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EXHIBIT 10.4
NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
This NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT (this "AGREEMENT")
dated as of October 14, 1999, between XXXXXXXXXXXXX.XXX, INC., a Delaware
Corporation (the "CORPORATION"), and Xxxxx X. Xxxxxxx, residing at _________,
_______, _____ _____ (the "PARTICIPANT").
W I T N E S S E T H:
WHEREAS, the Corporation desires, in connection with the Participant's
service as a Non-Employee Director of the Corporation, and in accordance with
the Stock Option Plan for Non-Employee Directors of XxxxxxxXxxxxx.xxx, Inc.,
effective as of August 1, 1999 (the "PLAN"), to provide the Participant with an
opportunity to acquire shares of the Corporation's Class A Common Stock, $0.01
par value (the "CLASS A STOCK"), on favorable terms and to thereby align his or
her interest in the continued progress and success of the Corporation's business
with those of the Corporation's shareholders. Unless otherwise defined herein,
all capitalized terms used herein shall have the same definitions as set forth
under the Plan.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein set forth and other good and valuable consideration, the Corporation and
the Participant hereby agree as follows:
1. Confirmation of Grant of Option. Subject to the terms of the Plan
and this Agreement, the Corporation hereby grants to the Participant the right
to purchase (hereinafter referred to as the "OPTION") an aggregate of 38,475
shares of Class A Stock, subject to adjustment as provided in the Plan (such
shares, as adjusted, hereinafter being referred to as the "SHARES"). The Option
is not intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended.
2. Exercise Price. The exercise price for the purchase of the Shares
covered by the Option will be $11.00 per Share, which equals the Fair Market
Value of such Shares on the date such Options are deemed granted pursuant to the
Plan, subject to adjustment as provided in the Plan.
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3. Exercise of Option. The Option shall be exercisable on the terms
and conditions hereinafter set forth:
(a) The Option shall become exercisable as to the following
amounts of the number of Shares originally subject thereto (after giving effect
to any adjustment pursuant to the Plan), on the dates indicated:
(i) as to 12,825 Shares on or after October 14, 2000;
(ii) as to 12,825 Shares on or after October 14, 2001;
and
(iii) as to 12,825 Shares on or after October 14, 2002.
(b) The Option may be exercised pursuant to the provisions of
this Section 3, by notice and payment (including, but not limited to, by a
"cashless" exercise) to the Corporation as provided in Section 12 hereof.
4. Term of Option. The term of the Option shall be a period of ten
(10) years from the date hereof, subject to earlier termination or cancellation
as provided in this Agreement. This Option, to the extent unexercised, shall
expire on the day immediately prior to the tenth anniversary of the date hereof.
The Participant shall not have any rights to dividends or any other rights of a
stockholder with respect to any shares of Class A Stock subject to the Option
until such shares shall have been issued to him or her (as evidenced by the
appropriate entry on the books of a duly authorized transfer agent of the
Corporation) provided that the date of issuance shall not be earlier than the
date this Option is exercised and payment of the full purchase price of the
shares of Class A Stock (with respect to which this Option is exercised) is made
to the Corporation.
5. Non-transferability of Option. The Option shall not be assigned,
transferred or otherwise disposed of, or pledged or hypothecated in any way, and
shall not be subject to execution, attachment or other process, except as may be
provided in the Plan. Any assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the provisions of the Plan, or any levy of
execution, attachment or other process attempted upon the Option, will be null
and void and without effect. Any attempt to make any such assignment, transfer,
pledge, hypothecation or other disposition of the Option or any attempt to make
any such levy of execution, attachment or other process will cause the Option to
terminate immediately upon the happening of any such event; provided, however,
that any such termination of the Option under the foregoing provisions of this
Section 5 will not prejudice any rights or remedies which the Corporation or any
Parent or Subsidiary may have under this Agreement or otherwise.
6. Exercise Upon Death. If the Participant dies while holding an
exercisable Option, such Option shall remain exercisable by his or her estate
(or other beneficiaries, as designated in writing by such Participant) until the
end of the exercise period under the Option,
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unless the Committee shall otherwise provide at the time of the grant of the
Option. At any time during the one year period following the Participant's
death, the Corporation shall have the right in its sole discretion to purchase,
and the estate or beneficiary of the deceased Participant shall have the
obligation to sell to the Corporation (i) any outstanding Option exercisable by
the estate or beneficiary at the then Fair Market Value of a share of Class A
Stock less the exercise price and (ii) any shares of Class A Stock held of
record or beneficially by the estate or beneficiary through the exercise of an
Option at their then Fair Market Value.
