Exhibit 10.5
Non-Qualified Stock Option Plan, Administrative Rules and Agreement under
which officers of the Company are eligible to receive options to purchase an
aggregate of 726,000 shares of the Company's $2.50 par value common stock.
106
XXXXXXX XXXXX, INC.
NONQUALIFIED STOCK OPTION PLAN
1. Purpose. The Nonqualified Stock Option Plan (the "Plan") is intended
to advance the interests of Xxxxxxx Xxxxx, Inc. (the "Company"), its
shareholders, and its subsidiaries by encouraging and enabling selected
officers and other key employees upon whose judgment, initiative and effort
the Company is largely dependent for the successful conduct of its business,
to acquire and retain a proprietary interest in the Company by ownership of
its stock. Options granted under the plan are intended to be options which do
not meet the requirements of Section 422 of the Internal Revenue Code of 1954,
as amended (the "Code").
2. Definitions.
(a) "Board" means the Board of Directors of the Company.
(b) "Common Stock" means the Company's $5.00 par value Common Stock.
(c) "Date of Grant" means the date on which an option is granted
under the Plan.
(d) "Option" means an option to acquire Common Stock granted under
the Plan.
(e) "Optionee" means a person to whom an option, which has not
expired, has been granted under the Plan.
(f) "Subsidiary" or "Subsidiaries" means a subsidiary corporation or
corporations of the Company as defined in Section 425 of the Code.
(g) "Successor" means the legal representative of the estate of a
deceased Optionee or the person or persons who acquire the right to exercise an
Option by bequest or inheritance or by reason of the death of any Optionee.
(h) "Administrative Rules" means Rules adopted by a majority vote of
the Board to interpret the provisions of the Plan or to impose other terms,
conditions and restrictions on the granting, term, vesting and exercise of the
Options and upon the issuance and transfer of Options and Stock issued pursuant
to the exercise of Options. Administrative Rules shall, upon adoption, become
part of this Plan as if originally stated herein. The Rules adopted by the
Board shall be passed by resolution and kept at the Company's chief executive
office.
3. Administration of Plan. The Plan shall be administered by the Board.
Options to members of the Board may be granted only by a majority of the
disinterested members of the Board. The Board shall have full and final
authority in its discretion, subject to the provisions of the Plan, to
determine the individuals to whom and the time or times at which options shall
be granted and the number of shares and purchase price of Common Stock covered
by each Option; to construe and interpret the Plan; to determine the terms
and provisions of the respective option agreements, which need not be
identical, including, but without limitation, terms covering the payment of
the option price; and to make all other determinations and take all other
actions deemed necessary or advisable for the proper administration of the
Plan. All such actions and determinations shall be conclusively binding for
all purposes and upon all persons.
4. Common Stock Subject to Options. The aggregate number of shares of
the Company's Common Stock which may be issued upon the exercise of Options
granted under the Plan shall not exceed 100,000, subject to adjustment under
the provisions of paragraph 9. The shares of Common Stock to be issued upon
the exercise of Options may be authorized but unissued shares, shares issued
and reacquired by the Company or shares bought on the market for the purposes
of the Plan. In the event any Option shall, for any reason, terminate or
expire or be surrendered without having been exercised in full, the shares
subject to such Option but not purchased thereunder shall again be available
for Options to be granted under the Plan.
5. Participants. Options may be granted under the Plan to officers of
the Company or of any of its Subsidiaries who are residents of the State or
Iowa when the Options are granted.
6. Terms and Conditions of Options. Any Option granted under the Plan
shall be evidenced by an agreement executed by the Company and the applicable
officer and shall contain such terms and be in such form as the Board may from
time to time approve, subject to the following limitations and conditions:
(a) Option Price. The option price per share with respect to each
Option shall be determined by the Board but shall in no instance be less than
100% of the fair market value of a share of the Common Stock on the Date of
Grant. For the purposes hereof, fair market value shall be as determined by the
Board and such determination shall be binding upon the Company and upon the
Optionee. The Board may make such determination (i) in case the Common Stock
shall not then be listed and traded upon a recognized securities exchange, upon
the basis of the mean between the bid and asked quotations for such stock on
the Date of Grant (as reported by The Wall
Street Journal "NASDAQ Bid And Asked Quotations" for the Date of Grant) or, in
the event that there shall be no bid or asked quotations on the Date of Grant,
then upon the basis of the mean between the bid and asked quotations on the
date nearest preceding the Date of Grant or (ii) in case the Common Stock
shall then be listed and traded upon a recognized securities exchange, upon
the basis of the mean between the highest and lowest selling prices at which
shares of the Common Stock were traded on such recognized securities exchange
on the Date of Grant as reported in The Wall Street Journal or, if the Common
Stock was not traded on said Date, upon the basis of the mean of such prices
on the date nearest preceding the Date of Grant, and (iii) upon any other
factors which the Board shall deem appropriate.
