EXHIBIT 10(f)
FORMS OF STOCK OPTION AGREEMENTS
1
21ST CENTURY INSURANCE GROUP
INCENTIVE STOCK OPTION AGREEMENT
PURSUANT TO THE
1995 STOCK OPTION PLAN
This Incentive Stock Option Agreement ("Agreement") is made and entered into as
of the Date of Grant indicated below by and between 20th Century Industries, a
California corporation, (the "Company") and the person named below as Optionee.
WHEREAS, Optionee is an employee of the Company and/or one or more of its
"subsidiary corporations," as such term is defined in Section 424(f), of the
Internal Revenue Code (the "Code"); and
WHEREAS, pursuant to the Company's 1995 Stock Option Plan (the "1995 Plan"), the
committee of the Board of Directors of the Company administering the 1995 Plan
(the "Committee") has approved the grant to Optionee of an option to purchase
shares of the Common Stock of the Company (the "Common Shares"), on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set
forth herein, the parties hereto hereby agree as follows:
1. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company hereby grants to
Optionee, and Optionee hereby accepts, as of the Date of Grant indicated
below, an option (the "Option") to purchase the number of Common Shares
indicated below (the "Option Shares") at the Exercise Price per share
indicated below. The Option shall expire at 5:00 p.m., prevailing Pacific
Time, on the Expiration Date indicated below and shall be subject to all of
the terms and conditions set forth in the 1995 Plan and this Agreement.
Optionee: ______________
Date of Grant: ___________, 199__
Numbers of shares purchasable: ________ shares
Exercise Price per share: $_________
Expiration Date: ___________, 200__
Vesting Rate: ________vesting
2. INCENTIVE STOCK OPTION; INTERNAL REVENUE CODE REQUIREMENTS. The Option is
intended to qualify as an incentive stock option under Section 422 of the
Code.
3. ACCELERATION AND TERMINATION OF OPTION.
(a) TERMINATION OF EMPLOYMENT.
(i) RETIREMENT. In the event that Optionee shall cease to be an
employee of the Company or any "subsidiary corporation", as
defined above, (such event shall be referred to herein as the
"Termination of Employment") by reason of retirement in
accordance with the Company's then-current retirement practices,
then the Option shall fully vest with respect to all Option
Shares upon the date of such Termination of Employment and shall
terminate no later than the Expiration Date. OPTIONEE UNDERSTANDS
AND ACKNOWLEDGES THAT, IF SUCH OPTION IS EXERCISED ON OR AFTER
THE THREE MONTH ANNIVERSARY OF SUCH TERMINATION OF EMPLOYMENT,
2
SUCH OPTION MAY NOT QUALIFY AS AN "INCENTIVE STOCK OPTION" UNDER
SECTION 422 OF THE CODE AND THAT OPTIONEE SHOULD CONSULT HIS OR
HER OWN TAX ADVISOR REGARDING ALL CONSEQUENCES ARISING FROM ANY
SUCH EXERCISE.
(ii) DEATH OR PERMANENT DISABILITY. If the Termination of Employment
occurs by reason of the death or Permanent Disability (as
hereinafter defined) of Optionee, then the Option shall (A) fully
vest with respect to all Option Shares upon the date of such
Termination of Employment, (B) be exercisable by Optionee or, in
the event of death, the person or persons to whom Optionee's
rights under the Option shall have passed by will or by the
applicable laws of descent or distribution, and (C) terminate on
the first anniversary of the date of such Termination of
Employment. "Permanent Disability" shall mean the inability to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than twelve
(12) months. The Optionee shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been
furnished to the Committee in such form and manner, and at such
times, as the Committee may require. Any determination by the
Committee that Optionee does or does not have a Permanent
Disability shall be final and binding upon the Company and
Optionee.
(iii) OTHER TERMINATION. If the Termination of Employment occurs for
any reason other than those enumerated in (i) through (ii) of
this Section 3(a), then (A) the portion of the Option that has
not vested on or prior to the date of such Termination of
Employment shall terminate on such date and (B) the remaining
vested portion of the Option shall terminate on the earlier of
the Expiration Date or the three (3) month anniversary of the
date of such Termination of Employment.
(b) DEATH FOLLOWING TERMINATION OF EMPLOYMENT. Notwithstanding anything to
the contrary in this Agreement, if Optionee shall die at any time
after the Termination of Employment and prior to the Expiration Date,
then, unless the Termination of Employment had occurred for cause, the
remaining vested but unexercised portion of the Option shall terminate
on the earlier of the Expiration Date or the first anniversary of the
date of such death.
