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EXHIBIT 10.10
SOVEREIGN SPECIALTY CHEMICALS, INC.
STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT dated as of December 29,
1999 between Sovereign Specialty Chemicals, Inc., a Delaware corporation (the
"Company") and [ ] the "Optionee").
The Company's Compensation Committee or the Company's Board of
Directors acting as the Committee (in either case, the "Committee") has
determined that the Optionee is one of the key employees of the Company, and
that the objectives of the Company's Stock Option Plan (the "Plan") will be
furthered by awarding to the Optionee Options under the Plan. Capitalized terms
defined in the Plan and not otherwise defined herein shall have the meaning
given such terms in the Plan.
In consideration of the foregoing and of the mutual
undertakings set forth in this Nonqualified Stock Option Agreement, the Company
and the Optionee agree as follows:
SECTION 1. Grant of Option.
1.1 The Company hereby grants to the Optionee an option (the
"Option") to purchase [ ] shares of Common Stock ("Common Stock") of the
Company, at a purchase price of $129.50 per share.
1.2 The Option granted hereby is intended to be a
"nonqualified" stock option subject to the provisions of section 83 of the Code
and is not intended to qualify as an "incentive stock option" subject to the
provisions of section 422 of the Code.
SECTION 2. Exercisability.
2.1 Subject to Sections 2.2, 2.3 and 4 hereof, the Option
shall be exercisable for the cumulative number of shares and at the times
provided in the following schedule:
Cumulative
Applicable Date Number of Shares
--------------- ----------------
On the first anniversary of the date hereof 20%
On the second anniversary of the date hereof 40%
On the third anniversary of the date hereof 60%
On the fourth anniversary of the date hereof 80%
On the fifth anniversary of the date hereof 100%
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For purposes of this agreement, each of the first through fifth anniversaries of
the date hereof shall be referred to as a "Vesting Date."
2.2 Death, Disability or Good Grounds. In the event that the
Optionee's employment is terminated by the Company other than by reason of a
Termination With Cause, by the Optionee for "Resignation for Good Grounds" (as
defined in the employment agreement between the Optionee and the Company, dated
[ ]), or as a result of the Optionee's death or Disability, the Option shall
become exercisable with respect to an additional 5% of the number of shares
covered thereby for each complete three (3) month period that has elapsed from
the preceding Vesting Date through the date of the Optionee's termination of
employment. Notwithstanding the foregoing, in the event the Optionee's
employment is terminated by reason of the Optionee's death or Disability
following the third anniversary of the date hereof, the Option shall become
exercisable in full.
2.3 Subject to Section 4, the Option will terminate as to any
and all shares of Common Stock for which the Option has not yet been exercised
on December 28, 2009.
SECTION 3. Method of Exercise.
3.1 The Option or any part thereof may be exercised only by
giving written notice to the Company in the form of Exhibit A hereto, which
notice shall state the election to exercise the Option and the number of whole
shares of Common Stock with respect to which the Option is being exercised. Such
notice must be accompanied by payment of the full purchase price for the number
of shares purchased.
3.2 Payment of the purchase price shall be made by certified
or official bank check payable to the Company. As soon as it is practicable
after it receives payment of the purchase price, the Company shall deliver to
the Optionee a certificate or certificates for the shares of Common Stock
acquired pursuant to the Option.
SECTION 4. Termination of Employment.
4.1 Death or Disability. In the event that the Optionee's
employment is terminated as a result of the Optionee's death or Disability, the
Option, to the extent exercisable on the date of termination (after giving
effect to Section 2.2 hereof) shall remain exercisable by the Optionee or by the
Optionee's legatee or legatees under his will, or by his personal
representatives or distributees, as applicable for a period of 180 days
following a termination of employment.
4.2 Termination for Cause. In the event of a Termination With
Cause of the Optionee by the Company at any time, the Option shall immediately
expire and cease to be exercisable and all rights granted to the Optionee under
this Agreement shall immediately expire.
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4.3 Other Termination of Employment. If the employment of the
Optionee is terminated under any circumstance other than those set forth in
Sections 4.1 or 4.2 hereof, the Optionee may, at any time within forty five (45)
days after his or her termination of employment, exercise the Option to the
extent, but only to the extent, that the Option or portion thereof was
exercisable on the date of termination.
