Exhibit 10-a-3
ROCKWELL XXXXXXX, INC.
2001 LONG-TERM INCENTIVES PLAN
STOCK OPTION AGREEMENT
STOCK OPTION TERMS AND CONDITIONS
1. Definitions
As used in these Stock Option Terms and Conditions, the following words
and phrases shall have the respective meanings ascribed to them below
unless the context in which any of them is used clearly indicates a
contrary meaning:
(a) Cashless Exercise: Cashless Exercise shall have the meaning set
forth in Section 3(a)(ii) herein.
(b) Change of Control: Change of Control shall have the same meaning as
such term has in Section 2(d) of the Plan.
(c) Xxxxxxx Xxxxxx: Xxxxxxx Xxxxxx & Co., Inc., the Stock Option
Administrator whom Rockwell Xxxxxxx has engaged to administer and
process all Option exercises.
(d) Committee: The Compensation and Management Development Committee of
the Board of Directors of Rockwell Xxxxxxx.
(e) Customer Service Center: Xxxxxxx Xxxxxx'x Customer Service Center
that is used to facilitate Option transactions. Contact Xxxxxxx
Xxxxxx at (000) 000-0000.
(f) Director: A member of the Board of Directors of Rockwell Xxxxxxx.
(g) Exercise Request and Attestation Form: The form attached as Exhibit
2 or any other form accepted by Xxxxxxx Xxxxxx in connection with
the use of already-owned Shares to pay all or part of the exercise
price for the Option Shares to be purchased on exercise of any of
the Options.
(h) Notice of Exercise Form: The form attached as Exhibit 1 or any other
form accepted by the Secretary of Rockwell Xxxxxxx in his sole
discretion.
(i) Options: The stock options listed in the first paragraph of the
letter dated [ ], to which these Stock Option Terms and Conditions
are attached and which together with these Stock Option Terms and
Conditions constitute the Stock Option Agreement.
(j) Option Shares: The shares of Rockwell Xxxxxxx Common Stock issuable
or transferable on exercise of the Options.
(k) Plan: Rockwell Xxxxxxx 2001 Long-Term Incentives Plan, as such Plan
may be amended and in effect at the relevant time.
(l) Rockwell Xxxxxxx: Xxxxxxxx Xxxxxxx, Inc., a Delaware corporation.
(m) Shares: Shares of Rockwell Xxxxxxx Common Stock.
(n) Stock Option Agreement: These Stock Option Terms and Conditions
together with the letter dated [ ], to which they are attached.
2. When Options May be Exercised
The Options may be exercised, in whole or in part (but only for a whole
number of shares) and at one time or from time to time, as to one-third
(rounded to the nearest whole number) of the Option Shares during the
period beginning on [ ] and ending on [ ], as to an additional one-third
(rounded to the nearest whole number) of the Option Shares during the
period beginning on [ ] and ending on [ ] and as to the balance of the
Option Shares during the period beginning on [ ] and ending on [ ], and
only during those periods, provided that:
(a) if you die while a Director, any person who holds the Options as
permitted by Section 4 herein may exercise all the Options not
theretofore exercised within (and only within) the period beginning
on your date of death (even if you die before you have become
entitled to exercise all or any part of the Options) and ending
three years thereafter or on [ ], if earlier;
(b) if you retire as a Director after attaining age 70 or at an earlier
age but after completing at least 5 years of service as a Director,
you (or any person who holds the Options as permitted by Section 4
herein) may thereafter exercise all the Options not theretofore
exercised within (and only within) the period beginning on your
retirement date (even if you retire before you have become entitled
to exercise all or any part of the Options) and ending five years
thereafter or on [ ], if earlier;
(c) if your service as a Director terminates as a result of your
disability or as a result of your resignation for reasons of the
antitrust laws, compliance with Rockwell Xxxxxxx' conflict of
interest policies or other circumstances that the Committee may
determine as serving the best interests of Rockwell Xxxxxxx, you (or
any person who holds the Options as permitted by Section 4 herein)
may thereafter exercise all the Options not theretofore exercised
within (and only within) the period beginning on your termination
date (even if the Options were not exercisable at such termination
date) and ending one year
-2-
thereafter or until [ ], if earlier, unless otherwise determined by
the Committee;
(d) if your service as a Director terminates for any reason not
specified above, the Options shall be void on the date of
termination of your service as a Director and shall not be exercised
thereafter; and
provided, further, that notwithstanding any other provision of the Stock
Option Agreement, if a Change of Control shall occur, then all outstanding
Options shall become fully exercisable whether or not otherwise then
exercisable and shall be and remain exercisable for the applicable period
hereinabove provided in this Section 2.
