Exhibit 10.2
STOCK OPTION AGREEMENT
(Non-Assignable)
Date: Option Number: 01-XXXX
XXXXXXXXXXX Number of Shares Purchasable
XXX
To Purchase Shares of
Class A Common Stock
-of-
K-V PHARMACEUTICAL COMPANY
Issued Pursuant to the
2001 Incentive Stock Option Plan (the "Plan")
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THIS CERTIFIES THAT XXXXXXXXXXXXXXXXXX is hereby granted the option to
purchase, at the option price of $XXXXX per share, all or any part of that
number of fully paid and non-assessable shares of the Class A Common Stock,
par value $0.01 per share ("Class A Common Stock"), of K-V Pharmaceutical
Company, a Delaware corporation (hereinafter called the "Company") above set
forth, upon and subject to the following terms and conditions:
This Option and all rights to purchase shares hereunder shall
expire ten (10) years from the date hereof (hereinafter called the
"expiration date.")
This Option and all rights hereunder shall be non-assignable and
non-transferable, except to the extent that the Holder's legatees, personal
representatives or distributees in the event of the Holder's death may be
permitted to exercise this Option as hereinafter set forth.
Any attempted transfer, assignment, pledge, hypothecation or other
disposition of this Option except as provided herein or in accordance with
the Company's 2001 Incentive Stock Option Plan (the "Plan") shall be null
and void and without effect.
As of XXXXXXXXXX, and prior to its expiration or earlier
termination, this Option shall be exercisable from time to time in
cumulative installments as to all or any of the shares then purchasable
hereunder as follows: During the twelve-month period commencing
XXXXXXXXXXXXX and ending XXXXXXXXXXXXXX it may be exercised as to 10% of the
shares originally subject hereto; and during each additional consecutive
twelve-month period, it may be exercised as to an additional 10%; until the
tenth twelve-month period, during which this Option shall be exercisable as
to all the shares subject hereto.
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This Option may be exercised from time to time only by delivery to
the Company at its main office (attention of the Secretary) of a duly signed
notice in writing stating the number of shares with respect to which this
Option is being exercised and the time and date of delivery thereof, which
time and date of delivery shall be during the normal business hours of the
Company on a regular business day not less than fifteen (15) days after the
giving of such notice unless an earlier date has been mutually agreed upon;
provided, however, that not less than ten (10) shares may be purchased at
any one time unless the number purchased is the total number then
purchasable hereunder; and provided further that this Option may not be
exercised at any time when this Option or the granting or exercise hereof
violates any law or governmental order or regulation. At the time of
delivery specified in such notice, the Company shall, without transfer or
issue tax to the Holder (or other person entitled to exercise this Option)
transfer and set aside for the benefit of the Holder (or other person
entitled to exercise this Option) a certificate or certificates out of the
Company's theretofore authorized but unissued or reacquired shares of Class
A Common Stock as the Company may elect (with appropriate legend thereon, if
deemed necessary by the Company, containing the representation by the person
exercising the Option that the shares purchased shall be for investment
purposes and not with a view to resale or distribution) against payment of
the option price in full for the number of shares purchased by either (i)
cash (including a certified or bank cashier's check or the equivalent
thereof), or (ii) at the discretion of the Committee, as defined in the
Plan, by delivering at fair market value, as determined by the Committee (as
provided under the Plan), Company Common Stock already owned by the
Participant, or (iii) any combination of cash and Company Common Stock, to
be held by the Company and subsequently delivered to the Holder (or such
other person) as hereinafter provided. If the Holder fails to pay for any
part of the number of shares specified in such notice as required, the right
to purchase such shares may be terminated by the Committee.
Except as hereinafter provided, no Option may be exercised at any
time unless the Holder hereof is an employee of the Company or any of its
subsidiaries.
To the extent that this Option has not been exercised in full prior
to its termination or expiration date, whichever occurs sooner, it shall
terminate and become void and of no effect.
