UMB FINANCIAL CORPORATION
2002 INCENTIVE STOCK OPTION PLAN
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT, made and entered into as of this 16th day
of December, 2003, by and between UMB FINANCIAL CORPORATION (the "Company"),
and X. Xxxxxx Xxxxxx, Jr. (10% shareholder), an employee of the Company, or
one of its subsidiaries, as the case may be (the "Employee").
WHEREAS, the Company desires, by affording the Employee an opportunity
to purchase shares of its common stock, $1.00 par value ("Common Stock"), as
hereinafter provided, to carry out the purpose of the 2002 Incentive Stock
Option Plan of the Company ("the "Plan");
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and for other good and valuable consideration, the parties hereto do
hereby agree as follows:
1. Grant of Option
The Company hereby irrevocably grants to the Employee, subject to the
Plan (the terms and provisions of which are incorporated herein by reference
as if fully set forth herein) and pursuant to the resolution of the Officers
Salary and Stock Option Committee adopted as of December 16, 2003, (the
"Grant Date") the right and option (the "Option") to purchase all or any part
of an aggregate of 2055 shares of Common Stock (such number being subject to
adjustment as provided in Paragraph 8 hereof), on the terms and conditions
herein set forth.
2. Option Price
The purchase price of the shares of Common Stock subject to the Option
shall be $53.51 per share (such amount being subject to adjustment as
provided in Paragraph 8 hereof), and the purchase price of all shares as to
which the Option is exercised shall be paid either in cash or, with the
consent of the Company, in stock of the Company at or prior to the time the
certificates for such shares are delivered.
3. Term of Option
The term of the Option shall be for a period of ten years from the Grant
Date, or five years from the Grant Date if the Employee owns stock possessing
more than ten percent (10%) of the total combined voting power or value of
all classes of stock of the Company or any Subsidiary Corporation, subject to
earlier termination, as provided in Paragraphs 4(e) and 6(a) hereof. Subject
to the provisions of this Agreement and except as otherwise provided in
paragraphs 6 and 7 hereof, the Option shall not be exercisable until the
Employee has completed four years and eleven (11) months of continuous
employment after the Grant Date at which time it shall become fully
exercisable. In the event the Employee would, in accordance with the
computation above, otherwise be entitled to exercise the Option for a
fractional share, the number of shares for which the Option first becomes
exercisable shall be rounded to the next highest whole share. In the event of
any partial exercise of the Option, the portion of the Option exercised shall
be for the shares subject to the Option which became exercisable at the
earliest date.
4. Restrictions on Right to Exercise Option
(a) The Option shall not be exercisable with respect to a fractional
share or with respect to fewer than ten (10) shares or the remaining shares
then subject to the Option, if less than ten (10).
(b) The Option shall not be exercisable in whole or in part unless or
until a Registration Statement under the Securities Act of 1933 covering the
common stock to be issued pursuant to the exercise of the Option shall have
been filed and become effective and the Employee agrees that his/her right of
exercise is subject to and contingent upon such Registration Statement being
effective and current at the time of exercise. The Company has previously filed
such a Registration Statement and hereby agrees to keep such Registration
Statement current and effective as to stock covered by the Option during the
period in which the Option may be exercised.
(c) Except as otherwise provided in Paragraphs 6 and 7, the Option shall
not be exercisable in whole or in part unless the Employee is in the employ of
the Company and/or a "subsidiary corporation" of the Company as that term is
defined in Section 425 of the Internal Revenue Code ("Subsidiary Corporation")
and shall have been continuously so employed by the Company and/or Subsidiary
Corporations since the date the Option was granted to the Employee.
(d) If the Employee is an "Affiliate" of the Company under Rule 144(a) of
the Securities Act of 1933, as amended (the "Act"), then he/she hereby: (1)
represents and warrants that the Option granted herein, and all Shares
purchased pursuant to the exercise of such Option, has and will be purchased
for investment and not with a view to the distribution or resale thereof; (2)
agrees that any sale of such Shares by him/her will be made in compliance with
Rule 144 of the Act; (3) agrees that any attempted resale that fails to comply
with Rule 144 of the Act will be deemed null and void; and (4) agrees that any
certificate(s) representing such Shares may contain an express legend
identifying such Shares as subject to resale restriction.
