GENMAR HOLDINGS, INC.
000 XXXXX XXXXX XXXXXX, XXXXX 0000
XXXXXXXXXXX, XXXXXXXXX 00000
October __, 1999
Re: GRANT OF STOCK OPTIONS
Dear ___________:
1. GRANT. As partial consideration for your agreeing to continue to be a
senior executive officer or Chairman of the Board of Directors of Genmar
Holdings, Inc. (the "Company"), the Board of Directors of the Company (the
"Board") hereby grants to you:
(a) an option (the "Initial Option") to purchase _____ shares of
common stock, par value $0.01, of the Company (the "Common
Stock") at an exercise price of $____ per share (the
"Initial Exercise Price").
(b) a second option (the "Second Option") to purchase _______
shares of Common Stock at an exercise price of $____ per
share [150% of Initial Exercise Price] (the "Subsequent
Exercise Price"); and
(c) a third option (the "Third Option," and together with the
Initial Option and the Second Option, the "Options") to
purchase _______ shares of Common Stock at an exercise price
of $____ PER SHARE [150% OF THE SUBSEQUENT EXERCISE PRICE].
2. VESTING OF OPTIONS.
(a) Your right to exercise the Initial Option shall vest and
become exercisable as follows:
(i) one-half shall vest and become fully exercisable on the
first anniversary of the date of grant of such Option;
and
(ii) one-half shall vest and become fully exercisable on the
second anniversary of the date of grant of such Option.
(b) Your right to exercise the Second Option shall vest and
become exercisable as follows:
(i) if the Common Stock trades at an average of 150% of the
Initial Exercise Price over a period of 30 consecutive
trading days at any time within three years after the
date hereof (the "Second Option Measurement Period"),
one half shall vest and become exercisable on the first
anniversary of the first day after the end of the
Second Option Measurement Period and one-half shall
vest and become exercisable on the second anniversary
of the first day after the end of the Second Option
Measurement Period;
(ii) to the extent not vested pursuant to clause (i) above,
the Second Option shall vest and become exercisable in
its entirety on October __, 2009.
(c) Your right to exercise the Third Option shall vest and
become exercisable as follows:
(i) if the Common Stock trades at an average of 150% of the
Subsequent Exercise Price over a period of 30
consecutive trading days at any time within three years
after the date hereof (the "Third Option Measurement
Period"), one half shall vest and become exercisable on
the first anniversary of the first day after the end of
the Third Option Measurement Period and one-half shall
vest and become exercisable on the second anniversary
of the first day after the end of the Third Option
Measurement Period;
(ii) to the extent not vested pursuant to clause (i) above,
the Third Option shall vest and become exercisable in
its entirety on October __, 2009.
3. TERM.
(a) Subject to the provisions of this paragraph, the unexercised
portion of the Initial Option, unless sooner terminated as
provided herein, shall expire on October __, 2004 and,
notwithstanding anything contained herein to the contrary,
no portion of the Initial Option may be exercised after such
date.
(b) Subject to the provisions of this paragraph, the unexercised
portion of the Second Option, unless sooner terminated as
provided herein, shall expire on October __, 2009; PROVIDED,
HOWEVER, that in the event the Second Option vests pursuant
to paragraph 2(b)(i), it shall expire on the fifth
anniversary of the first day after the end of
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the Second Option Measurement Period, unless sooner
terminated as provided herein.
(c) Subject to the provisions of this paragraph, the unexercised
portion of the Third Option, unless sooner terminated as
provided herein, shall expire on October __, 2009; PROVIDED,
HOWEVER, that in the event the Third Option vests pursuant
to paragraph 2(c)(i), it shall expire on the fifth
anniversary of the first day after the end of the Third
Option Measurement Period, unless sooner terminated as
provided herein.
(d) The date an Option expires pursuant to this paragraph 3
shall be referred to herein as the "Expiration Date."
4. TIME AND METHOD FOR EXERCISING AN OPTION.
(a) TIME. You may exercise a vested Option in one or more
installments from time to time prior to its Expiration Date,
subject to the provisions of subparagraph (b), below.
(b) TERMINATION. If prior to the Expiration Date, you have a
Termination of Employment (as defined below), any
outstanding Options will terminate on the applicable date as
described below; provided, however, that none of the events
described below shall extend the period of exercisability
beyond its Expiration Date:
(i) if you have a Termination of Employment by reason of
your death, the Options shall fully vest and become
immediately exercisable, shall remain exercisable for
six (6) months after your death and shall be
exercisable by the executor or administrator of your
estate or the person or persons to whom your rights
under the Options shall pass by will or the laws of
descent or distribution;
(ii) if you have a Termination of Employment by reason of
your "permanent disability" (as defined below), the
Options shall fully vest and become immediately
exercisable, and shall remain exercisable for six (6)
months after you became permanently disabled; PROVIDED,
HOWEVER, that if you die within six (6) months
following such disability and you have not
exercised the Options, the Options shall remain
exercisable for an additional six (6) months after your
death and shall be exercisable by the executor or
administrator of your estate or the person or persons
to whom your rights under the Options shall pass by
will or the laws of descent or distribution;
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(iii) if you have a Termination of Employment for any reason
other than for "Cause" (as defined below), death or
permanent disability, your non-vested Options shall
immediately become null and void and your vested
Options shall remain exercisable for three (3) months
after the Termination of Employment; and
(iv) if you have a Termination of Employment for "Cause,"
the Options, to the extent not theretofore exercised,
shall immediately become null and void.
