Form 10-K 1995 Stone & Xxxxxxx, Incorporated
Exhibit (10) (e) (i)
EMPLOYMENT AGREEMENT
AGREEMENT by and between STONE & XXXXXXX,
INCORPORATED, a Delaware corporation (the "Company"), and X. XXXXXX
XXXXX (the "Executive"), dated as of February 12, 1996.
WHEREAS, the Company desires to employ the Executive and to enter
into an agreement embodying the terms of such employment (this "Agreement")
and the Executive desires to enter into this Agreement and to accept such
employment, subject to the terms of this Agreement; and
WHEREAS, in addition to providing in this Agreement for the
terms of the Company's employment of the Executive, the Board of Directors of
the Company (the "Board"), has determined that it is in the best interests of
the Company and its shareholders to enter into a Change of Control Employment
Agreement with the Executive, dated as of the date hereof (the "Change of
Control Employment Agreement"), simultaneously with the execution and delivery
of this Agreement, so as to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or
occurrence of a Change of Control (as defined in the Change of Control
Employment Agreement) of the Company. NOW, THEREFORE, in consideration of the
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, the Company and the Executive agree as follows:
1. Term of Employment.
The Company hereby employs the Executive, and the Executive hereby
accepts such employment, for the period (the "Term of Employment") commencing
February 12, 1996 and continuing until the earlier of (a) February 11, 1999,
or (b) the termination of the Executive's employment in accordance with the
terms of this Agreement; provided however, that the Term of Employment shall
terminate, and (except as otherwise specifically provided herein) this
Agreement shall terminate and be of no further force or effect, immediately
upon the occurrence of the Effective Date under the Change of Control
Employment Agreement.
2. Positions, Duties and Responsibilities.
(a) Board Positions. Simultaneously with the execution and
delivery of this Agreement, the Executive is being elected to the Board as a
member of the class of directors with the term expiring in 1997. If the
current Chairman of the Board does not seek reelection as, or is not reelected
as, Chairman of the Board
1
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
immediately following the annual meeting of stockholders
of the Company in 1996 (or any meeting of stockholders held in lieu of such
meeting), it is the intention of the Board, the Company and the Executive that
the Executive shall be considered for election as Chairman of the Board at such
time. It is also the intention of the Board, the Company and the Executive
that the Executive shall be elected Chairman of the Board immediately following
the annual meeting of stockholders of the Company in 1997 (or any meeting of
stockholders held in lieu of such meeting).
(b) Executive Positions and Duties. During the Term of
Employment, the Executive shall serve as the President and Chief Executive
Officer of the Company and shall perform the duties incident to such offices,
including the general management of the affairs of the Company, and such other
executive duties as may from time to time be assigned to the Executive by the
Board. The Executive shall report directly to the Board and shall be subject
to its direction. The Executive agrees to devote his full-time and best
efforts to the performance and discharge of his duties and responsibilities
and, subject to Section 2(d) of this Agreement, agrees not to engage in any
other business activity whatsoever during the Term of Employment, whether or
not for profit.
(c) Acceptance of Services for Affiliates. The Executive agrees
to serve as an officer or director of any Affiliate (as hereinafter defined) if
elected to any such position by the Board or by the board of directors or
similar governing body of an Affiliate, and to perform such services for any
such Affiliate as may be assigned or as may be necessary as a result of such
position, without additional compensation therefor other than that specified
in this Agreement; provided, however, that the Executive shall be indemnified
by the Company or such Affiliate in serving in such positions or performing
such services to the same extent as the Executive is indemnified by the Company
in serving as a member of the Board or officer of the Company.
(d) Other Activities. Nothing in this Agreement shall preclude
the Executive from:
(i) serving on the boards of directors of a reasonable number
of other corporations or the boards of a reasonable number of trade
associations or charitable organizations;
(ii) engaging in charitable activities and community affairs;
(iii)managing his personal investments and affairs;
(iv) fulfilling his obligations under the Consultancy Agreement
dated September 30, 1994 with his former employer; and
2
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(v) managing, or engaging in activities arising out of, his
wholly-owned company with respect to matters or projects initiated prior
to the date of this Agreement,
provided that (A) such activities do not materially interfere with the
performance of the Executive's duties and responsibilities as the Company's
President and Chief Executive Officer, (B) such activities do not conflict
with the Company's policies concerning conflicts of interest or with the
business of the Company or any Affiliate in any way, and (C) the Executive
keeps the Board informed about any such directorship or if any such
activities can reasonably be expected to generate publicity. The executive has
delivered to the Chairman of the Board (and a copy has been circulated to
members of the Compensation Committee of the Board) a letter describing his
obligations under the Consultancy Agreement referred to in Section 2(d)(iv) of
this Agreement and the matters or projects referred to in Section 2(d)(v) of
this Agreement.
3. Place of Employment/Relocation Expenses.
(a) The Company acknowledges and accepts that the Executive
intends to continue his personal residency in Massachusetts and the Company
shall not require the Executive to relocate his personal residence during the
Term of Employment. The Company shall pay or reimburse the Executive for (i)
all reasonable living costs incurred in the New York City area and (ii)
reasonable expenses incurred by the Executive in commuting between the Boston
metropolitan area and the New York City metropolitan area. At the election of
the Executive, reasonable living costs in the New York City area may include
the rental of an apartment in New York City provided that the aggregate monthly
costs related to such rental shall not exceed $5,000 per month. The Company
will maintain for the Executive an office and related support staff and
assistance in both the Company's principal executive offices in New York City
and in the executive offices of the Company's Major Subsidiary (as hereinafter
defined) in Boston.
(b) If during the Term of Employment, the Executive should decide to
relocate his personal residence in Massachusetts to the New York City
metropolitan area, the following shall apply:
(i) The Company shall pay all reasonable costs of
moving incurred by the Executive in connection with the Executive's relocation
of his principal residence to the New York City metropolitan area, including
packing, unpacking, insurance and the movement of household items and family
vehicles.
(ii) With respect to the sale of the Executive's present
home in Massachusetts, the Company shall arrange for the payment in cash to
the Executive of the difference between the appraised fair market value of
such present residence and the existing mortgage loan relating to such
residence prior to the actual sale of said residence. Such payment may be made
through arrangements made by the Company with a relocation service.
3
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(iii)The Company shall reimburse the Executive for
reasonable expenses incurred by the Executive and his spouse in travelling to
and residing in the New York City area in connection with the Executive's
eventual relocation, including meals, lodging, transportation, and incidental
expenses for the purpose of locating a new residence.
(c) The Executive shall furnish the Company with reasonably
detailed receipts or other written evidence for all expenses of the Executive
to be paid by the Company or for which the Executive shall be entitled to
reimbursement, pursuant to this Section 3.
(d) It is the intention of the Company and the Executive that
all expenses to be paid by the Company or for which the Executive
shall be entitled to reimbursement pursuant to this Section 3 are
to be treated as reasonable business expenses of the Company and
that such payment or reimbursement shall not result in taxable
income to the Executive. If, notwithstanding such intention and
the taking by both the Company and the Executive of all reasonable
and appropriate steps to implement such intention, it shall be
determined that the payment or reimbursement of any expense
pursuant to this Section 3 shall have subjected the Executive to
the payment of any federal, state or local tax (which, together
with any interest or penalties imposed with respect to such taxes,
is herein called "Taxes on Reimbursement"), then the Executive
shall be entitled to receive an additional payment (a
"Reimbursement Gross-Up Payment") in an amount such that after
payment by the Executive of all Taxes on Reimbursement and all
taxes (including any interest or penalties) with respect to the
Reimbursement Gross-Up Payment, the Executive shall not suffer
any after-tax cost as a result of the payment or reimbursement of
expenses pursuant to this Section 3.
4. Compensation.
(a) Base Salary. During the first year of the Term of
Employment, the Company shall pay the Executive an annual base salary ("Base
Salary") of Five Hundred Thousand Dollars ($500,000), payable in arrears in
equal periodic installments in accordance with the normal payroll policies of
the Company from time to time in effect, subject to withholding for Federal,
state and local income taxes, FICA, FUTA and other legally required withholding
taxes. During the Term of Employment, the Base Salary shall be subject to
review at least annually by the Board provided that such review shall not
result in a decrease in Base Salary unless such decrease is in conjunction
with an across-the-board decrease in base salary applicable to all senior
executives of the Company and its Major Subsidiary.
