EXHIBIT 4.21
NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT, effective as of October 28, 1998, between CTB International
Corp., a Delaware corporation (the "Company"), and G. Xxxxxx Xxxxxxxxxxx (the
"Optionee").
W I T N E S S E T H :
WHEREAS, the Company, acting through its Board of Directors (the "Board")
has granted to the Optionee, effective as of the date of this Agreement, an
option to purchase shares of common stock, $.01 par value per share, of the
Company (the "Common Stock"), on the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained in this Agreement, the parties hereto agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms have
the meanings set forth below:
"Affiliate" of any Person means any other Person directly or indirectly
controlled by, controlling, or under common control with such Person.
"Board" means the Board of Directors of the Company.
"Cause" means action by the Optionee that constitutes misconduct,
dishonesty, the failure to comply with specific directions of the Board of
Directors or any senior executive officer of the Company (after having been
given a reasonably detailed written notice of, and a period of 20 days to cure,
such misconduct or failure), a deliberate and premeditated act against the
Company or its Affiliates or the commission of a felony. Any voluntary
termination of employment by the Optionee in anticipation of an involuntary
termination of the Optionee's employment for Cause shall be deemed to be a
termination for Cause.
"Fair Market Value" of a share of Common Stock on any date shall be, if the
Common Stock is listed on a national stock exchange, the officially quoted
closing price on such stock exchange, or if the Common Stock is listed on the
NASDAQ National Market, the officially quoted closing price on NASDAQ, or, if
the Common Stock is listed on NASDAQ but not on the National Market, the average
of the closing bid and asked prices reported by NASDAQ, in each case on the date
as of which the value is to be determined (or if such date is not a trading day,
as of the preceding trading day), or if the Common Stock is not so listed, the
fair market value determined in good faith by the Board.
"Option" has the meaning ascribed to such term in Section 2 of this
Agreement.
"Option Shares" has the meaning ascribed to such term in Section 2 of this
Agreement.
"Person" means any individual, partnership, corporation, group, trust or
other legal entity.
"Shares" means, collectively, the shares of Common Stock subject to the
Option, whether such shares are Option Shares or Vested Shares.
"Transaction" means (a) any consolidation or merger of the Company in which
the Company is not the surviving corporation other than a merger solely to
effect a reincorporation or a merger of the Company as to which stockholder
approval is not required pursuant to Sections 251(f) or 253 of the Delaware
General Corporation Law, or (b) any sale, lease, exchange or other transfer
(other than dividends) (in one transaction or a series of related transactions)
of all or substantially all of the assets or earning power of the Company, or
(c) the adoption of any plan or proposal for the liquidation or dissolution of
the Company.
"Vested Shares" means the Option Shares with respect to which the Option is
exercisable at any particular time.
SECTION 2. Option; Option Price. On the terms and subject to the conditions
of this Agreement, the Optionee shall have the option (the "Option") to purchase
up to 10,000 shares (the "Option Shares") of Common Stock at the price per
Option Share equal to the closing price of publicly traded common stock of the
Company as listed on the NASDAQ National Market as of the close of said market
on October 28, 1998 (the "Option Price").
SECTION 3. Term. The term of the Option (the "Option Term") shall commence
on the date hereof and expire on the tenth anniversary of the date hereof,
unless the Option shall theretofore have been terminated in accordance with the
terms of this Agreement.
SECTION 4. Time of Exercise.
(a) The Option shall become vested and exercisable as to the following
portions of the Option Shares:
Vesting Date Vested and Exercisable Percent of Option Shares
Three (3) Years Following 50%
the Date of This Agreement
Six (6) Years Following 50%
the Date of This Agreement
(b) Except as otherwise provided in Section 6, the Option shall remain
exercisable as to all such Vested Shares until the expiration of the Option
Term.
SECTION 5. Procedure for Exercise.
(a) The Option may be exercised with respect to Vested Shares, from time to
time, in whole or in part (but for the purchase of whole shares only), by
delivery of a written notice (the "Exercise Notice") from the Optionee to the
Company, which Exercise Notice shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of Vested Shares with respect to which the Optionee
is exercising the Option;
(iii) include any representations of the Optionee required under Section 8
hereof;
(iv) in the event that the Option shall be exercised by the representative
of the Optionee's estate pursuant to Section 6, include appropriate proof of the
right of such Person to exercise the Option;
(v) state the date upon which the Optionee desires to consummate the
purchase of such Vested Shares (which date must be prior to the termination of
the Option); and
(vi) comply with such further provisions as the Company may reasonably
require.