7. Exercise Upon Disability; Voluntary Termination. If the
Participant's service is terminated by reason of (i) Disability or (ii)
voluntary discontinuance of service, any then exercisable Option shall remain
exercisable until the end of the exercise period under such Option and all
Options not exercisable on the date of such termination shall be forfeited and
canceled.
8. Misconduct by Participant. If the Board of Directors (excluding
the Participant accused of such misconduct) determines that the Participant has
committed an act of embezzlement, fraud, dishonesty, nonpayment of an obligation
owed to the Corporation, breach of fiduciary duty or deliberate disregard of the
Corporation's rules resulting in loss, damage or injury to the Corporation, or
if the Participant makes an unauthorized disclosure of the Corporation's trade
secrets or confidential information, engages in any conduct constituting unfair
competition, induces any of the Corporation's customers to breach a contract
with the Corporation or induces any principal for whom the Corporation acts as
agent to terminate such agency relationship, neither the Participant nor his or
her estate shall be entitled to exercise any Option whatsoever. In making such
determination, the Board of Directors shall provide the Participant an
opportunity to appear and present evidence on the Optionee's behalf at a hearing
before the Board of Directors or a committee of the Board of Directors.
9. Exercise Upon Other Termination of Service. In the event the
Participant ceases to serve as a director of the Corporation for any reason
other than as described in Sections 6, 7 or 8 above, within ninety (90) days
after such cessation, the Participant may exercise his or her Option to the
extent that it was exercisable on the date of such termination. Notwithstanding
the foregoing, in no event may the Option be exercised after the term set forth
in Section 4 has expired. To the extent an Option was not exercisable at the
date of such termination, or the Participant does not exercise such Option
within the time specified above, the Option shall be forfeited and canceled.
10. Merger, Consolidation or Change in Control of Corporation. (a)
Upon the occurrence of a Liquidity Event or a Change in Control, the Participant
shall have the right immediately prior to the effective date of such Liquidity
Event (or, if later, within 10 days of the Optionee's notification of such
event) to exercise any Option granted and still outstanding (and not otherwise
expired) in whole or in part without regard to any installment or vesting
provision of this Agreement, provided that all conditions precedent to the
exercise of such Options, other than the passage of time, have occurred. The
Corporation, to the extent practicable, shall give advance notice to the
Participant of any such Liquidity Event. All such Options which are not so
exercised shall be canceled and forfeited as of the effective time of any such
Liquidity Event (or,
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if later, at the end of the applicable 10-day notice period). If the Corporation
engages in a Business Combination which is not a Liquidity Event, the
Corporation may, in connection with such transaction, at its option elect one of
the following: provide for (i) the continuance of the Option granted hereunder
(either by express provision or, if the Corporation is the surviving corporation
in the Business Combination, as a consequence of the failure to address the
treatment of options in the applicable agreements), (ii) the substitution of new
options for the Option granted hereunder (which new options grant the
Participant the right to purchase the securities they would have received had
they held Class A Stock immediately prior to the Business Combination) or (iii)
acceleration of any outstanding Options in which case such Business Combination
will be deemed a "Liquidity Event" and Options treated in accordance with the
preceding sentences of this Section 10.
11. Registration. The Corporation may register or qualify the shares
covered by the Option for sale pursuant to the Securities Act of 1933, as
amended, at any time prior to or after the exercise in whole or in part of the
Option.
12. Method of Exercise of Option. (a) Subject to the terms and
conditions of this Agreement, the Option shall be exercisable by notice in the
manner set forth in Exhibit A hereto (the "NOTICE") and provision for payment to
the Corporation in accordance with the procedure prescribed herein. Each such
Notice shall:
(i) state the election to exercise the Option and the
number of Shares with respect to which it is being exercised;
(ii) contain a representation and agreement as to
investment intent, if required by the Committee with respect to such
Shares, in a form satisfactory to the Committee;
(iii) be signed by the Participant or the person or
persons entitled to exercise the Option and, if the Option is being
exercised by any person or persons other than the Participant, be
accompanied by proof satisfactory to the Committee of the right of such
other person or persons to exercise the Option;
(iv) include payment of the full purchase price for the
shares of Class A Stock to be purchased pursuant to such exercise of the
Option; and
(v) be received by the Corporation on or before the date
of the expiration of this Option. In the event the date of expiration of
this Option falls on a day which is not a regular business day at the
Corporation's executive office then such Notice must be received at such
office on or before the last regular business day prior to such date of
expiration.
