1
EXHIBIT 10.21
XXXX XXXXXXXX CORPORATION
EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 4th day of January, 2000, by and
between Xxxx Xxxxxxxx Corporation, a Delaware corporation ("Xxxx Xxxxxxxx"), and
Xxxxxx Xxxxxx, Chairman, Chief Executive Officer and President of Xxxx Xxxxxxxx
("Employee ").
WITNESSETH, THAT:
WHEREAS, pursuant to that certain Xxxx Xxxxxxxx Corporation Special
Executive Non-Qualified Stock Option Agreement, dated as of April 5, 1999 (the
"Special Agreement"), by and between Xxxx Xxxxxxxx and Employee, Xxxx Xxxxxxxx
granted to Employee the right and option (the "Special Option") to purchase all
or any part of an aggregate of 150,000 shares of Common Stock;
WHEREAS, the Special Option was granted outside of Xxxx Xxxxxxxx'x 1996
Stock Incentive Plan (as it may be amended from time to time, the "Plan");
WHEREAS, pursuant to Section 7(a) of the Special Agreement, Employee
and Xxxx Xxxxxxxx agreed that if, at any time between January 1, 2000 and April
5, 2002, the Fair Market Value per share of Xxxx Xxxxxxxx Common Stock were
equal to or less than $50.00, Xxxx Xxxxxxxx would cancel the Special Option and
Employee would be granted an option pursuant to the Plan to purchase 150,000
shares at an exercise price of $50.00 per share (the "1996 Plan Replacement
Option");
WHEREAS, at the close of business on January 3, 2000, the Fair Market
Value per share of Xxxx Xxxxxxxx Common Stock was $46.025 per share;
WHEREAS, pursuant to a letter agreement of even date herewith by and
between the parties hereto (the "Cancellation Agreement"), the Special Agreement
was terminated and the Special Option was cancelled in consideration of the
granting of this option; and
WHEREAS, Xxxx Xxxxxxxx wishes to grant the 1996 Plan Replacement Option
to Employee pursuant to the Plan.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
2
1. Grant of Option
Subject to the provisions of Section 4 below, Xxxx Xxxxxxxx hereby
grants to Employee, on the date set forth above, the right and option
(hereinafter called "this option") to purchase all or any part of an aggregate
of 150,000 shares of Common Stock, par value $0.125 per share, at the price of
$50.00 per share on the terms and conditions set forth herein. This option is
not intended to be an incentive stock option within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code").
2. Duration and Exercisability
(a) This option shall in all events terminate on April 5, 2009. Subject
to the other terms and conditions set forth herein, this option may be exercised
by Employee in cumulative installments as follows:
Cumulative percentage
On or after each of of shares as to which
the following dates: option is exercisable:
-------------------- -----------------------
April 5, 2002 33 1/3%
April 5, 2003 66 2/3%
April 5, 2004 100%
(b) During the lifetime of Employee, this option shall be exercisable
only by Employee or, in the event Employee becomes disabled within the meaning
of Code section 22(e)(3), by Employee's personal representative(s) or
guardian(s). This option shall not be transferable or assignable by Employee
other than pursuant to a will or the laws of descent and distribution or to a
"Family Member" (as such term is defined in General Instruction A.5 to Form S-8
or an successor instruction or form) upon such terms and subject to such
conditions as shall be determined from time to time by the Committee of the
Board of Directors administering the Plan.
3. Effect of Termination of Employment
(a) In the event that Employee shall cease to be employed by Xxxx
Xxxxxxxx or its subsidiaries for any reason other than Employee's gross and
willful misconduct, Employee's death or disability or Employee's retirement (as
provided in paragraphs (b), (c) and (d) of this Section 3, respectively),
Employee shall have the right to exercise this option at any time within ninety
(90) days after such termination of employment to the extent of the full number
of shares Employee was entitled to purchase under this option on the date of
termination, subject to the condition that this option shall not be exercisable
after the expiration of its term.
(b) In the event that Employee shall cease to be employed by Xxxx
Xxxxxxxx or its subsidiaries by reason of Employee's gross and willful
misconduct during the course of employment, including, but not limited to, the
wrongful appropriation of funds or the
2
3
commission of a gross misdemeanor or felony, this option shall be terminated as
of the date of the misconduct.