(b) Payment of the Option Price for the Vested Shares to be purchased on
the exercise of the Option shall be made by certified or bank cashier's check
payable to the order of the Company, delivery of shares of Common Stock, valued
at their Fair Market Value as of the trading day immediately prior to the date
of exercise (including shares of Common Stock acquired upon exercise of this
Option) or by a combination of any of the foregoing means of payment.
(c) As a condition to the exercise of the Option and prior to the issuance
of any Vested Shares, the Optionee (or the representative of his estate) shall
be required to execute a Stockholders' Agreement (the "Stockholders' Agreement")
among the Company, the Optionee (or representative) and the other stockholders
of the Company, in the form attached hereto as Annex I.
(d) The Company shall be entitled to require as a condition of delivery of
the Vested Shares that the Optionee agree to remit when due an amount in cash
sufficient to satisfy all current or estimated future federal, state and local
withholding and employment taxes relating thereto.
SECTION 6. Termination of Employment. All or any part of the Option, to the
extent unexercised, shall terminate immediately upon the termination of
Optionee's employment with the Company or any of its Affiliates, except that the
Optionee shall have until the end of the third month following the date of such
termination of employment to exercise any portion of the Option that he could
have exercised on the date of such termination of employment; provided, however,
that such exercise must be accomplished prior to the expiration of the Option
Term. Notwithstanding the foregoing, if the Optionee's termination of employment
is due to his retirement, total and permanent disability (as determined by the
Board), or death, the Optionee, or the representative of the estate of the
Optionee, as the case may be, may exercise any portion of the Option which the
Optionee could have exercised on the date of such termination of employment for
a period of six months thereafter; provided, however, that such exercise must be
accomplished prior to the expiration of the Option Term. Notwithstanding the
foregoing, in the event of a termination of the Optionee's employment with the
Company or any of its Affiliates for Cause, the unexercised portion of the
Option shall terminate immediately and the Optionee shall have no right
thereafter to exercise any part of the Option.
SECTION 7. No Rights as a Stockholder. The Optionee shall not have any
rights or privileges of a stockholder with respect to any Shares until the date
of acceptance by the Company of payment for such Shares pursuant to the exercise
of the Option.
SECTION 8. Additional Provisions Related to Exercise. In the event of the
exercise of the Option at a time when there is not in effect a registration
statement under the Securities Act of 1933, as amended, relating to the Shares,
the Optionee hereby represents and warrants, and by virtue of such exercise
shall be deemed to represent and warrant, to the Company that the Option Shares
are being acquired for investment only and not with a view to the distribution
thereof, and the Optionee shall provide the Company with such further
representations and warranties as the Board may reasonably require in order to
ensure compliance with applicable federal and state securities, "blue sky" and
other laws. No Shares shall be purchased upon the exercise of the Option unless
and until the Company and/or the Optionee shall have complied with all
applicable federal or state registration, listing and/or qualification
requirements and all other requirements of law or of any regulatory agencies
having jurisdiction.
SECTION 9. Restriction on Transfer.
(a) The Option may not be transferred, pledged, assigned, hypothecated or
otherwise disposed of in any way by the Optionee and may be exercised during the
lifetime of the Optionee only by the Optionee. If the Optionee dies, the Option
shall thereafter be exercisable, during the period specified in Section 6, by
the representative of his estate to the full extent to which the Option was
exercisable by the Optionee at the time of his death. The Option shall not be
subject to execution, attachment or similar process. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect.
(b) Any shares issued to the Optionee upon exercise of the Option shall be
subject to the restrictions contained in the Stockholders' Agreement and shall
be deemed Stock (as defined in the Stockholders' Agreement) for all purposes
thereunder.
SECTION 10. Restrictive Legend. All stock certificates representing shares
issued upon exercise of the Option shall, unless otherwise determined by the
Board, have affixed thereto a legend substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SHARES HAVE BEEN ACQUIRED
FOR INVESTMENT ONLY AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT
OR AN OPINION OF COUNSEL TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.
IN ADDITION, THE TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED PURSUANT TO THE TERMS OF A STOCKHOLDERS' AGREEMENT AMONG THE ISSUER,
THE ORIGINAL HOLDER OF SUCH SHARES AND THE OTHER PARTIES NAMED THEREIN. COPIES
OF THE STOCKHOLDERS' AGREEMENT MAY BE OBTAINED WITHOUT CHARGE FROM THE SECRETARY
OF THE ISSUER."
SECTION 11. Noncompetition. In consideration for and as an express
condition of the Company's grant of the Option, Optionee hereby agrees to
execute and comply with the Noncompetition Agreement attached hereto as Annex II
and incorporated herein by reference.
