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EXHIBIT 4.1
XXXXX INSTRUMENTS CORP.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT") dated as
of the 12th day of April, 2000 by and between Xxxxx Instruments Corp., a
Delaware corporation (the "COMPANY"), and Xxxx Xxxxxxx (the "OPTIONEE").
R E C I T A L S
WHEREAS, the Company has granted to the Optionee, effective as of
the 12th day of April, 2000 (the "GRANT DATE"), a nonqualified stock option to
purchase all or any part of 130,000 shares of the Company's common stock, par
value $0.01 per share (the "COMMON STOCK"), subject to and upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. GRANT OF OPTION. This Agreement evidences the Company's grant to the
Optionee of the right and option to purchase, subject to and on the
terms and conditions set forth herein, all or any part of 130,000 shares
of the Company's Common Stock (the "SHARES") at the price of $56.50 per
Share (the "OPTION"), exercisable from time to time, subject to the
provisions of this Agreement, prior to the close of business on the day
before the tenth anniversary of the Grant Date (the "EXPIRATION DATE"),
unless earlier terminated pursuant to Section 9. Such price equals the
fair market value of the Common Stock as of the Grant Date.
2. EXERCISABILITY OF OPTION. The Option shall first become and remain
exercisable as to 1/4 of the shares on the first anniversary of the
Grant Date and as to an additional 1/36 of the shares on and after the
last day of each succeeding calendar month until all remaining Options
have become exercisable. If the Optionee does not in any year purchase
all or any part of the Shares to which the Optionee is entitled, the
Optionee has the right cumulatively thereafter to purchase any Shares
not so purchased and such right shall continue until the Option
terminates or expires. The Option shall only be exercisable in respect
of whole Shares, and fractional Share interests shall be disregarded.
The Option may only be exercised as to at least one-hundred (100) Shares
unless the number purchased is the total number at the time available
for purchase under the Option.
3. METHOD OF EXERCISE OF OPTION. The Option shall be exercisable by the
delivery to the Secretary of the Company of a written notice stating the
number of Shares to be purchased pursuant to the Option and accompanied
by (i) delivery of an executed EXERCISE AGREEMENT in the form attached
hereto as EXHIBIT A, (ii) payment of the full purchase price of the
Shares to be purchased, and (iii) payment in full of any tax withholding
obligation under federal, state or local law. Payment shall be made in
one or a combination of the following methods: (i) in cash or by
electronic funds transfer; (ii) by check payable to the order of the
Company; (iii) if authorized by the Board of Directors (the "BOARD"), by
a promissory note of the Optionee upon the terms and conditions approved
by the Board; (iv) by notice and third party payment in such manner as
may be authorized by the Board; or (v) by the delivery of shares of
Common Stock of the Company already owned by the Optionee, provided,
however, that the Board may in its absolute discretion limit the
Optionee's ability to exercise the Option by delivering such shares, and
provided further that any shares delivered which were initially acquired
upon exercise of a stock option must have been owned by
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the Optionee at least six months as of the date of delivery. Shares of
Common Stock used to satisfy the exercise price of the Option shall be
valued at their fair market value on the date of exercise.
4. TAX WITHHOLDING.
4.1. CASH OR SHARES. Upon any exercise of the Option, the Company shall
have the right at its option to (i) require the Optionee (or personal
representative or beneficiary, as the case may be) to pay or provide for
payment of the amount of any taxes which the Company may be required to
withhold with respect to the Option or (ii) deduct from any amount
payable in cash the amount of any taxes which the Company may be
required to withhold with respect to such cash payment. In any case
where a tax is required to be withheld in connection with the delivery
of shares of Common Stock, the Board may in its sole discretion grant to
the Optionee the right to elect, pursuant to such rules and subject to
such conditions as the Board may establish, to have the Company reduce
the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of shares valued at their then fair market value to
satisfy such withholding obligation.