4
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(b) Annual Bonuses. In addition to Base Salary, the Executive
shall be awarded, for each fiscal ending during the Term of Employment, an
annual bonus ("Annual Bonus") in cash of not less than (i) Two Hundred and
Fifty Thousand Dollars ($250,000) for the fiscal year ending December 31, 1996
and (ii) 50% of Base Salary, as in effect on the last day such fiscal year,
for the fiscal years ending December 31, 1997 and 1998. The amount of each
such Annual Bonus may be larger based upon the Executive's performance and
the discretion of the Board. Each such Annual Bonus shall be paid no later
than March 31 of the year next following the fiscal year for which the Annual
Bonus is awarded, unless the Executive shall elect to defer the receipt of
such Annual Bonus. It is the intent of the parties that a new long-term
performance plan (the "New LTPP") based upon the Company's financial strategic
plan and long-term objectives will be developed for the Company by the
management of the Company (under the direction of the Compensation Committee
of the Board and in consultation with the Company's compensation consultants)
and presented to the Board for approval and that the New LTPP will provide
for minimum, target (equalling a significant portion of the base salary of
the participants therein) and maximum awards based upon the extent to which
performance goals determined by the Compensation Committee of the Board are
achieved. If the New LTPP is adopted and the Executive is awarded an award
thereunder payable with respect to the fiscal years ending December 31, 1997
or 1998 then such award (regardless of the amount) shall substitute for the
Annual Bonus provided for in this Section 4(b) for such fiscal year.
(c) Stock Option Award. Simultaneously with the execution
and delivery of this Agreement, the Company is granting the Executive a ten-year
option, in the form attached to this Agreement as Exhibit A, to purchase 100,000
shares of Company Common Stock at an exercise price equal to the fair market
value per share of Common Stock at the time of grant (the "Stock Option Grant").
5. Plans and Fringe Benefits.
(a) During the Term of Employment, the Executive (i) shall be
entitled to participate in all incentive, savings and retirement plans,
practices, policies, and programs applicable generally to other senior level
executives of the Company and its Major Subsidiary (including, but not
limited to, the Company's Restricted Stock Plan, Employee Investment Plan,
Employee Stock Ownership Plan, Payroll-based Employee Stock Ownership Plan,
Employee Retirement Plan, Supplemental Retirement Plan and Stock Option Plan)
and (ii) shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by the
Company and its Major Subsidiary (including, without limitation, medical,
prescription, dental, disability, employee life (and, if applicable,
supplemental term life insurance), group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other senior level executives of the Company and its Major Subsidiary.
5
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(b) The Compensation Committee of the Board shall undertake
a study by the end of 1996 to review the perquisites accorded chief executives
of companies comparable to the Company in terms of industry, size and
financial performance for the purpose of considering the adoption of
perquisite plans and policies for the Executive comparable to those of such
companies, including, without limitation, with respect to tax and financial
planning services, supplemental insurance, club dues, an automobile and
transportation and related expenses.
6. Supplemental Pension.
The Company shall provide the Executive with a supplemental employee
retirement plan designed to provide the Executive with an annual pension benefit
(payable to and during the life of the Executive in equal monthly installments
and after his death to the spouse of the Executive to whom he is married as of
the date of this Agreement, if she survives the Executive, in equal monthly
installments in the same amount as the monthly installments payable during the
life of the Executive) commencing when the Executive reaches age 60, which
annual pension benefit (a) if the Executive remains employed by the Company
until the Executive reaches age 60, will be equal to 25% of the average
annual total compensation paid to the Executive during the three fiscal years
immediately prior to the date on which the Executive reaches age 60 and (b) if
the Executive's employment with the Company should terminate for any reason
prior to the date on which the Executive reaches age 60, will be equal to the
percentage (as hereinafter determined) of the average annual total compensation
paid to the Executive during the three (or such fewer number of years that the
Executive shall have been employed with the Company) fiscal years immediately
prior to the date on which the Executive's employment with the Company shall
have terminated, with such percentage equal to the product of (i) 3.125% and
(ii) a fraction, the numerator of which shall be the number of months from
the date hereof to the date on which the Executive's employment with the
Company shall have terminated and the denominator of which is 12. The Company's
obligation under this Section 6 shall be offset by any other pension benefits
paid to the Executive under other pension plans of the Company or its
Affiliates. The Executive's rights to the accrued benefits under this Section
6 shall become fully vested immediately regardless of the period of the
Executive's employment under this Agreement and the circumstances of the
termination of the Executive's employment. The obligations of the Company
under this Section 6 shall survive any termination of the Term of Employment or
this Agreement.
7. Reimbursement of Business and Other Expenses.
The Company shall pay or reimburse the Executive for all reasonable,
ordinary and necessary business expenses incurred or paid by the Executive
during the Term of Employment in the performance of the Executive's services
under this Agreement, in accordance with the operating policies of the Company
and its Major Subsidiary as in effect from time to time, upon presentation of
proper expense statements or vouchers or such other supporting documentation as
the Company may reasonably require.
6
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
8. Vacation.
During the Term of Employment, the Executive shall be entitled to paid
vacation in accordance with the most favorable plans, policies, programs and
practices of the Company and its Major Subsidiary but not less than four (4)
weeks paid vacation each year.
9. Termination.
(a) General. The Executive's employment with the Company
may be terminated during the Term of Employment only as provided in this Section
(b) Termination Events. The Executive's employment with the
Company shall terminate during the Term of Employment on the happening of the
first to occur of the following:
(i) the death, retirement or resignation of the Executive;
(ii) the termination by the Company of the Executive's
employment with the Company for Disability (as hereinafter defined);
(iii)the termination by the Company of the Executive's
employment with the Company for Cause (as hereinafter defined);
provided, however, that a termination for Cause shall not take effect
unless and until the following procedures are complied with:
(A) the Executive shall be given notice by the Board of
the Company's intention to terminate the Executive's
employment with the Company for Cause, which
notice shall (x) state in detail the particular act or
acts or failure or failures to act that constitute the
grounds on which the proposed termination for
Cause is based and (y) be given within six
(6) months of the Board's learning of such act or
acts or failure or failures to act;
(B) the Executive shall have ten (10) calendar days
following the Executive's receipt of the notice
referred to in Section 9(b)(iii)(A) of this Agreement
to give notice to the Company of a request for a
hearing before the Board regarding the grounds on
which the proposed termination for Cause is based,
which hearing shall be held within twenty (20)
calendar days following the Executive's receipt of
the notice referred to in Section 9(b)(iii)(A) of this
Agreement and at which hearing the Executive shall
be given an opportunity, together with counsel, to be
heard before the Board; and
(C) if, within five (5) calendar days following such
hearing, there shall have been delivered to the
Executive a copy of a resolution, duly adopted by
the affirmative vote of a majority of the entire
membership of the Board at the meeting of the Board
7
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
referred to in Section 9(b)(iii)(B) of this Agreement,
finding that, in the good faith opinion of the Board,
grounds for termination for Cause on the basis of the
notice referred to in Section 9(b)(iii)(A) of this
Agreement exist.
(iv) the termination by the Company of the Executive's
employment other than for Cause; or
(v) the termination by the Executive of the Executive's
employment with the Company for Constructive Termination Without
Cause (as hereinafter defined); provided, however, that a termination
for Constructive Termination Without Cause shall not take effect unless
and until the Company shall be given notice by the Executive of the
particular grounds on which the termination for Constructive
Termination Without Cause is based.
(c) Termination Definitions.
(i) Disability. The term "Disability," as used herein
shall mean the Executive's inability to perform substantially his duties
hereunder because of physical or mental disability for a cumulative
period of one hundred eighty (180) consecutive days or two hundred
forty (240) days in any consecutive twelve (12) month period during the
Term of Employment.
(ii) Cause. The term "Cause" as used herein shall mean
(A) the willful and continued failure of the Executive to perform
substantially his duties hereunder (other than any such failure
resulting from incapacity due to physical or mental disability) after
a written demand for substantial performance is delivered to the
Executive by the Board which specifically identifies the manner in
which the Board believes that the Executive has not substantially
performed the Executive's duties or (B) the Executive personally
engaging (as opposed to having acts or omissions of others attributed
to him) in illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company. For purposes of this definition
of Cause, no act or failure to act, on the part of the Executive, shall
be considered "willful" unless it is done, or omitted to be done, by
the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the
Company.
(iii)Constructive Termination Without Cause. The term
"Constructive Termination Without Cause" as used herein shall mean:
(A) a decrease in the Executive's Base Salary, a decrease
in the Executive's Annual Bonus (or the amount the
Executive's award under the New LTPP substituting
for such Annual Bonus pursuant to Section 4(b) of
this Agreement) or the termination of, or material
reduction in, any incentive, savings, retirement,
welfare benefit or perquisite plan, practice, policy or
program enjoyed by the Executive, except any such
decrease, termination or reduction therein made in
conjunction with an across-the-board decrease,
8
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
termination or reduction therein applicable to all
senior executives of the Company and its Major
Subsidiary;
(B) the failure to elect the Executive as Chairman of the
Board immediately following the annual meeting of
stockholders of the Company in 1997 (or any
meeting of stockholders held in lieu of such annual
meeting); or
(C) a material diminution in the Executive's duties or the
assignment to the Executive of duties which are
materially inconsistent with his duties or which
materially impair the Executive's ability to function
as the President and Chief Executive Officer of the
Company.
