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EXHIBIT 10.9
AMENDED AND RESTATED
STOCK OPTION AGREEMENT
This AMENDED AND RESTATED STOCK OPTION AGREEMENT is dated as
of April 4, 1997 (actually executed on July __, 1997) (this "Agreement") between
TEKNI-PLEX, INC., a Delaware corporation (the "Company"), and XXXXXXX X.X.
XXXXX, residing at 00 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 (the
"Executive").
WHEREAS, the Company desires, in connection with the
employment of the Executive, to provide the Executive with the opportunity to
acquire common stock, par value $.01 per share (the "Common Stock"), of the
Company on favorable terms and thereby provide additional incentive for the
Executive to promote the success of the business of the Company; and
WHEREAS, the Company and the Executive wish to amend the Stock
Option Agreement dated as of April 4, 1994, as previously amended and restated
as of February 21, 1996, and to restate it in its entirety.
NOW, THEREFORE, in consideration of the premises and the
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
1. Confirmation of Grant of Option. Pursuant to a
determination of the Board of Directors of the Company originally made on April
4, 1994 (the "Date of Grant") and hereby ratified and confirmed as of the actual
date of execution hereof, the Company, subject to the terms of this Agreement,
hereby confirms that the Executive has been granted, as a matter of separate
inducement and agreement, and in addition to and not in lieu of salary or other
compensation for services, the right to purchase (the "Option") all or part of
an aggregate of 21.795 shares of Common Stock representing two and one-half
percent (2.5%) of the outstanding Common Stock of the Company, on a fully
diluted basis, as of the actual date of execution hereof, on the terms and
conditions herein set forth, subject to adjustment as provided in Section 9
hereof.
2. Purchase Price. The purchase price for each share of Common
Stock covered by the Option will be equal to (A) the total dollar amount of the
capital contributions in Tekni-Plex Partners, L.P.("TPPLP") by the partners
therein, divided by (B) the number of shares of Common Stock held by TPPLP, in
each case
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as of the actual date of execution hereof, which price is subject to adjustment
as provided in Section 9 hereof.
3. Exercise of Option. The Option shall be exercisable on the
terms and conditions hereinafter set forth:
(a) The Option shall become fully exercisable as to 100% of
the shares subject thereto as of the date hereof.
(b) The Executive or permitted holder of the Option will not
have any rights to dividends or any other rights of a stockholder with respect
to any shares of Common Stock subject to the Option until such shares shall have
been issued to him (as evidenced by the appropriate entry on the books of a duly
authorized transfer agent of the Company) provided that the date of issuance
shall not be earlier than the Closing Date (as hereinafter defined) with respect
to such shares.
(c) The Option may be exercised by notice and payment to the
Company as provided in Sections 11 and 16 hereof.
4. Term of Option. The term of the Option shall be a period of
fifteen (15) years from the Date of Grant, subject to earlier termination or
cancellation as provided in this Agreement (the "Term"). Except as otherwise
provided in Sections 6 and 7 hereof, the Option will not be exercisable unless
the Executive shall, at the time of exercise, be an employee of the Company or
of an Affiliate (as hereinafter defined) of the Company. As used in this
Agreement, the term "Affiliate" refers to and includes each entity which
directly or indirectly, owns or controls, is under common ownership or control
with or is owned or controlled by, the Company, including each "subsidiary
corporation" within the meaning of the term as defined in Section 425(f) of the
Internal Revenue Code of 1986, as amended (the "Code").
5. Non-transferability of Option. The Option will not be
transferable otherwise than by will or by the laws of descent and distribution,
and the Option may be exercised during the lifetime of the Executive only by
him. More particularly, but without limiting the generality of the foregoing,
the Option may not be assigned, transferred or otherwise disposed of, or pledged
or hypothecated in any way (whether by operation of law or otherwise), and shall
not be subject to execution, attachment or other process. Any assignment,
transfer, pledge, hypothecation or other disposition of the Option attempted
contrary to the provisions of this Agreement, or any levy of execution,
attachment or other process attempted upon the Option, will be null and void and
without effect. Any attempt to make any such assignment, transfer, pledge,
hypothecation or other disposition of the Option or any attempt to make any such
levy of execution, attachment or other process will cause the Option to
terminate immediately upon the happening of any such event if the Board of
Directors of the Company, at any time, should in its sole discretion, so elect,
by written notice to the Executive or
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to the person or persons then entitled to exercise the Option under the
provisions of Section 7 hereof; provided, however, that any such termination of
the Option under the foregoing provisions of this Section 5 will not prejudice
any rights or remedies which the Company or any Affiliate thereof may have under
this Agreement or otherwise.