(b) Period of Option. The expiration date of each Option shall be
set by the Board.
(c) Change in Duties or Position of Optionee. So long as the
holder of an Option shall continue to be an employee of the Company or one or
more of its Subsidiaries, his Option shall not be affected by any change of
duties or position.
(d) Restrictions on Options and Stock Issued Pursuant to Options.
Administrative Rules may be adopted by the Board to interpret the provisions of
the Plan or to impose other terms, conditions, and restrictions on the
granting, term, vesting and exercise of Options and upon the issuance and
transfer of Options and Stock issued pursuant to the exercise of Options.
7. Shareholder Rights. Neither an Optionee nor his Successor shall have
any of the rights of a shareholder of the Company until the certificates
evidencing the shares purchased are properly delivered to such Optionee or his
Successor.
8. No Alteration of Employment Terms. The granting of an Option to an
eligible person does not alter in any way the Company's or the relevant
Subsidiary's existing rights to terminate such person's employment at any time
for any reason, nor does it confer upon such person any rights or privileges
except as specifically provided for in the Plan.
9. Adjustments. In the event that the outstanding shares of Common Stock
of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares, or dividend or other
distribution payable in capital stock, appropriate adjustment shall be made by
the Board in the number and kind of shares as to which
Options may be granted under the Plan. In addition, there shall be appropriate
adjustments made in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised, shall be exercisable, to the end
that the proportionate interest of the holder of the Option shall, to the
extent practicable, be maintained as before the occurrence of such event.
Such adjustment in outstanding Options shall be made without change in the
total price applicable to the unexercised portion of the Option but with a
corresponding adjustment in the option price per share.
10. Restrictions on Issuing Shares. The exercise of each Option shall be
subject to the condition that if at any time the Company shall determine in its
discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any securities exchange or under
any state or federal law, or that the consent or approval of any regulatory
body, is necessary or desirable as a condition of, or in connection with,
such exercise or the delivery or purchase of shares pursuant thereto, then
in any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, consent, or approval shall
have been effected or obtained free of any conditions not acceptable to the
Company.
11. Use of Proceeds. The proceeds received by the Company from the sale
of Common Stock pursuant to the exercise of Options granted under the Plan
shall be added to the Company's general funds and used for general corporate
purposes.
12. Suspension and/or Termination of Plan. The Board may at any time
suspend or terminate the Plan. The Board cannot change any provisions under the
Plan which would increase the cost of the Plan to the Company, or alter the
allocation of benefits under the Plan without approval by the shareholders of
the Company. Unless the Plan shall have been terminated by the Board, the Plan
shall terminate ten years after the effective date of the Plan. No Option may
be granted during any suspension or after the termination of the Plan. Except
as provided in this paragraph, no suspension or termination of the Plan shall,
without an Optionee's consent, alter or impair any of the rights or obligations
under any Option theretofore granted to such Optionee under the Plan.
13. Effectiveness of the Plan. The Plan shall become effective only
after the stockholders of the Company shall, by the affirmative vote of a
majority in interest of the Common Stock, have approved the Plan.
13. Time of Granting Options. Neither anything contained in the Plan or
in any resolution adopted or to be adopted by the Board of Directors or the
stockholders of the Company nor any action
taken by the Board shall constitute the granting of any Option. The granting of
an Option shall take place only when a written Option Agreement is duly
executed and delivered by or on behalf of the Company and the Optionee to
whom such Option shall be granted.
ADMINISTRATIVE RULES
FOR XXXXXXX XXXXX, INC.
NONQUALIFIED STOCK OPTION PLAN
1. Purpose. The Purpose of the Administrative Rules as adopted and
amended by the Board of Directors is to interpret the provisions of the
Xxxxxxx Xxxxx, Inc. "Nonqualified Stock Option Plan" (the "Plan") or to
impose other terms, conditions, and restrictions on the granting, term,
vesting and exercise of the options and upon the issuance and transfer of
Options and stock issued pursuant to the exercise of Options.