4.2. TAX LOANS. The Company may, in its discretion and to the extent
permitted by law, authorize a loan to the Optionee in the amount of any
taxes which the Company may be required to withhold with respect to
shares of Common Stock received (or disposed of, as the case may be)
pursuant to a transaction described in Section 4.1. Such a loan shall be
for a term, at a rate of interest and pursuant to such other terms and
conditions as the Company, under applicable law may establish.
5. OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF RESTRICTIONS. The
Board from time to time may authorize, generally or in specific cases
only, for the benefit of the Optionee any adjustment in the number of
shares subject to, the restrictions upon or the term, exercise or
purchase price or vesting schedule of the Option by cancellation of the
Option and a subsequent regranting of the Option, by amendment, by
substitution of the Option, by waiver or by other legally valid means.
Such amendment or other action may result among other changes in an
exercise or purchase price which is higher or lower than the exercise or
purchase price of the original or prior Option, provide for a greater or
lesser number of shares subject to the Option, or provide for a longer
or shorter vesting or exercise period.
6. RESTRICTIONS ON SHARES. The Certificate of Incorporation and Bylaws of
the Company, as either of them may be amended from time to time, may
provide for restrictions with respect to the Common Stock. To the extent
that these restrictions and limitations are greater than those set forth
in this Agreement, such restrictions and limitations shall apply to any
securities acquired upon exercise of the Option and are incorporated
herein by this reference.
7. NO TRANSFERABILITY; LIMITED EXCEPTION TO TRANSFER RESTRICTIONS.
7.1. LIMIT ON EXERCISE AND TRANSFER. Unless otherwise expressly provided
in (or pursuant to) this Section 7 or by applicable law (i) the Option
is non-transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance or
charge; the Option shall be exercised only by the Optionee; and (ii)
amounts payable or shares issuable pursuant to the Option shall be
delivered only to (or for the account of) the Optionee.
7.2. EXCEPTIONS. The Board may permit the Option to be exercised by and
paid only to certain persons or entities related to the Optionee,
including but not limited to members of the Optionee's family,
charitable institutions, or trusts or other entities whose beneficiaries
or beneficial owners are members of the Optionee's family and/or
charitable institutions, or to such other persons or entities as may be
approved by the Board, pursuant to such conditions and procedures as the
Board may establish. Any permitted transfer shall be subject to the
condition that the Board receive evidence satisfactory to it that the
transfer is being made for estate and/or tax planning purposes on a
gratuitous or donative basis and without consideration (other than
nominal consideration).
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7.3. FURTHER EXCEPTIONS TO LIMITS ON TRANSFER. The exercise and transfer
restrictions in this Section 7 shall not apply to:
(i) transfers to the Company,
(ii) the designation of a beneficiary to receive benefits in the
event of the Optionee's death or, if the Optionee has died,
transfers to or exercise by the Optionee's beneficiary, or, in
the absence of a validly designated beneficiary, transfers by
will or the laws of descent and distribution,
(iii) transfers pursuant to a qualified domestic relations order if
approved or ratified by the Board,
(iv) if the Optionee has suffered a disability, permitted transfers
or exercises on behalf of the Optionee by his or her legal
representative, or
(v) the authorization by the Board of "cashless exercise"
procedures with third parties who provide financing for the
purpose of (or who otherwise facilitate) the exercise of the
Option consistent with applicable laws and the express
authorization of the Board.
8. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement shall confer
upon the Optionee any right to continue in the employ or other service
of the Company or any of its subsidiaries, nor constitute any contract
or agreement of employment or other service, nor shall interfere in any
way with the right of the Company to change the Optionee's compensation
or other benefits or to terminate the employment of the Optionee, with
or without cause; provided, however, that nothing contained in this
Agreement shall adversely affect any independent contractual right of
the Optionee without his or her consent thereto.