(e) IF THE EMPLOYEE SHALL SELL ALL OR ANY PART OF THE COMMON STOCK
PURCHASED HEREUNDER WITHIN ONE (1) YEAR FROM THE DATE OF THE PURCHASE THEREOF,
THE OPTION (AND ANY OTHER OPTION OR OPTIONS HELD BY THE EMPLOYEE UNDER THE
PLAN), TO THE EXTENT THERETOFORE UNEXERCISED, SHALL THEREUPON TERMINATE, AND
THE EMPLOYEE SHALL BE INELIGIBLE TO RECEIVE ANY OTHER OPTION UNDER THE PLAN.
5. Non-Transferability
The Option shall not be transferable otherwise than by will or laws of
descent and distribution, and during the lifetime of the Employee may be
exercised only by the Employee. The Employee may designate a beneficiary to
exercise the Option after the Employee's death by filing a written
designation of beneficiary with the Committee prior to the Employee's death.
More particularly, but without limiting the generality of the foregoing, the
Option may not be assigned, transferred (except as provided above), pledged
or hypothecated in any way, shall not be assignable by operation of law and
shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to
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the provisions hereof and the levy of any execution, attachment or similar
process upon the Option shall be null and void and without effect.
6. Termination of Employment; Retirement or Disability
(a) In the event that the employment of the Employee shall be terminated
other than by death, by termination of employment by the Employee after
attaining age sixty with twenty years of service (a "Qualified Retirement
Termination"), or termination of employment as a result of Employee's permanent
and total disability (within the meaning of Section 22(e)(3) of the Internal
Revenue Code, as amended) (a "Disability Termination"), then the Option shall
immediately terminate and cease to be exercisable.
(b) If a Qualified Retirement Termination or Disability Termination of
Employee's employment occurs prior to the time that the Option has either
expired or has been fully exercised, then any unexercised portion of the Option
shall, upon the occurrence of such Qualified Retirement Termination or
Disability Termination, become immediately exercisable, and may thereafter be
exercised by the Employee at any time during the three -month period
immediately following the Qualified Retirement Event (if applicable) or the
one-year period immediately following the Disability Event (if applicable) but
in no event after the expiration of the teen for which the Option is granted,
or before the expiration of two years after the date the Option was granted.
7. Death of Employee
If the Employee shall die while employed by the Company or a Subsidiary
Corporation, or within three (3) months from the occurrence of a Qualified
Retirement Termination or within one (1) year after the occurrence of a
Disability Termination, then the Option shall immediately become exercisable
(if not otherwise already exercisable) upon the occurrence of such death, and
may thereafter be exercised within six (6) months after the date of such
death (whether or not the three months or the one-year period, as the case
may be, specified in Paragraph 6(b) had commenced to run on the date of
his/her or her death), but in no event after the expiration of the term for
which this Option is granted, or before the expiration of two years after the
date the Option was granted, by the beneficiary designated in a written
designation filed with the Committee prior to the Employee's death. If the
designated beneficiary does not survive Employee, the Option shall become an
asset of Employee's estate to be exercised by the personal representative or
administrator of Employee's estate.
8. Adjustments
In the event of any stock dividend, stock split or recapitalization, the
number of shares subject to the Option and the purchase price thereof shall
be proportionately adjusted in accordance with the terms of the Plan.
9. Method of Exercising Option
Subject to the terms and conditions of the Option Agreement, the Option
may be exercised by written notice to the Company in care of its Secretary at
its address of P. O. Xxx 000000, Xxxxxx Xxxx, Xxxxxxxx 00000-0000. Such
notice shall state the election to exercise the Option and
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the number of shares in respect of which it is being exercised, and shall be
signed by the person or persons exercising the Option. Such notice must be
accompanied by payment of the full purchase price of such shares, and the
date such notice and payment is received shall be the "Exercise Date."
Payment of such purchase price shall in either case be made either by check
payable to the order of the Company, or if the Company consents to have
payment made in shares of the Company, by delivery of certificates for the
requisite number of shares. The certificate or certificates for the shares as
to which the Option shall have been exercised shall be registered in the name
of the person or persons so exercising the Option and shall be delivered as
provided above to or upon the written order of the person or persons
exercising the Option. In the event the Option shall be exercised pursuant to
Paragraph 7 hereof by any person or persons other than the Employee, such
notice shall be accompanied by evidence of the authority of such person or
persons to exercise the Option and evidence satisfactory to the Company that
any death taxes payable with respect to such shares have been paid or
provided for.
