EXHIBIT 4.05
NON-QUALIFIED
STOCK OPTION AGREEMENT dated as of , between The Xxxxxx Xxx
Company, Inc., a Delaware corporation (referred to hereinafter as the
"Corporation"), and _______________ (the "Optionee").
In accordance with the provisions of The Xxxxxx Xxx Company,
Inc. 1997 Management Stock Option Plan (referred to hereinafter as the "Plan"),
the Compensation Committee (referred to hereinafter as the "Committee") of the
Board of Directors of the Corporation (the "Board") has authorized the execution
and delivery of this Agreement. Capitalized terms used herein without definition
shall have the respective meanings ascribed to such terms in the Plan, a copy of
which is attached hereto and made a part hereof.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the Corporation and Optionee agree as follows:
1. Grant of Stock Option. Subject to all the terms and
conditions of this Agreement and the Plan, the Corporation hereby grants to the
Optionee on the date hereof an option (the "Stock Option") to purchase up to
_________ shares of common stock, par value $.01 per share (the "Common Stock")
of the Corporation (such number being subject to adjustment as provided in
Section 11 of this Agreement). This Stock Option is not intended to constitute
an Incentive Stock Option within the meaning of section 422 of the Code.
2. Exercise Price. The exercise price per share of Common
Stock covered by the Stock Option shall be $________.
3. Vesting. The Optionee's right to purchase shares under the
Stock Option shall vest as follows: (i) with respect to 33% of the shares of
Common Stock subject thereto on the first anniversary of the date of grant; (ii)
with respect to an additional 33% of the shares of Common Stock subject thereto
on the second anniversary of the date of grant; and (iii) with respect to an
additional 34% of the shares of Common Stock subject thereto on the third
anniversary of the date of grant. The right to purchase shares under this Stock
Option shall be cumulative, so that if the full number of shares purchasable in
a period shall not be purchased, the balance may be purchased at any time or
from time to time thereafter, but not after the expiration of the Stock Option.
The Optionee must be a full time active employee of, or a consultant to, the
Corporation or any Affiliate on the respective vesting date as a condition to
any non-vested portion becoming vested. The vesting requirements of this Section
3 shall be waived automatically and the Stock Option shall be fully vested upon
a Change in Control.
4. Exercise. Vested portions of the Stock Option shall be
exercisable in part or in full at any time after each corresponding vesting
date. Except as provided in Section 7 hereof, the Stock Option may not be
exercised at any time unless the holder thereof is then a full time, active
employee of, or a consultant to, the Corporation or one of its Affiliates.
Rights under
the Stock Option which have become vested may be exercised only as to full
shares of Common Stock.
5. Method of Exercising Stock Option. Subject to the vesting
requirements, the Stock Option may be exercised by written notice of exercise to
the Corporation, which notice shall specify the number of shares of Common Stock
subject to the Stock Option to be purchased and shall be signed by the person
exercising the Stock Option.
Such notice shall be accompanied by payment of the full
purchase price by certified or bank check or, at the option of the Optionee, by
delivery of unrestricted shares of Common Stock registered in the name of the
Optionee duly assigned to the Corporation with the assignment guaranteed by a
bank, trust company or member firm of the New York Stock Exchange, Inc., or by a
combination of the foregoing. Any such shares so delivered by the Optionee upon
exercise of a Stock Option (i) must have been held by the Optionee for such
period of time and in such manner as is required by generally accepted
accounting principles to prevent the exercise of the Stock Option from being
deemed additional cash compensation to the Optionee chargeable against the
earnings of the Corporation, and (ii) shall be deemed to have a value per share
equal to the Fair Market Value of the shares on such date.
Payment for any shares subject to the Stock Option may also be
made by delivering a properly executed exercise notice to the Corporation,
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Corporation the amount of sale or loan proceeds necessary to pay the
purchase price, and, if requested by the Optionee, the amount of any federal,
state, local or foreign withholding taxes. To facilitate the foregoing, the
Corporation may enter into agreements for coordinated procedures with one or
more brokerage firms.