(c) ACCELERATION OF OPTION. The Option shall become fully exercisable
immediately prior to a Change in Control. A Change in Control shall be
deemed to take place upon the occurrence of any of the following:
(i) Any merger or consolidation of the Company with or into any other
person, as the result of which the holders of the Company's
Common Shares immediately prior to the transaction shall, on the
basis of such holdings prior to such transaction, hold less than
50% of the total outstanding voting stock of the surviving
corporation immediately upon completion of the transaction.
(ii) Any sale or exchange of all or substantially all of the property
and assets of the Company.
(iii) Any change in a majority of the Board of Directors of the
Company occurring within a period of two years or less, such that
a majority of the Board of Directors is comprised of individuals
who are not "Continuing Directors". For purposes of the
foregoing, a "Continuing Director" shall be a director (A) who
was in office at the commencement of such period of two years or
(B) was elected subsequent to the commencement of such period
with the approval of not less than a majority of those directors
referred to in clause (A) who are then in office. Any director
meeting the qualifications of clause (B) of the previous sentence
shall, with respect to further determinations after the date of
such director's election, be deemed a director meeting the
qualifications of clause (A) of the previous sentence.
3
(iv) Any "person" (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
shall become the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of a majority of
the Company's outstanding Common Stock.
(v) the liquidation or dissolution of the Company.
(vi) any other transaction or reorganization similar to the foregoing
which in the opinion of the Committee constitutes a "change of
control" of the nature described in subparagraphs (i) through (v)
hereof.
4. ADJUSTMENTS. In the event that the Common Shares are increased, decreased
or exchanged for or converted into cash, property or a different number or
kind of securities, or if cash, property or securities are distributed in
respect of such outstanding Common Shares, in either case as a result of a
reorganization, merger, consolidation, recapitalization, restructuring,
reclassification, partial or complete liquidation, stock split, reverse
stock split or the like, or if substantially all of the property and assets
of the Company are sold, then, unless the terms of such transaction shall
provide otherwise, the Option then outstanding shall thereafter be
exercisable (on substantially the same terms and subject to substantially
the same conditions as were applicable under such Option) for the number of
shares or other securities or cash or other property as the holder of such
Option would have been entitled to receive pursuant to such transaction had
such holder exercised such Option in full immediately prior to such
transaction. The Committee shall make appropriate and proportionate
adjustments in the number and type of shares or other securities or cash or
other property that may be acquired upon the exercise in full of the
Option; provided, however, that any such adjustments in the Option shall be
made without changing the aggregate Exercise Price of the then unexercised
portion of the Option; provided further that no adjustment shall be made to
the number of Common Shares that may be acquired to the extent such
adjustment would result in the Option being treated as other than an
Incentive Stock Option.
5. EXERCISE.
(a) IN GENERAL. The Option shall be exercisable during Optionee's lifetime
only by Optionee or by his or her guardian or legal representative,
and after Optionee's death only by the person or entity entitled to do
so under Optionee's last will and testament or applicable intestate
law. The Option may only be exercised by the delivery to the Company
of a written notice of such exercise pursuant to the notice procedures
set forth in Section 7 hereof, which notice shall specify the number
of Option Shares to be purchased, which for any single exercise may
not be fewer than 100 Option Shares or, if smaller, the number of
Option Shares then vested and exercisable, (the "Purchased Shares")
and the aggregate Exercise Price for such shares (the "Exercise
Price"), together with payment in full of such aggregate Exercise
Price and any Withholding Liability (as hereinafter defined) in cash.
At the discretion of the Committee, prior to Termination of Employment
an Optionee may pay all or a portion of such aggregate Exercise Price
(but not any Withholding Liability) by borrowing funds from the
Company in accordance with such policies and procedures as the
Committee may from time to time establish.
(b) LIMITATION ON EXERCISE. Notwithstanding any other provision of this
Agreement, Optionee shall not be entitled to benefit from the Option
granted hereunder and shall not be entitled to exercise any rights
with respect to this Option if such grant or exercise would violate
any provision of the charter of the Company. Pursuant to the 1995
Plan, the grant or exercise of an Option in violation of this Section
5(b) shall be void AB INITIO and shall not be effective to convey any
rights to Optionee. As a condition to exercise of this Option,
Optionee will be required to certify to the Company that the
acquisition of Common Shares pursuant to the exercise of this Option
will not result in a violation of any provision of the charter of the
Company. If this Option (or any portion thereof) is not exercisable by
4
virtue of this Section 5(b), then such exercise shall be deferred
until the earlier of such time, if any, that Optionee becomes entitled
to exercise this Option or the Expiration Date. This Section 5(b)
shall not result in an extension of the Expiration Date.
6. PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated to withhold
an amount on account of any federal, state, or local income tax imposed as
a result of the exercise of an option granted under this Plan (such amount
shall be referred to herein as the "Withholding Liability"), the Optionee
shall pay the Withholding Liability to the Company in full in cash on the
first date upon which the Company becomes obligated to pay such amount
withheld to the appropriate taxing authority, and the Company may delay
issuing the Common Shares pursuant to such exercise until it receives the
Withholding Liability from the Optionee.
7. NOTICES. Any notice given to the Company shall be addressed to the Company
at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000,
Attention: Corporate Secretary, or at such other address as the Company may
hereafter designate in writing to Optionee. Any notice given to Optionee
shall be sent to the address set forth below Optionee's signature hereto,
or at such other address as Optionee may hereafter designate in writing to
the Company. Any such notice shall be deemed duly given when made by hand
delivery, sent by overnight courier, sent by prepaid certified or
registered mail or transmitted by facsimile.
8. STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding anything to
the contrary in this Agreement, no shares of stock purchased upon exercise
of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (a) such shares have not been
admitted to listing upon official notice of issuance of each stock exchange
upon which shares of that class are then listed or (b) in the opinion of
counsel to the Company, such issuance or delivery would cause the Company
to be in violation of or to incur liability under any federal, state or
other securities law, or any requirement of any stock exchange listing
agreement to which the Company is a party, or any other requirement of law
or of any administrative or regulatory body having jurisdiction over the
Company.
9. NONTRANSFERABILITY. Neither the Option nor any interest therein may be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
10. 1995 PLAN. THE OPTION IS GRANTED PURSUANT TO THE 1995 PLAN, AS IN EFFECT ON
THE DATE OF GRANT, AND IS SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE
1995 PLAN, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, HOWEVER,
THAT NO SUCH AMENDMENT SHALL DEPRIVE OPTIONEE, WITHOUT HIS OR HER CONSENT,
OF THE OPTION OR OF ANY OF OPTIONEE'S RIGHTS UNDER THIS AGREEMENT. THE
INTERPRETATION AND CONSTRUCTION BY THE COMMITTEE OF THE 1995 PLAN, THIS
AGREEMENT, THE OPTION AND SUCH RULES AND REGULATIONS AS MAY BE ADOPTED BY
THE COMMITTEE FOR THE PURPOSE OF ADMINISTERING THE 1995 PLAN SHALL BE FINAL
AND BINDING UPON OPTIONEE. UNTIL THE OPTION SHALL EXPIRE, TERMINATE OR BE
EXERCISED IN FULL, THE COMPANY SHALL, UPON WRITTEN REQUEST, SEND A COPY OF
THE 1995 PLAN, IN ITS THEN CURRENT FORM, TO OPTIONEE OR ANY OTHER PERSON OR
ENTITY THEN ENTITLED TO EXERCISE THE OPTION.
11. FRACTIONAL SHARES. The Company shall not be required to issue a fraction of
a Common Share in connection with the exercise of the Option. In any case
where the Optionee would be entitled to receive a fraction of a Common
Share upon the exercise of the Option, the Company shall instead, upon the
exercise of the Option, issue the largest whole number of Common Shares
5
purchasable upon exercise of the Option, and pay to the Optionee in cash
the Fair Market Value (as determined by the Committee) of such fraction of
a Common Share at the time of exercise of the Option.
12. STOCKHOLDER RIGHTS. No person or entity shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of any Option Shares
until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
13. EMPLOYMENT RIGHTS. No provision of this Agreement or of the Option granted
hereunder shall (a) confer upon Optionee any right to continue in the
employ of the Company or any of its subsidiaries, (b) affect the right of
the Company and each of its subsidiaries to terminate the employment of
Optionee, with or without cause, or (c) confer upon Optionee any right to
participate in any employee welfare or benefit plan or other program of the
Company or any of its subsidiaries other than the 1995 Plan.
14. GOVERNING LAW. This Agreement and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the laws of the
State of California.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties with respect to the matters covered herein and supersedes all prior
written or oral agreements or 6 understandings of the parties with respect
to the matters covered herein. Optionee acknowledges that he or she has no
right to receive any additional options unless and until such time, if any,
that the Committee, in its sole discretion, may approve the grant thereof,
and that the Company has not made any representation to the Optionee
regarding future or additional option grants, or any other option related
matters. The grant of any options must be in writing.
