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Exhibit 10.48
XXXX NATIONAL CORPORATION
Nonqualified Stock Option Agreement
(1998 Plan/Time Vesting/Senior Executive)
This Nonqualified Stock Option Agreement (this "Agreement") is entered
into between the individual optionee named on the signature page hereof (the
"Optionee") and Xxxx National Corporation, a Delaware corporation (the
"Company"), as of the Grant Date. Certain capitalized terms used herein are
defined in Paragraph 8.
WHEREAS, the board of Directors of the Company has authorized a grant
of stock options on the terms hereof to the Optionee, who is employed in the
capacity shown on the signature page; and
NOW, THEREFORE, the Company hereby grants to the Optionee options (the
"Options") pursuant to the Company's 1998 Equity Performance and Incentive Plan
(the "Plan") to purchase the number of shares of Common Stock, par value $.001
per share, of the Company ("Common Stock") shown as the Original Award on the
signature page hereof; and agrees to cause certificates for any shares purchased
hereunder to be delivered to the Optionee upon payment of the purchase price in
full, all subject, however, to the terms and conditions of the Plan and the
terms and conditions hereinafter set forth.
1. EXERCISE. (a) Except as otherwise provided herein, the Options
(until terminated as hereinafter provided) will become vested and exercisable as
follows:
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Amount Vested Date Exercisable
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1/4 of the Original Award The first anniversary of the Grant Date; and
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1/4 of the Original Award The second anniversary of the Grant Date; and
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1/4 of the Original Award The third anniversary of the Grant Date; and
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All Unvested Shares The fourth anniversary of the Grant Date
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To the extent exercisable, the Options may be exercised in whole or in part from
time to time.
(b) Upon the occurrence of a Change in Control prior to the fourth
anniversary of the date of this Agreement, the Options, in addition to any
vesting pursuant to the provisions of Paragraph 1(a) above, will become
exercisable in full as to any then Unvested Shares immediately prior to the
consummation of such Change in Control.
(c) If a Termination Event occurs prior to the fourth anniversary
of the Grant Date, the Options will, in addition to any prior vesting pursuant
to Paragraph 1(a) above, immediately become exercisable in full with respect to
those Unvested Shares that would have vested on the next succeeding anniversary
of the Grant Date (if the Termination Event occurs on an anniversary of the
Grant Date, no additional Options will become exercisable besides those that
became exercisable as of that anniversary). Thereupon, all remaining Unvested
Options will be forfeited and cancelled.
(d) If a Sale Event occurs prior to the fourth anniversary of the
Grant Date and the Optionee is not a Full-Time Employee of the Company or a
continuing Subsidiary immediately after the Sale Event, the Options will, in
addition to any prior vesting pursuant to Paragraph 1(a) above, immediately
become exercisable in full with respect to those Unvested Shares that would have
vested on the next succeeding anniversary of the Grant Date (if the Sale
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Event occurs on an anniversary of the Grant Date, no additional Options will
become exercisable besides those that became exercisable as of that
anniversary). Thereupon, all remaining Unvested Options will be forfeited and
cancelled.
(e) If the Optionee dies or becomes permanently disabled while in
the employ of the Company or any Subsidiary, or the Optionee retires under a
retirement plan of the Company or any Subsidiary, the Options will, in addition
to any vesting pursuant to Paragraph 1(a) above, immediately become exercisable
in full with respect to those Unvested Shares that would have vested on the next
succeeding anniversary of the Grant Date (if the event occurs on an anniversary
of the Grant Date, no additional Options will become exercisable besides those
that became exercisable as of that anniversary). Thereupon, all remaining
Unvested Options will be forfeited and cancelled.
(f) Any exercise of the Options must be made in writing by the
Optionee delivered to the Secretary of the Company.
2. EXERCISE PRICE AND PAYMENT; RELOAD OPTIONS. (a) The Options will be
exercisable for Vested Shares (whether such vesting occurs pursuant to Paragraph
1(a), 1(b), 1(c), 1(d) or 1(e)) at the Exercise Price shown on the signature
page hereof.
