EXHIBIT 15
GREY ADVERTISING INC.
STOCK OPTION AGREEMENT
AGREEMENT, dated as of November 26,
1996, by and between GREY ADVERTISING INC., a
Delaware corporation ("Company"), and XXXXXX X.
XXXXX, residing at 000 Xxxx Xxxxxx, Xxx Xxxx, X.X.
00000 (such individual or, as the context
requires, his/her guardian, legal representative,
estate or other person to whom the rights
hereunder may be transferred by will or by the
laws of descent and distribution, being
hereinafter referred to as the "Optionee").
Pursuant to the Grey Advertising Inc.
1994 Stock Incentive Plan ("Plan"), the Board of
Directors, or a committee thereof, of the Company
("Board") has granted the Optionee, on the terms
and conditions set forth herein, an option to
purchase 20,000 shares of the Company's common
stock, par value $1 per share ("Common Stock").
The Plan is hereby incorporated by
reference and made a part hereof, and this
Agreement shall be subject to all terms and
conditions thereof.
NOW THEREFORE, the Company and the
Optionee hereby agree as follows:
1. Grant of Option.
(a) Number of Shares and Option
Price.
In accordance with the allotment
made by the Committee and subject to the terms and
conditions hereof, the Company grants, as of the
date hereof, to the Optionee a non-qualified
option to purchase ("Option") an aggregate of
20,000 shares of Common Stock ("Option Shares") at
an option exercise price of $235.00 per share,
which price is subject to adjustment in accordance
with Section 4 of this Agreement. The option
price, as adjusted from time to time, is
hereinafter referred to as the "Option Price".
(b) Term of Option; Conditions and
Manner of Exercise.
(i) The term of the
Option and of this Agreement shall commence as of
the date hereof ("Date of Grant") and, unless
earlier terminated as provided in this Agreement,
shall terminate upon the expiration of nine years
from the Date of Grant. Upon the termination of
the Option, all rights of the Optionee hereunder
shall cease.
(ii) The Option,
subject to the following provisions of this
paragraph, shall become exercisable in cumulative
installments as follows: one-third of the shares
subject to the Option from and after the Date of
Grant; one-third of the shares subject to the
Option from and after the first anniversary of the
Date of Grant; and one-third of the shares subject
to the Option from and after the second
anniversary of the Date of Grant; provided,
however, that the Option may be exercised only to
purchase whole shares, and in no case may a
fraction of a share be purchased. The right of
the Optionee to purchase Option Shares with
respect to which the Option has become exercisable
as herein provided may be exercised in whole or in
part at any time or from time to time prior to the
ninth anniversary of the Date of Grant.
(iii) The Option (or
any portion thereof) shall be exercised in the
following manner: the Optionee shall deliver to
the Company written notice of the exercise of the
Option (or any portion thereof) in a form
satisfactory to the Board, specifying the number
of Option Shares subject to the Option which the
Optionee elects to purchase, together with full
payment of the Option Price (w) in cash, (x) by
delivery of a check payable to the order of the
Company, (y) in shares of Common Stock with a
fair market value equal to the Option Price or
portion thereof being paid with shares (provided,
in each instance, that such shares of Common Stock
were owned by the Optionee for at least six months
prior to the exercise of the Option, unless such
requirement is waived by the Board), or (z) a
combination thereof. The Company shall thereafter
cause certificates representing the Option Shares
purchased to be delivered as promptly as
practicable, provided that the Optionee shall pay
to the Company at the time of exercise, or shall
otherwise make arrangements satisfactory to the
Company regarding payment of, any additional
amount, if any, as the Company deems necessary to
satisfy the Company's liability to withhold
Federal, state or local income or other taxes
incurred by the Company or the employer of the
Optionee by reason of the exercise of the Option,
or any portion thereof, or the transfer of the
Option Shares thereupon. If requested by the
Company, the Optionee shall also deliver this
Agreement to the Secretary of the Company who
shall endorse hereon a notation of such exercise
and return this Agreement to the Optionee. The
date of exercise of an Option that is validly
exercised shall be deemed to be the date on which
there shall have been delivered to the Company the
instruments and payments referred to in the first
sentence of this paragraph (iii), provided that
the Optionee has satisfied or thereafter satisfies
the other requirements of this paragraph (iii).
The Optionee shall be deemed to be the holder of
the Option Shares issued pursuant to the exercise
of the Option as of the date of exercise.
(iv) For the purposes
of the preceding paragraph (iii), "fair market
value" per share of Common Stock, as of a
particular date, shall mean (x) the closing sales
price per share of Common Stock reported on NASDAQ
or, if the shares are not so reported, on the
system or exchange on which the trading prices of
the shares are then reported or traded, (y) if
there is no reported closing sales prices per
share on such date, the average of the closing bid
and asked prices for the shares on such date as
reported by NASDAQ or such other system, or (z)
if the shares of Common Stock are not then quoted
by NASDAQ (or such other system) or traded on one
of the exchanges, such value as the Board, in its
sole discretion, shall determine.
