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Exhibit 10.3
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SINTER METALS, INC.
Nonqualified Stock Option Agreement
This Nonqualified Stock Option Agreement (the "Option
Agreement") is entered into as of the date set forth on the signature page
hereof by and between the individual named on the signature page hereof (the
"Optionee") and Sinter Metals, Inc., a Delaware corporation (the "Company").
WHEREAS, the Optionee is employed by the corporation
identified as the employer on the signature page hereof in the position shown
thereon;
WHEREAS, the execution of a Stock Option Agreement in the form
hereof was duly authorized by resolutions of the Board of Directors of the
Company (the "Board") adopted on the date shown on the signature page hereof
(the "Date of Grant"); and
WHEREAS, the option granted by this Option Agreement is
intended as a nonqualified stock option and shall not be treated as an
"incentive stock option" within the meaning of that term under Section 422 of
the Internal Revenue Code of 1986.
NOW, THEREFORE, the Company hereby grants to the Optionee an
option (the or this "Option") pursuant to the Company's 1994 Key Employee Stock
Incentive Plan (the "Plan") to purchase the number of shares of Class A Common
Stock, par value $.001 per share ("Class A Common Stock"), of the Company shown
on the signature page hereof (the "Option Shares"), and agrees to cause
certificates for any shares purchased hereunder to be delivered to the Optionee
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upon payment of the purchase price in full, all subject, however, to the terms
and conditions of the Plan and the terms and conditions hereinafter set forth.
Certain terms used herein are defined in Paragraph 8.
1. EXERCISE. (a) This Option (until terminated as hereinafter
provided) shall become exercisable to the extent of one-third of the Option
Shares on each of the first three anniversaries of the Date of Grant for so long
as the Optionee remains in the continuous employ of the Company or any
Subsidiary. For the purposes of this Section 1(a), leaves of absence approved by
the Board shall be regarded as employment. To the extent exercisable, this
Option may be exercised in whole or in part from time to time.
(b) Notwithstanding Section 1(a) hereof, this
Option shall become immediately exercisable in full (i) if the Optionee dies or
becomes permanently and totally disabled prior to the third anniversary of the
Date of Grant while in the continuous employ of the Company or a Subsidiary,
(ii) upon the retirement of the Optionee under a retirement plan of the Company
or a Subsidiary at or after the earliest voluntary retirement age provided for
therein or retirement of the Optionee at an earlier age with the consent of the
Board or (iii) upon the occurrence of a Change in Control of the Company.
2. EXERCISE PRICE AND PAYMENT. (a) This Option shall
be exercisable for Option Shares at an exercise price of $10.00 per
share (the "Exercise Price").
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(b) The exercise price for any shares shall be
payable (i) in cash or by currently dated check, (ii) by delivery to the Company
of a promissory note or notes of the Optionee in an amount not to exceed 80% of
the aggregate Exercise Price for the Option Shares and a stock pledge agreement
in substantially the forms and bearing the terms provided in EXHIBIT A and
EXHIBIT B, respectively, to this Option Agreement, (iii) by transfer to the
Company of shares or vested options (including options under this Option
Agreement) for the purchase of shares of Class A Common Stock having a Fair
Market Value (net of the exercise price, in the case of options) at the time of
exercise equal to the portion of the option price for which such transfer is
made, or (iv) by a combination of such methods of payment.
3. TERMINATION. This Option shall terminate and all
unexercised Options then outstanding shall be forfeited on the earliest of the
following dates:
(a) On the date on which the Optionee voluntarily
resigns (unless otherwise provided in a written agreement relating to
employment) or ceases to be an employee of the Company or a Subsidiary by reason
of termination of employment for Cause;
(b) One year after the date on which the Optionee
ceases to be an employee of the Company or a Subsidiary by reason of retirement
under a retirement plan of the Company or a Subsidiary at or after the earliest
voluntary retirement age provided for in such retirement plan or retirement at
an earlier age with the consent of the Board;
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(c) One year after the date of the death or
permanent disability of the Optionee if the Optionee dies or becomes permanently
disabled (i) while an employee of the Company or a Subsidiary or (ii) within the
one year period referred to in (b) above; or
(d) Ten years from the Date of Grant.
4. TRANSFERABILITY. This Option is not transferable by the
Optionee otherwise than by will or the laws of descent and distribution, and if
exercised, during the lifetime of the Optionee, is exercisable only by him or by
his guardian or legal representative.
