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Exhibit 10.24
STOCK OPTION AGREEMENT
(Incentive Stock Option)
THIS AGREEMENT is made to be effective as of _________________, by and
between X. X. Xxxxx Corporation, an Ohio corporation (the "COMPANY"), and
______________ (the "OPTIONEE").
WITNESSETH:
WHEREAS, pursuant to the provisions of the X. X. Xxxxx Corporation 1997
Incentive Stock Plan (as amended, the "PLAN"), the Board of Directors of the
COMPANY has appointed a Compensation Committee (the "COMMITTEE") to administer
the PLAN and the COMMITTEE has determined that an option to acquire common
shares, $1.00 par value (the "COMMON SHARES"), of the COMPANY should be granted
to the OPTIONEE upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto make
the following agreement, intending to be legally bound thereby:
(1) Grant of OPTION. The COMPANY hereby grants to the OPTIONEE an option
(the "OPTION") to purchase _______ COMMON SHARES of the COMPANY (subject to
adjustment as provided in Section (3)). The OPTION is intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "CODE").
(2) Terms and Conditions of the OPTION.
(A) OPTION Price. The purchase price (the "OPTION PRICE") to be paid by
the OPTIONEE to the COMPANY upon the exercise of the OPTION shall be $____ per
share, subject to adjustment as provided in Section (3).
(B) Exercise of the OPTION. The OPTION may not be exercised until the
OPTIONEE shall have completed twelve months of continuous employment with the
COMPANY and/or its subsidiaries immediately following the date hereof.
Thereafter, except as otherwise provided in this Agreement, the OPTION may be
exercised as follows:
(i) at any time after such twelve-month period, as to __% of the
COMMON SHARES subject to the OPTION (subject to adjustment as provided in
Section (3));
(ii) at any time after twenty-four months from the date of this
Agreement, as to an additional __% of the COMMON SHARES subject to the OPTION
(subject to adjustment as provided in Section (3));
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(iii) at any time after thirty-six-months, as to an additional __%
of the COMMON SHARES subject to the OPTION (subject to adjustment as provided in
Section (3));
(iv) at any time after forty-eight months from the date of this
Agreement, as to an additional __% of the COMMON SHARES subject to the OPTION
(subject to adjustment as provided in Section (3)) and
(v) at any time after sixty months from the date of this
Agreement, as to the remaining __% of the COMMON SHARES subject to the OPTION
(subject to adjustment as provided in Section (3)).
Subject to the other provisions of this Agreement, if the OPTION becomes
exercisable as to certain COMMON SHARES, it shall remain exercisable as to those
COMMON SHARES until the date of expiration of the OPTION term. The COMMITTEE
may, but shall not be required to (unless otherwise provided in this Agreement),
accelerate the schedule of the time or times when the OPTION may be exercised.
The grant of the OPTION shall not confer upon the OPTIONEE any right to
continue in the employment of the COMPANY nor limit in any way the right of the
COMPANY to terminate the employment of the OPTIONEE at any time in accordance
with law or the COMPANY's governing corporate documents.
(C) OPTION Term. The OPTION shall in no event be exercisable after the
expiration of ten (10) years from the date of this Agreement.
(D) Method of Exercise. The OPTION may be exercised by giving written
notice of exercise to the COMPANY in care of the Treasurer of the COMPANY
stating the number of COMMON SHARES subject to the OPTION in respect of which it
is being exercised. Payment for all such COMMON SHARES shall be made to the
COMPANY at the time the OPTION is exercised in United States dollars in cash
(including check, bank draft or money order). Payment for such COMMON SHARES
also may be made (i) by delivery of COMMON SHARES of the COMPANY already owned
by the OPTIONEE and having a Fair Market Value (as that term is defined in the
PLAN) on the date of delivery equal to the OPTION PRICE, or (ii) by delivery of
a combination of cash and already owned COMMON SHARES. After payment in full for
the COMMON SHARES purchased under the OPTION has been made, the COMPANY shall
take all such action as is necessary to deliver appropriate share certificates
evidencing the COMMON SHARES purchased upon the exercise of the OPTION as
promptly thereafter as is reasonably practicable.
(3) Adjustments and Changes in the COMMON SHARES.
