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EXHIBIT 4.16
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made as of July 5,
2000, between Xxxxxxxxxxx International, Inc., a Delaware corporation (the
"Company"), and __________________ (the "Non-Employee Director").
WITNESSETH:
WHEREAS, the Non-Employee Director serves on the Board of Directors of
the Company (the "Board of Directors") and the Company desires to have the
Non-Employee Director remain as a director and desires to encourage stock
ownership by the Non-Employee Director;
WHEREAS, the Company has, as an inducement, determined to grant to the
Non-Employee Director the option set forth in this Agreement in order that the
Non-Employee Director may obtain an interest in the stock ownership of the
Company;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Non-Employee Director hereby agree as follows:
1. Grant. (a) The Company hereby grants to the Non-Employee Director an
option (the "Option") on July 5, 2000, (the "Date of Grant") to purchase 60,000
shares of the Company's common stock, $1.00 par value ("Common Stock") having an
exercise price equal to the closing sale price of the Common Stock on the New
York Stock Exchange on July 5, 2000 (the "Option Price"). The Company and the
Non-Employee Director agree that the Option shall be subject to the terms of
this Agreement. The Company and the Non-Employee Director further agree that
this Agreement sets forth the complete terms of the Option as in effect on the
date hereof.
(b) Subject to Paragraph 6, the Option shall not be exercisable after
the expiration of ten years from the date the Option becomes first exercisable.
(c) The Option shall be considered to be a non-statutory option that 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").
(d) Subject to earlier vesting in the event of (i) a "Change in
Control" as provided in Paragraph 1(e) hereof, or (ii) in the event the
Non-Employee Director dies, retires or incurs a disability while serving as a
non-employee director of the Company as provided for in Paragraph 6, the Option
shall become exercisable on the third anniversary of the Date of Grant.
(e) Notwithstanding the provisions of Paragraph 1(d) hereof, the Option
shall be exercisable with respect to all of the shares subject to the Option
upon the occurrence of a Change in Control (as defined herein). For purposes of
this Agreement, a Change in Control shall mean the occurrence of one or more of
the following events: (i) any "person", including a "group", as those terms are
used in Section 13(d)(3) of the Securities Exchange Act of 1934,
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other than an affiliate of the Company as of the Date of Grant, becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 30 percent or more of the combined voting power of the Company's
then outstanding voting securities; (ii) the Company is merged or consolidated
with or into another corporation and immediately after giving effect to the
merger or consolidation either (A) less than 65 percent of the outstanding
voting securities of the surviving or resulting entity are then beneficially
owned in the aggregate by (x) the stockholders of the Company immediately prior
to such merger or consolidation or (y) if a record date has been set to
determine the stockholders of the Company entitled to vote on such merger or
consolidation, the stockholders of the Company as of such record date, or (B)
the board of directors, or similar governing body, of the surviving or resulting
entity does not have as a majority of its members the persons specified in
clause (iii)(A) and (B) below; (iii) if at any time the following do not
constitute a majority of the Board of Directors of the Company (or any successor
entity referred to in clause (ii) above): (A) persons who are directors of the
Company on the Date of Grant and (B) persons who, prior to their election as a
director of the Company (or successor entity if applicable), were nominated,
recommended or endorsed by a formal resolution of the Board of Directors of the
Company; (iv) persons who are directors of the Company as of the beginning of
any calendar year cease to constitute a majority of the members of the Board of
Directors at any time during that calendar year; or (v) the Company transfers
all or substantially all of its assets as contemplated by Delaware corporate law
on a consolidated basis to another corporation or entity which is a less than a
50 percent owned subsidiary of the Company.
(f) The Non-Employee Director may exercise the Option by delivering to
the Company a written notice stating (i) that he wishes to exercise the Option
on the date such notice is so delivered, (ii) the number of shares of stock with
respect to which the Option is to be exercised, (iii) the address to which the
certificate representing such shares of stock should be mailed, and (iv) the
social security number of the optionee. In order to be effective, such written
notice shall be accompanied by a payment equal to the Option Price multiplied by
the number of shares of stock with respect to which the Option is to be
exercised (the "Option Exercise Amount"). The Option Exercise Amount shall be
made by cashier's check drawn on a national banking association and payable to
the order of the Company in United States dollars.
