Checkpoint Systems Inc.
COMPENSATION OPTION AGREEMENT
This OPTION AGREEMENT (this "Agreement") is made as of January 1, 1995, by
and between Checkpoint Systems, Inc. ("Checkpoint"), a Pennsylvania corporation
and Xxxxxx X. Xxxxxx ("Xxxxxx"), an individual residing in Ft. Xxxxxx, Florida.
Checkpoint and MLE Enterprises, Inc. have entered into that certain
Consulting Agreement (the "Consulting Agreement") dated January 13, 1995,
pursuant to which MLE Enterprises, Inc. will provide consulting services for
Checkpoint. As part of the consideration for the services to be provided by MLE
Enterprises, Inc. under the Consulting Agreement, Checkpoint has agreed to grant
the options provided by this Agreement to Xxxxx Xxxxxx.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
intending to be legally bound, the parties hereto agree as follows:
1. Grant of Option: Checkpoint hereby grants to Xxxxxx the following
Non-Qualified Stock Options (the "Options") to purchase a total of 20,000 shares
(the "Option Shares") of Checkpoint's Common Stock, par value $.10 per share
("Common Stock") at the purchase price of $19.625 (the "Option Price") per share
(being 100% of the fair market value per share of Common Stock on the date
hereof as determined by Checkpoint).
(a) Option Grant Number 1 ("Grant 1") to purchase 10,000 shares of
Checkpoint's Common Stock, par value $.10 per share at the purchase price of
$19.625 per share.
(b) Option Grant Number 2 (Grant 2) to purchase 10,000 shares of
Checkpoint's Common Stock, par value $.10 per share at the purchase price of
$19.625 per share.
All shares of Common Stock authorized to be issued on the exercise of the
Options granted hereunder shall be either authorized but unissued shares or
shares held by Checkpoint in its Treasury.
2. Time of Exercise of Option. The vested and exercisable portion of Grants
1 and 2 as determined in accordance with Section 3, are exercisable for a period
of five (5) years beginning on the date Grants 1 and 2 first become exercisable.
Grant 1 shall become exercisable beginning on June 30, 1995 and Grant 2 shall
become exercisable beginning on June 30, 1996, provided however, that in the
case of each Grant, and as a precondition of exercise, the business plan
referred to in the Consulting Agreement shall have been attained or exceeded for
each respective year. In the event the appropriate business plan is attained, as
set forth in the preceding sentence, thereafter the respective Grant shall be
freely exercisable during the remaining term of the respective Grant shall be
freely exercisable during the remaining term of the Option. In the event the
conditions applicable to Grants 1 and 2 are not attained within the
respective time periods, Grants 1 and 2 terminate. Notwithstanding anything
contained in this Agreement to the contrary the Options granted herein shall
expire on the earlier of 45 days after the date upon which services to the
Company by MLE Enterprises, Inc. terminate or the dates calculated in accordance
with the first sentence in this Section 2.
3. Vesting. The Options shall be vested on the date hereof, and exercisable
as provided in Section 2.
4. Terms of Payment. Full payment of the Option Price for any Option Shares
with respect to which this Option is exercised shall be made in cash or by
personal or certified check, bank draft or postal or express money order, on the
date notice of exercise of the Option is given by Xxxxxx to Checkpoint.
5. Partial Exercise. The vested portion of this Option may be exercised in
whole or in part, subject to the provisions of this Agreement. Fractional shares
will not be issued.
6. Stock Certificates. Upon the exercise of the Option, appropriate stock
certificates shall be issued to Xxxxxx. The issuance of such stock certificates
shall vest in the holder all rights as a shareholder with respect to the Option
Shares evidenced thereby. Any stock certificate issued hereunder may contain
such securities law or other legends as Checkpoint deems appropriate.
7. Transferability. The Option shall be exercisable only by Xxxxxx or his
permitted assigns heirs, executors or administrators, as the case may be, and
the Option is not assignable or transferable otherwise than upon the prior
written consent of Checkpoint.
8. Adjustments to Number of Shares. In the event of any change in the
shares of Common Stock by reason of any stock dividend, recapitalization,
reorganization merger, consolidation, split-up, combination, or exchange of such
shares at a price substantially below fair market value, or rights offering to
purchase such shares, or of any similar change affecting such shares of Common
Stock, the number and kind of Option Shares subject to this Option and the
Option Price shall be appropriately adjusted to prevent substantial dilution or
enlargement of the rights granted to Xxxxxx hereunder.
9. No Rights As a Stockholder. Xxxxxx shall have no rights as a stockholder
with respect to the Option Shares until the date as of which a stock certificate
is issued pursuant to exercise of the Option. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, other property) or
distributions or rights for which the record date is prior to the date such
stock certificate is issued. Any stock dividends shall result in adjustment of
the number of shares pursuant to Section 8.
10. Tax and Securities Laws Matter. Xxxxxx acknowledges and agrees that the
Option has not been, and the Option Shares will not be upon issuance, registered
under the Securities Act of 1933, as amended, or any state securities laws and
may not be offered or sold without registration under the Securities Act of
1933, as amended, and compliance with state
securities laws, unless an exemption therefrom is applicable. Xxxxxx represents
that he is acquiring the Option and will acquire the Option Shares for
investment purposes only and has no present intention of disposing of the Option
or, upon issuance, the Option shares.
11. Notices. All notices hereunder shall be sent by registered or certified
mail, return receipt requested, or by overnight courier guaranteeing next day
delivery to the following addresses:
(i) if to Checkpoint, addressed to:
Checkpoint Systems, Inc.
Attention: General Counsel
000 Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
(ii) if to Xxxxxx, addressed to:
Xx. Xxxxxx X. Xxxxxx
c/o MLE Enterprises, Inc.
00000 Xxxxx Xxxxxx, Xxxxx 000
Xx Xxxxxx, Xxxxxxx 00000
12. Binding Effect. This Option Agreement shall be binding upon, and inure
to the benefit of, Checkpoint and its successors and Xxxxxx and his permitted
assigns, heirs, executors and administrators.
13. Integration and Governing Law. This Agreement comprises the entire
understanding between the parties hereto as to the subject matter covered hereby
and shall be construed and interpreted in accordance with the laws of the
Commonwealth of Pennsylvania, without giving effect to the conflict of law
provisions thereof.
IN WITNESS WHEREOF, the undersigned have executed this Option Agreement as
of the date and year first above written.
Xxxxxx X. Xxxxxx Checkpoint Systems, Inc.
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxx
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(Signature)
Xxxxx X. Xxxx
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(Printed Name)
President and Chief Executive Officer
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(Title)