10. RIGHTS OF THE COMPANY IN THE EVENT OF COMPETING EMPLOYMENT
THE EMPLOYEE HEREBY AGREES THAT ANY AND ALL OPTIONED SHARES ACQUIRED
UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE
COMPANY IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS PARAGRAPH 10 AND
THAT SUCH PROVISIONS SHALL SURVIVE THE EXERCISE OF THIS OPTION:
In the event the employment of the Employee with the Company or any
Subsidiary Corporation shall be terminated for any reason, and the Employee
within two (2) years thereafter becomes employed by any person, business or
entity engaged in business in competition with the business of the Company or
any Subsidiary Corporation, or in any other manner, directly or indirectly,
on his/her or her own account, by or through any other individual or entity,
as an officer, director, employee or stockholder of a corporation, as a
partner, employee or joint venturer, competes with the business of the
Company or any Subsidiary Corporation, at a business location which is within
a radius of thirty (30) miles of any business location of the Company or any
Subsidiary Corporation, the Employee will pay to the company (or its assigns)
within thirty (30) days after demand by the Company, an amount equal to the
excess, if any, of (a) the fair market value on the date of exercise of the
shares of Common Stock of the Company acquired upon exercise of this Option
which were exercised at any time within the two (2) year period preceding the
commencement of such competition, over (b) the purchase price paid for such
shares. Such amount shall be subject to appropriate adjustment in the case of
stock dividends, stock splits or recapitalization. The employee further
agrees that the Company shall have a right of set-off against any sums due
him/her or her from the Company or a Subsidiary Corporation in the form of
wages, bonuses or vacation pay for all sums due the Company under this
paragraph.
11. No Waiver
The failure of the Company in any instance to exercise any of its rights
granted under this Agreement shall not constitute a waiver of any other
rights that may subsequently arise under the provisions of this Agreement. No
waiver of any breach or condition of this Agreement shall be deemed to be a
waiver of any other or subsequent breach or condition, whether of like or
different nature.
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12. No Employment Contract
Employee agrees that he/she will, if the Company desires, remain in the
employ of the Company or, at the election of the Company from time to time, a
Subsidiary Corporation, for a period of at least two (2) years from the date
the Option is granted to him/her; and that he/she will, during such
employment, devote his/her entire time, energy and skill to the service of
the Company or such Subsidiary Corporation and the promotion of its
interests, subject to vacations, sick leave and leaves of absence in
accordance with the practices and policies of the Company and its Subsidiary
Corporations. Such employment shall be at the pleasure of the Company or such
Subsidiary Corporation, and shall be at such compensation as the Company or
such Subsidiary Corporation shall determine from time to time. Nothing herein
or in the Plan shall confer on Employee any right to continue in the employ
of the Company or any Subsidiary Corporation or affect in any way the right
of the Company or any Subsidiary Corporation to terminate Employee's
employment at any time. Except to the extent the terms of any written
employment contract between the Company and Employee may expressly provide
otherwise, the Company and its Subsidiary Corporations shall be under no
obligation to continue the employment of the Employee for any period of
specific duration and may terminate the employment of the Employee at any
time, with or without cause, free from any liability or any claim under the
Plan or otherwise, unless otherwise expressly provided herein or in the Plan.
The grant of an Option shall not be construed as giving Employee the right to
be retained in the employ of the Company or a Subsidiary Corporation.
13. Notices
Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be in writing and addressed to the Company in
care of its Secretary at its address of P. O. Xxx 000000, Xxxxxx Xxxx,
Xxxxxxxx 00000-0000. Any notice required to be given or delivered to the
Employee shall be in writing and addressed to the Employee at the address
indicated below the Employee's signature line on this Agreement. All notices
shall be deemed to have been given or delivered upon personal delivery or
upon deposit in the U. S. mail, postage prepaid and properly addressed to the
party to be notified.
14. Construction
This Agreement and the Option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the
express terms and provisions of the Plan.
15. General
The Company shall pay all original issue and transfer taxes with respect
to the issue and transfer of shares pursuant hereto and all other fees and
expenses necessarily incurred by the Company in connection therewith. The
holder of the Option shall not have any rights of a stockholder with respect
to the shares subject to the Option until such individual shall have
exercised the Option, paid the Option Price and such shares have been
transferred to the holder on the books and records of the Company upon the
exercise of the Option.
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IN WITNESS WHEREOF, this Stock Option Agreement has been duly executed
on behalf of the Company by the duly authorized officers of the Company, and
by the Employee, on the day and year first above written.
UMB FINANCIAL CORPORATION
By: ________________________________________
ATTEST: Chairman & Chief Executive Officer
__________________________ ______________________________________________
Secretary X. Xxxxxx Xxxxxx, Jr., Employee
0000 Xxxxx Xxxx., Xxxxxx Xxxx XX 00000
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