If, at the time of receipt by the Company of such written notice, (i)
the Company has unrestricted surplus in an amount not less than the Option
Exercise Amount, (ii) all accrued cumulative preferential dividends and other
current preferential dividends on all outstanding shares of preferred stock of
the Company have been fully paid, (iii) the acquisition by the Company of its
own shares of stock for the purpose of enabling the Non-Employee Director to
exercise the Option is otherwise permitted by applicable law and without any
vote or consent of any stockholder of the Company, and (iv) there shall have
been adopted, and there shall be in full force and effect, a resolution of the
Board of Directors of the Company authorizing the acquisition by the Company of
its own shares of stock for such purpose, then the Non-Employee Director may
deliver to the Company, in payment of the Option Exercise Amount, (x)
certificates registered in the name of the Non-Employee Director that represent
a number of shares of stock legally and beneficially owned by the Non-Employee
Director (free of all liens, claims and encumbrances of every kind) and having a
fair market value on the date of receipt by the Company of such written notice
that is not greater than the Option Exercise Amount, such certificates to be
accompanied by stock powers duly endorsed in blank by the record holder of
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the shares of stock represented by such certificates, with the signature of such
record holder guaranteed by a national banking association (or in lieu of such
certificates, other arrangements for the transfer of such shares to the Company
which are satisfactory to the Company), and (y) if the Option Exercise Amount
exceeds such fair market value, a cashier's check drawn on a national banking
association and payable to the order of the Company in an amount, in United
States dollars, equal to the amount of such excess. Notwithstanding the
provisions of the immediately preceding sentence, the Compensation Committee of
the Board of Directors (the "Committee"), in its sole discretion, may refuse to
accept shares of stock in payment of the Option Exercise Amount and, in that
event, any certificates representing shares of stock that were received by the
Company with such written notice shall be returned to the Non-Employee Director,
together with notice by the Company to the Non-Employee Director of the refusal
of the Committee to accept such shares of stock. If, at the expiration of seven
business days after the delivery to the Non-Employee Director of such written
notice from the Company, the Non-Employee Director shall not have delivered to
the Company a cashier's check drawn on a national banking association and
payable to the order of the Company in an amount, in United States dollars,
equal to the Option Exercise Amount, such written notice from the Non-Employee
Director to the Company shall be ineffective to exercise the Option.
As promptly as practicable after the receipt by the Company of (i) such
written notice from the Non-Employee Director and (ii) payment, in the form
required by the foregoing provisions of this Paragraph 1(f) of the Option
Exercise Amount, the Company shall cause its transfer agent to deliver to the
Non-Employee Director a certificate representing the number of shares of stock
with respect to which the Option has been so exercised, such certificate to be
registered in the name of the Non-Employee Director. Such delivery shall be
considered to have been made when such certificate shall have been mailed,
postage prepaid, to the Non-Employee Director at the address specified for such
purpose in such written notice from the Non-Employee Director to the Company.
2. Changes in the Company's Capital Structure. The existence of the
Option shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital adjustment of, or the payment of a dividend in capital stock or
other equity securities of the Company on, its Common Stock, or other increase
or reduction of the number of shares of the Common Stock without receiving
consideration therefor in money, services, or property, or the reclassification
of its Common Stock, in whole or in part, into other equity securities of the
Company, then (a) the number, class and per share price of shares of stock
subject to the outstanding Option shall be appropriately adjusted (or in the
case of the issuance of other equity securities as a dividend on, or in a
reclassification of, the Common Stock, the Option shall extend to such other
securities) in such a manner as to entitle the Non-Employee Director to receive,
upon exercise of the Option, for the same aggregate cash consideration, the same
total
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number and class or classes of shares (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) he would
have held after such adjustment if he had exercised the Option in full
immediately prior to the event requiring the adjustment, or, if applicable, the
record date for determining stockholders to be affected by such adjustment; and
(b) the number and class of shares then reserved for issuance under this
Agreement (or in the case of a dividend of, or reclassification into, other
equity securities, such other securities) shall be adjusted by substituting for
the total number and class of shares of stock then received, the number and
class or classes of shares of stock (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) that
would have been received by the owner of an equal number of outstanding shares
of Common Stock as a result of the event requiring the adjustment. Comparable
rights shall accrue to the Non-Employee Director in the event of successive
subdivisions, consolidations, capital adjustments, dividends or
reclassifications of the character described above.
