MSC INDUSTRIAL DIRECT CO., INC. NON-QUALIFIED STOCK OPTION AGREEMENT
EXHIBIT
10.4
2005
OMNIBUS EQUITY PLAN
STOCK OPTION AGREEMENT (the
"Agreement"),
dated as of _____________ __, 200__, by and between MSC Industrial Direct Co.,
Inc. (the "Company"), having an
address at 00 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, and [INSERT
ASSOCIATE NAME] (the "Grantee"), having an
address at _________________________________________________.
In
accordance with Section 4 of the MSC Industrial Direct Co., Inc. 2005 Omnibus
Equity Plan (the "Plan") and subject to
the terms of the Plan and this Agreement, the Company hereby grants to the
Grantee an option (the "Option") to purchase
all or any part of an aggregate of [INSERT
SHARES] shares (the “Shares”) of Class A
common stock, $.001 par value per share, of the Company (the “Stock”). Capitalized
terms used but not defined herein shall have the meaning given to such terms in
the Plan.
To
evidence the Option and to set forth its terms, the Company and the Grantee
agree as follows:
1. Confirmation of
Grant. The Company hereby evidences the Option granted to the
Grantee as of October ___, 2009, the date of
the grant of the Option by the Company’s Compensation Committee of the Board of
Directors (the “Committee”). The
Option granted hereby is a Non-Qualified Stock Option and is not intended to be
an "incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Number of
Shares. This Option shall be for an aggregate of [# OF
SHARES] Shares (subject to adjustment as provided in Section 3 of the
Plan).
3. Exercise
Price. The exercise price shall be $_____ per Share (the
"Exercise
Price") (subject to adjustment as provided in Section 3 of the
Plan). The Exercise Price reflects 100% of the Fair Market Value of
one Share of Stock as calculated under the Plan.
4. Term and Exercisability of
the Option. The Option shall expire on October 15, 2015, and,
except as otherwise provided herein, may be exercised prior to its expiration at
such times and for such number of whole Shares as follows:
(a) On
or after October ___, 2010, the Option
is exercisable for up to 25% of the total number of Shares subject to this
Option;
(b) On
or after October ___, 2011, the Option
is exercisable for up to 50% of the total number of Shares subject to this
Option;
(c) On
or after October ___, 2012, the Option
is exercisable for up to 75% of the total number of Shares subject to this
Option; and
(d) On
or after October ___, 2013, the Option
is exercisable for up to 100% of the total number of Shares subject to this
Option.
Notwithstanding the foregoing
provisions of this Paragraph 4, and, except as otherwise provided herein, any
portion of the Option which is not otherwise exercisable at the time of the
Grantee's termination of employment (or provision of services, if applicable)
with the Company and its Affiliates shall not become exercisable after such
termination.
5. Exercise of
Option. On or after the date any portion of the Option becomes
exercisable, but prior to the expiration of the Option in accordance with
Paragraph 4 above, the portion of the Option which has become exercisable may be
exercised in whole or in part by the Grantee (or, pursuant to Paragraph 6
hereof, his or her permitted successor) upon delivery of the following to the
Company:
(a) a
written notice of exercise which identifies this Agreement and states the number
of whole Shares then being purchased; and
(b) any
combination of cash (or by certified or bank check), and/or (i) mature shares of
unrestricted Stock as meet the requirements in the Plan then owned by the
Grantee in an amount having a combined Fair Market Value on the exercise date
equal to the aggregate Exercise Price of the Shares then being purchased using
such unrestricted Stock, (ii) certification of ownership of shares of mature
Stock owned by the Grantee to the satisfaction of the Administrator for later
delivery to the Company as specified by the Company, or (iii) unless otherwise
prohibited by law for either the Company or the Grantee, an irrevocable
authorization of a third party to sell Shares of Stock acquired upon the
exercise of the Option and remit to the Company a sufficient portion of the sale
proceeds to pay the entire exercise price and any tax withholdings resulting
from such exercise.