IN WITNESS WHEREOF, the Company and Optionee have duly executed this Agreement
as of the Date of Grant.
20TH CENTURY INDUSTRIES OPTIONEE:
By Xxxxxxx X. Xxxxxxx, President Signature _________________________
Street Address ____________________
City, State and Zip Code __________
6
21ST CENTURY INDUSTRIES
NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
1995 STOCK OPTION PLAN
This Non-Qualified Stock Option Agreement ("Agreement") is made and entered into
as of the Date of Grant indicated below by and between 20th Century Industries,
a California corporation, (the "Company") and the person named below as
Optionee.
WHEREAS, Optionee is an employee of the Company and/or one or more of its
subsidiaries; and
WHEREAS, pursuant to the Company's 1995 Stock Option Plan (the "1995 Plan"), the
committee of the Board of Directors of the Company administering the 1995 Plan
(the "Committee") has approved the grant to Optionee of an option to purchase
shares of the Common Stock of the Company (the "Common Shares"), on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set
forth herein, the parties hereto hereby agree as follows:
1. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company hereby grants to
Optionee, and Optionee hereby accepts, as of the Date of Grant indicated
below, an option (the "Option") to purchase the number of Common Shares
indicated below (the "Option Shares") at the Exercise Price per share
indicated below. The Option shall expire at 5:00 p.m., prevailing Pacific
Time, on the Expiration Date indicated below and shall be subject to all of
the terms and conditions set forth in the 1995 Plan and this Agreement.
Optionee: ______________
Date of Grant: _______, 199___
Numbers of shares purchasable: _________shares
Exercise Price per share: $________
Expiration Date: _________, 200___ 1
Vesting Rate: ___________vesting
2. NON-QUALIFIED STOCK OPTION. The Option is not intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code (the
"Code").
3. ACCELERATION AND TERMINATION OF OPTION.
(a) TERMINATION OF EMPLOYMENT.
(i) RETIREMENT. In the event that Optionee shall cease to be an employee
of the Company or any "subsidiary corporation", as defined above,
(such event shall be referred to herein as the "Termination of
Employment") by reason of retirement in accordance with the Company's
then-current retirement practices, then the Option shall fully vest
with respect to all Option Shares upon the date of such Termination of
Employment and shall terminate no later than the Expiration Date.
(ii) DEATH OR PERMANENT DISABILITY. If the Termination of Employment occurs
by reason of the death or Permanent Disability (as hereinafter
defined) of Optionee, then the Option shall (A) fully
7
vest with respect to all Option Shares upon the date of such
Termination of Employment, (B) be exercisable by Optionee or, in the
event of death, the person or persons to whom Optionee's rights under
the Option shall have passed by will or by the applicable laws of
descent or distribution, and (C) terminate on the first anniversary of
the date of such Termination of Employment. "Permanent Disability"
shall mean the inability to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than twelve (12)
months. The Optionee shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been
furnished to the Committee in such form and manner, and at such times,
as the Committee may require. Any determination by the Committee that
Optionee does or does not have a Permanent Disability shall be final
and binding upon the Company and Optionee.
(iii) OTHER TERMINATION. If the Termination of Employment occurs for any
reason other than those enumerated in (i) through (ii) of this Section
3(a), then (A) the portion of the Option that has not vested on or
prior to the date of such Termination of Employment shall terminate on
such date and (B) the remaining vested portion of the Option shall
terminate on the earlier of the Expiration Date or the three (3) month
anniversary of the date of such Termination of Employment.
(b) DEATH FOLLOWING TERMINATION OF EMPLOYMENT. Notwithstanding anything to the
contrary in this Agreement, if Optionee shall die at any time after the
Termination of Employment and prior to the Expiration Date, then, unless
the Termination of Employment had occurred for cause, the remaining vested
but unexercised portion of the Option shall terminate on the earlier of the
Expiration Date or the first anniversary of the date of such death.
(c) ACCELERATION OF OPTION. The Option shall become fully exercisable
immediately prior to a Change in Control. A Change in Control shall be
deemed to take place upon the occurrence of any of the following:
(i) Any merger or consolidation of the Company with or into any other
person, as the result of which the holders of the Company's Common
Shares immediately prior to the transaction shall, on the basis of
such holdings prior to such transaction, hold less than 50% of the
total outstanding voting stock of the surviving corporation
immediately upon completion of the transaction.
(ii) Any sale or exchange of all or substantially all of the property and
assets of the Company.