If the Company shall distribute to all holders of its shares of Common
Stock (including any such distribution made to non-dissenting stockholders in
connection with a consolidation or merger in which the Company is the surviving
corporation and in which holders of shares of Common Stock continue to hold
shares of Common Stock after such merger or consolidation) evidences of
indebtedness or cash or other assets (other than cash dividends payable out of
consolidated retained earnings not in excess of, in any one year period, the
greater of (a) in an amount per share of Common Stock equal to $1.00 per share
of Common Stock (as the same may be adjusted from time to time by the Board of
Directors of the Company to reflect the effect of changes in capitalization) and
(b) two times the aggregate amount of dividends per share paid during the
preceding calendar year and dividends or distributions payable in shares of
Common Stock or other equity securities of the Company described in the
immediately preceding paragraph, but including stock or other securities of any
corporation or other entity owned by the Company), then in each case the Option
Price shall be adjusted by reducing the Option Price in effect immediately prior
to the record date for the determination of stockholders entitled to receive
such distribution by the fair market value, as determined in good faith by the
Board of Directors of the Company (whose determination shall be described in a
statement filed in the Company's corporate records and be available for
inspection by any holder of the Option) of the portion of the evidence of
indebtedness or cash or other assets so to be distributed applicable to one
share of Common Stock; provided that in no event shall the Option Price be less
than the par value of a share of Common Stock. In the event such adjustment
would result in the Option Price being less than the par value of a share of
Common Stock but for the foregoing proviso, the terms of the Option shall be
appropriately adjusted so as to maintain the economic value of the Option,
including through an adjustment to the number of shares of Common Stock subject
to the Option and through a provision allowing the holder of the Option to
receive the evidence of indebtedness or cash or other assets so to be
distributed applicable to one share of Common Stock for each share of Common
Stock that may be purchased on the exercise of the Option. Such adjustment shall
be made whenever any such distribution is made, and shall become effective on
the date of the distribution retroactive to the record date for the
determination of the stockholders entitled to receive such distribution. In
addition, in the event the Company distributes shares or other securities of a
subsidiary corporation or other entity to the holders of the Common Stock, the
Board of Directors may, in lieu of the adjustment provided above, make provision
allowing the holder of the Option to receive the shares or securities of the
corporation
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or entity that are subject to the distribution. Comparable adjustments shall be
made in the event of successive distributions of the character described above.
If the Company shall make a tender offer for, or grant to all of its
holders of its shares of Common Stock the right to require the Company or any
subsidiary of the Company to acquire from such stockholders shares of, Common
Stock, at a price in excess of the Fair Market Value (a "Put Right") or the
Company shall grant to all of its holders of its shares of Common Stock the
right to acquire shares of Common Stock for less than the Fair Market Value (a
"Purchase Right") then, in the case of a Put Right, the Option Price shall be
adjusted by multiplying the Option Price in effect immediately prior to the
record date for the determination of stockholders entitled to receive such Put
Right by a fraction, the numerator of which shall be the number of shares of
Common Stock then outstanding minus the number of shares of Common Stock which
could be purchased at the Fair Market Value for the aggregate amount which would
be paid if all Put Rights are exercised and the denominator of which is the
number of shares of Common Stock which would be outstanding if all Put Rights
are exercised; and, in the case of a Purchase Right, the Option Price shall be
adjusted by multiplying the Option Price in effect immediately prior to the
record date for the determination of the stockholders entitled to receive such
Purchase Right by a fraction, the numerator of which shall be the number of
shares of Common Stock then outstanding plus the number of shares of Common
Stock which could be purchased at the Fair Market Value for the aggregate amount
which would be paid if all Purchase Rights are exercised and the denominator of
which is the number of shares of Common Stock which would be outstanding if all
Purchase Rights are exercised. In addition, the number of shares subject to the
Option shall be increased by multiplying the number of shares then subject to
the Option by a fraction which is the inverse of the fraction used to adjust the
Option Price. Notwithstanding the foregoing, if any such Put Rights or Purchase
Rights shall terminate without being exercised, the Option Price and number of
shares subject to the Option shall be appropriately readjusted to reflect the
Option Price and number of shares subject to the Option which would have been in
effect if such unexercised Put Rights or Purchase Rights had never existed.
