AMERICAN COMMERCIAL LINES INC. STOCK OPTION AGREEMENT
Exhibit 10.1
THIS STOCK OPTION AGREEMENT, including the accompanying Award Notice (the “Award Notice”)
issued to the Optionee named therein (both of which together shall constitute the “Agreement”), is
made as of the Grant Date set forth in the Award Notice between American Commercial Lines Inc., a
Delaware corporation (the “Company”), and the Optionee. Capitalized terms used herein that are not
otherwise defined shall have the meaning ascribed to them in the American Commercial Lines Inc.
stock plan designated in the Award Notice (the “Plan”).
W I T N E S S E T H:
WHEREAS, the Company desires to provide the Optionee with the opportunity to purchase shares
of its common stock, par value $0.01 per share (“Common Stock”), in accordance with the terms of
the Plan.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
hereinafter contained:
1. Grant of Option. The Company hereby grants to the Optionee the option to purchase
all or part of an aggregate of the number of shares of Common Stock set forth in the Award Notice,
on the terms and conditions set forth in the Plan, subject to the vesting, exercise and other
requirements set forth in the Agreement, to the extent not inconsistent with the Plan (the
“Option”).
2. Purchase Price. The per share purchase price of the shares of Common Stock
issuable upon exercise of the Option shall be the Exercise Price set forth in the Award Notice,
which the Committee has determined is equal to 100% of the Fair Market Value (as defined in the
Plan) of a share of Common Stock on the Grant Date.
3. Type of Stock Option. The Option is not intended to qualify as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended.
4. Term. The term of the Option shall expire as of the earliest of the following:
(a) the date that is ten (10) years from the Grant Date;
(b) to the extent the Option is vested on the date of such termination, the date that is one
(1) day following the date that the Optionee’s employment with the Company, or any Subsidiary or
Affiliate, is terminated for Cause, as defined in Section 5(e);
(c) to the extent the Option is vested on the date of such termination, the date that is
ninety (90) days after the Optionee’s employment with the Company, or any Subsidiary or Affiliate,
is terminated other than (i) for Cause or (ii) upon the Optionee’s death, Disability or Retirement,
as defined in the Plan;
(d) to the extent the Option is vested on the date of such termination, the date that is
twelve (12) months after the Optionee’s employment with the Company, or any Subsidiary or
Affiliate, is terminated as a result of the Optionee’s Disability, as defined in the Plan;
(e) to the extent the Option is vested on the date of such death, the date that is twelve (12)
months after the Optionee dies while employed by the Company, or any Subsidiary or Affiliate; or
(f) to the extent the Option is vested on the date of such Retirement, the date that is twelve
(12) months after the date the Optionee’s employment with the Company, or any Subsidiary or
Affiliate, is terminated as a result of the Optionee’s Retirement, as defined in the Plan (provided
that if the Optionee dies within such twelve (12) month period, any such unexercised Option shall
continue to be exercisable for twelve (12) months from the date of such death).
In the event of a termination of the Optionee’s employment for Cause, the Optionee shall forfeit
all rights hereunder with respect to any vested Options one day after the date of such termination.
Subject to the foregoing terms of this Section 4, if the Optionee’s employment terminates for any
reason, the Optionee shall forfeit all rights hereunder with respect to any non-vested Options as
of the date of such termination, including the right to purchase shares of Common Stock under the
Option.
5. Vesting. (a) Subject to any forfeiture provisions in this Agreement or in the
Plan, the Optionee shall become vested in the Option in accordance with the vesting schedule and
performance criteria, if any, set forth in the Award Notice.
(b) Notwithstanding the vesting schedule contained in the Award Notice, in the event of a
“Change in Control,” the Optionee shall become 100% vested in the Option. For purposes of this
Agreement, a “Change in Control” shall mean the occurrence of any of the following events, each of
which shall be determined independently of the others: (i) any “Person” (as hereinafter defined),
other than a holder of at least 10% of the outstanding voting power of the Company as of the date
of this Agreement, becomes a “beneficial owner” (as such term is used in Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of a majority of the
stock of the Company entitled to vote in the election of directors of the Company; (ii) individuals
who are Continuing Directors of the Company (as hereinafter defined) cease to constitute a majority
of the members of the Board; (iii) stockholders of the Company adopt and consummate a plan of
complete or substantial liquidation or an agreement providing for the distribution of all or
substantially all of the assets of the Company; (iv) the Company is a party to a merger,
consolidation, other form of business combination or a sale of all or substantially all of its
assets, with an unaffiliated third party, unless the business of the Company following consummation
of such merger, consolidation or other business
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combination is continued following any such
transaction by a resulting entity (which may be, but need not be, the Company) and the stockholders
of the Company immediately prior to such transaction hold, directly or indirectly, at least a
majority of the voting power of the resulting entity; provided, however, that a merger or
consolidation effected to implement a recapitalization of the Company (or similar transaction)
shall not constitute a Change in Control; (v) there is a Change in Control of the Company of a
nature that is reported in response to item 5.01 of Current Report on Form 8-K or any similar item,
schedule or form under the Exchange Act, as in effect at the time of the change, whether or not the
Company is then subject to such reporting requirements; provided, however, that for purposes of
this Agreement a Change in Control shall not be deemed to occur if the Person or Persons deemed to
have acquired control is a holder of at least 10% of the outstanding voting power of the Company as
of the date of this Agreement; or (vi) the Company consummates a
transaction which constitutes a
“Rule 13e-3 transaction”
(as such term is defined in Rule 13e-3 of the Exchange Act) prior to the
termination or expiration of this Agreement.
