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EXHIBIT 10.16
STOCK OPTION AGREEMENT
(Incentive Stock Options)
THIS AGREEMENT is made to be effective as of _________________, by and
between X.X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"), and
_____________ (the "OPTIONEE").
WITNESSETH:
WHEREAS, the Board of Directors of the COMPANY has adopted and the
shareholders of the COMPANY have approved the X.X. Xxxxx Corporation 1994 Stock
Option Plan (the "PLAN"); and
WHEREAS, pursuant to the provisions of the PLAN, the Board of Directors of
the COMPANY has appointed a Compensation Committee (the "COMMITTEE") to
administer the PLAN and the COMMITTEE has determined that an option to acquire
common shares, $1.00 par value (the "COMMON SHARES"), of the COMPANY should be
granted to the OPTIONEE upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto make
the following agreement, intending to be legally bound thereby:
(1) Grant of OPTION. The COMPANY hereby grants to the OPTIONEE an option
(the "OPTION") to purchase ______ COMMON SHARES of the COMPANY. The OPTION is
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended (the "CODE").
(2) Terms and Conditions of the OPTION.
(A) OPTION Price. The purchase price (the "OPTION PRICE") to be paid by
the OPTIONEE to the COMPANY upon the exercise of the OPTION shall be $_____ per
share, being 100% of the closing sale price for the COMMON SHARES of the COMPANY
as shown on the New York Stock Exchange on ______________, subject to adjustment
as provided in Section 3.
(B) Exercise of the OPTION. The OPTION may not be exercised until the
OPTIONEE shall have completed twelve months of continuous employment with the
COMPANY and/or its subsidiaries immediately following the date hereof.
Thereafter, the OPTION may be exercised as follows:
(i) at any time after such twelve-month period, as to ______ of
the COMMON SHARES subject to the OPTION;
(ii) at any time after twenty-four months from the date of this
Agreement, as to an additional ______ of the COMMON SHARES subject to the
OPTION;
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(iii) at any time after thirty-six months from the date of this
Agreement, as to an additional ______ of the COMMON SHARES subject to the
OPTION;
(iv) at any time after forty-eight months from the date of this
Agreement as to an additional ______ of the COMMON SHARES subject to the OPTION;
and
(v) at any time after sixty months from the date of this Agreement
as to the remaining ______ of the COMMON SHARES subject to the OPTION.
Subject to the other provisions of this Agreement, if the OPTION
becomes exercisable as to certain COMMON SHARES, it shall remain exercisable as
to those COMMON SHARES until the date of expiration of the OPTION term. The
COMMITTEE may, but shall not be required to (unless otherwise provided in this
Agreement), accelerate the schedule of the time or times when the OPTION may be
exercised.
The grant of the OPTION shall not confer upon the OPTIONEE any right to
continue in the employment of the COMPANY nor limit in any way the right of the
COMPANY to terminate the employment of the OPTIONEE at any time in accordance
with law or the COMPANY'S governing corporate documents.
(C) OPTION Term. The OPTION shall in no event be exercisable after the
expiration of ten (10) years from the date of this Agreement.
(D) Method of Exercise. The OPTION may be exercised by giving written
notice of exercise to the COMMITTEE in care of the Treasurer of the COMPANY
stating the number of full COMMON SHARES subject to the OPTION in respect of
which it is being exercised. Payment for all such COMMON SHARES shall be made to
the COMPANY at the time the OPTION is exercised in United States dollars in cash
(including check, bank draft or money order). If permitted by the COMMITTEE,
payment for such COMMON SHARES may be made (i) by delivery of COMMON SHARES of
the COMPANY already owned by the OPTIONEE and having a Fair Market Value (as
that term is defined in the PLAN) on the date of delivery equal to the OPTION
PRICE, or (ii) by delivery of a combination of cash and already owned COMMON
SHARES. After payment in full for the COMMON SHARES purchased under the OPTION
has been made, the COMPANY shall take all such action as is necessary to deliver
appropriate share certificates evidencing the COMMON SHARES purchased upon the
exercise of the OPTION as promptly thereafter as is reasonably practicable.
(E) Satisfaction of Taxes and Tax Withholding Requirements. The
COMMITTEE shall determine the appropriate arrangements for the satisfaction by
the COMPANY and the OPTIONEE of all federal, state, local or other income,
excise or employment taxes or tax withholding requirements applicable to the
exercise of the OPTION or the later disposition of the COMMON SHARES or other
property thereby acquired.
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(3) Adjustments and Changes in the COMMON SHARES.