Comparable adjustments shall be made in the event of successive transactions of
the character described above.
In the event of a merger of one or more corporations or entities with
or into the Company in which the Company is not the sole survivor or there is an
exchange, conversion or modification to the ownership of the then outstanding
shares of Common Stock of the Company, a consolidation of the Company and any
one or more corporations or entities, a statutory share or interest exchange in
which all of the Common Stock is acquired or any other similar business
combination with respect to the Company in which the Common Stock is acquired by
a third party, the Non-Employee Director, at no additional cost, shall be
entitled to receive, upon any exercise of the Option, in lieu of the number of
shares as to which the Option shall then represent the right to purchase, the
number and class of shares of stock or other securities, assets or other
property, including cash, to which the Non-Employee Director would have been
entitled to receive or continue to hold pursuant to the terms of the agreement
of merger, consolidation, share or interest exchange or other similar
transaction if at the time of such merger, consolidation, share or interest
exchange the Non-Employee Director had been a holder of a number of shares of
Common Stock equal to the number of shares as to which the Option shall then
represent the right to purchase. Comparable rights shall accrue to the
Non-Employee
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Director in the event of successive mergers, consolidations, share or interest
exchanges or other transactions of the character described above.
If a corporate transaction described in Section 424(a) of the Code
which involves the Company is to take place and there is to be no surviving
corporation while the Option remains in whole or in part unexercised, it shall
be cancelled by the Board of Directors of the Company as of the effective date
of any such corporate transaction but before such date the Non-Employee Director
shall be provided with a notice of such cancellation and the Non-Employee
Director shall have the right to exercise the Option in full (without regard to
any limitations on exercise set forth in or imposed by this Agreement) to the
extent it is then still unexercised during a 30-day period preceding the
effective date of such corporate transaction.
For purposes of this Xxxxxxxxx 0, Xxxx Xxxxxx Value per share of Common
Stock shall mean the closing price of a share of Common Stock as reported by the
principal national securities exchange on which the Common Stock is then listed
if the Common Stock is then listed on a national securities exchange, or the
average bid and asked prices of a share of Common Stock as reported in the
National Association of Securities Dealers Automated Quotation National Market
System (or successor system) if the Common Stock is not then listed on a
national securities exchange, on the trading day immediately preceding the first
trading day on which, as a result of the establishment of a record date or
otherwise, the trading price reflects that an acquiror of Common Stock in the
public market will not participate in or receive the payment of any applicable
dividend or distribution.
Except as otherwise expressly provided in this Agreement, the issue by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, for cash or property, or for labor or services
either upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of shares of
Common Stock then subject to the Option.
3. Exercise of the Option. The Option may be exercised from time to
time as to the total number of shares that may then be issuable upon the
exercise thereof or any portion thereof in the manner and subject to the
limitations provided for in Paragraph 1 hereof.
4. Assignment. The Option may not be transferred or assigned in any
manner by the Non-Employee Director except by will or the laws of descent and
distribution, and shall be exercisable during the Non-Employee Director's
lifetime only by him.
5. Requirement of Law. In the event the shares issuable on exercise of
the Option are not registered under the Securities Act of 1933, Xxxxxxxxxxx may
imprint on the certificate for such shares the following legend or any other
legend which counsel for Xxxxxxxxxxx considers necessary or advisable to comply
with Securities Act of 1933:
The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933 or under the
securities laws of any state and may not be sold or
transferred except upon such registration or upon receipt by
the Corporation of an opinion
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of counsel satisfactory to the Corporation, in form and
substance satisfactory to the Corporation, that registration
is not required for such sale or transfer.
The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act of 1933. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of the Option or the issuance of shares of Common Stock pursuant
thereto to comply with any law or regulation of any governmental authority.
6. Termination. The Option, to the extent it shall not previously have
been exercised, shall terminate as follows:
(a) If the Non-Employee Director ceases to serve on the Board of
Directors prior to the third anniversary of the Date of Grant, for any reason,
with or without cause, other than for death, retirement under the
then-established rules of the Board of Directors, or severance for disability,
the Option shall terminate and be immediately forfeited. If the Non-Employee
Director ceases to serve on the Board of Directors for any reason, with or
without cause, other than for death, retirement under the then-established rules
of the Board of Directors, or severance for disability on or after the third
anniversary of the Date of Grant, the Option shall continue in effect until the
date the Option is otherwise due to expire in accordance with Paragraph 1
hereof.