5. SECURITIES LAWS. This Option shall not be exercisable if
such exercise would involve a violation of any applicable federal or state
securities law, and the Company hereby agrees to make reasonable efforts to
comply with such securities laws. This Option shall not be exercisable unless
under said laws at the time of exercise the shares of Class A Common Stock or
other securities purchasable hereunder are exempt, are the subject matter of an
exempt transaction, or are registered in accordance with such laws.
6. ADJUSTMENTS. (a) The Board shall make such adjustments in
the option price and in the number or kind of shares of Class A Common Stock or
other securities covered by this Option as such Board may in good faith
determine is equitably required to prevent dilution or enlargement of the rights
of the Optionee that otherwise would result from (i) any increase or decrease in
the number or change in the kind of shares of capital stock of the
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Company be reason of a stock dividend, stock split, reverse stock split,
recapitalization, or other such increase or decrease or change effected without
the receipt of consideration by the Company, or (ii) any consolidation or merger
or other reorganization, or (iii) any distribution of rights or warrants to
purchase stock to all holders of the Company's common stock, or (iv) any other
corporate transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event, the Board, in its
discretion, may provide in substitution for any or all outstanding awards under
this Option such alternative consideration as it, in good faith, may determine
to be equitable in the circumstances and may require in connection therewith the
surrender of all awards so replaced.
(b) In the event that any provision hereof would result in the
vesting of shares in amounts other than a whole number, the number of shares
that are vested under the applicable formula shall be reduced or increased to
the nearest whole number (rounding 0.50 up), with the effect of any such
rounding deemed to attach to the last group of shares eligible for vesting
pursuant to this Option Agreement.
7. WITHHOLDING. If the Company shall be required to withhold
any federal, state, local or foreign tax in connection with the exercise of this
Option, it shall be a condition to such exercise that the Optionee pay or make
provision satisfactory to the Company for payment of all such taxes.
8. DEFINITIONS. The following terms shall have meanings set
forth below.
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"Cause" means gross neglect of duty, dishonesty, conviction of
a felony, disloyalty, intoxication, drug addiction, or other similar misconduct
adverse to the best interests of the Company; provided that if the Optionee is
party to an employment agreement with the Company or any of its subsidiaries
which contains a more restrictive definition of "Cause" or "for cause", such
more restrictive definition shall apply for purposes of this Option Agreement.
"Change in Control" shall be deemed to occur when:
(a) the individuals who constitute the Board at the
beginning of any period of two consecutive years cease for any reason during
that period to constitute a majority of the members of the Board (unless the
election, or the nomination for election by the stockholders of the Company, of
each nonincumbent nominee for the Board who is elected to the Board during that
period is approved by the votes of at least two-thirds of the members of the
Board who were members of the Board at the beginning of that period and are
still serving as members of the Board at the time of any such election or
nomination for election); or
(b) The Board adopts a resolution declaring that in
its opinion the transactions contemplated by any event or series of events
(including, without limitation, any tender offer, except a tender offer by the
Company or a subsidiary, for shares of stock in the Company or the execution of
an agreement that provides for the merger or consolidation of the Company with
another corporation or the sale of all or substantially all of the assets of the
Company) that in the opinion of the Board will, or is likely to, result in
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a change in control of the Company are certain to be consummated. If any
transaction, event or series of events referred to in this Section 1(c)(ii)
shall be abandoned, the Board may nullify the effect thereof and reinstate the
provisions of Section 1(a) hereof by giving written notice thereof to the
Optionee; PROVIDED, HOWEVER, that no such nullification and reinstatement shall
prejudice any exercise of this option that may have occurred prior to any such
nullification and reinstatement.
"Fair Market Value" means (a) in the event that the
any class of the Common Stock of the Company is then listed on any securities
exchange or quoted on any over-the-counter trading system, the per share average
of the high and low prices reported in the consolidated reporting system (for
exchange traded securities and last sale reported over-the-counter securities)
or the average of the bid and ask price (for other over-the-counter securities)
for the 5 trading days next preceding the applicable valuation date; (b) in the
event that no class of the Common Stock of the Company is then listed on any
securities exchange or quoted on any over-the-counter trading system, but the
Company is a party to a firm commitment underwriting agreement for a public
offering of the Common Stock, then, during the five business day period
following the execution and delivery by the Company of such agreement, the price
per share established as the purchase price for shares pursuant to such
underwriting agreement; and (c) in the event that neither clause (a) or (b) of
this definition are applicable, an amount determined in good faith by the Board
or by a committee of the Board.
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"Option Year" refers to the period commencing on either the
Date of Grant of this option or an annual anniversary of such date and ending on
the next ensuing annual anniversary of such date.
