1
Exhibit 10(m)
TRW
STOCK OPTION AGREEMENT QUALIFIED
UNDER THE LAWS OF FRANCE
TERMS AND CONDITIONS
1. PURCHASE RIGHTS
This option cannot be exercised before the fifth anniversary of the date of
grant. After that you will be entitled to purchase all of the shares covered by
this option, provided that you have been continuously employed with TRW Inc.
("TRW") since the date of grant. If the laws in France requiring that options be
held for five years from the date of grant in order to qualify for favorable tax
and social treatment applicable to stock options granted under the Law 70-1322
of December 31, 1970, as subsequently amended, are amended to require a holding
period of less than five years, this option shall become exercisable upon the
expiration of such shorter holding period, provided that you have been
continuously employed with TRW since the date of grant; provided, however, that
if such holding period shall be less than three years, this option shall become
exercisable in accordance with whichever of the following schedules shall be
applicable:
One-year Holding Period:
------------------------
Number of Full Years of Cumulative Maximum Percentage of
Continuous Service After Optioned Shares That May Be
Date of Grant Purchased
-----------------------------------------------------------------
1 33-1/3%
2 66-2/3%
3 100%
Two-year Holding Period:
------------------------
Number of Full Years of Cumulative Maximum Percentage of
Continuous Service After Optioned Shares That May Be
Date of Grant Purchased
-----------------------------------------------------------------
2 66-2/3%
3 100%
The number of shares that may be purchased in accordance with the foregoing
schedules shall be rounded down to the nearest whole share for each of the first
two years. Notwithstanding the foregoing, in the event of the termination of
your employment due to your death or to your permanent disability, or in the
event of a change in control of TRW, this option will immediately become
exercisable in respect of all of the shares covered by this grant. For purposes
of this agreement, a change in control is defined in resolutions adopted by the
Compensation and Stock Option Committee of the Directors of TRW on July 26,
1989, which, in summary, provide that a change in control is a change occurring
(a) by virtue of TRW's merger, consolidation or reorganization into or with, or
transfer of assets to, another corporation or (b) by virtue of a change in the
majority of the Directors of TRW during any two-year period unless the election
of each new Director was approved by a two-thirds vote of the Directors in
office at the beginning of such period or (c) through the acquisition of shares
representing 20% or more of the voting power of TRW or (d) through any other
change in control reported in any filing with the Securities and Exchange
Commission; provided, however, that no change in control is deemed to have
occurred by the acquisition of shares, or any report of such acquisition, by
TRW, a subsidiary of TRW or a TRW-sponsored employee benefit plan. The language
of the resolutions controls over this summary language.
2. EXERCISE IN WHOLE OR PART
To the extent this option has become exercisable, you may purchase on any date
or dates all or any part of the shares which you are then entitled to purchase.
However, no fractional shares may be purchased.
3. TERM OF OPTION
To the extent this option has become exercisable in accordance with paragraph 1
above, it may be exercised by you at any time during the 10-year period
beginning on the date of grant. To the extent this option remains unexercised at
the end of the 10-year period, your unexercised purchase rights will terminate.
To the extent unexercised, this stock option will terminate before the end of
such 10-year period in the following cases:
(a) If your employment with TRW terminates before you reach age 55, your
unexercised purchase rights will terminate three months after the date your
employment terminates.
(b) If the Directors of TRW shall find that you intentionally committed an act
materially inimical to the interests of TRW or a subsidiary, your unexercised
purchase rights will terminate as of the time you committed such act, as
determined by the Directors.
(c) In the event of your death at any time during the term of this option, your
unexercised purchase rights will terminate upon the earlier of (i) six months
after the date of your death and (ii) ten years after the date of grant.
If your employment is terminated by your permanent disability, your purchase
rights will not be subject to termination under clause (a) above and will
continue for the entire 10-year period. In the event of a change in control of
TRW (as defined herein), your purchase rights will not under any circumstances
be subject to termination before the end of the 10-year period beginning on the
date of grant. Nothing contained in this option shall extend this option beyond
a 10-year period beginning on the date of grant or shall limit whatever right
TRW or a subsidiary might otherwise have to terminate your employment at any
time.
4. PAYMENT OF OPTION PRICE
The option price shall be payable at the time of exercise. The option price
shall be paid at the Office of Secretary at TRW's corporate headquarters or at
any other place designated by the Secretary. The option price may be paid in
cash, by delivery of full shares of TRW Common, by a cashless exercise, or in
any combination of the foregoing, in accordance with such procedures and subject
to such further conditions as the Secretary of TRW may establish from time to
time. Notwithstanding the foregoing, the Compensation and Stock Option Committee
of TRW at any time may suspend or terminate your right to pay any or all of the
option price in shares of TRW Common.
Cash payments shall be made in United States dollars.
