Exhibit 10.4
XXXXXX CORPORATION
2005 EQUITY COMPENSATION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
(For Officers and Employees)
Pursuant to the Xxxxxx Corporation 2005 Equity Compensation Plan (the
"Plan"), Xxxxxx Corporation (the "Company") hereby grants to
_____________________________ (the "Optionee"), a non-qualified stock option
(the "Stock Option") to purchase a maximum of __________ shares of capital stock
of the Company (the "Capital Stock") at the price of $_____ per share, subject
to the terms of this Agreement. The Stock Option is granted as of
_____________________ (the "Grant Date").
1. Timing of Exercise. This Stock Option shall be immediately exercisable
in full as of the Grant Date. This Stock Option shall remain exercisable until
it expires on the tenth anniversary of the Grant Date, unless the Stock Option
is sooner terminated as provided herein.
2. Sale of Issued Shares. In the event that the Optionee exercises the
Stock Option prior to ________________, except as provided in Section 5 below,
the shares of Capital Stock acquired upon such exercise (the "Issued Shares")
may not be sold, assigned, transferred (including any transfer to the Company in
payment of the option price or withholding taxes of any stock option), pledged,
given away or in any other manner disposed of or encumbered, by the Optionee
until the earliest to occur of: (a) the termination of the Optionee's employment
with the Company and its Subsidiaries by reason of Retirement (as defined in the
Plan); (b) the termination of the Optionee's employment with the Company and its
Subsidiaries by reason of death; (c) the termination of the Optionee's
employment with the Company and its Subsidiaries by reason of Disability (as
defined in the Plan); (d) the involuntary termination of the Optionee's
employment with the Company and its Subsidiaries by the Company and/or its
Subsidiaries for any reason; (e) a Sale Event Determination Date (as defined in
Section 7 below); and (f) ________________ (the earliest of such dates or
events, the "Restriction Termination Date"). In order to effectuate the
foregoing, upon the exercise of the Stock Option prior to the Restriction
Termination Date and until the Restriction Termination Date, the Issued Shares
shall, at the discretion of the Company, either be retained by the Company
and/or shall bear a legend describing the restrictions on the sale of the Issued
Shares as described herein.
3. Termination of Stock Option. If the Optionee's employment by the Company
and its Subsidiaries terminates for any reason, other than death, Disability, or
Retirement (as defined in the Plan and described below), the Stock Option may
thereafter be exercised for a period of three months from the date of
termination of employment or the tenth anniversary of the Grant Date, if
earlier.
(a) Termination by Reason of Death. If the Optionee's employment by
the Company and its Subsidiaries terminates by reason of death, the Stock
Option may thereafter be exercised by the Optionee's beneficiary for a
period of five years from the date of death or until the tenth anniversary
of the Grant Date, if earlier.
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(b) Termination by Reason of Disability or Retirement. If the
Optionee's employment by the Company and its Subsidiaries terminates by
reason of Disability (as defined in the Plan), the Stock Option may
thereafter be exercised for a period of five years from the date of such
termination of employment or until the tenth anniversary of the Grant Date,
if earlier. If the Optionee's employment by the Company and its
Subsidiaries terminates by reason of Retirement (as defined in the Plan),
the Stock Option may thereafter be exercised for a period of five years
from the date of such termination of employment or until the tenth
anniversary of the Grant Date, if earlier.
4. Manner of Exercise. This Stock Option may be exercised in whole or in
part by giving written or electronic notice of exercise to the Company or the
Company's designee designated to accept such notices specifying the number of
shares to be purchased. Payment of the purchase price may be made by one or more
of the following methods:
(a) In cash, by check, or by other instrument acceptable to the Company;
(b) In Capital Stock (either actually or by attestation) valued at its Fair
Market Value (as defined in the Plan) as of the date of exercise; or
(c) By a combination of (a) and (b).
The Optionee may also deliver to the Company or the Company's designee
a properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company cash, a check or other instrument
acceptable to the Company to pay the purchase price; provided that the Optionee
and the broker shall comply with such procedures and enter into such agreements
of indemnity and other agreements as the Company shall prescribe as a condition
of such payment. Payment instructions will be received subject to collection.
Ownership of shares of Capital Stock to be purchased pursuant to the
exercise of the Stock Option will be contingent upon receipt by the Company of
the full purchase price for such shares and the fulfillment of any other
requirements contained in the Plan, this Agreement and applicable provisions of
law. In the event the Optionee chooses to pay the purchase price by
previously-owned shares of Capital Stock through the attestation method, only
the net amount of shares shall be issued.
5. Stock Option Transferable in Limited Circumstances. This Stock Option,
and, prior to the Restriction Termination Date, the Issued Shares, may be
transferred to a family member, trust or charitable organization to the extent
permitted by applicable law; provided that the transferee agrees in writing with
the Company to be bound by the terms of this Agreement and the Plan. Except as
permitted in the preceding sentence, the Stock Option, and, prior to the
Restriction Termination Date, the Issued Shares, are not transferable otherwise
than by will or by the laws of descent and distribution, and this Stock Option
shall be exercisable during the Optionee's lifetime only by the Optionee.
