EXHIBIT 10(G)
INCENTIVE STOCK OPTION AGREEMENT
* * * * * * *
This AGREEMENT, entered into as of this day of 199 ,
(hereinafter called the "Option Date") between KOLLMORGEN CORPORATION, a
corporation organized under the laws of the State of New York (hereinafter
called the "Corporation"), and of
an employee of the Corporation or of a subsidiary or affiliate of the
Corporation (hereinafter called the "Optionee").
WITNESSETH THAT:
WHEREAS, the Corporation by due corporate action and with the written
consent of the holders of at least a majority of the stock of the Corporation
entitled to vote adopted the 1991 Long Term Incentive Plan (such Plan, as
amended, hereinafter called the "Plan"); and
WHEREAS, the Plan is administered by the Personnel and Compensation
Committee of the Corporation's Board of Directors (hereinafter called the
"Committee"), which is composed of individuals who are not employees of the
Corporation or otherwise eligible to receive stock options; and
WHEREAS, the Committee has determined on the date hereof that it would
be in the best interests of the Corporation to grant to the Optionee the
option contained in this Agreement because of the incentives it will generate
in the Optionee to promote the long range interests of the Corporation; and
WHEREAS, the Optionee wishes to accept such option, upon the terms and
conditions hereinafter provided; and
WHEREAS, the Committee has determined that the option price hereinafter
provided for is not less than 100% of the fair market value of the Common
Stock of the Corporation on the date hereof;
NOW, THEREFORE, in consideration of the premises it is agreed as
follows:
1. Option Grant. Subject to the terms and conditions hereof and to
the terms and conditions of the Plan, which are hereby incorporated herein by
reference, the Corporation hereby grants to the Optionee, and the Optionee
hereby accepts, an incentive stock option (hereinafter called the "Option")
within the meaning of Section 422(A)(b) of the Internal Revenue Code of 1986,
as amended, to purchase shares of Common Stock, $2.50 par value,
of the Corporation (hereinafter called the "Optioned Shares") at a price of
$ per share (hereinafter called the "Option Price").
2
2. Period of Option, and Conditions of its Exercise.
(a) Unless the Option be terminated earlier as provided in this Option
Agreement, the term of the Option and of this Option Agreement shall commence
as of the date hereof and terminate at the close of business on the day
immediately preceding the tenth anniversary of such date. Upon any
termination of the Option, all rights of the Optionee hereunder shall cease.
Except as expressly provided in paragraph 3, this Option may be exercised as
follows:
i) up to 10% of the Optioned Shares on or after twelve (12)
months following the Option Date;
ii) up to an additional 10% of the Optioned Shares on or
after eighteen (18) months following the Option Date;
iii) up to an additional 20% of the Optioned Shares on or
after twenty-four (24) months following the Option Date;
and,
iv) up to an additional 20% of the Optioned Shares on or
after the third, fourth and fifth anniversary of the
Option Date;
provided, however, that the Committee may accelerate the date upon which the
option may be first exercisable if in its opinion such acceleration is
advisable in order to effectuate the purposes for which the Option was
granted. Events which the Committee may consider in arriving at such an
opinion shall include, by way of example and not limitation, any merger or
consolidation of the Corporation or any transfer by the Corporation of
substantially all of its assets or any change or proposed change in the
control of the Corporation. Notwithstanding the foregoing, upon a
determination by the Committee that there has been a sale of substantially
all of the Corporation's assets or a dissolution or liquidation of the
Corporation, or a "Change in Control" of the Corporation (as defined below)
this Option shall immediately become exercisable in full. For this purpose a
"Change in Control" shall mean a change in control of a nature that would be
required to be reported or disclosed by the Corporation in response to the
requirements of any rule or regulation promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), as in effect on the Option Date; provided, however, a
Change in Control shall be deemed to have occurred if and when (i) any person
[including a "Person" as used in Section 14(d) of the 1934 Act] is or becomes
a beneficial owner (as such term is defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of the Corporation representing 10% or
more of the combined voting power of the Corporation's then outstanding
securities (a) if the beneficial ownership of such person is not approved by
the Board of Directors of the Corporation either before or within 30 days
after receipt of notice that such person is or has become such a beneficial
owner, or (b) if, at any time within twenty-four (24) months thereafter, the
employment of the person employed as Chief Executive Officer of the
3
Corporation terminates involuntarily (other than for cause) or (ii) during
any period of twenty-four (24) consecutive months, commencing before or after
the Option Date, individuals who at the beginning of such twenty-four (24)
month period were directors of the Corporation cease for any reason, other
than solely because of death, retirement or disability, to constitute at
least a majority of the Board of Directors of the Corporation and the
nominations of their replacements are not approved by a majority of the
members of the original Board of Directors who continue on the Board.