(iv) Date of Termination. The term "Date of
Termination" as used herein shall mean:
(A) with respect to termination due to death, retirement
or resignation (other than for a Constructive
Termination Without Cause) of the Executive, the
date of death, retirement or resignation;
(B) with respect to termination due to Disability, fifteen
(15) calendar days following the giving of notice by
the Company to the Executive terminating the
Executive's employment for Disability;
(C) with respect to termination due to termination by the
Company for Cause, five (5) calendar days following
(x) the last day of the period during which the
Executive may request a hearing before the Board
pursuant to Section 9(b)(iii)(B) of this Agreement
with respect to any notice of intent to terminate the
Executive's employment for Cause given pursuant to
Section 9(b)(iii)(A) of this Agreement or (y) if the
Executive requests a hearing before the Board
pursuant to Section 9(b)(iii)(B) of this Agreement,
then the date on which there shall have been
delivered to the Executive a copy of the resolution
required by Section 9(b)(iii)(C) of this Agreement
(and if the copy of the resolution required by Section
9(b)(iii)(C) of this Agreement is not delivered to the
Executive within the period set forth therein, no
Date of Termination shall occur with respect to such
notice of intent to terminate the Executive's
employment for Cause);
(D) with respect to termination due to termination by the
Company other than for Cause, five (5) calendar
days following the giving of notice by the Company
to the Executive terminating the Executive's
employment for other than Cause; and
9
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(E) with respect to termination due to termination by the
Executive for Constructive Termination Without
Cause, fifteen (15) calendar days following the
giving of the notice by the Executive to the
Company terminating the Executive's employment
for Constructive Termination Without Cause
pursuant to Section 9(b)(v) of this Agreement.
(d) Obligations of the Company upon Termination.
(i) Other than for Cause or Constructive Termination
Without Cause. If, during the Term of Employment, the Company shall
terminate the Executive's employment other than for Cause or the
Executive shall terminate the Executive's employment for Constructive
Termination Without Cause, then:
(A) the Company shall pay to the Executive in a
lump sum in cash within thirty (30) days after the Date of
Termination the sum of the following amounts (w) the
Executive's Base Salary then in effect through the Date of
Termination to the extent not theretofore paid, (x) the
product of (I) the Executive's Annual Bonus in effect for
the fiscal year in which the Date of Termination occurs (or
if the New LTPP is in effect and the Executive has been
awarded an award thereunder with respect to the fiscal year
in which the Date of Termination occurs, then the amount
of the Executive's maximum award under the LTPP
substituting for such Annual Bonus pursuant to Section 4(b)
of this Agreement) and (II) a fraction, the numerator of
which is the number of days in the current fiscal year
through the Date of Termination, and the denominator of
which is three hundred and sixty-five (365), (y) any
compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not
theretofore paid and (z) any other amounts earned, accrued
or owing but not yet paid or reimbursed under Section 3, 4,
5 or 7 of this Agreement (the sum of the amounts described
in this Section 9(d)(i)(A) (w), (x), (y) and (z) shall be
hereinafter referred to as the "Accrued Obligations");
(B) the Company shall pay in thirty-six (36)
monthly installments in cash at the end of each month
commencing with the month next following the month in
which the Date of Termination shall have occurred and
continuing for a total of thirty-six (36) monthly installments
an aggregate amount equal to the product of (x) three (3)
and (y) the sum of (I) the Executive's Base Salary then in
effect and (II) the Executive's Annual Bonus in effect for
the fiscal year in which the Date of Termination occurs (or
if the New LTPP is in effect and the Executive has been
awarded an award thereunder with respect to the fiscal year
in which the Date of termination occurs, then the amount of
10
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
the Executive's maximum award under the LTPP
substituting for such Annual Bonus pursuant to Section 4(b)
of this Agreement, with the amount of each such monthly
installment being such aggregate amount divided by thirty-
six (36); provided, however, that at the Executive's election
made within thirty (30) days after the Date of Termination,
the Company shall pay the Executive the present value of
the aggregate of the monthly installment payments provided
for in this Section 9(d)(i)(B) in a lump sum (using as the
discount rate the applicable Federal Rate for short-term
Treasury obligations as published by the Internal Revenue
Service for the month in which the Date of Termination
occurs) in cash within thirty (30) days after the notice by
the Executive of his election to be so paid;
(C) for three (3) years after the Date of
Termination, or such longer period as may be provided by
the terms of the appropriate plan, program, practice or
policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to
those which would have been provided to them in
accordance with the plans, programs, practices and policies
described in Section 5(a)(ii) of this Agreement as if the
Executive's employment had not been terminated, provided,
however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other
welfare benefits under another employer-provided plan, the
medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during
such applicable period of eligibility. For purposes of
determining eligibility (but not the time of commencement
of benefits) of the Executive for retiree benefits pursuant to
such plans, practices, programs and policies of the
Company, the Executive shall be considered to have
remained employed by the Company until three (3) years
after the Date of Termination and to have retired on the last
day of such period;
(D) for three (3) years after the Executive's Date
of Termination, to the extent not theretofore paid or
provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be paid
or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or
agreement of the Company or any of its Affiliates (other
than any severance plan, program, policy or practice or
contract or agreement not provided for in this Agreement);
(E) for three (3) years after the Executive's Date
of Termination, the Executive shall be entitled to a
continuation of an accrual of credited service for the
purpose of the pension benefit provided pursuant to
Section 6 of this Agreement; and
11
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(F) the Executive's benefits under this Section
9(d)(i) shall be considered severance pay in consideration of
the Executive's past service and pay in consideration of the
Executive's continued service from the date hereof, and in
no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be
reduced whether or not the Executive obtains other
employment.
(ii) Death, Retirement or Resignation. If the
Executive's employment is terminated by reason of the Executive's
death, retirement or resignation (other than for a Constructive
Termination without Cause) during the Term of Employment, this
Agreement shall terminate without further obligations to the
Executive or the Executive's legal representative under this
Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of any amounts or benefits required to
be paid or provided or which the Executive is eligible to receive
under any plan, program, policy, practice, contract or agreement of
the Company or any of its Affiliates, including, without
limitation, those amounts or benefits to be paid or provided
pursuant to the plans, programs, practices, policies, agreements
or contracts referred to in Section 5(a), 5(b) or 6 of this
Agreement (collectively, "Other Benefits"). Accrued Obligations
shall be paid to the Executive or the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination.
(iii)Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during the Term
of Employment, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum
in cash within thirty (30) days of the Date of Termination.
(iv) Cause. If the Executive's employment shall be
terminated for Cause during the Term of Employment, this
Agreement shall terminate without further obligations to the
Executive, other than (A) the payment of (x) the Executive's Base
Salary through the Date of Termination, (y) the amount of any
compensation previously deferred by the Executive (together with
any accrued interest or earnings thereon) and any accrued vacation
pay, in each case to the extent not theretofore paid, and (z) and
any other amounts earned, accrued owing, but not yet paid, under
Sections 3 or 7 of this Agreement and (B) the timely payment or
provision of Other Benefits.
(e) Survival of the Obligations of the Company Upon Termination.
The obligations of the Company under this Section 9 upon termina-
tion of the Executive's employment under this Section 9 shall sur-
vive any termination of the Term of Employment or this Agreement.
12
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
10. Term of Employment and Post-Employment Conduct.
During the Term of Employment and for one (1) year from the Date of
Termination if such termination results from the Executive's resignation (other
than for a Constructive Termination without Cause) or the termination by the
Company of the Executive's employment with the Company for Cause, the
Executive will not, directly or indirectly: (a) engage, participate or be
interested in as owner, officer, director, manager, employee, consultant or
otherwise or have any financial interest in, or aid or assist anyone else in
the conduct of, any business or activity in any jurisdiction which is at the
time competitive with the business of the Company or its Affiliates as carried
on as of such Date of Termination or is actively being considered as an
additional business of the Company or its Affiliates on such Date of
Termination (provided, however, that neither (A) the Executive's ownership of
not more than 5% of the securities of any corporation or other entity which are
traded on any securities exchange or in the over-the-counter market or (B) the
Executive's engaging in the activities permitted under Section 2(d) of this
Agreement shall constitute a violation of this Section 10(a); or (b) offer
employment to, or consulting services to, or be employed by, or engage in
consulting services with, persons (other than secretarial and clerical
personnel) who were employed by the Company or its Affiliates during the twelve
(12) month period preceding such Date of Termination.
