CHECKPOINT SYSTEMS, INC.
COMPENSATION OPTION AGREEMENT
This OPTION AGREEMENT (this "Agreement") is made as of April 28, 1998, by
and between Checkpoint Systems, Inc. ("Checkpoint"), a Pennsylvania corporation
and Xxxxx X. Xxxxxx, Xx. ("Xxxxxx"), an individual residing at 0000 Xxxxxx Xxxxx
Xxxx, Xxxxxxxx, Xxxxxxx 00000.
Checkpoint and Xxxxxx have entered into that certain Consulting Agreement
(the "Consulting Agreement") dated July 7, 1998, pursuant to which Xxxxxx will
provide consulting services for Checkpoint. As part of the consideration for the
services to be provided by Xxxxxx under the Consulting Agreement, Checkpoint has
agreed to grant the options provided by this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
intending to be legally bound, the parties hereto agree as follows:
1. Grant of Option: Checkpoint hereby grants to Xxxxxx Non-Qualified Stock
Options (the "Options") to purchase a total 8,000 shares (the "Option Shares")
of Checkpoint's Common Stock, par value $.10 per share ("Common Stock") at the
purchase price of $17.9063 (the "Option Price") per share (being 100% of the
fair market value per share of Common Stock on the date hereof as determined by
Checkpoint).
All shares of Common Stock authorized to be issued on the exercise of
the Options granted hereunder shall be either authorized but unissued shares or
shares held by Checkpoint in its Treasury.
2. Time of Exercise of Option. The vested and exercisable portion of
Options granted in accordance with Section 3, are exercisable for a period of
five (5) years beginning on the date the Options first become exercisable.
Options shall become exercisable: (i) 50% or 4,000 shares are exercisable
immediately; (ii) 50% or 4,000 shall be exercisable upon the first anniversary
of the consulting agreement. Notwithstanding anything contained in this
Agreement to the contrary the Options granted herein shall expire on the earlier
of 45 days after the date upon which services to the Company by Xxxxxx
terminate.
3. Vesting. The Options shall be vested on the date hereof, and exercisable
as provided in Section 2.
4. Terms of Payment. Full payment of the Option Price for any Option Shares
with respect to which this Option is exercised shall be made in cash or by
personal or certified check, bank draft or postal or express money order, on the
date notice of exercise of the Option is given by Xxxxxx to Checkpoint.
5. Partial Exercise. The vested portion of this Option may be exercised in
whole or in part, subject to the provisions of this Agreement. Fractional shares
will not be issued.
6. Stock Certificates. Upon the exercise of the Option, appropriate stock
certificates shall be issued to Xxxxxx. The issuance of such stock certificates
shall vest in the holder all rights as a shareholder with respect to the Option
Shares evidenced thereby. Any stock certificate issued hereunder may contain
such securities law or other legends as Checkpoint deems appropriate.
7. Transferability. The Option shall be exercisable only by Xxxxxx or his
permitted assigns heirs, executors or administrators, as the case may be, and
the Option is not assignable or transferable otherwise than upon the prior
written consent of Checkpoint.
8. Adjustments to Number of Shares. In the event of any change in the
shares of Common Stock by reason of any stock dividend, recapitalization,
reorganization merger, consolidation, split-up, combination, or exchange of such
shares at a price substantially below fair market value, or rights offering to
purchase such shares, or of any similar change affecting such shares of Common
Stock, the number and kind of Option Shares subject to this Option and the
Option Price shall be appropriately adjusted to prevent substantial dilution or
enlargement of the rights granted to Xxxxxx hereunder.
9. No Rights As a Stockholder. Xxxxxx shall have no rights as a stockholder
with respect to the Option Shares until the date as of which a stock certificate
is issued pursuant to exercise of the Option. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, other property) or
distributions or rights for which the
record date is prior to the date such stock certificate is issued. Any stock
dividends shall result in adjustment of the number of shares pursuant to Section
8.
10. Tax and Securities Laws Matter. Xxxxxx acknowledges and agrees that the
Option has not been, and the Option Shares will not be upon issuance, registered
under the Securities Act of 1933, as amended, or any state securities laws and
may not be offered or sold without registration under the Securities Act of
1933, as amended, and compliance with state securities laws, unless an exemption
therefrom is applicable. Xxxxxx represents that he is acquiring the Option and
will acquire the Option Shares for investment purposes only and has no present
intention of disposing of the Option or, upon issuance, the Option shares.
11. Notices. All notices hereunder shall be sent by registered or certified
mail, return receipt requested, or by overnight courier guaranteeing next day
delivery to the following addresses:
(i) if to Checkpoint, addressed to:
Checkpoint Systems, Inc.
Attention: General Counsel
000 Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
(ii) if to Xxxxxx, addressed to:
Xx. Xxxxx X. Xxxxxx, Xx.
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
12. Binding Effect. This Option Agreement shall be binding upon, and inure
to the benefit of, Checkpoint and its successors and Xxxxxx and his permitted
assigns, heirs, executors and administrators.
13. Integration and Governing Law. This Agreement comprises the entire
understanding between the parties hereto as to the subject matter covered hereby
and shall be construed and interpreted in accordance with the laws of the
Commonwealth of Pennsylvania, without giving effect to the conflict of law
provisions thereof.
IN WITNESS WHEREOF, the undersigned have executed this Option Agreement as
of the date and year first above written.
Xxxxx X. Xxxxxx, Xx. Checkpoint Systems, Inc.
/s/ Xxxxx X. Xxxxxx, Xx. BY: /s/ Xxxxx X. Xxxx
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(Signature)
Xxxxx X. Xxxx
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(Printed Name)
President and Chief Executive Officer
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(Title)