(c) If Employee shall die while in the employ of Xxxx Xxxxxxxx or its
subsidiaries or if Employee shall become disabled within the meaning of Code
Section 22(e)(3) while in the employ of Xxxx Xxxxxxxx or its subsidiaries and
Employee shall not have fully exercised this option, this option may be
exercised at any time within twelve (12) months after Employee's death or
disability by the personal representative(s), administrator(s), or, if
applicable, guardian(s) of Employee or by any person or persons to whom this
option is transferred by will or the applicable laws of descent and
distribution, to the extent of the full number of shares then subject to this
option on the date of death or disability (i.e., the vesting of all shares which
have not vested pursuant to paragraph (a) of Section 2 hereof shall be
accelerated to such date) and subject to the condition that this option shall
not be exercisable after the expiration of its term.
(d) If Employee shall cease to be employed by Xxxx Xxxxxxxx or its
subsidiaries (i) for any reason other than Employee's gross and willful
misconduct or Employee's death or disability (as provided in paragraphs (b) and
(c) of this Section 3, respectively), (ii) at a time when Employee shall not
have fully exercised this option and (iii) at a time when Employee has been
employed by Xxxx Xxxxxxxx or its subsidiaries for a period of at least ten (10)
years and has attained the age of 50 or greater, this option may be exercised by
Employee at any time on or prior to the earlier of the fifth anniversary of the
date Employee ceased to be employed by Xxxx Xxxxxxxx or its subsidiaries or the
expiration of the term of this option (the period ending as of the earlier of
such dates being referred to hereinafter as the "post-retirement extended
exercise period") to the extent of the full number of shares Employee shall be
entitled to purchase under this option on the date Employee ceases to be
employed by Xxxx Xxxxxxxx; subject, however, to the conditions that, during such
post-retirement extended exercise period, Employee shall not (x) breach any of
the terms of Section 4 hereof, or (y) act in any manner determined by the
committee or subcommittee of Xxxx Xxxxxxxx'x Board of Directors administering
the Plan to be adverse to the interests of Xxxx Xxxxxxxx or its subsidiaries. If
at any time during such post-retirement extended exercise period Employee shall
cease to satisfy the conditions described in the preceding proviso, Employee's
right to exercise this option pursuant to this Section 3(d) shall terminate
immediately and Employee shall thereafter only be entitled to exercise this
option in accordance with paragraph (a) of this Section 3.
4. Certain Covenants.
(a) Noncompetition. Employee agrees that, during the post-retirement
extended exercise period, Employee will not, directly or indirectly, anywhere in
the United States, in any manner, whether as an advisor, principal, agent,
partner, officer, director, stockholder (except, as a passive investment, being
a beneficial holder of up to 1% of the outstanding shares of capital stock of
any corporation listed on a national securities exchange or publicly traded in
the over-the-counter market), employee, independent contractor, consultant, or
otherwise of any registered broker-dealer, financial services institution or
other entity, perform any services for or otherwise participate, directly or
indirectly, in any business in which Xxxx Xxxxxxxx or any of its
3
4
subsidiaries or affiliates is or may become engaged between the date hereof and
the date of Employee's termination of employment pursuant to Section 3(d)
hereof, including without limitation, the retail or institutional securities
brokerage business; the equity or fixed income capital markets businesses; the
provisions of asset management or financial or investment advisory services; and
the correspondent clearing businesses.
(b) Nonsolicitation. Employee agrees that, during the post-retirement
extended exercise period, Employee will not, directly or indirectly, in any
manner solicit, assist or engage any person employed by Xxxx Xxxxxxxx or its
subsidiaries or affiliates to leave the employ of Xxxx Xxxxxxxx or recruit, make
an offer of employment to or hire any person employed by Xxxx Xxxxxxxx or its
subsidiaries or affiliates.
(c) Confidentiality. Except as otherwise required by law or court
order, Employee agrees that Employee will not, at any time while employed by
Xxxx Xxxxxxxx or any of its subsidiaries or thereafter, divulge or otherwise
make accessible to anyone or use for any purpose any confidential or sensitive
knowledge or information concerning Xxxx Xxxxxxxx, its subsidiaries or
affiliates, any of its officers, directors, employees or agents or its business,
customers, strategic plans, financial condition or profitability obtained
through the performance of Employee's job responsibilities or during the course
of Employee's employment.