11. Confidential Information.
The Executive shall not, during the Term of Employment or at any time
thereafter, use for his own benefit or for the benefit of others, divulge,
furnish or make accessible to anyone other than the Company or its Affiliates
or their respective directors, officers or employees, otherwise than in the
regular course of the business of the Company, any knowledge or information
coming into the Executive's possession during his employment with respect to
(a) confidential or secret documents, processes, plans, formulae, devices or
material relating to the business and activities of the Company or its
Affiliates, or (b) any other confidential or secret aspect of the business of
the Company or its Affiliates, including, without limitation, any lists or
other information with respect to any customers of the Company or its
Affiliates, unless (i) any such information becomes generally available to the
public other than as a result of disclosure by the Executive or (ii) the
Executive is requested or required (by oral question, interrogatories, requests
for information or documents, subpoena, civil investigative demand or similar
process) to disclose any such information, in which case the Executive will
(A) promptly notify the Company of such request or requirement, so that the
Company may seek an appropriate protective order, and (B) cooperate with the
Company, at its expense, in seeking such an order.
Upon termination of the Executive's employment under this Agreement, the
Executive, at the request of the Board, shall promptly deliver to the Company
all written confidential or secret information of the Company or any of its
Affiliates.
13
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
12. Unique Services.
The Executive acknowledges and agrees that a breach by him of Section
10 or 11 of this Agreement will cause the Company irreparable injury and
damage. The Executive, therefore, expressly agrees that the Company shall be
entitled to injunctive or other equitable relief to prevent an anticipatory or
continuing breach of Section 10 or 11 of this Agreement. Nothing herein shall
be construed as a waiver by the Company of any right it may now have or
hereafter acquire to monetary damages by reason of any injury to its property,
business or reputation or otherwise arising out of any wrongful act or
omission of the Executive.
13. Scope of Restrictions.
While the restrictions and covenants set forth in Sections 10 and 11 of
this Agreement are considered by the parties to be reasonable in all
the circumstances it is recognized that restrictions and covenants of
the nature in question may fail for technical reasons unforeseen, and
accordingly it is hereby agreed and declared that if any of such
restrictions or covenants shall be adjudged to be void as going beyond
what is reasonable in all the circumstances for the protection of the
interests of the Company or any of its Affiliates but would be valid if
part of the wording hereof were deleted or the periods (if any) thereof
reduced or the range of activities or area dealt with hereby reduced in
scope, the said restriction or covenant shall apply with such
modifications as may be necessary to make it valid and effective.
14. Definitions. As used in this Agreement, the following terms shall have
the following respective meanings:
"Accrued Obligations" - see Section 9(d)(i)A of this Agreement.
"Affiliate" shall mean an entity that, directly or indirectly, controls
or is controlled by or under common control with the Company. For the
purposes of this definition, the concept of "control," when used with
respect to any specified person, shall signify the possession of the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities or
partnership or other ownership interests, by contract or otherwise;
provided that, in any event, any person which owns directly or
indirectly 20% or more of the securities having ordinary voting power
for the election of directors or other governing body of a corporation
or 20% or more of the partnership or other ownership interests of any
other person is deemed to control such corporation or other person.
"Agreement" - see the first Whereas clause of this Agreement.
"Annual Bonus" - see Section 4(b) of this Agreement.
"Base Salary" - see Section 4(a) of this Agreement.
"Board" - see the second Whereas clause of this Agreement.
"Cause" - see Section 9(c)(ii) of this Agreement.
14
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
"Change of Control Employment Agreement" - see the second Whereas
clause of this Agreement.
"Company" - see heading paragraph of this Agreement and Section 15(c)
of this Agreement.
"Constructive Termination Without Cause" - see Section 9(c)(iii) of this
Agreement.
"Date of Termination" - see Section 9(c)(iv) of this Agreement.
"Disability" - see Section 9(c)(i) of this Agreement.
"Executive" - see heading paragraph of this Agreement.
"Major Subsidiary" shall mean Stone & Xxxxxxx Engineering
Corporation.
"New LTPP" - see Section 4(b) of this Agreement.
"Other Benefits" - see Section 9(d)(ii) of this Agreement.
"Reimbursement Gross-Up Payment" - see Section 3(d) of this
Agreement.
"Stock Option Grant" - see Section 4(c) of this Agreement.
"Taxes on Reimbursement" - see Section 3(d) of this Agreement.
"Term of Employment" - see Section 1 of this Agreement.
15. Successors. (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
15
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
16. Miscellaneous. (a) This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by
the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: X. Xxxxxx Xxxxx
00 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
If to the Company: Stone & Xxxxxxx, Incorporated
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Constructive
Termination Without Cause pursuant to this Agreement, shall not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement.
(f) The Executive and the Company acknowledge that this
Agreement, together with the executed and delivered Stock Option Grant and
Change of Control Employment Agreement, constitute the entire agreement of the
parties hereto with respect to the Executive's employment by the Company.
(g) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original hereof but all of which together shall
constitute one and the same document.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from the Board, the Company
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.
16
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
STONE & XXXXXXX, INCORPORATED
X. XXXXXX XXXXX
By:
Name:
Title:
17
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
Exhibit A
STOCK OPTION GRANT
(NON-QUALIFIED OPTIONS)
To Purchase Shares of Common Stock of
STONE & XXXXXXX, INCORPORATED
THIS CERTIFIES that on February 12, 1996 (the "Date of Grant"), X.
Xxxxxx Xxxxx (the "Holder") was granted an option (the "Option") to purchase
all or any part of One Hundred Thousand (100,000) fully paid and non-assessables
shares (the "Shares") of Common Stock (the "Common Stock"), par value $1.00 per
share, of Stone & Xxxxxxx, Incorporated, a Delaware corporation
(the "Corporation"), at an exercise price of $[Insert Exercise Price] per Share
(the "Exercise Price"), upon and subject to the terms and conditions of the
1995 Stock Option Plan of Stone & Xxxxxxx, Incorporated (the "Plan") and
subject to the following provisions.
The Option and this Stock Option Grant shall not be treated as an
"Incentive Stock Option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
This Option may be exercised, in whole or in part, from time to time,
during the period beginning on the Date of Grant and ending on February 11, 2006
(the "Expiration Date").
To the extent that the Option shall not have been exercised in full
prior to the Expiration Date, the Option shall immediately terminate on
the Expiration Date and become void and of no further force or effect.
All or any part of the Option then exercisable shall terminate (i) at
the time the Holder's employment is terminated if the Holder's
employment is terminated because he is discharged for fraud, theft or
embezzlement committed against the Corporation or a subsidiary, affiliated
entity or customer of the Corporation, or for conflict of interest (other than
legitimate competition), (ii) at the expiration of a period of one year after
the Holder's death (but in no event later than the Expiration Date) if the
Holder's employment is terminated by reason of his death, (iii) unless it is
otherwise specifically provided herein, in the event of the Holder's retirement
or disability, at the expiration of a period of three years after the Holder's
employment is terminated because of retirement under the Employee Retirement
Plan of Stone & Xxxxxxx, Incorporated and Participating Subsidiaries or any
successor plan thereto or disability (but in no event later than the Expiration
Date), or (iv) at the expiration of a period of three months after the Holder's
employment is terminated (but in no event
1
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
later than the Expiration Date) if the Holder's
employment is terminated for any reason other than the reasons specified in
clauses (i) through (iii) above.
If prior to the complete exercise of the Option, the outstanding Shares
of Common Stock are changed into or exchanged for a different number or kind
of shares of the Corporation or other securities of the Corporation by reason
of merger, consolidation, recapitalization, reclassification, stock split,
stock dividend, or combination of shares, the Committee shall make an
appropriate and equitable adjustment in the number and kind of Shares subject
to the Option, to the end that after such event the Shares subject to the
Option shall be maintained as if the Holder had exercised the Option before
the occurrence of such event. Such adjustment in the Option shall be made
without change in the total price applicable to the Option or the unexercised
portion thereof (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary
corresponding adjustment in the Exercise Price.
The Option and all rights granted hereunder shall be non-transferable
unless by will or by the laws of descent and distribution, and during the
lifetime of the Holder, the Option shall be exercisable only by the Holder.
Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of,
or to subject to execution, attachment or similar process, the Option or any
right granted hereunder, contrary to the provisions of the Plan, shall be void
and ineffective, shall give no right to the purported transferee, and shall, at
the sole discretion of the Committee, result in forfeiture of the Option with
respect to the shares involved in such attempt.
The Option shall be exercised by the delivery of a written notice duly
signed by the Holder, together with this Stock Option Grant, and the full
purchase price of the Shares purchased pursuant to the exercise of the Option,
including any required withholding tax, to the Secretary of the Corporation or
such other officer of the Corporation appointed for the purpose of receiving
the same. The Option may not be exercised at any time when such Option, or the
exercise thereof, may result in the violation of any state or Federal law or
of the rules or regulations of any governmental regulatory body.
