STOCK OPTION AWARD AGREEMENT
Exhibit 10.18
THIS AGREEMENT CONSTITUTES PART OF THE PROSPECTUS COVERING SECURITIES REGISTERED UNDER THE
SECURITIES ACT OF 1933.
THIS STOCK OPTION AWARD AGREEMENT (hereinafter, the “Agreement”) is made as of this day of
, , by and between Xxxxxxxx Corporation, a New York corporation (the “Company”),
and (the “Optionee”). For the purposes of this Agreement, all capitalized terms not
defined herein shall have the meanings ascribed thereto under the terms of the Xxxxxxxx Corporation
2001 Equity Compensation Plan (as amended, the “Plan”), unless otherwise noted.
WHEREAS, Optionee is employed by the Company or its subsidiaries, as defined in the Plan; and
WHEREAS, the Company wishes to grant to Optionee an award of stock options under the Plan,
subject to the conditions and restrictions set forth in the Plan and this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained in this agreement, the
parties agree as follows:
1. Grant of Options. The Committee has granted to Optionee as of (the
“Grant Date”), options to purchase shares of common stock, par value $5.00 per share, of
the Company (“Common Stock”), upon the terms and conditions set forth in this Agreement and the
Plan. The options granted under this Agreement are intended to be non-statutory stock options.
2. Exercise Price. The exercise price of the shares of Common Stock covered by the
option shall be per share. This option price represents 100% of the Fair Market Value of
the Common Stock on the date of grant, as calculated under the Plan.
3. Term of Option. The term of the options shall be ten (10) years from the date
hereof, subject to earlier termination as provided in this Section 3. The date which is ten (10)
years after the Grant Date shall be termed the “Expiration Date”.
4. Vesting of Options. The options granted hereunder will be deemed vested upon
Optionee’s continued employment with the Company or one of the Company’s subsidiaries on the dates
set forth in the following schedule:
One (1) year from the Grant Date hereof |
33 1/3 % of the options | |
Two (2) years from the Grant Date hereof |
66 2/3 % of the options | |
Three (3) years from the Grant Date hereof |
100 % of the options |
5. Post-Employment Exercise of Options.
(a) If Optionee’s employment with the Company or a subsidiary terminates prior to the
Expiration Date, and at such time the Optionee is eligible for retirement at the Normal Retirement
Date or later, as defined in the Xxxxxxxx Corporation Employees’ Pension Plan (or as defined in a
subsidiary company’s salaried pension plan in the event Optionee’s pension benefits are received
solely from the subsidiary’s plan) in effect at the time of Optionee’s termination of employment,
then all unvested options shall vest immediately upon such termination and Optionee’s privilege to purchase shares may
be exercised
by Optionee at any time but in no event later than either the date which is five (5)
years after the date Optionee’s employment with the Company terminates or the Expiration Date,
whichever occurs first, and thereafter shall terminate.
(b) If Optionee’s employment with the Company or a subsidiary terminates prior to the
Expiration Date, and at such time the Optionee is eligible for early retirement but has not yet
reached the Optionee’s Normal Retirement Date, as such terms are defined in the Xxxxxxxx
Corporation Employees’ Pension Plan (or as defined in a subsidiary company’s salaried pension plan
in the event Optionee’s pension benefits are received solely from the subsidiary’s plan) in effect
at the time of Optionee’s termination of employment, then all unvested options shall continue to
vest in accordance with Section 4 hereof, and Optionee’s privilege to purchase shares may be
exercised by Optionee at any time but in no event later than either the date which is five (5)
years after the date Optionee’s employment with the Company terminates or the Expiration Date,
whichever occurs first, and thereafter shall terminate.
(c) If Optionee’s employment with the Company or a subsidiary terminates prior to the
Expiration Date by reason of permanent and total disability, as determined on the basis of medical
evidence satisfactory to the Company, then all unvested options shall vest immediately upon such
termination and Optionee’s privilege to purchase shares may be exercised by Optionee at any time
but in no event later than either the date which is five (5) years after the date Optionee’s
employment terminates or the Expiration Date, whichever occurs first, and thereafter shall
terminate.
(d) If Optionee’s employment with the Company or a subsidiary terminates prior to the
Expiration Date by reason of death, then all unvested options shall vest immediately upon such
termination and Optionee’s privilege to purchase shares may be exercised by Optionee’s beneficiary
(as defined under Section 8) at any time but in no event later than either the date that is five
(5) years after the date Optionee’s employment terminates or the Expiration Date, whichever occurs
first, and thereafter shall terminate.
