EXHIBIT 10.2
DIRECTOR
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement ("Option Agreement") is between
Xxxxxx Corporation, a Delaware corporation (the "Company") and
___________________ (the "Optionee").
W I T N E S S E T H:
WHEREAS, to carry out the purposes of the Xxxxxx Corporation Nonqualified
Stock Option Plan for Non-Employee Directors (the "Plan"), a nonqualified stock
option under the Plan is hereby granted to the Optionee in accordance with this
Option Agreement.
NOW THEREFORE, for and in consideration of these premises it is agreed as
follows:
1. Option. Subject to the terms and conditions contained herein, the
Company hereby irrevocably grants to Optionee the right and option ("Option") to
purchase from the Company _____________________ (_________) shares of the
Company's common stock, $1.00 par value ("Common Stock"), at a price of
$__________ per share.
2. Option Period. The Option herein granted may be exercised by Optionee
in whole or in part at any time during a ten (10) year period (the "Option
Period") beginning on ________________, 1999 (the "Grant Date"), subject to the
limitation that said Option shall not be exercisable for more than a percentage
of the aggregate number of shares offered by this Option determined by the
number of full years occurring since the Grant Date in accordance with the
following schedule:
Number of Percentage of
Full Years Shares Purchasable
------------- ------------------
Less than one 0%
One 25%
Two 50%
Three 75%
Four or more 100%
Notwithstanding anything in this Agreement to the contrary, upon the death of
the Optionee, the Option granted hereunder shall be fully exercisable and the
above schedule shall not apply.
3. Procedure for Exercise. The Option herein granted may be exercised by
written notice by Optionee to the Secretary of the Company setting forth the
number of shares of Common Stock with respect to which the Option is to be
exercised accompanied by payment for the shares to be purchased, and specifying
the address to which the certificate for such shares is to be mailed. The notice
shall be accompanied by (i) cash, cashier's check, bank draft, postal or express
money order payable to the order of the Company, or other immediately available
funds, or (ii) certificates representing shares of Common Stock theretofore
owned by Optionee duly endorsed for transfer to the Company, or (iii) any
combination of the preceding, equal in value to the aggregate exercise price.
The Optionee may initiate a "cashless exercise" as described in the Plan. Notice
may also be delivered by fax or telecopy provided that the exercise price of
such shares is received by the Company via wire transfer on the same day the fax
or telecopy transmission is received by the Company. An option to purchase
shares of Common Stock in accordance with this Plan, shall be deemed to have
been exercised immediately prior to the close of business on the date (i)
written notice of such exercise and (ii) payment in full of the exercise price
for the number of shares for which Options are being exercised, are both
received by the Company and Optionee shall be treated for all purposes as the
record holder of such shares of Common Stock as of such date.
As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to Optionee certificates for the number of
shares with respect to which such Option has been so exercised, issued in
Optionee's name or such other name as Optionee directs; provided, however, that
such delivery shall be deemed effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the United States
mail, addressed to Optionee at the address specified pursuant to this Section 3.
4. Cessation from the Board of Directors. If the Optionee ceases to serve
on the Board of Directors of the Company ("Board") during the Option Period for
any reason (including death), Options which are exercisable by the Optionee
pursuant to Section 2 on the date of such cessation from the Board shall expire
on the earlier of (i) one-hundred and eighty (180) days from the date of the
Optionee's cessation from the Board or (ii) the remaining Option Period
established for the Option pursuant to Section 2. Any Options which are not
exercisable by the Optionee pursuant to Section 2 on the date of the Optionee's
cessation from the Board shall expire on the date of such cessation from the
Board.
5. Transferability. This Option shall not be transferable by Optionee
otherwise than by Optionee's will or by the laws of descent and distribution.
During the lifetime of Optionee, the Option shall be exercisable only by him.
Any heir or legatee of Optionee shall take rights herein granted subject to the
terms and conditions hereof. No such transfer of this Option Agreement to heirs
or legatees of Optionee shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of such
evidence as the Board may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and
conditions hereof.