Payment for the Shares purchased pursuant to the exercise of the Option
shall be made in full to the Corporation at the time of the exercise of the
Option by any one or more of the following methods: (i) in cash (including
check, bank draft or money order), (ii) by delivery of other Shares of Common
Stock (which Shares shall be endorsed in blank or accompanied by executed stock
powers with signatures guaranteed by a recognized financial institution or a
member of a national securities exchange), (iii) by delivery of any combination
of cash and such other Shares, and (iv) by delivery of a properly executed
notice of exercise together with irrevocable instructions to a broker-dealer to
sell or margin a sufficient portion of the Shares and deliver the sale or
margin loan proceeds to the Corporation to pay for the full purchase price of
the Shares and applicable withholding taxes. If any such other
2
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
Shares of Common Stock delivered as
provided above were acquired through the previous exercise of any Option
granted to the Holder under the Plan, such Shares must have been held for at
least six months prior to such delivery.
If the Option shall have been exercised with respect to less than all
of the Shares subject to the Option, the Corporation shall cause to be
delivered to the person entitled thereto a new Stock Option Grant in replacement
of this Stock Option Grant, if surrendered at the time of the exercise of the
Option, indicating the number of Shares with respect to which the Option
remains available for exercise, or this Stock Option Grant shall be endorsed to
give effect to the partial exercise of the Option.
In the event that the Holder elects to exercise the Option or any part
thereof, and if the Corporation shall be required to withhold any amounts by
reason of any Federal, state or local tax laws, rules or regulations with
respect to the issuance of Shares to the Holder pursuant to the Option, the
Corporation shall be entitled to deduct and withhold such amounts from any
payments to be made to the Holder. In any event, the Holder shall make
available to the Corporation, promptly when requested by the Corporation,
sufficient funds to meet the requirements of such withholding; and the
Corporation shall be entitled to take and authorize such steps as it may deem
advisable to make such funds available to the Corporation out of any funds or
property due or to become due to the Holder.
The Holder shall not be entitled to any rights as a stockholder of the
Corporation with respect to any Shares subject to the Option until he shall have
become the beneficial owner of such Shares.
Nothing contained herein shall be construed as limiting any right which
the Corporation or any subsidiary of the Corporation may have to terminate at an
y time, with or without cause, the service of the Holder to the Corporation or
any such subsidiary.
Before issuing and delivering any Shares to the Holder, upon the
exercise of the Option, the Committee may (i) require the Holder to deliver a
written representation that the Shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such Shares, or (ii) condition the exercise of the Option or
the issuance and delivery of Shares upon the listing, registration or
qualification of the Shares covered by the Option upon any securities exchange
or under any state or Federal law or upon the consent or approval of any
governmental regulatory body and any such listing, registration, qualification,
consent or approval shall be free of any conditions not acceptable to the
Committee.
The Committee, with the consent of the Holder, may amend at any time
or from time to time, the terms and conditions of the Option and this Stock
Option Grant. The Committee may at any time or from time to time, in its
discretion,
3
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
accelerate the time or times at which the Option may be exercised to an
earlier time or times.
Any notice which either party hereto may be required or permitted to
give to the other shall be in writing, and may be delivered personally or by
mail, postage prepaid, addressed as follows: to the Corporation, any officer
of the Corporation, the Board of Directors or any member thereof, or the
Committee or any member thereof, at the Corporation's offices at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other address as the Corporation,
or any other such person, by notice to the Holder, may designate in writing
from time to time; to the holder, at the address shown below his signature on
this Stock Option Grant, or at such other address as the Holder, by notice to
the Corporation, may designate in writing from time to time. Notices shall be
effective upon receipt.
The Option and this Stock Option Grant are issued pursuant to, and are
subject to all of the terms and conditions of, the Plan, the terms, conditions
and definitions of which are hereby incorporated as though set forth at length,
and the receipt of a copy of which the Holder hereby acknowledges by his
signature below.
Unless otherwise indicated to the contrary herein, defined terms used in
the Stock Option Grant shall have the meaning as used in the Plan.
WITNESS, the seal of the Corporation and the signatures of this
Corporation's duly authorized officers and the Holder.
Dated: February 12, 1996
STONE & XXXXXXX, INCORPORATED
By:
ATTEST:
By:
ACCEPTED:
By:
X. Xxxxxx Xxxxx
Holder
00 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
4
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
FOR USE BY HOLDER FOR CORPORATION USE ONLY
Purchase Number Unexercised
Price Signature of Shares Portion of
Date Herewith of Holder Date Issued Option Countersign
5
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
Exhibit (10) (e) (ii)
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
AGREEMENT by and between STONE & XXXXXXX,
INCORPORATED, a Delaware corporation (the "Company"), and X. XXXXXX
XXXXX (the "Executive"), dated as of February 12, 1996 (this "Agreement").
The Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (a
s defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control
and to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control,
and to provide the Executive with compensation and benefits arrangements upon
a Change of Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are competitive with
those of other corporations. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement
simultaneously with the execution and delivery of an Employment Agreement,
dated as of the date hereof (the "Employment Agreement"), which provides for
the terms of the Company's employment of the Executive until the Effective Date
(as defined below) of this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions.
(a) The "Effective Date" shall mean the first date during the Change of
Control Period (as defined in Section 1(b)) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or anticipation of a Change of Control, then
for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.
(b) The "Change of Control Period" shall mean the period
commencing on the date hereof and ending on the third anniversary of the date
1
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
hereof; provided, however, that commencing on the date one year after the date
hereof, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to the Executive that the Change of Control Period shall not be so extended.
2. Change of Control.
For the purpose of this Agreement, a "Change of Control" shall
mean:
(a) The beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) by any individual, entity or group (within the meaning of Section 13(d)
(3) or 14(d)(2) of the Exchange Act) (a "Person") of 20% or more of either (i)
the then-outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a),the following
accumulations and acquisitions shall not constitute a Change of Control: (i)
any acquisition directly from the Company, (ii) any acquisition or accumulation
by the Company, (iii) any acquisition or accumulation by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (iv) any acquisition or accumulation by
any corporation pursuant to a transaction which complies with clauses (i), (ii)
and (iii) of subsection (c) of this Section 2, or (v) the beneficial ownership
of 20% or more of either the Outstanding Company Common Stock or the Outstanding
Company Voting Securities by a Person if such beneficial ownership occurs solely
because (x) of a change in the aggregate number of shares of Outstanding Company
Common Stock or Outstanding Company Voting Securities since the last date on
which such Person acquired beneficial ownership of any Outstanding Company
Common Stock or Outstanding Company Voting Securities or (y) such Person
acquired such beneficial ownership in the good faith belief that such
acquisition would not cause such beneficial ownership to equal or exceed 20% of
the Outstanding Company Common Stock or Outstanding Company Voting Securities
then outstanding and such Person relied in good faith in computing the
percentage of its beneficial ownership on publicly filed reports or documents of
the Company which are inaccurate or out-of-date; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a
2
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies by or on behalf
of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then-outstanding shares of common stock
and the combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the case may be,
of the corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly
or through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively,
the then-outstanding shares of common stock, or the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination, except to the extent that such ownership existed prior to
the Business Combination and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
Notwithstanding clause (v) of subsection (a) of this Section 2, if any Person
whose beneficial ownership is not a Change of Control due to such clause (v)
does not reduce such Person's percentage of beneficial ownership of Outstanding
Company Common Stock or Outstanding Company Voting Securities to less than 20%
by the close of business on the fifth business day after notice from the Company
(the date of notice being the first day) that such Person's beneficial
ownership of Outstanding Company Common Stock or Outstanding Company Voting
Securities equals or exceeds 20%, such Person's beneficial ownership shall be a
Change of Control at the end of such five business day period (and such clause
(v) shall no longer apply);
3
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
provided, however, that if such Person asserts in writing to the Company by the
end of such five business day period that a reduction in such Person's
percentage of beneficial ownership would subject such reduction to the
operation of Section 16(b) of the Exchange Act ("Section 16(b)") the period of
time during which the beneficial ownership of such Person must be reduced to
less than 20% so as not to constitute a Change in Control shall be extended to
the date that is the third business day immediately following the date which is
the earlier of (i) six (6) months following the receipt by such Person of the
notice from the Company of beneficial ownership of 20% or more or (ii) the date
upon which such reduction would no longer be subject to Section 16(b). For
purposes of this definition, the determination whether any Person acted in "good
faith" shall be conclusively determined by the Board, acting by a vote of those
directors of the Company who, at such time, shall constitute the Incumbent
Board.