No shares of Common Stock shall be issued until full payment
therefor has been made. The Optionee shall have the rights of a stockholder of
the Corporation holding the shares of Common Stock that are subject to the Stock
Option (including, if applicable, the right to vote the shares and the right to
receive dividends), when the Optionee has given written notice of exercise, has
paid in full for such shares and, if requested, has represented to and agreed
with the Corporation in writing that such Optionee is acquiring the shares
without a view to the public resale or distribution thereof in violation of
applicable securities laws; provided, however, that if the Optionee has elected
to defer receipt of all or a portion of the shares of Common Stock subject to
the Stock Option in accordance with procedures established by the Committee, the
Optionee shall not have any rights as a stockholder with respect to such
deferred shares unless and until shares of Common Stock are actually delivered
to the Optionee with respect thereto, except to the extent otherwise determined
by the Committee.
6. Limited Transferability of Stock Option. The Stock Option
shall not be transferable by the Optionee other than (i) by will or by the laws
of descent and distribution or (ii) pursuant to (1) a qualified domestic
relations order (as defined in the Code or title I of the
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Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder) or (2) a gift to such Optionee's children, whether directly or
indirectly or by means of a trust or partnership or otherwise. The Stock Option
shall be exercisable, subject to the terms of this Agreement and the Plan,
during the Optionee's lifetime, only by the Optionee or the guardian or legal
representative of the Optionee named on the signature page to this Agreement or
any person to whom the Stock Option is transferred in accordance with the
preceding sentence.
7. Termination of Employment or Service.
(a) If the Optionee's employment or service
terminates by reason of death, the Stock Option may thereafter be exercised, to
the extent then exercisable, or on such accelerated basis as the Committee may
determine, for a period of one year from the date of such death or until the
expiration of the stated term of the Stock Option, whichever period is the
shorter.
(b) If the Optionee's employment or service
terminates by reason of Disability, the Stock Option may thereafter be exercised
by the Optionee, to the extent it was exercisable at the time of termination, or
on such accelerated basis as the Committee may determine, for a period of three
years from the date of such termination of employment or service or until the
expiration of the stated term of the Stock Option, whichever period is the
shorter, provided, however, that if the Optionee dies within such period, the
Stock Option shall, notwithstanding the expiration of such period, continue to
be exercisable to the extent to which it was exercisable at the time of death
for a period of 12 months from the date of such death or until the expiration of
the stated term of the Stock Option, whichever period is the shorter.
(c) If the Optionee's employment or service
terminates by reason of Retirement, the Stock Option may thereafter be exercised
by the Optionee, to the extent it was exercisable at the time of such
Retirement, or on such accelerated basis as the Committee may determine, for a
period of five years from the date of such termination of employment or service
or until the expiration of the stated term of the Stock Option, whichever period
is the shorter; provided, however that if the Optionee dies within such period
the Stock Option shall, notwithstanding the expiration of such period, continue
to be exercisable to the extent to which it was exercisable at the time of death
for a period of 12 months from the date of such death or until the expiration of
the stated term of the Stock Option, whichever period, is shorter.
(d) Unless otherwise determined by the Committee: (i)
if the Optionee incurs a Termination of Employment for Cause, the Stock Option
shall thereupon terminate; and (ii) if the Optionee incurs a Termination of
Employment for any reason other than death, Disability or Retirement or for
Cause, the Stock Option, to the extent then exercisable, or on such accelerated
basis as the Committee may determine, may be exercised for the lesser of three
months from the date of such Termination of Employment or the balance of the
Stock Option's term; provided, however, that if the Optionee dies within such
three-month period, the Stock Option shall continue to be exercisable to the
extent to which it was exercisable at the time of
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death for a period of 12 months from the date of such death or until the
expiration of the stated term of the Stock Option, whichever period is the
shorter. Notwithstanding the foregoing, if the Optionee incurs a Termination of
Employment at or after a Change in Control, or other than by reason of death,
Disability or Retirement, the Stock Option shall be exercisable for the lesser
of (1) six months and one day from the date of such Termination of Employment,
and (2) the balance of the Stock Option's term.
8. Cashing Out of Stock Option. On receipt of written notice
of exercise, the Committee with the consent of the Optionee may elect to cash
out all or part of the portion of the shares of Common Stock for which the Stock
Option is being exercised by paying the Optionee an amount, in Cash or Common
Stock, equal to the excess of the Fair Market Value of the Common Stock over the
exercise price times the number of shares of Common Stock for which the Stock
Option is being exercised on the effective date of such cash-out.
