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Exhibit 10(D)(3)(b)
SERVOTRONICS, INC.
STOCK OPTION AGREEMENT
FOR
XXXXXXXX X. XXXXXXXX
DATED MARCH 24, 1998
1. Definitions.
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As used in this Agreement:
(a) "Company" means Servotronics, Inc.
(b) "Common Stock" means the common stock, $.20 par value, of the
Company.
(c) "Fair Market Value" of a share of Common Stock on a given date
means the average of the highest and lowest quoted sales prices of a share of
Common Stock on the American Stock Exchange on that date or, if no such shares
were traded on the American Stock Exchange on that date, on the next preceding
date on which such shares were so traded. However, if shares of Common Stock
have not been traded on the American Stock exchange for more than ten days
immediately preceding the given date, the Fair Market Value of a share of Common
Stock shall be determined by the Committee in such manner as it may deem
appropriate.
(d) "Option" means the option granted pursuant to this Agreement to
purchase 37,800 shares of Common Stock, which option is intended to be a
non-qualified stock option.
(e) "Committee" means the Board of Directors of the Company or any
committee of the Board that the Board has appointed to administer the Plan.
(f) "Date of Grant" means March 24, 1998.
(g) "Optionee" means Xxxxxxxx X. Xxxxxxxx, Xx.
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2. Administration.
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The Committee shall have all the powers vested in it by the terms of
this Agreement to administer the Agreement. The Committee is authorized to
interpret this Agreement.
3. Grant of Option.
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The Company grants to Optionee an option to purchase 37,800 shares of
Common Stock pursuant to this Agreement.
4. Terms of Option.
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(a) The purchase price of each share of Common Stock subject to the
Option is the Fair Market Value of a share of Common Stock on the Date of Grant
of the Option, which is $8.50.
(b) The Option may be exercised in whole or in part from time to time
on or after September 24, 1998, provided that the Option shall not be
exercisable later than the day preceding the tenth anniversary of the Date of
Grant.
(c) By executing this Agreement, the Optionee agrees on behalf of
himself, his executor, administrator, heirs, distributees, and transferees that
any shares of Common Stock purchased pursuant to the Option are being acquired
for investment and not with a view to distribution.
(d) To exercise the Option, written notice should be given to the
Secretary of the Company in the form attached to this Agreement.
(e) The purchase price of any shares with respect to which the Option
is exercised is payable in full on the date the Option is exercised, in cash or
in shares of Common Stock or in a combination of cash and such shares. The value
of a share of Common Stock delivered in payment of the purchase price shall be
its Fair Market Value on the date the Option is exercised.
(f) The Optionee may, during his lifetime, transfer the Option to any
other person.
(g) If the Option has not already expired, it shall expire upon the
death of the Optionee, and no shares of Common Stock may thereafter be purchased
pursuant to the Option, except that the Optionee's estate or the person to whom
such Optionee's rights
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under the Option are transferred by will or the laws of descent and distribution
or any person to whom the Optionee had transferred the Option before his death
may, within one year after the date of the Optionee's death, purchase any shares
of Common Stock that the Optionee was entitled to purchase under the Option on
the date of his death.
Nothing in this subsection shall allow the exercise of the Option
later than the day before the tenth anniversary of the Date of Grant of the
Option.
(h) The Optionee agrees that from and after the Date of Grant of the
Option and during the term of the Option he will not, unless acting as an
officer or employee of the Company or with the prior written consent of the
Company, directly or indirectly, engage or participate in, or own, manage,
operate, join, or control, or be connected as an officer, director, employee,
partner, investor, or otherwise with, any business manufacturing or selling
products or services similar to or competing with products or services
manufactured or sold by the Company or its subsidiaries or otherwise engage
directly or indirectly in competition with the Company or its subsidiaries. The
Optionee acknowledges that the remedy at law for any breach by him of the
foregoing will be inadequate and that the Company shall be entitled to
injunctive relief. Furthermore, the Option shall expire upon any breach by the
Optionee of the foregoing. Nothing contained in this Agreement, however, shall
prevent the Optionee from purchasing for investment 3 percent or less of any
outstanding class of securities of any company whose securities are held by the
general public.
