EXHIBIT 4.2
NONSTATUTORY STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") is made and entered into as
of January 30, 1997, by and between FIRSTFED FINANCIAL CORP., a Delaware
corporation ("Grantor"), and _________________ ("Grantee) with reference to the
following facts:
A. On January 30, 1997, and effective as of January 30, 1997, the Board of
Directors of Grantor adopted the FirstFed Financial Corp. 1997 Nonemployee
Directors Stock Incentive Plan (the "Plan"), subject to shareholder
approval of the Plan.
B. The Board of Directors of Grantor (the "Board of Directors") considers
it desirable and in Grantor's best interests that Grantee be provided
options to acquire shares of the Common Stock of Grantor pursuant to the
Plan, in order to provide Grantee with opportunities to acquire a
proprietary interest in Grantor as an incentive that will allow Grantor to
attract and retain highly competent persons to serve as Nonemployee
Directors.
NOW, THEREFORE, the parties hereto wish to memorialize and confirm the
terms and conditions of the option awards received by Grantee in accordance with
the foregoing, subject to and consistent with the terms and conditions set forth
in the Plan.
1. GRANT OF OPTION.
1.1 Grant of Nonstatutory Stock Option. Pursuant to the terms of
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Section 6 of the Plan, Grantee has received, as of each date listed on Schedule
1 attached hereto and incorporated herein by this reference (hereafter "Date of
Grant"), as such Schedule may be updated from time to time by agreement of the
parties, an option (as defined in Section 1.2 hereof) to purchase the number of
whole shares of Common Stock specified on Schedule 1 for each such Date of
Grant. The options covered by this Agreement are not intended to qualify or be
treated as "Incentive Stock Options," as defined in the Plan and in Section
422(b) of the Internal Revenue Code of 1986, as amended ( the "Code").
1.2 Use of Certain Terms. For the purposes of this Agreement, the
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term "Option" as used herein shall refer to each Nonstatutory Stock Option
awarded to Grantee under Section 6 of the Plan and covered by this Agreement, as
listed on Schedule 1 attached hereto.
2. PURCHASE PRICE.
The price at which Grantee shall be entitled to purchase shares of
Common Stock upon exercise of each Option covered by this Agreement (the "Option
Price") is listed on Schedule 1 attached hereto for each such Option.
3. Term of Option.
The Options subject to this Agreement are effective and shall be
exercisable by Grantee for a period of ten (10) years and one month, commencing
on the Date of Grant for each such Option. Options may also be earlier
terminated as provided in Section 7 hereof. The period within which each Option
is effective in accordance with this Agreement and the Plan is referred to
herein as the "Term" of such Option.
4. EXERCISABILITY OF OPTIONS.
4.1 Vesting of Options. No Option granted pursuant to Section 6 of
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the Plan shall be exercisable prior to the anniversary of the Effective Date.
Subject to the provisions of Section 4.2 herein, the Option shall only be
exercisable during its Term, and in accordance with the following schedule:
Period Percentage of Shares Exercisable
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January 31, 1998 100%
4.2 Acceleration of Vesting Upon a Change in Control. In the event
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of a "Change of Control" of Grantor (as hereinafter defined), any Option granted
hereunder, to the extent theretofore not immediately exercisable, shall
immediately become fully exercisable. For the purpose of this Agreement, a
"Change in Control" of Grantor shall mean any person (as such person is used in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act) becomes the beneficial owner
(as such term is used in Section 13(d)(1) of the Exchange Act) directly or
indirectly of securities representing at least 25% of the combined voting power
of the then outstanding securities of Grantor; or during any period of thirty-
six (36) consecutive months (whether commencing before or after the effective
date of the Plan), individuals who at the beginning of such period constituted
the Board of Directors cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election, of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period; or any
reorganization, merger or consolidation of Grantor with one or more corporations
as a result of which Grantor is not the surviving corporation, or as a result of
which the outstanding Common Stock is converted into or exchanged for cash or
securities of
another issuer or both, or upon the sale of all or substantially all the assets
of Grantor; or the approval by the stockholders of Grantor of any plan or
proposal for Grantor to be Acquired (as defined below) or for the liquidation or
dissolution of Grantor. For purposes of this Section 4.2, Grantor shall be
considered to be "Acquired" only if the owners of its voting securities
immediately prior to the effective date of any transactions referred to in this
section will not own immediately thereafter, as a result of having owned such
voting securities, securities representing a majority of the combined voting
power of the then outstanding securities of Grantor or the entity that then
owns, directly or indirectly, Grantor or all or substantially all of its assets.
5. Manners of Exercise and Payment.
5.1 Notice of Exercise and Payment for Shares. Subject to the
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restrictions set forth in Section 4 hereof, Grantee shall be entitled to
exercise an Option with respect to some or all of the shares of Common Stock
permitted to be purchased hereunder by delivery to Grantor of (1) a fully
executed written notice of exercise ( the "Notice of Exercise") in the form
attached hereto as Exhibit "A" and made a part hereof or such other form as
Grantor may from time to time require, and (2) the full aggregate Option Price
for the shares to be purchased, payable in cash, or at the Administrator's
discretion, by the assignment and delivery to Grantor of shares of Common Stock
or a combination of cash and such shares equal in value to the exercise price.
