EXHIBIT 10.26
AMERICAN COMMERCIAL LINES INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is made as of this
18th day of January, 2005 (the "Grant Date") between American Commercial Lines
Inc., a Delaware corporation (the "Company"), and W. Xxxxxxx Xxxxxxxx (the
"Optionee"). Capitalized terms used herein that are not otherwise defined shall
have the meaning ascribed to them in the American Commercial Lines Inc. Equity
Award Plan for Employees, Officers and Directors (the "Plan").
W I T N E S S E T H:
WHEREAS, the Company desires to provide the Optionee with the opportunity to
purchase shares of its common stock, par value $0.01 per share ("Common Stock"),
in accordance with the terms of the Plan; and
WHEREAS, the Optionee wishes to acquire the right to purchase shares of Common
Stock granted hereby.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter contained, the parties hereto mutually covenant and agree
as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee the
option to purchase all or part of an aggregate of 10,020 shares of Common Stock,
on the terms and conditions set forth in the Plan, subject to the vesting,
exercise and other requirements set forth in this Agreement, to the extent not
inconsistent with the Plan (the "Option").
2. PURCHASE PRICE. The per share purchase price of the shares of Common
Stock issuable upon exercise of the Option shall be $16.65, which shall be not
less than 100% of the Fair Market Value (as defined in the Plan) on the Grant
Date.
3. NONQUALIFIED STOCK OPTION. The Option is not intended to qualify as
an incentive stock option under Section 422 of the Internal Revenue Code, as
amended.
4. TERM. The term of the Option shall expire as of the earliest of the
following:
(a) the date that is ten (10) years from the Grant Date;
(b) to the extent the Option is vested on the date of such
termination, the date that is one (1) day following the date that the Optionee's
employment with the Company is terminated for Cause, as defined in Section 5
below;
(c) to the extent the Option is vested on the date of such
termination, the date that is ninety (90) days following the date that the
Optionee terminates his employment with the Company with Good Reason, as defined
in Section 5 below;
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(d) to the extent the Option is vested on the date of such
termination, the date that is ninety (90) days after the Optionee's relationship
as an employee of the Company is terminated other than (i) for Cause, or (ii)
upon the Optionee's death, Disability or Retirement;
(e) to the extent the Option is vested on the date of such
termination, the date that is twelve (12) months after the Optionee's employment
by the Company is terminated as a result of the Optionee's Disability, as
defined in the Plan;
(f) to the extent the Option is vested on the date of such death,
the date that is twelve (12) months after the Optionee dies while an employee of
the Company;
(g) to the extent the Option is vested on the date of such
Retirement, the date that is twelve (12) months after the Optionee's employment
by the Company is terminated as a result of the Optionee's Retirement, as
defined in the Plan (provided that if the Optionee dies within such twelve (12)
month period, any such unexercised Option shall continue to be exercisable for
twelve (12) months from the date of such death); or
In the event of termination of the Optionee's employment by the Company for
Cause, the Optionee shall forfeit all rights hereunder with respect to any
vested or non-vested Options as of the date of such termination. Subject to the
foregoing terms of this Section 4, if the Optionee terminates his employment by
the Company without Good Reason, the Optionee shall forfeit all rights hereunder
with respect to any non-vested Options as of the date of such termination,
including the right to purchase shares of Common Stock under the Option.
