FORM OF AGREEMENT FOR
SENIOR EXECUTIVE OFFICERS
GENMAR HOLDINGS, INC.
000 XXXXX XXXXX XXXXXX, XXXXX 0000
XXXXXXXXXXX, XXXXXXXXX 00000
September ____, 1999
Re: GRANT OF STOCK OPTIONS
Dear :
1. INITIAL GRANT. As partial consideration for your agreeing to continue to
be a senior executive officer or Chairman of the Board of Directors of Genmar
Holdings, Inc. (the "Company"), the Board of Directors of the Company (the
"Board") hereby grants to you an option (the "Initial Option") to purchase _____
shares of common stock, par value $0.01, of the Company (the "Common Stock") at
an exercise price of $_____ per share (the "Initial Exercise Price").
2. SUBSEQUENT GRANTS. The Board shall grant to you the following additional
options:
(a) a second option (the "Second Option") to purchase _______ shares of
Common Stock if the Common Stock trades at an average of 150% of the Initial
Exercise Price over a period of 30 consecutive trading days at any time within
three years of the date hereof at an exercise price equal to the Fair Market
Value (as defined below) of the Common Stock on the date of the grant of the
Second Option (the "Subsequent Exercise Price"); and
(b) a third option (the "Third Option," and together with the Initial
Option and the Second Option, the "Options") to purchase _______ shares of
Common Stock if the Common Stock trades at an average of 150% of the Subsequent
Exercise Price over a period of 30 consecutive trading days at any time within
three years of the date hereof at an exercise price equal to the Fair Market
Value of the Common Stock on the date of the grant of the Third Option.
(c) Each of the Second Option and the Third Option shall be granted
automatically hereunder without any further action on the part of the Company or
the Board effective on the first business day following the end of the 30
trading day period referred to in clauses (a) and (b) above.
(d) For purposes of this Section 2, "Fair Market Value" shall be the
closing price of the Company's Common Stock on the date of the calculation (or
on the last preceding date if Common Stock was not trading on such date) if the
Company's Common Stock is
readily tradable on a national securities exchange or other market system,
and if the Company's Common Stock is not readily tradable, Fair Market Value
shall mean the amount determined in good faith by the Board as the fair
market value of the Common Stock of the Company.
3. TERM AND VESTING OF OPTIONS.
(a) VESTING OF OPTIONS. Your right to exercise any Option shall vest and
become exercisable as follows:
(i) one-half shall vest and become fully exercisable on the first
anniversary of the date of grant of such Option; and
(ii) one-half shall vest and become fully exercisable on the second
anniversary of the date of grant of such Option.
(b) TERM. Subject to the provisions of this paragraph, the unexercised
portion of any Option, unless sooner terminated as provided herein, shall expire
on the fifth anniversary of the date of grant of such Option (the "Expiration
Date") and, notwithstanding anything contained herein to the contrary, no
portion of any Option may be exercised after such date.
4. TIME AND METHOD FOR EXERCISING AN OPTION.
(a) TIME. You may exercise a vested Option in one or more installments
from time to time prior to its Expiration Date, subject to the provisions of
subparagraph (b), below.
(b) TERMINATION. If prior to the Expiration Date, you have a Termination
of Employment (as defined below), any outstanding Options will terminate on the
applicable date as described below; provided, however, that none of the events
described below shall extend the period of exercisability beyond its Expiration
Date:
(i) if you have a Termination of Employment by reason of your death, the
Options shall fully vest and become immediately exercisable, shall remain
exercisable for six (6) months after your death and shall be exercisable by
the executor or administrator of your estate or the person or persons to
whom your rights under the Options shall pass by will or the laws of
descent or distribution;
(ii) if you have a Termination of Employment by reason of your "permanent
disability" (as defined below), the Options shall fully vest and become
immediately exercisable, and shall remain exercisable for three (3) months
after you became permanently disabled; PROVIDED, HOWEVER, that if you die
within six (6) months following such disability and you have not exercised
the Options, the Options shall remain exercisable for an additional six (6)
months after your death and shall be exercisable by the executor or
administrator of your estate or the person or persons to whom
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your rights under the Options shall pass by will or the laws of descent or
distribution;
(iii) if you have a Termination of Employment for any reason other than for
"Cause" (as defined below), death or permanent disability, your non-vested
Options shall immediately become null and void and your vested Options
shall remain exercisable for three (3) months after the Termination of
Employment; and
(iv) if you have a Termination of Employment for "Cause," the Options, to
the extent not theretofore exercised, shall immediately become null and
void.