2. Definitions.
A. Those terms defined in the Plan shall have the same meaning when
used in these Rules.
B. "Disability" means an employee of the company who is disabled as
defined under the Company's disability plan, if any, or under the Social
Security Rules.
2. Expiration Date of Options Granted Under the Plan. Except as
otherwise provided in Section 4(C)(1), the Options granted under the Plan
shall expire 10 years and 30 days from the date of issuance.
3. Vesting of Option Rights. Unless otherwise provided, an option
granted under this Plan shall become exercisable as follows:
A. 20% of the number of shares originally covered thereby at any time
after the Optionee has completed one (1) year of employment with the Company or
any of its Subsidiaries following the date of granting of the Option.
B. An additional 20% of the number of shares originally covered
thereby at the end of the second, third, fourth and fifth years of the
Optionee's employment with the Company or any Subsidiary thereof following
the date of granting of the Option. Said installments shall be cumulative to
the extent that the Optionee will be able to exercise 20, 40, 60, 80, or 100%
of the stock option rights originally granted thereby following the
completion of the first, second, third, fourth and fifth years of service,
respectively, with the Company or any of its Subsidiaries following the date
of the granting of the Option. To the extent not exercised, installments
shall be exercisable, in whole or in part, in any subsequent period but not
later than ten (10) years and 30 days from the date the Option is granted.
C. Notwithstanding the foregoing:
(1) Termination of Employment. Upon termination of an Optionee's
employment with the Company or with any of its subsidiaries for reasons other
than death, disability, retirement after age 60 or retirement before age 60
with Board approval, his Option privileges shall be limited to the shares
which were immediately purchasable by him at the date of such termination
and such Option privilege shall expire unless exercised by him within ninety
(90) days after the date of such termination. In the case of the death,
disability, retirement after age 60, or retirement before age 60 with
approval of the Board, the provisions of the preceding sentence shall not
apply, and an Option shall be vested as provided in Section 4(C)(2) and
4(C)(3) hereof and shall be exercisable for the remaining term thereof as
provided in Section 3 hereof.
(2) Death or Disability of Optionee. If an Optionee to whom an
Option shall have been granted shall die or become disabled while he shall be
employed by the Company or one or more of its Subsidiaries, such Option shall
thereupon be 100% vested and may be exercised to the extent not previously
exercised, as to all Common Shares which shall be covered by such Option by the
Optionee, legatee or legatees of the Optionee under his last Will, or by his
personal representatives or distributees.
(3) Retirement of Optionee. In the event that an Optionee to
whom an Option shall have been granted shall retire after the age of 60 any
Option held by such retired Optionee shall thereupon be 100% vested and may
be exercised, to the extent not previously exercised, as to all the shares
which shall be covered by such Option. In the event Optionee retires prior
to age 60, the Option may become 100% vested upon the approval of the Board
in its sole discretion. If the Optionee retires prior to the age of 60
without the approval of the Board, the first sentence of Section 4(C)(1)
shall control.
5. Nontransferability of Options. No option granted under the Plan shall
be transferable otherwise than by will or by laws of descent and distribution,
and during the lifetime of the Option only the Optionee (or his duly appointed
legal representative) may exercise the Option.
6. Exercising Options. Unless written notice, identifying which options
are being exercised, is given to the Company at the time the options are
exercised, the options held by the option holder that have been exercisable for
the longest period of time shall be deemed to be those exercised by the option
holder.
XXXXXXX XXXXX, INC.
1987 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
This Option Agreement is made this ____ day of _______________, 19___, by
and between Xxxxxxx Xxxxx, Inc., an Iowa corporation (the "Company") and
_________________________, an employee of the Company or Subsidiary thereof
(the "Employee").
The Company desires to carry out the purpose of its 1987 Stock Option
Plan (the "Plan") by affording the Employee an opportunity to purchase shares
of its common stock, par value Five Dollars ($5.00) per share (the "Common
Stock"), as provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement and for other good and valuable consideration, the Company and
the Employee have agreed, and do by this Agreement agree, as follows:
1. Grant of Option. The Company by this Agreement irrevocably grants to
the Employee the right and option (the "Option") to purchase ______ shares of
Common Stock (such number being subject to adjustment as provided in Paragraph
8 of this Agreement) on the terms and conditions set forth in this Agreement.
2. Purchase Price. The purchase price of the shares of the Common Stock
covered by this Option shall be _____________ Dollars and _____/100
(__________________) per share.
