XXXX COMPANY
1995 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made and entered into as of this ____ day of _______________,
____, by and between XXXX COMPANY, a Wisconsin corporation (the "Company"),
and ______________________________ (the "Optionee").
W I T N E S S E T H :
WHEREAS, the Company has adopted the Xxxx Company 1995 Stock Option Plan
(the "Plan"), the terms of which, to the extent not stated herein, are
specifically incorporated by reference in this Agreement; and
WHEREAS, one of the purposes of the Plan is to permit the granting of
options to purchase shares of the Company's Common Stock, $.10 par value (the
"Common Stock"), to certain key employees of the Company and its affiliates;
and
WHEREAS, the Optionee is now employed by the Company or an affiliate of
the Company in a key capacity, and the Company desires the Optionee to remain
in such employ, and to secure or increase his stock ownership in the Company
in order to increase his incentive and personal interest in the welfare of the
Company.
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements herein set forth, the parties hereby mutually
covenant and agree as follows:
1. Grant of Option. Subject to the terms and conditions of the
Plan and this Agreement, the Company grants to the Optionee an option (the
"Option") to purchase from the Company all or any part of the aggregate amount
of _______ shares of Common Stock (the "Optioned Shares"). The Option is
intended to constitute a non-qualified stock option and shall not be treated
as an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
2. Option Price. The price to be paid for the Optioned Shares
shall be $______ per share, which has been determined by the Compensation and
Benefits Committee of the Board of Directors of the Company (the "Committee")
to be not less than 100% of the fair market value of such stock on the date of
grant of the Option.
3. Exercisability and Termination of Option. Except as provided
herein, the Option may be exercised only while the Optionee is an employee of
either the Company or an affiliate of the Company and only if the Optionee has
been continuously so employed since the date of grant of the Option. Subject
to Paragraph 6, the Option may be exercised by the Optionee in whole, or in
part from time to time, during the period beginning ______________, ____, and
ending _____________________, ____, but only in accordance with the following
schedule:
Cumulative Percentage of Shares
Subject to Option Which May be
Purchased (which number of
shares shall be rounded
Elapsed Period of Time down to the nearest whole
After Date Option is Granted number)
Less than One (1) Year 0%
One (1) Year 33-1/3%
Two (2) Years 66-2/3%
Three (3) Years 100%
provided, however, that notwithstanding the foregoing vesting schedule, the
Option shall become immediately exercisable in full following a Change of
Control of the Company (as such term is defined in the Plan).
4. Manner of Exercise and Payment. Subject to the provisions of
Paragraph 3 hereof, the Option may be exercised only by written notice to the
Company, served upon the Secretary of the Company at its office at West Bend,
Wisconsin, specifying the number of shares in respect to which the Option is
being exercised. Subject to the provisions of this Agreement, the notice of
exercise must be accompanied by full payment of the option price of the shares
being purchased (i) in cash or by certified check or bank draft; (ii) by
tendering previously acquired shares of Common Stock (valued at their "fair
market value" as determined in the manner provided below); or (iii) by any
combination of the means of payment set forth in subparagraphs (i) and (ii).
For purposes of this Paragraph 4, the "fair market value" of a share of Common
Stock shall be equal to the last per share sale price of such Common Stock as
reflected on The Nasdaq Stock Market on the trading day next preceding the
date of exercise; provided, however, that if the principal market for the
shares of Common Stock is then a national securities exchange, the "fair
market value" shall be the closing price per share for the Common Stock on the
principal securities exchange on which the Common Stock is traded on the
trading date next preceding the date of exercise, or, in either case above, if
no trading occurred on the trading date next preceding the exercise date, then
the "fair market value" per share of Common Stock shall be determined with
reference to the next preceding date on which the Common Stock was traded.
For purposes of subparagraphs (ii) and (iii) above, the term "previously
acquired shares of Common Stock" shall only include Common Stock owned by the
Optionee prior to the exercise of the Option and shall not include shares of
Common Stock which are being acquired pursuant to the exercise of the Option.
No shares shall be issued until full payment therefor has been made.