"Person" or "person" means any corporation, partnership,
association, firm, entity or individual(s).
"Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. For purposes of
this Option Agreement, the continuous employ of the Optionee with the Company or
a Subsidiary shall not be deemed interrupted, and the Optionee shall not be
deemed to have ceased to be an employee of the Company or any Subsidiary, by
reason of the transfer of his employment among the Company and its Subsidiaries.
9. ACKNOWLEDGEMENT. (a) The undersigned Optionee hereby
acknowledges receipt of an executed original of this Option Agreement and
accepts the option granted hereunder.
(b) The Optionee acknowledges that he/she has been
advised that the shares of Class A Common Stock covered by this Option Agreement
have not been registered under the Securities Act of 1933 or any state
securities laws and agrees that he/she will not make any disposition of such
shares unless either (i) such shares have been registered under said Act or such
other laws or (ii) an exemption from the registration provisions of said Act and
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such other laws is applicable to the Optionee's proposed disposition of such
shares. The Optionee understands that the certificates for such shares may bear
a legend substantially as follows:
"The shares evidenced by this Certificate have not been
registered under the Securities Act of 1933 or any state
securities laws. Such shares may not be sold or otherwise
transferred until the same have been registered under said Act
or any applicable state securities laws or until the Company
shall have received an opinion of legal counsel or a copy of a
letter from the staff of the Division of Corporation Finance
of the Securities and Exchange Commission and the applicable
state regulatory agency, in either case satisfactory to the
Company, that such shares may legally be sold or otherwise
transferred without such registration."
(c) The Optionee acknowledges and agrees that certain Option
Shares may be subject to transfer restrictions and that certificates for certain
Option Shares shall bear restrictive legends referring to such restrictions and
be subject to stop-transfer instructions.
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EXECUTED effective this 16th day of December, 1994.
SINTER METALS, INC.
By:
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Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board
OPTIONEE
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Name of Optionee:
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Name of Employer:
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Position:
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Date of Grant:
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Number of Option Shares:
Class A Common Stock:
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Effective Date:
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Exhibit A to Nonqualified
Stock Option Agreement
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SECURED PROMISSORY NOTE
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$ , 19
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FOR VALUE RECEIVED, the undersigned, _____________
("Borrower"), hereby unconditionally promises to pay to the order of Sinter
Metals, Inc., a Delaware corporation (the "Company"), the principal sum of
______________________________ Dollars ($_______) in lawful money of the United
States of America and in immediately available funds, on [the fifth anniversary
of the Note] and to pay simple interest (computed on the basis of a 365 day
year) on the unpaid principal amount hereof from and after the date of this
Secured Promissory Note until the entire principal amount hereof has been paid
in full, at the rate of [the rate per annum equal to the lowest rate required
under applicable provisions of the Internal Revenue Code of 1986, as amended (or
any successor thereto), to avoid imputation of interest, calculated as of the
date of this Secured Promissory Note] plus .01%.)1 Subject to the provisions of
Section 2 and 3 hereof, the principal hereof is payable in full on the fifth
(5th) anniversary of the date of this Secured Promissory Note. Interest is
payable on each anniversary of the date of this Secured Promissory Note with
respect to the period ending on such anniversary. Not later than five business
days prior to the date on which payment of interest is due, the Company shall
give written notice to the Borrower of the amount of the payment due on such
date.
For purposes of this Promissory Note, a "business day" shall
mean any day other than a Saturday, Sunday or federal holiday and shall consist
of the time period from 12:01 a.m. through 12:00 Midnight Eastern time.
This Secured Promissory Note has been delivered in
consideration of a loan by the Company to the Borrower in connection with the
exercise by Borrower of options to purchase shares of Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), of the Company in accordance
with the terms of a certain nonqualified Stock Option Agreement (collectively,
the "Option") dated as of ______________, 19__. Payment of the principal of and
interest on this Secured Promissory Note is secured pursuant to the terms of a
Stock Pledge Agreement of even date herewith between Borrower and the Company.
This Secured Promissory Note is subject to the following further terms and
conditions:
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1 Need to determine interest rate; the formula stated is the lowest rate
permitted by the law to avoid imputed interest.
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1. Payment and Prepayment
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(a) if the borrower of any of his Permitted
Transferees shall sell any shares of Class A Common Stock,
such sale shall be made only for cash, and Borrower agrees to
promptly deliver to the Company the consideration received by
the Borrower on such sale of shares of Stock as partial
payment of the unpaid principal and accrued and unpaid
interest on this Secured Promissory Note until this Secured
Promissory Note is paid in full.
