RESTATED STOCK OPTION AGREEMENT DATED FEBRUARY 15, 2008
EXECUTION
COPY
RESTATED
STOCK OPTION AGREEMENT DATED FEBRUARY 15, 2008
Federal-Mogul Corporation, a Delaware
corporation (the "Company"), grants to Xxxx Xxxxx Xxxxxxx (the "Optionee") on
February 15, 2008 a non-qualified option (the "Option") to purchase from the
Company the number of shares of its Common Stock ("Stock") described below, at
the exercise price per share described below and upon and subject to the terms
and conditions set forth below. The date on which the Option is
granted is referred to herein as the “Grant Date”. In connection with
the extension of Optionee’s employment to March 23, 2013, pursuant to a Second
Amended and Restated Employment Agreement dated as of March 23, 2010 (“SAREA”),
Executive and the Company have agreed that the Option should be restated as
follows:
1. Intentionally
Omitted.
2. Number of Shares Subject to
Option. Four million (4,000,000) shares of Common
Stock are subject to the Option.
3. Option Exercise
Price. The per share exercise price of the Option shall be
$19.50, which is at least equal to the fair market value of a share of Stock on
the Grant Date.
4. Time and Manner of Exercise
of Option.
4.1. Maximum Term of
Option. In no event may the Option be exercised, in whole or
in part, after December 27, 2014 (the "Expiration Date") and
may, under certain circumstances described in Section 4.2(c) hereof,
be exercised only through a date earlier than December 27, 2014.
4.2. Exercise of
Option. (a) Effective March 23 , 2010, 100% of the
Option shall have vested assuming that Optionee is employed by Company on that
date.
(b) Intentionally
Omitted
(c) For the avoidance of
doubt, the Company and the Optionee each acknowledges and agrees that, anything
else to the contrary contained in this Agreement, the SAREA or any other
agreement to which Optionee and the Company are parties, if, on any date prior
to December 27, 2014, the Optionee is no longer employed by the Company for any
reason whatsoever (the date on which such event occurs being the “Optionee’s
Nonemployment Date”), including but not limited to being terminated by the
Company for cause or without cause, the Optionee’s leaving the employ of the
Company for good reason or not for good reason, as a result of his death or
disability or as a result of his retirement at any time or because the SAREA
expires without being renewed either on March 23, 2013 or before or after March
23, 2013, then the Option shall be exercisable by the Optionee or the Optionee's
legal representative until and including the earlier to occur of (i) the date
which is the ninetieth (90th) day after the Optionee's Nonemployment Date and
(ii) December 27, 2014.
4.3. Method of
Exercise. Subject to the limitations set forth in this
Agreement, the Option may be exercised by the Optionee by giving written notice
to the Company specifying the number of whole shares of Stock to be purchased
and accompanied by payment therefor in full (or arrangement made for such
payment to the Company's satisfaction) either (i) in cash, (ii) by delivery
(either actual delivery or by attestation procedures established by the Company)
of previously owned whole shares of Stock (for which the Optionee has good
title, free and clear of all liens and encumbrances) having an aggregate fair
market value, determined as of the date of exercise, equal to the aggregate
purchase price payable pursuant to the Option by reason of such exercise, (iii)
authorizing the Company to withhold whole shares of Stock which would otherwise
be delivered to the Optionee upon exercise of the Option having an aggregate
fair market value, determined as of the date of exercise, equal to the aggregate
purchase price payable pursuant to the Option by reason of such exercise, (iv)
to the extent permitted by applicable law, in cash by a broker-dealer acceptable
to the Company to whom the Optionee has submitted an irrevocable notice of
exercise, or (v) a combination of (i), (ii) and (iii). Any fraction
of a share of Stock which would be required to pay such purchase price shall be
disregarded and the remaining amount due shall be paid in cash by the
Optionee. No certificate representing a share of Stock shall be
delivered until the full purchase price therefor has been paid.
4.4. Termination of
Option. (a) In no event may the Option be exercised
after it expires as set forth in this Section 4.4. The Option shall
expire (i) on December 27, 2014 or (ii) on or prior to such date as provided in
Sections 4.1 and 4.2(c) hereof under the circumstances described in such two
Sections, in each case to the extent not exercised pursuant to Section
4.3.
(b) In the event that rights
to purchase all or a portion of the shares of Stock subject to the Option expire
or are exercised or forfeited, the Optionee shall, upon the Company's request,
promptly return this Agreement to the Company for full or partial cancellation,
as the case may be. Such cancellation shall be effective regardless
of whether the Optionee returns this Agreement. If the Optionee
continues to have rights to purchase shares of Stock hereunder, the Company
shall, within ten (10) days of the Optionee's delivery of this Agreement to the
Company, either (i) xxxx this Agreement to indicate the extent to which the
Option has expired or been exercised, cancelled or forfeited or (ii) issue to
the Optionee a substitute option agreement applicable to such rights, which
agreement shall otherwise be substantially similar to this Agreement in form and
substance.
