Exhibit 10(b)
XXXXXX CORPORATION
2000 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
TERMS AND CONDITIONS
(AS OF 8/22/03)
1. The Option - Terms and Conditions. Under and subject to the
provisions of the Xxxxxx Corporation 2000 Stock Incentive Plan (as amended from
time to time the "PLAN"), Xxxxxx Corporation (the "CORPORATION") has granted to
the Employee a Non-Qualified Stock Option (the "OPTION") to purchase such number
of shares of Common Stock of the Corporation at the designated price per share
as set forth in writing by the Corporation to the Employee. Such grant is
subject to the following Terms and Conditions (together with the Corporation's
letter specifying the number of options and exercise price and other terms, the
"AGREEMENT"):
(a) Except as set forth in Sections 1(e), 2(b), or 2(d),
the Option shall not be exercisable to any extent until and unless the Employee
shall have remained continuously in the employ of the Corporation for one year
from the grant date. The grant of the Option shall not limit or restrict the
Corporation's rights to terminate the Employee's employment.
(b) During the lifetime of the Employee, the Option shall
be exercisable only by the Employee, and, except as otherwise set forth in
Section 2, only while the Employee continues as an Employee of the Corporation.
(c) Notwithstanding any other provision of these Terms
and Conditions and the Agreement, the Option shall expire no later than ten
years from the grant date (the "EXPIRATION DATE"), and shall not be exercisable
thereafter.
(d) The Option shall become exercisable as follows:
(i) After the end of one year and prior to the
end of two years from the grant date, not more than fifty percent of the grant;
(ii) After the end of two years and prior to the
end of three years from the grant date, not more than seventy-five percent of
the grant; and
(iii) After the end of three years from the grant
date, one-hundred percent of the grant.
(e) Upon a "change of control" of the Corporation (as
defined in Section 11.1 of the Plan) any outstanding Option shall immediately
become fully exercisable.
2. Termination of Employment.
(a) Termination of Employment. In the event of
termination of employment with the Corporation other than as a result of
circumstances described in Sections 2(b), (c), (d), (e), and (f) below, the
Option, whether exercisable or not, shall terminate immediately upon termination
of employment.
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(b) Death. Notwithstanding Section 1(d), in the event of
the death of the Employee while employed by the Corporation, the Option shall
immediately become fully vested and exercisable and shall be exercisable only
within the twelve (12) months following the date of death, but no later than the
Expiration Date. In the event of the death of the Employee following termination
of or cessation of employment, the Option shall be exercisable only within the
twelve (12) months following the date of death, but no later than the Expiration
Date and then only to the extent that the Option was exercisable on the day
immediately prior to the date of the Employee's death. Following the death of
the Employee, the Option may be exercised only by the executor or administrator
of the Employee's estate or by the person or persons to whom the Employee's
rights under the Option shall pass by the Employee's will or the laws of descent
and distribution.
(c) Disability. In the event of cessation of employment
due to disability of the Employee (as determined by the Corporation) while
employed by the Corporation, the Option shall be exercisable by the Employee
until the Expiration Date and shall, unless Section 2(b) is applicable, continue
to become exercisable after such cessation of employment due to disability
according to the schedule set forth in Section 1(d).
(d) Retirement. In the event of retirement of the
Employee, the Option shall, if the retirement occurs after the Employee has
reached age 55 and has ten or more years of full-time service with the
Corporation, be exercisable by the Employee until the Expiration Date and only
to the extent that the Option was exercisable at the date of such retirement. In
the event of retirement of the Employee, the Option shall, if the retirement
occurs after the Employee has reached age 62 and has ten or more years of
full-time service with the Corporation, be exercisable by the Employee until the
Expiration Date and shall, unless Section 2(b) is applicable, continue to become
exercisable after such retirement according to the schedule set forth in Section
1(d).
(e) Misconduct. In the event of termination of employment
of the Employee by the Corporation for deliberate, willful or gross misconduct
("MISCONDUCT"), as determined by the Corporation, the Option shall be
exercisable only by the Employee within one (1) month following such cessation
of employment but no later than the Expiration Date and only to the extent that
it was exercisable at the date of such cessation of employment.
(f) Involuntary Termination. In the event of termination
of employment of the Employee by the Corporation other than for Misconduct, the
Option shall be exercisable only by the Employee within the three (3) months
following such cessation of employment but no later than the Expiration Date and
only to the extent that it was exercisable at the date of such cessation of
employment.
3. Exercise of Option. The Option may be exercised by delivering
to the Corporation at the office of the Corporate Secretary (i) a written
notice, signed by the person entitled to exercise the Option, stating the
designated number of shares such person then elects to purchase, (ii) payment in
an amount equal to the full purchase price of the shares to be purchased, and
(iii) in the event the Option is exercised by any person other than the
Employee, evidence satisfactory to the Corporation that such person has the
right to exercise the Option. Payment shall be made (a) in cash, (b) in
previously acquired shares of Common Stock of the Corporation, or (c) in any
combination of cash and such shares. Shares tendered in payment of the purchase
price which have been acquired through an exercise of a stock option shall have
been held at least six months prior to exercise of the Option and shall be
valued at the Fair Market Value. Upon the exercise of the Option, the
Corporation shall issue and deliver to the Employee, one or more certificates
for the shares in respect of which the Option shall have been so exercised. The
Employee does not have any rights as a shareholder in respect of any shares as
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to which the Option shall not have been duly exercised and no rights as a
shareholder shall exist prior to the proper exercise of such Option.
4. Prohibition Against Transfer. The Option and rights granted by
the Corporation under these Terms and Conditions and the Agreement are not
transferable except to family members or trust by will or by the laws of descent
and distribution, provided that the Option may not be so transferred to family
members or trusts except as permitted by applicable law or regulations. Without
limiting the generality of the foregoing, the Option may not be assigned,
transferred except as aforesaid, pledged or hypothecated, shall not be
assignable by operation of law, and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof, or the levy of any execution, attachment or similar process upon the
Option, shall be null and void and without effect.
5. Employment by Parent, Subsidiary or Successor. For the purpose
of these Terms and Conditions and the Agreement, employment by the Corporation,
any Subsidiary of or a successor to the Corporation shall be considered
employment by the Corporation.
6. Board Committee. The Board Committee shall have authority,
subject to the express provisions of the Plan as in effect from time to time, to
construe these Terms and Conditions and the Agreement and the Plan, to
establish, amend and rescind rules and regulations relating to the Plan, and to
make all other determinations in the judgment of the Board Committee necessary
or desirable for the administration of the Plan. The Board Committee may correct
any defect or supply any omission or reconcile any inconsistency in these Terms
and Conditions and the Agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect, and it shall be the sole and final
judge of such expediency.
7. Incorporation of Plan Provisions. These Terms and Conditions
and the Agreement are made pursuant to the Plan, the provisions of which are
hereby incorporated by reference. Capitalized terms not otherwise defined herein
have the meanings set forth in the Plan. In the event of a conflict between the
terms of these Terms and Conditions and the Agreement and the Plan, the terms of
the Plan shall govern.
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