(A) In the event that the outstanding COMMON SHARES of the COMPANY
shall be changed into or exchanged for a different kind of shares or other
securities of the COMPANY or of another corporation or for any other type of
property (whether by reason of
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merger, consolidation, recapitalization, reclassification, split-up, combination
of shares or otherwise) or if the number of such COMMON SHARES shall be
increased through the payment of a stock dividend, then unless such change
results in the termination of all outstanding options granted pursuant to the
PLAN, there shall be substituted for or added to each COMMON SHARE of the
COMPANY subject to the OPTION, the number and kind of shares or other securities
or other property into which each outstanding COMMON SHARE of the COMPANY shall
be changed, or for which each such COMMON SHARE shall be exchanged, or to which
the holder of each such COMMON SHARE shall be entitled, as the case may be. The
OPTION shall also be appropriately amended as to the OPTION PRICE and other
terms as may be necessary to reflect the foregoing events. The number of COMMON
SHARES that will vest on the dates set forth in Section (2)(B) shall be
appropriately adjusted to reflect any such change in the outstanding COMMON
SHARES. In the event there shall be any other change in the number or kind of
the outstanding shares of the COMPANY, or of any shares or other securities or
other property into which such shares shall have been changed, or for which they
shall have been exchanged, then if the COMMITTEE shall, in its sole discretion,
determine that such change equitably requires an adjustment in the OPTION, such
adjustment shall be made by the COMMITTEE in accordance with such determination.
Fractional shares resulting from any adjustment in the OPTION pursuant to this
Section 3(A) shall be rounded down to the nearest whole number of shares.
(B) Notwithstanding the foregoing, any and all adjustments in
connection with the OPTION shall comply in all respects with Section 422 of the
CODE, and the regulations promulgated thereunder.
(C) Notice of any adjustment pursuant to this Section (3) shall be
given by the COMPANY to the OPTIONEE.
(D) The grant of this OPTION shall not affect in any way the right of
the COMPANY to adjust, reclassify, reorganize, or otherwise change its capital
or business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
(4) Acceleration of OPTION. In the event that the COMPANY or its
shareholders enter into one or more agreements to dispose of all or
substantially all of the assets or fifty percent (50%) or more of the
outstanding capital stock of the COMPANY by means of sale (whether as a result
of a tender offer or otherwise), merger, reorganization or liquidation in one or
a series of related transactions (each, an "ACCELERATION EVENT"), then the
OPTION shall become exercisable during the fifteen (15) days immediately prior
to the scheduled consummation of the ACCELERATION EVENT with respect to the full
number of COMMON SHARES subject to the OPTION. Upon consummation of the
ACCELERATION EVENT, the OPTION, whether or not accelerated, will terminate and
cease to be exercisable, unless assumed by the successor corporation or parent
thereof.
(5) Non-Assignability of OPTION. The OPTION shall not be assignable or
otherwise transferable by the OPTIONEE except by will or by the laws of descent
and distribution.
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The OPTION may not be exercised during the lifetime of the OPTIONEE except by
him, his guardian or legal representative.
(6) Substitution for OPTION. The COMMITTEE shall have the authority to
effect, at any time and from time to time, with the consent of the OPTIONEE, the
cancellation of the OPTION and the grant in substitution therefor of one or more
new options under the PLAN covering the same or a different number of COMMON
SHARES at an option price per share in all events not less than 100% of the
closing sale price for the COMMON SHARES of the COMPANY as shown on the New York
Stock Exchange - Composite Transactions on the new grant date.
(7) Exercise After Termination of Employment.
(A) Except as otherwise provided in this Agreement, the OPTION shall be
exercisable only while the OPTIONEE is in the employment of the COMPANY and then
only if the OPTION has become exercisable by its terms, and if not exercisable
by its terms at the time the OPTIONEE ceases to be in the employment of the
COMPANY, shall immediately expire on the date of termination of employment.
(B) If the OPTION is exercisable by its terms at the time the OPTIONEE
ceases to be in the employment of the COMPANY other than by reason of OPTIONEE's
death, permanent disability or normal retirement (as defined in Section (7)(D)
below), it must be exercised on or before the earlier of three (3) months after
the date of the termination of employment of the OPTIONEE or the fixed
expiration date of the OPTION, after which period the OPTION shall expire.
Notwithstanding the foregoing, if the OPTIONEE's employment is terminated for
willful, deliberate or gross misconduct (such as, for example, dishonesty), the
OPTION shall, to the extent not previously exercised, expire immediately upon
such termination.
(C) In the event of the death of the OPTIONEE (i) while in the
employment of the COMPANY or (ii) within three (3) months after his termination
of employment other than for willful, deliberate or gross misconduct, the
unexercised portion of the OPTION (whether or not then exercisable by its terms)
shall become immediately exercisable by his estate for a period ending on the
earlier of the fixed expiration date of the OPTION or twelve months after the
date of death, after which period the OPTION shall expire. For purposes hereof,
the estate of an OPTIONEE shall be defined to include the legal representatives
thereof or any person who has acquired the right to exercise the OPTION by
reason of the death of the OPTIONEE.