2. Termination of Employment.
(a) Except as provided in
this Section 2, Options may not be exercised after
the Optionee has ceased to be employed by the
Company or a subsidiary of the Company.
(b) If the Optionee's
employment by the Company or a subsidiary of the
Company should terminate for any reason other than
death, disability (as defined in subparagraph (c)
below) or cause (as such term is defined in the
Optionee's employment agreement with the Company),
the Option may be exercised, to the extent the
Optionee was entitled to exercise the Option on
the date employment was terminated, at any time
within one year after such date, but in no event
later than nine years from the Date of Grant.
(c) If the Optionee's
employment by the Company or a subsidiary of the
Company should terminate by reason of the
Optionee's death or disability (within the meaning
of Section 105(d)(4) of the Internal Revenue Code
of 1954, as amended), the Option may be exercised,
in its entirety at any time within one year after
such date, but in no event later than nine years
from the Date of Grant.
3. Non-transferability.
The Option granted hereunder shall not
be transferable other than by will or by the laws
of descent and distribution, and may be exercised,
during the lifetime of the Optionee, only by the
Optionee or by his guardian or legal
representative.
4. Effect of Certain Changes.
(a) If there is any change in
the aggregate number of issued and outstanding
shares of the Common Stock and Company's Limited
Duration Class B Common Stock, par value $1 per
share ("Class B Stock"; the Common Stock and the
Class B Stock are collectively referred to herein
as the "Common Equity") through the declaration of
stock dividends, or through a recapitalization
resulting in stock splits, or combinations or
exchanges of such shares, the number of Option
Shares and the Option Price per share shall be
proportionately adjusted by the Board to reflect
any increase or decrease in the number of issued
shares of Common Equity; provided, however, that
any fractional shares resulting from such
adjustment shall be eliminated.
(b) In the event of a
proposed dissolution or liquidation of the
Company, or in the event of any corporate
separation or division, including, but not limited
to, a split-up, split-off or spin-off, the Board,
in its sole discretion, may provide (i) that the
Optionee shall have the right to exercise the
Option, to the extent then exercisable, solely for
the kind and amount of shares of stock and other
securities, property, cash or any combination
thereof receivable upon such dissolution,
liquidation, or corporate separation or division
by a holder of the number of shares of Common
Stock for which the Option might have been
exercised immediately prior to such dissolution,
liquidation, or corporate separation or division,
or (ii) that the Option shall terminate as of a
date to be fixed by the Board, provided however,
that not less than twenty days' prior written
notice of the date so fixed shall be given to the
Optionee, who shall have the right, during the
period of twenty days preceding such termination,
to exercise the Option as to all or any part of
the Option Shares covered thereby, including
shares as to which the Option would not otherwise
be exercisable, or (iii) for an equitable
adjustment in the Option Price.
(c) The Board shall, in its
sole discretion, in the case of a merger or
consolidation in which the Company is not the
surviving corporation (i) promptly make an
appropriate adjustment to the number and class of
shares of Common Stock available pursuant to the
Option, to the amount and kind of shares or other
securities or property receivable upon the
exercise of the Option after the effective date of
any such transaction, and/or to the Option Price,
or (ii) provide for the cancellation of the
Option, or any portion thereof then outstanding,
in consideration for a cash payment equal to the
product of (x) the difference between the Option
Price and the fair market value of the
consideration per share received or receivable by
holders of Common Equity in any such transaction
multiplied by (y) the number of Option Shares then
subject to the Option.
(d) Paragraphs (b) and (c) of
this Section 4 shall not apply to a merger or
consolidation in which the Company is the
surviving corporation and pursuant to which shares
of Common Stock are not converted into or
exchanged for stock or securities of any other
corporation, cash or any other thing of value. In
case of any consolidation or merger of another
corporation into the Company in which the Company
is the surviving corporation and in which there is
a reclassification or change (including a change
in the right to receive cash or other property) of
the shares of Common Stock (other than a change in
par value, or from par value to no par value, or
as a result of a subdivision or combination, but
including any change in such shares into two or
more classes or series of shares), the Board may,
in its sole discretion (i) make an appropriate
adjustment to the number and class of shares of
Common Stock available pursuant to the Option, to
the amount and kind of shares or other securities
or property receivable upon the exercise of the
Option after the effective date of any such
transaction, and/or to the Option Price or (ii)
provide for the cancellation of the Option, or any
portion thereof then outstanding, in consideration
for a cash payment equal to the product of (x) the
difference between the Option Price and the fair
market value of the consideration per share
received or receivable by holders of Common Equity
in any such transaction multiplied by (y) the
number of Option Shares then subject to the
Option.
