EXHIBIT 4.5
INTERNATIONAL POST LIMITED
(FORMERLY, INTERNATIONAL POST GROUP, INC.)
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of February 15, 1994 is made by and
between International Post Limited (formerly, International Post Group Inc.), a
Delaware corporation (the "Company") and Xxxxxxx X. Xxxxxx (the "Employee").
WHEREAS, the Company desires to permit the Employee to share
directly in the growth of the business of the Company and its Subsidiaries, and
to identify his interests with those of the Company's stockholders by awarding a
stock option to the Employee;
NOW, THEREFORE, and in consideration of the Employee's
employment with the Company or a Subsidiary, the Company and the Employee agree
as follows:
1. DEFINITIONS.
Any capitalized term which is not defined in this Agreement
shall have the meaning given such term under the Company's 1994 Long Term
Incentive Plan (the "Plan"). The following terms shall have the meaning
specified below, unless the context clearly indicates to the contrary:
"Cause" shall mean (a) the definition of "cause" used in the
employment agreement between the Employee and the Employer or (b) if the
Employee has not entered into such an agreement, the willful failure by the
Employee to perform his duties with the Employer or the willful engaging in
conduct which is injurious to the Employer, the Company, a Subsidiary, or, if
applicable, a Parent, monetarily or otherwise, as determined by the Committee in
its sole discretion.
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"Change in Control" shall have the meaning set forth in
Section 8.2 of the Plan, as in effect on the date hereof.
"Change in Control Date" shall have the meaning set forth in
Section 8.2 of the Plan, as in effect on the date hereof.
"Change in Control Price" shall have the meaning set forth in
Section 8.3 of the Plan, as in effect on the date hereof.
"Code" shall mean the Internal Revenue Code of 1986.
"Committee" shall mean the Compensation Committee of the Board
of Directors of the Company, appointed as provided in the Plan.
"Early Retirement" shall mean the Employee's retirement from
active employment with the Employer (a) on or after attainment of age fifty-five
(55) and the completion of fifteen years of service, or (b) in accordance with
the early retirement provisions of a pension plan maintained by the Employer.
"Employer" shall mean the Company or the Subsidiary that
employs the Employee on the date hereof, provided that, if the Employee
subsequently is transferred to another corporation covered by the Plan, such
employing corporation shall be the Employer for purposes of this Agreement.
"Normal Retirement" shall mean the Employee's retirement from
active employment with the Employer (a) on or after attainment of age sixty-five
(65), or (b) in accordance with the normal retirement provisions of a pension
plan maintained by the Employer.
"Permanent Disability" shall mean (a) the definition of
"disability" used in the employment agreement between the Employee and the
Employer, or (b) if the Employee has not entered into such an employment
agreement, a physical or mental incapacity that prevents the Employee from
engaging in or performing the principal duties of his customary employment or
occupation on a continuing or sustained basis.
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"Retirement" shall mean the Employee's (a) Early Retirement
that the Committee, in its sole discretion, has determined should be treated as
a Retirement for purposes of this Agreement, or (b) Normal Retirement.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Share" shall mean a share of the Company's Common Stock,
$0.01 par value. "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company, if each such corporation (other than
the last corporation in the unbroken chain), or if each group of commonly
controlled corporations, then owns fifty percent (50%) or more of the total
combined voting power in one of the other corporations in such chain.
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Employee and the Employer terminates
for any reason whatsoever, but excluding any termination where there is a
simultaneous reemployment by the Company, a Subsidiary, or, if applicable, a
Parent. If a corporation that is a Subsidiary ceases to be a Subsidiary as a
result of a sale of stock, such sale shall be deemed to be a Termination of
Employment of the Employee if he was employed by such Subsidiary immediately
prior to such sale.
2. INCORPORATION OF TERMS OF PLAN.
Except as otherwise specifically modified hereby, the terms
and conditions of the Plan shall apply to the option granted to the Employee
hereunder. Notwithstanding the foregoing, however, neither the option granted
hereunder nor the Shares issuable upon exercise thereof shall be deemed to have
been issued under the Plan.