9. Change in Control Cash-Out. Notwithstanding any other
provision of this Agreement or the Plan, during the 60-day period from and after
a Change in Control (the "Exercise Period"), the Optionee shall have the right,
whether or not the Stock Option is fully exercisable and in lieu of the payment
of the exercise price for the shares of Common Stock being purchased under the
Stock Option and by giving notice to the Corporation, to elect (within the
Exercise Period) to surrender all or part of the Stock Option to the Corporation
and to receive cash, within 30 days of such notice, in an amount equal to the
amount by which the Change in Control Price per share of Common Stock on the
date of such election shall exceed the exercise price per share of Common Stock
under the Stock Option (the "Spread") multiplied by the number of shares of
Common Stock granted under the Stock Option as to which the right granted under
this Section 9 shall have been exercised. Notwithstanding the foregoing, if any
right granted pursuant to this Agreement would make a Change in Control
transaction ineligible for pooling-of-interests accounting under APB No. 16,
that but for the nature of such grant would otherwise be eligible for such
accounting treatment, the Committee shall have the ability to substitute for the
cash payable pursuant to such right Common Stock with a Fair Market Value equal
to the cash that would otherwise be payable hereunder.
10. General Restriction. Notwithstanding any other provision
of this Agreement or the Plan, if at any time the Board shall determine, in its
discretion, that the registration or qualification of the shares subject to the
Stock Option upon any securities exchange or under any state or federal law or
regulation, or the consent, approval or permit of any state or federal
governmental agency, is necessary or advisable as a condition of, or in
connection with, the granting of the Stock Option or the issue or purchase of
shares thereunder, the Corporation shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock purchased upon exercise
of the Stock Option unless and until such listing, registration, qualification,
consent, approval or permit shall have been effected or obtained free of any
conditions not acceptable to the Board.
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11. Certain Transactions. In the event of any change in
capitalization, such as a stock split or combination or in the case of any
merger, consolidation, separation, including a spin-off, exchange of shares or
other distribution of stock or property of the Corporation, any reorganization
(whether or not such reorganization comes within the definition of such term in
section 368 of the Code) or any partial or complete liquidation or dissolution
of the Corporation, the Committee or Board may make such substitution or
adjustments in the aggregate number and kind of shares subject to the Stock
Option and/or such other equitable substitution or adjustments as it may
determine to be appropriate in its sole discretion; provided, however, that the
number of shares subject to the Stock Option shall always be a whole number.
12. Transfer of Shares. The certificates for shares purchased
upon exercise of the Stock Option may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer of such shares.
13. Right to Employment or Service. Nothing contained herein
shall confer upon the Optionee any right to be continued in the employment or
service of the Corporation or of any of its Affiliates or interfere in any way
with the right of the Corporation or any of its Affiliates to terminate his
employment or service at any time.
14. Definitions. Any terms or provisions used herein which are
defined in the Code or the regulations thereunder or corresponding provisions of
subsequent laws and regulations in effect at the time the Stock Option is
granted shall have the respective meanings as therein defined.
15. Amendment. The Board or the Committee may, from time to
time, require the modification or amendment of the terms of this Agreement;
provided, however, that no termination, modification or amendment of this
Agreement shall, without the consent of the Optionee, impair his rights
hereunder.
16. Notices. Notices hereunder shall be in writing, and if to
the Corporation, shall be delivered personally to the Treasurer of the
Corporation or mailed to its principal office, The Xxxxxx Xxx Company, Inc. 0000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, addressed to the attention of the
Treasurer, and if to the Optionee, shall be delivered personally or mailed to
the Optionee at his address as the same appears on the records of the
Corporation.
17. Interpretation. All decisions and interpretations made by
the Board or the Committee with regard to any question arising hereunder or
under the Plan shall be binding and conclusive on the Corporation and the
Optionee. In the event there is any inconsistency between the provisions of this
Agreement and the Plan, the provisions of the Plan shall govern.
18. Successors and Assigns. This Agreement shall bind and
inure to the benefit of the parties hereto and the successors and assigns of the
Corporation and, to the extent provided herein, to the personal representatives,
legatees and heirs of the Optionee.
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19. Governing Law. This Agreement shall be governed by an
construed in accordance with the laws of the State of Delaware without regard to
the conflict of laws principles thereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
THE XXXXXX XXX COMPANY, INC.
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Name:
Title:
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[Optionee]
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