(b) Nothing in this Option Agreement shall confer upon the Optionee any
right to continue in the employ of the Corporation or any subsidiary or
affiliate thereof or interfere in any way with the right of the Corporation
or any subsidiary or affiliate thereof to terminate the employment of the
Optionee at any time.
3. Death or Termination of Employment of Optionee.
(a) If the employment of the Optionee by the Corporation or a
subsidiary or affiliate thereof shall terminate by reason of his death, the
Option may be exercised prior to the earlier of (i) the expiration date of
the Option or (ii) the expiration of one year after the date of the
Optionee's death (or such longer period, not exceeding one additional year,
as the Committee may approve), by the person or persons (hereinafter called
the "Beneficiary") to whom the Optionee's rights under the Option pass by
will or the laws of descent or distribution (including his estate during the
period of administration), provided, however, that the Beneficiary shall be
entitled to exercise the Option only to the same extent exercisable by the
Optionee on the date of his death.
(b) If, prior to the first anniversary of the Option Date, the
Optionee's employment with the Corporation or any subsidiary or affiliate
thereof shall be terminated for any reason, this Option Agreement, the Option
and all rights to purchase Optioned Shares pursuant hereto shall forthwith
terminate and become null and void.
(c) If, on or after the first anniversary of the Option Date, the full-
time employment of the Optionee by the Corporation or any subsidiary or
affiliate thereof shall terminate for any reason other than (i) the death of
the Optionee or (ii) circumstances which, in the sole and absolute opinion of
the Committee, constitute cause for discharge of the Optionee, the Option may
be exercised by the Optionee at any time prior to the earlier of (i) the
expiration date of the Option or (ii) the expiration of three months after
the date of such termination of employment, to the extent the Option was
exercisable by the Optionee on the date of such termination of employment.
(d) If the employment of the Optionee by the Corporation or any
subsidiary or affiliate thereof shall terminate under circumstances which, in
the sole and absolute opinion of the Committee, constitute cause for
discharge, this Option Agreement, the Option, and all rights to purchase
shares pursuant hereto, shall forthwith terminate and become null and void.
4
(e) If the Optionee is employed by a subsidiary or affiliate of the
Corporation which ceases to be such a subsidiary or affiliate, the Optionee's
employment shall be deemed to terminate upon the date of such cessation,
unless he forthwith becomes or remains an employee of the Corporation or of
another subsidiary or affiliate thereof.
(f) To the extent that the Option is not exercised within the
applicable periods in the cases set forth in subparagraphs (a), (b) and (c)
of this paragraph 3, this Option Agreement, the Option, and all rights to
purchase shares pursuant thereto, shall forthwith terminate and become null
and void.
(g) Whether employment has been terminated for the purposes of this
Agreement shall be determined by the Committee, whose determination shall be
final, binding and conclusive.
(h) Anything in the Plan or herein contained notwithstanding, to the
extent that (i) any formal written employment or termination agreement
between the Corporation and the Optionee which is formally executed by both
the Corporation and the Optionee contains terms governing the Options
hereunder specifically or options in general in the event of a termination of
the Optionee's employment and (ii) the terms of such employment or
termination agreement applicable to such options in the event of a
termination of the Optionee's employment are more favorable to the Optionee
than the terms of this Agreement, then such terms of such employment or
termination agreement shall control the terms of this Agreement.
4. Non-Transferability. During the Optionee's lifetime the Option
shall be exercisable only by him and neither the Option nor any other right
granted to the Optionee hereunder shall be transferable by the Optionee other
than by will, the laws of descent and distribution, or a Qualified Domestic
Relations Order under ERISA and the Code. In the event of any attempt by the
Optionee to alienate, assign, pledge, hypothecate or otherwise dispose of
this Option or of any right hereunder, except as provided for herein, or in
the event of any levy of any attachment, execution or similar process upon
the rights or interest hereby conferred, the Corporation may terminate this
Option Agreement by notice to the Optionee and it shall thereupon become null
and void.
