1995
STOCK OPTION AGREEMENT
Pursuant to the M. A. Xxxxx Company (the "Company") 1988
Long-Term Incentive Plan as amended (the "Plan"), stock options
may be granted to you (hereinafter called "Associate") from time
to time under the terms and conditions described below and in the
Plan.
1. The Associate may be granted an option under this
Agreement in the form of an incentive stock option within the
meaning of Section 422 of the Code or a non-qualified stock
option, or both, as determined at the time of grant by the
Compensation Committee of the Board of Directors of the
Corporation (the "Compensation Committee". (Both such options
shall be referred to collectively herein as "options" and
individually as an "option", unless the context requires a
different interpretation.)
2. Except as provided in Section 3 hereof, the options
granted under this Agreement (until terminated as hereinafter
provided) shall be exercisable only to the extent of one-third of
the shares specified in the grant after the Associate shall have
been in the continuous employ of the Company or any Subsidiary
for one full year from the date of such grant and to the extent
of an additional one-third of such shares on each of the next two
successive anniversary dates of this grant thereafter during
which the Associate shall have been in the continuous employ of
the Company or any Subsidiary. In the case of an option intended
to be an incentive stock option, the aggregate fair market value,
determined as of the date of grant, of the shares as to which
such option is exercisable for the first time by the Associate
shall be limited to $100,000 per calendar year. Non-qualified
stock options are exercisable by the Associate without regard to
the foregoing limitation. The number of shares of Common Stock
as to which an option may be exercised shall be determined on the
last date on which the Associate shall have been in the
continuous employ of the Company or any Subsidiary except that
options may be exercised as to all the shares subject to such
options under the circumstances set forth in Section 3 hereof.
Any portion of an incentive stock option in excess of the fair
market value limitation on exercisability set forth above which
becomes fully exercisable as provided in Section 3, shall be
converted into a non-qualified stock option and exercisable in
accordance with its terms. For the purposes of this Section,
leaves of absence approved by the Chief Executive Officer of the
Company or approved by the Compensation Committee in the case of
a leave of absence involving the Chief Executive Officer of the
Company, for illness, military or governmental service, or other
cause, shall be considered as employment. To the extent
exercisable, the options granted under this Agreement may be
exercised in whole or in part from time to time only by written
notice delivered to and received by the Company, which notice
shall be signed by the Associate and shall state the election to
exercise an incentive stock option or a non-qualified stock
option and the number of whole shares of Common Stock with
respect to which the option is being exercised. Such notice may
be accompanied by (i) cash, (ii) a check payable to the Company,
or (iii) a certificate or certificates for shares of Common Stock
of the Company (that have been owned by the Associate for at
least 6 months) in a form for transfer acceptable to the Company,
or a combination thereof, in payment of the full option price for
the number of shares purchased. The Associate may exercise an
option and sell the shares acquired upon the exercise of such
option, pursuant to a brokerage arrangement consistent with
practices approved by the Company, and use the proceeds from such
sale as payment of all or a portion of the option price or any
taxes which the Company is required by law to withhold or is
requested by the Associate to withhold by reason of such
exercise. The Associate may elect to pay any such taxes by
directing the Company to withhold shares of Common Stock
otherwise deliverable as a result of an option exercise in an
amount up to his or her estimated marginal tax rate. As soon as
practicable after it receives such notice and payment, and
following receipt from the Associate of payment for any such
taxes, the Company will deliver to the Associate or designee a
certificate or certificates for the shares of Common Stock so
purchased.
