EXHIBIT 4.2
DIRECTOR STOCK OPTION AGREEMENT
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THIS AGREEMENT, dated as of January 26, 1998, is made by and between
CalMat Co., a Delaware corporation, hereinafter referred to as "Company," and
, a director of the Company, hereinafter referred to as "Director";
WHEREAS, the Company wishes to afford the Director the opportunity to
purchase shares of its $1.00 par value Common Stock; and
WHEREAS, the Company wishes to carry out the 1998 Stock Option Plan
for Officers, Directors and Key Employees of CalMat Co. (the terms of which are
hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Plan calls for the grant of the Director Stock Option
provided for herein to the Director as an inducement to serve on the Board of
Directors of the Company and as an incentive for increased efforts during such
service, and the Management Development and Compensation Committee of the
Company's Board of Directors (hereinafter referred to as the "Committee"),
appointed to administer said Plan, has advised the Company thereof and
instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
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Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary.
SECTION 1.1 - BOARD
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"Board" shall mean the Board of Directors of the Company.
SECTION 1.2 - CODE
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
SECTION 1.3 - OPTION
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"Option" shall mean the Director Stock Option to purchase Common Stock
of the Company granted under this Agreement.
SECTION 1.4 - PARENT CORPORATION
--------------------------------
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
SECTION 1.5 - PLAN
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"Plan" shall mean the 1998 Stock Option Plan for Officers, Directors
and Key Employees of CalMat Co.
SECTION 1.6 - PRONOUNS
----------------------
The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
SECTION 1.7 - SECRETARY
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"Secretary" shall mean the Secretary of the Company.
SECTION 1.8 - SUBSIDIARY
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"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company, if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
SECTION 1.9 - TERMINATION OF DIRECTORSHIP
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"Termination of Directorship" shall mean the time when the Director
ceases to be a director of the Company for any reason, including, but not by way
of limitation, a termination by resignation, failure to be elected, death or
retirement. The Board, in its absolute discretion, shall determine the effect
of all other matters and questions relating to Termination of Directorship.
ARTICLE II
GRANT OF OPTION
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SECTION 2.1 - GRANT OF OPTION
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In consideration of the Director's agreement to serve as a director of
the Company and for other good and valuable consideration, on the date hereof
the Company irrevocably
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grants to the Director the option to purchase any part or all of an aggregate of
3,000 shares of its $1.00 par value Common Stock upon the terms and conditions
set forth in this Agreement.
SECTION 2.2 - PURCHASE PRICE
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The purchase price of the shares of stock covered by the Option shall
be $26.0625 per share without commission or other charge.
SECTION 2.3 - CONSIDERATION TO THE COMPANY
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In consideration of the granting of this Option by the Company, the
Director agrees to serve as a director of the Company until the next annual
meeting of the stockholders of the Company. Nothing in this Agreement or in the
Plan shall confer upon the Director any right to continue as a director of the
Company, or shall interfere with or restrict in any way the rights of the
Company and its stockholders, which are hereby expressly reserved, to remove the
Director in accordance with applicable law and the Company's Certificate of
Incorporation and By-laws.
SECTION 2.4 - ADJUSTMENTS IN OPTION
-----------------------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Board shall make an appropriate and
equitable adjustment in the number and kind of shares as to which the Option, or
portions thereof then unexercised, shall be exercisable, to the end that after
such event the Director's proportionate interest shall be maintained as before
the occurrence of such event. Such adjustment in the Option shall be made
without change in the total price applicable to the unexercised portion of the
Option (except for any change in the aggregate price resulting from rounding-off
of share quantities or prices) and with any necessary corresponding adjustment
in the Option price per share. Any such adjustment made by the Board shall be
final and binding upon the Director, the Company and all other interested
persons.