(d) Cooperation. Employee agrees that Employee will cooperate with the
Company with respect to any claims, actions or proceedings brought or threatened
to be brought against the Company or any of its officers, directors, employees,
agents, successors or assigns that relate to Employee's employment or any
transactions, decisions or actions in which Employee was involved while an
employee or officer of the Company. Employee agrees to be available upon
reasonable notice and at mutually agreeable times to discuss issues or to review
documents with representatives of Xxxx Xxxxxxxx, and to appear without subpoena
for deposition or testimony at the request of Xxxx Xxxxxxxx in connection with
any legal or regulatory proceeding. Xxxx Xxxxxxxx will pay Employee's reasonable
expenses in connection with Employee's cooperation requested under this
agreement, including reasonable out-of-pocket travel expenses or documented lost
wages Employee incurs.
(e) Reasonableness of Restrictions. Employee agrees that the foregoing
covenants and limitations on Employee's post-retirement activities are
reasonable and appropriate under the circumstances, and that forfeiture of
unvested options for violation of any of the foregoing covenants is a reasonable
and appropriate remedy.
(f) Severability. To the extent any provision of this Agreement shall
be determined to be invalid or unenforceable in any jurisdiction, such provision
shall be deemed to be deleted from this Agreement as to such jurisdiction only,
and the validity and enforceability of the remainder of such provision and of
this Agreement shall be unaffected. In furtherance of and not in limitation of
the foregoing, Employee expressly agrees that should the duration of,
geographical extent of, or business activities covered by, any provision of this
Agreement be in excess of that which is valid or enforceable under applicable
law in a given jurisdiction, then such provision, as to such jurisdiction only,
shall be construed to cover only that duration, extent
4
5
or activities that may validly or enforceably be covered. Employee acknowledges
that uncertainty of the law in this respect and expressly stipulates that this
Agreement shall be construed in a manner that renders its provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible
under applicable law in each applicable jurisdiction.
5. Manner of Exercise
(a) This option can be exercised only by Employee or other proper party
by delivering within the option period written notice to Xxxx Xxxxxxxx at its
principal office. The notice shall state the number of shares as to which this
option is being exercised and be accompanied by payment in full of the option
price for all shares designated in the notice.
(b) Employee may pay the option price (i) by check (bank check,
certified check or personal check) or (ii) with the approval of Xxxx Xxxxxxxx,
by delivering to Xxxx Xxxxxxxx for cancellation shares of Xxxx Xxxxxxxx'x Common
Stock having a Fair Market Value (as defined in the Plan) on the date of
exercise equal to the option price; provided, however, that Employee shall not
be entitled to tender shares of Xxxx Xxxxxxxx'x Common Stock pursuant to
successive, substantially simultaneous exercises of this option or any other
stock option of Xxxx Xxxxxxxx.
6. Acceleration of Exercisability Upon Change in Control
Notwithstanding any installment or delayed exercise provision contained
in this Agreement, this option may be exercised in full immediately at or
anytime after the occurrence of a "Change in Control" (as hereinafter defined).
For purposes hereof, the following terms shall have the definitions set forth
below:
(a) "Change in Control" shall mean:
(i) the public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") that any person, entity or "group",
within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act, other than Xxxx Xxxxxxxx or any of its subsidiaries, or the
Xxxx Xxxxxxxx Retirement Plan or any other employee benefit plan of
Xxxx Xxxxxxxx or any of its subsidiaries, or any entity holding
shares of Xxxx Xxxxxxxx'x Common Stock organized, appointed or
established for, or pursuant to the terms of, any such plan, has
become the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of the combined
voting power of Xxxx Xxxxxxxx'x then outstanding voting securities
in a transaction or series of transactions;
(ii) the Continuing Directors cease to constitute a majority of
Xxxx Xxxxxxxx'x Board of Directors;
5
6
(iii) the shareholders of Xxxx Xxxxxxxx approve (1) any
consolidation or merger of Xxxx Xxxxxxxx in which Xxxx Xxxxxxxx is
not the continuing or surviving corporation or pursuant to which
shares of Xxxx Xxxxxxxx'x stock would be converted into cash,
securities or other property, other than a merger of Xxxx Xxxxxxxx
in which shareholders immediately prior to the merger have the same
proportionate ownership of stock of the surviving corporation
immediately after the merger; (2) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of Xxxx
Xxxxxxxx; or (3) any plan of liquidation or dissolution of Xxxx
Xxxxxxxx; or
(iv) the majority of the Continuing Directors determine in their
sole and absolute discretion that there has been a change in
control of Xxxx Xxxxxxxx.
