SMITH & WESSON HOLDING CORPORATION NON-QUALIFIED STOCK OPTION AGREEMENT FOR MICHAEL F. GOLDEN
Exhibit 4.15
XXXXX & WESSON HOLDING CORPORATION
FOR
XXXXXXX X. XXXXXX
XXXXXXX X. XXXXXX
1. Grant of Option. Xxxxx & Wesson Holding Corporation, a Nevada corporation (the “Company”)
hereby grants, as of December 6, 2004 (“Date of Grant”), to Xxxxxxx X. Xxxxxx (the “Optionee”) an
option (the “Option”) to purchase up to 500,000 shares of the Company’s Common Stock, $.001 par
value per share (the “Shares”), at an exercise price per share equal to $1.47. The Option shall be
subject to the terms and conditions set forth herein. The Option is a new employee inducement
option and is not being granted pursuant to the Company’s 2004 Incentive Compensation Plan (the
“Plan”). To the extent not provided for herein, the Option, however, shall be construed in
accordance with the Plan. The Option is a nonqualified stock option, and not an Incentive Stock
Option. The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by
all of the terms and conditions hereof and thereof and all applicable laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein that are defined in the
Plan and not defined herein shall have the meanings attributed to them under the Plan.
3. Vesting Schedule. Except as otherwise provided in Sections 6 or 12 of this Agreement, or
in the Plan, the Option shall vest in the installments as provided below, which shall be
cumulative. To the extent that the Option has become vested with respect to a percentage of Shares
as provided below, the Option may thereafter be exercised by the Optionee, in whole or in part, at
any time or from time to time prior to the expiration of the Option as provided herein for such
vested Shares. The following table indicates each date (the “Vesting Date”) upon which the Optionee
shall be vested and thereby entitled to exercise the Option with respect to the percentage of
Shares granted as indicated beside the date, provided that the Continuous Service of the Optionee
continues through and on the applicable Vesting Date:
| Percentage of Shares | Vesting Date | |
20% of the total number of options
granted.
|
Each of the first five annual anniversaries of the Date of Grant, commencing on December 6, 2005, such that the Option shall be fully vested, with respect to all Shares subject to this grant, on December 6, 2009. |
Except as otherwise specifically provided herein, there shall be no proportionate or partial
vesting in the periods prior to each Vesting Date, and all vesting shall occur only on the
appropriate Vesting Date. Upon the termination of the Optionee’s Continuous Service with the
Company and its Related Entities, any unvested portion of the Option shall terminate and be null
and void.
4. Method of Exercise. The vested portion of this Option shall be exercisable in whole or in
part in accordance with the vesting schedule set forth in Section 3 hereof by written notice which
shall state the election to exercise the Option, the number of vested Shares in respect of which
the Option is being exercised, and such other representations and agreements as to the holder’s
investment intent with respect to such Shares as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and shall be delivered
in person or by certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the exercise price. This Option shall be deemed to be exercised after
both (a) receipt by the Company of such written notice accompanied by the exercise price and (b)
arrangements that are satisfactory to the Committee or the Board in its sole discretion have been
made for Optionee’s payment to the Company of the amount that is necessary to be withheld in
accordance with applicable Federal or state withholding requirements. No Shares will be issued
pursuant to the Option unless and until such issuance and such exercise shall comply with all
relevant provisions of applicable law, including the requirements of any stock exchange upon which
the Shares then may be traded.
5. Method of Payment. Payment of the exercise price is due in full upon exercise of all or
any part of the Option. The Optionee may elect to make payment of the exercise price in one or
more of the following ways:
(i) Cash or by check.
(ii) In the Company’s sole discretion at the time the Option is exercised and provided that at
the time of exercise the Common Stock is publicly traded, pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common
Stock, results in either the receipt of cash (or check) by the Company or the receipt of
irrevocable instructions to pay the aggregate exercise price to the Company from the sales
proceeds.
(iii) In the Company’s sole discretion at the time the Option is exercised, delivery by
Optionee of a promissory note in a form satisfactory to the Company, in the amount of the aggregate
exercise price of the exercised Shares together with the execution and delivery by the Optionee of
a security agreement in a form satisfactory to the Company. The promissory note shall bear
interest at a rate at least equal to the “applicable federal rate” prescribed under the Code and
its regulations at time of purchase, and shall be secured by a pledge of the Shares purchased by
the promissory note pursuant to the security agreement. At any time that the Company is
incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the Delaware
General Corporation Law, shall be made in cash and not by deferred payment. Notwithstanding the
foregoing, payment by promissory note shall not be permitted to the extent such payment would
violate the Xxxxxxxx-Xxxxx Act of 2002.
