Stock Option and Restricted Stock Unit Agreement
Exhibit
10b(xvii)
X.X.
XXXXXXXX, INC.
2010
Incentive Plan
This Stock Option and Restricted Stock Unit
Agreement (the “Agreement”) is dated as of ____________________ (the “Effective
Date”) and is entered into between X.X. Xxxxxxxx, Inc., an Illinois
corporation (the “Company”), and _______________ (the “Executive”).
Pursuant to the
X.X. Xxxxxxxx, Inc. 2010 Incentive Plan (the "Plan") and in consideration of the
Executive's agreement to enter into an Unfair Competition Agreement between the
Company and the Executive concurrently with this Agreement (the “Unfair
Competition Agreement”), the Company desires to grant to the Executive (i) the
right and option (“Option”) to purchase shares of the Company’s common stock
(“Common Stock”) and (ii) restricted stock units (referred to herein as “RSUs”),
and the Executive desires to enter into the Unfair Competition Agreement and
accept such Option and RSUs (the “Awards”), on the terms and conditions set
forth in this Agreement, the Plan and the Unfair Competition
Agreement.
Capitalized terms used but not defined in this Agreement shall have the meanings
specified in the Plan.
In consideration of the mutual promises set
forth below and in the Unfair Competition Agreement, the parties hereto agree as
follows:
ARTICLE
I
Grants
Subject to the terms and conditions of this
Agreement, the Plan and the Unfair Competition Agreement (the terms of which are
hereby incorporated herein by reference) and effective as of the Effective Date,
the Company hereby grants to the Executive ______ RSUs and the Option to
purchase all or part of _________ shares of Common Stock.
ARTICLE
II
Provisions
Relating to Option
2.01 Term of
Option. The Option shall expire ten years from the Effective
Date (e.g., a grant on January 31, 2000 would expire on January 30, 2010),
subject to the terms and conditions set forth in this Agreement, the Plan and
the Unfair Competition Agreement.
2.02 Exercise Date. Unless otherwise
provided in the Plan, the Option shall not be exercisable in whole or in part
until the third (3rd)
anniversary of the Effective Date (such date, the “Option Vesting Date”),
provided, however, that the Option shall become immediately exercisable in the
event of the death or disability or the retirement of the Executive on or after
January 1 of the calendar year immediately following the Effective Date in
accordance with the provisions of the applicable retirement plan and Section
2.03 herein. For purposes of this
Agreement, the term “disability”
means the Executive’s inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or that has lasted for a continuous
period of not less than twelve (12) months.
2.03 Retirement. If
the retirement of the Executive occurs after the Effective Date but during the
same calendar year as the Effective Date then the number of options shall be
determined as follows:
(a) a portion of the Option shall
become immediately exercisable equal to the product of (x) the number of shares
subject to the Option, multiplied by (y) a fraction, the numerator of which is
the number of months during the calendar year in which the Effective Date occurs
that the Executive was employed by the company and the denominator of which is
12; and
(b) the balance of the Option not
immediately exercisable pursuant to subsection (a) above, will be forfeited in
full and the Executive shall have no further rights with respect to the Option
hereunder.
For purposes of the
foregoing calculation, the Executive will be deemed to have been employed by the
Company during the month that his employment terminates if, and only if, such
termination occurs on or after the fifteenth (15th)
calendar day of that month.
2.04 Notice. The
Executive may exercise the Option by giving appropriate notice of the
Executive’s desire to exercise the Option. The notice shall specify
the number of shares to be acquired.
2.05 Payment of Purchase
Price. The Executive shall at the time of exercise of the
Option (except in the case of a cashless exercise) tender to the Company the
full purchase price. At the discretion of the Compensation Committee
of the Board (the “Committee”), and subject to such rules and regulations as it
may adopt, the purchase price may be paid (i) in full in cash, (ii) in
Common Stock already owned by the Executive for at least six months and having a
fair market value on the date of exercise equal to the full purchase price,
(iii) through a combination of cash and Common Stock, or (iv) through a cashless
exercise through a broker-dealer approved for this purpose by the
Company.
2.06 Minimum
Exercise. An Option of 200 shares or less must be exercised in
its entirety. An Option for more than 200 shares may be exercised in
part for no fewer than 200 shares, or 100-share multiples in excess thereof,
unless the remaining shares subject to the Option are less than 200 shares, in
which case if any are exercised, the entire balance must be
exercised.