(b) All payments of principal and interest on this
Secured Promissory Note shall be made to the Company or its
order in lawful money of the United States of America and in
immediately available funds at the offices of the Company at
its then principal place of business (or at such other place
as the holder hereof shall notify Borrower in writing).
Borrower may, at his option, prepay this Secured Promissory
Note in whole or in part at any time or from time to time
without penalty or premium. Any prepayments of any portion of
the principal amount of this Secured Promissory Note shall be
accompanied by payment of all interest accrued but unpaid
hereunder.
(c) Concurrently with any payment of any portion of
this Secured Promissory Note pursuant to paragraph 1(a) hereof
or any prepayment of any portion of the principal amount of
this Secured Promissory Note pursuant to paragraph 1(b)
hereof, the Company shall make a notation of such application
or payment on this Secured Promissory Note. If full payment of
all unpaid principal of and accrued and unpaid interest on
this Secured Promissory Note is made, this Secured Promissory
Note shall be cancelled. Any partial payment or prepayment
shall be applied first to accrued and unpaid interest hereon
and then to the unpaid installments of principal hereof in the
inverse order of their maturity.
2. CONVERSION DEMAND NOTE. In the event that the borrower
shall cease to be employed by the Company or any of its subsidiaries as a result
of his death or permanent disability or his retirement under a retirement plan
of the Company or a subsidiary of the Company ("Retirement"), or through
termination without Cause (as defined in the Option), which term shall include
the Borrower's ceasing to be an employee of the Company or any of its
subsidiaries by reason of a sale or other disposition of the subsidiary by which
such Borrower is employed, then the unpaid principal of and accrued and unpaid
interest on this Secured Promissory Note shall, upon demand by the Company given
in writing to the Borrower, become immediately due and payable.
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3. EVENTS OF DEFAULT. Upon the occurrence of any of the
following events ("Events of Default"):
(a) Failure to pay any principal of this Promissory
Note, including any prepayments required hereunder, when due
which shall remain unremedied for thirty (30) days; or
(b) Provided that the notice required to be given
pursuant to the last sentence of the first paragraph of this
Secured Promissory Note has been given in accordance with the
terms thereof, failure to pay any interest due under this
Secured Promissory Note which shall remain unremedied for
thirty (30) days following the date when such installment was
originally due hereunder; or
(c) Borrower shall cease to be employed by the
Company or any of its subsidiaries by reason of voluntary
resignation or termination for Cause (as defined in the
Option); or
(d) A petition is filed by or against the Borrower
seeking the entry of an order for relief under the bankruptcy
laws of the United States, as now or hereafter amended or
supplemented, or there is an appointment of a permanent
receiver or a permanent trustee of all or substantially all
the property of the Borrower or an assignment is made by the
Borrower for the benefit of creditors;
then, and in any such event, the holder of this Secured Promissory Note may
declare, by notice of default given to Borrower, the entire principal amount of
this Secured Promissory Note to be forthwith due and payable, whereupon the
entire principal amount of this Secured Promissory Note outstanding shall become
due and payable without presentment, demand, protest and notices of any kind or
of dishonor, all of which are hereby expressly waived. Upon the occurrence of an
Event of Default, the accrued and unpaid interest hereunder shall thereafter
bear the same rate of interest as the principal hereunder, but in no event shall
such interest be charged which would violate any applicable usury law. If an
Event of Default shall occur hereunder, Borrower shall pay costs of collection,
including reasonable attorneys' fees, incurred by the holder in the enforcement
hereof.
No delay or failure by the holder of this Secured Promissory
Note in the exercise of any right or remedy shall preclude other or future
exercise thereof or the exercise of any other right or remedy.
4. ADDITIONAL RESTRICTIONS UPON OCCURRENCE OF AN EVENT OF
DEFAULT. In case an Event of Default shall occur and be continuing, the Borrower
agrees that he will not, without the prior written consent of the Company (which
consent shall not be unreasonably
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withheld), sell, assign, transfer, exchange, or otherwise dispose of, or grant
any option with respect to, any shares of Class A Common Stock then beneficially
owned or thereafter acquired by the Borrower, nor will he create, incur or
permit to exist any pledge, lien, mortgage, hypothecation, security interest,
charge, option or any other encumbrances with respect to any shares of Class A
Common Stock, or any interest therein, or any proceeds thereof.
5. Miscellaneous.
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(a) The provisions of this Secured Promissory Note
shall be governed by and construed in accordance with the laws
of the State of Delaware, without regard to the conflicts of
laws rules thereof.
