CLASS B OPTION AGREEMENT
Exhibit
10.3
This
Class B Option Agreement (the "Agreement") is entered into
this 11th day of February 2010, by and between, Icahn Enterprises, L.P., a
Delaware master limited partnership (together, with its successors, the "Partnership"), and Xxxxxx Xxxxxxxxx (the
"Optionee'').
In
consideration of the premises, mutual covenants and agreements herein, the
Partnership and the Optionee agree as follows:
1. Grant of Option. On the date
hereof, the Partnership hereby grants to the Optionee a Class B Option to
purchase from the Partnership, at a price of $55.60 per unit (the "Exercise Price"), up to
100,000 depositary (common) units of the type of units currently listed on the
New York Stock Exchange representing common limited partnership interests of the
Partnership (the "Units"), subject to the
provisions of this Agreement (collectively the "Options").
2. Vesting.
(a) In General. All of the
Options will be nonvested and forfeitable as of the Effective Date. Subject to
the Optionee's continued employment with the Partnership or its general partner
(together, with its successors, the "General Partner"), Options
with respect to 33,334 Units will vest at the close of business on December 31,
2010; 33,333 Units at the close of business on December 31, 2011; and 33,333
Units at the close of business on December 31, 2012.
(b) Acceleration of Vesting.
Notwithstanding Section (a), all Options that have not been previously forfeited
or expired shall become fully vested and nonforfeitable upon the earliest to
occur of the following: Termination by the General Partner and the
Partnership of the Optionee's employment with the Partnership and General
Partner without Cause or the termination by Optionee for Good
Reason. However, all Options expire after which they are no longer
exercisable as set forth in Section 3 and 4 hereof.
For
purposes of this Agreement, Cause and Good Reason shall be as defined in his
Optionee’s Employment Agreement of even date with the Partnership (the “Employment Agreement”).
(c) Cessation of Employment or Other
Service Relationship. Except as provided in Section 2(b), all unvested
Options terminate immediately upon the cessation of the Optionee's employment
with the Partnership and the General Partner.
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3.
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(a)
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Term
of Options. Except as set
forth in this Section 3, all Options, whether vested or unvested,
shall expire at the close of business on the 90th
day following the cessation of Optionee’s employment (the date on which
Optionee is no longer employed by Employer). Prior to the Expiration
Date, in the case of Optionee being terminated by the
Partnership and the General Partner without Cause or being terminated by
Optionee for Good Reason, the Option shall expire at the close of business
on the 180th
day following the cessation of Optionee’s
employment.
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(b)
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In
the event that Optionee shall remain in the continuous employ of the
Partnership and the General Partner through the Expiration Date (as
defined in the Employment Agreement to be December 31, 2012), the Option
to purchase the 100,000 Units will expire at 5:00 p.m. Eastern Time (the
“close of business”) on June 30, 2013, or if he remains employed beyond
March 31, 2013, then the Options shall expire on the earlier to occur of
(a) the close of business on the 90th
day after his employment ceases (or the 180th
day in the case of Optionee being terminated by the Partnership and the
General Partner without Cause or being terminated by Optionee for Good
Reason) and (b) December 31, 2014
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4. Exercise of Vested Options.
(a) Right to Exercise. The
Optionee may exercise a vested Option at any time after the later of the
Effective Date and the date on which the required approval of the grant of the
Options has been obtained from the requisite holders of outstanding Partnership
Units and at any time on or before the relevant Expiration Date.
(b) Exercise Period Following Cessation
of Employment. Following cessation of the Optionee's employment with the
Partnership and the General Partner the vested Options shall expire and be of no
further force and effect as set forth in Section
3 hereof.
(c) Exercise Procedure. In order
to exercise the Options, the following items must be delivered to the Secretary
of the General Partner (i) an exercise notice in the form attached hereto as
Appendix B, (ii) full payment of the Exercise Price for such Units, and (iii) an
executed copy of any other agreements or documents reasonably required by the
General Partner or the Partnership. An exercise will not be effective until all
of the foregoing items are received by Secretary of the General
Partner.