In the case of subparagraph (b)(i), (ii) and (iii), Options not
exercised by the revised expiration date for the Options shall become null and
void.
(c) Upon the occurrence of a "Change in Control" (as defined
below), the Options shall fully vest.
(d) DEFINITIONS. The following definitions shall be applicable
for purposes of this Agreement.
(i) "Cause" shall mean: (a) your violation of any
non-competition and/or confidentiality provisions
agreed to at any time between you and the Company or
its affiliates; (b) your commission of an intentional
act of fraud, embezzlement, theft or dishonesty against
the Company or its affiliates; (c) your conviction of,
or pleading of NOLO CONTENDERE to, any crime which
constitutes a felony or misdemeanor involving moral
turpitude or which might, in the reasonable opinion of
the Company, cause embarrassment to the Company; or (d)
the gross neglect or willful failure by you to perform
your duties and responsibilities in all material
respects with respect to services rendered to the
Company, if such breach of duty is not cured within 30
days after written notice thereof to you by the Board.
For purposes of clause (d), no act, or failure to act,
on your part shall be deemed "willful" unless done,
or omitted to be done, by you not in good faith and
without reasonable belief that such act, or failure to
act, was in the best interest of the Company.
(ii) A "Change of Control" shall mean:
(1) A change of control of the Company that would be
required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under
the Securities Exchange Act of 1934; or
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(2) During any period of two (2) consecutive years, the
individuals who at the beginning of such period
constitute the Company's Board of Directors or any
individuals who would be "Continuing Directors" (as
hereinafter defined) cease for any reason to
constitute at least a majority thereof; or
(3) The Company's Common Stock shall cease to be
publicly traded after initially being publicly
traded; or
(4) The Company's Board of Directors shall approve a
sale of all or substantially all of the assets of
the Company, and such transaction shall have been
consummated; or
(5) The Company's Board of Directors shall approve any
merger, consolidation, or like business combination
or reorganization of the Company, the consummation
of which would result in the occurrence of any
event described in Section 4(d)(ii)(1) above, and
such transaction shall have been consummated.
For purposes of this Section 4(c)(ii), "Continuing Directors"
shall mean (x) the directors of the Company in office on the date of grant of
the Initial Option (the "Effective Date") and any successor to any such director
and any additional director who after the Effective Date was nominated or
selected by a majority of the Continuing Directors in office (or by the
Nominating Committee of the Board of Directors of the Company) at the time of
his or her nomination or selection.
(iii) "Permanent Disability" shall mean any physical or
mental disability or incapacity which, in the sole
determination of the Board of Directors, renders you
incapable of fully performing the services required of
you in accordance with your obligations with respect to
the Company or a subsidiary of the Company for a period
of 180 consecutive days or for shorter periods
aggregating 180 days during any period of twelve (12)
consecutive months.
(iv) "Termination of Employment" shall mean the earlier of
(i) your termination of employment with the Company or
Xxxxxx Management Corporation, unless you are
immediately thereafter employed by the Company, or a
subsidiary, (ii) the termination of the management
contract between the Company and Xxxxxx Management
Corporation, unless you are immediately thereafter
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employed by the Company or a subsidiary, (iii) in the
event (i) or (ii) would be applicable but for your
employment with the Company or a subsidiary, your
termination of employment with the Company or the
subsidiary, as applicable, (iv) your permanent
disability or (v) your death.
(e) METHOD.
(i) NOTICE AND PAYMENT. An Option shall be deemed to be
exercised when written notice of such exercise has been
given to the Company in accordance with the terms of
such Option by the person entitled to exercise such
Option and full payment for the shares of Common Stock
with respect to which the Option is exercised has been
received by the Company. The consideration to be paid
for the Common Stock to be issued upon exercise of the
Option shall be payment in cash, by check, or with
shares of the Company's Common Stock, as provided in
Section (e)(ii) below. As soon as administratively
practicable following the exercise of an Option in the
manner set forth above, the Company shall issue or
cause its transfer agent to issue stock certificates
representing the shares of Common Stock purchased (as
evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the
Company).
(ii) ALTERNATIVE METHODS FOR EXERCISE OF OPTION. You may
elect to exercise an Option in whole or in part by (a)
delivering whole shares of the Company's Common Stock
previously owned by you (whether or not acquired
through the prior exercise of a stock option) having a
fair market value equal to the aggregate Option price;
or (b) by delivery to the Company of (x) irrevocable
instructions to deliver directly to a broker the stock
certificates representing the shares for which the
Option is being exercised, and (y) irrevocable
instructions to such broker to sell such shares and
promptly deliver to the Company the portion of the
proceeds equal to the Option price and any amount
necessary to satisfy the Company's obligation for
withholding taxes, or any combination thereof. For
purposes of making payment in shares of Common Stock,
such shares shall be valued at their fair market value
on the date of exercise of the Option and shall have
been held by you for at least six months.
