EXHIBIT 4.19
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is made as of September 26,
2001, between Xxxxxxxxxxx International, Inc., a Delaware corporation (the
"Company"), and ______________ (the "Non-Employee Director").
WITNESSETH:
WHEREAS, the Non-Employee Director serves on the Board of Directors of the
Company (the "Board of Directors") and the Company desires to have the
Non-Employee Director remain as a director and desires to encourage stock
ownership by the Non-Employee Director;
WHEREAS, the Company has, as an inducement, determined to grant to the
Non-Employee Director the option set forth in this Agreement in order that the
Non-Employee Director may obtain an interest in the stock ownership of the
Company;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Non-Employee Director hereby agree as follows:
1. Grant. (a) The Company hereby grants to the Non-Employee Director an
option (the "Option") on September 26, 2001, (the "Date of Grant") to purchase
60,000 shares of the Company's common stock, $1.00 par value ("Common Stock")
having an exercise price equal to the closing sale price of the Common Stock on
the New York Stock Exchange on September 26, 2001. The Company and the
Non-Employee Director agree that the Option shall be subject to the terms of
this Agreement. The Company and the Non-Employee Director further agree that
this Agreement sets forth the complete terms of the Option as in effect on the
date hereof.
(b) Subject to the terms and conditions of this Agreement, the Option
provides the Non-Employee Director with the option to purchase 60,000 shares of
Common Stock at a price of $23.77 per share (the "Option Price"). Subject to
Paragraph 6, the Option shall not be exercisable after the expiration of ten
years from the date the Option becomes first exercisable.
(c) The Option shall be considered to be a non-statutory option that is not
intended to be an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").
(d) Subject to earlier vesting in the event of (i) a "Change in Control" as
provided in Paragraph 1(e) hereof, or (ii) in the event the Non-Employee
Director dies, retires or incurs a disability while serving as a non-employee
director of the Company as provided for in Paragraph 6, the Option shall become
exercisable on the fourth anniversary of the Date of Grant.
(e) Notwithstanding the provisions of Paragraph 1(d) hereof, the Option
shall be exercisable with respect to all of the shares subject to the Option
upon the occurrence of a
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Change in Control (as defined herein). For purposes of this Agreement, a Change
in Control shall mean the occurrence of one or more of the following events: (i)
any "person", including a "group", as those terms are used in Section 13(d)(3)
of the Securities Exchange Act of 1934, other than an affiliate of the Company
as of the Date of Grant, becomes the beneficial owner, directly or indirectly,
of securities of the Company representing 30 percent or more of the combined
voting power of the Company's then outstanding voting securities; (ii) the
consummation of a reorganization, merger or consolidation or the sale or other
disposition of all or substantially all of the assets of the Company (a
"Corporate Transaction") and immediately after giving effect to the Corporate
Transaction either (A) less than 65% of the outstanding voting securities of the
Company or the entity resulting from such Corporate Transaction (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) are then beneficially owned in the aggregate
by (x) the stockholders of the Company immediately prior to such Corporate
Transaction or (y) if a record date has been set to determine the stockholders
of the Company entitled to vote on such Corporate Transaction, the stockholders
of the Company as of such record date, or (B) the Board of Directors, or similar
governing body, of the Company or the entity resulting from the Corporate
Transaction does not have as a majority of its members the persons specified in
clause (iii)(A) and (B) below; (iii) if at any time the following do not
constitute a majority of the Board of Directors of the Company (or any entity
resulting from a Corporate Transaction): (A) persons who are directors of the
Company on the Date of Grant and (B) persons who, prior to their election as a
director of the Company (or any entity resulting from a Corporate Transaction if
applicable), were nominated, recommended or endorsed by a formal resolution of
the Board of Directors of the Company; (iv) persons who are directors of the
Company as of the beginning of any calendar year cease to constitute a majority
of the members of the Board of Directors at any time during that calendar year;
or (v) the Company transfers all or substantially all of its assets as
contemplated by Delaware corporate law on a consolidated basis to another
corporation or entity which is a less than a 50 percent owned subsidiary of the
Company.