(A) In the event that the outstanding COMMON SHARES of the COMPANY
shall be changed into or exchanged for a different kind of shares or other
securities of the COMPANY or of another corporation, or for any other property,
(whether by reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise) or if the number of such COMMON
SHARES shall be increased through the payment of a stock dividend, then unless
such change results in the termination of all outstanding options granted
pursuant to the PLAN, there shall be substituted for or added to each COMMON
SHARE of the COMPANY subject to the OPTION, the number and kind of shares or
other securities or other property into which each outstanding COMMON SHARE of
the COMPANY shall be changed, or for which each such COMMON SHARE shall be
exchanged, or to which the holder of each such COMMON SHARE shall be entitled,
as the case may be. The OPTION shall also be appropriately amended as to the
OPTION PRICE and other terms as nay be necessary to reflect the foregoing
events. In the event there shall be any other change in the number or kind of
the outstanding shares of the COMPANY, or of any shares or other securities or
other property into which such shares shall have been changed, or for which they
shall have been exchanged, then if the COMMITTEE shall, in its sole discretion,
determine that such change equitably requires an adjustment in the OPTION, such
adjustment shall be made by the COMMITTEE in accordance with such determination.
Fractional shares resulting from any adjustment in the OPTION pursuant to this
section 3(A) shall be rounded down to the nearest whole number of shares.
(B) Notwithstanding the foregoing, any and all adjustments in
connection with the OPTION shall comply in all respects with Section 422 of the
CODE, and the regulations promulgated thereunder.
(C) Notice of any adjustment pursuant to this Section 3 shall be
given by the COMPANY to the OPTIONEE.
(4) Acceleration of OPTIONS.
(A) In the event that the COMPANY or its shareholders enter into
one or more agreements to dispose of all or substantially all of the assets or
fifty percent (50%) or more of the outstanding capital stock of the COMPANY by
means of sale (whether as a result of a tender offer or otherwise), merger,
reorganization or liquidation in one or a series of related transactions (each,
an "ACCELERATION EVENT"), then the OPTION shall become exercisable during the
fifteen (15) days immediately prior to the scheduled consummation of the
ACCELERATION EVENT with respect to the full number of COMMON SHARES subject to
the OPTION provided, however, that no such ACCELERATION EVENT will occur in the
event that (i) the primary purpose of the transaction is to change the COMPANY'S
domicile solely within the United States, (ii) the terms of the agreement(s)
require as a prerequisite for the consummation of the transaction that each
option granted by the COMPANY pursuant to the PLAN either be assumed by the
successor corporation or parent thereof or be replaced with a comparable option
to purchase shares of capital stock of the successor corporation or parent
thereof, or (iii) the transaction is approved by a majority of the members of
the Board of
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Directors of the COMPANY who had either been in office for more than twelve (12)
months prior to such transaction or had been elected, or nominated for election
by the COMPANY'S shareholders, by the vote of three-fourths of the directors
then still in office who were directors at the beginning of such twelve-month
period; and provided further that any exorcise of the OPTION during such fifteen
(15) day period shall be conditioned upon the consummation of such transaction
and shall be effective only immediately before such consummation, except to the
extent that the OPTIONEE may indicate, in writing, that such exercise is
unconditional with regard to all or part of the unaccelerated portion of the
OPTION. Upon consummation of the ACCELERATION EVENT, the OPTION, whether or not
accelerated, shall terminate and cease to be exercisable, unless assumed by the
successor corporation or parent thereof.
(B) The grant of this OPTION shall not affect in any way the right
of the COMPANY to adjust, reclassify, reorganize, or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.
(5) Non-Assignability of OPTION. The OPTION shall not be assignable or
otherwise transferable by the OPTIONEE except by will or by the laws of descent
and distribution. The OPTION may not be exercised during the lifetime of the
OPTIONEE except by him, his guardian or legal representative.
(6) Substitution for OPTION. The COMMITTEE shall have the authority to
effect, at any time and from time to time, with the consent of the OPTIONEE, the
cancellation of the OPTION and the grant in substitution therefor of one or more
new options under the PLAN covering the same or a different number of COMMON
SHARES at an option price per share in all events not less than 100% of the
closing sale price for the COMMON SNARES of the COMPANY as shown on the New York
Stock Exchange-Composite Transactions on the new grant date.
(7) Exercise After Termination of Employment.
(A) Except as otherwise provided in this Agreement, the OPTION
shall be exercisable only by the OPTIONEE, shall be exercisable only while the
OPTIONEE is in the employment of the COMPANY and then only if the OPTION has
become exercisable by its terms, and if not exercisable by its terms at the time
the OPTIONEE ceases to be in the employment of the COMPANY, shall immediately
expire on the date of termination of employment.
(B) If the OPTION is exercisable by its terms at the time the
OPTIONEE ceases to be in the employment of the COMPANY other than by reason of
the death, permanent disability or normal retirement of the OPTIONEE, it must be
exercised on or before the earlier of three (3) months after the date of the
termination of employment of the OPTIONEE or the fixed expiration date of the
OPTION after which period the OPTION shall expire. Notwithstanding the
foregoing, if the OPTIONEE'S employment is terminated for willful, deliberate or
gross misconduct (such as, for example, dishonesty), the OPTION shall, to the
extent not previously exercised, expire immediately upon such termination.