Except as hereinafter provided, all Class A Common Stock purchased
pursuant to the exercise of this Option shall be held by the Company for a
period of two years from the date of exercise. Such two year period shall
hereinafter be referred to as the "Holding Period". If the Holder leaves the
employ of the Company during the Holding Period for any reason, except
retirement (under normal Company policies), death or disability, the
Holder's purchase of Common Stock pursuant to the exercise of this option
shall be voidable at the Company's sole option and discretion at any time
within the Holding Period. If any purchase of Class A Common Stock is so
voided, the least (i) the funds paid by the Holder in connection with the
voided transaction; (ii) the value in cash of Common Stock used to purchase
such Class A Common Stock, determined
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as of the date of such purchase, less any amount which would have been
forfeited pursuant to the Plan relative to Stock used to purchase the
forfeited stock if such Stock had not been so used and the Holding Period
relative to such stock had not expired; or (iii) the fair market value per
share, as determined on the date of termination of the Holder's employment
with the Company in accordance with the provisions of the Plan, shall be
returned in full to the Holder within thirty (30) days after such purchase
is voided provided, however, no payment shall be due prior to the time that
the Company is in possession of the Class A Common Stock and an executed
stock power with respect to such Stock. In order to facilitate the
repurchase of Class A Common Stock by the Company in accordance with the
terms of this Paragraph, each Holder who exercises this Option or portion
thereof shall, at the time of payment for such Class A Common Stock, as
provided hereinabove, deliver to the Company a form of stock power and
assignment signed by such Holder in form and substance satisfactory to the
Company, rendering the certificates representing the shares of Common Stock
purchased (the "Certificates") negotiable to the Company. Notwithstanding
the foregoing, if the Holder demonstrates to the Committee of the Company a
need to obtain financing for the purchase of Class A Common Stock and
indicates his good faith intention to remain in the employ of the Company
during the Holding Period, the Committee, in its sole discretion, may permit
delivery of any Class A Common Stock purchased hereunder to a financial
institution for use as collateral security for the purchase of the Class A
Common Stock; subject to any necessary or appropriate restrictions with
respect thereto as may be required to comply with applicable federal and
state securities laws and/or the listing requirements of any national
securities exchange, and the Holder may use any Class A Common Stock so held
in payment of the Option Price for additional Class A Common Stock as
provided for herein.
If the Holder remains in the employ of the Company throughout the
Holding Period, or is terminated by reason of death, disability or
retirement (under normal Company policies) the Company shall deliver to the
Holder or the Holder's personal representative, as soon as practicable
thereafter, the Certificates, free and clear of restrictions except for the
restrictions which are necessary to assure compliance by the Company and the
Holder with applicable federal and state securities laws and/or the listing
requirements of any national securities exchange. If the Company fails or
declines to exercise its right to void any purchase pursuant to the terms of
the preceding paragraph hereof, the Company shall deliver the Certificates
to the Holder as soon as practicable after the expiration of the applicable
Holding Period for such shares of Common Stock represented by the
Certificates.
This Option shall not confer upon the Holder any right to remain in
the employ of the Company or any subsidiary thereof and shall not confer
upon the Holder any rights in the stock of the Company prior to the issuance
of a stock certificate pursuant to the exercise of this Option. No
adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
Except as provided in this paragraph, upon termination of the
Holder's employment with the Company or any of its subsidiaries for any
reason, this Option
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shall terminate. If the employment of the Participant is terminated by
reason of retirement (under normal Company policies) any outstanding Option
or unexercised portion thereof granted to him may be fully exercised by the
Participant, his personal representative, executor, administrator, heirs or
devisees, as applicable, at any time, within three months from the date of
termination by reason of retirement. If the employment of a Participant is
terminated by reason of death or disability, any outstanding Option or
unexercised portion thereof which was granted to him may be fully exercised
by the Participant, his personal representative, executor, administrator,
heirs or devisees, as applicable, at any time within one year from the date
of termination by reason of death or disability, provided that the
Participant has completed five (5) full years of employment with the Company
from the date the Option was granted. If the Participant has not completed
five (5) full years of employment with the Company from the date the Option
was granted, the Option may be exercised only to the extent exercisable as
of the date of termination of employment. Notwithstanding any of the
foregoing, no Option shall be exercisable at any time after the expiration
of the Option in accordance with its terms. Any transfer of employment from
the Company to any Parent or Subsidiary thereof, or vice versa, shall not be
deemed a termination of employment.