(b) All notices and other communication hereunder
shall be in writing and will be deemed to have been duly given
if delivered in person or mailed by certified mail or
guaranteed overnight delivery service to the Company at its
principal executive offices and to the Borrower at the last
address reflected in the Company's records.
(c) The paragraph headings contained in this
Promissory Note are for reference purposes only and shall not
affect in any way the meaning or interpretations of the
provisions thereof.
IN WITNESS WHEREOF, this Secured Promissory Note has been duly
executed and delivered by Borrower on the date first written above.
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Borrower:
Witness:
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Exhibit B to Nonqualified
Stock Option Agreement
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STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement") is made by the
individual pledgor identified on the signature page hereof, (the "Pledgor") to
Sinter Metals, Inc., a Delaware corporation (the "Company") as of the date set
forth on the signature page hereof.
RECITALS
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A. Pledgor has entered into one or more Stock Option
Agreements pursuant to the Company's 1994 Key Employee Stock Incentive Plan (the
"Option"), pursuant to which the Pledgor has exercised his option to purchase
the number of shares of Class A Common Stock, par value $.01 per share, shown on
the signature page hereof (such shares being the "Class A Common Stock" or the
"Shares").
B. In connection with the payment of the purchase price for
the Shares, the Pledgor has borrowed from the Company the principal amount shown
on the signature page hereof, and in consideration therefor, is delivering to
the Company the secured promissory note of the Pledgor, dated the date hereof,
for such principal amount (the "Promissory Note").
C. The Pledgor wishes to grant security and assurance
to the Company in order to secure the payment of the principal of
and interest on the Promissory Note and to that effect to pledge to
the Company the Shares.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
l. PLEDGE. The Pledgor hereby pledges, assigns, hypothecates,
transfers, and delivers to the Company, all the Shares (the "Pledged Stock") and
hereby grants to the Company, a first lien on, and security interest in, the
Pledged Stock and in all proceeds thereof, together with appropriate undated
stock powers duly executed in blank, as collateral security for the prompt and
complete payment when due (whether at the stated
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maturity, by acceleration or otherwise) of the unpaid principal of and interest
on the Promissory Note.
2. ADMINISTRATION SECURITY. The following provisions shall
govern the administration of the Pledged Stock:
(a) So long as no Event of Default has occurred and
is continuing (as used herein, "Event of Default" shall mean
the occurrence of any Event of Default under the Promissory
Note), the Pledgor shall be entitled to act with respect to
the Pledged Stock in any manner not inconsistent with the
provisions of this Agreement, the Promissory Note or any
document or instrument delivered or to be delivered pursuant
to or in connection with the Promissory Note.
(b) If, while this Agreement is in effect, the
Pledgor shall become entitled to receive or shall receive any
stock certificate (including, without limitation, any
certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of
capital, or issued in connection with any reorganization),
option or rights, in substitution of, in exchange for, or in
respect of, any shares of any Pledged Stock, the Pledgor
agrees to accept the same as the Company's agent and to hold
the same in trust on behalf of and for the benefit of the
Company and to deliver the same forthwith to the Company in
the exact form received, with the endorsement of the Pledgor
when necessary and/or appropriate undated stock powers duly
executed in blank, to be held by the Company subject to the
terms hereof, as additional collateral security for the
payment of the principal of and interest on the Promissory
Note. In case any distribution of capital shall be made on or
in respect of the Pledged Stock or any property shall be
distributed upon or with respect to the Pledged Stock pursuant
to the recapitalization or reclassification of the capital of
the Company or pursuant to the reorganization of the Company,
the property so distributed shall be delivered to the Company
to be held by it as additional collateral security for the
payment of the principal of and interest on the Promissory
Note. All sums of money and property so paid or distributed in
respect of the Pledged Stock which are received by the Pledgor
shall, until paid or delivered to the Company, be held by the
Pledgor in trust as additional collateral security for the
payment of the principal of and interest on the Promissory
Note. All property at any time pledged with the Company
hereunder (whether or not described herein) and all income
therefrom and proceeds thereof, are herein collectively
sometimes called the "Collateral."