5. Nontransferability of the Option. The Option shall not be
assignable, alienable, saleable or transferable by the Optionee other than by
will or the laws of descent and distribution; provided, however, that the
Optionee shall be entitled, in the manner provided in Paragraph 9 hereof, to
designate a beneficiary to exercise his rights, and to receive any shares of
Common Stock issuable, with respect to the Option upon the death of the
Optionee. The Option may be exercised during the lifetime of the Optionee
only by the Optionee or, if permitted by applicable law, the Optionee's
guardian or legal representative.
6. Exercisability After Termination of Employment.
(a) Death or Disability; Retirement. In the event the Optionee
dies while he is in the employ of the Company or any affiliate or if his
employment is terminated by reason of his retirement on or after attaining age
62 or by reason of his disability, the Option, to the extent not theretofore
exercised, may be exercised in full as follows: (i) by the legal
representative of the Optionee (who for purposes of this Agreement may be the
Optionee's beneficiary as designated pursuant to Paragraph 9) at any time
within twelve months after the date of the Optionee's death while in the
employ of the Company or any affiliate; or (ii) by the Optionee or his legal
representative or guardian at any time within twelve months after the
termination of the Optionee's employment by reason of retirement on or after
attaining age 62 or by reason of his disability, but in no event under
subparagraphs (i) or (ii) later than ten years after the date of grant of the
Option.
(b) Voluntary Termination; Termination for Cause. In the event the
Optionee voluntarily terminates his employment with the Company and any
affiliates or if his employment is terminated for Cause (as hereinafter
defined), the Option, to the extent not theretofore exercised, shall
immediately terminate upon such termination of employment. For purposes of
this Agreement, the term Cause shall mean any termination of the Optionee by
action of the Board of Directors of the Company because of the failure of the
Optionee to fulfill his obligations with the Company or any affiliate thereof
or because of serious willful misconduct by the Optionee in respect of his
obligations with the Company or any affiliate thereof which would cause a
substantial and demonstrable detriment to the Company, as, for example, the
commission by the Optionee of a felony or the perpetration by the Optionee of
a common-law fraud against the Company or any affiliate thereof, or any major
material action (i.e., not procedural or operational differences) taken
against the expressed directive of the Board of Directors of the Company.
(c) Other. In the event that the Optionee is discharged or leaves
the employ of the Company and its affiliates for any reason (other than the
death or disability of the Optionee, the retirement of the Optionee on or
after attaining age 62, the Optionee's voluntary termination of his employment
or the termination of the Optionee for Cause), the Option, to the extent not
theretofore exercised but then permitted under the percentage limitations of
Paragraph 3 hereof, may be exercised by the Optionee or by his legal
representative or guardian at any time within three months after the date of
termination of employment upon the tender to the Company, in cash or its
equivalent, of the full purchase price, but in no event later than ten years
after the date of grant of the Option.
7. Tax Withholding. The Company may deduct and withhold from any
cash otherwise payable to the Optionee (whether payable as salary, bonus or
other compensation) such amount as may be required for the purpose of
satisfying the Company's obligation to withhold Federal, state or local taxes.
Further, in the event the amount so withheld is insufficient for such purpose,
the Company may require that the Optionee pay to the Company upon its demand
or otherwise make arrangements satisfactory to the Company for payment of such
amount as may be requested by the Company in order to satisfy its obligation
to withhold any such taxes.