(iii) Any change in a majority of the Board of Directors of the Company
occurring within a period of two years or less, such that a majority
of the Board of directors is comprised of individuals who are not
"Continuing Directors". For purposes of the foregoing, a " Continuing
Director" shall be a director (A) who was in office at the
commencement of such period of two years or (B) was elected subsequent
to the commencement of such period with the approval of not less than
a majority of those directors referred to in clause (A) who are then
in office. Any director meeting the qualifications of clause (B) of
the previous sentence shall, with respect to further determinations
after the date of such director's election, be deemed a director
meeting the qualifications of clause (A) of the previous sentence.
(iv) Any "person" (as defined in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) shall become
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of a majority of the Company's
outstanding Common Stock.
8
(v) the liquidation or dissolution of the Company.
(vi) any other transaction or reorganization similar to the foregoing which
in the opinion of the Committee constitutes a "change of control" of
the nature described in subparagraphs (i) through (v) hereof.
4. ADJUSTMENTS. In the event that the Common Shares are increased, decreased
or exchanged for or converted into cash, property or a different number or
kind of securities, or if cash, property or securities are distributed in
respect of such outstanding Common Shares, in either case as a result of a
reorganization, merger, consolidation, recapitalization, restructuring,
reclassification, the property and assets of the Company are sold, then,
unless the terms of such transaction shall provide otherwise, the Option
then outstanding shall thereafter be exercisable (on substantially the same
terms and subject to substantially the same conditions as were applicable
under such Option) for the number of shares or other securities or cash or
other property as the holder of such Option would have been entitled to
receive pursuant to such transaction had such holder exercised such Option
in full immediately prior to such transaction. The Committee shall make
appropriate and proportionate adjustments in the number and type of shares
or other securities or cash or other property that may be acquired upon the
exercise in full of the Option.
5. EXERCISE.
(a) IN GENERAL. The Option shall be exercisable during Optionee's lifetime only
by Optionee or by his or her guardian or legal representative, and after
Optionee's death only by the person or entity entitled to do so under
Optionee's last will and testament or applicable intestate law. The Option
may only be exercised by the delivery to the Company of a written notice of
such exercise pursuant to the notice procedures set forth in Section 7
hereof, which notice shall specify the number of Option Shares to be
purchased, which for any single exercise may not be fewer than 100 Option
Shares or, if smaller, the number of Option Shares then vested and
exercisable, (the "Purchased Shares") and the aggregate Exercise Price for
such shares (the "Exercise Price"), together with payment in full of such
aggregate Exercise Price and any Withholding Liability (as hereinafter
defined) in cash. At the discretion of the Committee, prior to Termination
of Employment an Optionee may pay all or a portion of such aggregate
Exercise Price (but not any Withholding Liability) by borrowing funds from
the Company in accordance with such policies and procedures as the
Committee may from time to time establish.
(b) LIMITATION ON EXERCISE. Notwithstanding any other provision of this
Agreement, Optionee shall not be entitled to benefit from the Option
granted hereunder and shall not be entitled to exercise any rights with
respect to this Option if such grant or exercise would violate any
provision of the charter of the Company. Pursuant to the 1995 Plan, the
grant or exercise of an Option in violation of this Section 5(b) shall be
void AB INITIO and shall not be effective to convey any rights to Optionee.
As a condition to exercise of this Option, Optionee will be required to
certify to the Company that the acquisition of Common Shares pursuant to
the exercise of this Option will not result in a violation of any provision
of the charter of the Company. If this Option (or any portion thereof) is
not exercisable by virtue of this Section 5(b), then such exercise shall be
deferred until the earlier of such time, if any, that Optionee becomes
entitled to exercise this Option or the Expiration Date. This Section 5(b)
shall not result in an extension of the Expiration Date.
6. PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated to withhold
an amount on account of any federal, state, or local income tax imposed as
a result of the exercise of an option granted under this Plan (such amount
shall be referred to herein as the "Withholding Liability"), the Optionee
shall pay the Withholding Liability to the Company in full in cash on thE
first date upon which the Company becomes obligated to pay such amount
withheld to the appropriate taxing authority, and the Company may delay
9
issuing the Common Shares pursuant to such exercise until it receives the
Withholding Liability from the Optionee.
7. NOTICES. Any notice given to the Company shall be addressed to the Company
at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000,
Attention: Corporate Secretary, or at such other address as the Company may
hereafter designate in writing to Optionee. Any notice given to Optionee
shall be sent to the address set forth below Optionee's signature hereto,
or at such other address as Optionee may hereafter designate in writing to
the Company. Any such notice shall be deemed duly given when made by hand
delivery, sent by overnight courier, sent by prepaid certified or
registered mail or transmitted by facsimile.
8. STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding anything to
the contrary in this Agreement, no shares of stock purchased upon exercise
of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (a) such shares have not been
admitted to listing upon official notice of issuance of each stock exchange
upon which shares of that class are then listed or (b) in the opinion of
counsel to the Company, such issuance or delivery would cause the Company
to be in violation of or to incur liability under any federal, state or
other securities law, or any requirement of any stock exchange listing
agreement to which the Company is a party, or any other requirement of law
or of any administrative or regulatory body having jurisdiction over the
Company.
9. NONTRANSFERABILITY. Neither the Option nor any interest therein may be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
10. 1995 PLAN. THE OPTION IS GRANTED PURSUANT TO THE 1995 PLAN, AS IN EFFECT ON
THE DATE OF GRANT, AND IS SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE
1995 PLAN, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, HOWEVER,
THAT NO SUCH AMENDMENT SHALL DEPRIVE OPTIONEE, WITHOUT HIS OR HER CONSENT,
OF THE OPTION OR OF ANY OF OPTIONEE'S RIGHTS UNDER THIS AGREEMENT. THE
INTERPRETATION AND CONSTRUCTION BY THE COMMITTEE OF THE 1995 PLAN, THIS
AGREEMENT, THE OPTION AND SUCH RULES AND REGULATIONS AS MAY BE ADOPTED BY
THE COMMITTEE FOR THE PURPOSE OF ADMINISTERING THE 1995 PLAN SHALL BE FINAL
AND BINDING UPON OPTIONEE. UNTIL THE OPTION SHALL EXPIRE, TERMINATE OR BE
EXERCISED IN FULL, THE COMPANY SHALL, UPON WRITTEN REQUEST, SEND A COPY OF
THE 1995 PLAN, IN ITS THEN CURRENT FORM, TO OPTIONEE OR ANY OTHER PERSON OR
ENTITY THEN ENTITLED TO EXERCISE THE OPTION.
11. FRACTIONAL SHARES. The Company shall not be required to issue a fraction of
a Common Share in connection with the exercise of the Option. In any case
where the Optionee would be entitled to receive a fraction of a Common
Share upon the exercise of the Option, the Company shall instead, upon the
exercise of the Option, issue the largest whole number of Common Shares
purchasable upon exercise of the Option, and pay to the Optionee in cash
the Fair Market Value (as determined by the Committee) of such fraction of
a Common Share at the time of exercise of the Option.
12. STOCKHOLDER RIGHTS. No person or entity shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of any Option Shares
until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
13. EMPLOYMENT RIGHTS. No provision of this Agreement or of the Option granted
hereunder shall (a) confer upon Optionee any right to continue in the
employ of the Company or any of its subsidiaries, (b) affect the right of
10
the Company and each of its subsidiaries to terminate the employment of
Optionee, with or without cause, or (c) confer upon Optionee any right to
participate in any employee welfare or benefit plan or other program of the
Company or any of its subsidiaries other than the 1995 Plan.
14. GOVERNING LAW. This Agreement and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the laws of the
State of California.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties with respect to the matters covered herein and supersedes all prior
written or oral agreements or understandings of the parties with respect to
the matters covered herein. Optionee acknowledges that he or she has no
right to receive any additional options unless and until such time, if any,
that the Committee, in its sole discretion, may approve the grant thereof,
and that the Company has not made any representation to the Optionee
regarding future or additional option grants, or any other option related
matters. The grant of any options must be in writing.
16. IN WITNESS WHEREOF, the Company and Optionee have duly executed this
Agreement as of the Date of Grant.
20TH CENTURY INDUSTRIES OPTIONEE:
By Xxxxxxx X. Xxxxxxx, President Signature __________________________________
Street Address _____________________________
City, State and Zip Code ___________________
11
20TH CENTURY INDUSTRIES
NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
PURSUANT TO THE
1995 STOCK OPTION PLAN
This Nonemployee Director Stock Option Agreement ("Agreement") is made and
entered into as of the Date of Grant indicated below by and between 20th Century
Industries, a California corporation, (the "Company") and the person named below
as Optionee.