5. VESTING.
(a) Subject to any forfeiture provisions in this Agreement or in
the Plan, the Optionee shall become vested in the Options granted hereunder as
follows:
PERCENTAGE VESTED: VESTING DATE:
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33% 1st Anniversary of Grant Date
33% 2nd Anniversary of Grant Date
34% 3rd Anniversary of Grant Date
(b) Notwithstanding the vesting schedule contained in Section 5(a)
hereof, in the event of a "Change in Control", then the Optionee shall become
100% vested in the Option following such "Change in Control" of the Company. For
purposes of this Agreement, a "Change in Control" shall mean the occurrence of
any of the following events, each of which shall be determined independently of
the others: (i) any "Person" (as hereinafter defined), other than a holder of at
least 10% of the outstanding voting power of the Company as of the date of this
Agreement, becomes a "beneficial owner" (as such term is used in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of a majority of
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the stock of the Company entitled to vote in the election of directors of the
Company; (ii) individuals who are Continuing Directors of the Company (as
hereinafter defined) cease to constitute a majority of the members of the Board;
(iii) stockholders of the Company adopt and consummate a plan of complete or
substantial liquidation or an agreement providing for the distribution of all or
substantially all of the assets of the Company; (iv) the Company is a party to a
merger, consolidation, other form of business combination or a sale of all or
substantially all of its assets, with an unaffiliated third party, unless the
business of the Company following consummation of such merger, consolidation or
other business combination is continued following any such transaction by a
resulting entity (which may be, but need not be, the Company) and the
stockholders of the Company immediately prior to such transaction hold, directly
or indirectly, at least a majority of the voting power of the resulting entity;
provided, however, that a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) shall not constitute a
Change in Control; (v) there is a Change in Control of the Company of a nature
that is reported in response to item 5.01 of Current Report on Form 8-K or any
similar item, schedule or form under the Exchange Act, as in effect at the time
of the change, whether or not the Company is then subject to such reporting
requirements; provided, however, that for purposes of this Agreement a Change in
Control shall not be deemed to occur if the Person or Persons deemed to have
acquired control is a holder of at least 10% of the outstanding voting power of
the Company as of the date of this Agreement; or (vi) the Company consummates a
transaction which constitutes a "Rule 13e-3 transaction" (as such term is
defined in Rule 13e-3 of the Exchange Act) prior to the termination or
expiration of this Agreement.
(c) In the event of a Rule 13e-3 transaction, then effective
coincident with the consummation of such Rule 13e-3 transaction, all non-vested
Options issued hereunder shall immediately vest and be exercisable by Optionee
notwithstanding the vesting schedules set forth in Section 5(a) hereof;
provided, however, that notwithstanding the foregoing, in connection with the
consummation of such Change in Control or Rule 13e-3 transaction, all such
non-vested Options then held by Optionee shall be deemed to vest and become
exercisable at such time in order to permit Optionee to participate in such
transaction.
(d) For purposes of this Section 5, "Continuing Directors" shall
mean the members of the Board on the Grant Date, provided that any person
becoming a member of the Board subsequent to such date whose election or
nomination for election was supported by at least a majority of the directors
who then comprised the Continuing Directors shall be considered to be a
Continuing Director; and the term "Person" is used as such term is used Sections
13(d) and 14(d) of the Exchange Act.
(e) Notwithstanding the vesting schedule contained in Section 5(a)
hereof, in the event of a termination of employment by the Optionee with Good
Reason (as defined below), by the Company without Cause (as defined below), or
due to death or due to Disability, then the Optionee shall become 100% vested in
the Option following such termination.
(i) For purposes of this Agreement, "Cause" shall mean that
the Optionee has:
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(1) been convicted of, or pled nolo contendere to, a
felony or crime involving moral turpitude or an indictment for any felony or
misdemeanor involving moral turpitude, if such indictment is not discharged or
otherwise resolved within 18 months; or
(2) committed an act of personal dishonesty or fraud
involving personal profit in connection with the Optionee's employment by the
Company; or
(3) committed a material breach of any material
covenant, provision, term, condition, understanding or undertaking set forth in
this Agreement; or
(4) committed an act which the Board of Directors of the
Company (the "Board") has found to have involved willful misconduct or gross
negligence on the part of the Optionee; or
(5) failed or refused to substantially perform the
lawful duties of his employment in any material respect; or
(6) failed to comply with the lawful material written
rules and material policies of the Company in any material respect, as
determined by the Board;
provided, however, that no termination under clause (3), (4), (5) or
(6) above shall be effective unless the Optionee shall have first received
written notice describing in reasonable detail the basis for the termination and
within fifteen (15) days following delivery of such notice the Optionee shall
have failed to cure such alleged behavior constituting "cause"; provided,
further, that this notice requirement prior to termination shall be applicable
only if such behavior or breach is capable of being cured.
