THE FINOVA GROUP INC.
1992 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
[Date]
(NQ)
The FINOVA Group Inc. (Company), a Delaware corporation, hereby grants to
_________ (Grantee) the option (Option) to purchase from the Company, pursuant
to The FINOVA Group Inc. 1992 Stock Incentive Plan (Plan), at the prices stated
below (Option Price) ________ shares of its Common Stock of the par value of
$.01 each (Common Stock) through the exercise of this Option in accordance with
the terms and conditions hereinafter set forth.
Number of Options Exercise Price Vesting Date
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1. Option Period and Termination of Employment of Grantee. The period
during which this Option may be exercised (Option Period) is the period
beginning on the date hereof and ending ten (10) years from such date, subject
to paragraph 2 below, and during this period this Option may be exercised only
by the Grantee personally and while an employee of the Company or an affiliate
thereof, except that:
(a) If the Grantee ceases to be an employee of the Company or any
subsidiary or affiliate of the Company for any reason, excluding death,
disability, retirement and termination of employment for cause, the option
rights hereunder (as they exist on the day the Grantee ceases to be such an
employee) may be exercised only within a period of three (3) months thereafter,
subject to the notice requirements set forth below, or prior to the expiration
of the Option Period, whichever shall occur sooner. If Grantee is terminated for
cause, all the option rights hereunder shall expire immediately upon the giving
to such Grantee of notice of such termination.
(b) If the Grantee ceases to be an employee of the Company or any
subsidiary or affiliate of the Company due to death, or dies within the three
month or three year periods referred to in Sections (a) or (c) of this
paragraph, the option rights hereunder (as they exist immediately prior to the
Grantee's death) may be exercised by the Grantee's personal representative only
during a period of twelve (12) months thereafter, subject to the notice
requirements set forth below, or prior to the expiration of the Option Period,
whichever shall occur sooner.
(c) If the Grantee ceases to be an employee of the Company or any
subsidiary or affiliate of the Company by reason of disability or retirement,
the option rights hereunder (as they exist on the day the Grantee ceases to be
an employee) may be exercised only within a period of
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three (3) years thereafter, subject to the notice requirements set forth below,
or prior to the expiration of the Option Period, whichever shall occur sooner.
2. Method of Exercise of this Option. This Option may be exercised in the
manner hereinafter prescribed, in whole or in part, at any time or from time to
time, during the Option Period as follows:
(a) 34% of the shares hereby optioned at any time after one year
from the date hereof;
(b) 33% of the shares hereby optioned at any time after two years
from the date hereof:
(c) the balance of the shares hereby optioned at any time after
three years from the date hereof;
provided that 50 shares, or the total number of shares remaining unpurchased
hereunder, if less than 50 shares, is the minimum number which may be purchased
hereunder at any one time. This Option shall not be exercisable prior to the
expiration of one year from the date of grant, except as otherwise specified in
the Plan. Notwithstanding the above, in the event the Grantee ceases to be an
employee of the Company or any subsidiary or affiliate of the Company due to
death, disability or retirement at age 65 or later, the entire Option shall
become exercisable upon such occurrence. All purchases hereunder must be
completed within the time periods prescribed herein for the exercise thereof.
Options shall vest in increasing price order, as noted above.
On or before the expiration of the Option Period specified herein, written
notice of the exercise of this Option with respect to all or a part of the
Common Stock hereby optioned may be mailed or delivered to the Company by the
Grantee in substantially the form attached hereto or in such other form as the
Company may require, properly completed and among other things stating the
number of shares of Common Stock with respect to which the Option is being
exercised, and specifying the method of payment for such Common Stock. The
notice must be mailed or delivered prior to the expiration of this Option.
Before any stock certificates shall be issued, the entire purchase price of
the Common Stock purchased shall be paid to the Company. Certificates,
registered in the name of the purchaser for the Common Stock purchased, will be
issued to the purchaser as soon as practicable thereafter. Failure to pay the
purchase price for any Common Stock within the time specified in said notice
shall result in forfeiture of the Grantee's right to purchase the Common Stock
at a later date and the number of shares of Common Stock which may thereafter be
purchased hereunder shall be reduced accordingly.