3. Exercise Procedure
(a) To exercise all or any part of the Options, you (or any person who
holds the Options as permitted by Section 4 herein) must submit a
Notice of Exercise Form to Rockwell Xxxxxxx' Office of the Secretary
(Attention: Stock Option Administration; facsimile number (319)
000-0000) and then contact the Stock Option Administrator, Xxxxxxx
Xxxxxx, as follows:
(i) contact the Customer Service Center by calling (000) 000-0000
Monday through Friday, 9:00 a.m. to 9:00 p.m. Eastern Time and
follow the instructions provided;
(ii) full payment of the exercise price for the Option Shares to be
purchased on exercise of the Options may be made by:
- check; or
- in already-owned Shares; or
- by authorizing a third party approved by Rockwell
Xxxxxxx to sell the Shares (or a sufficient
portion of the Shares) acquired upon exercise of
the Option ("Cashless Exercise"); or
- in a combination of check and Shares (whether
already-owned Shares or Shares issued and
subsequently sold in connection with a Cashless
Exercise); and
(iii) in the case of an exercise of the Options by any person other
than you seeking to exercise the Options, such documents as
Xxxxxxx Xxxxxx or the Secretary of Rockwell Xxxxxxx shall
require to establish to their satisfaction that the person
seeking to exercise the Options is entitled to do so.
-3-
(b) An exercise of the whole or any part of the Options shall be
effective:
(i) if you elect (or any person who holds the Options as permitted
by Section 4 herein elects) to pay the exercise price for the
Option Shares entirely by check, (A) upon confirmation of your
transaction by using the Customer Service Center and full
payment of the exercise price and withholding taxes (if
applicable) are received by Xxxxxxx Xxxxxx within three
business days following the exercise; and (B) receipt of any
documents required pursuant to Section 3(a)(iii) herein; and
(ii) if you elect (or any person who holds the Options as permitted
by Section 4 herein elects) to pay the exercise price of the
Option Shares in Shares (whether already-owned Shares or
Shares issued and subsequently sold in connection with a
Cashless Exercise) or in a combination of Shares (whether
already-owned Shares or Shares issued and subsequently sold in
connection with a Cashless Exercise) and check, (A) upon
confirmation of your transaction by using the Customer Service
Center and full payment of the exercise price (as described in
Section 3(d)(i) herein) and withholding taxes (if applicable)
are received by Xxxxxxx Xxxxxx within three business days
following the exercise; and (B) receipt of any documents
required pursuant to Section 3(a)(iii) herein.
(c) If you choose (or any person who holds the Options as permitted by
Section 4 herein chooses) to pay the exercise price for the Option
Shares to be purchased on exercise of any of the Options entirely by
check, payment must be made by:
- delivering to Xxxxxxx Xxxxxx a check in the full amount
of the exercise price for those Option Shares; or
- arranging with a stockbroker, bank or other financial
institution to deliver to Xxxxxxx Xxxxxx full payment,
by check or (if prior arrangements are made with Xxxxxxx
Xxxxxx) by wire transfer, of the exercise price of those
Option Shares.
In either event, in accordance with Section 3(e) herein, full
payment of the exercise price for the Option Shares purchased must
be made within three business days after the exercise has been
conducted and confirmed through the Customer Service Center.
(d) (i) If you choose (or any person who holds the Options as
permitted by Section 4 herein chooses) to use already-owned
Shares to pay all or part of the exercise price for the
Option Shares to be purchased on exercise of any of the
Options, you (or any person who holds the
-4-
Options as permitted by Section 4 herein) must deliver to
Xxxxxxx Xxxxxx an Exercise Request and Attestation Form and
cash to cover the purchase of one Option Share as specified in
such form. To perform such a transaction, the Exercise Request
and Attestation Form must be submitted via fax ((720)
785-8874) by 4:00 p.m. Eastern Time on the date of exercise
and any questions concerning this type of transaction should
be referred to (000) 000-0000 (Stock Option Administration
Group Hotline) plus:
- at least the number of Shares whose value, based
on the closing price of Common Stock of Rockwell
Xxxxxxx on the New York Stock Exchange --
Composite Transactions on the day you have
exercised your Options through the Customer
Service Center, equals the exercise price for the
Option Shares; or
- any lesser number of Shares you desire (or any
person who holds the Options as permitted by
Section 4 herein desires) to use to pay the
exercise price for those Option Shares and a check
in the amount of such exercise price less the
value of the Shares delivered, based on the
closing price of Common Stock of Rockwell Xxxxxxx
on the New York Stock Exchange -- Composite
Transactions on the day you have exercised your
Options through the Customer Service Center.