5. Manner of Exercising Option. The Option shall be exercised in the
following manner: the Optionee (or the Beneficiary) shall give to the
Corporation notice in writing, substantially in the form set forth in Exhibit
A hereto, of his intention to purchase, specifying the number of Optioned
Shares as to which he desires to exercise the Option, the number and
denomination of the stock certificates that he desires, and the date on which
he desires to complete his purchase (the "Completion Date"), which shall not
be less than five business days thereafter. The Optionee (or the
Beneficiary) shall pay the Corporation on the Completion Date either (i) in
cash by Federal Reserve Wire Transfer or by check, or (ii) through the
delivery of shares of the Corporation's Common Stock having a fair market
5
value on the date of exercise equal to the full purchase price of the shares
purchased, or (iii) by a combination of (i) and (ii) above, against delivery
of one or more certificates therefor.
6. Issuance and Delivery of Shares. Against payment for the shares
purchased, the Corporation will issue and deliver to the Optionee (or the
Beneficiary) on the Completion Date, one or more certificates for the shares
purchased. If and so long as any Common Stock of the Corporation is listed
on any securities exchange, any other provisions of this Option Agreement
notwithstanding, the Corporation shall not be required to make delivery to
the Optionee (or the Beneficiary) of certificates for shares so purchased
until such shares have been listed (or authorized for listing upon official
notice of issuance) on the securities exchange on which outstanding shares of
Common Stock of the Corporation are then listed nor (whether listed or not)
until there has been compliance with such laws and regulations as the
Corporation may deem applicable, including, without limitation, the
Securities Act of 1933, the 1934 Act and the rules and regulations issued
thereunder.
7. Rights as Shareholder. The Optionee or a transferee of the Option
shall have no rights as a shareholder with respect to any share covered by
the Option until he shall have become the holder of record of such share,
and, subject to paragraph 8 hereof, no adjustment shall be made for dividends
or distributions or other rights in respect of such share for which the
record date is prior to the date upon which he shall become the holder of
record thereof.
8. Recapitalizations, Reorganizations, etc.
(a) The existence of the Option shall not affect in any way the right
or power of the Corporation or its shareholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
Corporation's capital structure or its business, or any merger or
consolidation of the Corporation, or any issue of stock or of options,
warrants or rights to purchase stock or of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the stock or the rights thereof
or convertible into or exchangeable for stock, or the dissolution or
liquidation of the Corporation, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceeding, whether of
a similar character or otherwise.
(b) The shares with respect to which the Option is granted are shares
of stock of the Corporation as presently constituted, but if, and whenever,
prior to the delivery by the Corporation of all of the shares of the stock
with respect to which the Option is granted, the Corporation shall effect a
subdivision or consolidation of shares, or other capital adjustment, the
payment of a stock dividend or other increase or reduction of the number of
shares of the stock outstanding, without receiving compensation therefor in
money, services or property, the number and price of shares remaining under
the Option shall be appropriately adjusted. Such adjustment shall be made by
6
the Committee, whose determination as to what adjustment shall be made, and
the extent thereof, shall be final, binding and conclusive. Any such
adjustment may provide for the elimination of any fractional share which
might otherwise become subject to the Option.
(c) Upon a merger or consolidation of the Corporation with any other
entity, pursuant to which the Corporation is not the surviving corporation or
pursuant to which the Corporation is the surviving corporation and holders of
Common Stock of the Corporation receive any consideration in exchange for
their shares of Common Stock of the Corporation, the Option shall be
terminated (whether or not vested) and the Optionee shall receive (i) the
consideration to which the Optionee would have been entitled pursuant to the
terms of the agreement of merger or consolidation, if immediately prior to
such merger or consolidation the Optionee had been the holder of record of a
number of shares of stock of the Corporation equal to the number of Optioned
Shares to which the Option relates, minus (ii) the Option Price. The
Committee shall have the authority to resolve any questions regarding the
application of the foregoing sentence and its determination shall be final,
binding and conclusive.
In the event of a liquidation or dissolution of the Corporation pursuant
to which the Committee has not, under Section 2 of the Option Agreement,
caused the Option to vest at least 20 days prior to such liquidation or
dissolution, the Option shall be terminated (whether or not vested) and the
Optionee shall receive (i) the consideration to which the Optionee would have
been entitled, if immediately prior to the liquidation or dissolution the
Optionee had been the holder of record of a number of shares of stock of the
Corporation equal to the number of Optioned Shares to which the Option
relates, minus (ii) the Option Price. The Committee shall have the authority
to resolve any questions regarding the application of the foregoing sentence
and its determination shall be final, binding and conclusive.
(d) Except as hereinbefore expressly provided, the issue by the
Corporation of shares of stock of any class, or securities convertible into
or exchangeable for shares of stock of any class, for cash or property, or
for labor or services, either upon direct sale or upon the exercise of
options, rights or warrants to subscribe therefor, or to purchase the same,
for upon conversion of shares or obligations of the Corporation convertible
into such shares or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of shares
of stock subject to the Option.
