Exhibit 10(a)(7)
Form of 1987 Nonqualified Stock Option Agreements
THIS AGREEMENT, dated as of the 18th day of May, 1995, between Texfi
Industries, Inc., a Delaware corporation (hereinafter called the "Company"), and
__________________ (hereinafter called the "Option Holder").
WITNESSETH:
WHEREAS, the Company has adopted the Texfi Industries, Inc. 1987
Nonqualified Stock Option Plan, a copy of which is annexed hereto as Exhibit A
(hereinafter called the "1987 Nonqualified Plan"); and
WHEREAS, the Company recognizes the value to it of the services of the
Option Holder as a key employee of the Company, and is desirous of furnishing
him with added incentive and inducement to contribute to the success of the
Company; and
WHEREAS, on May 18, 1995, pursuant to the provisions of the Plan, the
Board of Directors of the Company (a) granted to the Option Holder an option in
respect of the number of shares hereinbelow set forth (b) fixed and determined
the exercise prices for the option hereinbelow set forth, and (c) approved the
form of this Agreement;
NOW, THEREFORE, it is agreed by and between the parties hereto as
follows:
1. The Company hereby grants to the Option Holder the right and option
to purchase, on the terms and subject to the conditions set forth in the 1987
Nonqualified Plan and this Agreement, all or any part of an aggregate of
_____________ shares of the Common Stock ($1.00 par value) of the Company at the
purchase prices and exercisable in the amounts and at the times as set forth in
this paragraph 1. The Option Holder must remain in the continuous employ of the
Company for one year from the date of grant of the Option before he can exercise
any part of the Option. Thereafter, the Option may be exercised as follows:
(a) At any time after May 18, 1996 and prior to the termination of
the Option, the Option Holder is entitled to purchase from the
Company up to an aggregate of:
________ shares of the Common Stock at a purchase price of
$2.81 per share; and
________ shares of the Common Stock at a purchase price of
$3.63 per share; and
________ shares of the Common Stock at a purchase price of
$4.43 per share.
(b) At any time after May 18, 1997 and prior to the termination of
the Option, the Option Holder is entitled to purchase from the
Company additional shares up to an aggregate of:
________ shares of the Common Stock at a purchase price of
$2.81 per share; and
________ shares of the Common Stock at a purchase price of
$3.63 per share; and
________ shares of the Common Stock at a purchase price of
$4.43 per share.
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Unless sooner terminated pursuant to the 1987 Nonqualified Plan or this
Agreement, the Option shall terminate, and all rights of the Option Holder shall
expire, on May 17, 2000. In no event may the Option be exercised after May 17,
2000.
2. The Option or any part thereof may, to the extent that it is
exercisable, be exercised by giving written notice of exercise to the Treasurer
of the Company, specifying the option price and number of shares to be purchased
and accompanied by payment of the aggregate option price of the number of shares
purchased. Subject to Sections 8 and 9 hereof, such exercise shall be effective
upon the actual receipt by the Treasurer of the Company of such written notice
and payment. The aggregate option price of all shares purchased shall be paid in
cash, in Common Stock of the Company, or by certified or official check payable
to the order of the Company and, prior to delivery of the shares covered by such
exercise of the Option, the Option Holder shall comply with Section 9 below
relating to withholding for taxes. If payment is made in Common Stock of the
Company, such Common Stock shall be valued on the basis of its fair market value
on the date of exercise. If the shares are then traded on the New York Stock
Exchange, fair market value on the date of exercise shall mean the average
between the highest and lowest trading prices on the last trading day preceding
the date of exercise. Otherwise, fair market value shall be determined by the
Board of Directors of the Company and such determination shall be binding on all
persons. No rights or privileges of a stockholder of the Company in respect of
any of the shares issuable upon the exercise of any part of the Option shall
inure to the Option Holder, or to any other person entitled to exercise the
Option as herein provided, unless and until certificates representing such
shares shall have been issued and delivered.
3. The Option or any part thereof may be exercised during the lifetime
of the Option Holder only by the Option Holder and, except as provided in
Sections 9, 10 and 11 of the 1987 Nonqualified Plan, may be exercised only while
the Option Holder is in the employ of the Company.