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(iv) Provided that at the time of exercise the Common Stock is publicly traded, by delivery of
already-owned shares of Common Stock either that Optionee has held for the period required to avoid
a charge to the Company’s reported earnings (generally six (6) months) or that Optionee did not
acquire, directly or indirectly from the Company, that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of
exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time the
Optionee exercises the Option, shall include delivery to the Company of Optionee’s attestation of
ownership of such shares of Common Stock in a form approved by the Company. Notwithstanding the
foregoing, Optionee may not exercise the Option by tender to the Company of Common Stock to the
extent such tender would violate the provisions of any law, regulation or agreement restricting the
redemption of the Company’s stock.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of:
(i) three months after the date on which the Optionee’s Continuous Service is terminated other
than by reason of (A) Cause, which, solely for purposes of this Agreement, shall mean the
termination of the Optionee’s Continuous Service by reason of the Optionee’s willful misconduct or
gross negligence, (B) a mental or physical disability (within the meaning of Internal Revenue Code
Section 22(e)) of the Optionee as determined by a medical doctor satisfactory to the Committee or
the Board, or (C) the death of the Optionee;
(ii) immediately upon the termination of the Optionee’s Continuous Service for Cause;
(iii) twelve months after the date on which the Optionee’s Continuous Service is terminated by
reason of a mental or physical disability (within the meaning of Section 22(e) of the Code) as
determined by a medical doctor satisfactory to the Committee or the Board;
(iv) twelve months after the date of termination of the Optionee’s Continuous Service by
reason of the death of the Optionee; or
(v) the tenth anniversary of the Date of Grant.
(b) To the extent not previously exercised, (i) the Option shall terminate immediately in the
event of (1) the liquidation or dissolution of the Company, or (2) any reorganization, merger,
consolidation or other form of corporate transaction in which the Company does not survive or the
Shares are converted into or exchanged for securities issued by another entity, unless the
successor or acquiring entity, or an affiliate of such successor or acquiring entity, assumes the
Option or substitutes an equivalent option or right pursuant to Section 9(c) of the Plan, and (ii)
the Committee or the Board in its sole discretion may by written notice (“cancellation notice”)
cancel, effective upon the consummation of any corporate transaction described in Subsection
7(b)(i) of the Plan in which the Company does survive, the Option (or portion thereof) that remains
unexercised on such date. The Committee or the Board shall give written notice of any proposed
transaction referred to in this Section 6(b) a reasonable
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period of time prior to the closing date for such transaction (which notice may be given
either before or after approval of such transaction), in order that the Optionee may have a
reasonable period of time prior to the closing date of such transaction within which to exercise
the Option if and to the extent that it then is exercisable (including any portion of the Option
that may become exercisable upon the closing date of such transaction). The Optionee may condition
his exercise of the Option upon the consummation of a transaction referred to in this Section 6(b).
7. Transferability. The Option granted hereby is not transferable otherwise than by will or
under the applicable laws of descent and distribution, and during the lifetime of the Optionee the
Option shall be exercisable only by the Optionee, or the Optionee’s guardian or legal
representative. In addition, the Option shall not be assigned, negotiated, pledged or hypothecated
in any way (whether by operation of law or otherwise), and the Option shall not be subject to
execution, attachment or similar process. Upon any attempt to transfer, assign, negotiate, pledge
or hypothecate the Option, or in the event of any levy upon the Option by reason of any execution,
attachment or similar process contrary to the provisions hereof, the Option shall immediately
become null and void.
8. No Rights of Stockholders. Neither the Optionee nor any personal representative (or
beneficiary) shall be, or shall have any of the rights and privileges of, a stockholder of the
Company with respect to any shares of Stock purchasable or issuable upon the exercise of the
Option, in whole or in part, prior to the date of exercise of the Option.
9. Acceleration of Exercisability of Option. This Option shall become immediately fully
exercisable in the event that, prior to the termination of the Option pursuant to Section 6 hereof,
there is a “Change in Control”, as defined in Section 7(b) of the Plan, that occurs during the
Optionee’s Continuous Service and such “Change in Control” was not approved by the Board of
Directors of the Company.
10. No Right to Continuous Service. Neither the Option nor this Agreement shall confer upon
the Optionee any right to Continuous Service with the Company.
11. Law Governing. This Agreement shall be governed in accordance with and governed by the
internal laws of the State of Nevada.
12. Interpretation / Provisions of Plan Control. This Agreement is subject to all the terms,
conditions and provisions of the Plan, including, without limitation, the amendment provisions
thereof, and to such rules, regulations and interpretations relating to the Plan adopted by the
Committee or the Board as may be in effect from time to time. If and to the extent that this
Agreement conflicts or is inconsistent with the terms, conditions and provisions of the Plan, the
Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Optionee
accepts the Option subject to all the terms and provisions of the Plan and this Agreement. The
undersigned Optionee hereby accepts as binding, conclusive and final all decisions or
interpretations of the Committee or the Board upon any questions arising under the Plan and this
Agreement.
13. Notices. Any notice under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered personally or when deposited in the United
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States mail, registered, postage prepaid, and addressed, in the case of the Company, to the
Company’s President at Xxxxx & Wesson Holding Corporation, 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxxx 00000, or if the Company should move its principal office, to such principal office,
and, in the case of the Optionee, to the Optionee’s last permanent address as shown on the
Company’s records, subject to the right of either party to designate some other address at any time
hereafter in a notice satisfying the requirements of this Section.
IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the 6th day
of December, 2004.
| COMPANY: | ||||
| XXXXX & WESSON HOLDING CORPORATION | ||||
| By: | /s/ Xxxx X. Xxxxx | |||
| Name: | Xxxx X. Xxxxx | |||
| Title: | Chief Financial Officer | |||
Optionee has received a copy of the Company’s most recent prospectus describing the Plan and a
complete copy of the Plan document. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option,
and fully understands all provisions of the Option.
| Dated: | 6/02/2005 | OPTIONEE: | ||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Xxxxxxx X. Xxxxxx | ||||||
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