In the case of subparagraph (b)(i), (ii) and (iii), Options not exercised
by the revised expiration date for the Options shall become null and void.
(c) Upon the occurrence of a "Change in Control" (as defined below), the
Options shall fully vest.
(d) DEFINITIONS. The following definitions shall be applicable for
purposes of this Agreement.
(i) "Cause" shall mean: (a) your violation of any non-competition and/or
confidentiality provisions agreed to at any time between you and the
Company or its affiliates; (b) your commission of an intentional act of
fraud, embezzlement, theft or dishonesty against the Company or its
affiliates; (c) your conviction of, or pleading of NOLO CONTENDERE to, any
crime which constitutes a felony or misdemeanor involving moral turpitude
or which might, in the reasonable opinion of the Company, cause
embarrassment to the Company; or (d) the gross neglect or willful failure
by you to perform your duties and responsibilities in all material respects
with respect to services rendered to the Company, if such breach of duty is
not cured within 30 days after written notice thereof to you by the Board.
For purposes of clause (d), no act, or failure to act, on your part shall
be deemed "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that such act, or failure to act, was
in the best interest of the Company.
(ii) A "Change of Control" shall mean:
(1) A change of control of the Company that would be
required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934; or
(2) During any period of two (2) consecutive years,
the individuals who at the beginning of such period
constitute the Company's Board of Directors or any
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individuals who would be "Continuing Directors" (as
hereinafter defined) cease for any reason to constitute at
least a majority thereof; or
(3) The Company's Common Stock shall cease to be
publicly traded after initially being publicly traded; or
(4) The Company's Board of Directors shall approve a
sale of all or substantially all of the assets of the
Company, and such transaction shall have been consummated;
or
(5) The Company's Board of Directors shall approve
any merger, consolidation, or like business combination or
reorganization of the Company, the consummation of which
would result in the occurrence of any event described in
Section 4(d)(ii)(1) above, and such transaction shall have
been consummated.
For purposes of this Section 4(c)(ii), "Continuing
Directors" shall mean (x) the directors of the Company in
office on the date of grant of the Initial Option (the
"Effective Date") and any successor to any such director
and any additional director who after the Effective Date
was nominated or selected by a majority of the Continuing
Directors in office (or by the Nominating Committee of the
Board of Directors of the Company) at the time of his or
her nomination or selection.
(iii) "Permanent Disability" shall mean any physical or mental disability
or incapacity which, in the sole determination of the Board of Directors,
renders you incapable of fully performing the services required of you in
accordance with your obligations with respect to the Company or a
subsidiary of the Company for a period of 180 consecutive days or for
shorter periods aggregating 180 days during any period of twelve (12)
consecutive months.
(iv) "Termination of Employment" shall mean the earlier of (i) your
termination of employment with Xxxxxx Management Corporation, unless you
are immediately thereafter employed by the Company, or a subsidiary, (ii)
the termination of the management contract between the Company and Xxxxxx
Management Corporation, unless you are immediately thereafter employed by
the Company or a subsidiary, (iii) in the event (i) or (ii) would be
applicable but for your employment with the Company or a subsidiary, your
termination of employment with the Company or the subsidiary, as
applicable, (iv) your permanent disability or (v) your death.
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(e) METHOD.
(i) NOTICE AND PAYMENT. An Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance
with the terms of such Option by the person entitled to exercise such
Option and full payment for the shares of Common Stock with respect to
which the Option is exercised has been received by the Company. The
consideration to be paid for the Common Stock to be issued upon exercise of
the Option shall be payment in cash, by check, or with shares of the
Company's Common Stock, as provided in Section (e)(ii) below. As soon as
administratively practicable following the exercise of an Option in the
manner set forth above, the Company shall issue or cause its transfer agent
to issue stock certificates representing the shares of Common Stock
purchased (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company).
