EXHIBIT 4(b)
USA DETERGENTS, INC.
STOCK OPTION AGREEMENT
AGREEMENT made as of ____________________, by and between USA
Detergents, Inc., a Delaware corporation (the "Company") and __________________
(the "Optionee").
W I T N E S S E T H
WHEREAS, pursuant to the USA Detergents, Inc. 1995 Stock
Option Plan (the "Plan"), the Company desires to grant to the Optionee and the
Optionee desires to accept an option to purchase shares of the Company's common
stock, $.01 par value (the "Common Stock"), upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant. The Company hereby grants to the Optionee an option
to purchase __________ shares of Common Stock, at a purchase price per share of
$___ (the "Option"). This Option is intended to be treated as an option which
does qualify as an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").
2. Restrictions on Exercisability. Except as specifically
provided otherwise herein, the Option will become exercisable in accordance
with the following schedule based upon the period of the Optionee's continuous
employment or service with the Company or a subsidiary thereof following the
date hereof:
Period
of Continuous Incremental Cumulative
Employment/ Percentage of Percentage of
Service from the Option Option
Date of this Agreement Exercisable Exercisable
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Less than 1 year 0% 0%
1 year 25% 25%
2 years 25% 50%
3 or more years 50% 100%
No shares of Common Stock may be purchased hereunder unless the Optionee shall
have remained in the continuous employ or service of the Company or a
subsidiary thereof for at least six months from the date hereof. If the
Optionee performs services for the Company or a subsidiary thereof in a
capacity other than as an employee or consultant, then, for purposes hereof,
those services will be deemed to be continuous until they are terminated, and
they will be deemed to be terminated at the time provided therefor in the
consulting or other agreement governing the performance of such services or, if
there is no such agreement, at the time the Company or such subsidiary notifies
the Optionee that it no longer contemplates the use of such services. Unless
sooner terminated, the Option will expire if and to the extent it is not
exercised within ten years from the date hereof.
3. Exercise. The Option may be exercised in whole or in part
as provided above by delivering to the Secretary of the Company (a) a written
notice specifying the number of shares to be purchased, and (b) payment in full
of the exercise price, together with the amount, if any, deemed necessary by
the Company to enable it to satisfy any income tax withholding obligations with
respect to the exercise (unless other arrangements acceptable to the Company
are made for the satisfaction of such withholding obligations). The exercise
price shall be payable in cash or by bank or certified check or such other form
as the Company may (in its sole and absolute discretion) permit. The Company
may (in its sole and absolute discretion) permit all or part of the exercise
price to be paid with previously-owned shares of Common Stock, or by delivery
of a secured obligation therefor.
4. Rights as Stockholder. No shares of Common Stock shall be
sold or delivered hereunder until full payment for such shares has been made
(or, to the extent payable in installments, provided for). The Optionee shall
have no rights as a stockholder with respect to any shares covered by the
Option until a stock certificate for such shares is issued to the Optionee.
Except as otherwise provided herein, no adjustment shall be made for dividends
or distributions of other rights for which the record date is prior to the date
such stock certificate is issued.
5. Nontransferability. The Option is not assignable or
transferable except upon the Optionee's death to a beneficiary designated by
the Optionee or, if no designated beneficiary shall survive the Optionee,
pursuant to the Optionee's will and/or the laws of descent and distribution.
During an Optionee's lifetime, the Option may be exercised only by the Optionee
or the Optionee's guardian or legal representative.
