted, and the Optionee shall not be deemed
to have ceased to be an employee of the Company or any Subsidiary, by
reason of the transfer of his employment among the Company and any
Subsidiary, or by reason of a leave of absence approved by the
Committee for illness, military or governmental service, or other
cause.
7. NOTICE AND MANNER OF PAYMENT.
(a) This Option may be exercised by giving written notice
to the Company specifying the number of Common Shares to be
purchased. Such notice shall be accompanied by payment in full
of the purchase price, either by certified or official bank
check, or in full or in part in the form of unrestricted
Common Shares already owned by the Optionee for at least 6
months or Restricted Stock or Deferred Stock subject to an
award under the Plan. If payment of the purchase price is made
in the form of Restricted Stock or Deferred Stock subject to
an award under the Plan, the Common Shares received by the
Optionee upon the exercise of the Option Rights will be
subject to the same risks of forfeiture or restrictions on
transfer as those that applied to the consideration
surrendered by the Optionee except that such risks of
forfeiture and restrictions on transfer will apply only to the
same number of Common Shares received by the Optionee as
applied to the forfeitable or restricted Common Shares
surrendered by the Optionee.
(b) Any notice to the Company provided for herein shall
be in writing to the Company, marked Attention: Corporate
Secretary at The Xxxxxx & Sessions Co., 00000 Xxxxxxx Xxxx
Xxxxx, Xxxxxxxxx, Xxxx 00000, and any notice to the Optionee
shall be addressed to said Optionee at his or her address
currently on file with the Company. Except as otherwise
provided herein, any written notice shall be deemed to be duly
given if and when hand delivered, or five (5) business days
after having been mailed by United States registered or
certified mail, return receipt requested, postage prepaid, or
three (3) business days after having been sent by a nationally
recognized overnight courier service such as Federal Express,
UPS or DHL, addressed as aforesaid. Any party may change the
address to which notices are to be given hereunder by written
notice to the other party as herein specified, except that
notices of changes of address shall be effective only upon
receipt.
8. AMENDMENT, INTERPRETATION AND ADMINISTRATION OF THE PLAN. The
Committee shall have authority to interpret the provisions of this
Agreement and the Plan, to adopt, alter and repeal such administrative
rules, guidelines, and practices governing the Plan as it shall, from
time to time, deem advisable, and to otherwise supervise the
administration of the Plan. All decisions made in good faith by the
Committee pursuant to the provisions hereof shall be made in the
Committee's sole discretion and shall be final and binding on all
persons.
9. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement
shall confer upon the Optionee any right with respect to continuance of
employment by the Company or a Subsidiary, nor limit or affect in any
manner the right of the Company or a Subsidiary to terminate the
employment or adjust the compensation of the Optionee.
10. TAXES AND WITHHOLDING. If the Company or any Subsidiary shall
be required to withhold any federal, state, local or foreign tax in
connection with the exercise of this Option, and the amounts available
to the Company or such Subsidiary for such withholding are
insufficient, the Optionee shall pay the tax or make provisions that
are satisfactory to the Company or such
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Subsidiary for the payment thereof. The Optionee may elect to satisfy
all or any part of any such withholding obligation by surrendering to
the Company a portion of the Common Shares that are issuable or
transferable to the Optionee upon the exercise of this Option, and the
Common Shares so surrendered by the Optionee shall be credited against
any such withholding obligation at a price per Common Share so
surrendered which shall not be less than the mean between the highest
and lowest quoted selling price, regular way, of the Common Shares on
the New York Stock Exchange on the date of such surrender. The Company
will pay any and all issue and other taxes in the nature thereof which
may be payable by the Company in respect of any issue or delivery upon
a purchase pursuant to this Option.
11. COMPLIANCE WITH LAW. The Company shall make reasonable efforts
to comply with all applicable federal and state securities laws;
PROVIDED, HOWEVER, that notwithstanding any other provision of this
Agreement, this Option shall not be exercisable if the exercise thereof
would result in a violation of any such law.
12. ADJUSTMENTS. The Committee shall make or provide for such
adjustments in the number of Common Shares covered by this Option, in
the Option Price applicable to such Option, and in the kind of shares
covered thereby, as the Committee may determine is equitably required
to prevent dilution or enlargement of the Optionee's rights that
otherwise would result from (a) any stock dividend, stock split,
combination of shares, recapitalization, or other change in the capital
structure of the Company, (b) any merger, consolidation, spin-off,
split-off, spin-out, split-up, reorganization, partial or complete
liquidation, or other distribution of assets or issuance of rights or
warrants to purchase securities, or (c) any other corporate transaction
or event having an effect similar to any of the foregoing. In the event
of any such transaction or event, the Committee may provide in
substitution for this Option such alternative consideration as it may
determine to be equitable in the circumstances and may require in
connection therewith the surrender of this Option.
13. AVAILABLE SHARES. The Company shall at all times until the
expiration of this Option, reserve and keep available, either in its
treasury or out of its authorized but unissued shares of Common Stock,
the full number of Common Shares deliverable upon the exercise of this
Option.
14. RELATION TO OTHER BENEFITS. Any economic or other benefit to
the Optionee under this Agreement shall not be taken into account in
determining any benefits to which the Optionee may be entitled under
any profit-sharing, retirement or other benefit or compensation plan
maintained by the Company or a Subsidiary and shall not affect the
amount of any life insurance coverage available to any beneficiary
under any life insurance plan covering employees of the Company or a
Subsidiary.
15. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is
applicable hereto; PROVIDED, HOWEVER, that no amendment shall adversely
affect the rights of the Optionee under this Agreement without the
Optionee's consent.
16. RIGHTS AS A STOCKHOLDER. The Optionee shall have none of the
rights of a stockholder with respect to the shares of Common Stock
subject to this Option until such shares are issued to the Optionee
upon exercise of this Option.
17. SEVERABILITY. In the event that one or more of the provisions
of this 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.
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18. RELATION TO PLAN. This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistent provisions
between this Agreement and the Plan, the Plan shall govern. The
Committee acting pursuant to the Plan, as constituted from time to
time, shall, except as expressly provided otherwise herein, have the
right to determine any questions that arise in connection with this
Option or its exercise.
19. SUCCESSORS AND ASSIGNS. Without limiting Section 5 hereof, the
provisions of this Agreement shall inure to the benefit of, and be
binding upon, the successors, administrators, heirs, legal
representatives and assigns of the Optionee, and the successors and
assigns of the Company.
20. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the
State of Ohio, without giving effect to the principles of conflict of
laws thereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed on its behalf by its duly authorized officer as of the day and year
first above written.
THE XXXXXX & SESSIONS CO.
By:
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Xxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
The undersigned Optionee hereby acknowledges receipt of an executed
original of this Agreement and accepts this Option granted thereunder, and the
terms and conditions set forth in this Agreement.
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Optionee's Name
Dated:
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Revised: July 19, 2001
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