EXHIBIT 10.14
Form of Non-Incentive Stock Option Agreement for Xxxxxx Xxxxxxxxx
OM GROUP, INC.
1998 LONG-TERM INCENTIVE COMPENSATION PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is entered into this ___ day of August,
2005 but effective as of June 13, 2005 (being the date this option is granted)
by and between OM GROUP, INC. (the "Company"), and Xxxxxx X. Xxxxxxxxx (the
"Participant"), a Key Employee of the Company or a subsidiary of the Company, is
to evidence the non-incentive stock option granted to the Participant as
described herein. Capitalized terms used herein and not otherwise defined have
the meaning ascribed to them in the 1998 Long-Term Incentive Compensation Plan
of the Company, as adopted by the shareholders on May 5, 1998, and as it may be
amended (the "Plan").
WITNESSETH
That the parties hereto agree as follows:
Section 1. The Company hereby grants to the Participant the option of
purchasing the number of shares of Common Stock of the Company at the option
exercise price and subject to the terms and conditions hereinafter set forth.
Section 2. The aggregate number of shares of Common Stock purchasable
is ___________.
Section 3. The option exercise price is $________ per share.
Section 4. Except as otherwise provided in Sections 5, 6, 7, 8, 9, 10
and 12, the option rights granted hereunder shall become exercisable on
____________.
Section 5. This option shall become exercisable as to all of the shares
it covers upon the occurrence of any Change in Control of the Company (as
defined in the Plan) occurring within the option period specified in Section 11;
provided that this option shall not be exercisable prior to the expiration of
six months from the date of grant.
Section 6. To the extent not otherwise exercisable at the date of the
retirement of the Participant in accordance with a retirement plan or policy of
the Company or any subsidiary, this option shall become fully exercisable upon
such retirement, and the Participant may exercise the option rights set forth
herein at any time within three years following such retirement (but only within
the option period specified in Section 11).
Section 7. If the Participant shall die while still employed by the
Company or any subsidiary, this option shall become fully exercisable to the
extent not otherwise exercisable, and the person entitled by will or the
applicable laws of descent and distribution may exercise the
option rights set forth herein at any time within one year following the
Participant's death (but only within the option period specified in Section 11).
Section 8. If the Participant ceases to be employed by the Company or a
subsidiary due to the permanent and total disability of the Participant, this
option shall become fully exercisable to the extent not otherwise exercisable,
and the Participant may exercise the option rights set forth herein at any time
within the one-year period following the date of the Participant's cessation of
employment (but only within the option period set forth in Section 11).
Section 9. If the Participant shall die following the cessation of
employment with the Company or a subsidiary but within the periods provided for
in Sections 6 or 8, this option shall become fully exercisable to the extent not
otherwise exercisable, and the person entitled by will or applicable laws of
descent and distribution may exercise the option rights set forth herein at any
time within one year following the Participant's death (but only within the
option period set forth in Section 11).
Section 10. If the Participant ceases to be employed by the Company or
a subsidiary for any reason other than retirement, permanent and total
disability, or death, the Participant may exercise the option rights set forth
herein at any time within the three-month period following such cessation of
employment (but only within the option period specified in Section 11) to the
extent the Participant was entitled to exercise the same immediately prior to
such cessation of employment; provided, however, if there has been a Change in
Control of the Company and the Participant's employment with the Company shall
have terminated after such Change in Control and prior to six months from the
date of grant of this option, then this option may be exercised in whole or in
part at any time within the three-month period commencing six months from the
date of grant of this option.
Section 11. Notwithstanding any other provisions hereof, this option
shall not be exercisable after _________________.
Section 12. Notwithstanding any other provisions hereof, if the
Participant's employment with the Company or a subsidiary is terminated on
account of a violation of the Company's Code of Conduct and Ethics, this option
shall be forfeited upon such termination to the full extent not exercised at the
time of such termination.
Section 13. This option is not transferable by the Participant
otherwise than by will or by the laws of descent and distribution, and is
exercisable, during the lifetime of the Participant, only by the Participant or
the Participant's guardian or legal representative. Upon any attempt to
transfer, assign, pledge, hypothecate, or otherwise dispose of this option or
the related option rights contrary to the provisions of this Agreement, or upon
the levy of any attachment or similar process upon such option or rights, such
option and rights shall immediately become null and void.
Section 14. If the Participant's exercise of this option is prevented
by the terms of subsections (a), (b) or (c) of Section 18 and the Participant's
option terminates pursuant to Section 6, 8 or 9, then the Participant may,
notwithstanding the provisions of Section 6, 8 or 9 but only within the period
set forth in Section 11, exercise such option to the extent it would have been
exercisable immediately prior to its termination but for the operation of
Section 18 at
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any time within 30 days after such Participant is notified by the Company that
such exercise is no longer prevented by Section 18.
Section 15. In the event that at any time prior to the expiration of
this option each of the outstanding shares of Common Stock of the Company
(except shares held by dissenting stockholders) shall be changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or of another corporation, whether through reorganization,
recapitalization, stock split-up, combination of shares, merger or
consolidation, then for all purposes of this option there shall be substituted
for each share of Common Stock purchasable hereunder the number and kind of
shares of stock or other securities into which each such share of Common Stock
of the Company shall be so changed, or for which each such share shall be so
exchanged, and the shares or securities so substituted for each such share of
Common Stock shall be subject to purchase at an appropriately adjusted option
exercise price and subject to the terms and conditions hereof.
In the event that the Company shall issue a stock dividend in Common
Stock with respect to the Common Stock of the Company, the number of shares then
purchasable hereunder shall be adjusted by adding to each such share the number
of shares which would have been distributed as a stock dividend thereon had such
share been outstanding on the record date for payment of the stock dividend, and
each such share together with said additional shares shall be purchasable at the
option exercise price as above provided and as may be appropriately adjusted.