3. Term of Option. The term of the Option shall be for a period of ten
years and thirty days from the date of this Agreement subject to earlier
termination as provided in Paragraph 4, of this Agreement. The Employee may
exercise vested Options at any time or from time to time as to part or all of
the shares of Common Stock covered by the Option.
4. Vesting of Option Rights. Unless otherwise provided, an option
granted under this Plan shall become exercisable as follows:
A. Twenty percent (20%) of the number of shares originally covered
thereby at any time after the Optionee has completed one (1) year of
employment with the Company or any of its Subsidiaries following the date of
granting of the Option.
B. An additional 20% of the number of shares originally covered thereby
at the end of the second, third, fourth and fifth years of the Optionee's
employment with the Company or any Subsidiary thereof following the date of
granting of the Option. Said installments shall be cumulative to the extent
that the Optionee will be able to exercise 20, 40, 60, 80, or 100% of the
stock option rights originally granted thereby following the completion of the
first, second, third, fourth and fifth years of service, respectively, with
the Company or any of its subsidiaries following the date of the granting of
the Option. To the extent not exercised, installments shall be exercisable,
in whole or in part, in any subsequent period but not later than ten (10)
years and 30 days from the date the Option in granted.
C. Notwithstanding the foregoing:
(1) Termination of Employment. Upon termination of an Optionee's
employment with the Company or with any of its Subsidiaries for reasons other
than death, disability, retirement after age 60 or retirement before age 60
with Board approval, his Option privileges shall be limited to the shares
which were immediately purchasable by him at the date of such termination and
such option privileges shall expire unless exercised by him within ninety (90)
days after the date of such termination. In the case of the death,
disability, retirement after age 60, or retirement before age 60 with approval
of the Board of Directors of the Company, the provisions of the preceding
sentence shall not apply, and an Option shall be vested as provided in
Paragraph 4(C)(2)and 4(C)(3) hereof and shall be exercisable for the remaining
term thereof as provided in Section 3 hereof.
(2) Death or Disability of Optionee. If an Optionee to whom an Option
shall have been granted shall die or become disabled while he shall be
employed by the Company or one or more of its Subsidiaries, such Option shall
thereupon be 100% vested and may be exercised to the extent not previously
exercised, as to all Common Shares which shall be covered by such Option by
the Optionee, legatee or legatees of the Optionee under his last Will, or by
his personal representatives or distributees.
(3) Retirement of Optionee. In the event that an Optionee to whom an
Option shall have been granted shall retire after the age of 60 any Option
held by such retired Optionee shall thereupon be 100% vested and may be
exercised, to the extent not previously exercised, as to all the shares which
shall be covered by such Option. In the
event Optionee retires prior to age 60, the Option may become 100% vested upon
the approval of the Board of Directors of the Company in its sole discretion.
If the Optionee retires prior to the age of 60 without the approval of the
Board of Directors of the Company, the first sentence of Section 4(C)(1) shall
control.
5. Change in Duties or Position of Optionee. So long as the holder of
an Option shall continue to be an employee of the Company or one or more of
its Subsidiaries, his Option shall not be affected by any change of duties or
position.
6. Nontransferability of Options. No option granted under the Plan
shall be transferable otherwise than by will or by laws of descent and
distribution, and during the lifetime of the Optionee only the Optionee (or
his duly appointed legal representative) may exercise the Option.
7. Method of Exercising Option. Subject to the terms and conditions of
this Agreement, the Option may be exercised by written notice to the Company.
Such notice shall state the election to exercise the Option and the number of
shares in respect of which it is being exercised and shall be signed by the
person who shall exercise the Option. Such notice shall either (a) be
accompanied by payment of the full purchase price of such shares, in which
event the Company shall deliver a certificate or certificates representing
such shares as soon as practicable after notice shall be received; or (b) fix
a date (not less than five (5) nor more than fifteen (15) business days from
the date such notice shall be received by the Company) for the payment of the
full purchase price of such shares against delivery of a certificate or
certificates representing such shares. A certificate or certificates for the
shares as to which the Option shall have been so exercised shall be registered
in the name of the person who shall exercise the Option or in joint tenancy
with the right of survivorship with another as directed by the Optionee, and
shall be delivered as provided above to or upon the written order of the
person who shall exercise the Option.