WHEREAS, Optionee is a nonemployee director ("Nonemployee Director") of the
Company; and
WHEREAS, pursuant to the Company's 1995 Stock Option Plan (the "1995 Plan"), an
option to purchase shares of the Common Stock of the Company (the "Common
Shares") has been granted to Optionee on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set
forth herein, the parties hereto hereby agree as follows:
1. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company hereby grants to
Optionee, and Optionee hereby accepts, as of the Date of Grant indicated
below, an option (the "Option") to purchase the number of Common Shares
indicated below (the "Option Shares") at the Exercise Price per share
indicated below. The Option shall expire at 5:00 p.m., prevailing Pacific
Time, on the Expiration Date indicated below and shall be subject to all of
the terms and conditions set forth in the 1995 Plan and this Agreement.
Optionee: ____________________
Date of Grant: _____________, 199__
Numbers of shares purchasable: ______________shares
Exercise Price per share: $_________
Expiration Date: _____________, 200__
Vesting Rate: _________shares on__
2. NONQUALIFIED STOCK OPTION. The Option is not intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code (the
"Code").
3. EXPIRATION AND TERMINATION OF OPTION.
(a) EXPIRATION OF OPTION. The Option shall expire upon the first to occur of
the following:
(i) the first anniversary of the date upon which the Optionee shall cease
to be a Nonemployee Director as a result of death or Permanent
Disability;
(ii) the 90th day after the date upon which the Optionee shall cease to be
a Nonemployee Director for any reason other than death or Permanent
Disability;
(iii) the tenth anniversary of the Date of Grant of the Option. For
purposes of this paragraph, "Permanent Disability" shall mean the
inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be
12
expected to last for a continuous period of not less than twelve (12)
months. The Optionee shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been
furnished to the Committee in such form and manner, and at such times,
as the Committee may require. Any determination by the Committee that
Optionee does or does not have a Permanent Disability shall be final
and binding upon the Company and Optionee.
(c) TERMINATION OF OPTION. The Option shall terminate upon the first to occur
of the following:
(i) the dissolution or liquidation of the Company;
(ii) A reorganization, merger or consolidation of the Company as a result
of which the outstanding securities of the class then subject to such
outstanding Nonemployee Director Options are exchanged for or
converted into cash, property and securities not issued by the Company
(or any combination thereof) unless the terms of such reorganization,
merger or consolidation provide otherwise; or
(iii) the sale of substantially all of the property and assets of the
Company.
4. ADJUSTMENTS. In the event that the Common Shares are increased, decreased
or exchanged for or converted into cash, property or a different number or
kind of securities, or if cash, property or securities are distributed in
respect of such outstanding Common Shares, in either case as a result of a
reorganization, merger, consolidation, recapitalization, restructuring,
reclassification, partial or complete liquidation, stock split, reverse
stock split or the like, or if substantially all of the property and assets
of the Company are sold, then, unless such event shall cause the Option to
terminate pursuant to this Agreement or the terms of such transaction shall
provide otherwise, the Option then outstanding shall thereafter be
exercisable (on substantially the same terms and subject to substantially
the same conditions as were applicable under such Option) for the number of
shares or other securities or cash or other property as the holder of such
Option would have been entitled to receive pursuant to such transaction had
such holder exercised such Option in full immediately prior to such
transaction. The Committee shall make appropriate and proportionate
adjustments in the number and type of shares or other securities or cash or
other property that may be acquired upon the exercise in full of the
Option.
5. EXERCISE.
(a) IN GENERAL. The Option shall be exercisable during Optionee's lifetime only
by Optionee or by his or her guardian or legal representative, and after
Optionee's death only by the person or entity entitled to do so under
Optionee's last will and testament or applicable intestate law. The Option
may only be exercised by the delivery to the Company of a written notice of
such exercise pursuant to the notice procedures set forth in Section 7
hereof, which notice shall specify the number of Option Shares to be
purchased, which for any single exercise may not be fewer than 100 Option
Shares or, if smaller, the number of Option Shares then vested and
exercisable, (the "Purchased Shares") and the aggregate Exercise Price for
such shares (the "Exercise Price"), together with payment in full of such
aggregate Exercise Price and any Withholding Liability (as hereinafter
defined) in cash.
(b) LIMITATION ON EXERCISE. Notwithstanding any other provision of this
Agreement, Optionee shall not be entitled to benefit from the Option
granted hereunder and shall not be entitled to exercise any rights with
respect to this Option if such grant or exercise would violate any
provision of the charter of the Company. Pursuant to the 1995 Plan, the
grant or exercise of an Option in violation of this Section 5(b) shall be
void AB INITIO and shall not be effective to convey any rights to Optionee.