4. Upon termination of the Option Holder's employment with the Company
for any reason other than his death, the Option will terminate to the extent
that it has not previously been exercised, except that:
(a) If the Option Holder's employment terminates more than two
years after the date of grant of the Option, other than due to a
termination for Cause (as defined in Section 9 of the 1987 Nonqualified
Plan), the Option Holder may exercise the Option within 30 days after
such termination, but only to the extent that he could have exercised
the Option immediately prior to the termination and in no event after
the Option has expired; and
(b) If the Option Holder retires from service with the consent
of the Company at a time when he is entitled to exercise the Option, he
may exercise the Option within 90 days after such retirement, but only
to the extent that he could have exercised the Option immediately prior
to his retirement and in no event after the Option has expired.
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5. Upon termination of the Option Holder's employment by reason of his
death, the Option may be exercised within 180 days after his death by the estate
or other legal representative of the deceased Option Holder, but only to the
extent that it could have been exercised by the Option Holder immediately prior
to his death and in no event after the Option has expired.
6. Except as provided in Section 5 above, the Option and the rights and
privileges confirmed by this Agreement shall not be transferred, assigned,
pledged or hypothecated in any way, whether by operation of law or otherwise.
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of the Option or any right or privilege confirmed hereby contrary to the
provisions hereof, the Option and the rights and privileges confirmed hereby
shall immediately become null and void.
7. In the event of a stock dividend, split-up or combination of shares,
recapitalization or merger in which the Company is the surviving corporation
(other than a merger in which the stock- holders of the Company exchange their
stock) or other similar capital change, the number of shares of Common Stock of
the Company then subject to the Option and the exercise prices shall be adjusted
in such manner, if any, as the Board of Directors in its discretion shall
determine in order to provide the Option Holder with the substantial equivalent
of the opportunity provided here-under immediately prior to such change. Such
determination by the Board of Directors shall be binding on all persons. In the
event of a consolidation or a merger in which the Company is not the surviving
corporation, or any other merger in which the stock holders of the Company
exchange their stock, or in the event of complete liquidation of the Company, or
in the case of a tender offer accepted by the Board of Directors, the Option
shall thereupon terminate, provided, however, that the Board in its discretion
may, prior to the effective date of any such consolidation, merger, liquidation
or tender offer, either (i) make the Option immediately exercisable (to the
extent it is not already so exercisable) or (ii) arrange to have granted to the
Option Holder a replacement option on such terms as the Board determines to be
fair and reasonable.
8. The Option shall not be exercised in whole or in part and no
certificates representing shares subject to the Option shall be delivered,
(a) if any requisite approval or consent of any governmental
authority having jurisdiction over the exercise of options shall not
have been secured or if the issuance of shares subject to the Option
would violate any Federal, state or local law, regulation or order that
may be applicable; or
(b) so long as the Common Stock of the Company is listed on
the New York Stock Exchange, if the shares subject to the option shall
not have been effectively listed on such Exchange, unless the Company
is advised by its counsel that such listing is no longer required or
applicable.
The Company shall use its best efforts to obtain any such approval or consent
and to effect compliance with any such applicable law, regulation, order or
listing requirement, and the Option
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Holder or any other person entitled to exercise the Option shall take any action
reasonably requested by the Company in such connection.
9. The Option Holder acknowledges that, upon any exercise of the
Option, he will recognize ordinary income for income tax purposes (generally in
an amount equal to the difference between the fair market value of the shares on
the date of exercise and the option price paid therefor) and the Company will be
entitled to a corresponding deduction. Consequently, the Option Holder agrees
that he will pay, or make arrangements to pay, to the Company an amount equal to
any income and other taxes that the Company is required to withhold as a result
of his exercise of the Option. If for any reason such payment or arrangement to
pay is not made, the Company shall be entitled to withhold, from other sums
payable to the Option Holder, the amount of such income and other taxes.
10. Any notice to be given to the Company shall be addressed to the
Treasurer of the Company at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
Xxxxxxxx 00000.
11. Nothing herein contained shall affect the right of the Option
Holder to participate in and receive benefits under and in accordance with the
provisions of any pension, insurance or other benefit plan or program of the
Company in effect from time to time and for which he is eligible.
12. Nothing herein contained shall affect the right of the Company,
subject to the terms of any existing contractual arrangement to the contrary, to
terminate the Option Holder's employment at any time for any reason whatsoever.
13. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors or assigns, but neither this Agreement
nor any rights hereunder shall be assignable or otherwise transferable by
either party except as herein above expressly set forth.
TEXFI INDUSTRIES, INC.
By:
Option Holder
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