3. Notwithstanding any provision in this Agreement to the
contrary, the options granted under this Agreement (until
terminated as hereinafter provided) shall become exercisable to
the full extent of the shares specified in such grant if there is
a Change in Control of the Company, as hereinafter defined. For
purposes of this Agreement, a "Change in Control" shall have
occurred if any of the following events shall have occurred:
(a) The Company enters into an agreement to merge,
consolidate or reorganize into or with another corporation
or other legal person, and as a result of such merger,
consolidation or reorganization less than 75% of the
combined voting power of the then-outstanding securities of
such corporation or person immediately after such
transaction will be held in the aggregate by the holders of
Voting Stock (as that term is defined in Subsection (c)) of
the Company immediately prior to such transaction;
(b) The Company enters into an agreement to sell or
otherwise transfer all or substantially all of its assets to
any other corporation or other legal person, and as a result
of such sale or transfer less than 75% of the combined
voting power of the then-outstanding securities of such
corporation or person immediately after such sale or
transfer will be held in the aggregate by the holders of
Voting Stock of the Company immediately prior to such sale
or transfer;
(c) The filing on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), disclosing that any person (as the
term "person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) has become the beneficial
owner (as the term "beneficial owner" is defined under Rule
13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of securities representing 15% or more of
the combined voting power of the then-outstanding securities
entitled to vote generally in the election of directors of
the Company ("Voting Stock");
(d) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Form 8-K or Schedule 14A (or
any successor schedule, form or report or item therein) that
a change in control of the Company has or may have occurred
or will or may occur in the future pursuant to the any
then-existing contract or transaction;
(e) During any period of two consecutive years, individuals
who constituted the Directors of the Company at the
beginning of any such period cease for any reason to
constitute at least a majority thereof, unless the election,
or the nomination for election by the Company's
stockholders, of each new Director was approved by a vote of
at least two-thirds of the Directors of the Company then
still in office who were directors of the Company at the
beginning of such period; or
(f) Three or more new directors, separately or together,
are elected to the Board of Directors in spite of
publicly-stated opposition to such election by at least a
majority of the Board of Directors of the Company.
Notwithstanding the foregoing provisions of Sections 3(c) or (d)
hereof, a Change in Control shall not be deemed to have occurred
for purposes of this Agreement solely because (i) the Company,
(ii) an entity in which the Company directly or indirectly
beneficially owns 50% or more of the voting securities, or (iii)
the Company's Associates Ownership Trust, any Company-sponsored
employee stock ownership plan or any other employee benefit plan
of the Company, either files or becomes obligated to file a
report or proxy statement under or in response to Schedule 13D,
Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under the Exchange Act,
disclosing beneficial ownership by it of shares of Voting Stock,
whether in excess of 15% or otherwise, or because the Company
reports that a Change in Control of the Company has or may have
occurred or will or may occur in the future by reason of such
beneficial ownership.
In the event that any such agreement to merge, consolidate,
reorganize or sell or otherwise transfer assets referred to in
Sections 3(a) or (b) is terminated without such merger,
consolidation, reorganization or sale or transfer having been
consummated, or the person filing the Schedule 13D or Schedule
14D-1 referred to in Section 3(c) files an amendment to any such
Schedule disclosing that it no longer is the beneficial owner of
securities representing 15% or more of the Voting Stock of the
Company, or the Company reports that the Change in Control which
it reported in the filing referred to in Section 3(d) will not in
fact occur, the operation of this Section 3 may be nullified by
notice from the Board of Directors or the Compensation Committee
to the Associate and the provisions of Section 2 hereof may be
reinstated for accrual of exercise rights in installments, but
without prejudice to any exercise of the options granted under
this Agreement that may have occurred prior to such
nullification.
4. The options granted under this Agreement shall
terminate and cease to be exercisable on the earliest of the
following dates:
(a) On the date Associate ceases to be an employee of the
Company or a Subsidiary by reason of termination for Cause,
as defined below;
(b) Thirty days after the Associate ceases to be an
employee of the Company or a Subsidiary, unless Associate
ceases to be an employee by reason of termination for Cause,
as defined below, or by reason of death, permanent
disability or retirement as described in (c) or (d) below;
(c) Sixty months after the Associate ceases to be an
employee of the Company or a Subsidiary by reason of total
and permanent disability or retirement with consent of the
Company;
(d) Twelve months after the death of the Associate;
(e) On the date Associate becomes an employee of a
competitor of the Company or a Subsidiary without the
consent of the Board of Directors or Compensation Committee
of the Company; or
(f) Ten years from the date the option was granted
hereunder.