3. Employment Period.
The Company hereby agrees to continue the Executive in its employ, and
the Executive hereby agrees to remain in the employ of the Company subject to
the terms and conditions of this Agreement, for the period commencing on the
Effective Date and ending on the third anniversary of such date (the
"Employment Period").
4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate
in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the Effective Date and (B) the Executive's services shall be
performed at the location where the Executive was performing services
immediately preceding the Effective Date or any office or location less
than 35 miles from such location.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach
at educational
4
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
institutions, (C) manage personal investments and (D) engage in
activities permitted under Section 2(d) of the Employment Agreement, so
long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood
and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in
nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary"), which shall
be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has
been earned but deferred, to the Executive by the Company and its
affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During the
Employment Period, the Annual Base Salary shall be reviewed no more
than 12 months after the last salary increase awarded to the Executive
prior to the Effective Date and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any
other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual
Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased. As used in this Agreement, the term
"affiliated companies" shall include any company controlled by,
controlling or under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "Annual Bonus") in cash at least equal to the
Executive's highest bonus under the Employment Agreement or the Company's
annual contingent (or incentive) compensation plans or any comparable bonus
under any predecessor or successor plan, for the last three full fiscal years
prior to the Effective Date (annualized in the event that the Executive was
not employed by the Company for the whole of such fiscal year) (the "Recent
Annual Bonus"). Each such Annual Bonus shall be paid no later than the end
of the third month of the fiscal year next following the fiscal year for which
the Annual Bonus is awarded, unless the Executive shall elect to defer the
receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive,
5
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
savings and retirement plans, practices, policies and programs applicable genera
lly to other peer executives of the Company and its affiliated companies (inclu
ding, but not limited to, the Company's Restricted Stock Plan, Employee Investme
nt Plan, Employee Stock Ownership Plan, Payroll-based Employee Stock Ownership
Plan, Employee Retirement Plan, Supplemental Retirement Plan and Stock Option
Plan), but in no event shall such plans, practices, policies and programs provi
de the Executive with incentive opportunities (measured with respect to both reg
ular and special incentive opportunities, to the extent, if any, that such disti
nction is applicable), savings opportunities and retirement benefit opportuniti
es, in each case, less favorable in the aggregate, than the most favorable of
those provided by the Company and its affiliated companies for the Executive un
der such plans, practices, policies and programs as in effect at any time
during the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.
(iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, employee life (and, if applicable, supplemental term life
insurance), group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer executives of the
Company and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with benefits which are
less favorable, in the aggregate, than the most favorable of such plans,
practices, policies and programs in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time after the
Effective Date to the other peer executives of the Company and its affiliated
companies.
(v) Expenses. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of an automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding
6
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.
(vii) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.
(viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.
5. Termination of Employment.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment
Period. If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the definition
of Disability set forth below), it may give to the Executive written notice in
accordance with Section 12(b) of this Agreement of its intention to terminate
the Executive's employment. In such event, the Executive's employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive (the "Disability Effective Date"), provided that, within the 30
days after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's
duties with the Company on a full-time basis for 180 consecutive business days
as a result of incapacity due to mental or physical illness which is determined
to be total and permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive's legal
representative.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its
7
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the
manner in which the Board or Chief Executive Officer believes that the
Executive has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal
conduct or gross misconduct which is materially and
demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board (or, if applicable, upon the instructions of the
Chief Executive Officer or a senior officer of the Company) or based upon the
advice of counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by the Executive in good faith and in the best interests
of the Company. Anything in this Section 5(b) or elsewhere in this Agreement
to the contrary notwithstanding, the employment of the Executive shall in no
event be considered to have been terminated by the Company for Cause if
termination of the Executive's employment took place (a) as the result of bad
judgment or negligence on the part of the Executive, or (b) as the result of
an act or omission without the intent of gaining therefrom directly or
indirectly a profit to which the Executive was not legally entitled, or (c)
because of an act or omission believed by the Executive in good faith to have
been in or not opposed to the interests of the Company, or (d) for any act or
omission in respect of which a determination could properly be made that the
Executive met the applicable standard of conduct prescribed for indemnification
or reimbursement or payment of expenses under the By-laws of the Company
or the laws of the State of Delaware or the directors' and officers' liability
insurance of the Company, in each case as in effect at the time of such act or
omission, or (e) as the result of an act or omission which occurred more than
twelve calendar months prior to the Executive's having been given notice of the
termination of the Executive's employment for such act or omission unless the
commission of such act or such omission could not at the time of such
commission or omission have been known to a member of the Board (other than
the Executive, if the Executive is then a member of the Board), in which case
more than twelve calendar months from the date that the commission of such act
or such omission was or could reasonably have been so known, or (f) as the
result of a continuing course of action which commenced and was or could
reasonably have been known to a member of the Board (other than the Executive)
more than twelve calendar months prior to notice having been given to the
Executive of the termination of the Executive's employment.
The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice is provided
to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, the Executive is guilty of the conduct described in subparagraph
(i) or (ii) above, and specifying the particulars thereof in detail.
8
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(c) Good Reason. The Executive's employment may be
terminated by the Executive for Good Reason.
(i) For purposes of this Agreement, "Good Reason" shall mean
the following involuntary circumstances:
A. the assignment to the Executive of any duties inconsistent in
any respect with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
B. any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;
C. the Company's requiring the Executive to be based at any
office or location other than as provided in Section 4(a)(i)(B) hereof or to
relocate his personal residence or the Company's requiring the Executive to
travel on Company business to a substantially greater extent than required
immediately prior to the Effective Date;
D. any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
E. any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement.
For purposes of this Section 5(c)(i), any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
9
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(ii) For purposes of this Agreement, "Good Reason" shall also
mean the following voluntary circumstance: Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any reason during
the 30-day period immediately following the first anniversary of the Effective
Date shall be deemed to be a termination for Good Reason for all purposes of
this Agreement.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than thirty days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the
case may be.
6. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability.
(i) If, during the Employment Period, the Company shall
terminate the Executive's employment other than for Cause or Disability or the
Executive shall terminate employment for Good Reason as defined in Section 5(c)
(i) of this Agreement, then, subject to the provisions of Section 9 of this
Agreement:
A. the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the following
amounts:
(1) the sum of (a) the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid, (b) the product of (x)
the higher of (I) the Recent Annual Bonus and (II) the Annual Bonus paid or
payable, including any bonus or portion thereof which has been earned but
deferred (and annualized for any fiscal year consisting of less than twelve
full months or during which the Executive was employed for less than twelve
full months), for the most recently completed fiscal year during the Employment
10
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
Period, if any (such higher amount being referred to as the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the denominator of
which is 365 and (c) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (a), (b), and (c) shall be hereinafter referred
to as the "Accrued Obligations"); and
(2) the amount equal to the product of (a) three and (b) the sum
of (x) the Executive's Annual Base Salary and (y) the Highest Annual Bonus; and
(3) an amount equal to the excess of (a) the actuarial equivalent
of the benefit under the Company's qualified defined benefit retirement plan
(the "Retirement Plan") (utilizing actuarial assumptions no less favorable to
the Executive than those in effect under the Company's Retirement Plan
immediately prior to the Effective Date), and any excess or supplemental
retirement plan in which the Executive participates pursuant to the Employment
Agreement or otherwise (together, the "SERP") which the Executive would receive
if the Executive's employment continued for three years after the Date of
Termination assuming for this purpose that all accrued benefits are fully vested
, and, assuming that the Executive's compensation in each of the three years is
that required by Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial
equivalent of the Executive's actual benefit (paid or payable), if any,
under the Retirement Plan and the SERP as of the Date of Termination;
B. for three years after the Executive's Date of Termination,
or such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would
have been provided to them in accordance with the plans, programs, practices
and policies described in Section 4(b)(iv) of this Agreement as if the
Executive's employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies and their families,
provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits under
another employer-provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining eligibility (but
not the time of commencement of benefits) of the Executive for retiree benefits
pursuant to such plans, practices, programs and policies, the Executive shall be
considered to have remained employed until three years after the Date of
Termination and to have retired on the last day of such period;
C. for three years after the Executive's Date of Termination,
the Company shall, at its sole expense as incurred, provide the Executive with
outplacement services the scope and provider of which shall be selected by the
Executive in the Executive's sole discretion provided, however that the maximum
amount of expense to be incurred by the Company pursuant to this Section 6(a)
(i)C in any one calendar year shall not exceed 10% of the Executive's Annual
Base Salary; and
11
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
D. for three years after the Executive's Date of Termination, to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company and its affiliated
companies.