Notwithstanding the foregoing, (i) the
Grantee (or any permitted successor) shall take whatever additional actions,
including, without limitation, the furnishing of an opinion of counsel, and
execute whatever additional documents the Company may, in its sole discretion,
deem necessary or advisable in order to carry out or effect one or more of the
obligations or restrictions imposed by the Plan, this Agreement or applicable
law, and (ii) the Company may restrict the Grantee’s ability to exercise the
Option during any period when such exercise would constitute a violation of the
Company’s xxxxxxx xxxxxxx policy or any applicable federal or state securities
or other law or regulation.
No Shares
shall be issued upon exercise of the Option until full payment has been
made. Upon satisfaction of the conditions and requirements of this
Paragraph 5, the Company shall deliver to the Grantee (or his or her permitted
successor) a certificate or certificates for the number of Shares in respect of
which the Option shall have been exercised (less the number of Shares, if any,
utilized in the payment of the Exercise Price in a cashless exercise as
permitted under the Plan and the Agreement). Upon exercise of the
Option (or a portion thereof), the Company shall have a reasonable time to issue
the Stock for which the Option has been exercised, and the Grantee shall not be
treated as a stockholder for any purposes whatsoever prior to such
issuance. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date such Stock is recorded as
issued and transferred in the Company’s official stockholder records, except as
otherwise provided in the Plan or the Agreement.
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6. Limitation Upon
Transfer. This Option and all rights granted hereunder shall
not be transferred by the Grantee, other than to a Family Member (provided the
transfer is a gift without consideration and there is no subsequent transfer
other than by will or the laws of descent and distribution) or by will or by the
laws of descent and distribution, shall not otherwise be assigned, pledged or
hypothecated in any way, and shall not be subject to execution, attachment or
similar process. Any attempt to transfer this Option, other than as
provided above, or to assign, pledge or hypothecate or otherwise dispose of this
Option or of any rights granted hereunder contrary to the provisions hereof, or
upon the levy of any attachment or similar process upon this Option or such
rights, shall be null and void. The Option shall be
exercised during the Grantee's lifetime only by the Grantee or by the Grantee's
guardian or the Grantee’s legal representative.
7. Termination of Employment or
Provision of Services by Death, Disability. If the Grantee’s
employment with or provision of services for the Company and its Affiliates
terminates by death or Disability, the Option shall become exercisable in full
for a period of one year from the date of such death or Disability or until the
expiration of the stated term of such Option, whichever period is
shorter.
8. Termination of Employment or
Provision of Services by Retirement. If the Grantee’s
employment with or provision of services for the Company and its Affiliates
terminates by reason of Grantee’s Retirement, the Option shall become
exercisable in full for a period of one year from the date of such termination
or until the expiration of the stated term of such Option, whichever period is
shorter.
9. Involuntary Termination of
Employment or Provision of Services for Cause. If the
Grantee's employment with or provision of services for the Company and its
Affiliates terminates for Cause, vesting of all outstanding Options held by the
Grantee covered hereunder shall thereupon terminate and all Options held by the
Grantee covered hereunder shall thereupon terminate.
10. Involuntary Termination of
Employment or Provision of Services Without Cause. If the Grantee’s
employment with or provision of services for the Company and its Affiliates
terminates involuntarily for any reason other than death, Disability, Retirement
or Cause, the Option held by the Grantee covered hereunder may thereafter be
exercised, to the extent it was exercisable at the time of termination, for a
period of 30 days from the date of such termination of employment or provision
of services or until the expiration of the stated term of such Option, whichever
period is shorter. Notwithstanding the foregoing, to the extent the
Option is unvested or unexercisable at the date of termination, the Option shall
thereupon terminate.