5.
Additional Terms
and Conditions of Option.
5.1. Nontransferability of
Option. The Option may not be transferred by the Optionee
other than by will or the laws of descent and distribution. Except to
the extent permitted by the foregoing sentence, during the Optionee's lifetime
the Option is exercisable only by the Optionee or the Optionee's legal
representative. Except to the extent permitted by the foregoing, the
Option may not be sold, transferred, assigned, pledged, hypothecated, encumbered
or otherwise disposed of (whether by operation of law or otherwise) or be
subject to execution, attachment or similar process. Upon any attempt
to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose
of the Option, such attempted sale, transfer, assignment, pledge, hypothecation,
encumbrance or other attempted transaction shall immediately become null and
void.
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5.2. Investment Representation;
Restriction on Transfer of Stock. (a) The Optionee hereby
represents and covenants that (i) any share of Stock purchased upon exercise of
the Option will be purchased for investment and not with a view to the
distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), unless such purchase has been registered under
the Securities Act and any applicable state securities laws; (ii) any
subsequent sale of any such shares shall be made either pursuant to an effective
registration statement under the Securities Act and any applicable state
securities laws, or pursuant to an exemption from registration under the
Securities Act and such state securities laws; and (iii) if requested by
the Company, the Optionee shall submit a written statement, in form satisfactory
to the Company, to the effect that such representation (x) is true and
correct as of the date of purchase of any shares hereunder or (y) is true
and correct as of the date of any sale of any such shares, as
applicable. As a further condition precedent to any exercise of the
Option, the Optionee shall comply with all regulations and requirements of any
regulatory authority having control of or supervision over the issuance or
delivery of the shares and, in connection therewith, shall execute such
documents as are necessary to comply with such regulations and
requirements.
(b) The Company shall
require that certificates evidencing shares of Stock delivered in connection
with the exercise of the Option bear a legend indicating that the sale, transfer
or other disposition thereof by the holder is prohibited except in compliance
with Section 5.2(a) hereof.
(c) Notwithstanding the
foregoing, the Company agrees to register under the Securities Act the shares of
Stock subject to the Option as promptly as practicable following the date
hereof, but not later than thirty (30) days following the date of the Company’s
2010 annual meeting of stockholders, by filing a Form S-8 registration statement
in respect such shares of Stock.
5.3. Withholding
Taxes. (a) As a condition precedent to the delivery
of Stock upon exercise of the Option, the Optionee shall, upon request by the
Company, pay to the Company, in addition to the purchase price of the Stock,
such amount of cash as the Company may be required, under all applicable
federal, state, local or other laws or regulations, to withhold and pay over as
income or other withholding taxes (the "Required Tax
Payments") with respect to such exercise of the Option. If the
Optionee shall fail to advance the Required Tax Payments after request by the
Company, the Company may, in its discretion, deduct any Required Tax Payments
from any amount then or thereafter payable by the Company to the
Optionee.
(b) The Optionee may elect
to satisfy his obligation to advance the Required Tax Payments by any of the
following means: (i) a cash payment to the Company pursuant to
Section 5.3(a), (ii) delivery (either actual delivery or by attestation
procedures established by the Company) to the Company of previously owned whole
shares of Stock (for which the Optionee has good title, free and clear of all
liens and encumbrances) having an aggregate fair market value, determined as of
the date the obligation to withhold or pay taxes first arises in connection with
the Option (the "Tax
Date"), equal to the Required Tax Payments, (iii) directing the Company
to withhold whole shares of Stock which would otherwise be delivered to the
Optionee upon exercise of the Option having an aggregate fair market value,
determined as of the Tax Date, equal to the Required Tax Payments, (iv) to the
extent permitted by applicable law, a cash payment by a broker-dealer reasonably
acceptable to the Company to whom the Optionee has submitted an irrevocable
notice of exercise or (v) any combination of (i), (ii) and
(iii). Shares of Stock to be delivered or withheld may not have a
fair market value in excess of the amount of the Required Tax Payments
determined by applying the minimum statutory withholding rate. Any
fraction of a share of Stock which would be required to satisfy any such
obligation shall be disregarded and the remaining amount due shall be paid in
cash by the Optionee. No certificate representing a share of Stock
shall be delivered until the Required Tax Payments have been satisfied in
full.
