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EXHIBIT 10.6
PETROLITE CORPORATION
STOCK OPTION AGREEMENT
(NON-QUALIFIED)
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AGREEMENT made as of the 11th day of August, 1995, by and
between Petrolite Corporation, a Delaware Corporation, 000 Xxxxxxxx
Xxxxxx, Xx. Xxxxx, Xxxxxxxx 00000 (hereinafter the "Company") and
Xxxx X. Xxxxxxxx, 00000 Xxxxxxxxxxx Xxxxx, Xxxxx 000, Xx. Xxxxx,
Xxxxxxxx 00000 (hereinafter the "Optionee").
WITNESSETH:
A. The Company and the Optionee have entered into that
certain Management Agreement of even date (the "Management
Agreement") pursuant to which Optionee is to render valuable
services to the Company.
B. In consideration for the services to be provided by
Optionee pursuant to the Management Agreement the Company desires
to grant, and the Optionee desires to receive, an option to
purchase shares of the Company's Capital Stock.
NOW, THEREFORE, it hereby is agreed as follows:
1. Grant of Option. Subject to and upon the terms and
conditions set forth in this Agreement, the Company hereby grants
to Optionee, as of the date of this Agreement (the "Grant Date"),
the right and option to purchase up to 36,000 shares of the
Company's Capital Stock (the "Optioned Shares") from time to time
during the option term at the price of $21.0281 per share (the
"Option Price"). The Option Price is 75% of the average of the
mid-point between the bid and asked price for a share of the
Company's Capital Stock at the close of trading on the first five
trading days of August, 1995, as reported by the National
Association of Securities Dealers, Inc.
2. Option Term. The Option shall have a maximum term of
five (5) years, measured from the Grant Date and shall accordingly
expire at the close of business on August 11, 2000 (the "Expiration
Date"), unless terminated sooner as provided in this Agreement.
3. Option Nontransferable; Exception. The Option shall be
neither transferable nor assignable by Optionee other than by will
or by the laws of descent and distribution and may be exercised,
during Optionee's lifetime, only by Optionee.
4. Exercise of Option.
a. This Agreement is made pursuant to the Management
Agreement. Subject to the right of either party to terminate
the Management Agreement earlier, the Option granted hereunder
shall become exercisable with respect to 1/12 of the shares
subject thereto on and after September 29, 1995, and with
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respect to an additional 1/12 of the shares subject thereto on
and after the last business day of each succeeding calendar
month; except that, the final 1/12 shall become exercisable on
and after August 10, 1996. In the event the Management
Agreement is terminated before the Option has become fully
exercisable, the Option shall be and remain exercisable only
with respect to those shares for which the Option became
exercisable before termination of the Management Agreement.
b. To the extent that it becomes exercisable, the
Option may be exercised by Optionee at any time during the
Option Term. In the event of the death of the Optionee during
the Option Term, the Option may be exercised by his executors,
administrators, or other legal representatives, heirs,
legatees, next of kin, or distributees, within three months,
but not later than three months, after the date of the legal
qualification of the executors or administrators of his
estate, provided diligent efforts are made and such
qualification is obtained within a reasonable time after his
death. Notwithstanding anything in this Agreement to the
contrary, the Option granted to Optionee shall in no event be
exercisable after the Expiration Date.
5. Adjustment in Option Shares.
a. In the event any change is made to the Capital Stock
issuable hereunder by reason of any stock split, stock
dividend, combination of shares, or other change affecting the
outstanding Capital Stock as a class without receipt of
consideration, the appropriate adjustments will be made to
(i) the total number of Optioned Shares subject to this
Option and/or (ii) the Option Price payable per share in
order to reflect such change and thereby preclude a dilution
or enlargement of benefits hereunder.
b. If the Company is the surviving entity in any merger
or other business combination, then this Option, if
outstanding immediately after such merger or other business
combination, shall be appropriately adjusted to apply and
pertain to the number and class of securities which would be
issuable to the Optionee on the consummation of such merger or
business combination if the Option were exercised immediately
prior to such merger or business combination, and appropriate
adjustments also shall be made to the Option Price payable per
share, provided the aggregate Option Price payable hereunder
shall remain the same.
6. Right as Shareholder. The Optionee shall not have any of
the rights of a shareholder with respect to the Optioned Shares
until the Optionee shall have exercised the Option and paid the
Option Price.
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7. Manner of Exercising Option.
a. In order to exercise the Option with respect to all
or any part of the Optioned Shares for which the Option is at
the time exercisable, Optionee (or in the case of exercise
after Optionee's death, the Optionee's executor, administrator
heir or legatee, as the case may be) must take the following
actions:
(i) Execute and deliver written notice of such
exercise to the Company;
(ii) Pay the aggregate Option Price for the
purchased shares in cash;
(iii) Furnish to the Company appropriate
documentation that the person or persons exercising the
Option, other than the Optionee, have the right to
exercise the Option.
b. The Option shall be deemed to have been exercised
with respect to the number of Optioned Shares specified in the
notice when the notice shall have been delivered to the
Company as provided herein. Payment of the Option Price shall
become due immediately and shall accompany the notice. As
soon as practical thereafter, the Company shall mail or
deliver to Optionee, or to the other person or persons
exercising this Option, a certificate or certificates
representing the Optioned Shares so purchased and paid for,
with any appropriate legends affixed thereto.
c. In no event may this Option be exercised for any
fractional shares.