In the event that the outstanding shares of Class A Common Stock of
the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of
the Company or of another corporation, or in the event that there is a
"corporate transaction" as that term is defined in the Regulations under
Section 424 of the Internal Revenue Code of 1986, by reason of
reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, spin-off, combination of shares or dividend payable in
capital stock, this Option shall, to the extent that it has not been
exercised, entitle the Holder upon the subsequent exercise of this Option to
such number and kind of securities or other property, subject to the terms
of the Option, to which the Holder would be entitled had the Holder actually
owned the shares subject to the unexercised portion of this Option at the
time of the occurrence of such event, and the aggregate purchase price upon
the subsequent exercise of this Option shall be the same as if the Class A
Common Stock of the Company originally optioned were being purchased as
provided herein; provided, however, that each such adjustment in the number
and kind of shares subject to this Option, including any adjustment in the
Option price, shall be made in such manner as not to constitute a
"modification" as defined in Section 424 of the Internal Revenue Code of
1986. Any such adjustment made by the Committee shall be conclusive.
Upon the occurrence of: (i) the dissolution or liquidation of the
Company, (ii) a reorganization, merger or consolidation of the Company with
one or more corporations in which the Company is not the surviving
corporation, (iii) a sale of substantially all of the assets of the Company
or (iv) the transfer of more than 80% of the then outstanding Stock of the
Company to another entity or person in a single transaction or series of
transactions, the Plan shall terminate, and any outstanding Options granted
under the Plan shall terminate on the day before the consummation of the
transaction; provided
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that the Board of Directors shall have the right, but shall not be
obligated, to accelerate the time in which any Options may be exercised
prior to such a termination. However, the termination of such Options shall
not occur if the Board of Directors takes certain actions as provided in the
Plan. In addition, the Board of Directors has the authority to amend the
Plan to require that a successor corporation assume any outstanding Options.
The Company may postpone the issuance and delivery of shares upon
any exercise of this Option, if necessary, until admission of such shares to
listing on any stock exchange and completion of registration and
qualification of such shares under any applicable state or federal law, rule
or regulation.
The Holder hereof shall make such representations and furnish such
information to the Company as may be appropriate to permit the Company to
issue such shares in compliance with the provisions of the Security Act of
1933, as amended (the "Securities Act"), or any other applicable law,
including state securities laws. Without limiting the generality of the
foregoing, if requested by the Company, the Holder will represent, in form
acceptable to the Company, that the Holder is purchasing any shares issued
pursuant hereto for investment purposes and not with a view to resale or
distribution. The Holder, by acceptance of this Option, hereby consents to
the placing of restrictive legend on any stock certificate for shares
purchased hereunder, setting forth the restrictions applicable to the
further resale, transfer or other conveyance thereof without registration
under the Securities Act or other applicable law or the availability of an
exemption from registration thereunder and to the placing of transfer
restrictions on the records of the transfer agent for such shares. In
addition, the Holder hereof will not thereafter resell, transfer or
otherwise convey any shares purchased hereunder without compliance with one
of the following three conditions: (1) an opinion of the Holder's counsel is
received, in form and substance satisfactory to counsel for the Company,
that registration under the Security Act and applicable state securities
laws is not required; or (2) such shares have been registered for sale under
the Securities Act and any applicable state securities laws; or (3) a
"no-action" letter is received from the staff of the Securities and Exchange
Commission and from applicable state securities agencies, based on an
opinion of the Holder's counsel in form and substance reasonably
satisfactory to counsel for the Company, advising that registration under
the Securities Act is not required.
This Option is issued pursuant to the provisions of the Company's
2001 Incentive Stock Option Plan, the receipt of a copy of which the Holder
acknowledges by virtue of the acceptance hereof, and is subject to all the
terms and conditions of said Plan.
A determination by the Committee of any question which may arise
with respect to the interpretation and construction of the provisions of
this Option or of said Plan shall be final. The Committee may authorize and
establish such rules, regulations and revisions thereof not inconsistent
with the provisions of said Plan as it may deem advisable.
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WITNESS the seal of the Company and the signatures of its duly
authorized officers.
Dated: XXXXXXXXXXXXX
K-V PHARMACEUTICAL COMPANY
By
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Vice President, Finance
ACCEPTED:
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XXXXXXXXXXXXXXX
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POWER OF ATTORNEY
FOR VALUE RECEIVED I, XXXXXXXXXXXX, do hereby sell, assign and
transfer unto K-V PHARMACEUTICAL COMPANY all shares of the Capital Stock of
K-V PHARMACEUTICAL COMPANY standing in my name on the books of said K-V
PHARMACEUTICAL COMPANY represented by Certificate Number(s)
herewith and do hereby irrevocably constitute and
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appoint K-V PHARMACEUTICAL COMPANY'S Controller as attorney to transfer the
said stock on the books of the within named K-V PHARMACEUTICAL COMPANY with
full power of substitution in the premises.
DATED:
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IN PRESENCE OF: SIGNED:
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XXXXXXXXXXX
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