EXHIBIT 10.1
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STOCK OPTION AGREEMENT
(NON-QUALIFIED STOCK OPTION)
THIS AGREEMENT is made to be effective as of August 7, 2000,
by and between X.X. Xxxxx Corporation, an Ohio corporation (the "Company") and
Xxxxxxx X. Xxxxxxx (the "Optionee").
WITNESSETH:
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WHEREAS, the Compensation Committee (the "Compensation
Committee") of the Board of Directors (the "Board") of the Company has
determined that an option to acquire shares of common stock, $1.00 par value per
share, of the Company should be granted to the Optionee upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, the parties
hereto make the following agreement, intending to be legally bound thereby:
1. DEFINED TERMS. When used in this Agreement, the following
capitalized terms have the respective meanings set forth in this Section:
(a) ACT: The Securities Exchange Act of 1934, as amended, or
any successor thereto.
(b) ADMINISTRATOR: The Board or the Compensation Committee if
the Board has delegated to the Compensation Committee
such responsibility.
(c) APPLICABLE LAWS: the requirements relating to the
administration of stock option plans under U.S. state
corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which
the common shares of the Company are listed or quoted and
the applicable laws of any foreign country or
jurisdiction where Options are granted under the Plan.
(d) CHANGE IN CONTROL: (i) the sale or disposition, in
one or a series of related transactions, of all or
substantially all of the assets of the Company to any
"person" or "group" (as such terms are defined in
Sections 13(d)(3) and 14(d)(2) of the Act) or (ii) any
person or group is or becomes the "beneficial owner" (as
such term is defined in
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Rule 13d-3 under the Act), directly or indirectly, of
more than 50% of the total voting power of the voting
stock of the Company, including by way of merger,
consolidation or otherwise.
(e) CODE: The Internal Revenue Code of 1986, as amended, or
any successor thereto.
(f) FAIR MARKET VALUE: On a given date, the closing sale
price for the Company's common shares as reported on any
securities exchange on which the Company's common shares
may be listed on such date or, if no such sale occurred
on that date, then for the next preceding date on which a
sale was made. If the Company's common shares should be
no longer listed on a securities exchange, the fair
market value shall be determined by the Administrator.
2. GRANT OF OPTION. Subject to adjustment pursuant to
Section 4 of this Agreement, the Company hereby grants to the Optionee an option
(the "Option") to purchase 20,000 common shares, par value $1.00 per share, of
the Company (the "Shares"). The Option is not intended to qualify as an
incentive stock option under Section 422 of the Code.
3. TERMS AND CONDITIONS OF THE OPTION.
(a) OPTION PRICE. The purchase price (the "Option Price")
to be paid by the Optionee to the Company upon the exercise of the Option shall
be $3.19 per Share, subject to adjustment as provided in Section 4 of this
Agreement.
(b) EXERCISE OF THE OPTION. Except as otherwise provided
in this Agreement, the Option may be exercised by the Optionee as follows:
(i) The Option shall vest and become exercisable on
the earlier of (A) the date on which the Company terminates the Optionee's
employment or (B) six (6) months from the option grant date. The portion of the
Option which has become vested and exercisable pursuant to this Section 3 is
hereinafter referred to as the "Vested Portion."
(ii) In the event of a Change of Control, any portion
of the Option that is not then exercisable shall vest and become exercisable
prior to such Change in Control.
The grant of the Option shall not confer upon the Optionee any
right to continue in the employment of the Company
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nor limit in any way the right of the Company to terminate the employment of the
Optionee at any time.
(c) METHOD OF EXERCISE OF OPTION. At any time prior to
the Expiration Date (as defined in Section 6), the Optionee may exercise all or
a portion of the Option by delivering written notice of exercise to the Company,
together with payment in full for the Shares in an amount equal to the product
of the Option Price multiplied by the number of Shares to be acquired. Such
payment may be made in cash or its equivalent (e.g., by check) or in previously
issued and currently held shares of the Company, which shares shall be valued at
Fair Market Value on the date of exercise.
(d) TAX WITHHOLDING. The Company shall be entitled to
withhold (or secure payment from the Optionee in lieu of withholding) the amount
of any withholding or other payment required of the Company under the tax
withholding provisions of the Code, any state's income tax act or any other
applicable law with respect to any Shares issuable under the exercised Option,
and the Company may defer issuance unless indemnified to its satisfaction with
respect to payment of such withholding or other tax.
4. ADJUSTMENTS AND CHANGES IN THE SHARES.
The following provisions shall apply to the Option:
(a) GENERALLY. In the event of any change in the
outstanding shares of common stock of the Company by reason of any share
dividend or split, reorganization, recapitalization, merger, consolidation,
spin-off, combination or exchange of shares or other corporate exchange, or any
distribution to holders of shares of the Company other than regular cash
dividends or any transaction similar to the foregoing, the Administrator in its
sole discretion and without liability to any person may make such substitution
or adjustment, if any, as it deems to be equitable, as to (i) the number or kind
of shares or other securities issuable pursuant to this Option and (ii) the
Option Price and/or any other affected terms of this Option.
(b) CHANGE IN CONTROL. In the event of a Change in
Control, the Administrator may, but shall not be obligated to, make provision
for a cash payment to the Optionee in consideration for the cancellation of the
Option which shall equal the excess, if any, of the Fair Market Value of the
Shares subject to the Option over the Option Price of the Option.