8. Presumption of Options Exercised. Unless written notice, identifying
which options are being exercised, is given to the Company at the time the
options are exercised, the options held by the option holder that have been
exercisable for the longest period of time shall be deemed to be those
exercised by the option holder.
9. Shareholder Rights. Neither an Optionee nor his Successor shall have
any of the rights of a shareholder of the Company until the certificates
evidencing the shares purchased are properly delivered to such Optionee or his
Successor.
10. No Alteration of Employment Terms. The granting of an Option to an
eligible person does not alter in any way the Company's or the relevant
Subsidiary's existing rights to terminate such person's employment at any time
for any reason, nor does it confer upon such person any rights or privileges
except as specifically provided for in the Plan.
11. Adjustments. In the event that the outstanding shares of Common
Stock of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company or of another corporation, by reason of a recapitalization,
reclassification, stock split-up, combination of shares, or dividend or other
distribution payable in capital stock, appropriate adjustment shall be made by
the Board. in the number and kind of shares as to which Options may be granted
under the Plan. In addition, there shall be appropriate adjustments made in
the number and kind of shares as to which outstanding options, or portions
thereof then unexercised, shall be exercisable, to the end that the
proportionate interest of the holder of the Option shall, to the extent
practicable, be maintained as before the occurrence of such event. Such
adjustment in outstanding Options shall be made without change in the total
price applicable to the unexercised portion of the option but with a
corresponding adjustment in the option price per share. Nothing contained in
this paragraph shall be construed as authorizing the issuance of fractional
shares of stock.. The adjustments made pursuant to this paragraph shall be
rounded downward to the nearest whole share.
12. Restrictions on Issuing Shares. The exercise of each Option shall
be subject to the condition that if at any time the Company shall determine in
its discretion that the satisfaction of withholding tax or other withholding
liabilities, or that the listing, registration, or qualification of any shares
otherwise deliverable upon such exercise upon any securities exchange or under
any state or federal law, or that the consent or approval of any regulatory
body, is necessary or desirable as a condition of, or in connection with, such
exercise or the delivery or purchase of shares pursuant thereto, then in any
such event, such exercise shall not be effective unless such withholding,
listing, registration, qualification, consent, or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.
13. Stock Legend. The employee hereby consents to the imposition of an
appropriate stock transfer legend upon the stock issued pursuant to the
exercise of the options in a form prescribed by the Company's legal counsel.
14. Covenant of Employee. The Employee hereby covenants that he is
currently a bona fide resident of the State of Iowa.
15. Notices. Any notices provided for under this Agreement shall be in
writing and shall be delivered in person to the party to be notified or sent
by certified mail. Notices sent to the Company shall be addressed to Xxxxxxx
Xxxxx, Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxxxx, XX 00000. Notices sent to the
Employee shall be addressed to the Employee at his address as it appears in
the Company's regular records.
16. Terms. Those terms defined in the Xxxxxxx Xxxxx, Inc. Non Qualified
Stock Option Plan or the Administrative Rules adopted thereunder shall have
the same meanings when used in this Agreement.
17. Entire Agreement. This Agreement constitutes the entire agreement
between the Company and the Employee with respect to this Agreement. No
waiver, modification or amendment of any of the terms of this Agreement shall
be effective unless set forth in a written agreement signed by the Company and
the Employee.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
XXXXXXX XXXXX, INC.
By___________________________________
EMPLOYEE OPTION HOLDER
_____________________________________
AMENDMENT NO. 1 TO 1987 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
THIS AMENDMENT NO. 1 TO 1987 STOCK OPTION PLAN STOCK OPTION AGREEMENT
("Amendment") made and entered into as of this _____________________ day of
_________________, 1988, by and between Xxxxxxx Xxxxx, Inc., an Iowa
corporation ("Company") and _____________________, an employee of the Company
or of a subsidiary ("Employee").
RECITALS:
The Company and the Employee entered into a Stock Option Agreement dated
____________________________ ("Agreement") and the Company and the Employee
wish to amend the Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
and for other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Paragraph 4 of the Agreement is hereby amended by adding the following
subparagraph 4 to subparagraph C:
"(4) Should the Company be sold, merged or consolidated with another
company for whatever reason, and by whatever means, then all outstanding
options which have not yet become exercisable, shall become immediately
exercisable to the Optionee upon the date of such sale or merger transaction."
2. All other terms and conditions of the Agreement shall remain in full force
and effect.
Xxxxxxx Xxxxx, Inc.
By:____________________________
Employee Option Holder
_______________________________