11. Other Termination of
Employment or Provision of Services. If the Grantee’s
employment with or provision of services for the Company and its Affiliates is
terminated by the Grantee for any reason other than death, Disability or
Retirement, the Option may thereafter be exercised, to the extent it was
exercisable at the time of termination, for a period of 30 days from the date of
such termination of employment or provision of services or until the expiration
of the stated term of such Option, whichever period is
shorter. Notwithstanding the foregoing, to the extent the Option is
unvested or unexercisable at the date of termination, the Option shall thereupon
terminate.
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12. Tolling. Notwithstanding
the foregoing, to the extent permitted under Section 409A of the Code, the
exercise period following a termination described in Paragraphs (7), (8), (10)
or (11) above shall be tolled for any applicable window/blackout period
restrictions under the Company’s xxxxxxx xxxxxxx policy.
13. Change in
Control. Upon a Change in Control, and subject to the
terms of the Plan, the Options not then vested and exercisable shall become
fully vested and exercisable and shall be otherwise subject to the
Plan.
14. Effect of Amendment of
Plan. No discontinuation, modification, or amendment of the
Plan may, without the express written consent of the Grantee, adversely affect
the rights of the Grantee under this Option, except as expressly provided under
the Plan.
This Agreement may be amended as
provided under the Plan, but except as provided thereunder shall not adversely
affect Grantee’s rights hereunder without Grantee’s consent.
15. No Limitation on Rights of
the Company. The grant of this Option shall not in any way
affect the right or power of the Company to make adjustments, reclassifications,
or changes in its capital or business structure or to merge, consolidate,
dissolve, liquidate, sell, or transfer all or any part of its business or
assets.
16. Rights as a
Shareholder. The Grantee shall have the rights of a
shareholder with respect to the Shares covered by the Option only upon becoming
the holder of record of those Shares.
17. Compliance with Applicable
Law. Notwithstanding anything herein to the contrary, the
Company shall not be obligated to cause to be issued or delivered any
certificates for Shares pursuant to the exercise of the Option, unless and until
the Company is advised by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authority, and the requirements of any exchange upon which Shares
are traded. The Company shall in no event be obligated to register
any securities pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) or to take any other action in order to cause the issuance
and delivery of such certificates to comply with any such law, regulation or
requirement. The Company may require, as a condition of the issuance
and delivery of such certificates and in order to ensure compliance with such
laws, regulations, and requirements, that the Grantee make such covenants,
agreements, and representations as the Company, in its sole discretion,
considers necessary or desirable.
18. No Obligation to Exercise
Option. The granting of the Option shall impose no obligation
upon the Grantee to exercise the Option.
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19. Agreement Not a Contract of
Employment or Other Relationship. This Agreement is not a
contract of employment, and the terms of employment of the Grantee or other
relationship of the Grantee with the Company or any of its subsidiaries or
affiliates shall not be affected in any way by this Agreement except as
specifically provided herein. The execution of this Agreement shall
not be construed as conferring any legal rights upon the Grantee for a
continuation of an employment or other relationship with the Company or any of
its subsidiaries or affiliates, nor shall it interfere with the right of the
Company or any of its subsidiaries or affiliates to discharge the Grantee and to
treat him or her without regard to the effect which such treatment might have
upon him or her as a Grantee.
20. Tax
Consequences. The Company makes no representations or
warranties with respect to the tax consequences of the grant or exercise of the
Option and the disposition of the Shares obtained thereby. A Grantee should consult his or her
own tax advisor for information concerning the tax consequences of the grant and
exercise of the Option.
21. Withholding
Taxes. No later than the date as of which an amount first becomes
includible in the gross income of the Grantee for Federal income tax purposes
with respect to the exercise of the Option, the Grantee shall make arrangements
satisfactory to the Company regarding the payment of, any Federal, state, local
or foreign taxes of any kind required by law to be withheld with respect to such
amount, and by acceptance of this Award, Grantee has agreed to and hereby does,
instruct the Company to satisfy his or her withholding obligations with Shares
that would otherwise be delivered upon exercise of the Option. The
obligations of the Company under the Plan shall be conditional on such payment
arrangements, and the Company, its Subsidiaries and its Affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Grantee. The Administrator may establish such
procedures as it deems appropriate for such settlement of withholding
obligations with Grantee.