ARTICLE III
PERIOD OF EXERCISABILITY
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SECTION 3.1 - COMMENCEMENT OF EXERCISABILITY
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(a) Subject to Sections 3.1(b) and 3.4, the Option shall become
exercisable in four (4) cumulative installments as follows:
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(i) The first installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the first anniversary of the date the Option is granted.
(ii) The second installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the second anniversary of the date the Option is
granted.
(iii) The third installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the third anniversary of the date the Option is granted.
(iv) The fourth installment shall consist of twenty-five
percent (25%) of the shares covered by the Option and shall become
exercisable on the fourth anniversary of the date the Option is
granted.
(b) No portion of the Option which is unexercisable at
Termination of Directorship shall thereafter become exercisable.
Notwithstanding the foregoing, this Option shall become immediately
exercisable in full upon any retirement of the Director in accordance with
the Company's retirement policy applicable to directors, provided that in
no event shall the shares underlying this Option be sold or otherwise
disposed of, in whole or in part, during the six months after the date such
Option is granted (or the date this Plan is approved by the Company's
stockholders, if later).
SECTION 3.2 - DURATION OF EXERCISABILITY
----------------------------------------
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
SECTION 3.3 - EXPIRATION OF OPTION
----------------------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted; or
(b) The expiration of three (3) months from the date of the
Director's Termination of Directorship for any reason other than the
Director's death, unless the Director dies within said three-month period;
or
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(c) The expiration of one (1) year from the date of the
Director's death; or
(d) Unless the Option is assumed or an equivalent option is
substituted by a successor corporation pursuant to Section 3.4(a), the
effective date of either the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or
person of all or substantially all of the Company's assets, or eighty
percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company. At least thirty (30) days
prior to the effective date of such merger, consolidation, acquisition,
liquidation or dissolution, the Board shall give the Director notice of
such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
SECTION 3.4 - ASSUMPTION OR ACCELERATION OF EXERCISABILITY
----------------------------------------------------------
In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets, or eighty percent (80%) or
more of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, either:
(a) The Option shall be assumed or an equivalent option
substituted by any successor corporation to the Company. The Company
undertakes to make reasonable and adequate provision for such assumption or
substitution of the Option upon or in connection with such merger,
consolidation, acquisition, liquidation or dissolution; or
(b) The Board, by means of the notice referred to in Section
3.3(d), shall provide that the Option shall become exercisable, for a
minimum of thirty (30) days prior to such event, as to all the shares
covered hereby, notwithstanding that this Option may not yet have become
fully exercisable under Section 3.1(a).
The Board may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such assumption, substitution or acceleration of exercisability, including,
but not by way of limitation, provisions to ensure that any such acceleration
and resulting exercise shall be conditioned upon the consummation of the
contemplated corporate transaction, and determinations regarding whether
reasonable and adequate provisions for assumption or substitution have been made
as defined in subsection (a).
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ARTICLE IV
EXERCISE OF OPTION
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SECTION 4.1 - PERSON ELIGIBLE TO EXERCISE
-----------------------------------------
During the lifetime of the Director, only he may exercise the Option
or any portion thereof. After the death of the Director, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the Director's will or under the then
applicable laws of descent and distribution.