9. ADJUSTMENT AND TERMINATION UPON CERTAIN EVENTS.
9.1. ADJUSTMENTS. If there shall occur any extraordinary dividend or
other extraordinary distribution in respect of the Common Stock (whether
in the form of cash, Common Stock, other securities, or other property),
or any reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend), reverse stock split,
reorganization, merger, combination, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities
of the Company, or there shall occur any similar, unusual or
extraordinary corporate transaction or event in respect of the Common
Stock or a sale of substantially all the assets of the Company as an
entirety, then the Board shall, in such manner and to such extent (if
any) as it deems appropriate and equitable (1) proportionately adjust
any or all of (a) the number and type of shares of Common Stock (or
other securities) which thereafter may be made the subject of the
Option, (b) the number, amount and type of shares of Common Stock (or
other securities or property) subject to the Option, (c) the grant,
purchase, or exercise price of the Option, (d) the securities, cash or
other property deliverable upon exercise of the Option, or (e) the
performance standards appropriate to the Option, or (2) in the case of
an extraordinary dividend or other distribution, recapitalization,
reclassification, merger, reorganization, consolidation, combination,
sale of assets, split up, exchange, or spin off, make provision for a
cash payment or for the substitution or exchange of the Option or the
cash, securities or property deliverable to the Optionee based upon the
distribution or consideration payable to holders of the Common Stock of
the Company upon or in respect of such event. In any of such events, the
Board may take such action sufficiently prior to such event if necessary
to permit the Optionee to realize the benefits intended to be conveyed
with respect to the underlying shares in the same manner as is available
to stockholders generally.
9.2. ACCELERATION OF AWARDS UPON CHANGE IN CONTROL. Unless the Board
determines, prior to the occurrence of any of the following (each of
which shall be hereafter referred to as a "Change in Control Event"):
(i) Approval by the stockholders of the Company of the dissolution
or liquidation of the Company;
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(ii) Approval by the stockholders of the Company of an agreement to
merge or consolidate, or otherwise reorganize, with or into
one or more entities that are not subsidiaries or other
affiliates, as a result of which less than 50% of the
outstanding voting securities of the surviving or resulting
entity immediately after the reorganization are, or will be,
owned, directly or indirectly, by stockholders of the Company
immediately before such reorganization (assuming for purposes
of such determination that there is no change in the record
ownership of the Company's securities from the record date for
such approval until such reorganization and that such record
owners hold no securities of the other parties to such
reorganization, but including in such determination any
securities of the other parties to such reorganization held by
affiliates of the Company);
(iii) Approval by the stockholders of the Company of the sale of
substantially all of the Company's business and/or assets to a
person or entity which is not a subsidiary or other affiliate;
(iv) Any `person' (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended from time
to time (the "EXCHANGE ACT") but excluding any person
described in and satisfying the conditions of Rule 13d-1(b)(1)
thereunder) becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding
securities entitled to then vote generally in the election of
directors of the Company; or
(v) During any period not longer than two consecutive years,
individuals who at the beginning of such period constituted
the Board cease to constitute at least a majority thereof,
unless the election, or the nomination for election by the
Company's stockholders, of each new Board member was approved
by a vote of at least three-fourths of the Board members then
still in office who were Board members at the beginning of
such period (including for these purposes, new members whose
election or nomination was so approved),
that, upon the occurrence of a Change in Control Event, there shall be no
acceleration of benefits under the Option or determines that only certain or
limited benefits under the Option shall be accelerated and the extent to which
they shall be accelerated, and/or establishes a different time in respect of
such Change in Control Event for such acceleration, then upon the occurrence of
a Change in Control Event the Option shall become immediately exercisable. The
Board may override the limitations on acceleration in this Section 9.2 and may
accord the Optionee a right to refuse any acceleration, in such circumstances as
the Board may approve. Any acceleration of the Option shall comply with
applicable regulatory requirements, including, without limitation, Section 422
of the Internal Revenue Code of 1986, as amended from time to time (the "CODE").
