EXHIBIT 9
FORM OF NONQUALIFIED STOCK OPTION AGREEMENT
UNDER THE GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
1992 STOCK COMPENSATION PLAN
THIS AGREEMENT, made this 18th day of September, 1998 by and between Global
Industrial Technologies, Inc., a Delaware corporation (the "Company"), and
[Name] (the "Optionee").
W I T N E S S E T H:
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WHEREAS, pursuant to the Global Industrial Technologies, Inc. 1992 Stock
Compensation Plan (the "Plan"), the Company desires to afford the Optionee the
opportunity to acquire, or enlarge, his/her ownership of the Company's common
stock ("Common Stock"), so that he/she may have a direct proprietary interest in
the Company's success;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. GRANT OF OPTION. Subject to the term and conditions set forth herein
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and in the Plan, the terms of which are attached as Exhibit A, and to
the agreement in writing of Optionee to cancel all other outstanding
stock option granted to him or her by the Company, the Company hereby
grants to the Optionee, during the period commencing on the date of
this Agreement and ending on the close of business on the day of the
tenth anniversary of the date hereof, September 18, 2008 (the
"Termination Date"), the right and option (the "Option") to purchase
from the Company, at a price of $6,9063 per share (the "Option
Price"), an aggregate of __________________ shares of Common Stock
(the "Option Shares").
2. LIMITATION ON EXERCISE OF OPTION. Subject to the terms and conditions
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set forth herein and the Plan, the Optionee may exercise 50% of the
Option if the average closing price of the Common Stock for any
twenty-one (21) consecutive trading day period during the term (the
"Average Price") equals or exceeds $10.3595, and an additional 50% if
the Average Price equals or exceeds $13.8126 provided, however, that
in any event the Option shall be 100% exercisable after the fifth
anniversary of the date hereof, September 18, 2003.
3. TERMINATION OF EMPLOYMENT. Any Option held by the Optionee upon
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termination of employment shall remain exercisable as follows:
(a) If the Optionee's termination of employment is due to health,
disability, or retirement on or after the attainment of age 65
(or such younger age as the Committee may determine in its sole
discretion) all unvested Options shall automatically become
vested and exercisable in full on the date of such termination of
employment and shall be exercisable by the Optionee, any prior
transferee of the Option or by the Optionee's designated
beneficiary, or, if none, the person(s) to whom such Optionee's
rights under the Option are transferred by will or the laws of
descent and distribution
for 2 years following such termination of employment (but in no
event beyond the term of the Option), and shall thereafter
terminate;
(b) If the Optionee's termination of employment is a Termination for
Cause, the Option shall terminate immediately upon such
termination of employment, regardless of whether the Option was
then exercisable; and
(c) If the Optionee's termination of employment is for any other
reason, all unvested Options shall terminate on the date of
termination and all Options (to the extent exercisable as of the
date of termination) shall be exercisable for a period of 30 days
following such termination of employment (but in no event beyond
the term of the Option), and shall thereafter terminate. An
Optionee's status as an employee shall not be considered
terminated in the case of a leave of absence agreed to in writing
by the Company (including, but not limited to, military and sick
leave).
4. METHOD OF EXERCISING OPTION.
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(a) Options, to the extent vested and exercisable in accordance with
Section 2, may be exercised, in whole or in part, by giving
written notice of exercise to the Company specifying the number
of shares of Common Stock to be purchased. Such notice shall be
accompanied by the payment in full of the Option Price. Such
payment shall be made: (i) in cash, or (ii) by surrender to the
Company at Fair Market Value shares of Common Stock owned by the
holder of the Option, or (iii) by a combination of any such
methods.
(b) At the time of exercise, the Optionee shall pay to the Company
such amount as the Company deems necessary to satisfy its
obligation to withhold Federal, state or local income or other
taxes incurred by reason of the exercise or the transfer of
shares thereupon by tendering to the Company a check in the
amount of such withholding or, if allowed in the sole discretion
of the Committee, by electing to have withheld upon exercise,
shares of Common Stock having a Fair Market Value equal to the
amount of such tax withholding.
5. ISSUANCE OF SHARES. As promptly as practical after receipt of such
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written notification of exercise and full payment of the Option Price
and any required income tax withholding, the Company shall issue or
transfer to the Optionee the number of Option Shares with respect to
which Option have been so exercised (less shares withheld in
satisfaction of tax withholding obligations, if any), and shall
deliver to the Optionee a certificate or certificates therefor,
registered in the Optionee's name.
