1
EXHIBIT 10(i)
XXXXXX CORPORATION
STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
TERMS AND CONDITIONS
(AS OF 8/25/00)
1. THE OPTION - TERMS AND CONDITIONS. Under and subject to the
provisions of the Corporation's Stock Incentive Plan (as amended from time to
time the "Plan"), the Corporation has granted to the Employee a non-statutory
option (the "Option") to purchase such number of shares of Common Stock of the
Corporation at the designated price per share as set forth in writing by the
Corporation to the Employee. Such grant is subject to the following Terms and
Conditions:
(a) Except as set forth in Sections 1(e), 2(b), or 2(d), the
Option shall not be exercisable to any extent until and unless the
Employee shall have remained continuously in the employ of the
Corporation for one year from the grant date. The grant of the Option
shall not limit or restrict the Corporation's rights to terminate the
Employee's employment.
(b) During the lifetime of the Employee, the Option shall be
exercisable only by the Employee, and, except as otherwise set forth in
Section 2, only while the Employee continues as an Employee of the
Corporation.
(c) Notwithstanding any other provision of these Terms and
Conditions and the Agreement of which they form a part, the Option
shall expire no later than ten years from the grant date (the
"Expiration Date"), and shall not be exercisable thereafter.
(d) The Option is exercisable as follows:
(i) After the end of one year and prior to the end
of two years from the grant date, not more than fifty percent
of the grant;
(ii) After the end of two years and prior to the end
of three years from the grant date, not more than seventy-five
percent of the grant; and
(iii) After the end of three years from the grant
date, one-hundred percent of the grant.
(e) Upon a "change of control" of the Corporation (as defined
in Section 11.1 of the Plan) any outstanding Option shall immediately
become fully exercisable, provided that if the Employee is an officer
of the Corporation and a stock appreciation right has been granted with
respect to a portion or all of the shares covered by these Terms and
Conditions, the Option granted as to such shares may not in any event
be exercised prior to the end of six months from the grant date, but
the time set forth in Paragraph 2(f) shall be extended accordingly.
2
2. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OF EMPLOYMENT. In the event of termination of
employment other than as a result of circumstances described in
Sections 2(b), (c), (d), (e), and (f) below, the Options, whether
exercisable or not, shall terminate immediately upon termination of
employment.
(b) DEATH. Notwithstanding Section 1(d), in the event of the
death of the Employee while employed by the Corporation, the Option
shall immediately become fully vested and exercisable and shall be
exercisable only within the twelve (12) months following the date of
death, but no later than the Expiration Date. In the event of the death
of the Employee following termination of or cessation of employment,
the Option shall be exercisable only within the twelve (12) months
following the date of death, but no later than the Expiration Date and
then only if and to the extent that the Option was exercisable at the
date of the Employee's death. Following the death of the Employee,
Options may only be exercised by the executor or administrator of the
Employee's estate or by the person or persons to whom the Employee's
rights under the Option shall pass by the Employee's will or the laws
of descent and distribution.
(c) DISABILITY. In the event of cessation of employment due to
disability of the Employee (as determined by the Corporation) while
employed by the Corporation, the Option shall be exercisable by the
Employee until the Expiration Date and only to the extent that the
Option was exercisable at the date of such cessation of employment.
(d) RETIREMENT. In the event of retirement of the Employee,
the Option shall, if the retirement occurs after the Employee has
reached age 55 and has ten or more years of full-time service with the
Corporation, be exercisable by the Employee until the Expiration Date
and only to the extent that the Option was exercisable at the date of
such retirement. In the event of retirement of the Employee, the Option
shall, if the retirement occurs after the Employee has reached age 65
and has ten or more years of full-time service with the Corporation, be
exercisable by the Employee until the Expiration Date and shall
continue to become exercisable after such retirement according to the
schedule set forth in Section 1(d).