(d) Method of Payment. Payment of
the Exercise Price may be made at the election of the Optionee (i) by delivery
of cash, certified or cashier's check, money order or other cash equivalent
acceptable to the Partnership in its discretion, (ii) by a broker-assisted
cashless exercise in accordance with Regulation T of the Board of Governors of
the Federal Reserve System through a brokerage firm approved by the Partnership,
or (iii) by a cashless exercise for purposes of Section 19 of this Agreement, or
(iv) a combination of the foregoing.
(e) Issuance of Units. Upon
exercise of the Options in accordance with the terms of this Agreement, the
Partnership will issue to the Optionee or to the brokerage firm specified in the
Optionee's delivery instructions pursuant to a broker-assisted cashless
exercise, as the case may be, the number of Units so paid for, in the form of
fully paid and nonassessable Depositary Units representing limited partner
interests of the Partnership.
5. Tax Withholding. Upon the
exercise of the Options in accordance with the terms of this Agreement, the
Partnership shall have the right to withhold (and at the Optionee’s election the
Partnership shall withhold) the number of Units issuable in respect of the
Options having an aggregate Fair Market Value as of the date of the withholding
equal to the amount of any federal, state, local or foreign taxes payable as a
result of the vesting or exercise of the Options in whole or in part; provided,
however, that the value of the Units withheld may not exceed the statutory
minimum withholding amount required by law or such additional amount (as
permitted by law) elected by Optionee. The value of any Units
withheld by the Partnership shall be paid by the Partnership to satisfy
Optionee’s tax liabilities.
For
purposes of this Agreement, Fair Market Value means, with respect to
a Unit for any purpose on a particular date, (A) if Units are registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and
listed for trading on a national exchange or market, the average, for the 30-day
period preceding such date, of: (i) the closing price quoted on the New York
Stock Exchange, the American Stock Exchange, or the Nasdaq National Market, as
applicable; (ii) the last sale price quoted on the Nasdaq SmallCap Market; (iii)
the average of the high bid and low asked prices on the Nasdaq OTC Bulletin
Board Service or by the National Quotation Bureau, Inc.; or (iv) if Units are
not quoted by any of the above, the average of the closing bid and asked prices
on the relevant date furnished by a professional market maker for the Units, and
(B) if there are not any quoted bid and asked prices, the value as determined in
good faith by the Board of Directors of the General Partner (the "Board"),
provided, however, that for purposes of calculating Optionee's taxable income
upon exercise of the Options under the circumstances set forth in clause (A)
above, Fair Market Value shall mean the closing price or the last sale price
quoted on the principal exchange or market on which the Units are listed or
traded.
6. Adjustments for Transactions and
Other Events. Adjustments for Transactions and
Other Events. In the event that the Partnership engages
in:
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(a)
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A
split or combination of Units (whether by dividend of Units or otherwise),
a recapitalization, reorganization or other similar change in its capital
structure;
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(b)
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An
Excess Dividend (as defined below);
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(c)
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An
issuance of Units of the Partnership or securities convertible into or
exchangeable for Units of the Partnership, to Xx. Xxxx X. Icahn or his
affiliates, at a price per Unit less than its Fair Market Value;
or
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(d)
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A
going private transaction with a controlling person of the
Partnership.
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then the
Board shall make such equitable adjustments and modifications to the Options and
the terms of this Agreement, including but not limited to the number or kind of
interests covered by the Options, the Exercise Price, or the manner in which the
Options are to be exercised, as the Board reasonably determines is required or
appropriate in order to prevent the dilution or enlargement of the benefits or
potential benefits provided in respect of Options under this
Agreement.