(ii) If you choose (or any person who holds the Options as
permitted by Section 4 herein chooses) to use Option Shares
obtained by Cashless Exercise to pay all or part of the
exercise price for the remaining Option Shares to be purchased
on exercise of any of the Options, you (or any person who
holds the Options as permitted by Section 4 herein) must
contact the Customer Service Center at (000) 000-0000.
(iii) Xxxxxxx Xxxxxx will advise you (or any other person who, being
entitled to do so, exercises the Options) of the exact number
of Shares, at the closing price on the New York Stock Exchange
-- Composite Transactions on the effective date of exercise
under Section 3(b)(ii) herein, and any funds required to pay
in full the exercise price for the Option Shares purchased. In
accordance with Section 3(e) herein, you (or such other
person) must pay, by check, in Shares or in a combination of
check and Shares, any balance required to pay in full the
exercise price of the Option Shares purchased within three
business days following the effective date of such exercise of
the Options under Section 3(b)(ii) herein.
-5-
(iv) Notwithstanding any other provision of this Stock Option
Agreement, the Secretary of Rockwell Xxxxxxx may limit the
number, frequency or volume of successive exercises of any of
the Options in which payment is made, in whole or in part, by
delivery of Shares pursuant to this subparagraph (d) to
prevent unreasonable pyramiding of such exercises.
(e) An exercise conducted through the Customer Service Center,
whether or not full payment of the exercise price for the Option
Shares is received by Xxxxxxx Xxxxxx, shall constitute a binding
contractual obligation by you (or the other person entitled to
exercise the Options) to proceed with and complete that exercise
of the Options (but only so long as you continue, or the other
person entitled to exercise the Options continues, to be entitled
to exercise the Options on that date). By your acceptance of this
Stock Option Agreement, you agree (for yourself and on behalf of
any other person who becomes entitled to exercise the Options) to
pay to Xxxxxxx Xxxxxx in full the exercise price for those Option
Shares, that payment being by check, wire transfer, in Shares or
in a combination of check and Shares, on or before the third
business day after the date on which you conduct the transaction
through the Customer Service Center. If such payment is not
made, you (for yourself and on behalf of any other person who
becomes entitled to exercise the Options) authorize Rockwell
Xxxxxxx, in its discretion, to set off against retainer payments
or other amounts due or which may become due you (or the other
person entitled to exercise the Options) any balance of the
exercise price for those Option Shares remaining unpaid
thereafter.
(f) A book-entry statement representing the number of Option Shares
purchased will be issued as soon as practicable after Xxxxxxx Xxxxxx
has received full payment of the exercise price of those Option
shares.
4. Transferability; Nonassignability
You are not entitled to transfer the Options except (i) by will or by the
laws of descent and distribution; or (ii) by gift to any member of your
immediate family or to a trust for the benefit of one or more members of
your immediate family or to a family charitable trust established by you
or a member of your family; provided, however, that no transfer pursuant
to this clause (ii) shall be effective unless you have notified Rockwell
Xxxxxxx' Office of the Secretary (Attention: Stock Option Administration)
in writing specifying the Option or Options transferred, the date of the
gift or transfer and the name and Social Security or other Taxpayer
Identification Number of the donee or transferee. During your lifetime,
only you are entitled to exercise the Options unless you have transferred
any Option in accordance with this paragraph to a member of your immediate
family, a trust for the benefit of one or more members of your immediate
family, or a family charitable trust established by you or a member of
your family, in which case only
-6-
that transferee (or the legal representative of the estate or the heirs or
legatees of that transferee) shall be entitled to exercise that Option.
For purposes of this paragraph, your "immediate family" shall mean your
spouse and natural, adopted or step-children and grandchildren.
