EXHIBIT 4.2
APPENDIX C
XXXX XXXXXXXX CORPORATION
EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, is made this 31 day of March, 1998, by
and between Xxxx Xxxxxxxx Corporation, a Delaware corporation
(the "Company"), and _____________________ ("Employee").
WITNESSETH, THAT:
WHEREAS, the Company wishes to grant this stock option
to Employee pursuant to its 1996 Stock Incentive Plan (the
"Plan").
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants herein contained, the parties hereto hereby
agree as follows:
1. Grant of Option.
The Company hereby grants to Employee, on the date set
forth above, the right and option (hereinafter called "this
option") to purchase all or any part of an aggregate of
shares of Common Stock, par value $0.125 per share, at the price
of $58.875 per share on the terms and conditions set forth
herein. This option is not intended to be an incentive stock
option within the meaning of Section422 of the Internal Revenue
Code of 1986, as amended (the "Code").
2. Duration and Exercisability.
(a) This option may not be exercised by Employee until
the expiration of twelve (12) months from the date of grant, and
this option shall in all events terminate ten (10) years after
the date of grant. Subject to the other terms and conditions set
forth herein, this option may be exercised by Employee in
cumulative installment as follows:
Cumulative percentage
On or after each of of shares as to which
the following dates Option is exercisable
------------------- ---------------------
March 31, 1999 20%
March 31, 2000 50%
March 31, 2001 100%
(b) During the lifetime of Employee, this option shall
be exercisable only by Employee. This option shall not be
assignable or transferable by Employee, other than by will or the
laws of descent and distribution.
3. Effect of Termination of Employment.
(a) In the event that Employee shall cease to be
employed by the Company or its subsidiaries for any reason other
than Employee's gross and willful misconduct, Employee's death or
disability, or Employee's retirement (as provided in paragraphs
(b), (c) and (d) of this Section3, respectively), Employee shall
have the right to exercise this option at any time within three
months after such termination of employment to the extent of the
full number of shares Employee was entitled to purchase under
this option on the date of termination, subject to the condition
that this option shall not be exercisable after the expiration of
its term.
(b) In the event that Employee shall cease to be
employed by the Company or its subsidiaries by reason of
Employee's gross and willful misconduct during the course of
employment, including but not limited to, the wrongful
appropriation of funds, or the commission of a gross misdemeanor
or felony, this option shall be terminated as of the date of the
misconduct.
(c) If Employee shall die while in the employ of the
Company or its subsidiaries or if Employee shall become disabled
within the meaning of Code Section 22(e)(3) while in the employ
of the Company or its subsidiaries and Employee shall not have
fully exercised this option, this option may be exercised at any
time within twelve months after Employee's death or disability by
the personal representative(s), administrator(s), or, if
applicable, guardian(s) of Employee or by any person or person to
whom this option is transferred by will or the applicable laws of
descent and distribution, to the extent of the full number of
shares Employee was entitled to purchase under this option on the
date of death (or termination of employment, if earlier) or
disability and subject to the condition that this option shall
not be exercisable after the expiration of its term.
(d) If Employee shall cease to be employed by the
Company or its subsidiaries (i) for any reason other than
Employee's gross and willful misconduct or Employee's death or
disability (as provided in paragraphs (b) and (c) of this Section
3, respectively), (ii) at a time when Employee shall not have
fully exercised this option and (iii) at a time when Employee has
been employed by the Company or its subsidiaries for a period of
at least ten (10) years, this option may be exercised by Employee
at any time on or prior to the earlier of the third anniversary
of the date Employee ceased to be employed by the Company or its
subsidiaries or the expiration of the term of this option (the
period ending as of the earlier of such dates being referred to
hereinafter as the "post-retirement extended exercise period") to
the extent of the full number of shares Employee was entitled to
purchase under this option on the date Employee ceased to be so
employed, subject, however, to the condition that during such
post-retirement extended exercise period Employee shall not (x)
perform any services for or otherwise participate, directly or
indirectly, in the business of any broker/dealer or other entity
engaged in any business in which the Company or any of its
subsidiaries or affiliates is engaged or (y) act in any manner
determined by the committee of the Company's Board of Directors
administering the Plan to be adverse to the interests of the
Company or its subsidiaries. If at any time during such post-
retirement extended exercise period Employee shall cease to
satisfy this condition, Employee's right to exercise this option
pursuant to this paragraph (d) shall terminate immediately and
Employee shall thereafter only be entitled to exercise this
option in accordance with paragraph (a) of this Section 3.
4. Manner of Exercise.
(a) This option can be exercised only by Employee or
other proper party by delivering within the option period written
notice to the Company at its principal office. The notice shall
state the number of shares as to which this option is being
exercised and be accompanied by payment in full of the option
price for all shares designated in the notice.
(b) Employee may pay the option price (i) by check
(bank check, certified check or personal check), (ii) with the
approval of the Company, by delivering to the Company for
cancellation shares of the Company's Common Stock having a fair
market value equal to the option price; provided, however, that
Employee shall not be entitled to tender shares of the Company's
Common Stock pursuant to successive, substantially simultaneous
exercises of this option or any other stock option of the
Company, or (iii) by delivering to the Company for cancellation,
in whole or in part, the Company's Subordinated Debenture dated
March 31, 1998 held by Employee in an aggregate face amount equal
to the option price.