(D) In the event of the termination of employment of the OPTIONEE by
reason of the "permanent disability" or "normal retirement" of the OPTIONEE, the
unexercised portion of the OPTION (whether or not then exercisable by its terms)
shall become immediately exercisable in full for a period ending on the earlier
of three (3) months after the termination of employment or the fixed expiration
date of the OPTION, after which period the OPTION shall expire; provided,
however, that if such termination of employment occurs by reason of "disability"
within the meaning of Section 22(e)(3) of the CODE, said three-month period
shall be extended to twelve months. For purposes hereof, "permanent disability"
shall be deemed to be the inability of
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the OPTIONEE to perform the duties of his job with the COMPANY because of a
physical or mental disability as evidenced by the opinion of a COMPANY-approved
doctor of medicine licensed to practice medicine in the United States of America
and "retirement" shall be deemed to be "normal retirement" if the OPTIONEE is at
least 65 years of age and has completed at least five (5) consecutive years of
employment with the COMPANY at the date of retirement.
(8) Restrictions on Transfers of COMMON SHARES. Anything contained in this
Agreement or elsewhere to the contrary notwithstanding, the COMPANY may postpone
the issuance and delivery of COMMON SHARES upon any exercise of the OPTION until
completion of any stock exchange listing or registration or other qualification
of such COMMON SHARES under any state or federal law, rule or regulation as the
COMPANY may consider appropriate; and may require the OPTIONEE when exercising
the OPTION to make such representations and furnish such information as the
COMPANY may consider appropriate in connection with the issuance of the COMMON
SHARES in compliance with applicable law.
COMMON SHARES issued and delivered upon exercise of the OPTION shall be
subject to such restrictions on trading, including appropriate legending of
certificates to that effect, as the COMPANY, in its discretion, shall determine
are necessary to satisfy applicable legal requirements and obligations.
(9) Rights of OPTIONEE. The OPTIONEE shall have no rights as a shareholder
of the COMPANY with respect to any COMMON SHARES of the COMPANY covered by the
OPTION until the date of issuance of a certificate to him evidencing such COMMON
SHARES.
(10) PLAN as Controlling. All terms and conditions of the PLAN applicable
to the OPTION which are not set forth in this Agreement shall be deemed
incorporated herein by reference. In the event that any term or condition of
this Agreement is inconsistent with the terms and conditions of the PLAN, the
PLAN shall be deemed controlling.
(11) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
(12) Rights and Remedies Cumulative. All rights and remedies of the COMPANY
and of the OPTIONEE enumerated in this Agreement shall be cumulative and, except
as expressly provided otherwise in this Agreement, none shall exclude any other
rights or remedies allowed by law or in equity, and each of said rights or
remedies may be exercised and enforced concurrently.
(13) Captions. The captions contained in this Agreement are included only
for convenience of reference and do not define, limit, explain or modify this
Agreement or its interpretation, construction or meaning and are in no way to be
construed as a part of this Agreement.
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(14) Severability. If any provision of this Agreement or the application of
any provision hereof to any person or any circumstance shall be determined to be
invalid or unenforceable, then such determination shall not affect any other
provision of this Agreement or the application of said provision to any other
person or circumstance, all of which other provisions shall remain in full force
and effect, and it is the intention of each party to this Agreement that if any
provision of this Agreement is susceptible of two or more constructions, one of
which would render the provision enforceable and the other or others of which
would render the provision unenforceable, then the provision shall have the
meaning which renders it enforceable.
(15) Number and Gender. When used in this Agreement, the number and gender
of each pronoun shall be construed to be such number and gender as the context,
circumstances or its antecedent may required.
(16) Entire Agreement. This Agreement constitutes the entire agreement
between the COMPANY and the OPTIONEE in respect of the subject matter of this
Agreement, and this Agreement supersedes all prior and contemporaneous
agreements between the parties hereto in connection with the subject matter of
this Agreement. No officer, employee or other servant or agent of the COMPANY,
and no servant or agent of the OPTIONEE is authorized to make any
representation, warranty or other promise not contained in this Agreement. No
change, termination or attempted waiver of any of the provisions of this
Agreement shall be binding upon any party hereto unless contained in a writing
signed by the party to be charged.
(17) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns (including successive, as well as
immediate, successors and assigns) of the COMPANY.
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signatures on following page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first above written.
COMPANY:
X. X. XXXXX CORPORATION
By:
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Its:
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OPTIONEE:
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Name
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Xxxxxx Xxxxxxx
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Xxxx, Xxxxx, Zip Code
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Social Security Number
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