NONQUALIFIED
STOCK OPTION AGREEMENT
This Option Agreement (the "Agreement") is made as of the 30th day
of June, 2000, between Xxxxxxx Industries, Inc., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxxxxxx (the "Optionee").
WHEREAS, the Company desires to afford the Optionee the
opportunity to purchase shares of Common Stock, par value $.01 per share
(the "Common Stock"), of the Company.
NOW, THEREFORE, in connection with the mutual covenants
hereinafter set forth and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Definitions.
"Committee" shall mean members of the Company's 1998 Stock Option
Plan Committee.
2. Grant of Options. The Company hereby grants to the Optionee
the right and option (the "Option") to purchase up to, but not exceeding in
the aggregate, 15,000 shares of Common Stock, on the terms and conditions
herein set forth.
3. Purchase Price. The purchase price of each share of Common
Stock covered by the Option shall be $27.8125 (the "Purchase Price").
4. Term of Options. The term of the Option shall be ten (10)
years from the date hereof, subject to earlier termination as provided in
Section 6 hereof.
5. Vesting of Options. The Option, subject to the terms,
conditions and limitations contained herein, shall vest and become
exercisable with respect to the shares of Common Stock in accordance with
the following installments: as to 20% on the underlying shares of Common
Stock on the first anniversary of the date hereof, and an additional 20% on
each of the succeeding three anniversaries of the date hereof, as to the
remaining 20% of the underlying shares of common stock on the fifth
anniversary of the date hereof; provided that, with respect to each such
installment, the Optionee has remained in continuous employment with the
Company from the date hereof through the date such installment is designated
to vest.
6. Termination of Employment. In the event the Optionee's
employment with the Company is terminated for any reason other than death or
disability (within the meaning of Section 22(e)(3) of the Code), the Option
shall immediately lapse as of the date of such termination whether or not
exercisable on such date. In the event the Optionee's employment with the
Company is terminated by reason of the Optionee's death or disability
(within the meaning of Section 22(e)(3) of the Code), the Option shall
remain exercisable for a period of up to twelve months after termination of
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employment, to the extent exercisable at the time of termination of
employment, and shall lapse as to any shares of Common Stock for which it
has yet to become exercisable as of the date of such termination of
employment.
7. No Rights as a Shareholder. The Optionee shall have no rights
as a shareholder with respect to any shares of Common Stock issuable upon
the exercise of an Option until the date of issuance to the Optionee of a
certificate evidencing such shares of Common Stock. No adjustments, other
than as provided in Section 7 of the Plan, shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property)
or distributions for which the record date is prior to the date the
certificate for such shares of Common Stock is issued.
8. Method of Exercising Option. Subject to the terms and
conditions of this Agreement, the Option may be exercised by written notice
to the Secretary of the Company at the Company's principal executive
offices. Such notice shall state the election to exercise the Option and
the number of Common Shares in respect of which the Option is being
exercised, shall be signed by the person or persons so exercising the Option
and shall either:
(a) be accompanied by payment in full of the Purchase Price for
such shares of Common Stock; or
(b) fix a date, not less than five (5) nor more than ten (10)
business days from the date such notice shall be delivered to the Company,
for the payment in full of the Purchase Price for such shares of Common
Stock.
Payment of such Purchase Price shall be made in United States
dollars by payable to the order of the Company. Subject to such procedures
and rules as may be adopted from time to time by the Committee, the Optionee
may also pay such Purchase Price by (i) tendering to the Company shares of
Common Stock (held by the Optionee for at least six months prior to such
delivery) with an aggregate Fair Market Value on the date of exercise equal
to such Purchase Price, (ii) delivery to the Company of a copy of
irrevocable instructions to a stockbroker to sell shares of Common Stock and
to deliver promptly to the Company an amount sufficient to pay such Purchase
Price, or (iii) any combination of the methods of payment described in
clauses (i) and (ii) and in the preceding sentence. The certificate for
shares of Common Stock as to which the Option shall have been so exercised
shall be registered in the name of the person or persons so exercising the
Option. All shares of Common Stock purchased upon the exercise of the
Option as provided herein shall be fully paid and non-assessable.