5. Withholding
Rockwell Xxxxxxx or Xxxxxxx Xxxxxx shall have the right, in connection
with the exercise of the Options, in whole or in part, to deduct from any
payment to be made by Rockwell Xxxxxxx or Xxxxxxx Xxxxxx an amount equal
to the taxes required to be withheld by law with respect to such exercise
or to require you (or any other person entitled to exercise the Options)
to pay to it an amount sufficient to provide for any such taxes so
required to be withheld. By your acceptance of this Stock Option
Agreement, you agree (for yourself and on behalf of any other person who
becomes entitled to exercise the Options) that if Rockwell Xxxxxxx or
Xxxxxxx Xxxxxx elects to require you (or such other person) to remit an
amount sufficient to pay such withholding taxes, you (or such other
person) must remit that amount within three business days after the date
of the Option exercise as provided in Section 3(a)(ii) herein. If such
payment is not made, Rockwell Xxxxxxx, in its discretion, shall have the
same right of set-off as provided under Section 3(e) herein with respect
to payment of the exercise price for Option Shares.
6. Headings
The section headings contained in these Stock Option Terms and Conditions
are solely for the purpose of reference, are not part of the agreement of
the parties and shall in no way affect the meaning or interpretation of
this Stock Option Agreement.
7. References
All references in these Stock Option Terms and Conditions to Sections,
paragraphs, subparagraphs or clauses shall be deemed to be references to
Sections, paragraphs, subparagraphs and clauses of these Stock Option
Terms and Conditions unless otherwise specifically provided.
8. Entire Agreement
This Stock Option Agreement and the other terms applicable to Stock
Options granted under the Plan embody the entire agreement and
understanding between Rockwell Xxxxxxx and you with respect to the
Options, and there are no representations, promises, covenants, agreements
or understandings with respect to the Options other than those expressly
set forth in this Stock Option Agreement and the Plan.
-7-
9. Applicable Laws and Regulations
This Stock Option Agreement and Rockwell Xxxxxxx obligation to issue
Option Shares hereunder are subject to applicable laws and regulations.
Exhibit 1 Notice of Exercise Form
Exhibit 2 Exercise Request and Attestation Form (For Use With Already-
Owned Shares)
-8-
EXHIBIT 1
NOTICE OF EXERCISE FORM
To: Rockwell Xxxxxxx, Inc.
Office of the Secretary
000 Xxxxxxx Xxxx XX
Xxxxx Xxxxxx, XX 00000
Fax No. (000) 000-0000
1. OPTIONS EXERCISED: Subject to the terms and conditions of the Stock Option
Agreement dated [ ] with Rockwell Xxxxxxx, Inc. (Rockwell Xxxxxxx) thereunder, I
hereby exercise the following stock option(s):
Date of Number of Exercise Total
Grant Shares Price Purchase Price
----- ------ ----- --------------
$ $
------ --------- --------- -
$ $
------ --------- --------- -
$ $
------ --------- --------- -
2. PAYMENT: The following must be received by Xxxxxxx Xxxxxx & Co., Inc.
("Xxxxxxx Xxxxxx") within three business days following the date of exercise:
- A check payable to Rockwell Xxxxxxx Employee Stock Option Program or
a wire transfer to Xxxxxxx Xxxxxx for credit to the Rockwell Xxxxxxx
Employee Stock Option Program in the amount of the Total Purchase
Price of the above-itemized stock option(s); or
- A number of shares of Rockwell Xxxxxxx Common Stock surrendered or
sold to pay the Total Purchase Price of the above-itemized stock
option(s); or
- A combination of (i) check payable to Rockwell Xxxxxxx Employee
Stock Option Program or a wire transfer to Xxxxxxx Xxxxxx for credit
to the Rockwell Xxxxxxx Employee Stock Option Program, and (ii) a
number of Shares surrendered or sold, which together amount to the
Total Purchase Price of the above-itemized stock option(s).
Notice of Exercise Form
For Officers and Directors Only
Page 2
If full payment of the Total Purchase Price of the stock option(s)
listed in Item 1 is not delivered within three (3) business days after the
exercise date, Rockwell Xxxxxxx is authorized forthwith to set off the balance
due against any amounts due or which may become due me to satisfy my obligation
to pay the Total Purchase Price.
This Stock Option Exercise may not be revoked or changed after delivery of this
form, properly completed, dated and signed, to Rockwell Xxxxxxx whether or not
payment accompanies this form and whether this form is dated before, on or after
the date of such receipt.
________________________________
(Signature)
Printed Name __________________________
Dated:
-2-