6. Exercise Upon Cessation of Employment.
(a) If the Executive ceases to be employed by the Company or
any of its subsidiaries by reason of his discharge for cause, the Option shall
forthwith terminate. If, however, the Executive for any other reason (other than
death or disability) ceases to be so employed, the Option may, subject to the
provisions of Sections 5 and 8 hereof, be exercised to the same extent the
Executive would have been entitled under Section 3 hereof to exercise the Option
on the day immediately preceding the date of such cessation of employment, at
any time within six months after such cessation of employment, at the end of
which period the Option shall terminate. In any event the Option may not be
exercised after the expiration of the term provided in Section 4 hereof.
(b) The Option will not be affected by any change of duties or
position of the Executive as long as he continues to be employed by the Company
or any Affiliate thereof. If the Executive is granted a temporary leave of
absence, such leave of absence will be deemed a continuation of his employment
by the Company or any Affiliate thereof for the purposes of this Agreement, but
only if and so long as the employing corporation consents thereto. Retirement,
whether or not pursuant to any retirement or pension plan of the Company or any
Affiliate thereof, will be deemed to be a cessation of employment with written
consent for all purposes of this Agreement.
(c) Any termination of the Option by reason of cessation of
employment shall be without prejudice to any rights or remedies which the
Company or any of its Affiliates may have against the Executive or which the
Executive may have against the Company or any of its Affiliates under this
Agreement or otherwise.
7. Exercise Upon Death; Disability.
(a) If the Executive dies while he is employed by the Company
or any Affiliate thereof (other than by suicide in which case the Option shall
terminate) or within three months after he has ceased to be an employee
(provided such cessation was not due to the Executive having been discharged for
cause), during which period he would have been entitled to exercise the Option
under the provisions of Section 6 hereof, the Option may, subject to the
provisions of Sections 5 and 8 hereof, be exercised, to the extent the Executive
would have been entitled under Section 3 hereof to exercise the Option on the
day
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immediately preceding the date of his death, by the estate of the Executive or
by the person or persons (including the estate of any such xxxxxx or persons who
have died) who acquire the right to exercise the Option by bequest or
inheritance at any time within the period ending one year after the death of the
Executive, at the end of which period the Option shall terminate. In any event,
the Option may not be exercised after the expiration of the term provided in
Section 4 hereof.
(b) In the event that the employment of the Executive, by the
Company or any Affiliate thereof is terminated by reason of the "disability" of
the Executive, the Option may, subject to the provisions of Sections 5 and 8
hereof, be exercised, to the extent the Executive would have been entitled under
Section 3 hereof to exercise the Option on the day immediately preceding the
date of the termination of the Executive's employment, at any time within the
period ending six months after the date of such termination of employment, at
the end of which period the Option shall terminate. In any event, the Option may
not be exercised after the expiration of the term provided in Section 4 hereof.
For purposes of this Agreement, the term "disability" shall mean a physical or
mental disability as defined in Section 105 of the Code.
