HAYNES INTERNATIONAL, INC. NONQUALIFIED STOCK OPTION AGREEMENT
 |
Xxxxxx
International, Inc.
0000
Xxxx Xxxx Xxxxxx
X.X.
Xxx 0000
Xxxxxx,
Xxxxxxx 00000-0000
000-000-0000
/ Fax: 000-000-0000
|
October
1, 2008
XXXXXX
INTERNATIONAL, INC.
Dear
Xxxx
Xxxxxxxxx:
The
Compensation Committee of the Board of Directors of Xxxxxx International, Inc.
(the "Company") on October 1, 2008 ("Date of Grant") has granted you an option
(the "Option") to purchase 20,000 Shares of the Company’s Common Stock, $0.001
par value, pursuant to the Xxxxxx International, Inc. 2007 Stock Option Plan,
dated as of January 18, 2007 (the "Plan") and in accordance with the terms
of
the Executive Employment Agreement dated as of September 8, 2008 between you
and
the Company (the "Employment Agreement"), upon the following terms and
conditions set forth in this Nonqualified Stock Option Agreement (the
"Agreement"):
1. PURCHASE
PRICE OF THE OPTION. The purchase price of the Shares subject to the Option
is
$46.83 per Share which is equal to the Fair Market Value per Share as of the
Date of Grant. You must pay this purchase price by personal or bank cashier's
check at the time the Option is exercised; provided, however, that, with the
approval of the Committee, you may exercise the Option by (i) tendering to
the
Company certificates representing whole Shares owned by you duly endorsed for
transfer, or (ii) surrendering a sufficient portion of the vested Option based
on the difference between the exercise price of the Option and the Fair Market
Value at the time of exercise of the Shares subject to the Option, or (iii)
any
combination of (i) and/or (ii) and cash, together having a Fair Market Value
equal to the exercise price of the Shares with respect to which the Option
is
exercised. For this purpose, any Shares so tendered or withheld shall be deemed
to have a Fair Market Value as determined under the Plan.
To
exercise the Option, you must send written notice to the Committee at the
address provided in SECTION 11 of this Agreement. Such notice shall (1) state
the number of Shares being purchased pursuant to the Option; (2) be signed
by
the person or persons exercising the Option; and (3) be accompanied by payment
of the full purchase price of such Shares (as provided above). Certificates
evidencing Shares of the Company shall not be delivered to you until an
appropriate notice has been delivered and payment has been made.
2. OPTION
TERM AND VESTING. The term of the Option (the "Option Term") shall be a period
of ten (10) years from the Date of Grant, subject to earlier termination as
provided in SECTIONS 3 and 4 or as may be provided in the Plan. Except as
otherwise provided below in SECTIONS 3 or 4 which provide for accelerated
vesting under certain circumstances, the Option shall become exercisable with
respect to 33-1/3 percent of the total number of Shares covered by the Option
on
the first anniversary of the Date of Grant and with respect to an additional
33-1/3 percent on each of the second anniversary and the third anniversary
of
the Date of Grant, respectively. When the Option becomes exercisable with
respect to any Shares, those Shares may be purchased at any time, or from time
to time, in whole or in part, until the Option Term expires, subject to the
terms of this Agreement and the Plan.
3. TERMINATION
OF EMPLOYMENT OR SERVICE. Notwithstanding the vesting schedule set forth in
SECTION 2:
(a) If
you
cease to be an Employee of the Company due to a Termination for Cause (as
defined in the Employment Agreement), all outstanding Options whether vested
or
unvested shall be void and deemed to be forfeited upon the date your employment
or service ceases and shall not be exercisable to any extent whatsoever.
(b) If
you
cease to be an Employee of the Company due to (i) your resignation without
Good
Reason (as defined in the Employment Agreement), or (ii) termination by the
Company without Cause (as defined in the Employment Agreement) or your
resignation for Good Reason (as defined in the Employment Agreement), in either
case, prior to or more than 24 months after a Change in Control (as defined
in
the Employment Agreement), the unvested portion of the Option shall terminate
immediately and the vested portion of the Option that is exercisable as of
the
date employment ceases shall remain exercisable for six (6) months following
such termination, but not later than the expiration of the Option Term. If
you
do not exercise the Option during such period, the Option shall be void and
deemed to have been forfeited upon the expiration of such period and shall
be of
no further force or effect.
(c) If
you
cease to be an Employee of the Company due to your termination by the Company
without Cause (as defined in the Employment Agreement) or your resignation
for
Good Reason (as defined in the Employment Agreement), in either case, within
24
months after a Change in Control (as defined in the Employment Agreement),
the
Option as of the effective date of such termination of employment, to the extent
not previously vested and exercisable, shall become vested and exercisable
upon
the Release Effective Date (as defined in the Employment Agreement) and shall
remain exercisable for six (6) months following such termination, but not later
than the expiration of the Option Term. If you do not exercise the Option during
such period, the Option shall be void and deemed to have been forfeited upon
the
expiration of such period and shall be of no further force or
effect.
(d) If
you
cease to be an Employee of the Company by reason of your death or Disability,
the unvested portion of the Option shall immediately vest and become exercisable
and the Option shall remain exercisable for six (6) months following the date
of
death or Disability, but not later than the expiration of the Option Term.
If
you, or your authorized representative in the case of death, do(es) not exercise
the Option during such period, the Option shall be void and deemed to have
been
forfeited upon the expiration of such period and shall be of no further force
or
effect.