(iii) VOTING AND DIVIDEND RIGHTS. Until the issuance of such
stock certificates (as evidenced by the appropriate
entry on
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the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or
receive dividends or any other rights as a stockholder
shall exist with respect to the shares underlying the
Option notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other rights
for which the record date occurs prior to the date the
stock certificates are issued.
5. ANTI-DILUTION PROTECTION.
(a) In the event of any change in the shares subject to the
Options granted hereunder or to the capitalization of the
Company through merger, consolidation, reorganization,
recapitalization, stock dividends, stock split, reverse
stock split, split up, spin off, combination of shares,
exchange of shares, dividends in kind or other like change
in the capital structure of the Company or distribution
(other than normal cash dividends) to shareholders of the
Company, in order to prevent dilution or enlargement of your
rights under the Options, the Board of Directors shall
adjust, in its sole discretion, in an equitable manner as
applicable, the form of and number of shares which may be
acquired pursuant to the exercise of Options and the
exercise price of shares of such Options. The determination
of the Board of Directors as to these matters shall be
conclusive and binding.
(b) The Board of Directors, in its discretion, may determine
that, upon the occurrence of a Change in Control of the
Company or the events specified in paragraph 5(a), each
Option outstanding hereunder shall terminate within a
specified number of days after notice to the holder, and
such holder shall receive, with respect to each share of
Common Stock subject to such Option, an amount equal to the
excess of the value of the consideration paid to
stockholders of the Company in connection with such Change
of Control or other event over the exercise price per share
of such Option, such amount to be payable in cash, in one or
more kinds of property (including the property, if any,
payable in the transaction) or in a combination thereof, as
the Board of Directors, in its discretion, shall determine.
The provisions contained in the preceding sentence shall be
inapplicable to a Option granted within six (6) months
before the occurrence of a Change in Control if the holder
of such Option is subject to the reporting requirements of
Section 16(a) of the Exchange Act and no exception from
liability under Section 16(b) of the Exchange Act is
otherwise available to such holder.
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6. NON-TRANSFERABILITY. The Options may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution, and shall be exercisable, during your
lifetime only by you.
7. WITHHOLDING. The Company may withhold from sums due or to become due to
you from the Company an amount necessary to satisfy its obligation to withhold
taxes incurred by reason of the issuance or disposition of such shares pursuant
to the Options, or may require you to reimburse the Company in such amount. The
Company is not required to issue any shares until you have satisfied withholding
requirements, to the extent applicable.
8. NOTICES. All notices to the Company under this agreement shall be in
writing and shall be delivered by personal service , facsimile or registered or
certified mail (if such service is not available, then by first class mail),
postage pre-paid, to such address as may be designated from time to time by the
Company, and which shall initially be:
Genmar Holdings, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
All notices shall be deemed given when received.
9. NO EFFECT ON TERMS OF EMPLOYMENT. This Agreement is not a contract of
employment and the terms of your employment shall not be affected hereby or by
any agreement referred to herein except to the extent specifically so provided.
Nothing herein shall be construed to impose any obligation on the Company to
continue your employment and it shall not impose any obligation on your part to
remain in the employ of the Company.
10. TRANSFER RESTRICTIONS. The Company agrees that at the time of exercise
of an Option, it will use reasonable best efforts to have an effective
Registration Statement on Form S-8 under the Securities Act of 1933, as amended
(the "Act"), which includes a prospectus that is current with respect to the
shares subject to such Option. You covenant and agree with the Company that if,
at the time of exercise of such Option, there does not exist a Registration
Statement on an appropriate form under the Act, which Registration Statement
shall have become effective and shall include a prospectus that is current with
respect to the shares subject to such Option,
(a) that you are purchasing the shares for your own account and
not with a view to the resale or distribution thereof;
(b) that any subsequent offer for sale or sale of any such
shares shall be made either:
(i) pursuant to a Registration Statement on an appropriate
form under the Act, which Registration Statement shall
have
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become effective and shall be current with respect
to the shares being offered and sold, or
(ii) a specific exemption from the registration requirements
of the Act, but in claiming such exemption, you shall,
prior to any offer for sale or sale of such shares,
obtain a favorable written opinion from counsel for or
approved by the Company as to the applicability of such
exemption and
(c) that you agree that the certificates evidencing such shares shall
bear a legend to the effect of the foregoing.
11. SEVERABILITY OF PROVISIONS. If any provision of this agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereof and this agreement shall be construed and
enforced as if it did not include such provision.
12. AMENDMENT. This agreement cannot be amended except by a writing
executed by the Company and you.
13. APPLICABLE LAW; HEADINGS. This agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to the conflicts of laws principles thereof. The headings
in this agreement are solely for convenience of reference and shall not affect
its meaning or interpretation.
Very truly yours,
GENMAR HOLDINGS, INC.
By:
------------------------------
ACCEPTED:
---------------------------------------------
Signature of Senior Executive
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Name of Senior Executive
Dated:
--------------------- , ------
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