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6. Stock Option Shares. The shares to be issued under the Plan are shares
of the Capital Stock of the Company as constituted as of the date of this
Agreement, subject to adjustment as provided in Section 3(b) of the Plan.
7. Sale Event. Upon a determination by the Company that an event has
occurred that will or is likely to result in a Sale Event (as defined in the
Plan), the restrictions on the sale of the Issued Shares described in Section 2
above shall cease immediately (or as of the date which is 180 days preceding
such Sale Event, if later than such determination) (such date, the "Sale Event
Determination Date"). The occurrence of a Sale Event shall cause this Stock
Option to terminate, to the extent not then exercised, unless any surviving
entity agrees to assume this Stock Option.
8. Rights as a Shareholder. The Optionee shall have the rights of a
shareholder only as to shares of Capital Stock acquired upon exercise of the
Stock Option and not as to any shares of Capital Stock covered by unexercised
Stock Options. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such shares are acquired.
9. Tax Withholding. The Optionee hereby agrees that the exercise of this
Stock Option or any installment thereof will not be effective, and no shares
will become transferable to the Optionee, until the Optionee makes appropriate
arrangements with the Company for such income and employment tax withholding as
may be required of the Company under applicable United States federal, state or
local law on account of such exercise. The Optionee may satisfy the
obligation(s), in whole or in part, by electing (i) to make a payment to the
Company in cash, by check or by other instrument acceptable to the Company, (ii)
subject to the general or specific approval of the Compensation and Organization
Committee of the Board of Directors of the Company (the "Committee"), to deliver
to the Company a number of already-owned shares of Capital Stock having a value
not greater than the amount required to be withheld (such number may be rounded
up to the next whole share), or (iii) by any combination of (i) and (ii) and/or
the procedures described in the following sentence. The Committee may also
permit, in its sole discretion and in accordance with such procedures as it
deems appropriate, the Optionee to have the Company withhold a number of shares
which would otherwise be issued pursuant to this Stock Option having a value not
greater than the amount required to be withheld (such number may be rounded up
to the next whole share). The value of shares to be withheld or delivered (if
permitted by the Committee) shall be based on the Fair Market Value of a share
of Capital Stock as of the date the amount of tax to be withheld is to be
determined.
10. Tax Status. The Stock Option is not intended to qualify as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended.
11. The Plan. The Stock Option is subject in all respects to the terms,
conditions, limitations and definitions contained in the Plan. In the event of
any discrepancy or inconsistency between this Agreement and the Plan, the terms
and conditions of the Plan shall control. Capitalized terms in this Agreement
shall have the meaning specified in the Plan, unless a different meaning is
specified herein.
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12. No Obligation to Exercise Stock Option. The grant and acceptance of the
Stock Option imposes no obligation on the Optionee to exercise it.
13. No Obligation to Continue Employment. Neither the Company nor any
Subsidiary is obligated by or as a result of the Plan or this Agreement to
continue the Optionee in employment.
14. Notices. Notices hereunder shall be mailed or delivered to the Company
at its principal place of business and shall be mailed or delivered to the
Optionee at the address on file with the Company or, in either case, at such
other address as one party may subsequently furnish to the other party in
writing.
15. Purchase Only for Investment. To insure the Company's compliance with
the Securities Act of 1933, as amended, the Optionee agrees for himself or
herself, the Optionee's legal representatives and estate, or other persons who
acquire the right to exercise the Stock Option upon his or her death, that
shares will be purchased in the exercise of the Stock Option for investment
purposes only and not with a view to their distribution, as that term is used in
the Securities Act of 1933, as amended, unless in the opinion of counsel to the
Company such distribution is in compliance with or exempt from the registration
and prospectus requirements of that Act.
16. Governing Law. This Agreement and the Stock Option shall be governed by
the laws of the Commonwealth of Massachusetts, United States of America.
17. Beneficiary Designation. The Optionee hereby designates the following
person(s) as the Optionee's beneficiary(ies) to whom shall be transferred any
rights under the Stock Option which survive the Optionee's death. If the
Optionee names more than one primary beneficiary and one or more of such primary
beneficiaries die, the deceased primary beneficiary's interest will be
apportioned among any surviving primary beneficiaries before any contingent
beneficiary receives any amount, unless the Optionee indicates otherwise in a
signed and dated additional page. The same rule shall apply within the category
of contingent beneficiaries. Unless the Optionee has specified otherwise herein,
any rights which survive the Optionee's death will be divided equally among the
Optionee's primary beneficiaries or contingent beneficiaries, as the case may
be.
PRIMARY BENEFICIARY(IES)
Name % Address
(a) _____________________________ ____ ________________________
(b) _____________________________ ____ ________________________
(c) _____________________________ ____ ________________________
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CONTINGENT BENEFICIARY(IES)
Name % Address
(a) _____________________________ ____ ________________________
(b) _____________________________ ____ ________________________
(c) _____________________________ ____ ________________________
In the absence of an effective beneficiary designation, the Optionee
acknowledges that any rights under the Stock Option which survive the Optionee's
death shall be rights of his or her estate.
XXXXXX CORPORATION
By: ____________________________________
Name:
Title:
The undersigned hereby acknowledges receipt of the foregoing Stock
Option and agrees to its terms and conditions:
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Optionee
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