For the purposes of this
Agreement, the term Excess Dividend shall mean the amount, if any, by which the
aggregate dividends, paid to holders of Units from and after January 1, 2010, in
either cash or other property (valued at fair market value as determined by the
Board, in its reasonable discretion) exceeds the Tax Amount. ‘‘Tax Amount’’ means
the aggregate combined federal, state and local income taxes, for all
periods beginning on or after January 1, 2010, including estimated
taxes, that would be payable by the Partnership if it were a Delaware
corporation filing separate tax returns with respect to its Taxable Income for
such periods and owned 100% of Icahn Enterprises Holdings L.P.; provided, that
in determining the Tax Amount, the effect thereon of any net operating loss
carryforwards or other carryforwards or tax attributes, such as alternative
minimum tax carryforwards, that would have arisen if Partnership were a Delaware
corporation shall be taken into account, but only to the extent such
carryforwards or attributes arise after January 1, 2010; provided,
further that (i) if there is an adjustment in the amount of the Taxable Income
for any period, an appropriate positive or negative adjustment shall be made in
the Tax Amount, and if the Tax Amount is negative, then the Tax Amount for
succeeding periods shall be reduced to take into account such negative amount
until such negative amount is reduced to zero and (ii) any Tax Amount other than
amounts relating to estimated taxes shall be computed by a nationally recognized
accounting firm (but, including in any event, Partnership’s auditors).
Notwithstanding anything to the contrary, the Tax Amount shall not include taxes
resulting from Partnership’s change in the status to a corporation for tax
purposes.‘‘Taxable Income’’
means, for any period, the taxable income or loss of Partnership for such
period for federal income tax purposes.
7. Holder of Options Not a Unitholder.
Until such time, if any, that he exercises the Options, Optionee shall
have no rights as a Unitholder and shall not be owed the duties, if any, that
Unitholders are owed in their capacity as Unitholders.
8. Notices. All notices and
other communications made or given pursuant to this Agreement shall be in
writing and shall be sufficiently made or given if hand delivered or mailed by
certified mail, addressed to the Optionee at the address contained in the
records of the Partnership or General Partner, or addressed to the Partnership
for the attention of the Secretary of the General Partner at its principal
executive office or, if the receiving party consents in advance, transmitted and
received via telecopy or via such other electronic transmission mechanism as may
be available to the parties.
9. Investment Representation. if
at any time the Partnership determines that the delivery of Units under this
Agreement is or may be unlawful under the laws of any applicable jurisdiction,
or federal or state securities laws, the right to exercise the Options or
receive Units pursuant to the Options or exercise of any particular right
hereunder shall be suspended until the Partnership determines that such delivery
is lawful. The Partnership may require that the Optionee, as a condition to
exercise of the Option, and as a condition to the delivery of any Units, make
such written representations (including representations to the effect that such
person will not dispose of the Units so acquired in violation of federal or
state securities laws) and furnish such information as may, in the opinion of
counsel for the Partnership, be appropriate to permit the Partnership to issue
the Units in compliance with applicable federal and state securities
laws. The Partnership shall use its best efforts to register the
Units issuable upon exercise of the Options with the Securities and Exchange
Commission and, except during occasional periods when the registration statement
relating thereto may not be usable to maintain such registration so that such
Units are freely transferrable within a reasonable time following the date
hereof.
10. Entire Agreement. This
Agreement, together with the Employment Agreement, contains the entire agreement
between the parties with respect to the Options granted hereunder. Any oral or
written agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Agreement with respect to the
Options granted hereunder shall be void and ineffective for all
purposes. Any conflict between this Agreement and the Employment
Agreement with respect to the Options shall be determined as provided in this
Agreement.
11. Intentionally Omitted.
12. Amendment. This Agreement may
be amended from time to time in a written document signed by each of the parties
hereto.
13. Governing Law. The validity,
construction and effect of this Agreement, and of any determinations or
decisions made by the Partnership relating to this Agreement, and the rights of
any and all persons having or claiming to have any interest under this
Agreement, shall be determined exclusively in accordance with the laws of
Delaware without regard to its provisions concerning the applicability of laws
of other jurisdictions. Any suit with respect hereto will be brought in the
federal or state courts in the districts which include courts in Delaware, and
the Optionee hereby agrees and submits to the personal jurisdiction and venue
thereof.
14. Headings. The headings in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
15. Options Conditioned Upon Unit Holder
Approval. This Agreement and the Options are conditioned upon and subject
to approval thereof by a vote of the depositary unit holders in accordance with
rules under Section 16 of the Securities Exchange Act of 1934, as
amended. Partnership will use its best efforts to cause the
Unitholders to approve the grant of Options to Optionee and Xxxx X. Icahn has
agreed in connection with the Employment Agreement to vote all his Depositary
Units for the grant of the Options to Optionee.