(b) Payment of the purchase price of any shares of Class A
Stock, in respect of which the Option shall be exercised, shall be made by the
Participant or such person or persons at the place specified by the Corporation
on the date the Notice is received by the
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Corporation (i) by delivering to the Corporation a certified or bank cashier's
check payable to the order of the Corporation, (ii) by delivering to the
Corporation properly endorsed certificates of shares of Class A Stock (or
certificates accompanied by an appropriate stock power) with signature
guaranties by a bank or trust company, (iii) by having withheld from the total
number of shares of Class A Stock to be acquired upon the exercise of this
Option a specified number of such shares of Class A Stock, (iv) by any form of
"cashless" exercise or (v) by any combination of the above.
(c) The Option shall be deemed to have been exercised on the
date the Notice was received by the Corporation with respect to any particular
shares of Class A Stock if, and only if, the preceding provisions of this
Section 12 and the provisions of Section 13 hereof shall have been complied
with. Anything in this Agreement to the contrary notwithstanding, any Notice
given pursuant to the provisions of this Section 12 shall be void and of no
effect if all of the preceding provisions of this Section 12 (including this
subsection (c)) and the provisions of Section 13 shall not have been complied
with.
(d) The certificate or certificates for shares of Class A Stock
as to which the Option shall be exercised will be registered in the name of the
Participant (or in the name of the Participant's estate or other beneficiary, if
the Option is exercised after the Participant's death), or if the Option is
exercised by the Participant and if the Participant so requests in the Notice
exercising the Option, will be registered in the name of the Participant and
another person jointly, with right of survivorship, and will be delivered as
soon as practical after the date the Notice is received by the Corporation
(accompanied by full payment of the exercise price), but only upon compliance
with all of the provisions of this Agreement.
(e) If the Participant fails to accept delivery of and pay for
all or any part of the number of Shares specified in such Notice, his or her
right to exercise the Option with respect to such undelivered Shares may be
terminated in the sole discretion of the Committee. The Option may be exercised
only with respect to full Shares.
(f) The Corporation shall not be required to issue or deliver
any certificate or certificates for shares of its Class A Stock purchased upon
the exercise of any part of this Option prior to the payment to the Corporation,
upon its demand, of any amount requested by the Corporation for the purpose of
satisfying its liability, if any, to withhold state or local income or earnings
tax or any other applicable tax or assessment (plus interest or penalties
thereon, if any, caused by a delay in making such payment) incurred by reason of
the exercise of this Option or the transfer of shares thereupon. Such payment
shall be made by the Participant in cash or, with the consent of the
Corporation, by tendering to the Corporation shares of Class A Stock equal in
value to the amount of the required withholding. In the alternative, the
Corporation may, at its option, satisfy such withholding requirements by
withholding from the shares of Class A Stock to be delivered to the Participant
pursuant to an exercise of this Option, a number of shares of Class A Stock
equal in value to the amount of the required withholding.
13. Approval of Counsel. The exercise of the Option and the issuance
and delivery of shares of Class A Stock pursuant thereto shall be subject to
approval by the
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Corporation's counsel of all legal matters in connection therewith, including,
but not limited to, compliance with the requirements of the Securities Act of
1933 and the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Class A Stock may then be listed.
14. Resale of Class A Stock. (a) If so requested by the Corporation,
upon any sale or transfer of the Class A Stock purchased upon exercise of the
Option, the Participant shall deliver to the Corporation an opinion of counsel
satisfactory to the Corporation to the effect that either (i) the Class A Stock
to be sold or transferred has been registered under the Securities Act of 1933,
and that there is in effect a current prospectus meeting the requirements of
Section 10(a) of the Securities Act which is being or will be delivered to the
purchaser or transferee at or prior to the time of delivery of the certificates
evidencing the Class A Stock to be sold or transferred or (ii) such Class A
Stock may then be sold without violating Section 5 of said Act.
(b) The Class A Stock issued upon exercise of the Option shall
bear the following legend if required by counsel for the Corporation:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. NO TRANSFER OF SUCH
SECURITIES MAY BE MADE UNLESS SUCH TRANSFER IS MADE IN CONNECTION WITH AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT.
15. Reservation of Shares. The Corporation shall at all times during
the term of the Option reserve and keep available such number of shares of the
Class A Stock as will be sufficient to satisfy the requirements of this
Agreement.
16. Nonguarantee. Nothing contained in this Agreement shall be
construed to confer any right with respect to continuation of service as a
director of the Corporation or nomination to serve as a director of the
Corporation, nor shall it interfere in any way with any rights which the
Participant or the Corporation may have to terminate his or her directorship at
any time.