(b) The Exercise Price for any shares may be paid (i) in cash or
by check, (ii) if approved by the Compensation Committee prior to such exercise,
by delivery to the Company of a promissory note or notes of the Optionee;
PROVIDED, HOWEVER, that the principal amount of such notes for all optionees
outstanding at any one time pursuant to the Plan, the Company's 1996 Management
Stock Option Plan, the Company's 1993 Management Stock Option Plan and the
Company's 1992 Management Stock Option Plan shall not in the aggregate
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exceed $3,000,000, (iii) by actual or constructive transfer to the Company of
Mature Shares, or (iv) by a combination of such methods of payment.
(c) If, at a time at which the Optionee is a Full-time Employee,
the Optionee pays the Exercise Price of shares by delivery of Mature Shares,
additional option rights ("Reload Option Rights") shall, subject to the
provisions hereinafter set forth, be automatically granted to the Optionee equal
to the sum of (i) the number of Mature Shares transferred to the Company with
respect to such Exercise Price and (ii) the number of shares of Common Stock
surrendered to the Company in payment of the Withholding Amount associated with
the Options exercised through delivery of Mature Shares. In no event, however,
shall Reload Option Rights be granted unless the remainder of the original ten
(10) year term of the option being exercised is greater than six (6) months at
the time of such exercise. Such Reload Option Rights shall not be exercisable
during the six (6) month period immediately following the date of grant of such
Reload Option Rights. The Exercise Price of such Reload Option Rights shall be
one hundred (100) percent of the Stock Price per share on the day of the
exercise of the Options to which such Reload Option Rights relate. Such Reload
Option Rights shall terminate at such time as the Options being exercised would
have terminated had they not been exercised. Such Reload Option Rights will be
evidenced by an agreement in form substantially the same as this Agreement, with
appropriate changes. Reload Option Rights will not be granted with respect to
any Options that have been transferred by the original Optionee.
3. TERMINATION. The Options will terminate and all Unvested and Vested
Options then outstanding will be forfeited on the earliest of the following
dates:
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(a) On the date on which the Optionee voluntarily resigns (unless
otherwise provided in a written agreement relating to employment) or ceases to
be an employee of the Company or a Subsidiary by reason of termination of
employment for Cause;
(b) Subject to possible extension pursuant to Paragraph 3(c)
below, five years after either (i) the date on which the Optionee ceases to be
an employee of the Company or a Subsidiary by reason of retirement under a
retirement plan of the Company or a Subsidiary at or after the earliest
voluntary retirement age provided for in such retirement plan or retirement at
an earlier age with the consent of the Company's Board of Directors or the
Compensation Committee or (ii) the date of permanent disability of the Optionee
if the Optionee becomes permanently disabled while an employee of the Company or
a Subsidiary;
(c) Five years after the date of the death of the Optionee if the
Optionee dies while an employee of the Company or a Subsidiary or one year after
the date of death of the Optionee if the Optionee dies during the fifth year of
the five year period referred to in Paragraph 3(b) above;
(d) One year after the date of a Termination Event;
(e) On the first anniversary of the date of a Sale Event if the
Optionee is not a Full-Time Employee of the Company or a continuing Subsidiary
immediately after the Sale Event;
(f) Immediately (x) upon the Optionee accepting employment with a
Competitor without the prior written approval of the Company's Chief Executive
Officer or (y)
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upon a material breach by the Optionee of any applicable agreement with the
Company or a Subsidiary relating to non-competition, non-solicitation or
maintaining of Company confidences; or
(g) Ten years from the Grant Date.
4. TRANSFERABILITY. Unless otherwise approved by the Compensation
Committee following a request from the Optionee or the Optionee's guardian or
legal representative, the Options are not transferable by the Optionee otherwise
than by will or the laws of descent and distribution. If another type of
transfer is approved by the Compensation Committee, a transfer will only be
effective when the transferee of the Options enters into an agreement with the
Company (in form and substance acceptable to the Company) agreeing to be bound
by the provisions of this Agreement as if such transferee were the Optionee. If
exercised during the lifetime of the Optionee, the Options are exercisable only
by the Optionee or by the Optionee's guardian or legal representative, or by an
transferee authorized as provided in this Paragraph.
