EXHIBIT 1
OPTION # 1
STOCK OPTION AGREEMENT
FOR NON-QUALIFIED STOCK OPTION ENTERED INTO UNDER
XXXXXX XXXXXX, INC.
1992 EMPLOYEE STOCK INCENTIVE PLAN
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(Common Stock Option
Vesting After Year One)
THIS STOCK OPTION AGREEMENT is made and entered into as
of the 2nd day of March 1998, by and between XXXXXX XXXXXX,
INC., a Tennessee corporation (the "Company"), and Xxx
Xxxxx (the "Optionee").
1) Grant of Option. The Company hereby grants to the
Optionee the option (the "Option"), exercisable in whole or in
part, to purchase an aggregate of 800,000 shares either of the
Company's Common Stock, $1.00 par value per share, or of the
Company's Class B Common Stock, $1.00 par value per share, or
a combination thereof, at the following prices:
Number of Price Per Common Price Per Class B
Shares Stock Share Common Stock Share
----------- ---------------- ------------------
300,000 $ 12.875 $ 13.00
250,000 $ 16.09 $ 16.25
250,000 $ 19.31 $ 19.50
The Option shall become exercisable on the first
anniversary of the date hereof, provided that the Optionee's
employment by the Company or any Subsidiary (as defined in the
Plan) has not terminated prior to such first anniversary. The
vesting of the Option shall be accelerated, and the Option
shall become immediately exercisable as to 100% of the shares
underlying the Option, upon a Change in Control (as defined in
Section 9(b) below) or a Potential Change in Control (as
defined in Section 9(c) below), except as otherwise provided
in Section 9(a) below, provided that the Optionee's employment
by the Company or any Subsidiary has not terminated prior to
such Change in Control or Potential Change in Control.
The Optionee understands and agrees that this Option is
being granted to him in lieu of any increase in his base
compensation and of any additional awards of options for a
period of five (5) years from the date of grant of this
Option.
2) Option Plan. This Option is granted under the
Xxxxxx Xxxxxx, Inc. 1992 Employee Stock Incentive Plan (the
"Plan"), as amended from time to time, and is intended to be a
Non-Qualified Stock Option (as defined in the Plan). This
Option is subject to the terms and conditions set forth in the
Plan. In the event any of the provisions hereof conflict with
or are inconsistent with the provisions of the Plan, the
provisions of the Plan shall be controlling.
3) Expiration. Subject to the limitations set forth
in other sections of the Agreement, the Optionee may exercise
this Option, in whole or in part, at any time or from time to
time prior to five (5) years from the date this Option becomes
exercisable after which time it will expire with respect to
any then unexercised portion
4) Manner of Exercise. This Option shall be exercised
by the Optionee (or in the event of Optionee's death, by
Optionee's executors, administrators, heirs and successors) or
by a trust or foundation created by Optionee or by any
immediate family member in the event of a transfer pursuant to
Section 5 by delivering written notice to the Company stating
the number of shares of Common Stock or Class B Common Stock
purchased, the person or persons in whose name the shares are
to be registered and each such person's address and social
security number. Such notice shall not be effective unless
accompanied by the full purchase price for all shares so
purchased. The purchase price shall be payable in cash or by
means of unrestricted or restricted shares of the Company's
Stock (as defined in the Plan) or any combination thereof.
Payment in currency or by check, bank draft, cashier's check
or postal money order shall be considered payment in cash. In
the event of payment in the Company's Stock, the shares used
in payment of the purchase price shall be considered payment
to the extent of their fair market value, determined pursuant
to the Plan, on the date of exercise of this Option.
5) Transferability of Option. This Option shall be
transferable in whole or in part by the Optionee, only to a
trust or foundation created by Optionee or to a member of
Optionee's immediate family or by will or by the laws of
descent and distribution, and is exercisable during Optionee's
lifetime only by the Optionee or by the permitted transfers.
The terms of this Option shall be binding on the executors,
administrators, heirs and successors of the Optionee.
