EXHIBIT 99.3
Form of Non-Qualified Stock Option Agreement
KEYSTONE AUTOMOTIVE INDUSTRIES, INC.
1996 EMPLOYEE STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
This Stock option Agreement ("Agreement") is made and entered into as
of the Date of Grant indicated below by and between Keystone Automotive
Industries, Inc., a California corporation (the "Company"), and the person named
below ("Participant").
WHEREAS, Participant is an employee or independent contractor of the
Company or one or more of its subsidiaries; and
WHEREAS, pursuant to the Company's 1996 Employee Stock Incentive Plan
(the "Plan"), the committee of the Board of Directors of the Company
administering the Plan (the "Committee") has approved the grant to Participant
of an option to purchase shares of the common stock of the Company (the "Common
Stock"), on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
23. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company
hereby grants to Participant, and Participant hereby accepts, as of the Date of
Grant, an option to purchase the number of shares of Common Stock indicated
below (the "Option Shares") at the Exercise Price per share indicated below,
which option shall expire at 5:00 p.m., California time, on the Expiration Date
indicated below and shall be subject to all of the terms and conditions set
forth in this Agreement (the "Option"). On each anniversary of the Date of
Grant, the option shall become exercisable to purchase, and shall vest with
respect to, that number of Option Shares (rounded to the nearest whole share)
equal to the total number of Option Shares multiplied by the Annual Vesting Rate
indicated below.
Participant: _________________
Date of Grant: __________
Number of shares purchasable: __________
Exercise Price per share: __________
Expiration Date: __________
Annual Vesting Rate: __________%
The Option is not intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended (an "Incentive
Stock Option").
24. ACCELERATION AND TERMINATION OF OPTION.
(a) Termination of Employment.
(i) TERMINATION WITHIN ONE YEAR AFTER CHANGE OF CONTROL. In the
event that Participant shall cease to be an employee or independent contractor
of the Company or any of its subsidiaries (such event shall be referred to
herein as the "Termination" of Participant's "Employment") for any reason, or
for no reason, within one year after a Change of Control (as hereinafter
defined), then (A) the portion of the Option that has not vested on or prior to
the date of such Termination of Employment shall fully vest on such date and
(B) the Option shall terminate upon the earlier of the Expiration Date or the
first anniversary of the date of such Termination of Employment. "Change of
Control" shall mean the first to occur of the following events:
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(A) any date upon which the directors of the Company who
were last nominated by the Board of Directors (the "Board") for
election as directors cease to constitute a majority of the
directors of the Company;
(B) the date of the first public announcement that any
person or entity, together with all Affiliates and Associates (as
such capitalized terms are defined in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of such person or entity, shall have become the
Beneficial Owner (as defined in Rule 13d-3 promulgated under the
Exchange Act) of voting securities of the Company representing
25% or more of the voting power of the Company (a "25%
Stockholder"); PROVIDED, HOWEVER, that the terms "person" and
"entity," as used in this clause (B), shall not include (1) the
Company or any of its subsidiaries, (2) any employee benefit plan
of the Company or any of its subsidiaries, (3) any entity holding
voting securities of the Company for or pursuant to the terms of
any such plan, (4) any person or entity if the transaction that
resulted in such person or entity becoming a 25% Stockholder was
approved in advance by the Board or (5) any person or entity who
was a 25% Stockholder on the date of adoption of the Plan by the
Board; or
(C) a reorganization, merger or consolidation of the
Company (other than a reorganization, merger or consolidation the
sole purpose of which is to change the Company's domicile solely
within the United States) the consummation of which results in
the outstanding securities of any class then subject to the
Option being exchanged for or converted into cash, property or a
different kind of securities; PROVIDED, HOWEVER, that a Change of
Control shall not be deemed to occur if, as a result of such
reorganization, merger or consolidation of the Company, the
securities of any class then subject to the Option (the "Option
Securities") are exchanged for or converted into securities that
represent the same beneficial ownership of the Company and
possess the same voting, liquidation and other rights to which
the Option Securities were entitled immediately prior to such
reorganization, merger or consolidation.