5. SECURITIES LAWS. The Options are not exercisable if such exercise
would involve a violation of any applicable federal, state or other securities
law, and the Company hereby agrees to make reasonable efforts to comply with
such securities laws. The Options are not exercisable unless under said laws at
the time of exercise the shares of Common Stock or other securities purchasable
hereunder are exempt, are the subject matter of an exempt transaction, or are
registered in accordance with such laws.
6. ADJUSTMENTS. (a)The Board of Directors or the Compensation Committee
shall make such adjustment in the option price and in the number or kind of
shares of
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Common Stock or other securities covered by the Options as such Board or
Committee may in good faith determine is equitably required to prevent dilution
or enlargement of the rights of the Optionee that otherwise would result from
(i) any stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Company, or (ii) any merger,
consolidation, spin-off, split-off, spin-out, split up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of rights to
purchase securities, or (iii) any distribution to the holders of the Common
Stock of rights or warrant to purchase equity interests of the Company, or (iv)
any other corporate transaction or event having an effect similar to any of the
foregoing. Moreover, in the event of any such transaction or event, the Board of
Directors or the Compensation Committee, in its discretion, may provide in
substitution for any or all outstanding awards under the Options such
alternative consideration as it, in good faith, may determine to be equitable in
the circumstances and may require in connection therewith the surrender of all
awards so replaced.
(b) In the event that any provision of this Agreement would result
in a calculation of a number of shares in amounts other than a whole number, the
number of shares so calculated will be reduced or increased to the nearest whole
number (rounding 0.50 up), with the effect of any such rounding deemed to attach
to the last group of shares to be so calculated (with calculations to be
conducted in alphabetical or numerical order, as applicable).
7. WITHHOLDING. If the Company is required to withhold any federal,
state, local or foreign tax in connection with the exercise of the Options, it
will be a condition to such exercise that the Optionee make provision
satisfactory to the Company for payment of all such taxes. Upon exercise of any
Options, Optionee shall surrender to the Company, by the Company
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withholding from the shares of Common Stock to be issued upon such exercise to
the Optionee, in satisfaction of the Withholding Amount, shares of Common Stock
that have value in the aggregate that is equal to such Withholding Amount. In
the event that the Optionee desires to have an amount greater than the
Withholding Amount withheld, the excess over the Withholding Amount must be paid
to the Company in cash.
8. DEFINITIONS. The following capitalized terms have meanings as set
forth below.
"Cause" means gross neglect of duty, dishonesty, conviction of a
felony, disloyalty, intoxication, drug addiction, or other similar misconduct
adverse to the best interests of the Company.
"Change in Control" means if at any time any of the following events
shall have occurred:
(a) the Company merges into itself, or is merged or consolidated
with, another corporation and as a result of such merger or consolidation less
than 51% of the voting power of the then-outstanding voting securities of the
surviving or resulting corporation immediately after such transaction are
directly or indirectly beneficially owned in the aggregate by the former
stockholders of the Company immediately prior to such transaction;
(b) all or substantially all the assets accounted for on the
consolidated balance sheet of the Company are sold or transferred to one or more
corporations or persons, and as a result of such sale or transfer less than 51%
of the voting power of the then-outstanding voting securities of such
corporation or person immediately after such sale or transfer is directly
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or indirectly beneficially held in the aggregate by the former stockholders of
the Company immediately prior to such transaction or series of transactions;
(c) A person, within the meaning of Section 3(a)(9) or 13(d)(3)
(as in effect on the date hereof) of the Securities Exchange Act of 1934,
becomes the beneficial owner (as defined in Rule 13d-3 of the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934) of (i) 15%
or more but less than 35% of the voting power of the then- outstanding voting
securities of the Company without the prior approval by the Board, or (ii) 35%
or more of the voting power of the then-outstanding voting securities of the
Company; PROVIDED, HOWEVER, that the foregoing does not apply to any such
acquisition that is made by (w) any subsidiary of the Company; (x) any employee
benefit plan of the Company or of any Subsidiary or (y) any person or group of
which employees of the Company or of any Subsidiary control a greater than 25%
interest unless the Board of Directors of the Company determines that such
person or group is making a "hostile acquisition;"
(d) A majority of the members of the Board of Directors of the
Company or of any Subsidiary are not Continuing Directors, where a "Continuing
Director" is any member of the Board of Directors of the Company or, with
respect to a Subsidiary, of such Subsidiary who (x) was a member of the Board of
Directors of the Company or, with respect to a Subsidiary, of such Subsidiary on
the date hereof or (y) was nominated for election or elected to such Board of
Directors with the affirmative vote of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or election.