8. Employment. The Executive will serve the Company or an
Affiliate of the Company in good faith and use his best efforts to promote its
interest. Upon written notice from the Company to Executive that the Executive
has materially breached the provisions of this Section 8 and such breach is not
remedied within 30 days after such notice, the Option will thereupon terminate
without prejudice to any rights or remedies which the Company or such Affiliate
may have against the Executive under this Agreement or otherwise
9. Adjustments.
(a) For so long as TPPLP continues to own substantially all of
the outstanding Common Stock of the Company, the Option shall not be subject to
dilution by reason of additional issuances of Common Stock by the Company to
TPPLP, but shall continue to comprise that number of shares of the Company's
Common Stock as will result, upon exercise of the Option in full, in a 2 1/2%
interest in the Company's Common Stock. In the event of a stock dividend,
issuance of additional shares, stock split-up, share combination, share
redemption or retirement, exchange of shares, recapitalization, merger,
consolidation, acquisition or disposition of property or shares, reorganization,
liquidation or other similar changes or transactions of or by the Company, or
additional capital contributions to TPPLP, the Board of Directors of the Company
shall make (or shall undertake to have the Board of Directors of any corporation
which merges with, or acquires the stock or assets of, the Company make) such
adjustment of (whether by increasing or decreasing) the percentage, the number
or class of shares then covered by the Option, or of the option
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price, or both, as it shall, in its sole discretion, deem appropriate to give
proper effect to such event.
(b) At the time that TPPLP liquidates or otherwise distributes
at least a majority of the shares of the Company's Common Stock, the Option
will, as to the number of shares of Common Stock covered thereby, and the
purchase price for such shares, be fixed. Subsequent adjustment to the
percentage, number or class of shares then covered by the Option, or of the
option price, or both, shall be made by the Board of Directors of the Company as
it shall, in its sole discretion, deem appropriate to give proper effect to any
stock dividend, stock split-up, share combination, share redemption or
retirement, exchange of shares, recapitalization, merger, consolidation,
acquisition or disposition of property or shares, reorganization, liquidation or
other similar changes of or by the Company, as if the Option were fully
exercised at the then option price immediately prior to any such event.
10. Registration. The shares of Common Stock subject hereto
and issuable upon the exercise hereof have not been registered under the
Securities Act of 1933, as amended, and, if required upon the request of counsel
to the Company, the Executive will give a representation as to his investment
intent with respect to such shares prior to their issuance as set forth in
Section 11 hereof. The Company may register or quality the shares covered by the
Option for sale pursuant to the Securities Act of 1933, as amended, at any time
prior to or after the exercise in whole or in part of the Option.
11. Method of Exercise of Option.
(a) Subject to the terms and conditions of this Agreement, the
Option shall be exercisable by notice and payment to the Company in accordance
with the procedure prescribed herein. Each such notice shall:
(i) State the election to exercise the Option and the
number of shares in respect of which it is being exercised;
(ii) Contain a representation and agreement as to
investment intent, if required by counsel to the Company with respect
to such shares, in form satisfactory to counsel for the Company;
(iii) Be signed by the person or persons entitled to
exercise the Option and, if the Option is being exercised by any person
or persons other than the Executive, be accompanied by proof,
satisfactory to counsel for the Company, of the right of such person or
persons to exercise the Option; and
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(iv) Contain an undertaking to become a party to any
shareholders agreement among the Company and its other stockholders.
(b) Upon receipt of the notice specified in Section 11(a)
above, the Company will specify, by written notice to the Executive, a date and
time (such date and time being herein called the "Closing Date") and place for
payment of the full purchase price of such shares. The Closing Date will be not
more than fifteen days from the date the notice of exercise is received by the
Company unless another date is agreed upon by the Company and the Executive or
is required upon advice of counsel for the Company in order to meet the
requirements of Section 12 hereof.
(c) Payment of the purchase price of any shares of Common
Stock, in respect of which the Option shall be exercised, will be made by the
Executive at the place specified by the Company on or before the Closing Date by
delivering to the Company a certified or bank cashier's check payable to the
order of the Company. The Option will be deemed to have been exercised with
respect to any particular shares of Common Stock if, and only if, the preceding
provisions of this Section 11 and the provisions of Section 12 hereof shall have
been complied with, in which event the Option will be deemed to have been
exercised on the Closing Date. Anything in this Agreement to the contrary
notwithstanding, any notice of exercise given pursuant to the provisions of this
Section 11 will be void and of no effect if all the preceding provisions of this
Section 11 and the provisions of Section 12 shall not have been complied with.