(f) The Non-Employee Director may exercise the Option by delivering to the
Company a written notice stating (i) that he wishes to exercise the Option on
the date such notice is so delivered, (ii) the number of shares of stock with
respect to which the Option is to be exercised, (iii) the address to which the
certificate representing such shares of stock should be mailed, and (iv) the
social security number of the optionee. In order to be effective, such written
notice shall be accompanied by a payment equal to the Option Price multiplied by
the number of shares of stock with respect to which the Option is to be
exercised (the "Option Exercise Amount"). The Option Exercise Amount shall be
made by cashier's check drawn on a national banking association and payable to
the order of the Company in United States dollars.
If, at the time of receipt by the Company of such written notice, (i) the
Company has unrestricted surplus in an amount not less than the Option Exercise
Amount, (ii) all accrued cumulative preferential dividends and other current
preferential dividends on all outstanding shares of preferred stock of the
Company have been fully paid, (iii) the acquisition by the Company of its own
shares of stock for the purpose of enabling the Non-Employee Director to
exercise the Option is otherwise permitted by applicable law and without any
vote or consent of any stockholder of the Company, and (iv) there shall have
been adopted, and there shall be in full force and effect, a resolution of the
Board of Directors of the Company authorizing the
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acquisition by the Company of its own shares of stock for such purpose, then the
Non-Employee Director may deliver to the Company, in payment of the Option
Exercise Amount, (x) certificates registered in the name of the Non-Employee
Director that represent a number of shares of stock legally and beneficially
owned by the Non-Employee Director (free of all liens, claims and encumbrances
of every kind) and having a fair market value on the date of receipt by the
Company of such written notice that is not greater than the Option Exercise
Amount, such certificates to be accompanied by stock powers duly endorsed in
blank by the record holder of the shares of stock represented by such
certificates, with the signature of such record holder guaranteed by a national
banking association (or in lieu of such certificates, other arrangements for the
transfer of such shares to the Company which are satisfactory to the Company),
and (y) if the Option Exercise Amount exceeds such fair market value, a
cashier's check drawn on a national banking association and payable to the order
of the Company in an amount, in United States dollars, equal to the amount of
such excess. Notwithstanding the provisions of the immediately preceding
sentence, the Compensation Committee of the Board of Directors (the
"Committee"), in its sole discretion, may refuse to accept shares of stock in
payment of the Option Exercise Amount and, in that event, any certificates
representing shares of stock that were received by the Company with such written
notice shall be returned to the Non-Employee Director, together with notice by
the Company to the Non-Employee Director of the refusal of the Committee to
accept such shares of stock. If, at the expiration of seven business days after
the delivery to the Non-Employee Director of such written notice from the
Company, the Non-Employee Director shall not have delivered to the Company a
cashier's check drawn on a national banking association and payable to the order
of the Company in an amount, in United States dollars, equal to the Option
Exercise Amount, such written notice from the Non-Employee Director to the
Company shall be ineffective to exercise the Option.
As promptly as practicable after the receipt by the Company of (i) such
written notice from the Non-Employee Director and (ii) payment, in the form
required by the foregoing provisions of this Paragraph 1(f) of the Option
Exercise Amount, the Company shall cause its transfer agent to deliver to the
Non-Employee Director a certificate representing the number of shares of stock
with respect to which the Option has been so exercised, such certificate to be
registered in the name of the Non-Employee Director. Such delivery shall be
considered to have been made when such certificate shall have been mailed,
postage prepaid, to the Non-Employee Director at the address specified for such
purpose in such written notice from the Non-Employee Director to the Company.
2. Changes in the Company's Capital Structure. The existence of the Option
shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
If the Company shall effect a subdivision or consolidation of shares or
other capital adjustment of, or the payment of a dividend in capital stock or
other equity securities of the Company on, its Common Stock, or other increase
or reduction of the number of shares of the
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Common Stock without receiving consideration therefor in money, services, or
property, or the reclassification of its Common Stock, in whole or in part, into
other equity securities of the Company, then (a) the number, class and per share
price of shares of stock subject to the outstanding Option shall be
appropriately adjusted (or in the case of the issuance of other equity
securities as a dividend on, or in a reclassification of, the Common Stock, the
Option shall extend to such other securities) in such a manner as to entitle the
Non-Employee Director to receive, upon exercise of the Option, for the same
aggregate cash consideration, the same total number and class or classes of
shares (or in the case of a dividend of, or reclassification into, other equity
securities, such other securities) he would have held after such adjustment if
he had exercised the Option in full immediately prior to the event requiring the
adjustment, or, if applicable, the record date for determining stockholders to
be affected by such adjustment; and (b) the number and class of shares then
reserved for issuance under this Agreement (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) shall be
adjusted by substituting for the total number and class of shares of stock then
received, the number and class or classes of shares of stock (or in the case of
a dividend of, or reclassification into, other equity securities, such other
securities) that would have been received by the owner of an equal number of
outstanding shares of Common Stock as a result of the event requiring the
adjustment. Comparable rights shall accrue to the Non-Employee Director in the
event of successive subdivisions, consolidations, capital adjustments, dividends
or reclassifications of the character described above.