The purchase price may be paid either entirely in cash or in whole or in
part with unrestricted Common Stock already owned by the Grantee. If the Grantee
elects to pay the purchase price entirely in cash, he or she will be notified of
the purchase price by the Company. If the Grantee elects to pay the purchase
price either substantially all with Common Stock or partly with Common Stock and
the balance in cash, he or she will be notified by the Company of the fair
market value of
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the Common Stock on the exercise date and the amount of Common Stock or cash
payable. Within three business days after the exercise date, the Grantee shall
deliver to the Company either cash or Common Stock certificates, in negotiable
form, at least equal in value to the purchase price, or that portion thereof to
be paid for with Common Stock, together with cash sufficient to pay the full
purchase price. Only full shares of Common Stock shall be utilized for payment
purposes.
To the extent permissible under applicable tax, securities, and other laws,
the Grantee may satisfy a tax withholding requirement by surrendering Shares,
including Shares to which Grantee is entitled as a result of the exercise of
this Option, in such manner as the Company shall choose in its discretion to
satisfy such requirement.
3. Non-Transferability of this Option. This Option may not be assigned,
encumbered or transferred, in whole or in part, except by the Grantee's will or
in accordance with the applicable laws of descent and distribution, or pursuant
to a beneficiary designation effected in accordance with Company policy.
4. Adjustments for Changes in Capitalization of Company. The Common Stock
covered by this Option is, at the option of the Company, either authorized but
unissued or reacquired Common Stock. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split, extraordinary
distribution with respect to the Common Stock or other change in corporate
structure affecting the Common Stock during the Option Period, the number of
shares of Common Stock which may thereafter be purchased pursuant to this Option
and the purchase price per share, shall be appropriately adjusted, or other
appropriate substitutions shall be made, and the determination of the Board of
Directors of the Company, or the Executive Compensation Committee of the Board
of Directors, as the case may be, as to any such adjustments shall be final,
conclusive and binding upon the Grantee.
5. Effect of Change in Control. (a) In the event of a Change in Control (as
defined in the Plan), this Option (to the extent outstanding as of the date such
Change in Control is determined to have occurred) if not then exercisable and
vested shall become fully exercisable and vested to the full extent of the
original grant, without regard to the three month limit on exercisability
imposed by Section 5(i) of the Plan or any successor provision.
(b) Notwithstanding any other provision of the Plan, during the
60-day period from and after a Change in Control (the "Exercise Period"), the
Grantee shall have the right, whether or not this Option is fully exercisable
and in lieu of the payment of the exercise price for the shares of Common Stock
being purchased under the Option and by giving notice to the Company, to elect
(within the Exercise Period) to surrender all or part of the Option to the
Company and to receive cash, within 30 days of such notice, in an amount equal
to the amount by which the Change in Control Price (as defined in the Plan) per
share of Common Stock on the date of such election shall exceed the exercise
price per share of Common Stock under the Option (the "Spread") multiplied by
the number of shares of Common Stock granted under the Option as to which the
right granted hereunder shall have been exercised; provided, however, that if
the Change in Control is within six months of the date of grant of a particular
Option held by a Grantee who is an officer or director of
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the Company and is subject to Section 16(b) of the Securities Exchange Act of
1934, no such election shall be made by such Grantee with respect to such Option
prior to six months from the date of grant. Notwithstanding any other provision
hereof, if the end of such 60-day period from and after a Change in Control is
within six months of the date of grant of an Option held by a Grantee who is an
officer or director of the Company and is subject to Section 16(b), such Option
shall be canceled in exchange for a cash payment to the Grantee, effected on the
day which is six months and one day after the date of grant of such Option,
equal to the Spread multiplied by the number of shares of Common Stock granted
under the Option.
6. Plan and Plan Interpretations as Controlling. This Option and the terms
and conditions herein set forth are subject in all respects to the terms and
conditions of the Plan, which are controlling. The Plan provides that the
Executive Compensation Committee of the Board of Directors may from time to time
make changes therein, interpret it and establish regulations for the
administration thereof; provided that no such amendment shall impair the rights
of any Grantee under an Option without the Grantee's consent, except an
amendment for purposes of compliance with the federal securities laws. The
Grantee, by acceptance of this Option, agrees to be bound by said Plan and such
Board actions.
This Option may not be exercised whenever such exercise or the issuance
of any of the optioned shares would be contrary to law or the regulations of any
governmental authority having jurisdiction.
IN WITNESS WHEREOF, THE FINOVA GROUP INC. has caused this Option to be
duly executed in its name and dated as of the date of grant hereof.
Dated: THE FINOVA GROUP INC.
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By: X. XXXXXXXXXXX
ATTEST: Chairman
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Secretary or Assistant Secretary