In the event that there shall be any other change in the number or kind
of outstanding shares of Common Stock or other securities of the Company, or of
any shares of stock or other securities into which such shares of Common Stock
shall have been changed or for which they shall have been exchanged, or the
Company shall make an Extraordinary Distribution or a Prorata Repurchase, then
the Compensation Committee shall make such adjustment in the number or kind of
shares of stock or other securities covered by this option and in the number or
kind of shares of stock or other securities subject to purchase at the option
exercise price as above provided and with any such adjustment in the option
exercise price to reflect the effect of such Extraordinary Distribution or
Prorata Repurchase as the Compensation Committee, in its sole discretion may
determine is equitably required by such change, and such adjustment so made
shall be effective and binding for all purposes of this option.
Anything to the contrary herein contained notwithstanding, the
Participant shall not be entitled to purchase a fraction of a share under this
option.
Section 16. If the Company shall liquidate or dissolve, or shall be a
party to a merger or consolidation with respect to which the Company shall not
be the surviving corporation, the Company shall give written notice thereof to
the Participant at least 30 days prior thereto. The Participant shall have the
right within said 30-day period (but only within the period specified in Section
11) to exercise this option to the extent such Participant was entitled to
exercise the option on the date of the notice; provided, however, that if the
Participant is employed by the Company on the date of the notice, then
notwithstanding the provisions of Section 4, the Participant shall have the
right to exercise this option in full to the extent not previously exercised. To
the extent that this option shall not have been exercised on or prior to the
effective date of such liquidation, dissolution, merger or consolidation, then
notwithstanding any other
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provisions hereof, it shall terminate on said date, unless it is assumed by
another corporation within the meaning of Section 425(a) of the Internal
Revenue Code of 1986, as amended.
Section 17. Subject to the terms and conditions hereof, this option may
be exercised in whole or in part by delivering to the Company at its principal
place of business a written notice, signed by the person entitled to exercise
the option, of the election to exercise the option and stating the number of
shares to be purchased. Such notice shall, as an essential part thereof, be
accompanied by the payment of the full option exercise price of the shares then
to be purchased, except as provided below. Payment of the full option exercise
price may be made, at the election of the Participant, in (a) cash, (b) Common
Stock of the Company, or (c) any combination of cash or Common Stock of the
Company; provided, however, that the Participant may not use Common Stock of the
Company in payment of the purchase price unless such Common Stock has been held
by the Participant for at least six months. A Participant using Common Stock of
the Company to pay the purchase price of shares being purchased may do so either
by actual delivery of share certificates for such Common Stock or by attesting
as to the ownership of such Common Stock. Shares of Common Stock used in payment
of the purchase price shall be valued at their closing price on the New York
Stock Exchange on the trading day immediately preceding the date of exercise.
The Participant may elect to pay the purchase price upon the exercise of this
option by authorizing a third party to sell all the shares (or a sufficient
portion of the shares) acquired upon the exercise of the option and to remit to
the Company a sufficient portion of the sale proceeds to pay the entire purchase
price and any tax withholding resulting from such exercise. Upon the proper
exercise of this option, the Company shall issue in the name of the person
exercising the option, and deliver to such person, a certificate or certificates
for the shares purchased, provided that if any applicable law or regulation
requires the Company to take any action with respect to the shares specified in
such notice before the issuance thereof, the date of delivery of such shares
shall be extended for the period necessary to take such action. The Participant
agrees that as holder of this option, the Participant shall have no rights as a
stockholder or otherwise in respect of any of the option shares until the option
is effectively exercised as herein provided. The Participant agrees to pay in
cash, within the time period specified by the Company, the amount (if any)
required to be withheld for federal, state and local tax purposes on account of
the exercise of the option or to make such arrangements to satisfy such
withholding requirements as the Company deems appropriate.
Section 18. This option shall not be exercisable if such exercise would
violate:
(a) Any applicable state securities law;
(b) Any applicable registration or other requirements under the
Securities Act of 1933, as amended (the "Act"), the Securities
Exchange Act of 1934, as amended, or applicable listing
requirements of any stock exchange; or
(c) Any applicable legal requirement of any other governmental
authority.
The Company agrees to make reasonable efforts to comply with the
foregoing laws and requirements so as to permit the exercise of this option.
Furthermore, if a registration statement with respect to the shares to be issued
upon the exercise of this option is not in effect or if counsel for the Company
deems it necessary or desirable in order to avoid possible violation of the Act,
the Company may require, as a condition to its issuance and delivery of
certificates for the shares, the delivery to the Company of a commitment in
writing by the person exercising the
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option that at the time of such exercise it is such person's intention to
acquire such shares for such person's own account for investment only and not
with a view to, or for resale in connection with, the distribution thereof; that
such person understands the shares may be "restricted securities" as defined in
Rule 144 of the Securities and Exchange Commission; and that any resale,
transfer or other disposition of said shares will be accomplished only in
compliance with Rule 144, the Act, or the other rules and regulations
thereunder. The Company may place on the certificates evidencing such shares an
appropriate legend reflecting the aforesaid commitment and the Company may
refuse to permit transfer of such certificates until it has been furnished
evidence satisfactory to it that no violation of the Act or the rules and
regulations thereunder would be involved in such transfer.
Section 19. This Agreement is subject to the terms of the Plan. If
there is any inconsistency between this Agreement and the Plan, the Plan shall
govern.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate as of the day and year first above written.
"PARTICIPANT" OM GROUP, INC.
By: By:
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Title: Title:
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