If the Company shall distribute to all holders of its shares of Common
Stock (including any such distribution made to non-dissenting stockholders in
connection with a consolidation or merger in which the Company is the surviving
corporation and in which holders of shares of Common Stock continue to hold
shares of Common Stock after such merger or consolidation) evidences of
indebtedness or cash or other assets (other than cash dividends payable out of
consolidated retained earnings not in excess of, in any one year period, the
greater of (a) in an amount per share of Common Stock equal to $1.00 per share
of Common Stock (as the same may be adjusted from time to time by the Board of
Directors of the Company to reflect the effect of changes in capitalization) and
(b) two times the aggregate amount of dividends per share paid during the
preceding calendar year and dividends or distributions payable in shares of
Common Stock or other equity securities of the Company described in the
immediately preceding paragraph, but including stock or other securities of any
corporation or other entity owned by the Company), then in each case the Option
Price shall be adjusted by reducing the Option Price in effect immediately prior
to the record date for the determination of stockholders entitled to receive
such distribution by the fair market value, as determined in good faith by the
Board of Directors of the Company (whose determination shall be described in a
statement filed in the Company's corporate records and be available for
inspection by any holder of the Option) of the portion of the evidence of
indebtedness or cash or other assets so to be distributed applicable to one
share of Common Stock; provided that in no event shall the Option Price be less
than the par value of a share of Common Stock. In the event such adjustment
would result in the Option Price being less than the par value of a share of
Common Stock but for the foregoing proviso, the terms of the Option shall be
appropriately adjusted so as to maintain the economic value of the Option,
including through an adjustment to the number of shares of Common Stock subject
to the Option and through a provision allowing the holder of the Option to
receive the evidence of indebtedness or cash or other assets so to be
distributed applicable to one share of Common Stock for each share of Common
Stock that may be purchased on the exercise of the Option.
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Such adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of the distribution retroactive to the record date
for the determination of the stockholders entitled to receive such distribution.
In addition, in the event the Company distributes shares or other securities of
a subsidiary corporation or other entity to the holders of the Common Stock, the
Board of Directors may, in lieu of the adjustment provided above, make provision
allowing the holder of the Option to receive the shares or securities of the
corporation or entity that are subject to the distribution. Comparable
adjustments shall be made in the event of successive distributions of the
character described above.
If the Company shall make a tender offer for, or grant to all of its
holders of its shares of Common Stock the right to require the Company or any
subsidiary of the Company to acquire from such stockholders shares of, Common
Stock, at a price in excess of the Fair Market Value (a "Put Right") or the
Company shall grant to all of its holders of its shares of Common Stock the
right to acquire shares of Common Stock for less than the Fair Market Value (a
"Purchase Right") then, in the case of a Put Right, the Option Price shall be
adjusted by multiplying the Option Price in effect immediately prior to the
record date for the determination of stockholders entitled to receive such Put
Right by a fraction, the numerator of which shall be the number of shares of
Common Stock then outstanding minus the number of shares of Common Stock which
could be purchased at the Fair Market Value for the aggregate amount which would
be paid if all Put Rights are exercised and the denominator of which is the
number of shares of Common Stock which would be outstanding if all Put Rights
are exercised; and, in the case of a Purchase Right, the Option Price shall be
adjusted by multiplying the Option Price in effect immediately prior to the
record date for the determination of the stockholders entitled to receive such
Purchase Right by a fraction, the numerator of which shall be the number of
shares of Common Stock then outstanding plus the number of shares of Common
Stock which could be purchased at the Fair Market Value for the aggregate amount
which would be paid if all Purchase Rights are exercised and the denominator of
which is the number of shares of Common Stock which would be outstanding if all
Purchase Rights are exercised. In addition, the number of shares subject to the
Option shall be increased by multiplying the number of shares then subject to
the Option by a fraction which is the inverse of the fraction used to adjust the
Option Price. Notwithstanding the foregoing, if any such Put Rights or Purchase
Rights shall terminate without being exercised, the Option Price and number of
shares subject to the Option shall be appropriately readjusted to reflect the
Option Price and number of shares subject to the Option which would have been in
effect if such unexercised Put Rights or Purchase Rights had never existed.