(b) "Continuing Director" shall mean any person who is a member of the
Board of Directors of Xxxx Xxxxxxxx, while such a person is a member of the
Board of Directors, who is not an Acquiring Person (as hereinafter defined) or
an Affiliate or Associate (as hereinafter defined) of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
who (i) was a member of the Board of Directors on the date of this Agreement or
(ii) subsequently becomes a member of the Board of Directors, if such person's
initial nomination for election or initial election to the Board of Directors is
recommended or approved by a majority of the Continuing Directors. For purposes
of this paragraph (b), "Acquiring Person" shall mean any "person" (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together
with all Affiliates and Associates of such person, is the "beneficial owner" (as
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of Xxxx Xxxxxxxx representing 35% or more of the
combined voting power of Xxxx Xxxxxxxx'x then outstanding securities, but shall
not include Xxxx Xxxxxxxx, any subsidiary of Xxxx Xxxxxxxx or any employee
benefit plan of Xxxx Xxxxxxxx or of any subsidiary of Xxxx Xxxxxxxx or any
entity holding shares of Xxxx Xxxxxxxx'x Common Stock organized, appointed or
established for, or pursuant to the terms of, any such plan; and "Affiliate" and
"Associate" shall have the respective meanings ascribed to such terms in Rule
12b-2 promulgated under the Exchange Act.
(c) If a Change in Control shall occur, then the Board of Directors or
the Committee (if authority is delegated by the Board of Directors), in its sole
discretion, and without the consent of Employee, may determine that Employee
shall receive, with respect to some or all of the shares of Common Stock subject
to this option, as of the effective date of any such Change in Control, cash in
an amount equal to the excess of the Fair Market Value of such shares
immediately prior to the effective date of such Change in Control over the
exercise price per share of this option.
6
7
7. Miscellaneous
(a) This option is issued pursuant to the Plan, and is subject to its
terms. The terms of the Plan are available for inspection during business hours
at the principal offices of Xxxx Xxxxxxxx.
(b) This Agreement shall not confer on Employee any right with respect
to continuance of employment by Xxxx Xxxxxxxx or any of its subsidiaries, nor
will it interfere in any way with the right of Xxxx Xxxxxxxx to terminate such
employment at any time. Employee shall have none of the rights of a shareholder
with respect to shares subject to this option until such shares shall have been
issued to Employee upon exercise of this option.
(c) The exercise of all or any part of this option shall only be
effective at such time as the sale of Common Stock pursuant to such exercise
will not violate any state or federal securities or other laws.
(d) If Employee exercises all or any portion of this option subsequent
to any change in the number or character of the outstanding shares of Xxxx
Xxxxxxxx'x Common Stock (through merger, consolidation, reorganization,
recapitalization, stock dividend or otherwise), Employee shall then receive for
the aggregate price paid by Employee on such exercise of this option, the number
and type of securities or other consideration which Employee would have received
if such option had been exercised prior to the event changing the number or
character of outstanding shares.
(e) Xxxx Xxxxxxxx shall at all times during the term of this option
reserve and keep available such number of shares as will be sufficient to
satisfy the requirements of this Agreement.
(f) In order to provide Xxxx Xxxxxxxx with the opportunity to claim the
benefit of any income tax deduction which may be available to it upon the
exercise of the option, and in order to comply with all applicable federal or
state income tax laws or regulations, Xxxx Xxxxxxxx may take such action as it
deems appropriate to insure that, if necessary, all applicable federal or state
payroll, withholding, income or other taxes are withheld or collected from
Employee. Employee may elect to satisfy his federal and state income tax
withholding obligations upon exercise of this option by (i) having Xxxx Xxxxxxxx
withhold a portion of the shares of Common Stock otherwise to be delivered upon
exercise of such option having a fair market value equal to the amount of
federal and state income tax required to be withheld upon such exercise, in
accordance with the rules of the Committee, or (ii) delivering to Xxxx Xxxxxxxx
shares of its Common Stock other than the shares issuable upon exercise of such
option with a fair market value equal to such taxes, in accordance with the
rules of the Committee.
(g) This option shall be governed by the internal laws of the State of
Delaware, without regard to any conflict of laws principles.
7
8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
XXXX XXXXXXXX CORPORATION
By________________________________
Its ______________________________
__________________________________
XXXXXX XXXXXX
8