Any shares so assigned and delivered to Grantor in payment or partial payment of
the purchase price will be valued at their Fair Market Value on the exercise
date, which shall be the later of the date set forth in the Notice of Exercise
or the date such Notice is received by Grantor. In the event that the aggregate
Option Price delivered by Grantee to Grantor is insufficient to purchase all of
the shares requested in the Notice of Exercise, and Grantee shall fail to
provide Grantor with an amount sufficient to cover the shortfall within five (5)
days after receipt of written notice of such insufficiency, Grantor shall only
be obligated to deliver to Grantee that number of whole shares which the amount
previously paid by Grantee is sufficient to purchase.
5.2 Delivery of Shares. Upon receipt of a notice of exercise and
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full payment for the shares of Stock covered thereby, or such lesser number of
shares as Grantee is entitled to purchase pursuant to the terms of section 5.1
herein, Grantor shall, at its own expense, take and diligently pursue all such
action as may be necessary under applicable law to effect the transfer to
Grantee of the number of shares of Common Stock as to which such exercise was
effective. No fewer than fifty (50) shares may be purchased at one time
pursuant to any Option unless the number purchased is the total number at the
time available for purchase under the Stock
Option. No fractional shares will be issued pursuant to the exercise of a
Option, nor will any cash payments be made in lieu of fractional shares.
5.3 Grantee's Rights Prior to Exercise. Grantee shall not be deemed
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to be the holder of, or to have any of the rights of a holder with respect to,
any shares of Common Stock subject to an Option unless and until, (i) the Option
shall have been exercised pursuant to the terms hereof and Grantee shall have
paid the full required price for the number of shares as to which the Option
shall have been exercised; (ii) Grantor shall have issued and delivered the
shares to Grantee; and (iii) Grantee's name shall have been entered as a
stockholder of record on the books of Grantor; whereupon Grantee shall have full
voting and other ownership rights with respect to such shares.
6. NONTRANSFERABILITY.
Options shall not be transferable other than by will or the laws of
descent and distribution, or pursuant to the terms of a qualified domestic
relations order as such term is defined in the Code, as amended, and shall be
exercisable during the lifetime of Grantee only by Grantee (or Grantee's duly
appointed, qualified and acting personal representative).
7. Death or Termination of Service of Grantee.
7.1 Retirement or Death of Grantee. If Grantee terminates his or her
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service with Grantor by reason of death, Disability, or Normal Board Retirement,
an Option granted hereunder held by Grantee shall be automatically accelerated
with respect to its exercisability and shall become immediately exercisable in
full for the remaining number of shares of Common Stock subject to such Option
for one year after the date of such termination, whichever period is shorter,
and thereafter such Option shall terminate; provided, however, that if Grantee
dies or suffers a Disability during said one year period after Normal Board
Retirement, such Option shall remain exercisable in full for a period of one
year after the date of such death or Disability or until the expiration of the
stated term of such Option, whichever period is shorter, and thereafter such
Option shall terminate.
7.2 Other Termination of Service. If Grantee's services as a
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member of the Board of Directors terminate for any other reason, any portion of
an Option granted hereunder held by Grantee which is not then exercisable shall
terminate and any portion of such Option which is then exercisable may be
exercised for sixty (60) days after the date of such termination or until the
expiration of the stated term of such Option, whichever period is shorter, and
thereafter such Option shall terminate; provided, however, that if Grantee dies
or suffers a Disability during such sixty (60)
day period such Option may be exercised for a period of one year after the date
of Grantee's death or Disability, or until the expiration of the stated term of
such Option, whichever period is shorter, in accordance with its terms, but only
to the extent exercisable on the date of Grantee's death or Disability.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION.
8.1 Adjustment To Option. An appropriate and proportionate
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adjustment, as determined by the Administrator in accordance with the Plan,
shall be made in number, kind and per share purchase price of shares subject to
the unexercised portion of the Options covered by this Agreement at the time of
any change in the capitalization of Grantor; provided, however, that no such
adjustment shall change the aggregate purchase price (as determined pursuant to
Section 5.1 hereof) applicable to the unexercised portions of such Options.
8.2 Impact of Terminating Event on Option. Upon dissolution or
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liquidation of Grantor or upon a reorganization, merger or consolidation of
Grantor with one or more corporations as a result of which Grantor is not the
surviving corporation or as a result of which the outstanding Common Stock is
converted into or exchanged for cash or securities of another issuer or both or
upon the sale of all or substantially all the assets of Grantor, all
restrictions applicable to the exercise of outstanding Options shall continue in
full force and effect and provision shall be made in connection with such
transaction for the continuance of the Plan and the assumption of the
outstanding Options by or the substitution for such Options of new Options
covering the stock of the successor corporation, or a parent or subsidiary
thereof or Grantor with appropriate and proportionate adjustment in (i) the
number and kind of shares or other securities or cash or other property subject
to such Options and (ii) the price for each share or other unit of any other
securities or cash or other property subject to such Options without change in
the aggregate purchase price or value as to which such Options remain
exercisable; provided however, that if no public market exists for the Common
Stock or the other securities or property which would be subject to such Options
after consummation of such transaction, such Options shall be converted into the
right to receive, upon exercise thereof; an amount of each equal to the amount
determined by the Administrator to be the Fair Market Value on the effective
date of such transaction of the stock, other securities, cash and other property
that a share of Common Stock is entitled to receive, or into which it is
converted, pursuant to such transaction.
