EXHIBIT 28
______________ principal amount _____________________________
of Debentures the "Participant"
INVESTMENT OPTION AGREEMENT, made as of this 15th day of June, 1994, among
XXXXXX GROUP INTERNATIONAL, INC. (the "Company"), XXXXXX MANAGEMENT INVESTMENT
CORPORATION, a wholly owned subsidiary of the Company acting as agent for the
Company ("LMIC"), and the above-named Participant.
WHEREAS, the Compensation Committee of the Board of Directors of the
Company's parent corporation, The Xxxxxx Group Inc. ("TLGI") has adopted The
Xxxxxx Group Inc. 1994 Management Equity Investment Plan (the "Plan") to provide
an incentive to designated employees of the Company's direct and indirect U.S.
subsidiaries to continue employment and to work in the best interests of the
TLGI's shareholders by offering the employees the opportunity to make an
investment that will increase the employees' participation in the potential
appreciation of TLGI's Common Shares (the "Common Shares");
WHEREAS, the Participant is employed by a direct or indirect U.S.
subsidiary of the Company in a key capacity and the committee designated by
TLGI's Board of Directors to administer the Plan (the "Committee") has
designated the Participant as an eligible employee under the Plan;
WHEREAS, in connection with the Plan, the Company is issuing and selling to
LMIC an issue of 1994 Exchangeable Floating Rate Debentures due July 15, 2001
(the "Debentures"), which will be exchangeable for Convertible First Preferred
Shares, Series B, of TLGI (the "Convertible Preferred Shares"), which in turn
will be convertible into Common Shares; and
WHEREAS, LMIC, in its capacity as agent for the Company, has agreed to sell
to the Participant an investment option to purchase from LMIC a specified
principal amount of the Debentures and the Participant has agreed to purchase
such option from LMIC.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto agree as follows:
1. SALE AND PURCHASE OF OPTION. LMIC hereby sells, and the Participant
hereby purchases, an investment option (the "Option") evidenced by this
Investment Option Agreement entitling the Participant to purchase from LMIC the
principal amount of Debentures indicated above (the "Option Debentures"), at a
purchase price equal to $95,000 per $100,000 principal amount of Option
Debentures (the "Purchase Price"). The Option is not intended to be an
incentive stock option.
2. INVESTMENT OPTION AMOUNT FOR THE OPTION. Simultaneously with the
Participant's execution and delivery of this Investment Option Agreement, the
Participant has delivered to LMIC $5,000 per $100,000 principal amount of the
Option Debentures, representing the purchase price of the Option (the
"Investment Option Amount").
3. RESTRICTIONS ON EXERCISE OF THE OPTION.
(a) EXERCISABILITY. Except as otherwise provided herein, the Option
may not be exercised, in whole or in part, at any time prior to the fifth
anniversary of the date of this Investment Option Agreement. Thereafter, the
Option may be exercised beginning on the fifth anniversary of the date hereof
with respect to 50% of the principal amount of the Option Debentures, and
beginning on each of the sixth and seventh anniversaries of the date hereof with
respect to an additional 25% of the principal amount of the Option Debentures.
(b) ACCELERATED EXERCISABILITY. Notwithstanding Section 3(a), but
subject to Sections 3(c) and 3(d), the Option shall vest in full and may be
exercised immediately upon the occurrence of any Accelerated Vesting Event as
defined in Exhibit A hereto.
(c) EXPIRATION. The Option may not be exercised on or after, and
shall expire on, June 15, 2001 or such earlier date as is provided herein (the
"Expiration Date").
(d) SECURITIES LAWS. The Participant confirms that the Participant
will not make any distribution of Option Debentures purchased pursuant to any
exercise of the Option, the Convertible Preferred Shares into which such Option
Debentures are exchangeable or the Common Shares into which such Convertible
Preferred Shares are convertible, in violation of applicable securities laws.
4. REPURCHASE OF THE OPTION.
(a) DISCRETIONARY REPURCHASE. In the event the weighted average
trading price of the Common Shares for any five consecutive days on which such
shares are traded on NASDAQ/NMS exceeds $75.00 per share (as adjusted to reflect
any stock split, stock dividend or similar event) during the term hereof, LMIC
may repurchase the Option (and all other options outstanding under investment
option agreements entered into pursuant to the Plan), in whole, 20 business days
after notice to the Participant specifying LMIC's determination to repurchase
the Option and the date of repurchase. The repurchase shall be effected by
paying the Participant an amount equal to the Investment Option Amount
applicable to the unexercised portion of the Option; PROVIDED, HOWEVER, that in
such event the Option shall become exercisable in full (except to the extent
that any portion of the Option has been forfeited pursuant to Section 5) and the
Participant shall have the right to exercise the unexercised portion of the
Option
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within 18 business days after the date of such notice. Upon repurchase, the
then unexercised portion of the Option shall expire.