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3. GRANT OF OPTION.
3.1 Grant; Grant Date
Subject to the terms and conditions of the Plan, the Company
hereby grants to the Employee the right and option to purchase from the Company
all or any part of an aggregate of 181,818 Shares upon the terms and conditions
set forth in this Agreement. The Grant Date of the Option shall be February 15,
1994. The Employee hereby accepts the Option, acknowledges that he has received
and read a copy of the Plan, and agrees to be bound by all the terms and
provisions of the Plan and this Agreement.
3.2 Adjustments in Option.
In the event that the outstanding Shares subject to the Option
are changed into or exchanged for a different number or kind of shares or
securities of the Company, or of another corporation, by reason of
reorganization, merger or other subdivision, consolidation, recapitalization,
reclassification, stock split, issuance of warrants, stock dividend or
combination of shares or similar event, the Committee shall make an appropriate
and equitable adjustment in the Option so that the Employee's proportionate
interest shall be maintained as before the occurrence of such event to the
maximum extent possible. Any adjustment made by the Committee shall be final and
binding upon the Employee, the Company and all other interested parties.
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3.3 Option Terms
The Option granted under this Agreement shall be subject to
the following terms and conditions:
(a) Price. The exercise price for the Shares subject to the
Option shall be $9.35 per Share.
(b) Term. The Option shall expire on the tenth anniversary of
the Grant Date, unless terminated earlier in accordance with Section 3.3(e).
(c) Vesting. The Option is fully vested and exercisable.
(d) Exercise. The Option may be exercised in whole or in part
at any time prior to its expiration or termination, by providing written notice
of such exercise to the Secretary of the Company of the number of Shares as to
which the Option is being exercised, and enclosing payment for the Shares with
respect to which the Option is being exercised. Such payment shall be in cash or
by check, or if approved by the Committee, by the delivery of Shares previously
owned by the Employee, duly endorsed for transfer to the Company, with a Fair
Market Value on the date of delivery equal to the aggregate purchase price of
the Shares with respect to which the Option is being exercised, or pursuant to a
"cashless exercise," or any combination of the foregoing approved by the
Committee, in its sole discretion. Partial exercise shall be for whole Shares
only and shall not be for less than one thousand (1000) Shares unless the number
of Shares purchased constitutes the total number of Shares then remaining
subject to the Option or the Committee permits such smaller exercise in its sole
discretion. Notation of any partial exercise shall be made by the Company on
Schedule I hereto.
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(e) Status of Option Upon Termination of Employment. In the
event of the Termination of Employment of the Employee, the Option shall
terminate as follows:
(i) If the Employee's Termination of Employment is due
to death, Permanent Disability, or Retirement, the Option shall vest and
become immediately exercisable, for the shorter of five years following
such Termination or the remainder of its original term, and shall
thereafter terminate. The same rule shall apply if such Termination of
Employment (x) occurs after the occurrence of a Change in Control but on
or before the second anniversary of a Change in Control Date and either
(A) is an involuntary termination not for Cause or (B) is deemed to be a
Termination of Employment because the corporation employing the Employee
ceases to be a Subsidiary (as provided in the definition of "Termination
of Employment" in Section 1) and subsection (e)(ii) below does not apply
or (y) is, or is deemed to be under the Employment Agreement between the
Company and the Employee, a Termination of Employment without Cause.
(ii) If the Employee is employed by a Subsidiary when
all or substantially all of the stock or assets of the Subsidiary are
sold, as described in Section 8.2(e) of the Plan, the Option shall be
exercisable for the shorter of five years following the Change in Control
Date or the remainder of its original term.
(iii) In all other cases, the Option (to the extent
exercisable at the time of such Termination) shall be exercisable for a
period of thirty (30) days following the Employee's Termination of
Employment or until the expiration of its original term, whichever is
shorter, and shall thereafter terminate.