(e) If Optionee’s employment with the Company or a subsidiary terminates for any reason other
than death or permanent and total disability or at a time when Optionee is not eligible for
retirement, in each case as referred to above in Sections 5 (a), (b) and (c), then Optionee’s
privilege to purchase shares pursuant to options that are vested as of the date of termination may
be exercised by Optionee at any time within ninety (90) days of the termination of Optionee’s
employment, but in no event later than the Expiration Date, and thereafter shall terminate.
(f) In the event of a Change in Control, the options granted under this Agreement shall vest
immediately upon such Change in Control and shall remain exercisable by Optionee until the earlier
of (a) the date two years after the Change in Control effective date or (b) the Expiration Date.
(g) Notwithstanding any provisions of this Agreement to the contrary, if Optionee’s employment
with the Company or any of its subsidiaries is terminated for Cause, as defined herein, the
Committee may, in its sole discretion, immediately terminate the options granted under this
Agreement. For the purpose of this Agreement, “Cause” shall mean a termination of employment by
the Company due to (i) the violation by the Employee of any rule, regulation, or policy of the
Company, including the Company’s Business Code of Conduct; (ii) the failure by the Employee to meet
any requirement reasonably imposed upon such employee by the Company as a condition of continued
employment; (iii) the violation by the Employee of any federal, state or local law or regulation; (iv) the commission by the Employee of an act
of fraud, theft, misappropriation of funds, dishonesty, bad faith or disloyalty; (v) the failure by
the Employee to perform
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consistently the duties of the position held by such employee in a manner
which satisfies the expectations of the Company after such Employee has been provided written
notice of performance deficiencies and a reasonable opportunity to correct those deficiencies; or
(vi) the dereliction or neglect by the Employee in the performance of such employee’s job duties.
6. Method of Exercising Option. The option hereby granted may be exercised at any
time as to all or any of the shares then purchasable in accordance with this Agreement by payment
in full therefor, at the corporate offices of the Company, either in (a) cash (including checks,
bank draft money order or wire transfer) or (b) by delivering Common Stock owned of record by
Optionee, or a combination of cash and Common Stock owned of record by Optionee. The fair market
value of the Common Stock so delivered shall be the arithmetic mean of the high and low price of
the Common Stock on the New York Stock Exchange-Composite Transactions listing on the exercise date
(as of 4:00 p.m. Eastern Time). The utilization of Common Stock for all or part of the option
price shall be subject to rules and conditions issued by the Board or the Committee including but
not limited to common stock holding period requirements relating to pyramiding rules, regulations,
principles and practices of the Internal Revenue Service, the Securities and Exchange Commission
and the accounting profession. Upon receipt of such payment and payment of any required
withholding taxes, the Company will issue, sell and deliver fully paid and nonassessable shares of
Common Stock in the amount for which payment is so made. As soon as practicable after such
payment, the Company shall either transfer physical possession of a certificate or certificates
representing the shares of Common Stock so purchased or provide for book entry transfer of such
shares to the Optionee.
7. Optionee’s Alternative to Exercising Options.
(a) In the event of a Change in Control, and as an alternative to the exercise provisions
contained above, Optionee may under certain limited conditions hereinafter set forth, elect to
surrender and terminate the option granted herein as to all or any of the shares then purchasable
in accordance with this Agreement and receive cash from the Company.
(b) A written application containing an election to exercise this Section 7 alternative must
be submitted to the Secretary of the Company, or his or her designee, during the period that
commences on the date on which a Change in Control occurs and ends on the 60th day thereafter.
(c) The amount of cash paid upon exercise of this Section 7 alternative shall equal the total
number of option shares surrendered multiplied by the amount by which the fair market value of a
share of the Company’s common stock on the date of exercise exceeds the option price. The fair
market value of common stock, for purposes of this paragraph, shall be the arithmetic mean of the
high and low prices of the common stock as reported on the New York Stock Exchange-Composite
Transactions listing (or similar report) on the exercise date (as of 4:00 p.m. Eastern Time) as
determined in this Section 7(c), or, if no sale was made on such date, then on the next preceding
day on which a sale was made.
(d) This Section 7 alternative shall not be available more than six months after (i)
Optionee’s retirement from the Company or one of its subsidiaries, or (ii) Optionee ceases to be
considered an “executive officer” of the Company and therefore subject to Section 16(b) of the
Exchange Act.
8. Assignability/Beneficiary. The rights of Optionee, contingent or otherwise, in the
options cannot and shall not be sold, assigned or pledged or otherwise transferred or encumbered
other than by will
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or by the laws of descent and distribution. Optionee may designate a
beneficiary or beneficiaries to exercise any rights or receive any benefits that are due under
Section 5(d) following Optionee’s death. To be effective, such designation must be made in
accordance with such rules and on such form as prescribed by the Company’s corporate compensation
group for such purpose which completed form must be received by the Company’s corporate
compensation group or its designee before Optionee’s death. If Optionee fails to designate a
beneficiary, or if no designated beneficiary survives Optionee’s death, Optionee’s estate shall be
deemed Optionee’s beneficiary.