As used herein, termination for "Cause" shall mean the
determination by the Board of Directors or Compensation Committee
that Associate (i) engaged in improper conduct or acts involving
moral turpitude, (ii) failed to perform or negligently performed
his or her duties, or (iii) acted so as to substantially
prejudice the business or reputation of the Company or any of its
Subsidiaries. In the event the Associate shall intentionally
commit an act materially inimical to the interests of the Company
or a Subsidiary (including, without limitation, engaging in any
conduct that is competitive with the Company or a Subsidiary),
and the Board of Directors or Compensation Committee shall so
find, the options granted under this Agreement shall terminate at
the time of such act, notwithstanding any other provision of this
Agreement to the contrary. Nothing contained in this Agreement
shall limit whatever right the Company or a Subsidiary might
otherwise have to terminate the employment of the Associate.
5. Except as otherwise set forth herein, the options
granted under this Agreement are not transferable by the
Associate otherwise than by will or the laws of descent and
distribution, and are exercisable, during the lifetime of the
Associate, only by him or by his guardian or legal
representative. The Compensation Committee may approve transfers
of non-qualified options granted under this Agreement to members
of the Associate's family or to a trust to benefit the Associate
or members of the Associate's family.
6. The options granted under this Agreement shall not be
exercisable if such exercise would violate any applicable
securities laws. The Company agrees to make reasonable efforts to
effect and maintain all necessary registrations under such laws
so as to permit exercise of the options granted under this
Agreement unless the Compensation Committee shall determine that
such registrations would impose undue hardship on the Company.
7. The Compensation Committee shall make such adjustments
in the option price and in the number or kind of shares of Common
Stock or other securities covered by options granted under this
Agreement as the Compensation Committee in its sole discretion,
exercised in good faith, may determine is equitably required to
prevent dilution or enlargement of the rights of the Associate
that otherwise would result from (a) any stock dividend, stock
split, combination of shares, issuance of stock purchase rights,
recapitalization or other change in the capital structure of the
Company, or (b) any merger, consolidation, spin-off,
reorganization or partial or complete liquidation, or (c) any
other corporate transaction or event having an effect similar to
any of the foregoing. No adjustment provided for in this Section
6 shall require the Company to sell any fractional share.
8. For purposes of this Agreement, the continuous employ
of the Associate with the Company or a Subsidiary shall not be
deemed interrupted, and the Associate shall not be deemed to have
ceased to be an employee of the Company or any Subsidiary, by
reason of the transfer of such employee among the Company and its
Subsidiaries.
9. Terms not otherwise defined herein shall have the same
meaning as set forth in the Plan.
10. If Associate, either during employment by the Company
or a Subsidiary or within six (6) months after termination of
such employment for any reason, shall become an employee of a
competitor of the Company or a Subsidiary or shall engage in any
other conduct that is competitive with the Company or a
Subsidiary, unless the Board of Directors or Compensation
Committee of the Company shall determine otherwise, Associate
shall (a) return to the Company, in exchange for payment by the
Company of the option price paid therefor, all shares of Common
Stock that Associate has not disposed of that were purchased
pursuant to this Agreement within a period of one (1) year prior
to the date of the commencement of such employment by a
competitor or other competitive conduct, and (b) with respect to
any shares so purchased that the Associate has disposed of, pay
to the Company in cash the difference between (i) the option
price paid therefor by Associate pursuant to this Agreement, and
(ii) the closing price of the Common Stock on the New York Stock
Exchange on the date of such purchase (or on the last trading day
prior to such purchase, if there was no trading on the purchase
date). To the extent that such amounts are not paid to the
Company, the Company may set off the amounts so payable to it
against any amounts that may be owing from time to time by the
Company or a Subsidiary to Associate, whether as wages, deferred
compensation or vacation pay or in the form of any other benefit
or for any other reason.
EXECUTED in two original counterparts at Cleveland, Ohio on
Date Signed.
M. A. XXXXX COMPANY
By________________________________
Company Officer
Title
The undersigned Associate hereby acknowledges receipt of an
executed original of this 1995 Stock Option Agreement.
_________________________________
Associate