17. Notices. Each notice relating to this Agreement shall be in
writing and delivered in person, by air courier or by certified mail to the
proper address. All notices to the Corporation or the Committee shall be
addressed to them at XxxxxxxXxxxxx.xxx, Inc., 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxx, XX 00000, Attn: President and Chief Executive Officer. All notices to the
Participant shall be addressed to the Participant or such other person or
persons at the Participant's address above specified. Anyone to whom a notice
may be given under this Agreement may designate a new address by notice to that
effect.
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18. Benefits of Agreement. This Agreement shall inure to the benefit
of and be binding upon each successor and assign of the Corporation. All
obligations imposed upon the Participant and all rights granted to the
Corporation under this Agreement shall be binding upon the Participant's heirs,
legal representatives, successors and assigns.
19. Severability. In case any provision of this Agreement shall be
held illegal or void, such illegality or invalidity shall not affect the
remaining provisions of this Agreement, but shall be fully severable, and this
Agreement shall be construed and enforced as if said illegal or invalid
provisions had never been inserted herein.
20. Governing Law. All questions pertaining to the validity,
construction and administration of this Agreement shall be determined in
accordance with the laws of the State of New York.
21. Incorporation of Terms of Plan. This Agreement shall be
interpreted under, and subject to, all of the terms and provisions of the Plan,
which are incorporated herein by reference.
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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed in its name by its President and its corporate seal to be hereunto
affixed and attested by its Secretary or its Assistant Secretary and the
Participant has hereunto set his or her hand all as of the date, month and year
first above written.
ATTEST: XxxxxxxXxxxxx.xxx, Inc.
By:
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Secretary Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
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Xxxxx X. Xxxxxxx
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Social Security Number
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EXHIBIT A
NON-EMPLOYEE DIRECTOR STOCK OPTION EXERCISE FORM
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Date
XxxxxxxXxxxxx.xxx, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Secretary
Dear Sirs:
Pursuant to the provisions of the Non-Employee Director Stock Option
Agreement, dated October 14, 1999, whereby you have granted to me a stock option
to purchase 38,475 shares of the Class A Common Stock (the "CLASS A STOCK") of
XxxxxxxXxxxxx.xxx, Inc. (the "CORPORATION"), I hereby notify you that I elect to
exercise my option to purchase ______________ of the shares covered by such
Option at the exercise price specified thereon. In full payment of the price for
the shares being purchased hereby:
1. I am delivering to you herewith:
(a) a certified or bank cashier's check payable to the order of
the Corporation in the amount of $_________; $_________ of this amount is the
purchase price of the shares, and the balance represents payment of withholding
taxes as follows: Federal $_________, State $_________ and Local $_________ OR
(b) a certificate or certificates for [ ] shares of Class A
Stock of the Corporation, which have a Fair Market Value as of the date hereof
at least equal to the option exercise price, and a certified or bank cashier's
check, payable to the order of the Corporation, in the amount of $_________,
which represents payment of withholding taxes as follows: Federal $_________,
State $_________ and Local $_________. Any such stock certificate or
certificates are endorsed, or accompanied by an appropriate stock power, to the
order of the Corporation, with my signature guaranteed by a bank or trust
company or by a member firm of the National Association of Securities Dealers,
Inc.
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(c) OR
(d) Please retain __________ shares of Class A Stock of the
Corporation covered by the Option which have a Fair Market Value as of the date
hereof at least equal to the option exercise price. I am delivering to you
herewith a certified or bank cashier's check, payable to the order of the
Corporation, in the amount of $_________ which represents payment of withholding
taxes as follows: Federal $_________, State $_________ and Local $_________.
In the event the amounts designated above are insufficient for the
withholding of federal, state and local taxes, I hereby authorize the
Corporation to withhold in accordance with applicable law from any regular cash
compensation payable to me the balance of any taxes required to be withheld by
the Corporation under federal, state or local law as a result of my election
herein. Further, I acknowledge that I am purchasing these shares for investment
purposes only and not for resale.
Very truly yours,
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Xxxxx X. Xxxxxxx
Address for notices, reports, dividend checks and
other communications to stockholders:
[ ]
[ ]
[ ]
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Stock Option Plan for Non-Employee Directors of
XxxxxxxXxxxxx.xxx, Inc.
NON-EMPLOYEE DIRECTOR STOCK OPTION
Granted To
XXXXX X. XXXXXXX
Participant
38,475 $11.00
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Number of Shares Price per Share
DATE GRANTED: October 14, 1999 EXPIRATION DATE: October 13, 2009
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