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Exhibit 10(l)
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Form of Stock Option Agreement
Used in Connection with the
Grant of Non-Qualified Stock
Options Pursuant to the
X. X. Xxxxx Corporation
1998 Stock Option Plan
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STOCK OPTION AGREEMENT
(Non-Qualified Stock Options)
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THIS AGREEMENT is made to be effective as of ___________ 199_,
by and between X. X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"),
and ___________________________ (the "OPTIONEE").
WITNESSETH:
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WHEREAS, the Board of Directors and the shareholders of the
COMPANY have adopted the X. X. Xxxxx Corporation 1988 Stock Option Plan (the
"PLAN"); and
WHEREAS, pursuant to the provisions of the PLAN, the Board of
Directors of the COMPANY has appointed a Compensation Committee (the
"COMMITTEE") to administer the PLAN and the COMMITTEE has determined that an
option to acquire common shares, $1.00 par value (the "COMMON SHARES"), of the
COMPANY should be granted to the OPTIONEE upon the terms and conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the parties
hereto make the following agreement, intending to be legally bound thereby:
(1) GRANT OF OPTION. The COMPANY hereby grants to the
OPTIONEE an option (the "OPTION") to purchase _____ COMMON SHARES of the
COMPANY. The OPTION is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code of 1986, as amended (the
"CODE").
(2) TERMS AND CONDITIONS OF THE OPTION.
(A) OPTION PRICE. The purchase price (the
"OPTION PRICE") to be paid by the OPTIONEE to the COMPANY upon the exercise of
the OPTION shall be $___________ per share, subject to adjustment as provided
in Section 3.
(B) EXERCISE OF THE OPTION. The OPTION may not
be exercised until the OPTIONEE shall have completed twelve months of
continuous employment with the COMPANY and/or its subsidiaries immediately
following the date hereof. Thereafter, the OPTION may be exercised as follows:
(i) at any time after such twelve-month
period as to twenty percent (20%) of the COMMON SHARES subject to the OPTION;
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(ii) at any time after twenty-four months
from the date of this Agreement as to an additional twenty percent (20%) of the
COMMON SHARES subject to the OPTION;
(iii) at any time after thirty-six months
from the date of this Agreement as to an additional twenty percent (20%) of the
COMMON SHARES subject to the OPTION;
(iv) at any time after forty-eight months
from the date of this Agreement as to an additional twenty percent (20%) of the
COMMON SHARES subject to the OPTION; and
(v) at any time after sixty months from
the date of this Agreement as to the remaining twenty percent (20%) of the
COMMON SHARES subject to the OPTION.
Subject to the other provisions of this Agreement, if the
OPTION becomes exercisable as to certain COMMON SHARES, it shall remain
exercisable as to those COMMON SHARES until the date of expiration of the
OPTION term. The COMMITTEE may, but shall not be required to (unless otherwise
provided in this Agreement), accelerate the schedule of the time or times when
the OPTION may be exercised.
The grant of the OPTION shall not confer upon the OPTIONEE any
right to continue in the employment of the COMPANY nor limit in any way the
right of the COMPANY to terminate the employment of the OPTIONEE at any time in
accordance with law or the COMPANY's governing corporate documents.
(C) OPTION TERM. The OPTION shall in no event be
exercisable after the expiration of ten (10) years from the date of this
Agreement.
(D) METHOD OF EXERCISE. The OPTION may be
exercised by giving written notice of exercise to the COMMITTEE in care of the
Treasurer of the COMPANY stating the number of COMMON SHARES subject to the
OPTION in respect of which it is being exercised. Payment for all such COMMON
SHARES shall be made to the COMPANY at the time the OPTION is exercised in
United States dollars in cash (including check, bank draft or money order). If
permitted by the COMMITTEE, payment for such COMMON SHARES may be made (i) by
delivery of COMMON SHARES of the COMPANY already owned by the OPTIONEE and
having a Fair Market Value (as that term is defined in the PLAN) on the date of
delivery equal to the OPTION PRICE, or (ii) by delivery of a combination of
cash and already owned COMMON SHARES. After payment in full for the COMMON
SHARES purchased under the OPTION has been made, the COMPANY shall take all
such action as is necessary to deliver appropriate share certificates
evidencing
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the COMMON SHARES purchased upon the exercise of the OPTION as promptly
thereafter as is reasonably practicable.
