EXHIBIT 10.24
SOVEREIGN SPECIALTY CHEMICALS, INC.
STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
NONQUALIFIED STOCK OPTION AGREEMENT dated as of October 1, 2002
between Sovereign Specialty Chemicals, Inc., a Delaware corporation (the
"Company") and Xxxxxx X. Xxxxx, Xx., 000 Xxxx Xxxxx, Xxxxxx, XX 00000 (the
"Optionee").
The Company's Compensation Committee or the Company's Board of
Directors acting as the Committee (in either case, the "Committee") has
determined that the Optionee is one of the key employees of the Company,
and that the objectives of the Company's Stock Option Plan (the "Plan")
will be furthered by awarding to the Optionee Options under the Plan.
Capitalized terms defined in the Plan and not otherwise defined herein
shall have the meanings given such terms in the Plan.
In consideration of the foregoing and of the mutual undertakings set
forth in this Nonqualified Stock Option Agreement, the Company and the
Optionee agree as follows:
SECTION 1. Grant of Option.
----------------
1.1 The Company hereby grants to the Optionee an option (the "Option")
to purchase 60,000 shares of Common Stock of the Company ("Common Stock"),
at a purchase price of $115.00 per share.
1.2 The Option granted hereby is intended to be a "nonqualified" stock
option subject to the provisions of section 83 of the Code and is not
intended to qualify as an "incentive stock option" subject to the
provisions of section 422 of the Code.
SECTION 2. Exercisability.
---------------
2.1 Subject to Sections 2.2 and 4 hereof, the Option shall become
vested and be exercisable with respect to 1/16th of the number of shares of
Common Stock covered thereby on each of January 1st, April 1st, July 1st
and October 1st during the period commencing on the date hereof and ending
on October 1, 2006.
For purposes of this Agreement, each such date shall be referred to as a
"Vesting Date."
2.2 Subject to Section 4, the Option will terminate as to any and all
shares of Common Stock for which the Option has not yet been exercised on
October 1, 2012.
SECTION 3. Method of Exercise.
-------------------
3.1 The Option or any part thereof may be exercised only by giving
written notice to the Company in the form of Exhibit A hereto, which notice
shall state the election to exercise the Option and the number of whole
shares of Common Stock with respect to which the Option is being exercised.
Such notice must be accompanied by payment of the full purchase price for
the number of shares purchased.
3.2 Payment of the purchase price shall be made by certified or
official bank check payable to the Company. As soon as it is practicable
after it receives payment of the purchase price, the Company shall deliver
to the Optionee a certificate or certificates for the shares of Common
Stock acquired pursuant to the Option.
SECTION 4. Termination of Employment.
--------------------------
4.1 Death or Disability. In the event that the Optionee's employment
is terminated as a result of the Optionee's death or Disability, the
Option, to the extent exercisable on the date of termination (after giving
effect to Section 2.2 hereof) shall remain exercisable by the Optionee or
by the Optionee's legatee or legatees under his will, or by his personal
representatives or distributees, as applicable for a period of 180 days
following a termination of employment.
4.2 Termination for Cause. In the event of a Termination With Cause of
the Optionee by the Company at any time, the Option shall immediately
expire and cease to be exercisable and all rights granted to the Optionee
under this Agreement shall immediately expire.
4.3 Other Termination of Employment. If the employment of the Optionee
is terminated under any circumstance other than those set forth in Sections
4.1 or 4.2 hereof, the Optionee may, at any time within forty five (45)
days after his termination of employment, exercise the Option to the
extent, but only to the extent, that the Option or portion thereof was
exercisable on the date of termination.
4.4 Repurchase and Cancellation. Any Common Stock issued pursuant to
exercise of this Option is subject to the right of the Company to purchase
set forth in Section 4.5 of the Amended and Restated Shareholders Agreement
between the Optionee and the Company, dated as of May 12, 2000, as amended
from time to time (the "Shareholders Agreement"), and any unexercised
Options are subject to cancellation as set forth in Section 4.5 of the
Shareholders Agreement.
SECTION 5. Nonassignability.
-----------------
No right granted to the Optionee under the Plan or this Agreement
shall be assignable or transferable (whether by operation of law or
otherwise and whether voluntarily or involuntarily), other than by will or
by the laws of descent and distribution. All rights granted to the Optionee
under the Plan or this Agreement shall be exercisable only by the Optionee
or his estate, heirs or personal representatives.
SECTION 6. Right of Discharge Reserved.
----------------------------
Nothing in the Plan or in this Agreement shall confer upon the
Optionee any right to continue in the employ or service of the Company or
affect any right which the Company may have to terminate the employment or
services of the Optionee.
SECTION 7. No Rights as a Stockholder.
---------------------------
Neither the Optionee nor any person succeeding to the Optionee's
rights hereunder shall have any right as a stockholder with respect to any
shares subject to the Option until the date of the issuance of a stock
certificate to him for such shares. Except for adjustments made pursuant to
Section 3.4 of the Plan, no adjustment shall be made for dividends,
distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date is
prior to the date such stock certificate is issued.
SECTION 8. Plan Provisions to Prevail.
---------------------------
This Agreement shall be subject to all of the terms and provisions of
the Plan and the Shareholders Agreement, which are incorporated hereby and
made a part hereof. In the event there is any inconsistency between the
provisions of this Agreement and the Plan or the Shareholders Agreement,
the provisions of the Plan or the Shareholders Agreement, as applicable,
shall govern.
SECTION 9. Optionee's Acknowledgments.
---------------------------
By entering into this Agreement the Optionee agrees and acknowledges
that (a) he has received and read a copy of the Plan and accepts this
Option subject to the terms and provisions of the Plan, and (b) that no
member of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any award thereunder. As a
condition to the issuance of shares of Common Stock under this Option, the
Optionee authorizes the Company to withhold in accordance with applicable
law from any compensation payable to him any taxes required to be withheld
by the Company under federal, state, or local law as a result of his
exercise of this Option.
SECTION 10. Section Headings.
-----------------
The Section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of
such Sections.
SECTION 11. Notices.
--------
Any notice to be given to the Company hereunder shall be in writing
and shall be addressed to the Secretary of the Company, Xxxxxxxxx X. Xxxxx,
c/o AEA Investors Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at
such other address as the Company may hereinafter designate to the Optionee
by notice as provided herein. Any notice to be given to Optionee shall be
given at the address set forth on the first page hereof, or at such other
address as Optionee may hereinafter designate to the Company by notice as
provided herein. Notices hereunder shall be deemed to have been duly given
when personally delivered or mailed by registered or certified mail to the
party entitled to receive them.
SECTION 12. Successors and Assigns.
-----------------------
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and the successors and assigns of the Company and, to the
extent set forth in Section 5, the estate, heirs or personal
representatives of the Optionee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SOVEREIGN SPECIALTY CHEMICALS INC.
By: /s/ Xxxx X. Xxxxxx
----------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
OPTIONEE
/s/ Xxxxxx X Xxxxx, Xx.
--------------------------
Xxxxxx X. Xxxxx, Xx.