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(c) Notwithstanding paragraphs l and 2(b) hereof,
unless an Event of Default shall have occurred and be
continuing, the Pledgor shall be entitled to receive all cash
or stock dividends paid in respect of the Pledged Stock and,
unless the Company shall have given notice pursuant to
paragraph 3 of its intention to exercise all voting and
stockholder rights with respect to the Pledged Stock and any
stock dividends thereof, to vote the Pledged Stock and any
stock dividends thereof and to give consents, waivers and
ratifications in respect of the Pledged Stock and any stock
dividends thereof; PROVIDED, HOWEVER, that no vote shall be
cast or consent, waiver or ratification given or action taken
which would impair the Collateral or be inconsistent with or
violate any provision of this Agreement, the Promissory Note,
or any document or instrument delivered or to be delivered
pursuant to or in connection with the Promissory Note.
(d) Notwithstanding any payment or payments made by
the Pledgor hereunder, or the receipt of any amounts by the
Company with respect to the Collateral, or any set-off or
application of funds of the Pledgor by the Company, the
Pledgor shall not be entitled to be subrogated to any of the
rights of the Company against any Collateral held by the
Company for the payment of the principal of and interest on
the Promissory Note until the principal of and interest on the
Promissory Note are paid in full.
(e) The Pledgor shall immediately upon request by the
Company and in confirmation of the security interests hereby
created, execute and deliver to the Company such further
instruments, deeds, transfers, assurances and agreements, in
form and substance satisfactory to the Company, as the Company
shall request, including any financing statement and
amendments thereto, or any other documents, as required under
Delaware law and any other applicable law to protect the
security interests created hereunder.
(f) Subject to any sale by the Company or other
disposition by the Company of the Pledged Stock or any stock
dividends thereon or other property pursuant to this Agreement
and subject to Section 6 below, the Pledged Stock and any
other Collateral shall be returned to the Pledgor upon full
payment of the principal of and interest on the Promissory
Note.
3. RIGHTS OF HOLDING. The Company shall not be liable for
failure to collect or realize upon the principal of and interest on the
Promissory Note or any collateral security therefor, or any part thereof, or for
any delay in so doing nor shall the Company be under any obligation to take any
action
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whatsoever with regard thereto. Any or all shares of the Pledged Stock and any
stock dividends thereon held by the Company hereunder may, if an Event of
Default has occurred and is continuing, provided that the Company shall have
given prior written notice of its intention to do so to the Pledgor, be
registered in the name of the Company or its nominee, and the Company or its
nominee may thereafter exercise all voting and stockholder rights at any meeting
of the Company and exercise any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to any shares
of the Pledged Stock and any stock dividends thereon as if it were the absolute
owner thereof, including without limitation, the right to exchange at its
discretion, any and all of the Pledged Stock and any stock dividends thereon
upon the merger, consolidation, reorganization, recapitalization or other
readjustment of the Company or upon the exercise by the Company of any right,
privilege or option pertaining to any shares of the Pledged Stock and any stock
dividends thereon, and in connection therewith, to deposit and deliver any and
all of the Pledged Stock and any stock dividends thereon with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine, all without liability except to account for
property actually received by it, but the Company shall have no duty to exercise
any of the aforesaid rights, privileges or options and shall not be responsible
for any failure to do so or delay in so doing.
4. Remedies in Case of an Event of Default.
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(a) In case an Event of Default shall have occurred
and be continuing, the Company shall have all of the remedies
of a secured party under the Delaware Uniform Commercial Code,
and, without limiting the foregoing, shall have the right,
subject to any necessary regulatory approvals, to sell, assign
and deliver the whole or, from time to time, any part of the
Collateral or any interest in any part thereof, at any private
sale or at public auction, with or without demand of
performance or other demand, advertisement or notice of the
time or place of sale or adjournment thereof or otherwise,
each of which demands, advertisements and/or notices are
hereby expressly waived (except the Company shall give 10
days' notice to the Pledgor of the time and place of any sale
pursuant to this Section 4), for cash, on credit or for other
property, for immediate or future delivery, and for such price
or prices and on such terms as the Company shall, in its sole
discretion, determine, the Pledgor hereby waiving and
releasing any and all right or equity of redemption whether
before or after sale hereunder. At any such sale the Company
may bid for and purchase the whole or any part of the
Collateral so sold free from any such right or equity of
redemption. The Company shall apply the net proceeds of any
such sale, after deducting
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19
all reasonable costs and expenses of every kind incurred
therein or incidental to the care, safekeeping or otherwise of
any and all of the Collateral or in any way relating to its
rights hereunder, including reasonable attorney's fees and
legal expenses, to the payment in whole or in part of the
principal of and interest on the Promissory Note, in such
order as the Company may elect, the Pledgor remaining liable
for any deficiency remaining unpaid after such application,
and only after so applying such net proceeds and after the
payment by the Company of any other amount required by any
provision of law, including, without limitation, Section
9-504(l)(c) of the Uniform Commercial Code, need the Company
account for the surplus, if any, to the Pledgor. The Pledgor
agrees that the Company need not give more than ten days'
notice of the time and place of any public sale or of the time
after which a private sale or other intended disposition is to
take place and that such notice is reasonable notification of
such matters. No notification need be given to the Pledgor if
it has signed after default a statement renouncing or
modifying any right to notification of sale or other intended
disposition.
