Exhibit 10.4
TECHNICAL CONSUMER PRODUCTS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
This AGREEMENT (this "Agreement") is entered into by and between
Technical Consumer Products, Inc., a Delaware corporation (the "Company"), and
Xxxxx X. Xxxxxxx (the "Optionee") on January 11, 2002.
1. EFFECTIVENESS/OPERATION OF AGREEMENT. This Agreement will be effective
and binding immediately upon its execution but the stock option grant
evidenced hereby shall not be operative until the date (the "Date of
Grant") of the consummation of the Company's first public offering
conducted by a nationally recognized underwriter pursuant to an
effective registration statement filed under the Securities Act of
1933, as amended, covering the offer and sale of the Company's equity
securities, in whole or in part, for the account of the Company (the
"Initial Public Offering").
2. GRANT OF STOCK OPTION.
(a) Subject to and upon the terms, conditions, and restrictions
set forth in this Agreement and in the Company's Amended and
Restated 2001 Equity Plan (the "Plan"), the Company grants to
the Optionee as of the Date of Grant a stock option (the
"Option") to purchase 19 shares (the "Optioned Shares") of
common stock, par value $0.001 per share, of the Company (the
"Common Shares"), subject to adjustment as provided in Section
14 (including, without limitation, upon any stock split
occurring in connection with the Initial Public Offering). The
Option may be exercised from time to time in accordance with
the terms of this Agreement.
(b) The price at which each of the Optioned Shares may be
purchased pursuant to the Option shall be the price at which
each Common Share (or such other equity security) is sold to
the public in the Initial Public Offering, after giving effect
to any stock split occurring in connection with the Initial
Public Offering, subject to further adjustment as hereinafter
provided (the "Option Price").
(c) The Option is intended to be a non-qualified stock option and
shall not be treated as an "incentive stock option" within the
meaning of that term under Section 422 of the Code, or any
successor provision thereto.
3. TERM OF OPTION. The term of the Option shall commence on the Date of
Grant and, unless earlier terminated in accordance with Section 7
hereof, shall expire ten (10) years from the Date of Grant (the date on
which the Option terminates being referred to herein as the "Expiration
Date").
4. RIGHT TO EXERCISE. Subject to Section 7 and Section 8 hereof, the
Option will become exercisable in full six months after the Date of
Grant if the Optionee remains continuously employed by the Company
until such time. After the Option becomes exercisable, it may be
exercised from time to time prior to the Expiration Date. To the extent
the Option is exercisable, it may be exercised in whole or in part. In
no event shall the Optionee be entitled to acquire a fraction of one
Optioned Share pursuant to the Option. The Optionee shall be entitled
to the privileges of ownership with respect to Optioned Shares
purchased and delivered to the Optionee upon the exercise of all or
part of the Option.
5. OPTION NONTRANSFERABLE. The Option granted hereby shall be neither
transferable nor assignable by the Optionee other than by will or by
the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee, or in the event of his
or her legal incapacity, by his or her guardian or legal representative
acting on behalf of the Optionee in a fiduciary capacity under state or
foreign law and court supervision.
6. NOTICE OF EXERCISE; PAYMENT. To the extent then exercisable, this
Option may be exercised by written notice to the Company stating the
number of Optioned Shares for which the Option is being exercised and
the intended manner of payment. Payment equal to the aggregate Option
Price of the Optioned Shares for which the Option is being exercised
shall be tendered in full with the notice of exercise to the Company in
cash in the form of currency or check or other cash equivalent
acceptable to the Company. The Optionee may also tender the Option
Price by (i) the actual or constructive transfer to the Company of
nonforfeitable, nonrestricted Common Shares that have been owned by the
Optionee for more than six months prior to the date of exercise, or
(ii) by any combination of the foregoing methods of payment, including
a partial tender in cash and a partial tender in nonforfeitable,
nonrestricted Common Shares. Nonforfeitable, nonrestricted Common
Shares that are transferred by the Optionee in payment of all or any
part of the Option Price shall be valued on the basis of their Market
Value per Share. After the Initial Public Offering, the requirement of
payment in cash shall be deemed satisfied if the Optionee makes
arrangements that are satisfactory to the Company with a broker that is
a member of the National Association of Securities Dealers, Inc. to
sell on the exercise date a sufficient number of Optioned Shares that
are being purchased pursuant to the exercise, so that the net proceeds
of the sale transaction will at least equal the amount of the aggregate
Option Price plus payment of any applicable withholding taxes, and
pursuant to which the broker undertakes to deliver to the Company the
amount of the aggregate Option Price plus payment of any applicable
withholding taxes on a date satisfactory to the Company, but not later
than the date on which the sale transaction will settle in the ordinary
course of business. As a further condition precedent to the exercise of
the Option, the Optionee shall comply with all regulations and
requirements of any regulatory authority having control of, or
supervision over, the issuance of Common Shares and in connection
therewith shall execute any documents that the Board of Directors of
the Company or any committee of the Board (the "Board"), shall in its
sole discretion deem necessary or advisable. The date of the Optionee's
written notice shall be the exercise date.
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7. TERMINATION OF AGREEMENT.
