Exhibit 10.4
STOCK OPTION AGREEMENT
THIS AGREEMENT, made this 4th day of December, 1991, by and between
Xxxxxxx Industries, Inc., a Delaware corporation (the "Company") and Xxxxxx
X. Xxxx, who resides at Xxxx Xxx Xxxx, (X.X. Xxx 00) Xxxx Xxxxxxx, Xxx Xxxx
00000 (the "Optionee") .
W I T N E S S E T H:
WHEREAS, the Company desires to to obtain the services of the Optionee
as set forth in an employment agreement between the Optionee and the Company
dated as of October 1, 1991 (the "Employment Agreement"); and
WHEREAS, as an inducement for the Optionee to enter into the Employment
Agreement, the Company has agreed to grant the Optionee stock options as
follows;
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option. The Company grants to the Optionee, during the
period commencing as of October 1, 1991 and ending one year from the
termination of the Optionee's employment with the Company under the
Employment Agreement (the "Expiration Date"), the right and option (the
"Option") to purchase from the Company, up to, but not exceeding in the
aggregate, five-hundred thousand (500,000) shares of the Company's common
stock, par value $.01 per share (the "Stock") at the closing price of the
Stock on the New York Stock Exchange on the last trading day preceding the
date on which this Agreement is signed, as written below the signature lines
on the last page of this Agreement, or such lower price as the Company may
hereafter determine to be fair and reasonable.
2. Exercisability of Option. The Option shall be exercisable in whole
or in part as of October 1, 1991 and shall remain so exercisable until the
Expiration Date, unless the Executive's employment under the Employment
Agreement is terminated for Cause (as defined therein) in which case the
Executive shall forfeit the Option effective as of the date of the
termination of his employment with the Company, provided, however, that the
Option shall remain exercisable for the 30 day period following the
Executive's receipt of the written notice required under section 4(b) of the
Employment Agreement.
3. Method of Exercisinq Option. (a) The Optionee may exercise the
Option by delivering to the Company a written notice stating the number of
shares that the Optionee has elected to purchase at that time from the
Company and full payment of the purchase price of the shares then to be
purchased. Payment of the purchase price of the shares may be made (i) by
certified or bank cashier's check payable to the order of the Company, or
(ii) by surrender or delivery to the Company of shares of Stock having a fair
market value equal to the purchase price.
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(b) At the time of exercise, the Optionee shall pay to the Company
such amount as is necessary to satisfy the Company's obligation to withhold
Federal, state or local income or other taxes incurred by reason of the
exercise or the transfer of shares thereupon; provided, however, that the
Optionee may, at his election and in lieu of paying such amounts, instruct
the Company to withhold from the shares of stock otherwise deliverable,
shares with an aggregate fair market value equal to the amount of such
withholding obligation.
(c) With respect to any Option exercise made pursuant to this Section
3, the "fair market value" of the Stock shall mean the average closing price
of the Stock on the New York Stock Exchange (or such other exchange on which
the Stock is then listed) during the five business days immediately preceding
the date upon which the Optionee delivers written notice of exercise.
4. Issuance of Shares. As promptly as practicable after receipt of
notification of exercise, full payment of purchase price and satisfaction of
tax withholding as provided in Section 3, the Company shall issue or transfer
to the Optionee the number of shares as to which the Option has been so
exercised, and shall deliver to the Optionee a certificate or certificates
therefor, registered in his name.
5. Non-Transferability. (a) The Option is not transferable by the
Optionee otherwise than by will or the laws of descent and distribution and
is exercisable during the Optionee's lifetime only by him. No assignment or
transfer of the Option, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except by will or
the laws of descent and distribution), shall vest in the assignee or
transferee any interest or right herein whatsoever, but immediately upon such
assignment or transfer the Option shall terminate and become of no further
effect.
(b) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be
construed to apply to the executors, the administrators, personal
representatives, or the person or persons to whom the Option may be
transferred by will or by the laws of descent and distribution, the word
"Optionee" shall be deemed to include such person or persons.
6. Rights as Stockholder. The Optionee or a transferee of the Option
shall have no rights as a stockholder with respect to any share of Stock
covered by the Option until he shall have become the holder of record of such
share.
7. Recapitalizations, Reorganizations, Etc. (a) The existence of
the Option shall not affect the power of the Company or its stockholders to
accomplish 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 stock or of options, warrants
or rights to purchase stock or securities ahead of or affecting the Stock or
the rights thereof or convertible into or exchangeable for Stock, 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.
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(b) The shares with respect to which the Option is granted are shares of
Stock of the Company as presently constituted, but if, and whenever, before
the delivery by the Company of all of the shares of optioned Stock, the
Company shall issue Stock, or effect a subdivision or consolidation of Stock
outstanding, without receiving fair value therefor in money, services or
property, the number and price of shares remaining under the Option shall be
appropriately adjusted to preserve the full value of the Option as determined
immediately prior to such transaction.
(c) Upon any change in the outstanding shares of Stock by reason of any
recapitalization, merger, consolidation, spin-off, combination or exchange of
shares or other corporate change, or any distributions to common shareholders
other than cash dividends, the Company shall make such substitutions or
adjustments as are appropriate and equitable, as to the number or kind of
shares of Stock or other securities covered by this Option and the option
price thereof. The Company shall notify the Optionee of any intended sale of
all or substantially all of the Company's assets within a reasonable time
prior to such sale.
8. Notice. Notice and other communications relating to this Agreement
shall be in writing, and shall be mailed to or delivered to the party for
whom it is intended at such address as may from time to time be designated by
him or it in a notice mailed or delivered to the other party as herein
provided; unless and until some other address be so designated, all notices
or communications by the Optionee to the Company shall be mailed or delivered
to the Company at 000 Xxxxx Xxxxxxxx, Xxxxxxx, Xxxxxx 00000, and all notices
or communications by the Company to the Optionee may be given to the Optionee
personally or may be mailed to him at the address shown below his signature.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
XXXXXXX INDUSTRIES, INC.
By:/s/Xxxx X.Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: EVP Finance
Date: December 4, 1991
/s/Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Date: December 4, 1991
Address of Optionee:
Xxxx Xxx Xxxx
X.X. Xxx 00
Xxxx Xxxxxxx, XX 00000
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