(ii) If, during the Employment Period, the Executive shall
terminate employment for Good Reason as defined in Section 5(c)(ii) of this
Agreement, then, subject to the provisions of Section 9 of this Agreement:
A. the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the Accrued Obligations;
B. the Company shall pay in thirty-six (36) monthly
installments at the end of each month commencing with the month next following
the month in which the Date of Termination shall have occurred and continuing
for a total of thirty-six monthly payments, an aggregate amount equal to the
sum of (1) an amount equal to the product of (x) three (3) and (y) the sum of
(i) the Executive's Annual Base Salary and (ii) the Executive's Highest Annual
Bonus and (2) the amount determined by the application of Section 6(a)(i)A(3)
above, with the amount of each such monthly installment being such aggregate
amount divided by thirty-six (36);
C. for three years after the Executive's Date of Termination,
or such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would
have been provided to them in accordance with the plans, programs, practices
and policies described in Section 4(b)(iv) of this Agreement as if the
Executive's employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies and their families,
provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits under
another employer-provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining eligibility
(but not the time of commencement of benefits) of the Executive for retiree
benefits pursuant to such plans, practices, programs and policies, the Executive
shall be considered to have remained employed until three years after the Date
of Termination and to have retired on the last day of such period;
D. for three years after the Executive's Date of Termination,
the Company shall, at its sole expense as incurred, provide the Executive with
outplacement services the scope and provider of which shall be selected by the
Executive in the Executive's sole discretion provided, however that the maximum
amount of expense to be incurred by the Company pursuant to this Section 6(a)
(ii)D in any one calendar year shall not exceed 10% of the Executive's Annual
Base Salary;
E. for three years after the Executive's Date of Termination, to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company and its affiliated
companies; and 12
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
F. The Company's obligation to make any particular installment
payment required by Section 6(a)(ii)B above will be offset, on a dollar for
dollar basis, by any of the following amounts (to the extent that they have not
theretofore been the basis for an offset) that shall have been received by the
Executive since the Executive's Date of Termination (with respect to activities
initiated by the Executive after such Date of Termination) and prior to the
date on which such installment is due to be paid by the Company: (x) the amount
of any cash compensation received by the Executive from another employer
employing the Executive after such Date of Termination; (y) the amount of any
cash payment received by the Executive as a result of self-employment activities
by the Executive initiated by the Executive after such Date of Termination; and
(z) the amount of any employment or self-employment compensation with respect to
employment or self-employment of the nature described in clause (x) or (y),
respectively, which, although not paid, has been guaranteed to the Executive
as of the date of such installment. The Executive agrees (1) to notify the
Company promptly upon securing employment or becoming self-employed during any
period during which installment payments are payable by the Company pursuant to
Section 6(a)(ii)B above and (2) to furnish the Company written evidence of
compensation earned for such employment or self-employment as the Company may
from time to time reasonably request.
(b) Death. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of any amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy, practice, contract or agreement of the Company or any of its affiliated
companies, including, without limitation, those amounts or benefits to be paid
or provided pursuant to the plans, programs, practices, policies, agreements or
contracts referred to in Section 4(b)(iii) or (iv) of this Agreement or Section
6 of the Employment Agreement (collectively, the Other Benefits"). Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term "Other Benefits" as
utilized in this Section 6(b) shall include, without limitation, and the
Executive's estate and/or beneficiaries shall be entitled to receive, benefits
at least equal to the most favorable benefits provided by the Company and
affiliated companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs, practices and
policies relating to death benefits, if any, as in effect with respect to other
peer executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.
(c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump
sum in cash within 30 days of the Date of Termination. With respect to the
provision of Other Benefits, the term "Other Benefits" as utilized in this
13
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and
its affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer
executives and their families at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive and/or the
Executive's family, as in effect at any time thereafter generally with respect
to other peer executives of the Company and its affiliated companies and their
families.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (x) the Executive's Annual Base
Salary through the Date of Termination, (y) the amount of any compensation
previously deferred by the Executive, and (z) other benefits, in each case to
the extent theretofore unpaid. If the Executive voluntarily terminates
employment during the Employment Period, excluding a termination for Good
Reason, this Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations and the timely payment or
provision of Other Benefits. In such case, all Accrued Obligations shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination.
7. Nonexclusivity of Rights.
Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any plan, program, policy or practice
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor, subject to Section 12(f), shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any such plan, policy, practice or program of or any such
contract or agreement with the Company or any of its affiliated companies at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
8. Full Settlement.
(a) No Set-Off. Except as provided for in Section 6(a)(ii)F, the
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any set-
off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others.
(b) No Mitigation Obligation. The Executive's benefits hereunder
shall be considered severance pay in consideration of the Executive's past
service, and pay in consideration of the Executive's continued service from
the date hereof and in no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, except as
provided for in Section 6(a)(ii)F, such amounts shall not be reduced whether
or not the Executive obtains other employment.
14
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(c) Expenses. In order that the purpose of this Agreement not be
frustrated, it is the intent of the Company that the Executive not be required
to incur the expenses associated with the enforcement of the Executive's rights
under this Agreement by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits intended to be
extended to the Executive hereunder, nor be bound to negotiate any settlement
of the Executive's rights hereunder under threat of incurring such expenses.
Accordingly, if following the Effective Date it should appear to the Executive
that the Company has failed to comply with any of its obligations under this
Agreement or, if at any time, in the event that the Company or any other person
takes any action to declare this Agreement void or unenforceable, or institutes
any litigation or other legal action designed to deny, diminish or to recover
from, the Executive the benefits intended to be provided to the Executive
hereunder, and that the Executive has complied with all of the Executive's
obligations under this Agreement, the Company irrevocably authorizes the
Executive from time to time to retain counsel of the Executive's choice at the
expense of the Company as provided in this Section 8(c), to represent the
Executive in connection with the initiation or defense of any litigation or
other legal action, whether by or against the Company or any director, officer,
stockholder or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel (other than a counsel acting on behalf of the Company
in connection with this Agreement), the Company irrevocably consents to the
Executive's entering into an attorney-client relationship with such counsel,
and in that connection the Company and the Executive agree that a confidential
relationship shall exist between the Executive and such counsel. The Company
agrees to pay as incurred, to the full extent permitted by law, all costs and
expenses which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including, without
limitation, as a result of any contest by the Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Internal Revenue Code of 1986, as amended (the "Code"). Included within
such costs and expenses shall be the reasonable fees and expenses of counsel
selected from time to time by the Executive as hereinabove provided, which fees
and expenses shall be paid or reimbursed to the Executive by the Company on a
regular, periodic basis upon presentation by the Executive of a statement or
statements prepared by such counsel in accordance with its customary practices.
9. Certain Reductions of Payments to the Executive and Certain
Additional Payments by the Company.
(a) (i) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Section 9) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code (such excise tax is hereinafter
referred to as the "Excise Tax"), then the Payments shall be reduced, in the
aggregate, to an amount (the "Reduced Amount") such that the receipt of
Payments will not give rise to any Excise Tax, it being the intention of the
Company and the Executive that no Payment made pursuant to this Agreement be
deemed an "excess parachute payment" pursuant to Section 280G of the Code.
15
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(ii) If, notwithstanding the intention of the Company and the
Executive that no Payment made pursuant to this Agreement be deemed an "excess
parachute payment" pursuant to Section 280G of the Code and that no Excise Tax
be payable by the Executive as a result of any Payment and the operation of
Section 9(a)(i) above, it shall be determined that a Payment is subject to the
Excise Tax, then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including the computation of the
Reduced Amount, whether and when a Gross-Up Payment is required and the amount
of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determinations, shall be made by Coopers & Xxxxxxx L.L.P. or such other
certified public accounting firm as may be designated by the Executive (the
"Accounting Firm") which shall provide detailed supporting calculations both
to the Company and the Executive within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time
as is requested by the Company. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this Section 9,
shall be paid by the Company to the Executive within five days of the receipt
of the Accounting Firm's determination. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made here
under. In the event that the Company exhausts its remedies pursuant to Section
9(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall be promptly paid by the Company
to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to
be paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:
16
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or to contest
the claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 9(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by
the Executive of an amount advanced by the Company pursuant to Section 9(c),
a determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
17
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
10. Confidential Information.
The Executive shall hold in a fiduciary capacity for the benefit of
the Company all secret or confidential information, knowledge or data relating
to the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
11. Successors.
(a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to
principles of conflict of laws. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors
and legal representatives.
18
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive X. Xxxxxx Xxxxx
00 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
If to the Company: Stone & Xxxxxxx, Incorporated
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)A-E of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
(f) The Executive and the Company acknowledge that the
employment of the Executive by the Company is currently subject to the terms and
conditions of the Employment Agreement and, subject to Section 1(a) of this
Agreement and the Employment Agreement, the Executive's employment may be
terminated by either the Executive or the Company prior to the Effective Date,
in which case the Executive shall have no further rights under this Agreement.