(e) In the event of a change
in the Common Stock of the Company as presently
constituted, which is limited to a change of all
of its authorized shares with par value into the
same number of shares with a different par value
or without par value, the shares resulting from
any such change shall be deemed to be the Common
Stock within the meaning of the Plan.
(f) To the extent that the
foregoing adjustments relate to stock or
securities of the Company, such adjustments shall
be made by the Board, whose determination in that
respect shall be final, binding and conclusive.
(g) Except as otherwise
expressly provided in this Agreement or in the
Plan, the Optionee shall have no rights by reason
of any subdivision or consolidation of shares of
stock of any class or the payment of any stock
dividend or any other increase or decrease in the
number of shares of stock of any class or by
reason of any dissolution, liquidation, merger or
consolidation or spin-off of assets or stock of
another corporation, and any issue by the Company
of shares of stock of any class, or securities
convertible into shares of stock of any class,
shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number
or price of Option Shares. The grant of the
Option does not affect in any way the right or
power of the Company to make adjustments,
reclassifications, reorganizations or changes of
its capital or business structures or to merge or
to consolidate or to dissolve, liquidate or sell,
or transfer all or part of its business or assets.
5. Restrictions upon Option Shares.
(a) The Optionee, as a
condition to the exercise of the Option, by
exercising the Option, or any portion thereof,
warrants, effective as of the date of exercise,
but only to the extent the Option Shares are not
being issued pursuant to an effective registration
statement on Form S-8 (or any successor form),
that (i) the Option Shares are being acquired for
investment, for the Optionee's own account, and
not with a view to the distribution or resale
thereof in violation of the Securities Act of
1933, as amended ("1933 Act"), and (ii) he/she
will not sell or transfer any of such shares
unless and until (A) a registration statement
under the 1933 Act is then in effect covering such
shares and the purchaser or transferee thereof has
been furnished with a prospectus which complies
with the provisions of the 1933 Act, or (B) in
the opinion of counsel for the Company,
registration under the 1933 Act is not required in
connection with the sale or transfer.
(b) The Option shall not be
exercisable if its exercise would violate any
applicable state securities law, any registration
provisions or other requirements of the 1933 Act,
the Securities Exchange Act of 1934, as amended
(or any rules or regulations promulgated under
either of such Acts), or any other applicable law,
ordinance, rule or regulation. In connection with
the foregoing, the Company shall not be obligated
to prepare and file (or cause to be prepared and
filed), nor take any action to cause to become
effective, any registration statement required by
applicable law with respect to the issuance of the
Option Shares subject to the Option, or any
portion thereof, or upon exercise thereof, nor
shall the Company be obligated to seek an
exemption from any such registration statement
requirement.
(c) The Company may in its
discretion place an appropriate legend or notation
on the certificates representing Option Shares
issued upon exercise of the Option, or any portion
thereof.
(d) The Company may instruct
any transfer agent for its Common Equity not to
transfer any of the Option Shares unless advised
by the Company that the provisions of the Plan and
this Agreement have been complied with.
(e) The Optionee agrees to
take any other action which may reasonably be
requested by the Company in order to ensure that
the Company, by allowing the Optionee to exercise
the Option (in whole or in part), will not be in
violation of any law or regulation.
6. Agreement Not to Compete.
Anything in the Plan or the
Agreement to the contrary notwithstanding, if the
Optionee, without the written consent of the
Company, engages either directly or indirectly, in
any manner or capacity, as principal, agent,
partner, officer, director, employee or otherwise,
in any business or activity competitive with the
business conducted by the Company or any
subsidiary of the Company, the Option, to the
extent not previously exercised, shall expire
forthwith.
7. No Employment Agreement.
This Agreement shall not be
deemed or construed to be an agreement by the
Company to employ the Optionee for any specific or
non-specific period of time.
8. Notices.
Any notice required or permitted
under this Agreement shall be deemed given when
delivered personally, or when deposited in the
United States postal system, postage prepaid,
addressed, as appropriate, to Optionee either at
his address hereinabove set forth or such other
address as he may designate in writing to the
Company, or to the Company, at Grey Advertising
Inc., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Secretary; or such other
address as the Company may designate in writing to
the Optionee.
9. Failure to Enforce Not a Waiver.
The failure of the Company to
enforce at any time any provision of this
Agreement shall in no way be construed to be a
waiver of such provision or of any other provision
hereof.
10. Governing Law.
This Agreement shall be governed
by and construed according to the laws of the
State of Delaware, without regard to the conflicts
of law rules thereof.
11. Amendments.
This Agreement may be amended or
modified at any time by an instrument in writing
signed by the parties hereto, provided that no
such amendment or modification shall be made which
would be inconsistent with the terms of the Plan.
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the day and year
above written.
GREY ADVERTISING INC.
By /s/ Xxxxxx X. Xxxxxxxx
Executive Vice President
/s/ Xxxxxx X. Xxxxx
XXXXXX X. XXXXX