(b) REPURCHASE UPON REDEMPTION OF DEBENTURES. In the event the
Debentures are redeemed by the Company pursuant to Section 3(a) of the
Debentures, LMIC shall repurchase the unexercised portion of the Option on the
date of such redemption by paying the Participant an amount equal to the
Investment Option Amount applicable to the unexercised portion of the Option.
(c) REPURCHASE FOLLOWING EXPIRATION. Unless sooner repurchased
pursuant to Section 4(a) or 4(b), LMIC shall repurchase the Option, in whole, on
the Expiration Date by paying the Participant an amount equal to the Investment
Option Amount applicable to the unexercised portion of the Option.
5. TERMINATION OF EMPLOYMENT. If the Participant is no longer employed
with the Company or any of its direct or indirect U.S. subsidiaries for any
reason whatsoever, including death or disability, the unexercised portion of the
Option shall be forfeited except to the extent that the Option has become
nonforfeitable as follows: the Option shall become nonforfeitable with respect
to 14% of the Option Debentures on each of the first five anniversaries of the
date hereof and with respect to an additional 15% of the Option Debentures on
the sixth and seventh anniversaries of the date hereof, provided that the
Participant is employed by the Company or any of its subsidiaries on such date.
The Participant (or the Participant's estate in the event of Participant's
death) shall be entitled (until the Expiration Date and subject to Sections 3
and 4) to exercise the nonforfeited portion of the Option to the extent not
previously exercised. The Investment Option Amount with respect to any portion
of the Option Debenture forfeited pursuant to this Section 5 shall be refunded
to the Participant, without interest, within 20 business days after the date on
which the Participant terminates employment.
6. EXERCISE.
(a) GENERAL. The Option may be exercised by the Participant as a
whole or from time to time in part by completion and delivery to LMIC of a
notice (together with any documents specified therein) in one of several forms
to be prescribed by LMIC depending on whether the Participant proposes to pay
the Purchase Price for the Debentures being purchased in cash or with the prior
consent of LMIC, by application of the proceeds from a simultaneous conversion
of Debentures into Convertible Preferred Shares and then into Common Shares and
the sale of all or a portion of such Common Shares (provided such sale is
permitted under applicable securities laws). Upon exercise of the Option the
Participant will be required to pay to LMIC an amount equal to the Purchase
Price (I.E., $95,000 for each $100,000 principal amount of Option Debentures
being purchased). Each exercise of the Option shall be made with respect to no
less than $50,000 principal amount of Option Debentures unless
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the remaining principal amount of Debentures purchasable under the Option is
less than such amount.
(b) COMPLIANCE WITH LAWS. Notwithstanding anything herein to the
contrary, no Debentures, Convertible Preferred Shares or Common Shares will be
issued hereunder unless and until all the applicable requirements imposed by
U.S., Canadian, state and provincial securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction have been met.
Neither the Company, LMIC nor TLGI shall be obligated to undertake the
registration or qualification of Debentures, Convertible Preferred Shares or
Common Shares under any applicable securities laws.
(c) SCHEDULE. Upon each exercise of the Option, the Participant will
be required to submit to LMIC the Participant's copy of this Investment Option
Agreement for notation by LMIC on the schedule annexed hereto of the principal
amount of Option Debentures purchased, the date of exercise and the remaining
principal amount of Option Debentures for which the Option may be exercised.
When the Option has been fully exercised, the Participant's copy of this
Investment Option Agreement will be marked cancelled. Upon any repurchase of
the Option, the Participant will be required to deliver the Participant's copy
of this Investment Option Agreement to LMIC for similar marking.
7. EXCHANGE. Exchange of Debentures acquired by a Participant upon
exercise of the Option shall be effected by completion and delivery to the
Company of an exchange notice (together with the documents specified therein) in
the form prescribed by the Company. Participant shall be required to exchange
any Debentures acquired pursuant to this Agreement for Convertible Preferred
Shares, and each notice relating to the exercise of the Option hereunder shall
include a statement that Participant elects to exchange the Debentures acquired
pursuant to the Option for Convertible Preferred Shares. Each such exchange
shall be effected immediately upon the purchase or the Debenture by Participant.