SECTION 12. Optionee's Employment. Nothing in the Option shall confer upon
the Optionee any right to continue in the employ of the Company or any of its
Affiliates or interfere in any way with the right of the Company or its
Affiliates or stockholders, as the case may be, to terminate the Optionee's
employment or to increase or decrease the Optionee's compensation at any time.
SECTION 13. Adjustment.
(a) Subject to Section 9(b), if the Common Stock is changed by reason of a
stock split, reverse stock split, stock dividend or recapitalization, or
converted into or exchanged for other securities as a result of a merger,
consolidation or reorganization, the Board shall make such adjustments in the
number and class of shares of stock subject to the Option, and such adjustments
to the Option Price, as shall be equitable and appropriate in its good faith
judgment under the circumstances.
(b) The following rules shall apply in connection with the occurrence of
any Transaction:
(i) the Optionee shall be given (A) written notice of such Transaction at
least 20 days prior to its proposed effective date (as specified in such notice)
and (B) an opportunity, during the period commencing with delivery of such
notice and ending 10 days prior to such proposed effective date, to exercise the
Option in full; provided, however, that upon the occurrence of a Transaction,
the Option, to the extent not so exercised, shall automatically terminate; and
(ii) notwithstanding anything contained in Section 13(b)(i), Section
13(b)(i) shall not be applicable if provision shall be made in connection with
such Transaction for the assumption of the Option by, or the substitution for
the Option of new options covering the stock of, the surviving, successor or
purchasing corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number, kind and Option Price of shares subject to the
Option.
(c) The following rules shall apply in connection with Section 13(a) and
(b) above:
(i) no fractional shares shall be issued as a result of any such
adjustment, and any fractional shares resulting from the computations pursuant
to Section 13(a) or (b) shall be eliminated without consideration from the
Option;
(ii) no adjustment shall be made for the issuance to stockholders of rights
to subscribe for additional shares of Common Stock or other securities; and
(iii) any adjustments referred to in Section 13(a) or (b) shall be made by
the Board in its sole discretion and shall be conclusive and binding on the
Optionee.
SECTION 14. Notices. All notices, claims, certificates, requests, demands
and other communications hereunder shall be in writing and shall be deemed to
have been duly given and delivered if personally delivered or if sent by
nationally recognized overnight courier, by telecopy, or by registered or
certified mail, return receipt requested and postage prepaid, addressed as
follows:
(a) if to the Company, to it at:
CTB International Corp.
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: J. Xxxxxxxxxxx Xxxxxxx
with a copy to:
Xxxxxxx X. Xxxxxxx
CTB International Corp.
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
(b) if to the Optionee, to him at such Optionee's
address as most recently supplied to the Company and
set forth in the Company's records
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been received (i) in the case of
personal delivery, on the date of such delivery (or if such date is not a
business day, on the next business day after the date sent), (ii) in the case of
nationally-recognized overnight courier, on the next business day after the date
sent, (iii) in the case of telecopy transmission, when received (or if not sent
on a business day, on the next business day after the date sent), and (iv) in
the case of mailing, on the third business day following the date on which the
piece of mail containing such communication is posted.
SECTION 15. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement must be in writing and shall not operate or be
construed as a waiver of any other or subsequent breach.
SECTION 16. Optionee's Undertaking. The Optionee hereby agrees to take
whatever additional actions and execute whatever additional documents the
Company may in its reasonable judgment deem necessary or advisable in order to
carry out or effect one or more of the obligations or restrictions imposed on
the Optionee pursuant to the provisions of this Agreement.
SECTION 17. Amendment. This Agreement may not be amended, terminated,
suspended or otherwise modified except in a written instrument, duly executed by
both parties.
SECTION 18. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Indiana (without giving
effect to principles of conflicts of laws).
SECTION 19. Counterparts. This Agreement may be executed in one or more
counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts together shall constitute but one agreement.
SECTION 20. Entire Agreement. This Agreement (and the other writings
incorporated by reference herein) constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
written or oral negotiations, commitments, representations and agreements with
respect thereto.
SECTION 21. Severability. In the event any one or more of the provisions of
this Agreement should be held invalid, illegal or unenforceable in any respect
in any jurisdiction, such provision or provisions shall be automatically deemed
amended, but only to the extent necessary to render such provision or provisions
valid, legal and enforceable in such jurisdiction, and the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Non-Qualified
Stock Option Agreement as of the date first written above.
CTB International Corp.
By: /s/ J.Xxxxxxxxxxx Xxxxxxx /s/ X. Xxxxxx Colingwood
Name: J. Xxxxxxxxxxx Xxxxxxx X. Xxxxxx colingwood
Title: Presedent & CEO
Date: 11/4/98 Date: 11/4/98