6. COMPANY; OPTIONEE.
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(a) The term "Company" as used in this Agreement with reference to
employment shall include the Company and its Subsidiaries, as
appropriate.
(b) Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should
logically be construed to apply to the
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beneficiaries, the executors, the administrators, or the person
or persons to whom the Option may be transferred by will or by
the laws of descent and distribution, the word "Optionee" shall
be deemed to include such person or persons.
7. NON-TRANSFERABILITY. The Option is not transferable by the Optionee
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otherwise than to a designated beneficiary upon death or by will or
the laws of descent and distribution, and are exercisable during the
Optionee's lifetime only by him/her; provided, however, the Optionee
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may, subject to such terms and conditions specified by the Committee,
transfer the Option to an Immediate Family Member (or to corporations,
trusts, partnerships, or limited liability companies established
exclusively for such family members); provided, further, that there is
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no consideration for such transfer. No assignment or transfer of the
Option, or of the rights represented thereby, whether voluntary or
involuntary, by operation of law or otherwise (except as otherwise
provided by this Section 7 or upon death, by will or the laws of
descent and distribution), shall vest in the assignee or transferee
any interest or right herein whatsoever, but immediately upon such
assignment or transfer the Option shall terminate and become of no
further effect. For purposes of the foregoing, Immediate Family Member
shall mean, except as otherwise determined by the Committee, an
Optionee's children, stepchildren, grandchildren, parents,
stepparents, grandparents, spouse, siblings, in-laws and persons
related by reason of legal adoption.
8. ACCELERATION OF VESTING. Notwithstanding the foregoing, upon the
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occurrence of:
(a) a Change in Control (as defined below); or
(b) a tender offer or exchange offer is made by any "person" within
the meaning of Section 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act") for 30% or more of the Company Voting
Securities (as defined below) other than such a tender offer or
exchange offer that is made by the Company or any affiliate, the
Option shall automatically become vested and immediately
exercisable in full.
For purposes of this Agreement, "Change in Control" means the
occurrence of any one of the following events:
(i) individuals who, on February 23, 1998, constitute the Board
(the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board, provided that
any person becoming a director subsequent to March 18,
1998, whose election or nomination for election was
approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or
by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without
written objection to such nomination) shall be an Incumbent
Director; provided, however, that no individual initially
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elected or nominated as a director of the Company as a
result of an actual or threatened election contest with
respect to directors or as a result of any other actual or
threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed
to be an Incumbent Director.
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(ii) any "person" (as such term is defined in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) is or becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of
the Company's then outstanding securities eligible to vote
for the election of the Board (the "Company Voting
Securities"); provided, however, that the event described
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in this paragraph (ii) shall not be deemed to be a Change
in Control by virtue of any of the following acquisitions:
(A) by the Company or any Subsidiary, (B) by any employee
benefit plan (or related trust) sponsored or maintained by
the Company or any Subsidiary, (C) by any underwriter
temporarily holding securities pursuant to an offering of
such securities, (D) pursuant to a Non-Qualifying
Transaction (as defined in paragraph (iii)), or (E)
pursuant to any acquisition by Executive or any group of
persons including Executive (or any entity controlled by
Executive or any group of persons including Executive).
(iii) the shareholders of the Company approve a merger,
consolidation, statutory share exchange, or similar form of
corporate transaction involving the Company or any of its
Subsidiaries, whether for such transaction or the issuance
of securities in the transaction or otherwise (a "Business
Combination"): (A) unless an Action is pending immediately
after such approval or (B) unless immediately following
such Business Combination: (X) 50% or more of the total
voting power of (I) the corporation resulting from such
Business Combination (the "Surviving Corporation"), or (II)
if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of
the voting securities eligible to elect directors of the
Surviving Corporation (the "Parent Corporation"), is
represented by Company Voting Securities that were
outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which
such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the
holders thereof is in substantially the same proportion as
the voting power of such Company Voting Securities among
the holders thereof immediately prior to the Business
Combination, (Y) no person (other than any employee benefit
plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation), is or
becomes the beneficial owner, directly or indirectly, of
30% or more of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) and (Z) at least a majority of the
members of the board of directors of the Parent Corporation
(or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business
Combination were Incumbent Directors at the time of the
Board's approval of the execution of the initial agreement
providing for such Business Combination (any Business
Combination which satisfies all of the criteria
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specified in (X), (Y) and (Z) above shall be deemed to be a
"Non-Qualifying Transaction").