9. Income Tax Withholding. The Company may make such provisions
and take such steps as it may deem necessary or appropriate for the
withholding of all federal, state, local and other taxes required by law to
be withheld with respect to the exercise of the Option and the issuance of
the shares of Common Stock, including, but not limited to, retaining shares
of Common Stock otherwise to be delivered upon exercise, deducting the
amount of any such withholding taxes from any other amount then or
thereafter payable by the Company, or any Subsidiary, to the Optionee, or
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requiring the Optionee, or the beneficiary or legal representative of the
Optionee, to pay to the Company the amount required to be withheld or to
execute such documents as the Company deems necessary or desirable to enable
it to satisfy its withholding obligations.
10. Non-Transferability. Unless otherwise determined by the
Committee, this Option is not assignable or transferable other than by will
or the laws of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee. The Option shall not be subject
to execution, attachment or other process.
11. Further Conditions to Exercise.
(a.) The obligation of the Company to issue shares of Common
Stock pursuant to the exercise of the Option shall be subject to all
applicable laws, rules and regulations, and to such approvals by
governmental agencies as may be required. Notwithstanding any of the
provisions hereof, the Optionee may not exercise the Option, and the Company
will be under no obligation to offer to sell or to sell and shall be
prohibited from offering to sell or selling any shares of Common Stock
pursuant to the exercise of any Option unless such exercise, offer or sale
shall be properly registered pursuant to the Securities Act of 1933 (as now
in effect or as hereafter amended) (the "Securities Act") with the
Securities and Exchange Commission or unless the Company has received an
opinion of counsel, satisfactory to the Company, that such shares may be
offered or sold without such registration pursuant to an available exemption
therefrom and the terms and conditions of such exemption have been fully
complied with. The Company shall use reasonable efforts to register the
offer or sale of shares of Common Stock underlying the Option pursuant to
the Securities Act and to take any other affirmative action in order to
cause the exercise of the Options or the issuance or transfer of shares
pursuant thereto to comply with any law or regulation of any governmental
authority. If the shares of Common Stock offered for sale or sold under any
Option are offered or sold pursuant to an exemption from registration under
the Securities Act, the Company may restrict the transfer of such shares and
may legend the Common Stock certificates representing such shares in such
manner as it deems advisable to ensure the availability of any such
exemption.
(b.) The Company is relieved from any liability for the non-
issuance or non-transfer or any delay in issuance or transfer of any shares
of Common Stock subject to the Option which results from the inability of
the Company to obtain or in any delay in obtaining from any regulatory body
having jurisdiction all requisite authority to issue or transfer shares of
Common Stock of the Company either upon exercise of the Option or shares of
Common Stock issued as a result of such exercise if counsel for the Company
deems such authority necessary for lawful issuance or transfer of any such
shares.
(c.) The Company is relieved from any liability for the non-
issuance or non-transfer or any delay in issuance or transfer of any shares
of Common Stock subject to the Option which results from the inability of
the Company to obtain or in any delay in obtaining from any regulatory body
having jurisdiction all requisite authority to issue or transfer shares of
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Common Stock of the Company either upon exercise of the Option or shares of
Common Stock issued as a result of such exercise if counsel for the Company
deems such authority necessary for lawful issuance or transfer of any such
shares.
(d.) For purposes of this Agreement, the term "Cause" shall mean
(i) Optionee's continued failure to substantially perform his employment
duties, (ii) the engaging by Optionee in willful misconduct injurious to the
Company, or (iii) the commission by the Optionee of an act of moral
turpitude which is punishable as a felony. For purposes of this Agreement,
the term "Noncompetitive Action" shall mean (i) the Optionee's taking action
which would, assuming Optionee were a party to the Company's standard
Employee Confidentiality and Non-Solicitation Agreement, violate the terms
of such agreement (whether or not Optionee has actually executed such
agreement), or (ii) engaging by the Optionee in willful conduct which
benefits a direct competitor of the Company or is demonstrably injurious to
the Company.