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6. No Rights as Stockholder. Optionee shall have no rights as a
stockholder with respect to any shares of Common Stock covered by this Option
Agreement until the Option is exercised by written notice and accompanied by
payment as provided in Section 3 above. Until such time, Optionee shall not be
entitled to dividends attributable to such shares or to vote such shares at
meetings of the stockholders of the Company. Except as provided in Section 8
hereof, no adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash or securities or other property) paid or distributions or other
rights granted in respect of any share of Common Stock for which the record date
for such payment, distribution or grant is prior to the date upon which the
Optionee shall have exercised said Option by written notice and payment to the
Company, as provided hereinabove.
7. Corporate Transactions.
a. If the Company is reorganized, merged or consolidated or is
otherwise a party to a plan of exchange with another corporation pursuant to
which reorganization, merger, consolidation or plan of exchange, shareholders of
the Company receive any shares of Common Stock or other securities or if the
Company shall distribute ("Spin Off") securities of another corporation to its
shareholders, there shall be substituted for the shares subject to the
unexercised portion of the Option an appropriate number of shares of (i) each
class of stock or other securities which were distributed to the shareholders of
the Company in respect of such shares in the case of a reorganization, merger,
consolidation or plan of exchange, or (ii) in the case of a Spin Off, the
securities distributed to shareholders of the Company together with shares of
Common Stock, such number of shares or securities to be determined in accordance
with the provisions of Section 425 of the Internal Revenue Code of 1986, as
amended (the "Code") (or other applicable provisions of the Code or regulations
issued thereunder which may from time to time govern the treatment of incentive
stock options in such a transaction); provided, however, that the Option may be
canceled by the Company as of the effective date of (x) a reorganization,
merger, consolidation, plan of exchange or Spin Off or (y) any dissolution or
liquidation of the Company, by giving notice to the Optionee or his personal
representative of its intention to do so and by permitting the purchase for a
period of at least thirty days during the sixty days next preceding such
effective date of all of the shares subject to the Option; and provided further
that in the event of a Spin Off, the Company may, in lieu of substituting
securities or accelerating and canceling the Option as contemplated above, elect
(i) to reduce the purchase price for each share of Common Stock subject to the
Option by an amount equal to the fair market value, as determined in accordance
with the provisions of Section 5(b) of the Plan, of the securities distributed
in respect of each outstanding share of Common Stock in the Spin Off or (ii) to
reduce proportionately the purchase price per share and to increase
proportionately the number of shares of Common Stock subject to the Option in
order to reflect the economic benefits inuring to the shareholders of the
Company as a result of the Spin Off.
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b. The Option shall become fully exercisable upon a Change in Control
of the Company (as defined in the next sentence). "Change in Control" of the
Company shall be conclusively deemed to have occurred if (and only if) any of
the following shall have taken place: (i) a change in control is reported by the
Company in response to Item 1 of Form 8-K (or any successor item of Form 8-K or
any similar item of any other report required to be filed by the Company under
the Securities Exchange Act of 1934, as amended ("Exchange Act")); (ii) any
"person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
forty percent or more of the combined voting power of the Company's then
outstanding securities; or (iii) following the election or removal of directors,
a majority of the Board consists of individuals who were not members of the
Board two years before such election or removal, unless the election of each
director who was not a director at the beginning of such two-year period has
been approved in advance by directors representing at least a majority of the
directors then in office who were directors at the beginning of the two-year
period.
c. Except as hereinbefore expressly provided, the issue by the
Company of shares of stock of any class, or securities convertible into or
exchangeable for shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into or exchangeable for shares of stock of any class
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Common Stock subject to the Option granted
hereunder.
8. Changes in Capital Structure. The existence of outstanding Options
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
Common Stock or subscription rights thereto, or any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceedings, whether of a similar character or otherwise.
If the outstanding shares of Common Stock of the Company shall at any time be
changed or exchanged by a subdivision or consolidation of shares of Common Stock
or other capital readjustment, a declaration of a stock dividend, stock split,
combination of shares, or recapitalization, the number and kind of shares
subject to the Plan or subject to any Options theretofore granted, and the
Option prices, shall be appropriately and equitably adjusted so as to maintain
the proportionate number of shares without changing the aggregate Option price.