(b) The Pledgor recognizes that the Company may be
unable to effect a public sale of all or a part of the Pledged
Stock or other securities held as part of the Collateral by
reason of certain prohibitions contained in the Securities Act
of 1933 (the "Act"), or in the rules and regulations
promulgated thereunder, but may be compelled to resort to one
or more private sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire the
Pledged Stock or such other securities for their own account,
for investment and not with a view to the distribution or
resale thereof. The Pledgor agrees that private sales so made
may be at prices and on other terms less favorable to the
seller than if the Pledged Stock or such other securities were
sold at public sale, and that the Company has no obligation to
delay the sale of the Pledged Stock or such other securities
for the period of time necessary to permit the registration of
the Pledged Stock or such other securities for public sale
under the Act. The Pledgor agrees that a private sale or sales
made under the foregoing circumstances shall be deemed to have
been made in a commercially reasonable manner.
(c) If any consent, approval or authorization of any
state, municipal or other governmental department, agency or
authority should be necessary to effectuate any sale or
disposition by the Company pursuant to this Section 4 of the
Pledged Stock or other securities held as part of the
Collateral, the Pledgor will execute all such applications and
other instruments as may be
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20
required in connection with securing any such consent,
approval or authorization, and will otherwise use his best
effort to secure the same.
(d) Neither failure nor delay on the part of the
Company to exercise any right, remedy, power or privilege
provided for herein or by statute or at law or in equity shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power or privilege
preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege.
5. PLEDGOR'S OBLIGATIONS NOT AFFECTED. The obligations of the
Pledgor under this Agreement shall remain in full force and effect with regard
to, and shall not be impaired or affected by: (a) any subordination, amendment
or modification of or addition or supplement to the Promissory Note, or any
assignment or transfer thereof: (b) any exercise or non-exercise by the Company
of any right, remedy, power or privilege under or in respect of this Agreement,
the Promissory Note, or any waiver of any such right, remedy, power or
privilege; (c) any waiver, consent, extension, indulgence or other action or
inaction in respect of this Agreement or the Promissory Note, or any assignment
or transfer of any thereof; or (d) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like, of the Company
or its successors, whether or not the Pledgor shall have notice or knowledge of
any of the foregoing.
6. TRANSFER BY PLEDGOR. Without the prior written consent of
the Company, the Pledgor agrees that he will not sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
collateral, nor will he create, incur or permit to exist any pledge, lien,
mortgage, hypothecation, security interest, charge, option or any other
encumbrance with respect to any of the collateral, or any interest therein, or
any proceeds thereof, except for the lien and security interest provided for by
this Agreement.
7. REPRESENTATION, WARRANTIES AND COVENANTS OF THE PLEDGOR.
The Pledgor represents and warrants that (a) he is the legal, record and
beneficial owner of, and has good and marketable title to, the Pledged Stock,
subject to no pledge, lien, mortgage, hypothecation, security interest, charge,
option or other encumbrance whatsoever, except the lien and security interest
created by this Agreement; (b) he has the authority and legal right to pledge
all the Pledged Stock pursuant to this Agreement; and (c) the pledge, assignment
and delivery of such Pledged Stock pursuant to this Agreement creates a valid
first lien on and a first perfected security interest in such shares of the
Pledged Stock, and the proceeds thereof, subject to no prior pledge, lien,
mortgage, hypothecation, security interest, charge, option or encumbrance or to
any agreement purporting to grant to any third
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21
party a security interest in the property or assets of the Pledgor which would
include the Pledged Stock. The Pledgor covenants and agrees that he will defend
the Company's right, title and security interest in and to the Pledged Stock and
the proceeds thereof against the claims and demands of all persons whomsoever;
and covenants and agrees that he will have like title to and right to pledge any
other property at any time hereafter pledged to the Company as Collateral
hereunder and will likewise defend the Company's right thereto and security
interest therein.