22. Notices. Any
notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally or sent by certified, registered, or
express mail, postage prepaid, return receipt requested, or by a reputable
overnight delivery service. Any such notice shall be deemed given
when received by the intended recipient.
23. Governing
Law. Except to the extent preempted by Federal law, this
Agreement shall be construed and enforced in accordance with, and governed by,
the laws of the State of New York without regard to the principles thereof
relating to the conflicts of laws.
24. Receipt of
Plan. The Grantee acknowledges receipt of a copy of the Plan,
and represents that the Grantee is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all the terms and provisions
of this Agreement and of the Plan. The Grantee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator with respect to any questions arising under this Agreement or the
Plan.
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25. Other Terms and
Conditions. The foregoing does not modify or amend any terms
of the Plan. To the extent any provisions of the Agreement are
inconsistent or in conflict with any terms or provisions of the Plan, the Plan
shall govern.
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IN WITNESS WHEREOF, the
Company and the Grantee have duly executed this Agreement as of the date first
written above.
MSC
INDUSTRIAL DIRECT CO.,
INC.
I have
read, understand and agree to abide by the terms of this Agreement, the Plan and
the Associate confidentiality, Non-Solicitation and Non-Competition Agreement
that I entered into with the company dated as of
_______________________ _____, 200___ (the “Associate
Agreement”). I hereby acknowledge that the grant of Shares pursuant
to this Agreement is consideration for my entering into and complying with the
Associate Agreement. I understand this Agreement, the Plan and the
Associate Agreement in all respects the terms and conditions of the Option
granted to me.
In
addition, in accordance with the Company's Executive Incentive Compensation
Recoupment Policy (the “Policy”), a copy of which I acknowledge having received
and which I have reviewed and understand, I agree to the following:
(i) I
agree, upon demand by the Company, to forfeit, return or repay to the Company
any or all of the “Option Benefits and Proceeds” if the Company determines that
I engaged in Misconduct that caused or partially caused the need for a
significant restatement of financial results, other than as a result of a change
in accounting principles (a “Restatement”). “Misconduct” shall mean a
knowing violation of SEC rules and regulations or Company policy, as determined
by the Board or the Compensation Committee of the Board in its sole and absolute
discretion.
(ii) I
agree, upon demand by the Company, to forfeit, return or repay to the Company
any or all of the "Option Benefits and Proceeds" if I breach or violate any of
the terms of the Associate Agreement (which also shall mean any future Associate
Agreement) following the termination of my employment with the
Company.
“Option
Benefits and Proceeds” shall mean (a) to the extent that the Option has not been
fully exercised, all of my remaining rights under the Option, (b) to the extent
that I have exercised all or any part of the Option and continue to hold shares
acquired upon exercise of the Option, any such shares, and (c) to the extent
that I have exercised all or any part of the Option and disposed of shares
acquired upon exercise of the Option, any net proceeds realized from such
disposition (or, in the case of a gift, the fair market value of the shares so
gifted at the time of the gift); provided, that for purposes of clause (ii)
above, clauses (b) and (c) of this definition of “Option Benefits and Proceeds”
only shall apply with respect to an exercise of the Option during the period
beginning two years before and ending two years after the termination of my
employment.
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These
provisions are subject to the limitations on the period for recoupment set forth
in the Policy and shall terminate in the event of a Change in
Control.
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Date
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Associate
Signature
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FOR MSC INDUSTRIAL DIRECT
CO., INC. USE ONLY
ACCEPTED
BY MSC INDUSTRIAL DIRECT CO., INC.
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By:
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Name:
Xxxxxxxx Xxx
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Title:
Sr. Compensation Analyst
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Date:
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