EXHIBIT 10.41
NON-QUALIFIED STOCK OPTION AGREEMENT
To: Xxxxx Xxxxxxxxx ("Employee")
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Name
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Address
Date of Grant: October 14, 1999
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Exercise Price: $11 1/8 per share
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Employee is hereby granted the option described below, effective as of
the above date of grant, to purchase shares of common stock, $.01 par value per
share ("Stock"), of Xxxx.xxx, Inc. (the "Company") at the exercise price shown
above. Capitalized terms used herein without definition have the meanings
assigned in the employment agreement dated as of the above date of grant between
the Company, Xxxx.xxx Holding Corp. and Employee (the "Employment Agreement").
1. Employee is hereby granted options to purchase 150,000 shares of
Stock (the "Option"). The Option shall have an exercise price equal to eleven
dollars and 1/8 ($11.125) per share (the "Exercise Price") and, subject to
Section 2, below, shall vest with respect to the indicated number of shares of
Stock according to the following schedule:
(a) fifty thousand (50,000) shares of Stock shall vest and
become exercisable upon the first anniversary of the date of grant.
(b) fifty thousand (50,000) shares of Stock shall vest and
become exercisable upon the second anniversary of the date of grant.
(c) fifty thousand (50,000) shares of Stock shall vest and
become exercisable upon the third anniversary of the date of grant.
(d) Notwithstanding the foregoing, (i) any portion of the
Option that was not previously vested and exercisable shall become fully vested
and exercisable on the effective date of any termination of the employment of
Employee under the Employment Agreement by the Company without Cause (as defined
in Section 6.3 of the Employment Agreement) or by Employee for Good Reason (as
defined in Section 6.4(b) of the Employment Agreement) and (ii) the Board of
Directors of the Company (the "Board") or its designees may accelerate or waive
the aforesaid scheduled vesting dates with respect to any or all of the shares
of Stock covered by the Option.
2. In the event of a "Change in Control" (as hereafter defined) of the
Company, any portion of the Option that was not previously vested and
exercisable on the effective date of the Change in Control, shall become fully
vested and exercisable on such effective date of such Change in Control. A
"Change in Control" shall be deemed to have occurred upon the happening of any
of the following events:
(a) any Person (as defined in Section 3(a)(9) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than
the Company, becomes the Beneficial Owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company or any
Significant Subsidiary (as defined below) representing fifty percent (50%) or
more of the combined voting power of the Company's, or such Significant
Subsidiary's, as the case may be, then outstanding securities; provided, that a
Person shall be deemed to be the Beneficial Owner of all shares that any such
Person has the right to acquire pursuant to any agreement or arrangement or upon
exercise of conversion rights, warrants, options or otherwise, without regard to
the sixty (60)-day period referred to in Rule 13d-3 under the Exchange Act);
(b) during any period of two years, individuals who at the
beginning of such period constitute the Board and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clauses (a), (b) or (d) of this
Section 2) whose election by the Board or nomination for election by
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved, but excluding for this purpose any such new director whose initial
assumption of office occurs as a result of either an actual or threatened
election contest or other actual or threatened solicitation of proxies or
consents by or on behalf of an individual, corporation, partnership, group,
association or other entity other than the Board, cease for any reason to
constitute at least a majority of the Board of either or the Company or a
Significant Subsidiary;
(c) the consummation of a merger or consolidation of the
Company or any subsidiary of the Company owning directly or indirectly all or
substantially all of the consolidated assets of the Company ( a "Significant
Subsidiary") with any other entity, other than a merger or consolidation which
would result in the voting securities of the Company or a Significant Subsidiary
outstanding immediately prior thereto continuing to represent more than fifty
percent (50%) of the combined voting power of the surviving or resulting entity
outstanding immediately after such merger or consolidation;
(d) the shareholders of the Company approve a plan or
agreement for the sale or disposition of fifty percent (50%) or more of the
consolidated assets of the Company in which case the Board shall determine the
effective date of the Change of Control resulting therefrom;
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(e) any other event occurs which the Board determines, in its
discretion, would materially alter, the structure of the Company or its
ownership; and
3. Employee may exercise the Option by giving written notice to the
Secretary of the Company on forms supplied by the Company at its then principal
executive office, accompanied by payment of the Exercise Price for the total
number of shares specified to be purchased by Employee. The payment may be in
any of the following forms: (a) cash, which may be evidenced by a check and
includes cash received from a so-called "cashless exercise" of the Option; (b)
certificates representing shares of Stock, which will be valued at the fair
market value (as defined in the Employment Agreement) per share of the Stock on
the date of the Option exercise in question, accompanied by an assignment of
such Stock to the Company; or (c) any combination of cash and Stock valued as
provided in clause (b), immediately above. Any assignment of Stock shall be in a
form and substance satisfactory to the Secretary of the Company, including
guarantees of signature(s) and payment of all transfer taxes, if the Secretary
of the Company deems such guarantees necessary or desirable.