8. ATTORNEY-IN-FACT. The Company or its successor is hereby
appointed the attorney-in-fact of the Pledgor for the purpose of carrying out
the provisions of this Agreement and taking any action and executing any
instrument which the Company reasonably may deem necessary or advisable to
accomplish the purposes hereof, including without limitation, the execution of
the applications and other instruments described in Section 4(c), which
appointment as attorney-in-fact is irrevocable as one coupled with an interest.
9. TERMINATION. Upon payment in full of the principal of and
interest on the Promissory Note and upon the due performance of and compliance
with all the provisions of the Promissory Note, this Agreement shall terminate
and the Pledgor shall be entitled to the return of such of the Collateral as has
not theretofore been sold, released from this Agreement pursuant to Section 6 or
otherwise applied pursuant to the provisions of this Agreement.
10. NOTICES. All notices or other communications required or
permitted to be given hereunder shall be in writing and will be deemed to have
been duly given if delivered in person or mailed by certified mail or guaranteed
overnight delivery service to the Company at its principal executive offices and
to the Pledgor at the last address reflected in the Company's records.
11. MISCELLANEOUS. The Company and its assigns shall have no
obligation in respect of the Collateral, except to hold and dispose of the same
in accordance with the terms of this Agreement. Neither this Agreement nor any
provisions hereof may be amended, modified, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
enforcement of the amendment, modification, waiver, discharge or termination is
sought. The provisions of this Agreement shall be binding upon the successors
and assigns of the Pledgor. The captions in this Agreement are for convenience
of reference only and shall not define or limit the provisions hereof. This
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware, without regard to the rules of conflicts of laws
thereof. This Agreement may be executed in multiple counterparts, each of which
shall be an original, but all of which taken together shall constitute one
instrument.
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22
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered on as of _____________ __, _______.
SINTER METALS, INC.
By:
-------------------------------------
Its:
----------------------------------
PLEDGOR
----------------------------------------
Name of Pledgor:
----------------------------------------
Number of Shares of
Class A Common Stock pledged:
-----------------------------
Principal amount of Promissory Note $
------------------
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23
Schedule to Nonqualified Stock Option Agreement
In accordance with Instruction 2 to Item 601 of Regulation
S-K, the Registrant has omitted the following Nonqualified Stock Option
Agreements, which are identical in all respects to the filed Nonqualified Stock
Option Agreement, except with respect to the following:
OPTIONEE ------1st Round------- -------2nd Round----------
-------- Price at Price at
Total Date of Date of Total Date of Date of
Options Xxxxx Xxxxx Options Xxxxx Xxxxx
------- ----- ----- ------- ----- ------
Xxxxxx X. Xxxxxxxx 65,000 10 10/24/94 65,000 21 9/18/96
Xxxxxx X. XxXxxxx 25,000 10 10/24/94 20,000 21 9/18/96
Xxxxxxx X. Xxxxxxx 25,000 10 12/16/94 25,000 21 9/18/96
Xxxxxx X. Xxxxxxxx 10,000 10.125 5/18/96 10,000 21 9/18/96
Xxxx Xxxxxx 15,000 21 9/18/96
Xxxxxx Xxxxx 4,000 10 10/24/94
Xxxx Xxxxxxxxx 7,000 10 10/24/94 7,000 21 9/18/96
Xxxxxx Xxxxxxx 1,000 10 10/24/94 1,000 21 9/18/96
Xxxxx Xxxxxxxx 1,000 10 10/24/94 1,000 21 9/18/96
Xxxx Heitzenreiter 4,000 14.38 4/10/96
1,000 10 10/24/94 1,000 21 9/18/96
Xxxx Xxxxxxxxxx 1,000 10 10/24/94 5,000 21 9/18/96
Xxxxxxx X. XxXxxx 2,000 10 10/24/94 2,000 21 9/18/96
Xxxxxx X. Xxxxxx 1,000 10 10/24/94 5,000 21 9/18/96
*Xxxxx Xxxx 7,000 10 10/24/94
Xxxxxxx Xxxx 7,000 10 10/24/94 5,000 21 9/18/96
Xxxxx Xxxxxxxxx 2,000 10 11/1/94 0 21 9/18/96
Xxxxx Xxxxxxx 1,000 10.625 10/18/95 3,000 21 9/18/96
Xxxx-Xxxx Xxxxxxxx 5,000 21 9/18/96
Xxxxxxxxx Xxxxx 200 21 9/18/96
Xxxxxx Xxxxxxxxx 100 21 9/18/96
Xxx X. Xxxxxx 10,000 28.25 12/13/96
-------- --------
160,000 180,300
======== ========
* 2,333 options were forfeited in the fourth quarter of 1996.
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