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(C) In the event of the death of the OPTIONEE (i) while in the
employment of the COMPANY or (ii) within three (3) months after his termination
of employment other than for willful, deliberate or gross misconduct, the
unexercised portion of the OPTION (whether or not then exercisable by its terms)
shall become immediately exercisable by his estate for a period ending on the
earlier of the fixed expiration date of the OPTION or twelve (12) months after
the date of death, after which period the OPTION shall expire. For purposes
hereof, the estate of an OPTIONEE shall be defined to include the legal
representatives thereof or any person who has acquired the right to exercise the
OPTION by reason of the death of the OPTIONEE.
(D) In the event of the termination of employment of the OPTIONEE
by reason of the "permanent disability" or "normal retirement" of the OPTIONEE,
the OPTION shall become fully exercisable for a period ending on the earlier of
three (3) months after the termination of employment or the fixed expiration
date of the OPTION; provided, however, that if such termination of employment
occurs by reason of "disability" within the meaning of Section 22(e)(3) of the
CODE, said three-month period shall be extended to twelve months. For purposes
hereof, "permanent disability" shall be deemed to be the inability of the
OPTIONEE to perform the duties of his job with the COMPANY because of a physical
or mental disability as evidenced by the opinion of a COMPANY-approved doctor of
medicine licensed to practice medicine in the United States of America and
"retirement" shall be deemed to be "normal retirement" if the OPTIONEE is at
least 65 years of age and has completed at least five (5) consecutive years of
employment with the COMPANY at the date of retirement.
(8) Restrictions on Transfers of COMMON SHARES.
Anything contained in this Agreement or elsewhere to the contrary
notwithstanding, the COMPANY may postpone the issuance and delivery of COMMON
SHARES upon any exercise of the OPTION until completion of any stock exchange
listing or registration or other qualification of such COMMON SHARES under any
state or federal law, rule or regulation as the COMPANY may consider
appropriate; and may require the OPTIONEE when exercising the OPTION to make
such representations and furnish such information as the COMPANY may consider
appropriate in connection with the issuance of the COMMON SHARES in compliance
with applicable law.
COMMON SHARES issued and delivered upon exercise of the OPTION shall be
subject to such restrictions on trading, including appropriate legending of
certificates to that effect, as the COMPANY, in its discretion, shall determine
are necessary to satisfy applicable legal requirements and obligations.
(9) Rights of OPTIONEE as Shareholder. The OPTIONEE shall have no
rights as a shareholder of the COMPANY with respect to any COMMON SHARES of the
COMPANY covered by the OPTION until the date of issuance of a certificate to him
evidencing such COMMON SHARES.
(10) PLAN as Controlling. All terms and conditions of the PLAN
applicable to the OPTION which are not set forth in this Agreement shall be
deemed incorporated herein by
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reference. In the event that any term or condition of this Agreement is
inconsistent with the terms and conditions of the PLAN, the PLAN shall be deemed
controlling.
(11) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio.
(12) Rights and Remedies Cumulative. All rights and remedies of the
COMPANY and of the OPTIONEE enumerated in this Agreement shall be cumulative
and, except as expressly provided otherwise in this Agreement, none shall
exclude any other rights or remedies allowed by law or in equity, and each of
said rights or remedies may be exercised and enforced concurrently.
(13) Captions. The captions contained in this Agreement are included
only for convenience of reference and do not define, limit, explain or modify
this Agreement or its interpretation, construction or meaning and are in no way
to be construed as a part of this Agreement.
(14) Severability. If any provision of this Agreement or the
application of any provision hereof to any person or any circumstance shall be
determined to be invalid or unenforceable, then such determination shall not
affect any other provision of this Agreement or the application of said
provision to any other person or circumstance, all of which other provisions
shall remain in full force and effect, and it is the intention of each party to
this Agreement that if any provision of this Agreement is susceptible of two or
more constructions, one of which would render the provision enforceable and the
other or others of which would render the provision unenforceable, then the
provision shall have the meaning which renders it enforceable.
(15) Number and Gender. When used in this Agreement, the number and
gender of each pronoun shall be construed to be such number and gender as the
context, circumstances or its antecedent may required.
(16) Entire Agreement. This Agreement constitutes the entire agreement
between the COMPANY and the OPTIONEE in respect of the subject matter of this
Agreement, and this Agreement supersedes all prior and contemporaneous
agreements between the parties hereto in connection with the subject matter of
this Agreement. No officer, employee or other servant or agent of the COMPANY,
and no servant or agent of the OPTIONEE, is authorized to make any
representation, warranty or other promise not contained in this Agreement. No
change, termination or attempted waiver of any of the provisions of this
Agreement shall be binding upon any party hereto unless contained in a writing
signed by the party to be charged.
(17) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successor; and assigns (including successive, as well
as immediate, successors and assigns) of the COMPANY.
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signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
COMPANY:
X. X. XXXXX CORPORATION
By:
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Its:
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OPTIONEE:
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Signature of Optionee
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Xxxxxx Xxxxxxx
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Xxxx Xxxxx Zip Code
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Telephone Number
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Social Security Number
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