2
Shares delivered in payment of the option price shall be valued at their fair
market value on the date of exercise. For purposes of this option, "fair market
value" is the average of the high and low sales prices of a share of TRW Common
on the date of exercise on the New York Stock Exchange Composite Transactions
Listing as reported in the Midwest edition of The Wall Street Journal (or if
there are no sales on such date, then the closing sale price on such Listing on
the nearest date before the date of exercise) or such other method or procedure
for determining fair market value as the Compensation and Stock Option Committee
of TRW in its sole discretion may determine. For purposes of this option, the
"date of exercise" is the date on which written notice, accompanied by the
option price, is received by the Secretary of TRW or his designee that you have
elected to exercise all or part of this option.
5. TAXES
Upon any exercise of this option, TRW may withhold delivery of certificates for
the purchased shares until you make arrangements satisfactory to TRW to pay any
withholding, transfer or other taxes due as a result of such exercise. You may
elect, in accordance with applicable regulations of the Compensation and Stock
Option Committee of TRW, to pay a portion or all of the amount of required
withholding taxes in cash, through a cashless exercise or in shares of TRW
Common, either by delivering to TRW previously held shares of TRW Common or by
having shares of TRW Common withheld from the shares purchased hereunder.
6. SECURITIES LAWS
This option shall not be exercisable if such exercise would violate any federal
or state securities law. TRW will use its best efforts to make such filings and
initiate such proceedings as may be necessary to prevent such violations unless
the Directors of TRW determine, in their sole discretion, that such filings or
proceedings would result in undue expense or hardship for TRW. TRW may place
appropriate legends on the certificates for the optioned shares, give
stop-transfer instructions to its transfer agents or take any other action to
achieve compliance with those laws in connection with any exercise of this
option or your resale of the optioned shares.
7. TRANSFERABILITY
This option is not transferable other than by will or the laws of descent and
distribution and shall be exercisable during your lifetime only by you or your
guardian or legal representative.
8. LEAVES OF ABSENCE
If you take a leave of absence for illness, military or governmental service or
other reasons, and such leave has been specifically approved by the Chairman of
the Board or the President of TRW for purposes of this option, then such leave
will not be treated as an interruption of your employment.
9. ADJUSTMENTS
The Compensation and Stock Option Committee of TRW shall make adjustments in the
option price and the number or kind of shares of TRW Common or other securities
covered by this option only in accordance with the terms of the TRW plan and the
French sub-plan thereunder, pursuant to which this stock option is granted.
10. CERTAIN DEFINITIONS
For purposes of this option, employment with a subsidiary will be treated as
equivalent to employment with TRW itself, and your continuous employment will
not be deemed to be interrupted by reason of your transfer among TRW and its
subsidiaries. "Subsidiary" means a corporation or other entity in an unbroken
chain of entities beginning with TRW if each of the entities other than the last
entity in the unbroken chain owns stock or other ownership interests possessing
50% or more of the total outstanding combined voting power of all classes of
stock or other interests in the next entity in the chain. "Subsidiary" also
means, if not covered by the definition of subsidiary in the preceding sentence
and if specifically approved by the Chairman of the Board of TRW with respect to
this option, a corporation or other entity in which TRW has a direct or indirect
ownership interest.
11. MISCELLANEOUS
By participating in the TRW stock option program, you understand and agree to
the following conditions:
(a) This stock option is subject to all the terms and conditions of the TRW
plan, including the French sub-plan thereunder, pursuant to which it is granted.
The Compensation and Stock Option Committee of TRW has authority to interpret
and construe any provision of this instrument and the TRW plan and the French
sub-plan thereunder pursuant to which this stock option is granted, and any such
interpretation and construction shall be binding and conclusive. Any reference
in this option to the Directors of TRW includes the Executive Committee of the
Directors.
(b) The program is discretionary and TRW can cancel or terminate it at any time.
As such, the program does not create any contractual or other right to receive
options or benefits in lieu of options in the future. Any future option grants,
including but not limited to the timing of any grant, number of options, vesting
provisions, and the exercise price, will be within TRW's sole discretion.
(c) Your participation in the TRW stock option program is completely voluntary
and is not a condition or right of your employment.
(d) The value of your TRW stock option is an extraordinary item of compensation
outside the scope of your employment contract, if any. As such, your option is
not part of normal or expected compensation for purposes of calculating any
severance, resignation, redundancy, end of service payments, bonuses,
long-service awards, social insurance contributions (except where local law
specifically provides otherwise), pension or retirement benefits, or similar
payments.
(e) Your vesting progress will end if your employment terminates before five
years after the grant date, or such shorter period prescribed in Section 1
hereof, for reasons other than death, permanent disability or a change in
control.
(f) The future value of the TRW stock is unknown and cannot be predicted with
any certainty. If the TRW stock does not increase in value, the option will have
no value.
(g) You authorize your manager to furnish TRW (and any agent of TRW
administering the program or providing program recordkeeping services) with such
information and data as it shall request in order to facilitate the grant of
options and administration of the program. You also waive any data privacy
rights you might have with respect to such information about you, which is
needed to issue your TRW stock option grant.
(h) Your TRW stock option may not be assigned, sold, encumbered, or in any way
transferred or alienated, except as otherwise explicitly provided in the Stock
Option Agreement.
(i) The TRW stock option program is governed by and subject to U.S. law.
Interpretation of the program and your rights thereunder will be governed by
provisions of U. S. law.