8. Compliance with Laws and Regulations.
a. The exercise of this Option and the issuance of
Optioned Shares upon such exercise shall be subject to
compliance by the Company and the Optionee with all applicable
requirements of law relating thereto and with all applicable
regulations of any stock exchange or trading system on which
shares of the Company's Capital Stock may be listed at the
time of such exercise and issuance.
b. In connection with the exercise of this Option,
Optionee shall execute and deliver to the Company such
representations in writing as may be requested by the Company
in order for it to comply with the applicable requirements of
federal and state securities laws.
c. Optionee is familiar with the Company and has
obtained such financial and other information concerning the
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Company as Optionee deems necessary to make an informed
decision regarding any exercise of the Option granted herein.
d. Any shares acquired hereunder shall be acquired for
Optionee's own account without a view to the distribution
thereof within the meaning of the United States Securities Act
of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder.
9. Restrictions on Transfers of Optioned Shares. Optionee
understands and agrees that, unless and until the Optioned Shares
are registered under the Securities Act, the Optionee will not
offer, sell or otherwise dispose of all or any part of the Optioned
Shares to any person unless, in the opinion of counsel satisfactory
to Petrolite, an exemption from such registration requirements is
available. Optionee further agrees that a legend to the foregoing
effect may be placed upon any certificate or other documents issued
representing the Optioned Shares, and the records of Petrolite may
be marked to indicate the restrictions on transfer. On the written
request of the Optionee, Petrolite will remove the legend from the
certificate or other documents issued representing the Optioned
Shares if, in the opinion of Petrolite's securities counsel, the
shares may be transferred freely without registration.
10. Right to Registration.
a. The Optionee, upon written request at any time from
the Grant Date through the Expiration Date, may make one
demand requesting that the Company use its reasonable best
efforts to effect the registration under the Securities Act of
all or part of the Optioned Shares then held by the Optionee.
Registration requested pursuant to this Section 10 shall be
effected by the filing of a registration statement on the
appropriate registration form, as determined by the Company.
b. In connection with its obligations hereunder, the
Company shall file such prospectuses, exhibits, undertakings,
and other certificates and instruments with the Securities and
Exchange Commission (the "SEC") as may be requested or
required by the SEC or its staff, and shall file such pre-
effective amendments to its registration statement as may be
required to obtain the declaration of effectiveness. The
Company shall have the right to postpone for up to six months
any registration hereunder if, in the good faith opinion of
the Company, such registration would interfere with any
material transaction then being pursued by the Company or
otherwise would adversely affect the Company in any material
way. Anything herein to the contrary notwithstanding, the
Company shall not be required to file any registration
statement hereunder if, in the opinion of the Company's
counsel, the Optioned Shares proposed to be registered may be
sold freely without such registration.
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c. All costs and expenses of every kind relating to or
arising from the preparation and filing of a registration
statement, amendments, supplements, prospectuses, exhibits,
undertakings and other documents shall be paid by the Company;
provided, however, that the Company shall not be required to
pay the fees and expenses of counsel for the Optionee or any
underwriting discounts, commission or transfer taxes.
d. Before the effective date of the registration
statement specified herein, the Company and the Optionee shall
enter into an agreement providing for a reciprocal
indemnification against any losses, claims, damages or
liabilities to which the Optionee or the Company may become
subject under the Securities Act or otherwise, in the form of
the reciprocal indemnification provisions with respect to
materials provided by them, respectively, for inclusion in the
type of statement that customarily appears in underwriting
agreements used by reputable investment bankers.
11. Company's Right to Repurchase. Notwithstanding the
foregoing, upon the written request of the Optionee requesting that
the Company effect the registration under the Securities Act of all
or part of the Optioned Shares, the Company may, in lieu of using
its best efforts to effect the registration of such Optioned Shares
under the Securities Act, repurchase all or any portion of the
Optioned Shares to be so registered at the current market value of
the Optioned Shares, which shall be determined by using the average
of the daily average of the bid and asked price for a share of the
Company's Capital Stock at the close of trading on the twenty (20)
days immediately following the date of such request for
registration, as reported by the National Association of Securities
Dealers, Inc. If the Company elects to repurchase all or a portion
of the Optioned Shares, the Company shall pay cash for such
Optioned Shares to be repurchased within twenty (20) business days
after notice to the Optionee of the Company's election to
repurchase such Optioned Shares, which election shall be made
within twenty (20) days after receipt by the Company of the
Optionee's written request.
12. Successors and Assigns. Except to the extent otherwise
provided herein, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of the
Optionee and the successors and assigns of the Company.
13. Notices. Any notice required to be given or delivered to
the Company under the terms of this Agreement shall be in writing
and addressed to the Company in care of its Secretary at its
corporate offices. Any notice required to be given or delivered to
Optionee shall be in writing and addressed to Optionee at the
address indicated above. All notices shall be deemed to have been
given or delivered upon personal delivery or upon depositing in the
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U.S. mail, postage prepaid and properly addressed to the party to
be notified.
14. Applicable Law. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the
State of Missouri.
15. Nonstatutory Stock Option. The Option is intended not to
qualify as an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, and
shall be so construed.
16. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed in duplicate on its behalf by its duly authorized
officer, and Optionee also has executed this Agreement in
duplicate, all as of the day and year indicated above.
Company: PETROLITE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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(Signature)
Chairman, President and CEO
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(Title)
Optionee: XXXX X. XXXXXXXX
/s/ Xxxx X. Xxxxxxxx
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(Signature)
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