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Exhibit 10.5
ANNEX A-2
XXXX NATIONAL CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
(NONEMPLOYEE DIRECTORS)
June 12, 1997
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[1997 Version B]
XXXX NATIONAL CORPORATION
Nonqualified Stock Option Agreement
(Nonemployee Directors)
This Nonqualified Stock Option Agreement (this "Agreement"),
dated as of June 12, 1997 (the "Date of Grant"), is entered into between the
individual optionee named on the signature page hereof (the "Optionee") and Xxxx
National Corporation, a Delaware corporation (the "Company").
WHEREAS, the Company's Amended and Restated Nonqualified Stock
Option Plan for Nonemployee Directors (the "Plan") and approved by the Company's
stockholders on the Date of Grant provides for automatic periodic grants of
options to purchase shares ("Shares") of Class A Common Stock, par value $.001
per share, of the Company ("Common Stock") to each member of the Board of
Directors (the "Board") of the Company who is a Nonemployee Director (as defined
in the Plan); and
WHEREAS, the Optionee is a Nonemployee Director to whom a
grant of 1000 Shares was made pursuant to the Plan effective as of the Date of
Grant; and
WHEREAS, the execution of a Stock Option Agreement evidencing
such grant in the form hereof is authorized by a resolution of the Board duly
adopted as of the Date of Grant; and
WHEREAS, the option granted by this Agreement (the "Option")
is intended as a nonqualified stock option and shall not be treated as an
"incentive stock option" within the meaning of that term under Section 422 of
the Internal Revenue Code of 1986.
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NOW, THEREFORE, the Company and the Optionee agree as
follows: [Certain capitalized terms used herein are defined in
Paragraph 8.]
1. GRANT AND EXERCISE. (a) The Optionee has an option to
purchase 1000 Shares on the terms and conditions of this Agreement. Except as
otherwise provided herein, this Option (until terminated as hereinafter
provided) shall become exercisable on the first anniversary of the date of this
Agreement if the Optionee is then still serving as a Nonemployee Director.
(b) If a change in Control Event occurs prior to the first
anniversary of the date of this Agreement and while the Optionee is still
serving as a Nonemployee Director, this Option shall immediately become
exercisable in full as to any then Unvested Shares.
(c) If the Optionee dies or becomes permanently disabled prior
to the first anniversary of the date of this Agreement and while the Optionee is
still serving as a Nonemployee Director of the Company, this Option shall
immediately become exercisable in full with respect to all then Unvested Shares.
(d) To the extent exercisable, this Option may be exercised in
whole or in part from time to time. Any exercise of 0this Option shall be made
in writing by the Optionee delivered to the Secretary of the Company.
2. EXERCISE PRICE AND PAYMENT. (a) This Option shall
be exercisable for Vested Shares (whether such vesting occurs
pursuant to Paragraph 1.(a), 1.(b) or 1.(c)) at the price of $41.25
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per share.
(b) The exercise price for any Shares shall be
payable in cash or by check.
3. TERMINATION. This Option shall terminate and all options
then outstanding for Unvested Shares and Vested Shares shall be forfeited on the
earliest of the following dates:
(i) Thirty days after the Optionee ceases to be a
member of the Board for any reason other than death or permanent disability;
(ii) One year after the death or permanent
disability of the Optionee if the Optionee dies or becomes
permanently disabled while still serving as a member of the Board;
or
(iii) Ten years from the Date of Grant.
4. TRANSFERABILITY. This Option is not transferable by the
Optionee otherwise than by will or the laws of descent and distribution. This
Option may not be exercised during the Optionee's lifetime except by the
Optionee or, in the event of the Optionee's incapacity, by his or her guardian
or legal representative acting in a fiduciary capacity on behalf of the Optionee
under state law and court supervision.
5. SECURITIES LAWS. This Option shall not be exercisable if
such exercise would involve a violation of any applicable federal or state
securities law, and the Company hereby agrees to make reasonable efforts to
comply with such securities laws. This Option shall not be exercisable unless
under said laws
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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 shall make or provide for such
adjustments in the number of shares of Common Stock covered by this Agreement,
the exercise price per share of Common Stock applicable thereto, and the kind of
shares (including shares of another issuer) covered hereby, as the Board in good
faith determines to be equitably required in order to prevent dilution or
expansion of the rights of the Optionee that otherwise would result from (a) any
stock dividend, stock split, combination of shares, recapitalization or other
changes in the capital structure of the Company or (b) any merger,
consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of warrants or
other rights to purchase securities or (c) any other corporate transaction or
event having an effect similar to any of the foregoing.
(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 shall 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).
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7. WITHHOLDING. If the Company shall be required to withhold
any federal, state, local or foreign tax in connection with the exercise of this
Option, it shall be a condition to such exercise that the Optionee pay or make
provision satisfactory to the Company for payment of all such taxes.
8. DEFINITIONS. The following terms shall have meanings set
forth below.
"Change of Control Event" means (i) the happening of a filing
pursuant to any federal or state law in connection with any tender offer for
shares of the Company (other than a tender offer by the Company or a Subsidiary)
or upon the execution of any agreement for the merger or consolidation of the
Company with another corporation or for the sale of all or substantially all of
the assets of the Company or upon the adoption by the stockholders of any
resolution of reorganization or dissolution of the Company or upon the
occurrence of any other event or series of events having an effect similar to
any of the foregoing, which tender offer, merger, consolidation, sale,
reorganization, dissolution or other event or series of events, if consummated,
will result in the holders of Common Stock ceasing to own directly or indirectly
at least 80 percent of either the voting securities of the Company or the assets
then owned by the Company, or (ii) if during any period of two consecutive years
from and after the Date of Grant, individuals who at the beginning of such
period constituted the members of the Board cease for any reason to constitute a
majority thereof (unless the election, or the nomination for election by the
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stockholders, of each member of the Board first elected during such period was
approved by a vote of at least two-thirds of the members of the Board then still
in office who were members of the Board then still in office who were members of
the Board at the beginning of any such period).
"Nonemployee Director" means a member of the Board who is
not an employee of the Company or any Subsidiary.
"Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of the
corporations 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.
"Unvested Shares" means, as of any given time, those Shares
relating to this Option that are not, at the time in question, otherwise
permitted, under the terms of this Agreement, to be acquired pursuant to the
exercise of this Option.
"Vested Shares" means, as of any given time, those Shares
relating to this Option that are, at the time in question, otherwise permitted,
under the terms of this Agreement, to be acquired pursuant to the exercise of
this Option.
9. ACKNOWLEDGEMENT. The undersigned Optionee hereby
acknowledges receipt of an executed original of this Agreement and accepts the
Option granted hereunder.
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Nonqualified Stock Option
Agreement (Directors Plan)
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EXECUTED at Cleveland, Ohio as of the date first set forth
above.
XXXX NATIONAL CORPORATION
By
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OPTIONEE
Name of Optionee:
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