Exhibit 10.5(a)
XXXXXX XXXX EDUCATORS CORPORATION
STOCK OPTION AGREEMENT
(1991 Stock Incentive Plan)
(EMPLOYEE VERSION)
This Stock Option Agreement ("Agreement") is made and entered into as of
the Date of Grant indicated below by and between Xxxxxx Xxxx Educators
Corporation, a Delaware corporation (the "Company"), and the person named below
as Employee.
WHEREAS, the Company has offered shares of common stock, par value $.001
per share, of the Company (the "Common Stock") to the public; and
WHEREAS, Employee is an employee of the Company and/or one or more of its
Affiliates; and
WHEREAS, pursuant to the Company's 1991 Employee Stock Incentive Plan (the
"Plan"), the committee of the Board of Directors of the Company administering
the Plan (the "Committee") has approved the grant to Employee of an option to
purchase shares of Common Stock, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant of Option; Certain Terms and Conditions. The Company hereby grants
to Employee, and Employee hereby accepts, as of the Date of Grant, an option to
purchase the number of shares of Common Stock indicated below (the "Option
Shares") at the Exercise Price per share indicated below, which option shall
expire at 5:00 o'clock p.m. (local time at the Company's principal executive
office) on the Expiration Date indicated below and shall be subject to all of
the terms and conditions set forth in this Agreement (the "Option"). On the Date
of Grant and on each of the first, second, and third anniversaries of the Date
of Grant, the Option shall be Vested as to that number of Option Shares (rounded
to the nearest whole share) equal to the total number of Option Shares
multiplied by the Annual Vesting Rate indicated below.
Employee:
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Date of Grant:
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Number of
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Option Shares:
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Exercise Price
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per Option Share:
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Expiration Date:
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Annual Vesting
Rate:
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The Option is intended to be an Incentive Stock Option to the extent
permitted by Section 422(d) of the Code. That part of the Option which cannot
qualify as an Incentive Stock Option shall be a Non-Qualified Stock Option.
2. Acceleration and Termination of Option.
(a) Termination by Death. If an Employee incurs a Termination of
Employment by reason of death, any Stock Option held by such Employee will
become fully Vested on the date of Death and may thereafter be exercised,
for a period of one year (or such other period as the Committee may
specify) from the date of such death or until the expiration of the stated
term of such Stock Option, whichever period is the shorter.
(b) Termination by Reason of Disability. If an employee incurs a
Termination of Employment by reason of Disability, any Stock Option held by
such Employee may thereafter be exercised by the Employee, to the extent it
was Vested at the time of termination, for a period of one year from the
date of such Termination of Employment or until the expiration of the
stated term of such Stock Option, whichever period is the shorter;
provided, however, that if the Employee dies within such one-year period,
any unexercised Stock Option held by such Employee shall, notwithstanding
the expiration of such one-year period, continue to be exercisable for a
period of 12 months from the date of such death or until the expiration of
the stated term of such Stock Option, whichever period is the shorter.
(c) Termination by Reason of Retirement. If an Employee incurs a
Termination of Employment by reason of Retirement, any Stock Option held by
such Employee will become fully Vested one year after the date of
Retirement (First Year Retirement Anniversary Date) and may thereafter be
exercised by the Employee, for a period of one year from the date of the
First Year Retirement Anniversary Date or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. If the
Employee dies prior to the First Year Retirement Anniversary Date, any
Stock Option held by the Employee shall be fully Vested on the date of
death and any unexercised Stock Option shall continue to be exercisable for
a period of 12 months from the date of such death or until the expiration
of the stated term of such Stock Option, whichever period is the shorter.
(d) Other Termination. Unless otherwise determined by the Committee,
if an Employee incurs a Termination of Employment for any reason other than
death, Disability or Retirement, any Stock Option held by such Employee
shall thereupon terminate, except that if such Termination of Employment of
the Employee is involuntary and without Cause, such Stock Option shall be
fully Vested and may be exercised within the lesser of six months from the
date of such Termination of Employment or the balance of such Stock
Option's term. Notwithstanding the foregoing, if an Employee incurs a
Termination of Employment at or after a Change in Control, other than by
reason of death, Disability or Retirement, any Stock Option held by such
Employee shall be Vested and may be exercised within the lesser of (1) six
months and one day from the date of such Termination of Employment, and (2)
the balance of such Stock Option's term.
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3. Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, spin-off, stock split, extraordinary
distribution with respect to the Common Stock or other similar change in
corporate structure affecting the Common Stock, such substitution or adjustments
shall be made in the aggregate number of shares reserved for issuance under the
Plan, in the number and option price of shares subject to outstanding Stock
Options and Stock Appreciation Rights, and the number of shares subject to other
outstanding Awards granted under the Plan as may be determined to be appropriate
by the Committee, in its sole discretion; provided, however, that the number of
shares subject to any Award shall always be a whole number.