Comparable adjustments shall be made in the event of successive transactions of
the character described above.
In the event of a merger of one or more corporations or entities with or
into the Company in which the Company is not the sole survivor or there is an
exchange, conversion or modification to the ownership of the then outstanding
shares of Common Stock of the Company, a consolidation of the Company and any
one or more corporations or entities, a statutory share or interest exchange in
which all of the Common Stock is acquired or other similar business combination
with respect to the Company in which the Common Stock is acquired by a third
party, the Non-Employee Director, at no additional cost, shall be entitled to
receive, upon any exercise of the Option, in lieu of the number of shares as to
which the Option shall then represent the right to purchase, the number and
class of shares of stock or other securities, assets or other property,
including cash, to which the Non-Employee Director would have been entitled to
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receive or continue to hold pursuant to the terms of the agreement of merger,
consolidation, share or interest exchange or other similar transaction if at the
time of such merger, consolidation, share or interest exchange the Non-Employee
Director had been a holder of a number of shares of Common Stock equal to the
number of shares as to which the Option shall then represent the right to
purchase. Comparable rights shall accrue to the Non-Employee Director in the
event of successive mergers, consolidations, share or interest exchanges or
other transactions of the character described above.
If a corporate transaction described in Section 424(a) of the Code which
involves the Company is to take place and there is to be no surviving
corporation while the Option remains in whole or in part unexercised, it shall
be cancelled by the Board of Directors of the Company as of the effective date
of any such corporate transaction but before such date the Non-Employee Director
shall be provided with a notice of such cancellation and the Non-Employee
Director shall have the right to exercise the Option in full (without regard to
any limitations on exercise set forth in or imposed by this Agreement) to the
extent it is then still unexercised during a 30-day period preceding the
effective date of such corporate transaction.
For purposes of this Xxxxxxxxx 0, Xxxx Xxxxxx Value per share of Common
Stock shall mean the closing price of a share of Common Stock as reported by the
principal national securities exchange on which the Common Stock is then listed
if the Common Stock is then listed on a national securities exchange, or the
average bid and asked prices of a share of Common Stock as reported in the
National Association of Securities Dealers Automated Quotation National Market
System (or successor system) if the Common Stock is not then listed on a
national securities exchange, on the trading day immediately preceding the first
trading day on which, as a result of the establishment of a record date or
otherwise, the trading price reflects that an acquiror of Common Stock in the
public market will not participate in or receive the payment of any applicable
dividend or distribution.
Except as otherwise expressly provided in this Agreement, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of shares of
Common Stock then subject to the Option.
3. Exercise of the Option. The Option may be exercised from time to time as
to the total number of shares that may then be issuable upon the exercise
thereof or any portion thereof in the manner and subject to the limitations
provided for in Paragraph 1 hereof.
4. Assignment. The Option may not be transferred or assigned in any manner
by the Non-Employee Director except by will or the laws of descent and
distribution, and shall be exercisable during the Non-Employee Director's
lifetime only by him.
5. Requirement of Law. In the event the shares issuable on exercise of the
Option are not registered under the Securities Act of 1933, Xxxxxxxxxxx may
imprint on the certificate for such shares the following legend or any other
legend which counsel for Xxxxxxxxxxx considers necessary or advisable to comply
with Securities Act of 1933:
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The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities
laws of any state and may not be sold or transferred except upon such
registration or upon receipt by the Corporation of an opinion of
counsel satisfactory to the Corporation, in form and substance
satisfactory to the Corporation, that registration is not required for
such sale or transfer.
The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act of 1933. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of the Option or the issuance of shares of Common Stock pursuant
thereto to comply with any law or regulation of any governmental authority.
6. Termination. The Option, to the extent it shall not previously have been
exercised, shall terminate as follows:
(a) If the Non-Employee Director ceases to serve on the Board of Directors
prior to the fourth anniversary of the Date of Grant, for any reason, with or
without cause, other than for death, retirement under the then-established rules
of the Board of Directors, or severance for disability, the Option shall
terminate and be immediately forfeited. If the Non-Employee Director ceases to
serve on the Board of Directors for any reason, with or without cause, other
than for death, retirement under the then-established rules of the Board of
Directors, or severance for disability on or after the fourth anniversary of the
Date of Grant, the Option shall continue in effect until the date the Option is
otherwise due to expire in accordance with Paragraph 1 hereof.