(c) In the event of a Rule 13e-3 transaction, then effective coincident with the consummation
of such Rule 13e-3 transaction, all non-vested Options issued hereunder shall immediately vest and
be exercisable by Optionee notwithstanding the vesting schedule set forth in the Award Notice;
provided, however, that notwithstanding the foregoing, in connection with the consummation of such
Change in Control or Rule 13e-3 transaction, all such non-vested Options then held by the Optionee
shall be deemed to vest and become exercisable at such time in order to permit Optionee to
participate in such transaction.
(d) Notwithstanding the vesting schedule contained in the Award Notice, in the event of a
termination of employment by the Optionee with Good Reason (as hereinafter defined), by the Company
without Cause (as hereinafter defined), or due to death or due to Disability, then the Optionee
shall become 100% vested in the Option as of the date of such termination.
(e) For purposes of this Agreement:
| (i) | “Continuing Directors” shall mean the members of the Board on the Grant Date, provided that any person becoming a member of the Board subsequent to such date whose election or nomination for election was supported by at least a majority of the directors who then comprised the Continuing Directors shall be considered to be a Continuing Director; | ||
| (ii) | “Person” is used as such term is used in Sections 13(d) and 14(d) of the Exchange Act; | ||
| (iii) | “Cause” shall have the meaning set forth in the employment agreement, if any, between the Company and the Optionee, or if no such employment agreement exists, then such term shall have the meaning set forth in the Plan. |
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| (iv) | “Good Reason” shall have the meaning set forth in the employment agreement, if any, between the Company and the Optionee or, if no such employment agreement exists, such term shall mean the resignation of the Optionee from employment with the Company following the occurrence of either or both of the events set forth in clauses (A) and (B) below without the prior written consent of the Optionee, provided that, in connection with either or both events, (1) the Optionee delivers written notice to the Company of his or her intention to resign from employment due to either or both of such events, which notice specifies in reasonable detail the circumstances claimed to provide the basis for such resignation, and (2) such event or events are not cured by the Company within fifteen (15) days following delivery of such written notice: |
| (A) | any reduction in the Optionee’s annual rate of base salary; or | ||
| (B) | any removal by the Company of the Optionee from his or her position or the assignment to the Optionee of duties and responsibilities materially inconsistent and adverse with such position, except in connection with termination of the Optionee’s employment for Cause or disability. |
6. Exercise. The Optionee shall not be entitled to exercise the Option until it is
vested. Subject to the provisions of Section 4, the Option may be exercised only while the
Optionee is employed by the Company or an Affiliate or Subsidiary of the Company. In no event
shall the Option be exercisable after the expiration date of the Option.
7. Nontransferability. The Option shall not be transferable or assignable other than
by will or the laws of descent and distribution, or pursuant to a qualified domestic relations
order as described in Section 206(d) of the Employee Retirement Income Security Act of 1974, as
amended, subject to Article 3. Any other attempt to assign, transfer, pledge, hypothecate, dispose
of or subject the Option to execution, attachment or similar process shall be null and void and
without effect. The Option may be exercised during the lifetime of the Optionee only by the
Optionee, his guardian or his legal representative, or by an alternate payee pursuant to a
qualified domestic relations order.
8. Method of Exercising Options.
(a) Subject to the terms and conditions of this Agreement, the Option may be exercised by
notice delivered to the Company or its designated representative in accordance with procedures
prescribed by the Company or such designated representative. Such notice shall state that the
Option is being exercised thereby and shall specify the number of shares of Common Stock being
purchased. The notice shall be accompanied by payment in full of the Option price for such shares
of Common Stock, such payment to be made in (i) cash, as described in Section 8(c) of the Plan;
(ii) subject to Section 8(c) of the Plan, that number of shares of unrestricted Common Stock which
has an aggregate Fair Market Value as of the date of exercise equal to the
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aggregate exercise price
for all of the shares of Common Stock subject to such exercise; (iii) shares of Common Stock which
would otherwise be delivered pursuant to the exercise of the Option having an aggregate Fair Market
Value, determined as of the date of exercise, equal to the amount necessary to satisfy such
obligation, provided that the Committee determines that such withholding of shares does not cause
the Company to recognize an increased compensation expense under applicable accounting principles;
(iv) a combination of methods (i), (ii) and (iii); (v) to the extent permitted by applicable law,
pursuant to independently-arranged broker assisted “cashless” exercise with third party brokers
unrelated to the Company; or (vi) other means authorized by the Committee in accordance with
Section 8(c) of the Plan. If the tender or withholding of shares of Common Stock as payment of the
Option price would result in the issuance of fractional shares of Common Stock, the Company shall
instead return the balance in cash or by check to the Optionee. If the Option is exercised by any
person or persons other than the Optionee, the exercise of the Option shall be subject to
appropriate proof (as determined by the Committee) of the right of such person or persons to
exercise the Option under the terms of the Plan and this Agreement. As soon as practicable after
notice and payment are received and the exercise is approved, the Company shall either issue and
deliver, in the name of the person or persons exercising the Option, a certificate or certificates
representing such shares or direct the transfer agent designated by the Company to record the
issuance of such shares to such person or persons in book entry form.