(ii) For purposes of this Agreement, "Good Reason" shall mean
the Optionee's resignation or retirement with the consent of the Company, such
consent may be given at the Company's sole discretion. The Optionee shall
deliver written notice to the Company of his intention to resign or retire from
employment by the Company at least ninety (90) days prior to his expected last
day of employment by the Company. The Company shall provide notice to the
Optionee within thirty (30) days of its receipt of such notice indicating
whether the Company consents to the Optionee's resignation or retirement and,
therefore, whether the Optionee's relationship as an employee of the Company is
terminated for "Good Reason."
6. EXERCISE. The Optionee shall not be entitled to exercise the Option
until it is vested. Subject to the provisions of Section 4, the Option may be
exercised only while the Optionee is an employee of the Company. In no event
shall the Option be exercisable after the expiration date of the Option.
7. NONTRANSFERABILITY. The Option shall not be transferable or
assignable other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as described in Section 206(d)
of the Employee Retirement Income Security Act of 1974, as amended, subject to
Article 3. Any other attempt to assign, transfer, pledge, hypothecate, dispose
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of or subject the Option to execution, attachment or similar process shall be
null and void and without effect. The Option may be exercised during the
lifetime of the Optionee only by the Optionee, his guardian or his legal
representative, or by an alternate payee pursuant to a qualified domestic
relations order.
8. METHOD OF EXERCISING OPTIONS.
(a) Subject to the terms and conditions of this Agreement, the
Option may be exercised by written notice delivered to the Company or its
designated representative in the manner and at the address for notices set forth
in Section 11 hereof. Such notice shall state that the Option is being exercised
thereby and shall specify the number of shares of Common Stock involved. The
notice shall be signed by the person or persons exercising the Option and shall
be accompanied by payment in full of the Option price for such shares of Common
Stock, such payment to be made in (i) cash, as described in Section 8(c) of the
Plan; (ii) subject to Section 8(c) of the Plan, that number of Mature Shares of
unrestricted Common Stock, or vested Restricted Stock, which has an aggregate
Fair Market Value as of the date of exercise equal to the aggregate exercise
price for all of the shares of Common Stock subject to such exercise; (iii) a
combination of methods (i) and (ii); (iv) to the extent permitted by applicable
law, pursuant to independently arranged broker assisted "cashless" exercise with
third party brokers unrelated to the Company; or (v) other means authorized by
the Committee in accordance with Section 8(c) of the Plan. If the tender of
shares of Common Stock as payment of the Option price would result in the
issuance of fractional shares of Common Stock, the Company shall instead return
the balance in cash or by check to the Optionee. If the Option is exercised by
any person or persons other than the Optionee, the notice described in this
Section 8(a) shall be accompanied by appropriate proof (as determined by the
Committee) of the right of such person or persons to exercise the Option under
the terms of the Plan and this Agreement. The Company shall issue and deliver,
in the name of the person or persons exercising the Option, a certificate or
certificates representing such shares as soon as practicable after notice and
payment are received and the exercise is approved.
(b) The Option may be exercised in accordance with the terms of
the Plan and this Agreement with respect to any whole number of shares subject
to the Option, but in no event may an Option be exercised as to fewer than one
hundred (100) shares at any one time, or the remaining shares covered by the
Option if less than two hundred (200).
(c) The Optionee shall have no rights of a stockholder with
respect to shares of Common Stock to be acquired by the exercise of the Option
until the date of issuance of a certificate or certificates representing such
shares. Except as otherwise expressly provided in the Plan, no adjustment shall
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued. All shares of Common Stock purchased upon
the exercise of the Option as provided herein shall be fully paid and
non-assessable.