9. Compliance With Securities Laws. Upon the acquisition of any shares
pursuant to the exercise of the Option herein granted, Optionee (or any person
acting under Section 5) will enter into such written representations, warranties
and agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Option Agreement.
10. Compliance With Laws. Notwithstanding any of the other provisions
hereof, Optionee agrees that he will not exercise the Option(s) granted hereby,
and that the Company will not be obligated to issue any shares pursuant to this
Option Agreement, if the exercise of the Option(s) or the issuance of such
shares of Common Stock would constitute a violation by the Optionee or by the
Company of any provision of any law or regulation of any governmental authority.
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11. Withholding of Tax. To the extent that the exercise of this Option or
the disposition of shares of Common Stock acquired by exercise of this Option
results in compensation income to the Optionee for federal or state income tax
purposes, the Optionee shall pay to the Company at the time of such exercise or
disposition (or such other time as the law permits if the Optionee is subject to
Section 16(b) of the Exchange Act) such amount of money as the Company may
require to meet its obligation under applicable tax laws or regulations; and, if
the Optionee fails to do so, the Company is authorized to withhold from any cash
remuneration then or thereafter payable to the Optionee, any tax required to be
withheld by reason of such resulting compensation income or Company may
otherwise refuse to issue or transfer any shares otherwise required to be issued
or transferred pursuant to the terms hereof. Payment of the withholding tax by
the Optionee shall be made in accordance with Section 10 of the Plan.
12. Resolution of Disputes. As a condition of the granting of the Option
hereby, the Optionee and his heirs and successors agree that any dispute or
disagreement which may arise hereunder shall be determined by the Board in its
sole discretion and judgment, and that any such determination and any
interpretation by the Board of the terms of this Option Agreement shall be final
and shall be binding and conclusive, for all purposes, upon the Company,
Optionee, his heirs and personal representatives.
13. Legends on Certificate. The certificates representing the shares of
Common Stock purchased by exercise of an Option will be stamped or otherwise
imprinted with legends in such form as the Company or its counsel may require
with respect to any applicable restrictions on sale or transfer and the stock
transfer records of the Company will reflect stop-transfer instructions with
respect to such shares.
14. Compliance With. Every notice hereunder shall be in writing and shall
be given by registered or certified mail. All notices of the exercise of any
Option hereunder shall be directed to Xxxxxx Corporation, 1500 Xxxxxx Building,
0000 Xxxxxx, Xxxxxxx, Xxxxx 00000-0000, Attention: Secretary. Any notice given
by the Company to Optionee directed to him at his address on file with the
Company shall be effective to bind him and any other person who shall acquire
rights hereunder. The Company shall be under no obligation whatsoever to advise
Optionee of the existence, maturity or termination of any of Optionee's rights
hereunder and Optionee shall be deemed to have familiarized himself with all
matters contained herein and in the Plan which may affect any of Optionee's
rights or privileges hereunder.
15. Construction and Interpretation. Whenever the term "Optionee" is used
herein under circumstances applicable to any other person or persons to whom
this award, in accordance with the provisions of Section 5 hereof, may be
transferred, the word "Optionee" shall be deemed to include such person or
persons. References to the masculine gender herein also include the feminine
gender for all purposes.
16. Agreement Subject to Plan. This Option Agreement is subject to the
Plan. The terms and provisions of the Plan (including any subsequent amendments
thereto) are hereby incorporated herein by reference thereto. In the event of a
conflict between any term or provision contained herein and a term or provision
of the Plan, the applicable terms and provisions of the Plan will govern and
prevail. All definitions of words and terms contained in the Plan shall be
applicable to this Option Agreement.
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17. Binding Effect. This Option Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under Optionee.
IN WITNESS WHEREOF, this Option Agreement has been executed as of the ___
day of ________________, ____.
ATTEST: XXXXXX CORPORATION
______________________________ By:_________________________________
OPTIONEE
____________________________________
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