(e) If
you
cease to be an Employee of the Company by reason of your Retirement, the
unvested portion of the Option shall terminate immediately, and the vested
portion of the Option that is exercisable as of the date your employment or
service ceases shall remain exercisable for six (6) months following the date
of
such Retirement, but not later than the expiration of the Option Term. If you
do
not exercise the Option during such period, the Option shall be void and deemed
to have been forfeited upon the expiration of such period and shall be of no
further force or effect.
2
(f) If
you
cease to be an Employee of the Company by reason of your Disability or death
and
only if price quotations for the Shares are not available on any exchange or
national market system, you or the beneficial holder of the Option, as the
case
may be, shall have the right during the exercise period provided in SECTION
3(d)
above to demand that the Company purchase the vested portion of the Option
from
you, or such beneficial holder, at a value equal to the difference between
the
Fair Market Value of the Shares subject to the Option and the exercise price
of
such Option.
4. ADJUSTMENT;
CHANGE IN CONTROL.
(a) The
Option may be adjusted or terminated in any manner as contemplated in the
Plan.
(b) Except
as
provided herein, the Option may be exercised in whole at any time or in part
at
any time to the extent that the Shares under the Option are then exercisable.
In
no event, however, may the Option be exercised after the expiration of the
Option Term, as described in SECTION 6 below.
5. TRANSFER
RESTRICTIONS. The Option is non-transferable otherwise than by will or the
laws
of descent and distribution. It may be exercised only by you, or if you die,
by
your executor, administrator, or person(s) to whom the Option is transferred
by
will or the laws of descent and distribution in accordance with SECTION
3.
6. EXPIRATION
OF AGREEMENT. All rights to exercise the Option shall expire, in any event,
upon
the expiration of the Option Term.
7. SHARE
CERTIFICATES. Certificates evidencing Shares issued upon any exercise of the
Option may bear a legend setting forth among other things such restrictions
on
the disposition or transfer of the Shares as the Company may deem appropriate
to
comply with federal and state securities laws.
8. IMPACT
OF
AGREEMENT ON YOUR EMPLOYMENT OR SERVICE. Nothing contained in this Agreement
or
the Plan shall restrict the right of the Company or any of its Subsidiaries
to
terminate your employment or service at any time with or without Cause subject
to any written employment agreement.
9. AGREEMENT
IS SUBJECT TO PLAN AND EMPLOYMENT AGREEMENT. This Agreement is subject to all
terms, provisions, and conditions of the Plan, which is incorporated herein
by
reference and to such regulations as may from time to time be adopted by the
Committee. This Agreement is further subject to the terms relating to the Option
that are set forth in the Employment Agreement. In the event of any conflict
between the provisions of the Plan and/or the Employment Agreement and the
provisions of this Agreement, the terms, conditions, and provisions of the
Plan
and/or Employment Agreement shall control, and this Agreement shall be deemed
to
be modified accordingly. In the event of any conflict between the provisions
of
the Plan and the provisions of the Employment Agreement relating to the Option,
the provision of the Employment Agreement shall control and this Agreement
shall
be deemed to be modified accordingly.
3
10. NATURE
OF
OPTION. This Agreement is intended to grant a Nonqualified Option.
11. NOTICE.
All notices by you to the Company and your exercise of the Option shall be
addressed to Xxxxxx International, Inc., 0000 Xxxx Xxxx Xxxxxx, X.X. Xxx 0000,
Xxxxxx, XX 00000, ATTENTION: Compensation Committee, or such other address
as
the Company may, from time to time specify.
12. SECURITIES
LAWS. Notwithstanding anything contained in this Agreement or in the Plan to
the
contrary, the Option may not be exercised until all applicable federal and
state
securities requirements pertaining to the offer and sale of the securities
issued pursuant to the Plan have been met and the Company has been advised
by
counsel satisfactory to the Company that all applicable requirements have been
met. If requested by the Committee, you agree to deliver to the Company such
signed representations and covenants as may be necessary, satisfactory to the
Company in the opinion of counsel, for compliance with applicable federal and
state securities laws and such other instruments and agreements as the Committee
may reasonably request.
13. WITHHOLDING.
The Company shall have the right to withhold from your regular cash
compensation, if any, or from any payments under this Agreement, or require
you
to submit, amounts sufficient to satisfy any federal, state, or local income
or
employment tax withholding requirements arising from your exercise of any rights
under this Agreement or make such other arrangements satisfactory to the Company
with regard to such taxes, including the withholding of Shares of common stock
that are subject to the Option, at such time as the Company deems necessary
or
appropriate for compliance with such laws.
14. DEFINITIONS.
All capitalized terms not otherwise defined herein shall have the meanings
assigned to them in the Plan.
|
Very
truly yours,
|
|
|
XXXXXX
INTERNATIONAL, INC.
|
|
|
/s/
XXXX XXXXX
|
|
|
Xxxx
Xxxxx, Chairman of the Board
|
4
ACCEPTANCE
OF NONQUALIFIED STOCK OPTION AGREEMENT
I
hereby
accept the terms and provisions of this Nonqualified Stock Option Agreement,
dated October 1, 2008 ("Agreement"), and the Xxxxxx International, Inc.
("Company") 2007 Stock Option Plan dated as of January 18, 2007 ("Plan"). I
acknowledge that I have received a copy of the Plan and the Employment
Agreement, and I am familiar with the terms and provisions of the Plan,
Employment Agreement (as it relates to the Options) and the Agreement. I agree
to accept as binding, conclusive, and final all decisions and interpretations
of
the Company's Board of Directors and Committee upon any questions arising under
the Plan or this Agreement.
Dated
this 1st day of October, 2008.
|
/s/
XXXX XXXXXXXXX
|
|
|
Xxxx
Xxxxxxxxx
|
|
|
Address
|