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6. Termination of Service, Disability or Death. If the
Optionee ceases to be employed by or perform services for the Company and any
subsidiary thereof for any reason other than death or disability (as defined
below), then, unless sooner terminated under the terms hereof, the Option will
terminate on the date three months after the date of the Optionee's termination
of employment or service; provided, however, that if the Optionee is an
employee of the Company and the Optionee's employment with the Company is
terminated by the Company for "cause" (as defined below), then the Option will
terminate on the date of such termination of employment. If the Optionee's
employment or service is terminated by reason of the Optionee's death or
disability (or if the Optionee's employment or service is terminated by reason
of disability and the Optionee dies within 12 months after such termination of
employment or service), then, unless sooner terminated under the terms hereof,
the Option will terminate on the date 12 months after the date of such
termination of employment or service (or one year after the later death of a
disabled Optionee). For purposes hereof, the term "disability" means the
inability of Optionee to perform the customary duties of Optionee's employment
or other service for the Company or a subsidiary thereof by reason of a
physical or mental incapacity which is expected to result in death or be of
indefinite duration. For purposes hereof, termination by the Company for
"cause" shall mean: (i) Optionee's refusal to perform, or willful breach or
neglect of the performance of any of his duties or obligations as an employee
of the Company; (ii) Optionee's conviction (which, through lapse of time or
otherwise, is not subject to appeal) of any crime or offense involving money or
other property of the Company or any of its subsidiaries; (iii) Optionee's
performance of any act or his failure to act, for which if Executive were
prosecuted and convicted, a crime or offense involving money or property of the
Company or any of its subsidiaries, or which would constitute a felony in the
jurisdiction involved, would have occurred; (iv) any attempt by Optionee to
improperly secure any personal profit in connection with the business of the
Company or any of its subsidiaries; (v) chronic alcoholism or drug addiction;
or (vi) any breach by Optionee of the terms of any confidentiality or
non-competition provisions applicable to Option by Company policy and/or
pursuant to any agreement between the Company and the Optionee; provided,
however, that if the Optionee is covered by an employment agreement with the
Company which contains a definition of "cause," the definition contained in
such employment agreement shall be used in lieu of the definition contained
herein.
7. Securities Registration Required. Notwithstanding anything
herein to the contrary, the Option may not be exercised (i) unless and until a
registration statement covering the shares of Common Stock issuable upon
exercise of the Option granted hereunder has been filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended, or (ii) if in the opinion of counsel to the Company, such
exercise and/or issuance would result in a violation of federal or state
securities laws.
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8. Change in Control; Capital Changes.
(a) If any event constituting a "Change in Control
of the Company" shall occur, the Option shall, unless sooner terminated under
the terms hereof, immediately become exercisable. A "Change in Control of the
Company" shall be deemed to occur if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (ii) the stockholders of
the Company shall approve any plan or proposal for liquidation or dissolution
of the Company, or (iii) any person (as such term is used in Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of 40% or more of the Company's outstanding Common
Stock other than pursuant to a plan or arrangement entered into by such person
and the Company, or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire Board of
Directors of the Company shall cease for any reason to constitute a majority
thereof unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period.
(b) In the event of any stock split, stock dividend
or similar transaction which increases or decreases the number of outstanding
shares of Common Stock, appropriate adjustment shall be made by the Board of
Directors of the Company to the number and option exercise price per share of
Common Stock which may be purchased under the Option. In the case of a merger,
consolidation or similar transaction which results in a replacement of the
Company's Common Stock and stock of another corporation but does not constitute
Change in Control of the Company, the Company will make a reasonable effort,
but shall not be required, to replace the Option granted hereunder with
comparable options to purchase the stock of such other corporation, or will
provide for immediate maturity of the Option, with the Option being terminated
if not exercised within the time period specified by the Board of Directors of
the Company.
(c) In the event of any adjustment in the number of
shares covered by any option pursuant to the provisions hereof, any fractional
shares resulting from such adjustment will be disregarded and each such option
will cover only the number of full shares resulting from the adjustment.
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(d) All adjustments under this Section 8 shall be
made by the Board of Directors of the Company, and its determination as to what
adjustments shall be made, and the extent thereof, shall be final, binding and
conclusive.
9. No Employment Rights. Nothing in this Agreement shall give
the Optionee any right to continue in the employ or service of the Company or a
subsidiary thereof, or interfere in any way with the right of the Company or a
subsidiary thereof to terminate the employment or service of the Optionee.
10. Provisions of Plan. The provisions of the Plan shall
govern if and to the extent that there are inconsistencies between those
provisions and the provisions hereof. The Optionee acknowledges receipt of a
copy of the Plan prior to the execution of this Agreement.
11. Administration. The committee appointed by the Board of
Directors of the Company to administer the Plan will have full power and
authority to interpret and apply the provisions of this Agreement and act on
behalf of the Company in connection with this Agreement, and the decision of
said committee as to any matter arising under this Agreement shall be binding
and conclusive as to all persons.
12. Miscellaneous.
(a) This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
(b) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware. This Agreement,
together with the Plan, constitutes the entire agreement between the parties
with respect to the subject matter hereof, and controls and supersedes any
prior understandings, agreements or representations by or between the parties,
written or oral between the parties with respect to its subject matter
including, without limitation, any correspondence from the Company to the
Optionee regarding options granted or approved for grant to the Optionee. This
Agreement may not be modified except by written instrument executed by the
parties.
IN WITNESS WHEREOF, this Agreement has been executed as of
the date first above written.
USA DETERGENTS, INC.
By:
Title:
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