(E) SATISFACTION OF TAXES AND TAX WITHHOLDING
REQUIREMENTS. The COMMITTEE shall determine the appropriate arrangements for
the satisfaction by the COMPANY and the OPTIONEE of all federal, state, local
or other income, excise or employment taxes or tax withholding requirements
applicable to the exercise of the OPTION or the later disposition of the COMMON
SHARES or other property thereby acquired.
(3) ADJUSTMENTS AND CHANCES IN THE COMMON SHARES.
(A) In the event that the outstanding COMMON
SHARES of the COMPANY shall be changed into or exchanged for a different kind
of shares or other securities of the COMPANY or of another corporation (whether
by reason of merger, consolidation, recapitalization, reclassification,
split-up, combination of shares or otherwise) or if the number of such COMMON
SHARES shall be increased through the payment of a stock dividend, then unless
such change results in the termination of all outstanding options granted
pursuant to the PLAN, there shall be substituted for or added to each COMMON
SHARE of the COMPANY subject to the OPTION, the number and kind of shares or
other securities into which each outstanding COMMON SHARE of the COMPANY shall
be changed, or for which each such COMMON SHARE shall be exchanged, or to which
the holder of each such COMMON SHARE shall be entitled, as the case may be.
The OPTION shall also be appropriately amended as to the OPTION PRICE and other
terms as may be necessary to reflect the foregoing events. In the event there
shall be any other change in the number or kind of the outstanding shares of
the COMPANY, or of any shares or other securities into which such shares shall
have been changed, or for which they shall have been exchanged, then if the
COMMITTEE shall, in its sole discretion, determine that such change equitably
requires an adjustment in the OPTION, such adjustment shall be made by the
COMMITTEE in accordance with such determination. Fractional shares resulting
from any adjustment in the OPTION pursuant to this Section 3(A) shall be
rounded down to the nearest whole number of shares.
(B) Notice of any adjustment pursuant to this
Section 3 shall be given by the COMPANY to the OPTIONEE.
(4) ACCELERATION OF OPTIONS.
(A) In the event that the COMPANY or its
shareholders enter into one or more agreements to dispose of all or
substantially all of the assets or fifty percent (50%) or more of the
outstanding capital stock of the COMPANY by means of sale (whether as a result
of a tender offer or otherwise), merger,
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reorganization or liquidation in one or a series of related transactions (each,
an "ACCELERATION EVENT"), then the OPTION shall become exercisable during the
fifteen (15) days immediately prior to the scheduled consummation of the
ACCELERATION EVENT with respect to the full number of COMMON SHARES subject to
the OPTION; provided, however, that no such ACCELERATION EVENT will occur in
the event that (i) the primary purpose of the transaction is to change the
COMPANY's domicile solely within the United States, (ii) the terms of the
agreement(s) require as a prerequisite for the consummation of the transaction
that each option granted by the COMPANY pursuant to the PLAN either be assumed
by the successor corporation or parent thereof or be replaced with a comparable
option to purchase shares of capital stock of the successor corporation or
parent thereof, or (iii) the transaction is approved by a majority of the
members of the Board of Directors of the COMPANY who had either been in office
for more than twelve (12) months prior to such transaction or had been elected,
or nominated for election by the COMPANY's shareholders, by the vote of
three-fourths of the directors then still in office who were directors at the
beginning of such twelve- month period; and provided further that any exercise
of the OPTION during such fifteen (15) day period shall be conditioned upon the
consummation of such transaction and shall be effective only immediately before
such consummation, except to the extent that the OPTIONEE may indicate, in
writing, that such exercise is unconditional with regard to all or part of the
unaccelerated portion of the OPTION. Upon consummation of the ACCELERATION
EVENT, the OPTION, whether or not accelerated, will terminate and cease to be
exercisable, unless assumed by the successor corporation or parent thereof.
(B) In the event of the occurrence of an
ACCELERATION EVENT, if the OPTIONEE is subject to the filing requirements
imposed under Section 16(a) of the Securities Exchange Act of 1934 with respect
to the COMPANY, the OPTIONEE shall receive a payment of cash equal to the
difference between the aggregate "Fair Value" of the COMMON SHARES subject to
such accelerated OPTION and the aggregate OPTION PRICE of such COMMON SHARES.
