EXHIBIT 4.11
DIRECTOR NON-QUALIFIED STOCK OPTION AGREEMENT
This Director Non-Qualified Stock Option Agreement ("Agreement") has
been entered into as of the 15{th} day of December, 1998, between Hurco
Companies, Inc., an Indiana corporation (the "Company") and Xxxxxxx X.
Xxxxx, a director of the Company ("Director").
WHEREAS, the Board of Directors of the Company has granted to Director
an option to purchase shares of the Company's common stock, no par value
(the "Common Stock"), pursuant to the terms and conditions as provided in
this Agreement; and
WHEREAS, the Company and Director desire to set forth the terms and
conditions of the option;
WHEREAS, the option evidenced by this Agreement is separate and
distinct from options granted pursuant to the 1997 Stock Option Plan of the
Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, the Company and Director agree as
follows:
1. GRANT OF OPTION AND EXERCISE PRICE. Subject to the terms and
conditions stated in this Agreement, on December 15, 1998 (the "Date of
Grant"), the Committee granted to Director an option (the "Option") to
purchase 15,000 shares of the Company's Common Stock (the "Shares") at an
exercise price of $5.813 per Share (the "Exercise Price").
2. NON-QUALIFIED STOCK OPTION. The Option is not intended to qualify
as an incentive stock option under Section 422 of the Internal Revenue Code
of 1986, as amended.
3. EXERCISE OF OPTION. The Option shall become fully exercisable on
December 15, 1999. Notwithstanding the foregoing, the Option shall become
immediately exercisable upon a Change in Control of the Company. For
purposes of this Agreement, a Change in Control of the Company means (a)
the acquisition of 25% or more of the outstanding shares of Common Stock of
the Company; (b) any merger or consolidation involving the Company, if
following such merger or consolidation, the persons who were the
shareholders of the Company prior to such transaction own less than 50% of
the outstanding capital stock of the surviving or consolidated corporation;
(c) individuals who are currently Directors of the Company cease for any
reason to constitute at least a majority of the Board of Directors of the
Company (provided, however, that any individual becoming a Director whose
election or nomination for election was approved by a vote of at least a
majority of the Directors then comprising the current Directors, shall be
considered a current Director); or (d) approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company or the sale
or other disposition of all or substantially all of the assets of the
Company.
4. TERM OF OPTION. Unless sooner terminated as provided in this
Agreement, the Option shall expire on December 14, 2004. In the event that
Director ceases to serve as a director of the Company for any reason other
than his death or total disability, the Option shall terminate six (6)
months after termination of service. In the event that Director ceases to
serve as a director because of his death or total disability, the Option
shall terminate twelve (12) months after termination of service.
5. RECLASSIFICATION, CONSOLIDATION OR MERGER. If and to the extent
that the number of issued shares of the Common Stock of the Company shall
be increased or reduced by change in par value, split up, reclassification,
distribution of a stock dividend of 5% or more, or the like, the number of
shares subject to the Option and the Exercise Price per share shall be
proportionately adjusted.
If the Company is the surviving corporation in any reorganization,
consolidation or merger with another corporation, Director shall be
entitled to receive options covering shares of such reorganized,
consolidated, or merged company in the same proportion, at an equivalent
price, and subject to the same conditions, provided, however, that the new
option or assumption of the Option shall not give the Director additional
benefits which he did not have under the Option, or deprive him of benefits
which he had under the Option.
6. RIGHTS PRIOR TO EXERCISE OF OPTION. The Option is non-
transferrable by Director and is exercisable only by him during his
lifetime, except that in the case of his judicially declared incompetence
or disability the Option may be exercised by the legally appointed guardian
or conservator of his estate. In the case of the Director's death while
any part of the Option is outstanding, the Option may be exercised by the
executor of his will or administrator of his estate or, if the
administration of his estate has been closed, by his heirs or legatees
entitled thereto. Neither Director nor any person claiming under or
through him shall have any rights as a shareholder of the Company with
respect to any of the option shares until full payment of the Exercise
Price and delivery to him or certificates for such shares as herein
provided.
7. RESTRICTIONS ON DISPOSITION. All shares acquired by Director
pursuant to this Agreement shall be subject to the following restrictions:
The shares will be "restricted securities" as defined in Rule 144 under the
Securities Act of 1933 ("Act") and must be held unless subsequently
registered under the Act or an exemption from such registration is
available. The Company is not obligated to register the shares under the
Act. The shares acquired pursuant to exercise of the Option shall be
acquired for Director's own account for investment for an indefinite period
and not with a view to the sale or distribution of any part or all thereof,
by public or private sale or other disposition. Notwithstanding the
foregoing, the Company may refuse to transfer the shares until it receives
an opinion of counsel for the Company that such transfer is exempt from
registration under the Act or qualification under any other securities law.
8. PAYMENT OF TAXES ON EXERCISE OF OPTION. Whenever shares of Common
Stock are to be issued to Director in connection with the exercise of the
Option, the Company shall have the right to require him to remit to the
Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. In the alternative, the Company may elect to
withhold from the shares to be issued that number of shares (based on the
market value of the stock at that time) which would satisfy the tax
withholding amount due.
9. BINDING EFFECT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
10. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana.
11. NOTICES. All notices and other communications required or
permitted under this Agreement shall be written and shall be delivered
personally or sent by registered or certified first-class mail, postage
prepaid and return receipt required, addressed as follows: if to the
Company, to the Company's principal office at Xxx Xxxxxxxxxx Xxx,
Xxxxxxxxxxxx, Xxxxxxx 00000, and if to the Director or his or her
successor, to the address last furnished by the Director to the Company.
Each notice and communication shall be deemed to have been given when
received by the Company or the Director.
IN WITNESS WHEREOF, the Company and Director have executed this
Agreement as of the date first written above.
HURCO COMPANIES, INC.
By: /S/ XXXXX X. XXXXXXXXXX
Xxxxx X. XxXxxxxxxx, President & CEO
/S/ XXXXXXX X. XXXXX
Signature of Director