ARTICLE
III
Provisions
Relating to RSUs
3.01 Vesting. If
the Executive remains continuously employed by the Company or a Subsidiary until
the third (3rd)
anniversary of the Effective Date (such date, the “RSU Vesting Date”), then 100
percent of the RSUs shall vest on such date, but no such vesting shall
occur
before the RSU
Vesting Date unless otherwise provided or permitted by the Plan or this
Agreement. Vesting of the RSUs means that the RSUs shall be converted
into shares of Common Stock (“settled”) on the RSU Vesting Date, unless such
settlement is deferred by the Executive as described in Section 3.04
below.
3.02 Effect of Termination of
Employment. If the Executive’s
employment is terminated by the Executive or by the Company or a Subsidiary
prior to the third anniversary of the Effective Date for any reason other than
the Executive’s retirement, death or disability, all of the RSUs shall be
forfeited. The RSUs shall immediately vest in the event of the death,
disability or retirement of the Executive in accordance with the provisions of
the applicable retirement plan, and the date of such vesting shall be the RSU
Vesting Date for all purposes hereunder. For purposes of this
Agreement, the term “disability” means the Executive’s inability to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or that
has lasted for a continuous period of not less than twelve (12)
months.
3.03 Settlement. Upon
the settlement of the RSUs on the RSU Vesting Date and subject to Section 4.02
of this Agreement, shares evidencing the conversion of the RSUs into Common
Stock shall, as soon as practicable, be issued electronically and registered in
the Executive’s name and in the Executive’s electronic stock plan account which
is administered by the Company through a third party provider. If,
however, the Executive elects to defer settlement of the RSUs as provided in
Section 3.04 of this Agreement, the shares of Common Stock shall be issued as
set forth in the Deferral Election Agreement entered into between the Company
and the Executive.
3.04 Deferral
Election. With the prior approval of the Committee, the
Executive may elect to defer to a later date the settlement of the RSUs that
would otherwise occur on the RSU Vesting Date. The Committee shall,
in its sole discretion, establish the rules and procedures for such settlement
deferrals.
3.05 Dividends and Other
Distributions. The Executive shall be entitled to receive cash
payments equal to any cash dividends and other distributions paid with respect
to a number of shares of Common Stock corresponding to the number of RSUs held
by the Executive, provided that if any such dividends or distributions are paid
in shares, the fair market value of such shares shall be converted into RSUs,
and further provided that such RSUs shall be subject to the same forfeiture
restrictions and restrictions on transferability as apply to the RSUs with
respect to which they relate.
ARTICLE
IV
General
4.01 Recoupment of
Incentive-Based Compensation. If the Board of Directors
determines that the Executive has committed fraud against the Company or has
been engaged in any criminal conduct that involves or is related to the Company
and such Executive is entitled to receive performance shares, stock options,
restricted stock units or cash incentive compensation (“Incentive Compensation”)
then the Company shall recover from the Executive such
Incentive
Compensation, in
whole or in part, for any period of time, as it deems appropriate under the
circumstances. The Board shall have sole discretion in determining
whether the Executive’s conduct was in compliance with the law or Company policy
and the extent to which the Company will seek recovery of the Incentive
Compensation notwithstanding any other remedies available to the
Company.
4.02 Tax Withholding
Obligations. The Executive shall be
responsible for any required withholding including, but without limitation,
taxes, FICA contributions, or the like under any federal, state or applicable
statute, rule, or regulation in connection with the award, deferral, vesting,
exercise or settlement (as the case may be) of the Awards. The
Company may withhold a number of shares of Common Stock having a fair market
value on the date that the amount is to be withheld equal to the amount
determined by the Company to be the required statutory minimum withholding; this
amount may or may not satisfy the Executive’s calendar year withholding
obligation. The Company shall not issue and shall not deliver any of
its Common Stock until and unless the proper provision for minimum required
withholding has been made.
4.03 Restriction on
Transferability. Except to the extent otherwise provided in
the Plan, the Awards may not be sold, transferred, pledged, assigned, or
otherwise alienated at any time. Any attempt to do so contrary to the
provisions hereof shall be null and void.
4.04 Rights as
Shareholder. The Executive shall not have voting or any other
rights as a shareholder of the Company with respect to the Awards. Upon exercise
of the Option and settlement of the RSUs, the Executive will obtain, with
respect to the shares of Common Stock received in such exercise or settlement,
full voting and other rights as a shareholder of the Company.