(e) MISCONDUCT. In the event of termination of employment of
the Employee by the Corporation for deliberate, willful or gross
misconduct ("Misconduct"), as determined by the Corporation, the Option
shall be exercisable only by the Employee within one (1) month
following such cessation of employment but no later than the Expiration
Date and only to the extent that it was exercisable at the date of such
cessation of employment.
(f) INVOLUNTARY TERMINATION. In the event of termination of
employment of the Employee by the Corporation other than for
Misconduct, the Option shall be exercisable only by the Employee within
the three (3) months following such cessation of employment but no
later than the Expiration Date and only to the extent that it was
exercisable at the date of such cessation of employment. The three
month period shall be increased to such greater period up to six months
as may be necessary to permit exercise by an Employee who is an officer
under the conditions set forth in Section 1(e).
3
3. EXERCISE OF OPTION. The Option may be exercised by delivering to the
Corporation at the office of the Corporate Secretary (i) a written notice,
signed by the person entitled to exercise the Option, stating the designated
number of shares such person then elects to purchase, (ii) payment in an amount
equal to the full purchase price of the shares to be purchased, and (iii) in the
event the Option is exercised by any person other than the Employee, evidence
satisfactory to the Corporation that such person has the right to exercise the
Option. Payment shall be made (a) in cash, (b) in previously acquired shares of
Common Stock of the Corporation, or (c) in any combination of cash and such
shares. Shares tendered in payment of the purchase price which have been
acquired through an exercise of a stock option shall have been held at least six
months prior to exercise of the Option and shall be valued at the closing price
as reported by the New York Stock Exchange for the day preceding the date of
exercise of the Option. Upon the exercise of the Option, the Corporation shall
issue and deliver to the Employee, one or more certificates for the shares in
respect of which the Option shall have been so exercised. The Employee does not
have any rights as a shareholder in respect of any shares as to which the Option
shall not have been duly exercised and no rights as a shareholder shall exist
prior to the proper exercise of such Option.
4. PROHIBITION AGAINST TRANSFER. The Option and rights granted by the
Corporation under these Terms and Conditions and the Agreement of which they
form a part are not transferable except to family members or trust, by will or
by the laws of descent and distribution, provided that the Option may not be
transferred to family members or trusts except as permitted by applicable law or
regulations. Without limiting the generality of the foregoing, the Option may
not be assigned, transferred except as aforesaid, pledged or hypothecated, shall
not be assignable by operation of law, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof, or the levy of any execution, attachment or similar process upon the
Option, shall be null and void and without effect.
5. EMPLOYMENT BY PARENT, SUBSIDIARY OR SUCCESSOR. For the purpose of
these Terms and Conditions and the Agreement of which they form a part,
employment by a parent or subsidiary of or a successor to the Corporation shall
be considered employment by the Corporation. "Parent" and "subsidiary" as used
herein shall have the meaning of "parent" and "subsidiary corporation,"
respectively, as defined in Section 424 of the Internal Revenue Code of 1986, as
amended, or subsequent comparable statute.
6. COMMITTEE. The Committee administering the Plan shall have
authority, subject to the express provisions of the Plan as in effect from time
to time, to construe these Terms and Conditions and the Agreement of which they
form a part and the Plan, to establish, amend and rescind rules and regulations
relating to the Plan, and to make all other determinations in the judgment of
the Committee necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in these Terms and Conditions and the Agreement of which they form
a part in the manner and to the extent it shall deem expedient to carry the Plan
into effect, and it shall be the sole and final judge of such expediency.
7. INCORPORATION OF PLAN PROVISIONS. These Terms and Conditions and the
Agreement of which they form a part are made pursuant to the Plan, the
provisions of which are hereby incorporated by reference. Capitalized terms not
otherwise defined herein have the meanings set forth in the Plan. In the event
of a conflict between the terms of these Terms and Conditions and the Agreement
of which they form a part and the Plan, the terms of the Plan shall govern.
