Reference: NQSO 98-1
EXHIBIT 10.18
NONQUALIFIED STOCK OPTION AGREEMENT
GRANTED TO: Xxxxx Xxxxxxxx
DATE OF GRANT: January 2, 1998
GRANTED PURSUANT TO: Heartland Technology, Inc. 1997 Incentive and Capital
Accumulation Plan
NUMBER OF UNDERLYING 50,000 shares
SHARES OF COMMON
STOCK:
EXERCISE PRICE: $16.625 per share
VESTING SCHEDULE: 100% at May 30, 1998
1. This Nonqualified Stock Option Agreement (the "Agreement") is made
and entered into as of January 2, 1998, between Heartland Technology, Inc., a
Delaware corporation (the "Company"), and Xxxxx Xxxxxxxx ("Employee"). It is the
intent of the Company and Employee that the Option (as defined in Paragraph 2
below) will not qualify as an "incentive stock option" under Section 422 of the
Internal Revenue Code of 1986, as amended from time to time (the "Code").
2. Employee is granted an option by the Compensation Committee of the
Company's Board of Directors (the "Committee") to purchase 50,000 shares of
Common Stock (the "Option") pursuant to the Company's 1997 Incentive and Capital
Accumulation Plan (the "Plan"). Capitalized terms not defined herein shall have
the meanings ascribed thereto in the Plan. The Option granted hereunder is a
matter of separate inducement and is not in lieu of salary or other compensation
for Employee's services.
3. The Option's exercise price is $16.625 per share, such exercise
price being in the judgment of the Committee not less than one hundred percent
(100%) of the Fair Market Value of a share of Common Stock on the date of grant.
4. Subject to Paragraphs 5, 6 and 7 below, the Option shall become
fully exercisable on May 30, 1998 (the "Vesting Date").
5. Subject to Paragraphs 6 and 7 below, the unexercised portion of the
Option, unless sooner terminated, shall expire on January 2, 2008 (the
"Expiration Date") and, notwithstanding anything contained herein to the
contrary, no portion of the Option may be exercised after such date.
6. If prior to the Expiration Date, Employee's employment with the
Company or any subsidiary corporation terminates, the Option will terminate on
the applicable date as described below, provided, however, that none of the
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events described below shall extend the period of exercisability beyond the
Expiration Date:
(a) If the employment of Employee is terminated by reason of
Employee's death while in the employ of the Company or any subsidiary
corporation, the Option shall immediately become fully exercisable and remain
exercisable for twelve (12) months after Employee's death and shall be
exercisable by the executor or administrator of the estate of the deceased
Employee or the person or persons to whom the deceased Employee's rights under
the Option shall pass by will or the laws of descent or distribution;
(b) If the employment of Employee is terminated by the Company or
any subsidiary corporation for reason of Employee's "permanent disability" (as
defined below), the Option shall immediately become fully exercisable on the
date of such termination and shall remain exercisable for six (6) months after
such date; provided, however, that if Employee dies during the six month period
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following such date and Employee has not exercised the Option, the Option shall
remain exercisable for an additional twelve (12) months after Employee's death
and shall be exercisable by the executor or administrator of the estate of the
deceased Employee or the person or persons to whom the deceased Employee's
rights under the Option shall pass by will or the laws of descent or
distribution;
(c) If the employment of Employee is terminated by the Company or
any subsidiary corporation for "Cause" (as defined below), the Option shall, to
the extent not theretofore exercised, immediately become null and void on the
date of such termination;
(d) If the employment of Employee is terminated (i) by the Company
or any subsidiary corporation other than (X) for "Cause" or (Y) for reason of
Employee's death or "permanent disability" or (ii) by the Employee for "Good
Reason" (as defined below), the Option to the extent not theretofore exercised
shall immediately become fully exercisable on the date of such termination and
shall remain exercisable for six (6) months after such date;
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(e) If the employment of Employee is terminated by the Employee
prior to the Vesting Date for other than "Good Reason", the Option shall, to the
extent not theretofore exercised, immediately become null and void on the date
of such termination; or
(f) If the employment of Employee is terminated by the Employee on
or after the Vesting Date, the Option shall remain exercisable for six (6)
months after the date of such termination.
For purposes of this Agreement, the terms "permanent disability",
"Cause" and "Good Reason" shall have the meanings ascribed to such terms in the
Employee's employment agreement with the Company (f/k/a Milwaukee Land Company),
dated June 29, 1993, as amended from time to time (the "Employment Agreement"),
or any successor agreement.