4. Exercise. The Option shall be exercisable during Employee's lifetime
only by Employee or by his or her guardian or legal representative, and after
Employee's death only by the person or entity entitled to do so under Employee's
last will and testament or applicable intestate law. The Option may only be
exercised by the delivery to the Company of a written notice of such exercise,
which notice shall specify the number of Option Shares to be purchased (the
"Purchased Shares") and the aggregate Exercise Price for such shares (the
"Exercise Notice"), together with payment in full of such aggregate Exercise
Price in cash or by bank check payable to the Company; provided, however, that
payment of such aggregate Exercise Price may instead be made, in whole or in
part, by the delivery to the Company of a certificate or certificates
representing shares of Common Stock, duly endorsed or accompanied by a duly
executed stock powers, which delivery effectively transfers to the Company good
and valid title to such shares, free and clear of any pledge, commitment, lien,
claim or other encumbrance (such shares to be valued on the basis of the
aggregate Fair Market Value thereof on the date of such exercise), provided that
the Company is not then prohibited from purchasing or acquiring such shares of
Common Stock. Such notice shall also specify the number of Purchased Shares
which are acquired pursuant to the exercise of an Incentive Stock Option and
pursuant to the exercise of a Non-Qualified Stock Option. In the absence of such
designation, Purchased Shares shall be deemed to be acquired first from the
exercise of an Incentive Stock Option.
5. Payment of Withholding Taxes. If the Company is obligated to withhold an
amount on account of any federal, state or local tax imposed as a result of the
exercise of the Option, including, without limitation, any federal, state or
other income tax, or any F.I.C.A., state disability insurance tax or other
employment tax, then Employee shall, concurrently with such exercise, pay such
amount to the Company in cash or by check payable to the Company or by reducing
the number of shares of Common Stock to be issued and delivered to Employee upon
such exercise (such reduction to be valued on the basis of the aggregate Fair
Market Value (determined on the date of such exercise) of the additional shares
of Common Stock that would otherwise have been issued and delivered upon such
exercise), provided that the Company is not then prohibited from purchasing or
acquiring such additional shares of Common Stock.
6. Stock Exchange Requirements; Applicable Laws. All certificates for
shares of Common Stock or other securities delivered under this Agreement shall
be subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Commission, any stock exchange upon which the Common Stock is then listed and
any applicable Federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
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7. Nontransferability. Neither the Option nor any interest therein may be
sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred
in any manner other than by will or the laws of descent and distribution.
8. Plan. The Option is granted pursuant to the Plan, as in effect on the
Date of Grant, and is subject to all the terms and conditions of the Plan, as
the same may be amended from time to time, and the Plan's definitions are hereby
incorporated by reference herein; provided, however, that no such amendment
shall deprive Employee, without his or her consent, of the Option or of any
Employee's rights under this Agreement. The interpretation and construction by
the Committee of the Plan, this Agreement, the Option and such rules and
regulations as may be adopted by the Committee for the purpose of administering
the Plan shall be final and binding upon Employee. Until the Option shall
expire, terminate or be exercised in full, the Company shall, upon written
request therefor, send a copy of the Plan, in its then-current form, to Employee
or any other person or entity then entitled to exercise the Option.
9. Stockholder Rights. No person or entity shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of any Option Shares
until the Option shall have been duly exercised to purchase such Option Shares
in accordance with the provisions of this Agreement.
10. Employment Rights. No provision of this Agreement or of the Option
granted hereunder shall (a) confer upon Employee any right to continue in the
employ of the Company or any of its subsidiaries, (b) affect the right of the
Company and each of its subsidiaries to terminate the employment of Employee,
with or without cause, or (c) confer upon Employee any right to participate in
any employee welfare or benefit plan or other program of the Company or any of
its subsidiaries other than the Plan.
11. Governing Law. This Agreement and the Option granted hereunder shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
12. Investment Representation and Agreement. The Committee may require
Employee to furnish to the Company, prior to the issuance of any shares upon the
exercise of all or any part of this option, an agreement (in such form as such
Committee may specify) in which Employee represents that the shares acquired by
him upon exercise are being acquired for investment and not with a view to the
sale or distribution thereof.
13. Entire Agreement. This Agreement, together with the Plan, constitutes
the entire obligation of the parties hereto with respect to the subject matter
hereof and shall supersede any prior expressions of intent or understanding with
respect to this transaction. Employee hereby acknowledges receipt of a copy of
the Plan.
14. Amendment. Any amendment hereto shall be in writing and signed by the
parties hereto.
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15. Waiver; Cumulative Rights. The failure or delay of either party to
require performance by the other party of any provision hereof shall not affect
its right to require performance of such provision unless and until such
performance has been waived in writing. Each and every right hereunder is
cumulative and may be exercised in part or in whole from time to time.
16. Counterparts. This Agreement may be signed in two counterparts.
17. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the Date of Grant.
XXXXXX XXXX EDUCATORS CORPORATION
By:
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Name: Louis Lower II
Title: President and Chief Executive
Officer
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Employee
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