(b) If the Non-Employee Director dies prior to the fourth anniversary of
the Date of Grant, the Option shall be immediately exercisable and shall
continue in effect until ten years following the date of his death. If the
Non-Employee Director dies on or after the fourth anniversary of the Date of
Grant, the Option shall continue in effect until the date the Option is
otherwise due to expire in accordance with Paragraph 1 hereof. After the death
of the Non-Employee Director, his executors, administrators or any persons to
whom the Option may be transferred by will or by the laws of descent and
distribution shall have the right, at any time prior to the Option's expiration
to exercise it.
(c) If the Non-Employee Director retires in good standing from the Board of
Directors under the then-established rules of the Board of Directors prior to
the fourth anniversary of the Date of Grant, the Non-Employee Director shall
become entitled to exercise that portion of the Option determined by multiplying
the number of shares of Common Stock subject to the Option by a fraction, the
numerator of which is his total whole years of service as a director of the
Company since the Date of Grant and the denominator of which is four. To the
extent that the Option is exercisable under the preceding sentence, the Option
shall be exercisable until ten years following the date of the Non-Employee
Director's retirement in accordance with this Paragraph 6(c), and the remainder
of the Option shall terminate immediately. If the Non-Employee Director retires
in good standing from the Board of Directors of the Company under the
then-established rules of the Board of Directors on or after the fourth
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anniversary of the Date of Grant, the Option shall continue until the date the
Option is otherwise due to expire in accordance with Paragraph 1 hereof.
(d) If the Non-Employee Director ceases to be a director of the Company due
to disability prior to the fourth anniversary of the Date of Grant, the Option
shall be immediately exercisable and shall continue in effect until ten years
following the date the Non-Employee Director ceased to be a director of the
Company due to a disability. If the Non-Employee Director ceases to be a
director of the Company due to disability on or after the fourth anniversary of
the Date of Grant, the Option shall continue in effect until the date the Option
is otherwise due to expire in accordance with Paragraph 1 hereof.
7. Amendment. This Agreement may not be changed, amended or modified except
by an agreement in writing signed on behalf of each of the parties hereto.
8. No Rights as a Stockholder. The Non-Employee Director shall not have any
rights as a stockholder with respect to any shares of Common Stock issuable upon
the exercise of the Option until the date of issuance of the stock certificate
or certificates representing such shares following the Non-Employee Director's
exercise of the Option pursuant to its terms and conditions and payment for such
shares. Except as otherwise provided in this Agreement, no adjustment shall be
made for dividends or other distributions made with respect to the Common Stock
the record date for the payment of which is prior to the date of issuance of the
stock certificate or certificates representing such shares following the
Non-Employee Director's exercise of the Option.
9. Governing Law. The validity, construction and performance of this
Agreement shall be governed by the laws of the State of Delaware. Any invalidity
of any provision of this Agreement shall not affect the validity of any other
provision.
10. Notices. All notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed to have been duly made or
given if mailed by registered or certified mail, return receipt requested. Any
such notice mailed to the Company shall be addressed to its principal executive
office at 000 Xxxx Xxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000, and any notice
mailed to the Non-Employee Director shall be addressed to the Non-Employees
Director's residence address as it appears on the books and records of the
Company or to such other address as either party may hereafter designate in
writing to the other.
11. Retention Obligation. The granting of the Option shall not impose upon
the Company any obligation to continue to have the Non-Employee Director serve
on the Board of Directors of the Company; and the right of the Board of
Directors to remove the Non-Employee Director as a director of the Company shall
not be diminished or affected by reason of the grant of the Option to the
Non-Employee Director pursuant to this Agreement.
12. Binding Effect. This Agreement shall inure to the benefit of and bind
the successors and assigns of the Company. This Agreement shall inure to the
benefit of and bind the heirs, executors, administrators and legal
representatives of the Non-Employee Director.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as
of the day and year first above mentioned.
XXXXXXXXXXX INTERNATIONAL, INC.
By:
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Xxx X. Xxxxxxxxx
Senior Vice President
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