The certificate or certificates for shares of Common Stock as to which the
Option shall be exercised will be registered in the name of the Executive or, if
the Executive so requests in the notice exercising the Option, will be
registered in the name of the Executive and another person jointly, with right
of survivorship, and will be delivered on the Closing Date to the Executive at
the place specified for the closing, but only upon compliance with all of the
provisions of this Agreement. If the Executive fails to accept delivery of and
pay for all or any part of the number of shares specified in such notice upon
tender or delivery thereof on the Closing Date, his right to exercise the Option
with respect to such undelivered shares may be terminated in the sole discretion
of the Board of Directors of the Company, which discretion shall be exercised in
good faith.
12. Approval of Counsel. The exercise of the Option and the
issuance and delivery of shares of Common Stock pursuant thereto shall be
subject to approval by the Company's counsel of all legal matters in connection
therewith, including compliance with the requirements of the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder, and the requirements of any stock exchange
upon which the Common Stock may then be listed.
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13. Resale of Common Stock.
(a) Upon any sale or transfer of the Common Stock purchased
upon exercise of the Option, the Executive shall deliver to the Company an
opinion of counsel satisfactory to the Company to the effect that either (i) the
Common Stock to be so sold or transferred has been registered under the
Securities Act of 1933, as amended, and that there is in effect a current
prospectus meeting the requirements of Subsection 10(a) of said Act which is
being or will be delivered to the purchaser or transferee at or prior to the
time of delivery of the certificates evidencing the Common Stock to be sold or
transferred, or (ii) such Common Stock may then be sold without violating
Section 5 of said Act.
(b) The Common Stock issued upon exercise of the Option shall
bear the following legend if required by counsel for the Company:
THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE FIRST
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY, SUCH REGISTRATION IS
NOT REQUIRED.
14. Reservation of Shares. The Company shall at all times
during the term of the Option reserve and keep available such number of shares
of the class of stock then subject to the Option as will be sufficient to
satisfy the requirements of this Agreement.
15. Limitation of Action. The Executive and the Company each
acknowledges that every right of action accruing to him or it, as the case may
be, and arising out of or in connection with this Agreement against the Company
or an Affiliate thereof, on the one hand, or against the Executive, on the other
hand, will, irrespective of the place where an action may be brought, cease and
be barred by the expiration of three years from the date of the act or omission
in respect of which such right of action arises.
16. Notices. Each notice relating to this Agreement shall be
in writing and delivered in person or by certified mail to the proper address.
All notices to the Company shall be addressed to it at its then principal
office, Attention: Chief Executive Officer, with a copy to MST Partners, L.P.
000 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, Attention: J. Xxxxxx XxXxxxx.
All notices to the Executive shall be addressed to the Executive at the
Executive's address above specified. Anyone to whom a notice may be given under
this Agreement may designate a new address by notice to that effect.
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17. Benefits of Agreement. This Agreement shall inure to the
benefit of and be binding upon each successor and assign of the Company. All
obligations imposed upon the Executive and all rights granted to the Company
under this Agreement shall be binding upon the Executive's heirs, legal
representatives and successors
18. Severability. In the event that any one or more provisions
of this Agreement shall be deemed to be illegal or unenforceable, such
illegality or unenforceability shall not affect the validity and enforceability
of the remaining legal and enforceable provisions hereof, which shall be
construed as if such illegal or unenforceable provision or provisions had not
been inserted.
19. Governing Law. THIS AGREEMENT WILL BE CONSTRUED AND
GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
20. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
21. Integration. This Agreement constitutes the entire
understanding of the parties hereto and shall supersede all prior agreements,
representations and understandings of the parties hereto related to the subject
matter hereof and without limiting the generality of the foregoing shall
supersede the stock option agreement dated as of April 4, 1994, as previously
amended and restated as of February 21, 1996.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Stock Option Agreement to be executed as of the date and
year first above written.
TEKNI-PLEX, INC.
By:______________________________
Name: F. Xxxxxxx Xxxxx
Title: Chief Executive Officer
_________________________________
XXXXXXX X.X. XXXXX
_________________________________
Social Security Number
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