"Competitor" means any Person that competes with any then-existing
business of the Company or any Subsidiary.
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"Exercise Price" means the exercise price per share indicated as
the Exercise Price per share on the signature page hereof.
"Full-time Employee" means a person having the status of a
full-time employee of the Company or a Subsidiary working at least 20 hours a
week, including a person who is on a short-term disability, parental or other
leave under an applicable benefit plan or other approved leave.
"Grant Date" means the date of the Board or Compensation Committee
action awarding the Options to the Optionee as indicated on the signature page
hereof.
"Mature Shares" means (x) nonforfeitable, unrestricted shares of
Common Stock that have been owned by the Optionee for more than six (6) months
prior to the date of exercise, or (y) shares of restricted stock or other shares
of Common Stock that are forfeitable or subject to restrictions on transfer,
including, without limitation, shares of Common Stock issued pursuant to the
earn out of performance shares or performance units, which shares have been
owned by the Optionee for more than six (6) months and that the Company agrees
to accept as consideration, or (z) such other Company securities as the
Company's chief accounting officer, upon consultation with the Company's
independent accountants, determines will not adversely affect the Company's tax
or accounting position by accepting.
"Original Award" means the number of shares of Common Stock
indicated as the Original Award on the signature page hereof.
"Person" means any corporation, partnership, limited liability
company, association, firm, other entity or individual(s).
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"Sale Event" means the consummation of a sale or other event by
which the Subsidiary by which the Optionee is primarily employed ceases to be a
Subsidiary of the Company.
"Stock Price" means the closing price of the Common Stock on the
principal exchange on which the Common Stock is traded.
"Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (or a group of corporations that themselves are Subsidiaries) other
than the last corporation in the unbroken chain owns stock possessing fifty
percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain. For purposes of this Agreement, the
continuous employment of the Optionee with the Company or a Subsidiary will not
be deemed interrupted, and the Optionee will not be deemed to have ceased to be
an employee of the Company or any Subsidiary, by reason of the transfer of his
employment among the Company and its Subsidiaries.
"Termination Event" means the Optionee's ceasing to be an employee
of the Company or its Subsidiaries by reason of termination by the employer of
the Optionee's employment without Cause.
"Trading Days" means days on which the principal exchange on which
the Common Stock is traded is open for trading, regardless whether actual
trading in the Common Stock occurs.
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"Unvested Shares" means, as of any given time, those shares of
Common Stock relating to the Options that are not, at the time in question,
otherwise permitted, under the terms of this Agreement, to be acquired pursuant
to the exercise of the Options.
"Vested Shares" means, as of any given time, those shares of
Common Stock relating to the Options that are, at the time in question,
otherwise permitted, under the terms of this Agreement, to be acquired pursuant
to the exercise of the Options.
"Withholding Amount" means the minimum amount of withholding taxes
including Federal, state and local income taxes and social security and Medicare
taxes required to be withheld by the Company by the applicable taxing
authorities, as the result of the exercise of an Option.
9. ACKNOWLEDGMENT. The undersigned Optionee hereby acknowledges receipt
of an executed original of this Agreement and accepts the Options granted
hereunder.
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Nonqualified Stock Option
Agreement (1998 Plan/Senior Executive)
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EXECUTED at Cleveland, Ohio as of the date first set forth above.
XXXX NATIONAL CORPORATION
By:____________________________________
Title:_________________________________
_______________________________________
OPTIONEE
Name of Optionee: _______________________________________
Name of Employer: _______________________________________
Position: _______________________________________
Number of Shares
in the Original Award: _______________________________________
Date of Board Resolution
authorizing this Option: _______________________________________
Exercise Price per Share: _______________________________________
