CONE XXXXX CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of the 15th day of June, 2001, between Cone
Xxxxx Corporation, a North Carolina corporation having its principal office at
0000 X. Xxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx (hereinafter called the
"Company"), and, (Name) a key management employee of the Company (hereinafter
called the "Option Holder").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has adopted, and the
shareholders have approved, the Amended and Restated 1992 Stock Plan, a copy of
which is annexed hereto as Exhibit A (hereinafter called the "Plan"); and
WHEREAS, the Company recognizes the value to it of the services of the
Option Holder as a key management employee and is desirous of furnishing him or
her with added incentive and inducement to contribute to the success of the
Company; and
WHEREAS, on June 15, 2001, pursuant to the provisions of the Plan, the
stock committee ("Committee") appointed by the Board of Directors of the Company
(a) granted to the Option Holder, pursuant to Article II, Section 1 of the Plan,
an option in respect of the number of shares as set forth herein, (b) designated
the option an Incentive Stock Option, (c) fixed and determined the option price
as set forth herein, and (d) approved the form of this Agreement:
NOW, THEREFORE, in consideration of the mutual promises and
representations herein contained and other good and valuable consideration, it
is agreed by and between the parties hereto as follows:
1. Subject to the Plan, the terms and provisions of which are incorporated
herein by reference, the Company hereby grants to the Option
Holder an Incentive Stock Option to purchase, on the terms and
subject to the conditions hereinafter set forth, all or any part of
an aggregate of shares of the Common Stock ($0.10 par value) of the
Company at the purchase price of $1.11 per share (the "Option"),
exercisable in the amounts and at the times set forth in this
paragraph 1. Unless sooner terminated as provided in Section 3(f) of
Article II of the Plan or in this Agreement, the Option shall
terminate, and all rights of the Option Holder hereunder shall expire,
on June 14, 2011. In no event may the Option be exercised after June
14, 2011.
The Option may be exercised as follows:
(a) up to shares (20% of the total shares subject to the Option)
at any time after November 8, 2001 and prior to termination of
the Option;
(b) up to shares (40% of the total shares subject to
the Option), less any shares previously purchased pursuant to
the Option, at any time after November 8, 2002 and prior to
termination of the Option;
(c) up to shares (60% of the total shares subject to
the Option), less any shares previously purchased pursuant to
the Option, at any time after November 8, 2003 and prior to
termination of the Option;
(d) up to shares (80% of the total shares subject to
the Option), less any shares previously purchased pursuant to
the Option, at any time after November 8, 2004 and prior to
termination of the Option;
(e) up to shares (100% of the total shares subject to
the Option), less any shares previously purchased pursuant to
the Option, at any time after November 8, 2005 and prior to
termination of the Option;
provided, however, that not less than one hundred shares may be
purchased at any one time unless the number purchased is the total
number that may be purchased under the Option at that time.
2. The option or any part thereof may, to the extent that it is
exercisable, be exercised in the manner provided in Section 3(c) of
Article II of the Plan. Payment of the aggregate option price for the
number of shares purchased shall be made in the manner provided in
Section 3(d) Article II of the Plan.
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
Section 3(f) of Article II of the Plan, may be exercised only while the
Option Holder is in the employ of the Company.
4. Except as provided in Section 3(e) and 3(f) of Article II of the Plan
with respect to transfers upon the death of the Option Holder, the
Option 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 of privilege confirmed hereby contrary to the
provisions hereof, the Option and the rights and privileges confirmed
hereby shall immediately become null and void.
5. If the Corporation shall be a party to any merger or consolidation
in which it is not the surviving corporation or pursuant to which the
shareholders of the Corporation exchange their Common Stock, or if the
Corporation shall dissolve or liquidate or sell all or substantially
all of its assets, all options outstanding under this Agreement shall
terminate on the effective date of such merger, consolidation,
dissolution, liquidation or sale; provided, however, that the Committee
in its discretion, may prior to such effective date, accelerate the
time at which any outstanding option may be exercised, may authorize
a payment to the Option Holder that approximates the economic benefit
that the Option Holder would realize if the option were exercised
immediately before such effective date, may authorize a payment in
such other amount as it deems appropriate to compensate the Option
Holder for the termination of their option, or may arrange for the
granting of a substitute option to the Option Holder.
6. The Option Holder acknowledges that, in the event of certain
dispositions of shares of Common Stock purchased pursuant to exercise
of the Option, the Option Holder may recognize ordinary income for
federal and state income tax purposes (generally in an amount equal
to the difference between the fair market value of the purchased shares
on the date of exercise and the option price therefor) and the
Company may be entitled to a corresponding deduction. Consequently,
the Option Holder agrees to notify the Company of any disposition of
shares purchased pursuant to exercise of the Option that is made
within two years from the date of grant of the Option (June 15, 2001),
or within one year after the delivery of a stock certificate evidencing
such shares and to provide to the Company such information with respect
to the disposition as may be reasonably requested by the Company. The
Option Holder further agrees that, in the event of a disposition within
either of the aforesaid periods, the Option Holder will pay, or make
arrangements for payment, to the Company an amount equal to the income
and other taxes that the Company may be required to withhold as a
result of the Option Holder's disposition and that, unless such payment
or arrangement is made, the Company shall be entitled to withhold, from
other sums payable to the Option Holder the amount of such income and
other taxes.
7. Any notice to be given to the Company shall be addressed to the
Secretary of the Company at the location of its principal corporate
office.
8. 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 as in effect from time to time and for which the Option
Holder is eligible.
9. 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.
10. This Agreement shall be binding upon and inure to the benefit of the
Option Holder, his or her personal representatives, heirs and legatees,
but neither this Agreement nor any rights hereunder shall be assignable
or otherwise transferable by the Option Holder except as expressly set
forth in this Agreement or in the Plan.
11. Other terms and conditions:
Pursuant to Article II, Section 3(d) of the Plan, the Committee has
consented to the receipt of shares of Common Stock of the Company as a
medium of payment.
CONE XXXXX CORPORATION
By /s/Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
President and Chief Executive Officer