(a) This Agreement and the Option granted hereby shall terminate
automatically and without further notice on the earliest of the
following dates:
(i) One (1) year after the Optionee's retirement at or
after age 65;
(ii) One (1) year after the Optionee's death if such death
occurs while the Optionee is employed by the Company
or any Subsidiary;
(iii) One (1) year after the Optionee's permanent and total
disability, if the Optionee becomes permanently and
totally disabled while an employee of the Company or
any Subsidiary;
(iv) Except as provided otherwise under Section 7(b)
below, thirty (30) calendar days after the Optionee
ceases to be an employee of the Company and the
Subsidiaries for any reason other than as described
in Section 7(a)(i), 7(a)(ii) or 7(a)(iii) hereof; or
(v) the Expiration Date.
(b) In the event that the Optionee's employment is terminated for
just cause, this Agreement shall terminate at the time of such
termination notwithstanding any other provision of this
Agreement and the Optionee's option will cease to be
exercisable to the extent exercisable as of such termination
and will not become exercisable after such termination. For
purposes of this provision, "just cause" shall mean, with
respect to an Optionee, "just cause," "cause" or a word or
phrase of similar import as defined in any employment,
severance or other agreement between the Company or any
Subsidiary and the Optionee, or if there is no such agreement
in effect that contains a definition of "just cause," "cause"
or a word or phrase of similar import, "just cause" shall mean
that the Optionee shall have committed prior to termination of
employment any of the following acts:
(i) an intentional act of fraud, embezzlement, theft, or
any other material violation of law;
(ii) intentional wrongful damage to material assets of the
Company or any Subsidiary;
(iii) intentional wrongful disclosure of material
confidential information of the Company or any
Subsidiary;
(iv) intentional wrongful engagement in any competitive
activity that would constitute a material breach of
the duty of loyalty to the Company or any Subsidiary;
(v) intentional breach of any stated material employment
policy of the Company or any Subsidiary; or
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(vi) the repeated failure of Optionee to timely perform
Optionee's duties reasonably requested by the Company
or to comply with reasonable directives of the
Company after having been given notice thereof.
(c) This Agreement shall not be exercisable for any number of
Optioned Shares in excess of the number of Optioned Shares for
which this Agreement is then exercisable, pursuant to Sections
4 and 8 hereof, on the date of termination of employment. For
the purposes of this Agreement, the continuous employment of
the Optionee with the Company shall not be deemed to have been
interrupted, and the Optionee shall not be deemed to have
ceased to be an employee of the Company, by reason of the
transfer of his or her employment among the Company and the
Subsidiaries or a leave of absence approved by the Board.
8. ACCELERATION OF OPTION. Notwithstanding Section 4 hereof, after the
Date of Grant the Option granted hereby shall become immediately
exercisable in full in the event of (a) a Change in Control; (b) the
Optionee's retirement at or after age 65; (c) the death of the Optionee
if such death occurs while the Optionee is employed by the Company or
any Subsidiary; or (d) the Optionee's permanent and total disability if
the Optionee becomes permanently and totally disabled while an employee
of the Company or any Subsidiary.
9. STOCK CERTIFICATES. Upon receipt of the Option Price, the Company shall
mail or deliver to the Optionee, as promptly as practicable, a stock
certificate or certificates representing the Optioned Shares being
exercised and for which payment of the Option Price has been received.
10. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement shall
confer upon the Optionee any right with respect to continuance of
employment by the Company or any subsidiary of the Company, nor limit
or affect in any manner the right of the Company or any subsidiary of
the Company to terminate the employment or adjust the compensation of
the Optionee.
11. DEATH OF OPTIONEE. If the Optionee dies on or before the Expiration
Date, this Option shall be exercisable by the person to whom such
Option is transferred by will or the laws of descent and distribution,
within, but only within, the period specified in Section 7(a) hereof,
but in no event after the Expiration Date. Except as otherwise
indicated by the context, the term "Optionee," as used in this Option,
shall be deemed to include the estate of the Optionee and any person
who acquires the right to exercise this Option by bequest or
inheritance or otherwise by reason of the death of Optionee.
12. TAXES AND WITHHOLDING. To the extent that the Company shall be required
to withhold any federal, state, local or foreign taxes in connection
with the exercise of the Option, and the amounts available to the
Company for such withholding are insufficient, it shall be a condition
to the exercise of the Option that the Optionee shall pay such taxes or
make provisions that are satisfactory to the Company for the payment
thereof. The Optionee may elect to satisfy all or any part of any such
withholding obligation by (a) surrendering to the Company a portion of
the Optioned Shares that are issued or transferred to the Optionee upon
the exercise of the Option, and the Optioned Shares so surrendered by
the
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Optionee shall be credited against any such withholding obligation at
the Market Value per Share of such shares on the date of such surrender
or (b) utilizing the broker assistance arrangement provided in Section
6.
13. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; PROVIDED,
HOWEVER, notwithstanding any other provision of this Agreement, the
Option shall not be exercisable if the exercise thereof would result in
a violation of any such law.