(b) If the Non-Employee Director dies prior to the third anniversary of
the Date of Grant, the Option shall be immediately exercisable and shall
continue in effect until ten years following the date of his death. If the
Non-Employee Director dies on or after the third anniversary of the Date of
Grant, the Option shall continue in effect until the date the Option is
otherwise due to expire in accordance with Paragraph 1 hereof. After the death
of the Non-Employee Director, his executors, administrators or any persons to
whom the Option may be transferred by will or by the laws of descent and
distribution shall have the right, at any time prior to the Option's expiration
to exercise it.
(c) If the Non-Employee Director retires in good standing from the
Board of Directors under the then-established rules of the Board of Directors
prior to the third anniversary of the Date of Grant, the Non-Employee Director
shall become entitled to exercise that portion of the Option determined by
multiplying the number of shares of Common Stock subject to the Option by a
fraction, the numerator of which is his total whole years of service as a
director of the Company since the Date of Grant and the denominator of which is
three. To the extent that the Option is exercisable under the preceding
sentence, the Option shall be exercisable until ten years following the date of
the Non-Employee Director's retirement in accordance with this Paragraph 6(c),
and the remainder of the Option shall terminate immediately. If the Non-Employee
Director retires in good standing from the Board of Directors of the Company
under the then-established rules of the Board of Directors on or after the third
anniversary of the Date of Grant, the Option shall continue until the date the
Option is otherwise due to expire in accordance with Paragraph 1 hereof.
(d) If the Non-Employee Director ceases to be a director of the Company
due to disability prior to the third anniversary of the Date of Grant, the
Option shall be immediately
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exercisable and shall continue in effect until ten years following the date the
Non-Employee Director ceased to be a director of the Company due to a
disability. If the Non-Employee Director ceases to be a director of the Company
due to disability on or after the third anniversary of the Date of Grant, the
Option shall continue in effect until the date the Option is otherwise due to
expire in accordance with Paragraph 1 hereof.
7. Amendment. This Agreement may not be changed, amended or modified
except by an agreement in writing signed on behalf of each of the parties
hereto.
8. No Rights as a Stockholder. The Non-Employee Director shall not have
any rights as a stockholder with respect to any shares of Common Stock issuable
upon the exercise of the Option until the date of issuance of the stock
certificate or certificates representing such shares following the Non-Employee
Director's exercise of the Option pursuant to its terms and conditions and
payment for such shares. Except as otherwise provided in this Agreement, no
adjustment shall be made for dividends or other distributions made with respect
to the Common Stock the record date for the payment of which is prior to the
date of issuance of the stock certificate or certificates representing such
shares following the Non-Employee Director's exercise of the Option.
9. Governing Law. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware. Any invalidity
of any provision of this Agreement shall not affect the validity of any other
provision.
10. Notices. All notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed to have been duly made or
given if mailed by registered or certified mail, return receipt requested. Any
such notice mailed to the Company shall be addressed to its principal executive
office at 000 Xxxx Xxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000, and any notice
mailed to the Non-Employee Director shall be addressed to the Non-Employees
Director's residence address as it appears on the books and records of the
Company or to such other address as either party may hereafter designate in
writing to the other.
11. Retention Obligation. The granting of the Option shall not impose
upon the Company any obligation to continue to have the Non-Employee Director
serve on the Board of Directors of the Company; and the right of the Board of
Directors to remove the Non-Employee Director as a director of the Company shall
not be diminished or affected by reason of the grant of the Option to the
Non-Employee Director pursuant to this Agreement.
12. Binding Effect. This Agreement shall inure to the benefit of and
bind the successors and assigns of the Company. This Agreement shall inure to
the benefit of and bind the heirs, executors, administrators and legal
representatives of the Non-Employee Director.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of the day and year first above mentioned.
XXXXXXXXXXX INTERNATIONAL, INC.
By:
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Xxxxxx X. Xxxx
Executive Vice President
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Non-Employee Director
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