Participant shall not be required to convert Convertible Preferred Shares
acquired pursuant to such exchange into Common Shares. To the extent that the
exchange of Debentures would result in the issuance of fractional shares, the
Participant shall be entitled only to receive cash equal to the market value of
such fractional shares.
8. MISCELLANEOUS.
(a) NO RIGHT TO CONTINUED EMPLOYMENT. Neither this Investment Option
Agreement nor the Plan shall be construed as giving the Participant any right to
be retained in the employ of TLGI, the Company or any of their direct or
indirect subsidiaries.
(b) NON-TRANSFERABILITY. Except as provided in Section 5, the Option
is exercisable only by the Participant during his or her lifetime and neither
this Investment
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Option Agreement nor the Option may be sold, pledged, assigned, hypothecated or
transferred in any manner.
(c) TAX WITHHOLDING. The Company and its subsidiaries shall have the
right to require the Participant to remit to the Company, prior to the delivery
of any certificate or certificates for Debentures, Convertible Preferred Shares
or Common Shares or the payment of any money or other property, an amount
sufficient to satisfy any tax withholding requirements.
(d) AMENDMENT. This Investment Option Agreement may not be modified,
amended or waived in any manner except by an instrument in writing signed by
each of the parties hereto. The waiver by any party of compliance with any
provision of this Investment Option Agreement by any other party shall not
operate or be construed as a waiver of any other provision of this Investment
Option Agreement, or of any subsequent breach by such party of a provision of
this Investment Option Agreement.
(e) NOTICE OF CERTAIN EVENTS. The Company shall provide the
Participant with a copy of any notice required to be given to holders of
Debentures pursuant to the terms of the Debentures. Any such notice shall be
provided to the Participant at the same time such notice is required to be
provided to holders of Debentures.
(f) MAINTENANCE OF AN OFFICE. This Investment Option Agreement may
be submitted for exercise of the Option and notices or demands to or upon LMIC
in respect hereof may be served at the offices of Xxxxxx Group Inc. in
Covington, Kentucky. LMIC will advise the Participant of any change in the
location of such office.
(g) NOTICES. Except as otherwise provided herein, every notice or
other communication relating to this Investment Option Agreement shall be in
writing, and shall be mailed or delivered to the party for whom it is intended
at such address as may from time to time be designated by such party in a notice
mailed or delivered to the other party as herein provided; PROVIDED, HOWEVER,
that unless and until some other address shall be so designated, all notices or
communications by the Company to the Participant may be given to the Participant
personally or may be mailed to the address noted under the Participant's
signature below. Any notice or other communication given by personal delivery
shall be conclusively deemed to have been delivered on the day of actual
delivery thereof and, if given by registered mail, on the third business day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the business day during which such normal
business hours next occur if not given during such hours on any day. Any notice
given by electronic communication shall be confirmed by mail or personal
delivery as noted above.
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(h) HEADINGS. The headings of paragraphs herein are included solely
for convenience of reference and shall not affect the meaning or interpretation
of any of the provisions of this Investment Option Agreement.
(i) GOVERNING LAW. This Investment Option Agreement is to be
governed by and interpreted in accordance with the laws of New York.
(j) ACKNOWLEDGMENT OF AGENCY. The parties hereto acknowledge that
LMIC is acting as agent on behalf of the Company and is issuing and selling the
Option and is acquiring, holding and transferring the Debentures, in its
capacity as such pursuant to the terms of this Investment Option Agreement and
the Plan. Accordingly, the rights and obligations of
LMIC hereunder shall be regarded as direct rights and obligations of the Company
for all purposes hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Investment Option
Agreement as of the day and year first above written.
XXXXXX GROUP INTERNATIONAL, INC.
By:
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Title:
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Address:
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XXXXXX MANAGEMENT INVESTMENT
CORPORATION
By:
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Title:
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Address:
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Participant
Address:
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Social Security or Tax I.D. Number
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SCHEDULE
RECORD OF OPTION EXERCISES
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Principal Amount of Remaining Principal
Debentures Purchased Amount of Debentures
DATE PURSUANT TO OPTION SUBJECT TO OPTION
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NOTATION MADE BY
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EXHIBIT A
Accelerated Vesting Events
An "Accelerated Vesting Event" shall be deemed to have occurred upon (i) an
Event of Default under the Debentures, (ii) either Section 3.1 or Section 3.2 of
the Shareholder Rights Plan dated April 20, 1990 of TLGI, as amended, becoming
applicable, or (iii) the acquisition of 25% or more of the Common Shares by any
person other than Xxxxxxx X. Xxxxxx.