SECTION 4.2 - PARTIAL EXERCISE
------------------------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
twenty-five (25) shares (or minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
SECTION 4.3 - MANNER OF EXERCISE
--------------------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Director or the other person
then entitled to exercise the Option or portion, stating that the Option or
portion is thereby exercised, such notice complying with all applicable
rules established by the Board; and
(b) Full payment for the shares with respect to which such Option
or portion is thereby exercised:
(1) In cash or by check; or
(2) By delivery of shares of the Company's Common Stock
owned by the Director duly endorsed for transfer to the Company with a
fair market value (as determinable under Section 4.2(b) of the Plan) on
the date of delivery equal to the aggregate Option price of the shares
with respect to which such Option or portion is thereby exercised; or
(3) By means of any combination of the consideration
provided in the foregoing subsections (1) and (2); and
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(c) A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the Director or other person then
entitled to exercise such Option or portion, stating that the shares of
stock are being acquired for his own account, for investment and without
any present intention of distributing or reselling said shares or any of
them except as may be permitted under the Securities Act of 1933, as
amended (the "Act"), and then applicable rules and regulations thereunder,
and that the Director or other person then entitled to exercise such Option
or portion will indemnify the Company against and hold it free and harmless
from any loss, damage, expense or liability resulting to the Company if any
sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Board may, in its
absolute discretion, take whatever additional actions it deems appropriate
to ensure the observance and performance of such representation and
agreement and to effect compliance with the Act and any other federal or
state securities laws or regulations. Without limiting the generality of
the foregoing, the Board may require an opinion of counsel acceptable to it
to the effect that any subsequent transfer of shares acquired on an Option
exercise does not violate the Act, and may issue stop-transfer orders
covering such shares. Share certificates evidencing stock issued on
exercise of this Option may bear an appropriate legend referring to the
provisions of this subsection (c) and the agreements herein. The written
representation and agreement referred to in the first sentence of this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Act, and such
registration is then effective in respect of such shares; and
(d) In the event the Option or portion shall be exercised
pursuant to Section 4.1 by any person or persons other than the Director,
appropriate proof of the right of such person or persons to exercise the
Option.
SECTION 4.4 - CONDITIONS TO ISSUANCE OF STOCK CERTIFICATES
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The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all the
following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed; and
(b) The completion of any registration or other qualification of
such shares under any state or federal law or under rulings or regulations
of the Securities and Exchange Commission or of any other governmental
regulatory
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body, which the Board shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Board shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Board may from time to time establish for
reasons of administrative convenience.
SECTION 4.5 - RIGHTS AS STOCKHOLDER
-----------------------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company with respect to any shares
purchasable upon the exercise of any part of the Option unless and until
certificates representing such shares shall have been issued by the Company to
such holder.
ARTICLE V
MISCELLANEOUS
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SECTION 5.1 - ADMINISTRATION
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The Board or 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 Board or the Committee in good faith shall be
final and binding upon the Director, the Company and all other interested
persons. No member of the Board or the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Option. In its absolute discretion, the Board may, at any time
and from time to time, exercise any and all rights and duties of the Committee
under the Plan and this Agreement, or may at any time and from time to time
delegate to the Committee any and all of its rights and duties under the Plan
and this Agreement.
SECTION 5.2 - OPTION NOT TRANSFERABLE
-------------------------------------
Neither the Option nor any interest or right therein or part
thereof shall be liable for the debts, contracts or engagements of the Director
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means,
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings
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(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.2 shall not
prevent transfers by will or by the applicable laws of descent and distribution.
SECTION 5.3 - SHARES TO BE RESERVED
-----------------------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
SECTION 5.4 - 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, and any
notice to be given to the Director shall be addressed to him at the address
given beneath his signature thereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Director shall,
if the Director is then deceased, be given to the Director's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall
be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
SECTION 5.5 - TITLES
--------------------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
SECTION 5.6 - STOCKHOLDER APPROVAL
----------------------------------
The Plan will be submitted for approval by the Company's stockholders
within twelve months after the date the Plan was initially adopted by the Board.
This Option may not be exercised to any extent by anyone prior to the time when
the Plan is approved by the stockholders, and if such approval has not been
obtained by the end of said twelve-month period, this Option shall thereupon be
cancelled and become null and void. The Company shall take such actions with
respect to the Plan as may be necessary to satisfy the requirements of Rule 16b-
3(b).
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
CALMAT CO.
By ______________________________________
A. Xxxxxxxxx Xxxxxxxx
Chairman of the Board and
Chief Executive Officer
By ______________________________________
Xxxx Xxxxxxxx
Executive Vice President,
General Counsel and Secretary
___________________________________
Director
___________________________________
___________________________________
Address
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