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Exhibit D
STOCK OPTION CONTRACT
THIS STOCK OPTION CONTRACT made by and between MAGNETIC TECHNOLOGIES
CORPORATION, having its offices located at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("the Company") and XXXXXX X. XxXXXX, residing at 00 Xxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("the Employee").
WHEREAS, the Company desires to provide an incentive to the Employee to
maintain an employment relationship with the Company by enabling the Employee to
share in the success of the Company through an equity interest; and
WHEREAS, in the judgment of the Company's Board of Directors, the fair
market value of the Company's Common Stock on May 19, 1992 (the date this Stock
Option Contract was authorized) was $3.50 per share;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, the Company hereby grants to the Employee an option
to purchase an aggregate of one hundred thousand (100,000) shares of the
Company's $.15 par value Common Stock ("the Shares") at a price of Three Dollars
and Fifty Cents ($3.50) per Share, pursuant to the following terms and
conditions of this contract.
1. TERM. The term of the stock option granted hereunder (that is, the
period during which it may be exercised by the Employee in whole or in part)
will commence on the date of this Contract and will expire upon the earliest to
occur of the following dates: (a) May 18, 1997; (b) upon the mutual written
agreement of the Company and the Employee; and (c) in the event that the
Employee's employment with the Company becomes terminated, at the conclusion of
the following applicable time period:
A. In the event that the Employee's employment with the
Company shall be terminated for any reason other than death, the
Employee may exercise all rights hereunder for a period of thirty (30)
days after such employment termination; provided, however, that if such
termination is by reason of either the retirement of the Employee (as
mutually agreed upon by the Company and the Employee) or the disability
of the Employee, the exercise period will be one (1) year after such
event, rather than 30 days. For purposes hereof, the Employee's
employment status will be considered to remain intact during any period
in which the Employee is on sick leave, military duty or other bona
fide leave of absence to the extent that such leave does not exceed the
greater of (i) six (6) months or (ii) that period during which the
Employee has a right by statute or contract to resume such employment.
B. In the event that the Employee shall die prior to the
complete exercise of all rights under this Contract, the then
unexercised portion hereof may be exercised in whole or in part for a
period of six (6) months after the date of the
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Employee's death, either by the Employee's estate or by or on behalf of
such persons as to whom the Employee's rights hereunder shall pass
under the Employee's Will or by the laws of descent and distribution.
2. EXERCISE PROCEDURE. In order to exercise the stock option granted
hereunder, in whole or in part, the Employee must give written notice to the
Company, directed to its Secretary at its principal office, such notice to:
A. Specify the number of Shares being purchased and the
purchase price being paid therefor, accompanied by payment in full of
such purchase price; and
B. Contain, in form and substance satisfactory to counsel for
the Company, written acknowledgements, representations and covenants by
the Employee with respect to such limitations on the transferability of
the Shares as counsel for the Company may in its sole discretion
determine to be in effect at that time by reason of the
non-registration of the Shares under the Securities Act of 1933 as
amended ("the Act"), including the Employee's (i) acknowledgement that
the Shares are being purchased under a claim of exemption from
registration under the Act as a transaction not involving a public
offering, (ii) representations and warranties that the Shares are being
acquired for investment purposes and not with a view to the
distribution thereof, and (iii) agreement not to transfer, encumber or
dispose of the Shares unless (x) a registration statement with respect
to the Shares shall be effective under the Act and there shall have
been compliance with applicable state laws or (y) in compliance with
Rule 144 or some other exemption from registration under the Act.
The Company will issue stock certificate(s) to the Employee representing the
Shares purchased by the Employee hereunder as soon as practical after the
Company's receipt of the aforementioned notice and payment, including clearance
of funds. Each such certificate shall contain such restrictive legends as may be
established by counsel for the Company evidencing the aforementioned transfer
restrictions. The Employee will acquire rights as a stockholder of the Company
with respect to the Shares so purchased upon the date of the issuance of such
stock certificate(s).
3. NON-ASSIGNABILITY. The rights granted under this Contract may not be
assigned, pledged or transferred by the Employee, except by Will or the laws of
descent or distribution as set forth in Paragraph 1 hereof.
4. ANTI-DILUTION. The aggregate number and kind of Shares represented
by the stock option granted under this Contract, and the exercise price of such
option, will be automatically proportionately adjusted or changed to reflect any
increase, decrease or change in the total outstanding shares of the Company's
Common Stock resulting from a stock dividend, recapitalization, merger,
consolidation, split-up, combination, exchange of stock or similar transaction
which may occur subsequent to the date hereof but prior to the exercise of any
rights under this Contract (but not by reason of
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the issuance or purchase of the Company's Common Stock in consideration of
money, services or property).
5. RESERVATION OF SHARES. Because of the substantial conditions which
must be met to entitle the Employee to exercise the stock option rights
hereunder, the Company's Board of Directors will be under no obligation to
reserve the Shares under this Contract, and no particular shares of the
Company's Common Stock will be construed as optioned or reserved for the
Employee pursuant to this Contract. The Company will be deemed to have complied
with the terms of this Contract if, at the time of the Employee's exercise of
rights hereunder, it has a sufficient number of authorized and unissued shares
of Common Stock available for such purpose. Neither this Contract nor any
subsequent reservation of the Shares for the Employee will be construed as
constituting the establishment of a trust of the Shares.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of May 19, 1992, in several counterparts, each of which shall be considered to
be an original and at least one of which has been delivered to each party
hereto.
MAGNETIC TECHNOLOGIES CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, Chairman
THE EMPLOYEE:
/s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx
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AMENDMENT TO STOCK OPTION CONTRACT
The undersigned, MAGNETIC TECHNOLOGIES CORPORATION, having its offices located
at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("the Company") and XXXXXX X.
XxXXXX, residing at 00 Xxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("the
Employee") hereby agree that Paragraph 1. ("TERM.") of a certain Stock Option
Contract dated May 19, 1992, is hereby amended to change the date which appears
on the fifth line of said Paragraph 1 from "May 18, 1997" to the new date of May
18, 2002. The parties further agree that the purpose of the aforesaid amendment
is to extend the term of the Stock Option Contract for a period of five years
unless said Contract becomes sooner terminated pursuant to the other terms of
said Paragraph 1.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as
of May 18, 1997, in several counterparts, each of which shall be considered to
be an original and at least one of which has been delivered to each party
hereto.
MAGNETIC TECHNOLOGIES CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, Chairman
THE EMPLOYEE
By: /s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx