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Notwithstanding the foregoing, the Committee may provide,
after consultation with the appropriate Chief Executive Officer, that the Option
may be exercised after the periods provided in this Section 3.3(e), but in no
event beyond the original term of the Option.
3.4 Nontransferability
The Option shall not be transferable other than by will, the
applicable laws of descent and distribution, or pursuant to a qualified domestic
relations order, as such term is defined in Rule 16b-3(a)(2) of the Securities
Exchange Act of 1934, as amended, and no transfer so effected shall be effective
to bind the Company unless the Company has been furnished with written notice
thereof and such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions of the Option.
3.5 Conditions to Issuance of Stock Certificates
(a) The Shares deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued Shares or
issued Shares which have been reacquired by the Company. Such Shares shall be
fully paid and non-assessable. The stock certificates evidencing the Shares
shall bear such legends restricting transferability as the Committee deems
necessary or advisable.
(b) The Company shall not be required to issue or deliver any
certificate or certificates for Shares deliverable upon any exercise of the
Option prior to fulfillment of all of the following conditions:
(i) The completion of any registration or other
qualification of such Shares under any state or federal law or under
rulings or regulations of the Securities and Exchange Commission or of
any other governmental regulatory body, or the obtaining of approval or
other clearance from any state or federal governmental agency which the
Committee shall, in its sole discretion, deem necessary or advisable.
(ii) In the event that the Shares have not been
registered under the Securities Act, if the Committee shall, in its sole
discretion, deem it necessary or advisable, the execution by the Employee
of a written representation and agreement, in a form satisfactory to the
Committee, in which the Employee represents that the Shares acquired by
him upon exercise are being acquired for investment and not with a view
to distribution thereof in violation of applicable law.
3.6 Rights as Stockholder
The Employee shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any Shares purchasable
upon the exercise of the Option unless and until certificates representing such
Shares shall have been issued by the Company.
4. Change in Control Provisions.
4.1 Impact of Event
In the event of a Change in Control prior to the Employee's
Termination of Employment, the following shall apply:
(a) Any portion of the Option that had not yet become
exercisable and vested shall become fully vested and exercisable immediately.
(b) In the event of a Change in Control other than one
described in Section 8.2(e) of the Plan, if, within one year after the Change in
Control Date, (i) no Shares are listed on a national securities exchange or are
traded on an over-the-counter market or (ii) for a period of sixty (60)
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consecutive trading days, the Fair Market Value of a Share on such an exchange
or market shall have declined by twenty percent (20%) or more from the Fair
Market Value of a Share on the Change in Control Date or the Change in Control
Price, whichever is higher, then for a period of sixty (60) days following the
event that gives rise to the obligation to pay under this clause (b), the
Company shall offer the Employee the opportunity to be paid the value of the
outstanding Option, determined on the basis of the Change in Control Price. Such
amount shall be payable in a cash lump sum within thirty (30) days after the
Company receives notification of the Employee's election to accept the offer
described in this clause (b).
4.2 Designated Beneficiary
If the Employee dies prior to receiving any payment due under
Section 4.1(b) of this Agreement, such payment shall be made to his beneficiary
(as designated in the form and manner determined by the Committee) or, if no
designation is in effect, to the Employee's estate.
5. MISCELLANEOUS.
5.1 Administration
The Committee shall have the power to interpret the Plan and
this Agreement, and to adopt such rules for the administration, interpretation
and application of the Plan as are consistent therewith and to interpret or
revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Employee, the Company and all other interested persons.
5.2 Withholding of Taxes; Section 83(b) Election
No later than the date as of which an amount first becomes
includable in the gross income of the Employee for federal income tax purposes
with respect to the grant of the Option under this Agreement, the Employee shall
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pay to the Company, or the Employee (or his Designated Beneficiary) shall make
arrangements satisfactory to the Company regarding the payment of, any federal,
state, or local taxes of any kind required by law or the Company to be withheld
with respect to such amount. The obligations of the Company under this Agreement
shall be conditioned on such payment or arrangements, and the Company (and its
Subsidiaries and, if applicable, a Parent) shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Employee.
5.3 Parachute Payments
In the event that the aggregate present value of the payments
to the Employee under this Agreement, and any other plan, program, or
arrangement or agreement maintained by the Company (a Subsidiary, or, if
applicable, a Parent) constitutes an "excess parachute payment" (within the
meaning of Section 280G(b)(1) of the Code and reduced by amounts treated as
reasonable compensation under Section 280G(b)(4) of the Code) and the excise tax
under Section 4999 of the Code on such payment would cause the net parachute
payments (after taking into account federal, state and local income and excise
taxes) to which the Employee otherwise would be entitled to be less than what
the Employee would have netted (after taking into account federal, state and
local income taxes) had the present value of his total parachute payments
equaled $1.00 less than three times his "base amount" (within the meaning of
Code Section 280(G)(b)(3)(A)), the Employee's total "parachute payments" (within
the meaning of Code Section 280G(b)(2)(A)) shall be reduced (by the minimum
possible amount) so that their aggregate present value equals $1.00 less than
three times such base amount. For purposes of this calculation, it shall be
assumed that the Employee's tax rate will be the maximum marginal federal,
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state and local income tax rate on earned income, with such maximum federal rate
to be computed with regard to Code Section l(g), if applicable. In the event
that the Employee and the Company are unable to agree as to the amount of the
reduction described above, if any, the Employee shall select a law firm or
accounting firm reasonably acceptable to the Company regarding federal income
tax or employee benefit matters and such law firm or accounting firm shall
determine the amount of such reduction and such determination shall be final and
binding upon the Employee and the Company.
5.4 No Right to Continued Employment
Nothing in this Agreement or in the Plan shall confer upon the
Employee any right to continue in the employ of the Employer or shall interfere
with or restrict in any way the rights of the Employer, which are hereby
expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without cause, subject to the terms of any separate
agreement with the Employee.
5.5 Entire Agreement; Amendment
This Agreement together with the Plan constitutes the entire
agreement between the parties with respect to the subject matter hereof. Any
term or provision of this Agreement may be waived at any time by the party which
is entitled to the benefits thereof, and any term or provision of this Agreement
may be amended or supplemented at any time by the mutual consent of the parties
hereto, except that any waiver of any term or condition, or any amendment, of
this Agreement must be in writing.
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5.6 Governing Law
The laws of the State of Delaware shall govern the
interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflict of
laws.
5.7 Successors
This Agreement shall be binding upon and inure to the benefit
of the successors, assigns and heirs of the respective parties.
5.8 Notices
All notices or other communications made or given in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by registered or certified mail, return
receipt requested, to those listed below at their following respective addresses
or at such other address as each may specify by notice to the others:
To the Employee:
Xxxxxxx X. Xxxxxx
00 Xxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
To the Company:
International Post Limited
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Chairman of the Board of Directors
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5.9 Waiver
The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
5.10 Titles; Construction
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Agreement. The
masculine pronoun shall include the feminine and neuter and the singular shall
include the plural, when the context so indicates. IN WITNESS WHEREOF, the
parties hereto have duly executed this Agreement as of the day and year first
above written.
INTERNATIONAL POST LIMITED (formerly,
INTERNATIONAL POST GROUP INC.)
By: /S/ XXXXXX XXXXX
----------------
Name: Xxxxxx Xxxxx
Title: President and
Chief Executive Officer
EMPLOYEE
/S/ XXXXXXX X. XXXXXX
---------------------
Name: Xxxxxxx X. Xxxxxx
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SCHEDULE I
Notations As to Partial Exercise
Number of Balance of
Date of Purchased Shares on Authorized Notation
Exercise Shares Option Signature Date
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