9. Rights as a Shareholder. Neither Optionee nor his/her beneficiary or legal
representative shall be, or have any rights of, a shareholder of the Company or have any right to
notice of meetings of shareholders or of any other proceedings of the Company.
10. Changes in Capital Structure. The number of options covered by this Agreement and
the exercise price thereof will be adjusted appropriately in the event of any stock split, stock
dividend, combination of shares, merger, consolidation, reorganization, or other change in the
nature of the shares of Common Stock in the same manner in which other outstanding shares of Common
Stock not subject to the Plan are adjusted.
11. Governing Law. This grant and exercise of this option is subject to the condition
that this option, together with any other options granted on the Grant Date, will conform with any
applicable provisions of any State or Federal law or regulation in force either at the time of
grant of the option or the exercise thereof. The Committee and the Board reserve the right
pursuant to the condition mentioned in this paragraph to terminate all or a portion of this option
if, in the opinion of the Committee and the Board, this option or the exercise thereof does not
conform with any such applicable State or Federal law or regulation and such nonconformance shall
cause material harm to the Company.
This Agreement is to be governed by the laws of the State of New York, without regard to
conflicts of laws principles thereof.
12. Tax Withholding. Optionee’s ability to exercise Optionee’s options and receive
the benefits of such exercise are contingent upon Optionee’s agreement that Optionee will remit to
the Company any taxes that the Company is required by law to collect from Optionee. The Company
reserves the right to deduct from the total number of shares purchased by Optionee pursuant to the
exercise of the options the number of shares the fair market value of which equals any tax
withholding obligation that the company has upon Optionee’s exercise of the option. The Company
also reserves the right to require that any such taxes be remitted to the Company from the proceeds
of the sale of any stock acquired by Optionee through exercise of the option by any stock broker
effecting such sale.
13. Continued Employment. Nothing contained herein shall be construed as conferring
upon the Optionee the right to continue in the employ of the Company or any of its subsidiaries as
an executive or in any other capacity.
14. Parties to Agreement. This Agreement and the terms and conditions herein set
forth are subject in all respects to the terms and conditions of the Plan, which are controlling.
All decisions or interpretations of the Board and of the Committee shall be binding and conclusive
upon Optionee or upon Optionee’s executors or administrators or beneficiary upon any question
arising hereunder or under the
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Plan. This Agreement will constitute an agreement between the
Company and the Employee as of the date first above written, which shall bind and inure to the
benefit of their respective executors, administrators, beneficiaries, successors and assigns.
15. Modification. No change, termination, waiver or modification of this Agreement
will be valid unless in writing and signed by all of the parties to this Agreement.
16. Consent to Jurisdiction. Optionee hereby consents to the jurisdiction of any
state or federal court located in the county in which the principal executive office of the Company
is then located for purposes of the enforcement of this Agreement and waives personal service of
any and all process upon Optionee. The Optionee waives any objection to venue of any action
instituted under this Agreement.
17. Notices. All notices, designations, consents, offers or any other communications
provided for in this Agreement must be given in writing, personally delivered, or by facsimile
transmission with an appropriate written confirmation of receipt, by nationally recognized
overnight courier or by U.S. mail. Notice to the Company is to be addressed to its then principal
office. Notice to the Optionee or any transferee is to be addressed to his/her/its respective
address as it appears in the records of the Company, or to such other address as may be designated
by the receiving party by notice in writing to the Secretary of the Company.
18. Further Assurances. At any time, and from time to time after executing this
Agreement, the Optionee will execute such additional instruments and take such actions as may be
reasonably requested by the Company to confirm or perfect or otherwise to carry out the intent and
purpose of this Agreement.
19. Provisions Severable. If any provision of this Agreement is invalid or
unenforceable, it shall not affect the other provisions, and this Agreement shall remain in effect
as though the invalid or unenforceable provisions were omitted. Upon a determination that any term
or other provision is invalid or unenforceable, the Company shall in good faith modify this
Agreement so as to effect the original intent of the parties as closely as possible.
20. Captions. Captions herein are for convenience of reference only and shall not be
considered in construing this Agreement.
21. Entire Agreement. This Agreement represents the parties’ entire understanding and
agreement with respect to the issuance of the option, and each of the parties acknowledges that it
has not made any, and makes no promises, representations or undertakings, other than those
expressly set forth or referred to therein.
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IN WITNESS WHEREOF, the parties agree to the terms and conditions stated herein by signing and
returning to the Company the attached copy hereof.
| XXXXXXXX CORPORATION |
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| By: | ||||
| Vice President | ||||
| Accepted by: |
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| (Employee’s name) | ||||
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