7. Upon the occurrence of a "Change in Control" (as defined below), the
Option shall immediately become fully exercisable and shall terminate thirty
(30) days after the occurrence of the Change in Control. Upon such termination,
Employee shall receive, with respect to the unexercised portion of the Option,
an amount in cash equal to the product of (X) the amount, if any, by which the
Fair Market Value of a share of Common Stock immediately prior to the occurrence
of such Change in Control exceeds the exercise price per share specified in
Paragraph 3 hereof and (Y) the number of shares with respect to which the Option
remained exercisable on the date of such termination. For purposes of this
Agreement, the term "Change in Control" shall have the meaning ascribed to such
term in the Plan.
8. Employee may exercise the Option regardless of whether any other
option that Employee has been granted by the Company remains unexercised. In no
event may Employee exercise the Option for a fraction of a share or for less
than 100 shares unless the number purchased is the remaining balance for which
the Option is then exercisable.
9. The Option's exercise price shall be paid by Employee on the date
the Option is exercised, in full in cash or shares of Common Stock or, in the
sole discretion of the Committee, any other method that the Committee shall
prescribe, including, without limitation, by the withholding of shares or the
delivery of an executed promissory note to the Company on such terms and
conditions as the Committee shall determine in its sole discretion.
10. The Company may withhold from sums due or to become due to Employee
from the Company an amount necessary to satisfy its obligation to withhold taxes
incurred by reason of the issuance or disposition of shares pursuant to the
Option, or may require Employee to reimburse the Company in such amount.
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11. Employee shall not have any of the rights of a shareholder with
respect to the shares of Common Stock underlying the Option while the Option is
unexercised.
12. Any exercise of this Option shall be in writing addressed to the
Corporate Secretary of the Company at the principal place of business of the
Company, specifying the Option being exercised and the number of shares to be
purchased, accompanied by payment therefor.
13. This Option shall not be transferable otherwise than by will or the
laws of descent and distribution, and shall be exercisable, during Employee's
lifetime, only by Employee. Notwithstanding the foregoing, this Option may be
transferred by Employee solely to Employee's spouse, siblings, parents, children
and grandchildren or trusts for the benefit of such persons, subject to any
restriction included in this Agreement.
14. If the Company, in its sole discretion, shall determine that it is
necessary, to comply with applicable securities laws, the certificate or
certificates representing the shares purchased pursuant to the exercise of the
Option shall bear an appropriate legend in form and substance, as determined by
the Company, giving notice of applicable restrictions on transfer under or in
respect of such laws.
15. The Company agrees that at the time of exercise of the Option it
will use reasonable efforts in good faith to have an effective Registration
Statement on Form S-8 under the Securities Act of 1933, as amended (the "Act"),
which includes a prospectus that is current with respect to the shares subject
to the Option. Employee covenants and agrees with the Company that if, at the
time of exercise of the Option, there does not exist a Registration Statement on
an appropriate form under the Act, which Registration Statement shall have
become effective and shall include a prospectus that is current with respect to
the shares subject to the Option, (i) that he or she is purchasing the shares
for his or her own account and not with a view to the resale or distribution
thereof, (ii) that any subsequent offer for sale or sale of any such shares
shall be made either pursuant to (x) a Registration Statement on an appropriate
form under the Act, which Registration Statement shall have become effective and
shall be current with respect to the shares being offered and sold, or (y) a
specific exemption from the registration requirements of the Act and applicable
state securities laws, but in claiming such exemption, Employee shall, prior to
any offer for sale or sale of such shares, obtain a favorable written opinion
from counsel for or approved by the Company as to the applicability of such
exemption and (iii) that Employee agrees that the certificates evidencing such
shares shall bear a legend to the effect of the foregoing.
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16. This Agreement is subject to all terms, conditions, limitations and
restrictions contained in the Plan, which shall be controlling in the event of
any conflicting or inconsistent provisions.
17. This Agreement is not a contract of employment and the terms of
Employee's employment shall not be affected hereby or by any agreement referred
to herein except to the extent specifically so provided herein or therein.
Nothing herein shall be construed to impose any obligation on the Company to
continue Employee's employment, and it shall not impose any obligation on
Employee's part to remain in the employ of the Company.
18. Employee acknowledges and agrees that neither the Company, its
shareholders nor its directors and officers, has any duty or obligation to
disclose to the Employee any material information regarding the business of the
Company or affecting the value of the Common Stock before or at the time of a
termination of the employment of Employee by the Company, including, without
limitation, any information concerning plans for the Company to make a public
offering of its securities or to be acquired by or merged with or into another
firm or entity.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
HEARTLAND TECHNOLOGY, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx
Title: Vice President - Finance
ACCEPTED:
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
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