(ii) ALTERNATIVE METHODS FOR EXERCISE OF OPTION. You may elect to
exercise an Option in whole or in part by (a) delivering whole shares of
the Company's Common Stock previously owned by you (whether or not acquired
through the prior exercise of a stock option) having a fair market value
equal to the aggregate Option price; or (b) by delivery to the Company of
(x) irrevocable instructions to deliver directly to a broker the stock
certificates representing the shares for which the Option is being
exercised, and (y) irrevocable instructions to such broker to sell such
shares and promptly deliver to the Company the portion of the proceeds
equal to the Option price and any amount necessary to satisfy the Company's
obligation for withholding taxes, or any combination thereof. For purposes
of making payment in shares of Common Stock, such shares shall be valued at
their fair market value on the date of exercise of the Option and shall
have been held by you for at least six months.
(iii) VOTING AND DIVIDEND RIGHTS. Until the issuance of such stock
certificates (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder shall exist
with respect to the shares underlying the Option notwithstanding the
exercise of the Option. No adjustment will be made for a dividend or other
rights for which the record date occurs prior to the date the stock
certificates are issued.
5. ANTI-DILUTION PROTECTION. In the event of any change in the shares subject
to the Options granted hereunder or to the capitalization of the Company through
merger, consolidation, reorganization, recapitalization, stock dividends, stock
split, reverse stock split, split up, spin off, combination of shares, exchange
of shares, dividends in kind or other like change in the capital structure of
the Company or distribution (other than normal cash dividends) to shareholders
of the Company, in order to prevent dilution or
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enlargement of your rights under the Options, the Board of Directors shall
adjust, in its sole discretion, in an equitable manner as applicable, the
form of and number of shares which may be acquired pursuant to the exercise
of Options and the exercise price of shares of such Options. The
determination of the Board of Directors as to these matters shall be
conclusive and binding.
6. NON-TRANSFERABILITY. The Options may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution, and shall be exercisable, during your
lifetime only by you.
7. WITHHOLDING. The Company may withhold from sums due or to become due to
you from the Company an amount necessary to satisfy its obligation to withhold
taxes incurred by reason of the issuance or disposition of such shares pursuant
to the Options, or may require you to reimburse the Company in such amount. The
Company is not required to issue any shares until you have satisfied withholding
requirements, to the extent applicable.
8. NOTICES. All notices to the Company under this agreement shall be in
writing and shall be delivered by personal service , facsimile or registered or
certified mail (if such service is not available, then by first class mail),
postage pre-paid, to such address as may be designated from time to time by the
Company, and which shall initially be:
Genmar Holdings, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
All notices shall be deemed given when received.
9. NO EFFECT ON TERMS OF EMPLOYMENT. This Agreement is not a contract of
employment and the terms of your employment shall not be affected hereby or by
any agreement referred to herein except to the extent specifically so provided.
Nothing herein shall be construed to impose any obligation on the Company to
continue your employment and it shall not impose any obligation on your part to
remain in the employ of the Company.
10. TRANSFER RESTRICTIONS. The Company agrees that at the time of exercise of
an Option, it will use reasonable best efforts 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 such Option. You covenant and agree with the Company that if, at the time of
exercise of such 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 such Option,
(a) that you are purchasing the shares for your own account and not with
a view to the resale or distribution thereof;
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(b) that any subsequent offer for sale or sale of any such shares shall
be made either:
(i) pursuant to 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
(ii) a specific exemption from the registration requirements of the Act,
but in claiming such exemption, you 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
(c) that you agree that the certificates evidencing such shares shall
bear a legend to the effect of the foregoing.
11. SEVERABILITY OF PROVISIONS. If any provision of this agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereof and this agreement shall be construed and
enforced as if it did not include such provision.
12. AMENDMENT. This agreement cannot be amended except by a writing executed
by the Company and you.
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13. APPLICABLE LAW; HEADINGS. This agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to the conflicts of laws principles thereof. The
headings in this agreement are solely for convenience of reference and shall
not affect its meaning or interpretation.
Very truly yours,
GENMAR HOLDINGS, INC.
Accepted:
-----------------------------------
Signature of Senior Executive
-----------------------------------
Name of Senior Executive
Dated:
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