4.4 Repurchase and Cancellation. Any Common Stock issued
pursuant to exercise of this Option is subject to the right of the Company to
purchase set forth in Section 4.5 of the Shareholder Agreement between the
Optionee and the Company, dated December 29, 1999 (the "Shareholder Agreement"),
and any unexercised Options are subject to cancellation as set forth in Section
4.5 of the Shareholder Agreement.
SECTION 5. Nonassignability.
No right granted to the Optionee under the Plan or this
Agreement shall be assignable or transferable (whether by operation of law or
otherwise and whether voluntarily or involuntarily), other than by will or by
the laws of descent and distribution. All rights granted to the Optionee under
the Plan or this Agreement shall be exercisable only by the Optionee or his
estate, heirs or personal representatives.
SECTION 6. Right of Discharge Reserved.
Nothing in the Plan or in this Agreement shall confer upon the
Optionee any right to continue in the employ or service of the Company or affect
any right which the Company may have to terminate the employment or services of
the Optionee.
SECTION 7. No Rights as a Stockholder.
Neither the Optionee nor any person succeeding to the
Optionee's rights hereunder shall have any right as a stockholder with respect
to any shares subject to the Option until the date of the issuance of a stock
certificate to him or her for such shares. Except for adjustments made pursuant
to Section 3.4 of the Plan, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and whether in
cash, securities or other property) for which the record date is prior to the
date such stock certificate is issued.
SECTION 8. Plan Provisions to Prevail.
This Agreement shall be subject to all of the terms and
provisions of the Plan and the Shareholder Agreement, which are incorporated
hereby and made a part hereof. In the event there is any inconsistency between
the provisions of this Agreement and the Plan or the Shareholder Agreement, the
provisions of the Plan or the Shareholder Agreement, as applicable, shall
govern.
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SECTION 9. Optionee's Acknowledgments.
By entering into this Agreement the Optionee agrees and
acknowledges that (a) he has received and read a copy of the Plan and accepts
this Option subject to the terms and provisions of the Plan, and (b) that no
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any award thereunder. As a condition to
the issuance of shares of Common Stock under this Option, the Optionee
authorizes the Company to withhold in accordance with applicable law from any
compensation payable to him any taxes required to be withheld by the Company
under federal, state, or local law as a result of his exercise of this Option.
SECTION 10. Section Headings.
The Section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of said
Sections.
SECTION 11. Notices.
Any notice to be given to the Company hereunder shall be in
writing and shall be addressed to the Secretary of the Company, Xxxxxxxxx X.
Xxxxx, c/o AEA Investors Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
at such other address as the Company may hereinafter designate to the Optionee
by notice as provided herein. Any notice to be given to Optionee shall be given
at the address set forth on the first page hereof, or at such other address as
Optionee may hereinafter designate to the Company by notice as provided herein.
Notices hereunder shall be deemed to have been duly given when personally
delivered or mailed by registered or certified mail to the party entitled to
receive them.
SECTION 12. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and the successors and assigns of the Company and, to the
extent set forth in Section 5, the estate, heirs or personal representatives of
the Optionee.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
SOVEREIGN SPECIALTY
CHEMICALS, INC.
By:
OPTIONEE
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Schedule 1
The following individuals entered into agreements substantially identical to the
agreement filed with this report. The following chart sets forth the material
details in which such agreements differ from the document filed.
NAME NUMBER OF OPTIONS EXERCISE PRICE
---- ----------------- --------------
Xxxx X. Xxxxxxx 15,000 $129.50
Xxxxxx Xxxxxx-Xxxxx 2,500 $129.50
Xxxxxxx X. Xxxxxxxx 4,000 $129.50
Xxxx Xxxxxxxxx 4,000 $129.50
Xxxxx X. Xxxxxxx 2,500 $129.50
Xxxxxxxxx X. Xxxxx 9,500 $129.50
Xxxxxx X. Xxxxxx 9,500 $129.50
Xxxxx Xxxxx 9,200 $129.50
Xxxx Xxxxx 9,200 $129.50
Xxxxx Xxxx 9,000 $129.50
Xxxxxxx Xxxxxxxx 5,000 $129.50