(ii) RETIREMENT. If Participant's Employment is Terminated by reason
of Participant's retirement in accordance with the Company's then current
retirement policy ("Retirement"), and a Change of Control shall not have
occurred within one year prior thereto, then (A) the portion of the Option that
has not vested on or prior to the date of such Retirement shall terminate on
such date and (B) the remaining vested portion of the Option shall terminate
upon the Expiration Date.
(iii) DEATH OR PERMANENT DISABILITY. If Participant's Employment is
Terminated by reason of the death or Permanent Disability (as hereinafter
defined) of Participant, and a Change of Control shall not have occurred within
one year prior thereto, then (A) the portion of the Option that has not vested
on or prior to the date of such Termination of Employment shall terminate on
such date and (B) the remaining vested portion of the Option shall terminate
upon the earlier of the Expiration Date or the first anniversary of the date of
such Termination of Employment. "Permanent Disability" shall mean the inability
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than 12 months. Participant shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been furnished to the
Board in such form and manner, and at such times, as the Board may require. Any
determination by the Board that Participant does or does not have a Permanent
Disability shall be final and binding upon the Company and Participant.
(iv) OTHER TERMINATION. If Participant's Employment is Terminated
for no reason, or for any reason other than Retirement, death or Permanent
Disability, and a Change of Control shall not have occurred within one year
prior thereto, then the Option shall terminate upon the date of such Termination
of Employment.
(b) DEATH FOLLOWING TERMINATION OF EMPLOYMENT. Notwithstanding
anything to the contrary contained in this Agreement, if Participant shall die
at any time after the Termination of his or her Employment and prior to the
Expiration Date, then (i) the portion of the Option that has not vested on or
prior to the date of such death shall terminate on such date and (ii) the
remaining vested portion of the Option shall terminate on the earlier of the
Expiration Date or the first anniversary of the date of such death.
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(c) OTHER EVENTS CAUSING ACCELERATION OF OPTION. The Committee, in
its sole discretion, may accelerate the exercisability of the Option at any time
and for any reason.
(d) OTHER EVENTS CAUSING TERMINATION OF OPTION. Notwithstanding
anything to the contrary contained in this Agreement, the Option shall terminate
upon the consummation of any of the following events, or, if later, the
thirtieth day following the first date upon which such event shall have been
approved by both the Board and the shareholders of the Company:
(i) the dissolution or liquidation of the Company; or
(ii) a sale of substantially all of the property and assets of
the Company, unless the terms of such sale shall provide otherwise.
25. ADJUSTMENTS. In the event that the outstanding securities of the
class then subject to the Option are increased, decreased or exchanged for or
converted into cash, property or a different number or kind of securities, or
cash, property or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a
regular cash dividend) or other distribution, stock split, reverse stock split
or the like, or in the event that substantially all of the property and assets
of the Company are sold, then, unless such event shall cause the Option to
terminate pursuant to Section 2(d) hereof, the Committee shall make appropriate
and proportionate adjustments in the number and type of shares or other
securities or cash or other property that may thereafter be acquired upon the
exercise of the Option; PROVIDED, HOWEVER, that any such adjustments in the
Option shall be made without changing the aggregate Exercise Price of the then
unexercised portion of the Option.
26. EXERCISE.
(a) The Option shall be exercisable during Participant's
lifetime only by Participant or by his or her guardian or legal representative,
and after Participant's death only by the person or entity entitled to do so
under Participant's last will and testament or applicable intestate law. The
Option may only be exercised by the delivery to the Company of a written notice
of such exercise, which notice shall specify the number of Option Shares to be
purchased (the "Purchased Shares") and the aggregate Exercise Price for such
shares (the "Exercise Notice"), together with payment in full of such aggregate
Exercise Price in cash or by check payable to the Company; PROVIDED, HOWEVER,
that payment of such aggregate Exercise Price may instead be made, in whole or
in part, by the delivery to the Company of a certificate or certificates
representing shares of Common Stock, duly endorsed or accompanied by a duly
executed stock powers, which delivery effectively transfers to the Company good
and valid title to such shares, free and clear of any pledge, commitment, lien,
claim or other encumbrance (such shares to be valued on the basis of the
aggregate Fair Market Value (as defined in the Plan) thereof on the date of such
exercise), provided that the Company is not then prohibited from purchasing or
acquiring such shares of Common Stock.