(e.) If the Optionee employment with the Company is terminated
for "Cause" (as defined herein), then to the extent the Optionee exercised
any Options within the six month period preceding such termination, the
Optionee will be required to repay to the Company (and the Optionee agrees
to repay as a condition of exercise) the difference between (a) the average
of the high and low selling prices of the Common Stock on the exercise date
and (b) the exercise price per share, multiplied by the number of shares for
which the Option was exercised. The Committee will determine whether an
Optionee's employment is terminated for Cause. However, the Committee, in
its discretion, may choose not to enforce the foregoing provisions in the
case of any particular Optionee.
(f.) In the event that the outstanding shares of Common Stock or
the capital structure of the Company are changed by reason of
reorganization, merger, consolidation, recapitalization, reclassification,
stock split, reverse stock split, combination or exchange of shares and the
like, or dividends payable in shares of Common Stock, the Committee may make
such appropriate adjustment to the number of shares of Common Stock subject
to the Option and the Purchase Price as determined by the Committee, in its
sole discretion, to be appropriate. If the Company shall be reorganized,
consolidated, or merged with another corporation, or if all or substantially
all of the assets of the Company shall be sold or exchanged, the Optionee
shall at the time of issuance of the stock under such corporate event be
entitled to receive upon the exercise of the Option the same number and kind
of shares of stock or the same amount of property, cash or securities as
Optionee would have been entitled to receive upon the occurrence of any such
corporate event as if Optionee had been, immediately prior to such event, the
holder of the number of shares of Common Stock covered by the unexercised
portion of the Option; provided however, that if any such event occurs or if
the Company enters into an agreement to undertake any such event, the
Committee may, in its sole discretion, cancel the Option and pay to the
Optionee, in cash or stock, or any combination thereof, the value
of such option as determined by the Committee based on the price per share
of Common Stock received or to be received by the stockholders of the
Company upon such event. If fractions of a share would result from any such
adjustment, the adjustment shall be revised to the next lower whole number
of shares.
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(g.) This agreement shall be administered by the Committee. The
Committee shall have the authority, in its discretion, to interpret this
Agreement, to prescribe, amend and rescind rules and regulations relating to
this Agreement, to accelerate the vesting of the Option, and to make all
other determinations and take all other actions necessary or advisable for
the administration of the Agreement. The Committee's determinations on all
matters relating to the Agreement shall be conclusive.
(h.) If the Optionee's employment with the Company is terminated
for any reason other than Cause, and within the following six months the
Optionee engages in Noncompetitive Action, then to the extent the Optionee
has exercised any Options within the period beginning six months prior to
the Optionee's termination of employment with the Company and ending on the
date the Optionee engages in Noncompetitive Action, the Optionee will be
required to repay the Company (and the Optionee agrees to so repay as a
condition to exercise) the difference between (a) the average of the high
and low selling prices of the Common Stock on the exercise date and (b) the
exercise price per share, multiplied by the number of shares for which the
Option was exercised. The Committee will determine whether an Optionee has
engaged in a Noncompetitive Action. However, the Committee, in its
discretion, may choose not to enforce the foregoing provisions with respect
to Noncompetitive Action.
12. Nonqualified Stock Option. The Option granted hereunder is
not intended to be an "incentive stock option" within the meaning of Section
422 of the Code.
13. Binding Effect. This Agreement shall be binding upon the
heirs, executors, administrators and successors of the parties hereto.
14. Not a Contract of Employment. Nothing contained in this
Agreement shall be deemed to confer upon the Optionee any right to remain in
the employ of the Company or of any subsidiary thereof.
15. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware applicable
to contracts made and to be performed in such State.
16. Headings. Headings are for the convenience of the parties
and are not deemed to be part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first written above.
XXXXXXX INDUSTRIES, INC.
By:/s/Xxxxxxx X. X'Xxxxx
Name: Xxxxxxx X. X'Xxxxx
Title: Chief Executive Officer
OPTIONEE
/s/Xxxxxx X. Xxxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxx
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