The Optionee shall be permitted to satisfy the Company's tax
withholding requirements by making a written election (in accordance with such
rules and regulations and in such form as the Committee may determine) to have
the Company withhold shares of Common Stock otherwise issuable to the Optionee
(the "Withholding Election") or to deliver to the Company shares of Common
Stock (the "Delivery Election") in each case having a fair market value on the
date income is recognized (the "Tax Date") pursuant to the exercise of the
Option equal to the minimum amount required to be withheld. If a Delivery
Election is in effect at the time of the exercise of the Option, the Optionee
shall deliver the shares of Common Stock subject to such Delivery Election on,
or as soon as practicable after, the Tax Date. If the number of shares of
Common Stock withheld or delivered to satisfy withholding tax requirements
shall include a fractional share, the number of shares withheld or delivered
shall be reduced to the next lower whole number and the Optionee shall deliver
cash in lieu of such fractional share, or otherwise make arrangements
satisfactory to the Company for payment of such amount. A Withholding
Election or Delivery Election must be received by the Secretary of the Company
on or prior to the Tax Date. In addition, if the Optionee is an officer,
director or more than 10% shareholder of the Company ("Insider"), the
following shall apply:
A Withholding Election or Delivery Election made hereunder by
an Insider will not be effective until at least six months after the
date of grant of the Option (except in the event of the death or
disability of the Optionee) and shall be made by an Insider in one
of two ways. Either (i) the Withholding Election or Delivery
Election, as the case may be, shall be received by the Secretary at
least six months prior to the Tax Date and shall be irrevocable
(provided that a new election revoking the prior Withholding
Election or Delivery Election, as the case may be, may be made with
respect to the unexercised portion of the Option effective six
months after receipt by the Secretary of such new election), or (ii)
the Withholding Election or the Delivery Election, as the case may
be, must be received by the Secretary during a ten business day
period commencing on the third business day following the release of
the Company's quarterly or annual, as the case may be, statement of
sales and earnings and on or prior to the Tax Date.
8. Capital Adjustments Affecting the Common Stock. The number of
Optioned Shares subject hereto and the related per share exercise price shall
be subject to adjustment in accordance with Section 4(b) of the Plan.
9. Designation of Beneficiary. (a) The person whose name appears
on the signature page hereof after the caption "Beneficiary" or any successor
designated by the Optionee in accordance herewith (the person who is the
Optionee's beneficiary at the time of his death is herein referred to as the
"Beneficiary") shall be entitled to exercise the Option, to the extent it is
exercisable, after the death of the Optionee. The Optionee may from time to
time revoke or change his beneficiary without the consent of any prior
beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective
unless received by the Committee prior to the Optionee's death, and in no
event shall any designation be effective as of a date prior to such receipt.
(b) If no such Beneficiary designation is in effect at the time of
the Optionee's death, or if no designated Beneficiary survives the Optionee or
if such designation conflicts with law, the Optionee's estate acting through
his legal representative shall be entitled to exercise the Option, to the
extent it is exercisable after the death of the Optionee. If the Committee is
in doubt as to the right of any person to exercise the Option, the Company may
refuse to recognize such exercise, without liability for any interest or
dividends on the Optioned Shares, until the Committee determines the person
entitled to exercise the Option, or the Company may apply to any court of
appropriate jurisdiction and such application shall be a complete discharge of
the liability of the Company therefor.
10. Transfer Restriction. The shares to be acquired upon exercise
of the Option may not be sold or offered for sale except pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
or in a transaction which, in the opinion of counsel for the Company, is
exempt from the registration provisions of said Act.
11. Status of Optionee. The Optionee shall not be deemed for any
purposes to be a shareholder of the Company with respect to any of the
Optioned Shares except to the extent that the Option shall have been exercised
with respect thereto, the shares shall have been fully paid, and a stock
certificate issued therefor. Neither the Plan nor the Option shall confer
upon the Optionee any right to continue in the employ of the Company, nor to
interfere in any way with the right of the Company to terminate the employment
of the Optionee at any time.
12. Powers of the Company Not Affected. The existence of the
Option shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
bonds, debentures, preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or dissolution or liquidation of the
Company, or any sale or transfer of all or any part of the Company's assets or
business or any other corporate act or proceeding, whether of a similar
character or otherwise.
13. Interpretation by Committee. As a condition of the granting of
the Option, the Optionee agrees, for himself and his legal representatives or
guardians, that this Agreement shall be interpreted by the Committee and that
any interpretation by the Committee of the terms of this Agreement and any
determination made by the Committee pursuant to this Agreement shall be final,
binding and conclusive.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officers and its corporate seal to be hereunto
affixed, and the Optionee has hereunto affixed his hand and seal as of the day
and year first above written.
XXXX COMPANY
By: __________________________________________
[CORPORATE SEAL] Attest: ______________________________________
(SEAL)
____________________________________ , Optionee
Beneficiary:___________________________________
Address of Beneficiary:________________________
Beneficiary's Tax Identification
No.: __________________________________________