27. PAYMENT OF WITHHOLDING TAXES. If the Company becomes obligated
to withhold an amount on account of any tax imposed as a result of the exercise
of the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then Participant shall, on the first day upon which the Company becomes
obligated to pay such amount to the appropriate taxing authority, pay such
amount to the Company in cash or by check payable to the Company.
28. NOTICES. All notices and other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company at
000 Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xx X. Xxxxx, or to
Participant at the address set forth beneath his or her signature on the
signature page hereto, or at such other addresses as they may designate by
written notice in the manner aforesaid.
29. STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS. Notwithstanding
anything to the contrary in this Agreement, no shares of stock purchased upon
exercise of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (i) such shares have not been admitted
to listing upon official notice of issuance on each stock exchange upon which
shares of that class are then listed or (ii) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of
or to incur liability under any federal,
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state or other securities law, or any requirement of any stock exchange
listing agreement to which the Company is a party, or any other requirement
of law or of any administrative or regulatory body having jurisdiction over
the Company.
30. NONTRANSFERABILITY. Neither the Option nor any interest therein
may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
31. PLAN. The Option is granted pursuant to the Plan, as in effect
on the Date of Grant, and is subject to all the terms and conditions of the
Plan, as the same may be amended from time to time; PROVIDED, HOWEVER, that no
such amendment shall deprive Participant, without his or her consent, of the
Option or of any of Participant's rights under this Agreement. The
interpretation and construction by the Committee of the Plan, this Agreement,
the Option and such rules and regulations as may be adopted by the Committee for
the purpose of administering the Plan shall be final and binding upon
Participant. Until the Option shall expire, terminate or be exercised in full,
the Company shall, upon written request therefor, send a copy of the Plan, in
its then-current form, to Participant or any other person or entity then
entitled to exercise the Option.
32. SHAREHOLDER RIGHTS. No person or entity shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of any Option
Shares until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
33. EMPLOYMENT OR CONTRACT RIGHTS. No provision of this Agreement or
of the Option granted hereunder shall (i) confer upon Participant any right to
continue in the employ of or contract with the Company or any of its
subsidiaries, (ii) affect the right of the Company and each of its subsidiaries
to terminate the employment or contract of Participant, with or without cause,
or (iii) confer upon Participant any right to participate in any employee
welfare or benefit plan or other program of the Company or any of its
subsidiaries other than the Plan. PARTICIPANT HEREBY ACKNOWLEDGES AND AGREES
THAT THE COMPANY AND EACH OF ITS SUBSIDIARIES MAY TERMINATE THE EMPLOYMENT OR
CONTRACT OF PARTICIPANT AT ANY TIME AND FOR ANY REASON, OR FOR NO REASON, UNLESS
PARTICIPANT AND THE COMPANY OR SUCH SUBSIDIARY ARE PARTIES TO A WRITTEN
EMPLOYMENT OR INDEPENDENT CONTRACTOR AGREEMENT THAT EXPRESSLY PROVIDES
OTHERWISE.
34. GOVERNING LAW. This Agreement and the Option granted hereunder
shall be governed by and construed and enforced in accordance with the laws of
the State of California without reference to choice or conflict of law
principles.
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IN WITNESS WHEREOF, the Company and Participant have duly executed
this Agreement as of the Date of Grant.
KEYSTONE AUTOMOTIVE INDUSTRIES, INC.
By____________________________
Authorized Representative
PARTICIPANT
______________________________
Signature
______________________________
Printed Name
______________________________
Street Address
______________________________
City, State and Zip Code
______________________________
Social Security Number
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