9. TAX WITHHOLDING.
Notwithstanding any other provision of this Agreement, upon the
exercise of any Option, Grantee hereby agrees to pay Grantor within thirty (30)
days
of receipt of a written demand therefor from Grantor, an amount in cash equal to
the amount of any tax required to be withheld by Grantor or to direct Grantor to
withhold such amount from any payments otherwise owing to Grantee, in order to
permit Grantor to obtain any otherwise available deduction under any applicable
federal or state tax laws. Notwithstanding Section 5.2 hereof, Grantor shall
have no obligation to deliver the shares of Common Stock with respect to which
Grantee has exercised any such Option or to make payment with respect to any
shares of Common Stock with respect to which Grantee has surrendered any such
Option until Grantee has paid or permitted Grantor to withhold such amount as
provided herein.
10. CONDITION TO GRANT OF OPTIONS.
Notwithstanding anything herein to the contrary, any Option granted
hereunder shall immediately become null and void in the event that the
stockholders of the Grantor shall fail to approve the Plan.
11. GOVERNMENT AND OTHER REGULATIONS.
The obligation of Grantor to sell and deliver shares of Common Stock
under the Plan is subject to all applicable laws, rules and regulations, and the
obtaining of all such approvals from all government agencies as deemed necessary
of appropriate by Grantor.
12. NOTICES.
All notices, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered in person, or by United
States mail, certified or registered, with return receipt requested, or
otherwise actually delivered, in the case of Grantee, to the last address of
Grantee appearing on the books of Grantor, and in the case of Grantor to:
FirstFed Financial Corp.
000 Xxxxxxxx Xxxx.
Xxxxx Xxxxxx, XX 00000
Attention: General Counsel
or to such other address or addresses as Grantee or Grantor shall hereafter have
specified in writing. Any such notice, demand or other communication hereunder
shall be deemed to have been duly given on the date actually delivered or as of
the third business day following the date mailed, as the case may be.
13. MODIFICATION OF AGREEMENT.
This Agreement may be modified, amended, suspended or terminated, and
any terms, covenants, representations or conditions may be waived, but only by a
written instrument consistent with the provisions of the Plan and executed by
the parties hereto.
14. SEVERABILITY.
Should any provision of this Agreement be held by a court to be
unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full force
in accordance with their terms.
15. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and, when
such counterparts have been executed by each of the parties hereto, said
counterparts shall constitute a single and valid agreement although each of the
signatory parties have executed separate counterparts hereof.
16. TITLES.
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
17. PLAN CONTROLLING.
This Agreement shall be construed so as to be consistent with the Plan
and the provisions of the Plan shall be deemed to be controlling in the event
any provision hereof shall appear to be inconsistent therewith. Grantee hereby
acknowledges receipt of a copy of the Plan from Grantor.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
"GRANTOR" "GRANTEE"
FIRSTFED FINANCIAL CORPORATION,
a Delaware corporation
By:___________________________ ______________________________
Xxxxxxx Xxxxxxxx
President and CEO
Attest: ________________________
Xxx X. Xxxxxxx
Secretary
SCHEDULE 1
Effective Date Number of Shares Subject to Option Exercise Price
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January 30, 1997 4,000 $21.75
This schedule 1 replaces and supersedes all prior Schedule 1's attached to
that certain Option Award Agreement dated n/a, by and between FirstFed Financial
Corp. and Grantee(the "Agreement"). The parties to the Agreement hereby
acknowledge and agree that this schedule 1 accurately and completely lists the
Option(s) (and the specified terms thereof) covered by such Agreement.
ACKNOWLEDGED AND AGREED:
FIRSTFED FINANCIAL CORP., GRANTEE
a Delaware Corporation
By:______________________________ By:___________________________
Its:_____________________________
Dated:___________________ Dated:___________________
NOTICE OF EXERCISE OF
A NONSTATUTORY STOCK OPTION
TO: THE BOARD OF DIRECTORS OF FIRSTFED FINANCIAL CORP.
The undersigned hereby elects to purchase _____________________ whole shares of
Common Stock of FirstFed Financial Corp. ( the "Company") pursuant to the
Nonstatutory Stock Option granted to the undersigned in that certain Stock
Option Agreement between the Company and the undersigned bearing an Effective
Date of.
The aggregate purchase price for such shares is $ __________________, which
amount is being tendered herewith. The effective date of this election shall
be______________________, or the date of receipt of this Notice by Grantor if
later.
Executed this___________day of______________, at___________________
________________________________
(Name)
________________________________
(Social Security Number)