14. ADJUSTMENTS. The Board may make or provide for such adjustments in the
number of Optioned Shares covered by the Option, in the Option Price
applicable to the Option, and in the kind of shares covered thereby, as
the Board, in its sole discretion, exercised in good faith, may
determine is equitably required to prevent dilution or enlargement of
the Optionee's rights that otherwise would result from (a) any stock
dividend, stock split, combination of shares, recapitalization, or
other change in the capital structure of the Company, (b) any merger,
consolidation, spin-off, split-off, spin-out, split-up, reorganization,
partial or complete liquidation, or other distribution of assets or
issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the
foregoing. In the event of any such transaction or event, the Board, in
its discretion, may provide in substitution for the Option such
alternative consideration as it may determine to be equitable in the
circumstances and may require in connection therewith the surrender of
the Option.
15. AVAILABILITY OF COMMON SHARES. The Company shall at all times until the
expiration of the Option reserve and keep available, either in its
treasury or out of its authorized but unissued Common Shares, the full
number of Optioned Shares deliverable upon the exercise of the Option.
16. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is
applicable hereto; PROVIDED, HOWEVER, that no amendment shall adversely
affect the rights of the Optionee under this Agreement without the
Optionee's consent.
17. SEVERABILITY. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be
separable from the other provisions hereof, and the remaining
provisions hereof shall continue to be valid and fully enforceable.
18. RELATION TO THE PLAN. This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistency between the
provisions of this Agreement and the Plan, the Plan shall govern.
Capitalized terms used herein without definition shall have the
meanings assigned to them in the Plan. The Board acting pursuant to the
Plan, or any duly authorized committee thereof, as constituted from
time to time, shall, except as expressly provided otherwise herein,
have the right to determine any questions which arise in connection
with the Option or its exercise.
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19. SUCCESSORS AND ASSIGNS. Without limiting Section 5 hereof, the
provisions of this Agreement shall inure to the benefit of, and be
binding upon, the successors, administrators, heirs, legal
representatives and assigns of the Optionee, and the successors and
assigns of the Company.
20. GOVERNING LAW. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Delaware,
without giving effect to the principles of conflict of laws thereof.
21. NOTICES. Any notice to the Company provided for herein shall be in
writing to the Company and any notice to the Optionee shall be
addressed to the Optionee at his or her address on file with the
Company. Except as otherwise provided herein, any written notice shall
be deemed to be duly given if and when delivered personally or sent by
registered mail or electronic means of communication, and addressed as
aforesaid. Any party may change the address to which notices are to be
given hereunder by notice to the other party as herein specified
(provided that for this purpose any mailed notice shall be deemed given
on the third business day following deposit of the same in the mail).
22. COMPLETE AGREEMENT. This Agreement embodies the complete agreement and
understanding between the Optionee and the Company (and/or the
Company's predecessors) with respect to the granting to the Optionee of
stock options exercisable for Common Shares or, except with respect to
any understanding, agreement or representation relating to the purchase
of the ten (10) Common Shares owned by Optionee as of the date of this
Agreement, any other transfer of Common Shares to the Optionee and,
effective as of the date of this Agreement, this Agreement terminates,
supersedes and preempts, without any liability to either party, any
prior understandings, agreements or representations by or between the
Optionee and the Company (and/or the Company's predecessors), written
or oral, which may have related to the granting of options to purchase
securities by the Company (and/or the Company's predecessors) or any
representative of the Company (and/or of the Company's predecessors) to
the Optionee (including, without limitation, any claim by the Optionee
for stock options exercisable for Common Shares in connection with an
agreement by and between the Optionee and the Company's predecessor
dated November 28, 2000 (the "November Agreement")) or any other
transfer of Common Shares or other securities to the Optionee. Optionee
hereby fully, finally and forever releases, discharges, quit claims and
covenants not to xxx, and otherwise agrees not to enforce any claim,
cause of action, right, title or interest of any kind and every
description against the Company (or the Company's predecessors) and its
officers, directors, employees, shareholders, agents, representatives,
attorneys, accountants, affiliates, successors and assigns, of, from
and with respect to any and all claims, demands, claims for relief,
actions, causes of action, suits, arbitrations, demands, proceedings,
debts, obligations, liabilities, damages, losses, costs, attorneys'
fees, and expenses of any kind, character or nature whatsoever, whether
known or unknown, suspected or unsuspected, fixed or contingent,
arising out of, or otherwise in connection with, the November
Agreement.
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23. THIRD PARTIES. Nothing herein expressed or implied is intended or shall
be construed to confer upon or give to any person, other than (a) the
parties to this Agreement; (b) as contemplated by Section 22 hereof;
and (c) any permitted assignees of the Company and the Optionee, any
rights or remedies under or by reason of this Agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer and Optionee has also
executed this Agreement in duplicate, as of the day and year first above
written.
TECHNICAL CONSUMER PRODUCTS, INC.
/s/ Xxxx Xxxx
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By: Xxxx Xxxx
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Title: Chief Financial Officer
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The undersigned Optionee hereby acknowledges receipt of an executed original of
this Stock Option Agreement.
/s/ Xxxxx X. Xxxxxxx
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Optionee
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