16. Non-Guarantee of Employment or Other
Service Relationship. Nothing in this Agreement shall alter the
Optionee's at-will or other employment status with the Partnership or the
General Partner, nor be construed as a contract of employment or other service
relationship between the Partnership or the General Partner and the Optionee, or
as a contractual right of the Optionee to continue in the employ of, or in a
service relationship with (or to occupy any particular position with, or receive
any particular benefit or compensation from the Partnership, and any change
thereof shall not be deemed to constitute a termination of employment hereunder)
the Partnership or the General Partner for any period of time, or as a
limitation of the right of the Partnership or the General Partner to discharge
the Optionee at any time with or without cause or notice and whether or not such
discharge results in the forfeiture of any Units.
17. No Rights as a Holder of a
Unit. The Optionee will not have any of the rights of a holder of a Unit
until such Units have been issued to him upon the due exercise of the
Options.
18. Nontransferability of
Options. The Options are nontransferable and may be exercised only by
Optionee except that (a) upon the death of the Optionee, vested Options may be
transferred by will or the laws of descent and distribution or (b) if the
Optionee is under a legal disability, the vested Options may be transferred to
the Optionee's guardian or legal representative. Except as provided above, the
Options may not be assigned, transferred, pledged, hypothecated or disposed of
in any way (whether by operation of law or otherwise) and shall not be subject
to execution, attachment or similar process.
19. Units No Longer Publicly
Traded. In the event that the Units are no longer publicly traded, the
Optionee may exercise the vested Options on a cashless basis, in which event the
Optionee will be paid with respect to each Unit for which the Option is
exercised the amount by which the Fair Market Value of the Unit, on the date of
exercise exceeds, the Exercise Price.
ICAHN
ENTERPRISES L.P
CLASS B OPTION EXERCISE
FORM
TO: Secretary
of ICAHN ENTEROPRISES, L.P.
FROM: _________________________________
I hereby
irrevocably exercise my option to purchase depositary (common) units
representing limited partner interests of ICAHN ENTERPRISES, L.P. subject to all
the terms and provisions of the Option Grant Agreement as follows:
Date of
Option Grant: ______________________________
Date(s)
of Vesting of
Option: _________________________________
Exercise
Price: $____ per unit
Number of
Units to be
Purchased: _________________________________
Total
Exercise Price Enclosed:
$ _________________________________
Units
should be registered as follows:
o In
Optionee's name or the name of another individual:
Name(s) _________________________________________
Address _________________________________________
Social
Security
Number: _____________________________
o In
the name of Optionee's broker
_____________________________
Full
payment of the aggregate option exercise price pursuant to Sections 4(c) and (d)
of the Option Grant Agreement is enclosed as follows:
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(i)
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Cash,
certified or cashier’s check, money order or other cash equivalent in the
amount of $________, (number of Units being exercised x xxxxx xxxxx per
unit)
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____
(ii)
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Broker-assisted
cashless exercise pursuant to Federal Reserve Regulation T in the amount
of $_________ (broker is hereby authorized to make such payment directly
to ICAHN ENTERPRISES, L.P.)
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Contact Information for
Broker:
Name: ___________________________________
Address: ___________________________________
___________________________________
Telephone: ___________________________________
Any broker-assisted cashless exercise
must be in accordance with Federal Reserve Regulation T.
______________________________
Optionee’s Signature
Date: ________________________
IN
WITNESS WHEREOF, the Partnership has caused this Agreement to be executed this
11th
day of February 2010.
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Icahn
Enterprises, L.P.
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By:
Icahn Enterprises G. P. Inc., general
partner
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By:
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/s/ Xxxxx Xxxxxxx
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Name:
Xxxxx Xxxxxxx
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Title:
Principal Executive
Officer
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The
undersigned hereby acknowledges that he has carefully read this Agreement and
agrees to be bound by all of the provisions set forth herein.
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WITNESS
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OPTIONEE
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/s/
Xxxxxx X. Xxxxxxxxx
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