6) Termination of Employment. Except as provided in
Section 10 below, in the event that Optionee ceases to be
employed by the Company or one of its subsidiaries for any
reason other than the Optionee's death, Disability (as defined
in the Plan) or Retirement (as defined in the Plan), this
Option may be exercised, to the extent then exercisable, for
three (3) months following the Optionee's termination of
employment, provided that the Option shall terminate
immediately and become void and of no effect in the event
Optionee's employment is terminated for Cause (as defined in
the Plan), subject to the further condition that this Option
shall not be exercisable after the expiration of five (5)
years from the date it is granted. In the event Optionee
ceases to be employed by the Company or one of its
subsidiaries due to death, Disability or Retirement, this
Option may be exercised at any time until the expiration of
five (5) years from the date that this Option becomes
exercisable, except as provided in Section 10 below.
7) Adjustment. The number of shares of Common Stock
and Class B Common Stock of the Company subject to this Option
and the price per share of such shares shall be adjusted by
the Company from time to time pursuant to the Plan.
8) No Rights Until Exercise. The Optionee shall have
no rights hereunder as a shareholder with respect to any
shares subject to this Option until the date of the issuance
of a stock certificate to him for such shares.
9) Change in Control Provisions.
(a) Impact of Event. In the event of a "Change in
Control" (as defined in Section 9(b) below) or a "Potential
Change in Control" (as defined in Section 9(c), below), but
with respect to a "Potential Change of Control", only if and
to the extent so determined by the Committee, the Option shall
immediately vest and become exercisable as to all of the
shares underlying the Option, provided that the Optionee's
employment by the Company or any Subsidiary has not terminated
prior to such Change in Control or Potential Change in Control
and provided that such "Change in Control" or "Potential
Change in Control" event is not a "Rule 13e-3 transaction" as
defined in Rule 13e-3 promulgated under the Securities
Exchange Act of 1934, as amended.
(b) Definition of "Change in Control". For the
purposes of Section 9(a), a "Change in Control" means the
happening of any of the following:
(i) any person or entity, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended, other than the Company or a wholly-owned
subsidiary or an officer thereof or any employee benefit plan
of the Company or any of its subsidiaries, becomes the
beneficial owner of the Company's securities having 35% or
more of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of
directors of the Company (other than as a result of an
issuance of securities initiated by the Company in the
ordinary course of business); or
(ii) as the result of, or in connection with, any
cash tender or exchange offer, merger or other business
combination, sales of assets or contested election, or any
combination of the foregoing transactions, less than a
majority of the combined voting power of the then outstanding
securities of the Company or any successor corporation or
entity entitled to vote generally in the election of the
directors of the Company or such other corporation or entity
after such transaction are held in the aggregate by the
holders of the Company's securities entitled to vote generally
in the election of directors of the Company immediately prior
to such transaction; or
(iii) during any period of two consecutive years,
individuals who at the beginning of any such period constitute
the Board of Directors of the Company cease for any reason to
constitute at least a majority thereof, unless the election,
or the nomination for election by the Company's shareholders,
of each director of the Company first elected during such
period 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 any such period.
(c) Definition of "Potential Change in Control".
For the purposes of Section 9(a), a "Potential Change in
Control" means the happening of any of the following:
(i) The approval by shareholders of an
agreement by the Company, the consummation of which would
result in a Change in Control of the Company as defined
in Section 9(b); or
(ii) The acquisition of beneficial ownership,
directly or indirectly, by any entity, person or group
(other than the Company or a Subsidiary or any Company
employee benefit plan (including any trustee of such plan
acting as such trustee)) of securities of the Company
representing 5% or more of the combined voting power of
the Company's outstanding securities and the adoption by
the Committee of a resolution to the effect that a
Potential Change in Control of the Company has occurred
for purposes of the Plan.
10) Forfeiture of Option. Notwithstanding the
provisions of Section 6 above, this Option shall terminate
immediately and become void and of no effect if Optionee shall
enter into "Competition with the Company." "Competition with
the Company" shall mean serving as principal, agent, salesman,
employee or officer with any entity competing with the Company
or a subsidiary of the Company in any market in which the
Company or a subsidiary of the Company does business during
the term of the Option.
11) Amendment. This Option may be amended as provided
in the Plan.
12) Validity of Agreement. In the event that any
provision of this Agreement is declared invalid or
unenforceable, such invalidity or unenforceability shall in no
way affect the validity or enforceability of any other
provision. In the event any of the restrictions set forth in
this Agreement cannot be legally enforced as specified, such
fact shall not affect the applicability of such restrictions
in a reasonable manner.
XXXXXX XXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Chairman, Compensation
Committee of the Board of
Directors
/s/ Xxx Xxxxx
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Xxx Xxxxx
