EXHIBIT 10.4
FORM OF $125 NONQUALIFIED STOCK OPTION AGREEMENT UNDER THE REGISTRANT'S 1996
STOCK OPTION AND AWARD PLAN
TRANSAMERICA CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
Transamerica Corporation (the "Company") hereby grants you,
[NAME OF EMPLOYEE] (the "Employee"), a nonqualified stock option under the
Company's 1996 Stock Option and Award Plan (the "Plan"), to purchase shares of
common stock of the Company ("Shares"). The date of this Agreement is [DATE]
(the "Grant Date"). In general, the latest date this option will expire is [DATE
10 YEARS FROM GRANT DATE] (the "Expiration Date"). However, as provided in
Appendix A (attached hereto), this option may expire earlier than the Expiration
Date. Subject to the provisions of Appendix A (attached hereto) and of the Plan,
the principal features of this option are as follows:
Maximum Number of Shares
Purchasable with this Option: [NUMBER] Purchase Price per Share: $125.00
---------------------------- ------------------------
Scheduled Vesting Dates Number of Shares
[DATE 3 YEARS FROM GRANT DATE] [# of Shares]
[DATE 4 YEARS FROM GRANT DATE] [# of Shares]
[DATE 5 YEARS FROM GRANT DATE] [# of Shares]
Event Triggering Termination of Option Maximum Time to Exercise After
Triggering Event*
Termination of Employment due to Disability 3 years
Termination of Employment due to Early or
Normal Retirement 5 years
Termination of Employment due to death 3 years
Termination of Employment within 1 year after
a Change of Control for a reason other than
Disability, Early or Normal 1 year
Retirement or death
All other Terminations of Employment 3 months
* However, in no event may this option be exercised after the Expiration Date
(except in certain cases of the death of the Employee).
Your signature below indicates your agreement and
understanding that this option is subject to all of the terms and conditions
contained in Appendix A and the Plan. For example, important additional
information on vesting and termination of this option is contained in Paragraphs
4 through 7 of Appendix A. ACCORDINGLY, PLEASE BE SURE TO READ ALL OF APPENDIX
A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS OPTION.
TRANSAMERICA CORPORATION EMPLOYEE
By_______________________ _______________________
Title: [NAME]
APPENDIX A
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS
1. Grant of Option. The Company hereby grants to the Employee
under the Plan, as a separate incentive in connection with his or her employment
and not in lieu of any salary or other compensation for his or her services, a
nonqualified stock option to purchase, on the terms and conditions set forth in
this Agreement and the Plan, all or any part of an aggregate of [NUMBER] Shares.
The option granted hereby is not intended to be an Incentive Stock Option within
the meaning of Section 422 of the Code.
2. Exercise Price. The purchase price per Share for this
option (the "Exercise Price") shall be $125.00.
3. Number of Shares. The number and class of Shares specified
in Paragraph 1 above, and/or the Exercise Price, are subject to adjustment by
the Committee in the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, split-up, Share
combination, distribution or other change in the corporate structure of the
Company affecting the Shares (an "Event"). Any such adjustment shall be made by
the Committee as constituted immediately prior to the applicable Event (the
"Applicable Committee") and shall be designed so that if the Employee (or any
beneficiary) exercises this option after an Event, he or she shall receive (upon
payment of the Exercise Price for each Share exercised) the securities and any
other property (other than regular cash dividends) which the Employee (or
beneficiary) would have been entitled to had he or she instead acquired the
Shares on the Grant Date and held them through the date of exercise.
Notwithstanding the preceding, (a) the number of Shares subject to this option
always shall be a whole number, and (b) if the Applicable Committee determines
that the delivery of securities or other property (other than Shares) from any
such adjustment would create an undue burden or expense, the Employee (or
beneficiary) instead shall receive a lump sum cash payment equal to the fair
market value (as determined by the Applicable Committee) of such securities or
other property.
4. Vesting Schedule. This option is scheduled to become exercisable as to
33 1/3% of the shares subject to such option on the third anniversary date of
the Grant Date, and as to an additional 33 1/3% on each succeeding anniversary
date, until the right to exercise this option shall have accrued with respect to
100% of the Shares subject to this option. However, on any scheduled vesting
date, vesting actually will occur only if the Employee remains an Employee on
such date. Notwithstanding the foregoing, in the event of the Employee's
Termination of Employment due to Early Retirement, Normal Retirement, Disability
or death, the right to exercise a portion of such Shares will vest on the date
that such right otherwise would have vested, as determined in the discretion of
the Committee based on the time elapsed from the Grant Date to the Termination
of Employment and the vesting date.
5. Change of Control. In the event a Change of Control occurs
prior to the Employee's Termination of Employment, the right to exercise one
hundred percent (100%) of the Shares subject to this option will vest on the
date on which the Change of Control occurs.
6. Termination of Option. Except as provided in the last
sentence of this Paragraph 6, in the event of the Employee's Termination of
Employment for any reason other than Early or Normal Retirement, Disability or
death, the Employee may, within three (3) months after the date of such
Termination, or prior to the Expiration Date, whichever shall first occur,
exercise any vested but unexercised portion of this option. In the event of the
Employee's Termination of Employment due to Disability, the Employee may, within
three (3) years after the date of such Termination, or prior to the Expiration
Date, whichever shall first occur, exercise any vested but unexercised portion
of this option. In the event of the Employee's Termination of Employment due to
Early or Normal Retirement, the Employee may, within five (5) years from the
date of such Termination, or prior to the Expiration Date, whichever shall first
occur, exercise any vested but unexercised portion of this option. In the event
of the Employee's Termination of Employment within one year after a Change of
Control for any reason other than Early or Normal Retirement, Disability or
death, the Employee may, within one (1) year after the date of such Termination,
or prior to the Expiration Date, whichever shall first occur, exercise any
vested but unexercised portion of this option.