(d) The Optionee agrees that no later than the date as of which an
amount first becomes includible in his gross income for federal income tax
purposes with respect to the Option, the Optionee shall pay to the Company, or
make arrangements satisfactory to the
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Company regarding the payment of, any federal, state, local or foreign taxes of
any kind required by law to be withheld with respect to such amount. Withholding
obligations may be settled with Common Stock, including Common Stock that is
acquired upon exercise of the Option. The obligations of the Company under this
Agreement and the Plan shall be conditional on such payment or arrangements, and
the Company, its Affiliates and Subsidiaries shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment otherwise due to
the Employee.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company and the terms of the Plan, if, during
the term of this Agreement, there shall be any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common Stock
or any other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company (as defined in Section
14 of the Plan), the Committee may, in its sole discretion, make an appropriate
and equitable adjustment in the aggregate number, kind and option price of
shares subject to this Option; provided, however, that in no event shall the
Option price be adjusted below the par value of a share of Common Stock, nor
shall any fraction of a share be issued upon the exercise of the Option.
10. CONDITIONS UPON ISSUANCE OF OPTION. As a condition to the exercise
of the Option, the Company may require the Optionee to (i) represent and warrant
at the time of any such exercise that the Common Stock is being purchased only
for investment and without any present intention to sell or distribute such
shares if, in the opinion of legal counsel for the Company, such a
representation is required by any relevant provision of law; and (ii) enter into
a lock-up or similar agreement with the Company with respect to such shares
prohibiting, for up to ninety (90) days, the disposition of such shares.
11. NOTICES. Each notice relating to this Agreement shall be in writing
and shall be sufficiently given if delivered by registered or certified mail, or
by a nationally recognized overnight delivery service, with postage or charges
prepaid, to the address hereinafter provided in this Section 11. Any such notice
or communication given by first-class mail shall be deemed to have been given
two business days after the date so mailed, and such notice or communication
given by overnight delivery service shall be deemed to have been given one
business day after the date so sent, provided such notice or communication
arrives at its destination. Each notice to the Company shall be addressed to it
at its offices at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxxx, Xxxxxxx 00000
(attention: Senior Vice President, Law and Administration), with a copy to the
Chairman of the Compensation Committee of the Company or to such other designee
of the Company. Each notice to the Optionee or other person or persons then
entitled to exercise the Option shall be addressed to the Optionee or such other
person or persons at the Optionee's address shown on the signature page hereof.
12. LIMITATIONS. Nothing contained in this Agreement shall be construed
as conferring upon the Optionee the right to continue as an employee of the
Company or shall affect the right of the Company, in its sole discretion, to
terminate the Optionee's relationship as an employee of the Company at any time,
with or without Cause.
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13. INCORPORATION OF THE PLAN. Notwithstanding the terms and conditions
contained herein, this Agreement shall be subject to and governed by all the
terms and conditions of the Plan, which is hereby incorporated by reference. In
the event of any discrepancy or inconsistency between the terms and conditions
of this Agreement and of the Plan, the terms and conditions of the Plan shall
control.
14. INTERPRETATION. The interpretation and construction of any terms or
conditions of the Plan, or of this Agreement or other matters related to the
Plan by the Committee, shall be final and conclusive.
15. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or be invalid under
applicable law, then such provision shall be ineffective to the minimal extent
of such provision or the remaining provisions of this Agreement or the
application of such provision to other parties or circumstances.
16. ENFORCEABILITY. This Agreement shall be binding upon the Optionee
and such Optionee's estate, personal representative and beneficiaries.
17. PRONOUNS, SINGULAR/PLURAL. Any use of any masculine pronoun shall
include the feminine and vice-versa, and any use of a singular shall include the
plural or vice-versa, as the context and facts may require.
18. COUNTERPART EXECUTION. This Agreement may be executed in
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute the entire document.
* * * * *
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
its officer thereunto duly authorized, and the Optionee has executed this
Agreement all as of the day and year first above written.
AMERICAN COMMERCIAL LINES INC.
By: /s/ Xxxx X. Xxxxxxx
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Its: Senior Vice President,
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Law & Administration
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OPTIONEE: W. XXXX XXXXXXXX
/s/ W. Xxxx Xxxxxxxx
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OPTIONEE'S ADDRESS:
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