(c) NO RESTRICTIONS ON COMPANY. The grant of the Option
shall not affect in any way the right of the Company to
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adjust, reclassify, reorganize, or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
5. NON-ASSIGNABILITY OF OPTION. Unless otherwise permitted
by the Administrator, the Option shall not be assignable or otherwise
transferable by the Optionee except by will or by the laws of descent and
distribution. The Option may not be exercised during the lifetime of the
Optionee except by him, his guardian or legal representative.
6. EXERCISE AFTER TERMINATION OF EMPLOYMENT. Subject to the
provisions of this Agreement, the Optionee may exercise all or any part of the
Vested Portion of this Option at any time prior to the earliest to occur of:
(a) the tenth anniversary of the date of this Agreement;
(b) one (1) year following the date of Optionee's death;
or
(c) two (2) years following the date of termination of
Optionee's employment with the Company.
Upon the earliest to occur of any of the events described in
clauses (a), (b) or (c) above (the "Expiration Date"), the Option shall
terminate, and Optionee shall have no further rights under this Agreement.
7. RESTRICTIONS ON TRANSFERS OF COMMON SHARES. Anything
contained in this Agreement or elsewhere to the contrary notwithstanding, the
Company may postpone the issuance and delivery of Shares upon any exercise of
the Option until completion of any stock exchange listing or registration or
other qualification of such Shares under any state or federal law, rule or
regulation as the Company may consider appropriate; and may require the Optionee
when exercising the Option to make such representations and furnish such
information as the Company may consider appropriate in connection with the
issuance of the Shares in compliance with applicable law.
Shares issued and delivered upon exercise of the Option shall
be subject to such restrictions on trading, including appropriate legending of
certificates to that effect, as the Company, in its discretion, shall determine
are necessary to satisfy applicable legal requirements and obligations.
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8. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant
to the exercise of the Option unless the exercise of such Option and the
issuance and delivery of such Shares shall comply with Applicable Laws and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the
exercise of the Option, the Administrator may require the person exercising the
Option to represent and warrant at the time of any such exercise that the Shares
are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.
9. BUY OUT OF OPTION GAINS. At any time after the Option
becomes exercisable, the Administrator shall have the right to elect, in its
sole discretion and without the consent of the Optionee, to cancel the Option
and pay to the Optionee the excess of the Fair Market Value of the Shares over
the Option Price at the date the Administrator provides written notice (the "Buy
Out Notice") of the intention to exercise the right. A buy out pursuant to this
Section shall be effected by the Company as promptly as possible after the date
of the Buy Out Notice. Payment of the buy out amount may be made in cash, in
common shares of the Company, or partly in cash and partly in common shares as
the Administrator deems advisable. To the extent payment is made in common
shares, the number of shares shall be determined by dividing the amount of the
payment to be made by the Fair Market Value of a common share at the date of the
Buy Out Notice. Payment of such buy out amount shall be made net of any
applicable foreign, federal (including Federal Insurance Contributions Act),
state and local withholding taxes.
10. RIGHTS OF OPTIONEE. The Optionee shall have no rights as
a stockholder of the Company with respect to any Shares of the Company covered
by the Option until (a) the Optionee has given written notice of exercise of the
Option, (b) the Optionee has paid in full for such Shares and, if applicable,
satisfied any other conditions imposed by the Administrator and (c) the date of
issuance of a certificate to him evidencing such Shares.
11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio without regard to
conflict of law provisions.
12. RIGHTS AND REMEDIES CUMULATIVE. All rights and remedies
of the Company and of the Optionee enumerated in this
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Agreement shall be cumulative and, except as expressly provided otherwise in
this Agreement, none shall exclude any other rights or remedies allowed by law
or in equity, and each of said rights or remedies may be exercised and enforced
concurrently.
13. CAPTIONS. The captions contained in this Agreement are
included only for convenience of reference and do not define, limit, explain or
modify this Agreement or its interpretation, construction or meaning and are in
no way to be construed as a part of this Agreement.
14. SEVERABILITY. If any provision of this Agreement or the
application of any provision hereof to any person or any circumstance shall be
determined to be invalid or unenforceable, then such determination shall not
affect any other provision of this Agreement or the application of said
provision to any other person or circumstance, all of which other provisions
shall remain in full force and effect, and it is the intention of each party to
this Agreement that if any provision of this Agreement is susceptible of two or
more constructions, one of which would render the provision enforceable and the
other or others of which would render the provision unenforceable, then the
provision shall have the meaning which renders it enforceable.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the Company and the Optionee in respect of the subject matter
of this Agreement, and this Agreement supersedes all prior agreements between
the parties hereto in connection with the subject matter of this Agreement. No
officer, employee or other servant or agent of the Company, and no servant or
agent of the Optionee is authorized to make any representation, warranty or
other promise not contained in this Agreement. No change, termination or
attempted waiver of any of the provisions of this Agreement shall be binding
upon any party hereto unless contained in a writing signed by the party to be
charged.
16. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns (including successive,
as well as immediate, successors and assigns) of the Company.
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Optionee has reviewed this Agreement in its entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Agreement
and fully understands all provisions of this Agreement. Optionee hereby agrees
to accept as binding, conclusive and final all decisions or interpretations of
the Administrator upon any questions arising under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date first above written.
COMPANY:
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X.X. XXXXX CORPORATION
By: /s/Xxxxxx Xxxxx
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Xxxxxx Xxxxx
Chairman and Chief Executive
Officer
OPTIONEE:
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/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
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Street Address
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
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City, State, Zip Code
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
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Social Security Number
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