From and after the Effective Date, except as otherwise specifically provided
in the Employment Agreement, this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of
Directors, the Company has caused these presents to be executed in its name on
its behalf, all as of the day and year first above written.
STONE & XXXXXXX, INCORPORATED
X. XXXXXX XXXXX
By:
Name:
Title:
19
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
Exhibit (10) (e) (iii)
STOCK OPTION GRANT
(NON-QUALIFIED OPTIONS)
To Purchase Shares of Common Stock of
STONE & XXXXXXX, INCORPORATED
THIS CERTIFIES that on February 12, 1996 (the "Date of Grant"), X.
Xxxxxx Xxxxx (the "Holder") was granted an option (the "Option") to purchase
all or any part of One Hundred Thousand (100,000) fully paid and non-assessable
shares (the "Shares") of Common Stock (the "Common Stock"), par value $1.00 per
share, of Stone & Xxxxxxx, Incorporated, a Delaware corporation (the
"Corporation"), at an exercise price of $34.875 per Share (the "Exercise
Price"), upon and subject to the terms and conditions of the 1995 Stock Option
Plan of Stone & Xxxxxxx, Incorporated (the "Plan") and subject to the following
provisions.
The Option and this Stock Option Grant shall not be treated as an
"Incentive Stock Option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
This Option may be exercised, in whole or in part, from time to time,
during the period beginning on the Date of Grant and ending on February 11, 2006
(the "Expiration Date").
To the extent that the Option shall not have been exercised in full
prior to the Expiration Date, the Option shall immediately terminate on
the Expiration Date and become void and of no further force or effect.
All or any part of the Option then exercisable shall terminate (i) at
the time the Holder's employment is terminated if the Holder's employment
is terminated because he is discharged for fraud, theft or embezzlement
committed against the Corporation or a subsidiary, affiliated entity or
customer of the Corporation, or for conflict of interest (other than
legitimate competition), (ii) at the expiration of a period of one year
after the Holder's death (but in no event later than the Expiration
Date) if the Holder's employment is terminated by reason of his death,
(iii) unless it is otherwise specifically provided herein, in the event
of the Holder's retirement or disability, at the expiration of a period
of three years after the Holder's employment is terminated because of
retirement under the Employee Retirement Plan of Stone & Xxxxxxx,
Incorporated and Participating Subsidiaries or any successor plan thereto
or disability (but in no event later than the Expiration Date), or (iv) at
the expiration of a period of three months after the Holder's employment
is terminated (but in no event later than the Expiration Date) if the
Holder's employment is terminated for any reason other than the reasons
specified in clauses (i) through (iii) above.
1
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
If prior to the complete exercise of the Option, the outstanding Shares
of Common Stock are changed into or exchanged for a different number or
kind of shares of the Corporation or other securities of the Corporation by
reason of merger, consolidation, recapitalization, reclassification, stock
split, stock dividend, or combination of shares, the Committee shall make an
appropriate and equitable adjustment in the number and kind of Shares subject
to the Option, to the end that after such event the Shares subject to the
Option shall be maintained as if the Holder had exercised the Option before
the occurrence of such event. Such adjustment in the Option shall be made
without change in the total price applicable to the Option or the unexercised
portion thereof (except for any change in the aggregate price resulting from
rounding -off of share quantities or prices) and with any necessary
corresponding adjustment in the Exercise Price.
The Option and all rights granted hereunder shall be non-transferable
unless by will or by the laws of descent and distribution, and during the
lifetime of the Holder, the Option shall be exercisable only by the Holder.
Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of,
or to subject to execution, attachment or similar process, the Option or any
right granted hereunder, contrary to the provisions of the Plan, shall be void
and ineffective, shall give no right to the purported transferee, and shall,
at the sole discretion of the Committee, result in forfeiture of the Option
with respect to the shares involved in such attempt.
The Option shall be exercised by the delivery of a written notice duly
signed by the Holder, together with this Stock Option Grant, and the full
purchase price of the Shares purchased pursuant to the exercise of the Option,
including any required withholding tax, to the Secretary of the Corporation
or such other officer of the Corporation appointed for the purpose of receiving
the same. The Option may not be exercised at any time when such Option, or the
exercise thereof, may result in the violation of any state or Federal law or
of the rules or regulations of any governmental regulatory body.
Payment for the Shares purchased pursuant to the exercise of the Option
shall be made in full to the Corporation at the time of the exercise of the
Option by any one or more of the following methods: (i) in cash (including
check, bank draft or money order), (ii) by delivery of other Shares of Common
Stock (which Shares shall be endorsed in blank or accompanied by executed
stock powers with signatures guaranteed by a recognized financial institution
or a member of a national securities exchange), (iii) by delivery of any
combination of cash and such other Shares, and (iv) by delivery of a properly
executed notice of exercise together with irrevocable instructions to a
broker-dealer to sell or margin a sufficient portion of the Shares and
deliver the sale or margin loan proceeds to the Corporation to pay for the
full purchase price of the Shares and applicable withholding taxes. If any
such other Shares of Common Stock delivered as provided above were acquired
through the previous exercise of any Option granted to the Holder under the
Plan, such Shares must have been held for at least six months prior to such
delivery.
If the Option shall have been exercised with respect to less than all of
the Shares subject to the Option, the Corporation shall cause to be delivered
to the person entitled thereto a new Stock Option Grant in replacement of this
Stock Option Grant, if surrendered at the time of the exercise of the Option,
2
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
indicating the number of Shares with respect to which the Option remains
available for exercise, or this Stock Option Grant shall be endorsed to give
effect to the partial exercise of the Option.
In the event that the Holder elects to exercise the Option or any part
thereof, and if the Corporation shall be required to withhold any amounts by
reason of any Federal, state or local tax laws, rules or regulations with
respect to the issuance of Shares to the Holder pursuant to the Option, the
Corporation shall be entitled to deduct and withhold such amounts from any
payments to be made to the Holder. In any event, the Holder shall make
available to the Corporation, promptly when requested by the Corporation,
sufficient funds to meet the requirements of such withholding; and the
Corporation shall be entitled to take and authorize such steps as it may deem
advisable to make such funds available to the Corporation out of any funds or
property due or to become due to the Holder.
The Holder shall not be entitled to any rights as a stockholder of the
Corporation with respect to any Shares subject to the Option until he shall have
become the beneficial owner of such Shares.
Nothing contained herein shall be construed as limiting any right which
the Corporation or any subsidiary of the Corporation may have to terminate at
any time, with or without cause, the service of the Holder to the Corporation or
any such subsidiary.
Before issuing and delivering any Shares to the Holder, upon the
exercise of the Option, the Committee may (i) require the Holder to deliver a
written representation that the Shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such Shares, or (ii) condition the exercise of the Option or
the issuance and delivery of Shares upon the listing, registration or
qualification of the Shares covered by the Option upon any securities exchange
or under any state or Federal law or upon the consent or approval of any
governmental regulatory body and any such listing, registration, qualification,
consent or approval shall be free of any conditions not acceptable to the
Committee.
The Committee, with the consent of the Holder, may amend at any time
or from time to time, the terms and conditions of the Option and this Stock
Option Grant. The Committee may at any time or from time to time, in its
discretion, accelerate the time or times at which the Option may be exercised
to an earlier time or times.
Any notice which either party hereto may be required or permitted to
give to the other shall be in writing, and may be delivered personally or by
mail, postage prepaid, addressed as follows: to the Corporation, any officer
of the Corporation, the Board of Directors or any member thereof, or the
Committee or any member thereof, at the Corporation's offices at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other address as the Corporation,
or any other such person, by notice to the Holder, may designate in writing
from time to time; to the holder, at the address shown below his signature on
this Stock Option Grant, or at such other address as the Holder, by notice to
the Corporation, may designate in writing from time to time.
Notices shall be effective upon receipt.
3
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
The Option and this Stock Option Grant are issued pursuant to, and are
subject to all of the terms and conditions of, the Plan, the terms, conditions
and definitions of which are hereby incorporated as though set forth at length,
and the receipt of a copy of which the Holder hereby acknowledges by his
signature below.
Unless otherwise indicated to the contrary herein, defined terms used in
the Stock Option Grant shall have the meaning as used in the Plan.
WITNESS, the seal of the Corporation and the signatures of this
Corporation's duly authorized officers and the Holder.
Dated: February 12, 1996
STONE & XXXXXXX, INCORPORATED
By:
ATTEST:
By:
ACCEPTED:
By:
X. Xxxxxx Xxxxx
Holder
00 Xxxxxxxx Xxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
4
Form 10-K 1995 Stone & Xxxxxxx, Incorporated
FOR USE BY HOLDER FOR CORPORATION USE ONLY
Purchase Number Unexercised
Date Price Signature of Shares Portion of
Herewith of Holder Date Issued Option Countersign
5