9.3. POSSIBLE EARLY TERMINATION OF ACCELERATED AWARDS. If the Option has
been fully accelerated as permitted by Section 9.2 but is not exercised
prior to (i) a dissolution of the Company, or (ii) an event described in
Section 9.2 that the Company does not survive, or (iii) the consummation
of an event described in Section 9.2 that results in a change of control
approved by the Board, the Option shall thereupon terminate, subject to
any provision that has been expressly made by the Board for the
survival, substitution, exchange or other settlement of the Option.
9.4. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) Resignation or Dismissal. If the Optionee's employment by the
Company or any of its subsidiaries terminates for any reason (the date
of such termination being referred to as the "SEVERANCE DATE") other
than retirement, a "permanent and total disability" within the meaning
of Section 22(e)(3) of the Code and such other disabilities,
infirmities, afflictions or conditions as the Board by rule may include
("TOTAL DISABILITY") or death, or "for cause" (as determined in the
discretion of the Board), the Optionee shall have, subject to earlier
termination pursuant to or as contemplated by Section 1 or 9.2 hereof,
three
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months after the Severance Date to exercise the Option to the extent it
shall have become exercisable on the Severance Date. In the case of a
termination "for cause", the Option shall terminate on the Severance
Date. In other cases, the Option, to the extent not exercisable on the
Severance Date, shall terminate.
(b) Death or Disability. If the Optionee's employment by the
Company or any of its subsidiaries terminates as a result of Total
Disability or death, the Optionee, the Optionee's personal
representative or his or her beneficiary, as the case may be, shall
have, subject to earlier termination pursuant to or as contemplated by
Section 1 or 9.2 hereof, until 12 months after the Severance Date to
exercise the Option to the extent it shall have become exercisable by
the Severance Date. The Option to the extent not exercisable on the
Severance Date shall terminate.
(c) Retirement. If the Optionee's employment by the Company or
any of its subsidiaries terminates as a result of retirement with the
consent of the Company or from active service as an employee or officer
of the Company on or after attaining age 55 with 10 or more years of
service or after age 65, the Optionee, the Optionee's personal
representative or his or her beneficiary, as the case may be, shall
have, subject to earlier termination pursuant to or as contemplated by
Section 1 or 9.2 hereof, until 12 months after the Severance Date to
exercise the Option to the extent it shall have become exercisable by
the Severance Date. The Option, to the extent not exercisable on the
Severance Date, shall terminate.
(d) Board Discretion. Notwithstanding the foregoing provisions of
this Section 9.4, in the event, or in anticipation, of a termination of
employment with the Company or any of its subsidiaries for any reason,
other than discharge for cause, the Board may, in its discretion,
increase the portion of the Option available to the Optionee, or the
Optionee's beneficiary or personal representative, as the case may be,
or, subject to the provisions of Section 1 hereof, extend the
exercisability period upon such terms as the Board shall determine and
expressly set forth in or by amendment to this Agreement.
9.5. EFFECT OF CHANGE OF SUBSIDIARY STATUS. If an entity ceases to be a
subsidiary of the Company a termination of employment and service shall
be deemed to have occurred with respect to each employee of such
subsidiary who does not continue as an employee of another entity within
the Company.
10. SHARES TO BE RESERVED. The Company shall at all times during the term of
the Option reserve and keep available such number of shares of Common
Stock as will be sufficient to satisfy the requirements of this
Agreement.
11. ASSIGNMENT. This Agreement cannot be directly or indirectly assigned or
transferred by the Optionee in whole or in part without the prior
written consent of the Company.
12. NOTICES. Any notices, demands or requests of any kind whatsoever
hereunder shall be given in writing and sent to the addresses set forth
below or to such other address as either party may from time to time in
writing designate. Each such notice or other communication shall be
effective (i) if given by telecommunication, when transmitted to the
applicable number so specified in (or pursuant to) this Section 12 and a
verification of receipt is received, (ii) if given by mail, three days
after such communication is deposited in the mail with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other
means, when actually delivered at such address.