For this purpose, "Fair Value" shall mean the highest aggregate fair market
value of the subject COMMON SHARES during the 60-day period immediately
preceding the date of the consummation of the ACCELERATION EVENT. Payment of
said cash shall be made within ten (10) days after said consummation of the
ACCELERATION EVENT. The foregoing payments under this Section 4(B) shall be
made in lieu of and in full discharge of any and all obligations of the COMPANY
in respect of the OPTION.
(C) The grant of this OPTION shall not affect in
any way the right of the COMPANY to adjust, reclassify, reorganize, or
otherwise change its capital or business structure
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or to merge, consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.
(5) NON-ASSIGNABILITY OF OPTION. The OPTION shall not be
assignable or otherwise transferable by the OPTIONEE except by will or by the
laws of descent and distribution. The OPTION may not be exercised during the
lifetime of the OPTIONEE except by him, his guardian or legal representative.
(6) SUBSTITUTION FOR OPTION. The COMMITTEE shall have
the authority to effect, at any time and from time to time, with the consent of
the OPTIONEE, the cancellation of the OPTION and the grant in substitution
therefor of one or more new options under the PLAN covering the same or a
different number of COMMON SHARES.
(7) EXERCISE AFTER TERMINATION OF EMPLOYMENT.
(A) Except as otherwise provided in this
Agreement, the OPTION shall be exercisable only by the OPTIONEE, shall be
exercisable only while the OPTIONEE is in the employment of the COMPANY and
then only if the OPTION has become exercisable by its terms, and if not
exercisable by its terms at the time the OPTIONEE ceases to be in the
employment of the COMPANY, shall immediately expire on the date of termination
of employment.
(B) If the OPTION is exercisable by its terms at
the time the OPTIONEE ceases to be in the employment of the COMPANY other than
by reason of the death, permanent disability or normal retirement of the
OPTIONEE, the OPTION must be exercised on or before the earlier of three (3)
months after the date of termination of employment or the fixed expiration date
of the OPTION after which period the OPTION shall expire. Notwithstanding the
foregoing, if the OPTIONEE's employment is terminated for willful, deliberate
or gross misconduct (such as, for example, dishonesty), the OPTION shall, to
the extent not previously exercised, expire immediately upon such termination.
(C) In the event of the death of the OPTIONEE (i)
while in the employment of the COMPANY or (ii) within three (3) months after
his termination of employment other than for willful, deliberate or gross
misconduct, the unexercised portion of the OPTION (whether or not then
exercisable by its terms) shall become immediately exercisable by his estate
for a period ending on the earlier of the fixed expiration date of the OPTION
or twelve months after the date of death, after which period the OPTION shall
expire. For purposes hereof, the estate of an OPTIONEE shall be defined to
include the legal representatives thereof or any person who has acquired the
right to exercise the OPTION by reason of the death of the OPTIONEE.
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(D) In the event of the termination of employment
of the OPTIONEE by reason of the "permanent disability" of the OPTIONEE, the
unexercised portion of the OPTION (whether or not then exercisable by its
terms) shall become exercisable for a period ending on the earlier of the fixed
expiration date of the OPTION or twelve (12) months from the date of
termination, after which period the OPTION shall expire. For purposes hereof,
"permanent disability" shall be deemed to be the inability of the OPTIONEE to
perform the duties of his job with the COMPANY because of a physical or mental
disability as evidenced by the opinion of a COMPANY-approved doctor of medicine
licensed to practice medicine in the United States of America.
(E) In the event of the termination of employment
of the OPTIONEE by reason of the "normal retirement" of the OPTIONEE, the
unexercised portion of the OPTION (whether or not then exercisable by its
terms) granted to the OPTIONEE on or before his 65th birthday shall become
immediately exercisable for a period ending on the earlier of the fixed
expiration date of the OPTION or twelve (12) months after the date of death,
after which period the OPTION shall expire. Also, in the event of the "normal
retirement" of the OPTIONEE, the unexercised portion of the OPTION (whether or
not then exercisable by its terms) granted to the OPTIONEE after his 65th
birthday and held for a period of at least twelve (12) consecutive months of
active employment with the COMPANY after the date of grant shall become
immediately exercisable for a period ending on the earlier of the fixed
expiration date of the OPTION or twelve (12) months after the date of death,
after which period the OPTION shall expire. For purposes hereof, "retirement"
shall be deemed to be "normal retirement" if the OPTIONEE is at least 65 years
of age and has completed at least five (5) consecutive years of employment with
the COMPANY at the date of retirement.