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all
or substantially all of the Company's assets.
For purposes of this Agreement, "Action" shall mean any action,
proceeding, litigation or investigation by any governmental entity
before any court or governmental entity seeking to prohibit or
restrain a Business Combination, seeking to make consummation of a
Business Combination illegal, or seeking to impose material
limitations on the ownership or use of the Company's assets as a
result of consummation of a Business Combination from the date the
Company has received written notice thereof.
Notwithstanding the foregoing; (I) a Change in Control of the Company
shall not be deemed to occur solely because any person acquires
beneficial ownership of more than 30% of the Company Voting Securities
as a result of the acquisition of Company Voting Securities by the
Company which reduces the number of Company Voting Securities
outstanding; provided, that, if after such acquisition by the Company
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such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of
the Company shall then occur; and (II) a Change in Control of the
Company under paragraph (iii) hereof shall be deemed to have occurred
if, after shareholders have approved a Business Combination, an Action
is instituted prior to the consummation of such Business Combination;
in such event, all unexercised Options that became exercisable upon
such shareholder approval shall cease to be exercisable until the date
occurring on the earlier of (a) the time such Options would have
become exercisable pursuant to Section 2 hereof, (b) the consummation
of the Business Combination or (c) the dismissal of settlement of the
Action.
9. RIGHTS AS SHAREHOLDER. The Optionee or a transferee of the Option
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shall have no rights as a shareholder with respect to any Option
Shares until he/she shall have become the holder of record of such
shares, and no adjustment shall be made for dividends or distributions
or other rights in respect of such shares of Common Stock for which
the record date is prior to the date upon which he shall become the
holder of record thereof.
10. ADJUSTMENTS. In the event of any change in the number of outstanding
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shares of Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, or other change in the
capital structure of the Company, there will be made an appropriate
adjustment to the Option Price and the number of Option Shares then
subject to any outstanding Options, all in a manner as shall be
determined by the Committee.
11. COMPLIANCE WITH LAW. Notwithstanding any of the provisions hereof,
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the Optionee hereby agrees that he will not exercise the Option, and
that the Company will not be obligated to issue or transfer any shares
to the Optionee hereunder, if the exercise hereof or the issuance or
transfer of such shares shall constitute a violation by the Optionee
or the Company of any provisions of any law or regulation of any
governmental authority. Any determination in this
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connection by the Committee shall be final, binding and conclusive.
The Company shall in no event be obliged to register any securities
pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) or to take any other affirmative action in order to
cause the exercise of the Option or the issuance or transfer of shares
pursuant thereto to comply with any law or regulation of any
governmental authority.
12. NOTICE. Every notice or other communication relating to this
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Agreement shall be in writing, and shall be mailed to or delivered to
the party for whom it is intended at such address as may from time to
time be designated by it in a notice mailed or delivered to the other
party as herein provided; provided, that, unless and until some other
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address be so designated, all notices or communications by the
Optionee to the Company shall be mailed or delivered to the Company at
its principal executive office, and all notices or communications by
the Company to the Optionee may be given to the Option personally or
may be mailed to him at his address as recorded in the records of the
Company.
13. NONQUALIFIED STOCK OPTION. The Option granted hereunder is not
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intended to be an incentive stock within the meaning of Section 422 of
the Code.
14. BINDING EFFECT. Subject to Section 7 hereof, this Agreement shall be
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binding upon the heirs, executors, administrators and successors of
the parties hereto.
15. GOVERNING LAW. This Agreement shall be construed and interpreted in
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accordance with the laws of the State of Delaware.
16. PLAN. The terms and provisions of the Plan are incorporated herein by
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reference, and the Optionee hereby acknowledges receiving a copy of
the Plan. In the event of a conflict or inconsistency between
discretionary terms and provisions of the Plan and the express
provisions of this Agreement, this Agreement shall govern and control.
In all other instances of conflicts or inconsistencies or omissions,
the terms and provisions of the Plan shall govern and control. All
capitalized terms not defined herein shall have the meaning ascribed
to them as set forth in the Plan.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Global Industrial Technologies, Inc.
____________________________________
By: Xxxxx X. Xxxxxxx
Vice President - Human Resources
By: ____________________________________
[Name]
Optionee
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