4. The Option will, to the extent not previously exercised by
Employee, expire on October 13, 2009.
5. In the event of any change in the outstanding shares of the Stock
by reason of a stock dividend, stock split, consolidation, transfer of assets,
reorganization, conversion or what the Board deems in its reasonable discretion
to be similar circumstances, the number and kind of shares of Stock subject to
the Option and the Exercise Price shall be appropriately adjusted in a manner to
be determined in the reasonable discretion of the Board.
6. The Option is not transferable otherwise than by will or the laws
of descent and distribution, and is exercisable during Employee's lifetime only
by Employee, including, for this purpose, Employee's legal guardian or custodian
in the event of the disability of Employee. Until the Exercise Price has been
paid in full pursuant to due exercise of this Option and certificate(s)
representing Employee's ownership of the purchased shares are issued to
Employee, Employee does not have any rights as a shareholder of the Company. The
Company reserves the right not to deliver to Employee the certificate(s)
representing shares purchased by virtue of the exercise of the Option during any
period of time in which the Company deems, based on the written opinion of its
counsel, that such delivery would violate a federal, state, local or securities
exchange rule, regulation or law.
7. Notwithstanding anything to the contrary contained herein, the
Option is not exercisable:
(a) During any period of time in which the Company deems,
based on the written opinion of its counsel, that the exercisability of the
Option, the offer to sell the shares underlying the Option, or the sale thereof,
would violate a federal, state, local or securities exchange rule, regulation or
law; or
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(b) Until Employee has paid or made suitable arrangements to
pay all federal, state and local income tax withholding required to be withheld
by the Company in connection with the Option exercise.
8. The following two paragraphs shall be applicable if, on a date of
exercise of the Option, the Stock to be purchased pursuant to such exercise has
not been registered under the Securities Act of 1933, as amended (the "Act"),
and under applicable state securities laws, and shall continue to be applicable
for so long as such registration has not occurred:
(a) Employee hereby agrees, warrants and represents that he
will acquire the Stock to be issued hereunder for his own account for investment
purposes only, and not with a view to, or in connection with, any resale or
other distribution of any shares of such Stock, except as hereafter permitted.
Employee further agrees that he will not at any time make any offer, sale,
transfer, pledge or other disposition of such Stock to be issued hereunder
without an effective registration statement under the Act, and under any
applicable state securities laws or an opinion of counsel acceptable to the
Company to the effect that the proposed transaction will be exempt from such
registration. Employee shall execute such instruments, representations,
acknowledgments and agreements as the Company may, in its sole discretion, deem
advisable to avoid any violation of federal, state, local or securities exchange
rule, regulation or law.
(b) The certificates for Stock to be issued to Employee
hereunder shall bear the following legend:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933, as amended,
or under applicable state securities laws. The shares have
been acquired for investment and may not be offered, sold,
transferred, pledged or otherwise disposed of without an
effective registration statement under the Securities Act of
1933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to the Company that
the proposed transaction will be exempt from such
registration."
The foregoing legend shall be removed upon registration of the legended shares
under the Act and under any applicable state laws or upon receipt of an opinion
of counsel acceptable to the Company that said registration is no longer
required.
9. The sole purpose of the agreements, warranties, representations and
legend set forth in the two immediately preceding paragraphs is to prevent
violations of the Act, and any applicable state securities laws.
10. It is the intention of the Company and Employee that the Option
shall not be an "Incentive Stock Option" as that term is used in Section 422 of
the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
The Option is not granted pursuant to any stock option plan.
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11. This agreement and the Employment Agreement constitute the entire
understanding between the Company and Employee with respect to the subject
matter hereof and no amendment, modification or waiver of this agreement, in
whole or in part, shall be binding upon the Company or Employee unless in
writing and signed by the Executive Vice President of the Company and Employee.
This agreement and the performances of the parties hereunder shall be construed
in accordance with, and governed by the laws of, the Commonwealth of
Pennsylvania.
Employee shall sign a copy of this agreement and return it to the
Company's Secretary, thereby indicating Employee's understanding of, and
agreement with its terms and conditions.
XXXX.XXX INC,
By:
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I hereby acknowledge receipt of a copy of the foregoing stock option agreement
and, having read it, hereby signify my understanding of, and my agreement with,
its terms and conditions.
October 14, 1999
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Xxxxx Xxxxxxxxx (Date)
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