5. Adjustment of Shares Available.
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If there is any change in the number of outstanding shares of Common
Stock of the Company through the declaration of stock dividends or through stock
splits, then the number of shares subject to the Option and the purchase price
of the shares subject to the Option shall be automatically adjusted. If there is
any change in the number of outstanding shares of Common Stock of the Company
through any change in the capital account of the Company or through any other
transaction referred to in section 424(a) of the Internal Revenue Code, then the
number of shares subject to the Option and the purchase price of the shares
subject to the Option shall be appropriately adjusted by the Committee, except
to the extent the Committee takes other action pursuant to the following
paragraph.
Notwithstanding the provision of any other Section of this Agreement,
if the Company shall not be the surviving corporation in any merger or
consolidation, or if the Company is to sell all or substantially all of its
assets, or if the ownership of more than 25 percent of the outstanding shares of
Common Stock shall change as the result of a concerted action by one or more
persons or corporations or if an attempt is so made to effect such a change of
ownership, or if the Company is to be dissolved and liquidated (each such event
shall be referred to in this paragraph as a "Corporate Change"), then the Option
shall become
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exercisable in full as of the Change in Control, and the Committee may, subject
to the agreement of the Optionee (i) further accelerate the time at which the
Option may be exercised so that the Option may be exercised in full on or before
a date fixed by the Committee, (ii) provide for and offer the purchase of the
Option to the extent then outstanding for an amount of cash equal to the excess
of the Fair Market Value of the shares subject to the Option (which in the event
of a change in the ownership of more than 25 percent of the outstanding shares
of Common Stock shall not be less than the amount of cash and the fair market
value of other consideration tendered for such outstanding shares) over the
aggregate purchase price of the shares subject to the Option, (iii) make such
adjustments to the Option as the Committee finds appropriate to reflect such
Corporate Change, providing such adjustments are not to the disadvantage of the
Optionee, or (iv) cause any surviving corporation in such Corporate Change to
assume the Option or substitute a new option (of equal or greater value) for
such Option.
6. No Right to Continued Employment.
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Nothing in this Agreement is a conferral upon the Optionee of
additional the rights to continue in the employ of the Company. It is recognized
and agreed that the Company's and the Optionee's obligations with respect to the
Optionee's continued employment with the Company are contained in a separate
agreement dated August 8, 1986, as amended.
7. Rights as Stockholder.
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No person shall have the rights of a stockholder with respect to
shares of Common Stock subject to the Option until the date of issuance, if any,
of a stock certificate pursuant to the exercise of the Option.
8. Regulatory Approvals and Listing.
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The Company shall not be required to issue any certificate or
certificates for shares of Common Stock upon the exercise of the Option prior to
(a) the obtaining of any approval from any government agency that the Company
shall, in its sole discretion, reasonably determine to be necessary, (b) the
admission of such shares to listing on any stock exchange on which the Common
Stock may then be listed, and (c) the completion of any registration or other
qualification of such shares under any state or Federal law or rulings or
regulations of any governmental body that the Company shall, in its sole
discretion, reasonably determine to be necessary or advisable. The Company
agrees to use its best efforts to accomplish the above expeditiously and at no
cost to the Optionee.
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9. Satisfaction of Tax Liabilities.
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The Company shall not be required to issue any certificate for shares
of Common Stock upon the exercise of the Option unless any Federal, state, or
local tax withholding obligation incurred by the Company in connection with the
exercise of the Option has been provided for by the Optionee through the
Optionee's delivery of a sufficient amount of cash or shares of Common Stock to
the Company or through the Company's retention of shares of Common Stock
otherwise issuable on the exercise of the Option.
The value of a share of Common Stock delivered or retained to provide
for the tax withholding obligation incurred by the Company shall be its Fair
Market Value on the date the Option is exercised.
10. Construction.
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This Agreement shall be construed in accordance with the law of the
State of Delaware.
SERVOTRONICS, INC.
By
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Xxx X. Xxxxx
Secretary and Treasurer
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Xxxxxxxx X. Xxxxxxxx
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