9. Change in Option Terms. The Committee may, with the consent of the
Optionee (or the Beneficiary), modify or change the terms of this Option
Agreement, including the Option Price, in a manner which does not conflict
with the provisions of the Plan; provided that the Option Price as so changed
or modified shall not be less than 100% of the fair market value of the
Common Stock of the Corporation on the date of such modification or change.
7
10. Definition of "Year", "Subsidiary" and "Affiliate". For all
purposes of this Option Agreement:
(a) A "year" shall be a period of 365 consecutive days (or 366
consecutive days if a 29th of February shall fall during such
period). The first day of any period shall commence at 12:01
o'clock A.M., Eastern Standard Time, on such day, and the last day
of such period shall terminate at 12:00 o'clock midnight. If the
last day of any period shall fall on a Saturday, Sunday or legal
holiday in the State of New York, such period shall be deemed to
end on the next business day thereafter.
(b) A "subsidiary" shall be a corporation as defined in Section 424(f)
of the Internal Revenue Code.
(c) An "affiliate" shall be a joint venture, partnership or other
entity (other than a corporation), 50 percent or more of which is
owned directly or indirectly by the Corporation.
11. Notices. Any notice given under this Option Agreement shall be in
writing and shall be deemed given when delivered personally, or when sent by
certified mail, postage prepaid, in the case of the Optionee to his address
hereinabove set forth or such other address as he may designate by notice
given to the Corporation, and in the case of the Corporation, to its
Corporate Office at 0000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000, Attention:
Secretary, or such other address as may then be applicable by notice given to
the Optionee.
12. Failure to Enforce not a Waiver. The failure of the Corporation to
enforce at any time any provision of this Option Agreement or the Plan shall
in no way be construed to be a waiver of such provision as to any future
event or of any other provision hereof or of the Plan.
13. Governing Law. This Option Agreement and its interpretation and
performance shall be controlled solely by the laws of the State of New York.
14. Date of Granting of the Option. The date of this Option Agreement
shall be deemed for all purposes the date of the granting of the Option,
unless and except where the grant is conditioned upon any event, in which
case the date of satisfaction on which such event occurs shall be deemed the
date of the granting of the Option.
15. Power of the Committee. The Committee shall have all the powers
delegated to it by the provisions of the Plan including, without limitation,
the power to construe this Option Agreement and the Plan, and the power to
determine whether a termination of the Optionee's employment was for reasons
constituting cause for discharge, and any determinations of the Committee
shall be conclusive.
8
16. Provisions of the Plan. The Option provided for herein is granted
pursuant to the Plan, and the Option and this Option Agreement are in all
respects governed by, and subject to all of the terms and provisions of, the
Plan. Any term used herein shall, unless the context plainly requires
otherwise, have the meaning assigned to it in the Plan. The Corporation
agrees to maintain a copy of the Plan during the term of this Option
Agreement at its principal office for inspection by the Optionee at any time
during normal business hours.
IN WITNESS WHEREOF, the Corporation has caused this Option to be signed
by its corporate officer thereunto duly authorized, and the Optionee has
signed this Option Agreement, all as of the date first above written.
KOLLMORGEN CORPORATION
By ___________________________
Vice President
___________________________
Optionee
S.S. #_____________________
9
EXHIBIT A
[Sample form of letter to be sent by Optionee (or Beneficiary)]
[ Date ]
Kollmorgen Corporation
Attention: Secretary
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Re: Exercise of Stock Option
Dear Sirs:
Pursuant to the terms of the Option Agreement between us dated
________________, 19___, in which you have granted me an option to purchase a
certain number of shares of your Common Stock, of the par value of $2.50 per
share, on certain terms and conditions, I hereby give notice that I elect to
exercise such option to the extent of _____________ shares and that I desire
to complete this purchase on __________________, 19___. On that date I shall
pay you the sum of _____________________________________________ Dollars
($___________) in full payment for such shares. In addition, on that date I
shall pay you all applicable federal, state and local taxes, if any, required
under withholding tax rules and regulations. I request that such shares be
evidenced by __________ stock certificate(s) in the following
denomination(s): ____________________________________.
Very truly yours,
[name and address]
S.S.#
NOTE: The above form should be appropriately modified in the
case of use by a person to whom the rights of a deceased
Optionee have passed by will or the laws of descent and
distribution.