13. WAIVER. The parties reserve the right to waive by mutual written consent
for a specific period and under specific conditions any provision of
this Agreement, provided that such waiver shall be limited to the period
and conditions specified by mutual written consent and shall in no way
constitute a general waiver, or be considered as evidence of any given
interpretation of any provision so waived.
14. GOVERNING LAW. This Agreement, and the legal relations between the
parties, shall be governed by and construed in accordance with the laws
of the State of California, without regard to conflicts of law
doctrines. All actions or proceedings under or relating to this
Agreement will be resolved in a state or federal court located in Orange
County, California; provided, however, that in the Company's discretion,
such an action may be heard in some other place designated by it if
necessary to acquire jurisdiction over third persons so that the dispute
can be resolved in one action. Each party hereby (i) agrees to submit to
the jurisdiction of
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the federal and state courts located in Orange County, California, (ii)
agrees to appear in any such action, (iii) consents to the jurisdiction
of such courts and (iv) waives any objections it might have as to venue
in any such court. Service of process may be made in any action, suit or
proceeding by mailing or delivering a copy of such process to a party at
its address and in the manner set forth in Section 12 hereof.
15. TITLES. Titles and paragraph headings are for reference purposes only
and are not to be considered a part of this Agreement.
16. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided,
if possible, to achieve the intent of the parties to the extent
possible. In any event, all other provisions of this Agreement shall be
deemed valid and enforceable to the extent possible.
17. ENTIRE AGREEMENT. The parties hereto acknowledge that each has read this
Agreement, understands it, and agrees to be bound by its terms. The
parties further agree that this Agreement and any modifications made
pursuant to it constitute the complete and exclusive written expression
of the terms of the agreement between the parties, and supercede all
prior or contemporaneous proposals, oral or written, understandings,
representations, conditions, warranties, covenants, and all other
communications between the parties relating to the subject matter of
this Agreement. The parties further agree that this Agreement may not in
any way be explained or supplemented by a prior or existing course of
dealings between the parties, by any usage of trade or custom, or by any
prior performance between the parties pursuant to this Agreement or
otherwise.
18. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument.
19. ATTORNEY'S FEES. In the event that any action or proceeding is brought
in connection with this Agreement the prevailing party therein shall be
entitled to recover its costs and reasonable attorney's fees.
20. COMPLIANCE WITH LAWS. Notwithstanding anything else contained herein to
the contrary, this Agreement, the granting and vesting of the Option and
the offer, issuance and delivery of Shares under this Agreement are
subject to compliance with all applicable federal and state laws, rules
and regulations (including but not limited to state and federal
securities laws and federal margin requirements) and to such approvals
by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in
connection therewith. Any securities delivered in respect of this
Agreement will be subject to such restrictions, and to any restrictions
the Company may require to preserve a pooling of interests under
generally accepted accounting principles, and the person acquiring such
securities will, if requested by the Company, provide such assurances
and representations to the Company as the Company may deem necessary or
desirable to assure compliance with all applicable legal requirements.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by a duly authorized officer and the Optionee has
hereunto set his or her hand.
XXXXX INSTRUMENTS CORP.,
a Delaware corporation
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
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Its: Vice President and General Counsel
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0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
OPTIONEE
/s/ Xxxxxx Xxxxxxx
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Signature
Xxxxxx Xxxxxxx
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Print Name
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Address
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Telephone
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Facsimile
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CONSENT OF SPOUSE
In consideration of the execution of the foregoing Nonqualified
Stock Option Agreement by Xxxxx Instruments Corp., I, Xxxxxxxx Xxxxxxx, the
spouse of the Optionee herein named, do hereby agree to be bound by all of the
terms and provisions thereof.
DATED: 30.6.2000 /s/ Xxxxxxxx Xxxxxxx
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Signature of Spouse