7. Death of Employee. In the event that the Employee dies
prior to the expiration of this option in accordance with the provisions of
Paragraph 6 above, the Employee's designated beneficiary or beneficiaries, or if
no beneficiary survives the Employee, the administrator or executor of the
Employee's estate, may, within three (3) years after the date of death, exercise
any vested but unexercised portion of this option. Any such transferee must
furnish the Company (a) written notice of his or her status as a transferee, (b)
evidence satisfactory to the Company to establish the validity of the transfer
of this option and compliance with any laws or regulations pertaining to such
transfer, and (c) written acceptance of the terms and conditions of this option
as set forth in this Agreement.
8. Persons Eligible to Exercise Option. This option shall be
exercisable during the Employee's lifetime only by the Employee. The option is
not transferable except that the Employee may transfer this option (a) by a
valid beneficiary designation made in a form and manner acceptable to the
Committee, or (b) by will or the applicable laws of descent and distribution.
9. Exercise of Option. This option may be exercised by the
person then entitled to do so as to any Shares which may then be purchased (a)
by giving written notice of exercise to the Secretary of the Company (or his or
her designee), specifying the number of full Shares to be purchased and
accompanied by full payment of the Exercise Price (and the amount of any income
tax the Company is required by law to withhold by reason of such exercise), and
(b) by giving satisfactory assurances in writing if requested by the Company,
signed by the person exercising the option, that the Shares to be purchased upon
such exercise are being purchased for investment and not with a view to the
distribution thereof.
10. Suspension of Exercisability. If at any time the Company
shall determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of the purchase of Shares
hereunder, this option may not be exercised, in whole or in part, unless and
until such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the Company.
The Company shall make reasonable efforts to meet the requirements of any such
state or federal law or securities exchange and to obtain any such consent or
approval of any such governmental authority.
11. No Rights of Stockholder. Neither the Employee (nor any
beneficiary) shall be or have any of the rights or privileges of a stockholder
of the Company in respect of any of the Shares issuable pursuant to the exercise
of this option, unless and until certificates representing such Shares shall
have been issued, recorded on the records of the Company or its transfer agents
or registrars, and delivered to the Employee (or beneficiary).
12. No Effect on Employment. The Employee's employment with
the Company and its Affiliates is on an at-will basis only. Accordingly, the
terms of the Employee's employment with the Company and its Affiliates shall be
determined from time to time by the Company or the Affiliate employing the
Employee (as the case may be), and the Company or the Affiliate shall have the
right, which is hereby expressly reserved, to terminate or change the terms of
the employment of the Employee at any time for any reason whatsoever, with or
without good cause. For purposes of this Agreement, the transfer of employment
of the Employee between the Company and any one of its Affiliates (or between
Affiliates) shall not be deemed a Termination of Employment.
13. Address for Notices. Any notice to be given to the Company
under the terms of this Agreement shall be addressed to the Company, in care of
its Secretary, at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or at
such other address as the Company may hereafter designate in writing.
14. Option is Not Transferable. Except as otherwise provided
in Paragraphs 7 and 8 above, this option and the rights and privileges conferred
hereby may not be transferred, pledged, assigned or otherwise hypothecated in
any way (whether by operation of law or otherwise) and shall not be subject to
sale under execution, attachment or similar process. Upon any attempt to
transfer, pledge, assign, hypothecate or otherwise dispose of this option, or of
any right or privilege conferred hereby, or upon any attempted sale under any
execution, attachment or similar process, this option and the rights and
privileges conferred hereby immediately shall become null and void.
15. Maximum Term of Option. Notwithstanding any other
provision of this Agreement except Paragraph 7 above relating to the death of
the Employee (in which case this option is exercisable to the extent set forth
therein), this option is not exercisable after the Expiration Date.
16. Binding Agreement. Subject to the limitation on the
transferability of this option contained herein, this Agreement shall be binding
upon and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.
17. Conditions to Exercise. The Exercise Price for this option
must be paid in the legal tender of the United States or, in the Committee's
sole discretion, in Shares. Exercise of this option will not be permitted until
satisfactory arrangements have been made for the payment of the appropriate
amount of withholding taxes (as determined by the Company).
18. Plan Governs. This Agreement is subject to all of the
terms and provisions of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Capitalized terms and phrases used and not
defined in this Agreement shall have the meaning set forth in the Plan.
19. Committee Authority. The Committee shall have all
discretion, power, and authority to interpret the Plan and this Agreement and to
adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Employee, the Company and all other interested persons, and shall be
given the maximum deference permitted by law. No member of the Committee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.
20. Captions. The captions provided herein are for convenience
only and are not to serve as a basis for the interpretation or construction of
this Agreement.
21. Agreement Severable. In the event that any provision in
this Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.
22. Modifications to this Agreement. This Agreement
constitutes the entire understanding of the parties on the subjects covered. The
Employee expressly warrants that he or she is not executing this Agreement in
reliance on any promises, representations, or inducements other than those
contained herein. Modifications to this Agreement or the Plan can be made only
in an express written contract executed by a duly authorized officer of the
Company.