(8) RESTRICTIONS ON TRANSFERS OF COMMON SHARES. Anything
contained in this Agreement or elsewhere to the contrary notwithstanding, the
COMPANY may postpone the issuance and delivery of COMMON SHARES upon any
exercise of the OPTION until completion of any stock exchange listing or
registration or other qualification of such COMMON SHARES under any state or
federal law, rule or regulation as the COMPANY may consider appropriate; and
may require the OPTIONEE when exercising the OPTION to make such
representations and furnish such information as the COMPANY may consider
appropriate in connection with the issuance of the COMMON SHARES in compliance
with applicable law.
COMMON SHARES issued and delivered upon exercise of the OPTION
shall be subject to such restrictions on trading, including appropriate
legending of certificates to that effect,
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as the COMPANY, in its discretion, shall determine are necessary to satisfy
applicable legal requirements and obligations.
(9) RIGHTS OF OPTIONEE. The OPTIONEE shall have no
rights as a shareholder of the COMPANY with respect to any COMMON SHARES of the
COMPANY covered by the OPTION until the date of issuance of a certificate to
him evidencing such COMMON SHARES.
(10) PLAN AS CONTROLLING. All terms and conditions of the
PLAN applicable to the OPTION which are not set forth in this Agreement shall
be deemed incorporated herein by reference. In the event that any term or
condition of this Agreement is inconsistent with the terms and conditions of
the PLAN, the PLAN shall be deemed controlling.
(11) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio.
(12) RIGHTS AND REMEDIES CUMULATIVE. All rights and
remedies of the COMPANY and of the OPTIONEE enumerated in this Agreement shall
be cumulative and, except as expressly provided otherwise in this Agreement,
none shall exclude any other rights or remedies allowed by law or in equity,
and each of said rights or remedies may be exercised and enforced concurrently.
(13) CAPTIONS. The captions contained in this Agreement
are included only for convenience of reference and do not define, limit,
explain or modify this Agreement or its interpretation, construction or meaning
and are in no way to be constructed as a part of this Agreement.
(14) SEVERABILITY. If any provision of this Agreement or
the application of any provision hereof to any person or any circumstances
shall be determined to be invalid or unenforceable, then such determination
shall not affect any other provision of this Agreement or the application of
said provision to any other person or circumstance, all of which other
provisions shall remain in full force and effect, and it is the intention of
each party to this Agreement that if any provision of this Agreement is
susceptible of two or more constructions, one of which would render the
provision unenforceable, then the provision shall have the meaning which
renders it enforceable.
(15) NUMBER AND GENDER. When used in this Agreement, the
number and gender of each pronoun shall be construed to be such number and
gender as the context, circumstances or its antecedent may required.
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(16) ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the COMPANY and the OPTIONEE in respect of the subject
matter of this Agreement, and this Agreement supersedes all prior and
contemporaneous agreements between the parties hereto in connection with the
subject matter of this Agreement. No officer, employee or other servant or
agent of the COMPANY, and no servant or agent of the OPTIONEE is authorized to
make any representation, warranty or other promise not contained in this
Agreement. No change, termination or attempted waiver of any of the provisions
of this Agreement shall be binding upon any party hereto unless contained in a
writing signed by the party to be charged.
(17) SUCCESSORS AND ASSIGNS. This Agreement shall insure
to the benefit of and be binding upon the successors and assigns (including
successive, as well as immediate, successors and assigns) of the COMPANY.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date first above written.
COMPANY:
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X. X. XXXXX CORPORATION
By:______________________________
Its:__________________________
OPTIONEE:
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_________________________________
Signature of Optionee
_________________________________
Street Address
_________________________________
City State Zip Code
_________________________________
Telephone Number
_________________________________
Social Security Number
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