5. Acceleration of Exercisability.
Notwithstanding any installment or delayed exercise
provision contained in this Agreement, this option may be
exercised in full on or after the sixteenth business day
following the date of a "Change in Control" (as hereinafter
defined). For purposes hereof, the following terms shall have
the definitions set forth below:
(a) "Change in Control" shall mean:
(i) the public announcement (which, for purposes of
this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") that any person, entity or "group",
within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act, other than the Company or its
subsidiaries, or the Company Stock Bonus Plan, or any
other employee benefit plan of the Company or any of
its subsidiaries, or any entity holding shares of the
Company Common Stock organized, appointed or
established for, or pursuant to the terms of, any such
plan, has become the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange
Act) of 35% or more of the combined voting power of the
Company's then outstanding voting securities in a
transaction or series of transactions;
(ii) the Continuing Directors (as hereinafter defined)
cease to constitute a majority of the Company's Board
of Directors;
(iii) the shareholders of the Company approve (1) any
consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation
or pursuant to which shares of the Company's stock
would be converted into cash, securities or other
property, other than a merger of the Company in which
shareholders immediately prior to the merger have the
same proportionate ownership of stock of the surviving
corporation immediately after the merger; (2) any sale,
lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or
substantially all of the assets of the Company; or (3)
any plan of liquidation or dissolution of the Company;
or
(iv) the majority of the Continuing Directors determine
in their sole and absolute discretion that there has
been a change in control of the Company.
(b) "Continuing Director" shall mean any person who is
a member of the Board of Directors of the Company while such
a person is a member of the Board of Directors, who is not
an Acquiring Person (as hereinafter defined) or an Affiliate
or Associate (as hereinafter defined) of an Acquiring
Person, or a representative of an Acquiring Person or of any
such Affiliate or Associate, and who (i) was a member of the
Board of Directors on the date of this Agreement or (ii)
subsequently becomes a member of the Board of Directors, if
such person's initial nomination for election or initial
election to the Board of Directors is recommended or
approved by a majority of the Continuing Directors. For
purposes of this paragraph (b), "Acquiring Person" shall
mean any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) who or which, together with
all Affiliates and Associates of such person, is the
"beneficial owner" (as defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of
securities of the Company representing 35% or more of the
combined voting power of the Company's then outstanding
securities, but shall not include the Company, any
subsidiary of the Company or any employee benefit plan of
the Company or of any subsidiary of the Company or any
entity holding shares of the Company's Common Stock
organized, appointed or established for, or pursuant to the
terms of, any such plan; and "Affiliate" and "Associate"
shall have the respective meanings ascribed to such terms in
Rule 12b-2 promulgated under the Exchange Act.
6. Miscellaneous.
(a) This option is issued pursuant to the Plan and is
subject to its terms. The terms of the Plan are available for
inspection during business hours at the principal offices of the
Company.
(b) This agreement shall not confer on Employee any
right with respect to continuance of employment by the Company or
any of its subsidiaries, nor will it interfere in any way with
the right of the Company to terminate such employment at any
time. Employee shall have none of the rights of a shareholder
with respect to shares subject to this option until such shares
shall have been issued to Employee upon exercise of this option.
(c) The exercise of all or any parts of this option
shall only be effective at such time that the sale of Common
Stock pursuant to such exercise will not violate any state or
federal securities or other laws.
(d) If Employee exercises all or any portion of this
option subsequent to any change in the number or character of the
outstanding shares of the Company's Common Stock (through merger,
consolidation, reorganization, recapitalization, stock dividend
or otherwise), Employee shall then receive for the aggregate
price paid by Employee on such exercise of this option, the
number and type of securities or other consideration which
Employee would have received if such option had been exercised
prior to the event changing the number or character of
outstanding shares.
(e) The Company shall at all times during the term of
this option reserve and keep available such number of shares as
will be sufficient to satisfy the requirements of this agreement.
(g) In order to provide the Company with the
opportunity to claim the benefit of any income tax deduction
which may be available to it upon the exercise of this option,
and in order to comply with all applicable federal or state
income tax laws or regulations, the Company may take such action
as it deems appropriate to insure that, if necessary, all
applicable federal or state payroll, withholding, income or other
taxes are withheld or collected from Employee. Employee may
elect to satisfy his federal and state income tax withholding
obligations upon exercise of this option by (i)having the Company
withhold a portion of the shares of Common Stock otherwise to be
delivered upon exercise of such option having a fair market value
equal to the amount of federal and state income tax required to
be withheld upon such exercise, in accordance with the rules of
the committee of the Company's Board of Directors that
administers the Plan (the "Committee"), or (ii)delivering to the
Company shares of its Common Stock other than the shares issuable
upon exercise of such option with a fair market value equal to
such taxes, in accordance with the rules of the Committee.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed on the day and year first above written.
Xxxx Xxxxxxxx Corporation
By Xxxx X. Xxxxx
-----------------------
Xxxx X. Xxxxx
Vice Chairman & CFO
Xxxx Xxxxxxxx Corporation
__________________________
["Employee"]