4.05 Administration. The
Committee shall have the power to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation, and application of the
Plan as are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Executive, the
Company, and all other interested persons. No member of the Committee
shall be personally liable for any action, determination, or interpretation made
in good faith with respect to the Plan or this Agreement.
4.06 Effect on Other Employee
Benefit Plans. The value of the Awards granted pursuant to
this Agreement and the value of shares of Common Stock received in exercise or
settlement (as the case may be) of such Awards shall not be included as
compensation, earnings, salaries, or other similar terms used when calculating
the Executive’s benefits under any employee benefit plan sponsored by the
Company or any Subsidiary except as such plan otherwise expressly
provides. The Company expressly reserves its rights to amend, modify,
or terminate any of the Company’s or any Subsidiary’s employee benefit
plans.
4.07 No Employment
Rights. The Awards granted pursuant to this Agreement shall
not give the Executive any right to remain employed by the Company or a
Subsidiary.
4.08 Amendment. This Agreement may be
amended only by a writing executed by the Company and the Executive which
specifically states that it is amending this
Agreement. Notwithstanding the foregoing, this Agreement may be
amended solely by the Committee by a writing which specifically states that it
is amending this Agreement, so long as a copy of such amendment is delivered to
the Executive, and provided that no such amendment adversely affecting the
rights of the Executive hereunder may be made without the Executive’s written
consent. Without limiting the foregoing, the Committee reserves the
right to change, by written notice to the Executive, the provisions of the
Awards or this Agreement in any way it may deem necessary or advisable to carry
out the purpose of the grant as a result of any change in applicable laws or
regulations or any future law, regulation, ruling, or judicial decision,
provided that any such change shall be applicable only to Awards which are then
subject to restrictions as provided herein.
4.09 Notices. Any notice to be given
under the terms of this Agreement to the Company shall be addressed to the
Company in care of its Secretary. Any notice to be given to Executive
shall be addressed to Executive at the address listed in the employer’s records
or to the Executive’s electronic stock plan account held at the Company’s third
party provider. By a notice given pursuant to this Section 4.09,
either party may designate a different address for notices. Any
notice shall have been deemed given when actually delivered.
4.10 Severability. If all or any part of
this Agreement or the Plan is declared by any court or governmental authority to
be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any
portion of this Agreement or the Plan not declared to be unlawful or
invalid. Any Section of this Agreement (or part of such a Section) so
declared to be unlawful or invalid shall, if possible, be construed in a manner
which will give effect to the terms of such Section or part of a Section to the
fullest extent possible while remaining lawful and valid.
4.11 Construction. The Options are being
issued pursuant to Article 6 (Stock Options) of the Plan and the RSUs are being
issued pursuant to Article 8 (Restricted Stock and Restricted Stock Units) of
the Plan. Both Awards are subject to the terms of the
Plan. The Executive acknowledges receipt of the Plan booklet which
contains the entire Plan, and the Executive represents and warrants that he has
read the Plan. Additional copies of the Plan are available upon request during
normal business hours at the principal executive offices of the
Company. To the extent that any provision of this Agreement violates
or is inconsistent with an express provision of the Plan, the Plan provision
shall govern and any inconsistent provision in this Agreement shall be of no
force or effect.
4.12 Miscellaneous.
(a) The Board may terminate,
amend, or modify the Plan; provided, however, that no such termination,
amendment, or modification of the Plan may in any way adversely affect the
Executive’s rights under this Agreement without the Executive’s written
approval.
(b) This Agreement shall be
subject to all applicable laws, rules, and regulations, and to such approvals by
any governmental agencies or national securities exchanges as may be
required.
(c) All obligations of the
Company under the Plan and this Agreement, with respect to the Awards, shall be
binding on any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets of the
Company.
(d) To the extent not
preempted by federal law, this Agreement shall be governed by, and construed in
accordance with, the laws of the Province of Ontario.
4.13 French
Language. The present agreement has been drafted in English at
the express wish of the parties. Le présent contrat a été rédigé en
anglais à la demande expresse des parties.
IN WITNESS WHEREOF, the parties have executed
and delivered this Agreement effective as of the day and year first above
written.
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EXECUTIVE:
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X.X.
XXXXXXXX, INC.
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___________________________________
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By:_______________________________________________ | |
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Xxxxx X.
Xxxx
Chairman,
President and Chief Executive Officer
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| Date:______________________________ | Date:______________________________________________ | |
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