(b) The Option may be exercised in accordance with the terms of the Plan and this Agreement
with respect to any whole number of shares subject to the Option, but in no event may an Option be
exercised as to fewer than one hundred (100) shares at any one time, or the remaining shares
covered by the Option if less than two hundred (200).
(c) The Optionee shall have no rights of a stockholder with respect to shares of Common Stock
to be acquired by the exercise of the Option until the date of issuance of such shares. Except as
otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights
for which the record date is prior to the date such shares are issued. All shares of Common Stock
purchased upon the exercise of the Option as provided herein shall be fully paid and
non-assessable.
(d) The Optionee agrees that no later than the date as of which an amount first becomes
includible in his gross income for federal income tax purposes with respect to the Option, the
Optionee shall pay to the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld
with respect to such amount. Withholding obligations may be settled with Common Stock, including
Common Stock that is acquired upon exercise of the Option, having an aggregate Fair Market Value
not in excess of the amount determined by applying the minimum statutory withholding rate. The
obligations of the Company under this Agreement and the Plan shall be conditional on such payment
or arrangements, and the Company, its Affiliates and Subsidiaries shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment otherwise due to the Optionee.
9. Adjustment upon Changes in Capitalization. Subject to any required action by the
stockholders of the Company and the terms of the Plan, if, during the term of this
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Agreement, there
shall be any increase or decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or reclassification of the Common
Stock or any other increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company (as defined in Section 14 of the Plan), the
Committee may, in its sole discretion, make an appropriate and equitable adjustment in the
aggregate number, kind and option price of shares subject to this Option; provided, however, that
in no event shall the Option price be adjusted below the par value of a share of Common Stock, nor
shall any fraction of a share be issued upon the exercise of the Option.
10. Conditions Upon Issuance of Option. As a condition to the exercise of the Option,
the Company may require the Optionee to represent and warrant at the time of any such exercise that
the Common Stock is being purchased only for investment and without any present intention to sell
or distribute such shares if, in the opinion of legal counsel for the Company, such a
representation is required by any relevant provision of law.
11. Notices. Except as otherwise prescribed by the Company or its authorized
representative, each notice relating to this Agreement shall be in writing and shall be
sufficiently given if delivered by registered or certified mail, or by a nationally recognized
overnight delivery service, with postage or charges prepaid, to the address hereinafter provided in
this Section 11. Any such notice or communication given by first-class mail shall be deemed to
have been given two business days after the date so mailed, and such notice or communication given
by overnight delivery service shall be deemed to have been given one business day after the date so
sent, provided such notice or communication arrives at its destination. Each notice to the Company
shall be addressed to it at its offices at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxxx, Xxxxxxx 00000
(attention: Senior Vice President, Law and Administration), with a copy to the Chairman of the
Compensation Committee of the Company or to such other designee of the Company. Each notice to the
Optionee or other person or persons then entitled to exercise the Option shall be addressed to the
Optionee or such other person or persons at the address of such person last known to the Company.
12. Limitations. Nothing contained in this Agreement shall be construed as conferring
upon the Optionee the right to continue as an employee, or shall affect the right of the Company,
in its sole discretion, to terminate the Optionee’s employment at any time, with or without cause.
13. Incorporation of the Plan. Notwithstanding the terms and conditions contained
herein, this Agreement shall be subject to and governed by all the terms and conditions of the
Plan, which is hereby incorporated by reference. In the event of any discrepancy or inconsistency
between the terms and conditions of this Agreement and of the Plan, the terms and conditions of the
Plan shall control.
14. Interpretation. The interpretation and construction of any terms or conditions of
the Plan, or of this Agreement or other matters related to the Plan by the Committee, shall be
final and conclusive.
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15. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement or the application thereof to any party or circumstance shall be prohibited by or
be invalid under applicable law, then such provision shall be ineffective to the minimal extent of
such provision or the remaining provisions of this Agreement or the application of such provision
to other parties or circumstances.
16. Enforceability. This Agreement shall be binding upon the Optionee and such
Optionee’s estate, personal representative and beneficiaries.
17. Pronouns, Singular/Plural. Any use of any masculine pronoun shall include the
feminine and vice-versa, and any use of a singular shall include the plural or vice-versa, as the
context and facts may require.
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