As a condition to exercise of this Option, Optionee will be required to
certify to the Company that the acquisition of Common Shares pursuant to
the exercise of this Option
13
will not result in a violation of any provision of the charter of the
Company. If this Option (or any portion thereof) is not exercisable by
virtue of this Section 5(b), then such exercise shall be deferred until the
earlier of such time, if any, that Optionee becomes entitled to exercise
this Option or the Expiration Date. This Section 5(b) shall not result in
an extension of the Expiration Date.
6. PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated to withhold
an amount on account of any federal, state, or local income tax imposed as
a result of the exercise of an option granted under this Plan (such amount
shall be referred to herein as the "Withholding Liability"), the Optionee
shall pay the Withholding Liability to the Company in full in cash on the
first date upon which the Company becomes obligated to pay such amount
withheld to the appropriate taxing authority, and the Company may delay
issuing the Common Shares pursuant to such exercise until it receives the
Withholding Liability from the Optionee.
7. NOTICES. Any notice given to the Company shall be addressed to the Company
at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000,
Attention: Corporate Secretary, or at such other address as the Company may
hereafter designate in writing to Optionee. Any notice given to Optionee
shall be sent to the address set forth below Optionee's signature hereto,
or at such other address as Optionee may hereafter designate in writing to
the Company. Any such notice shall be deemed duly given when made by hand
delivery, sent by overnight courier, sent by prepaid certified or
registered mail or transmitted by facsimile.
8. STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding anything to
the contrary in this Agreement, no shares of stock purchased upon exercise
of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (a) such shares have not been
admitted to listing upon official notice of issuance of each stock exchange
upon which shares of that class are then listed or (b) in the opinion of
counsel to the Company, such issuance or delivery would cause the Company
to be in violation of or to incur liability under any federal, state or
other securities law, or any requirement of any stock exchange listing
agreement to which the Company is a party, or any other requirement of law
or of any administrative or regulatory body having jurisdiction over the
Company.
9. NONTRANSFERABILITY. Neither the Option nor any interest therein may be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
10. 1995 PLAN. THE OPTION IS GRANTED PURSUANT TO THE 1995 PLAN, AS IN EFFECT ON
THE DATE OF GRANT, AND IS SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE
1995 PLAN, AS THE SAME MAY BE AMENDED FROM TIME TO TIME; PROVIDED, HOWEVER,
THAT NO SUCH AMENDMENT SHALL DEPRIVE OPTIONEE, WITHOUT HIS OR HER CONSENT,
OF THE OPTION OR OF ANY OF OPTIONEE'S RIGHTS UNDER THIS AGREEMENT. THE
INTERPRETATION AND CONSTRUCTION BY THE COMMITTEE OF THE 1995 PLAN, THIS
AGREEMENT, THE OPTION AND SUCH RULES AND REGULATIONS AS MAY BE ADOPTED BY
THE COMMITTEE FOR THE PURPOSE OF ADMINISTERING THE 1995 PLAN SHALL BE FINAL
AND BINDING UPON OPTIONEE. UNTIL THE OPTION SHALL EXPIRE, TERMINATE OR BE
EXERCISED IN FULL, THE COMPANY SHALL, UPON WRITTEN REQUEST, SEND A COPY OF
THE 1995 PLAN, IN ITS THEN CURRENT FORM, TO OPTIONEE OR ANY OTHER PERSON OR
ENTITY THEN ENTITLED TO EXERCISE THE OPTION.
11. FRACTIONAL SHARES. The Company shall not be required to issue a fraction of
a Common Share in connection with the exercise of the Option. In any case
where the Optionee would be entitled to receive a fraction of a Common
Share upon the exercise of the Option, the Company shall instead, upon the
14
exercise of the Option, issue the largest whole number of Common Shares
purchasable upon exercise of the Option, and pay to the Optionee in cash
the Fair Market Value (as determined by the Committee) of such fraction of
a Common Share at the time of exercise of the Option.
12. STOCKHOLDER RIGHTS. No person or entity shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of any Option Shares
until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
13. GOVERNING LAW. This Agreement and the Option granted hereunder shall be
governed by, construed and enforced in accordance with the laws of the
State of California.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties with respect to the matters covered herein and supersedes all prior
written or oral agreements or understandings of the parties with respect to
the matters covered herein. Optionee acknowledges that he or she has no
right to receive any additional options except as provided in the 1995
Plan. The grant of any options must be in writing.
IN WITNESS WHEREOF, the Company and Optionee have duly executed this Agreement
as of the Date of Grant.
20TH CENTURY INDUSTRIES OPTIONEE:
By Xxxxxxx X. Xxxxxxx, President
15