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5.4. Adjustment. In
the event of any stock split, stock dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off or
other similar change in capitalization or event, or any distribution to holders
of Stock other than a regular cash dividend, the number and class of securities
subject to the Option and the purchase price per security shall be appropriately
adjusted by the Company without an increase in the aggregate purchase
price. If any adjustment would result in a fractional security being
subject to the Option, the Company shall pay the Optionee, in connection with
the first exercise of the Option occurring after such adjustment, an amount in
cash determined by multiplying (i) the fraction of such security (rounded to the
nearest hundredth) by (ii) the excess, if any, of (x) the fair market value on
the exercise date over (y) the exercise price of the Option.
5.5. Compliance with Applicable
Law. The Option is subject to the condition that if the
listing, registration or qualification of the shares subject to the Option upon
any securities exchange or under any law, or the consent or approval of any
governmental body, or the taking of any other action is necessary or desirable
as a condition of, or in connection with, the purchase or delivery of shares
hereunder, the Option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained, free of any conditions not acceptable to the
Company. The Company agrees to use reasonable efforts to effect or
obtain any such listing, registration, qualification, consent or
approval.
5.6. Delivery of
Certificates. Upon the exercise of the Option, in whole or in
part, the Company shall deliver or cause to be delivered one or more
certificates representing the number of shares purchased against full payment
therefor. The Company shall pay all original issue or transfer taxes
and all fees and expenses incident to such delivery, except as otherwise
provided in Section 5.3.
5.7. Option Confers No Rights as
Stockholder. The Optionee shall not be entitled to any
privileges of ownership with respect to shares of Stock subject to the Option
unless and until purchased and delivered upon the exercise of the Option, in
whole or in part, and the Optionee becomes a stockholder of record with respect
to such delivered shares; and the Optionee shall not be considered a stockholder
of the Company with respect to any such shares not so purchased and
delivered.
5.8. Option Confers No Rights to
Continued Employment. In no event shall the granting of the
Option or its acceptance by the Optionee give or be deemed to give the Optionee
any right to continued employment by the Company or any affiliate of the
Company.
5.9. Company to Reserve
Shares. The Company shall at all times prior to the expiration
or termination of the Option reserve and keep available, either in its treasury
or out of its authorized but unissued shares of Stock, the full number of shares
subject to the Option from time to time.
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6.
Cash Out of
Option. The Company, acting through the Compensation Committee of the
Board of Directors, shall have the right in connection with any exercise of the
Option by the Optionee (which exercise shall be evidenced by a written notice
delivered by the Optionee to the Company specifying the amount and manner of
exercise in accordance with Section 4.3 hereof), to cash out all or part of the
portion of the shares of Stock for which the Stock Option is being exercised by
paying the Optionee an amount in cash equal to the excess of the fair market
value of the Stock, determined as of the date of exercise of the Option, over
the option exercise price times the number of shares of Stock for which the
Option is being exercised on such exercise date (the “Cash Out
Right”). In the event that the Compensation Committee of the Board of
Directors does not exercise in whole the Cash Out Right within one business day
of receipt of such notice of exercise of the Option, then the Option (or portion
thereof) shall have been exercised in the amount and manner specified in such
notice.
7.
Miscellaneous
Provisions.
7.1. Designation as Nonqualified
Stock Option. The Option is hereby designated as not
constituting an "incentive stock option" within meaning of section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"). This Agreement
shall be interpreted and treated in a manner consistent with such
designation.
7.2. Successors. This
Agreement shall be binding upon and inure to the benefit of any successor or
successors of the Company and any person or persons who shall, upon the death of
the Optionee, acquire any rights hereunder in accordance with this Agreement or
the Plan.
7.3. Notices. All
notices, requests or other communications provided for in this Agreement shall
be made, if to the Company, to Federal-Mogul Corporation, 00000 Xxxxxxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: General Counsel; and
if to the Optionee, to Xxxx Xxxxx Xxxxxxx, 0000 Xxxxx Xxxxx Xxxxx, Xxxxxxxxxx
Xxxxx, XX 00000. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by personal
delivery to the party entitled thereto, (b) by facsimile with confirmation of
receipt, (c) by mailing in the United States mails to the last known address of
the party entitled thereto or (d) by express courier service. The
notice, request or other communication shall be deemed to be received upon
personal delivery, upon confirmation of receipt of facsimile transmission or
upon receipt by the party entitled thereto if by United States mail or express
courier service; provided, however, that if a notice, request or other
communication sent to the Company is not received during regular business hours,
it shall be deemed to be received on the next succeeding business day of the
Company.
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7.4. Amendment. The
provisions of this Agreement may be amended only by the written agreement of the
Company executed by the Chairman of the Compensation Committee of the Board of
Directors and the Optionee following the review and approval of any such
amendment by the Compensation Committee of the Board of Directors or its
designee.
7.5. Governing
Law. This Agreement, the Option and all determinations made
and actions taken pursuant hereto and thereto, to the extent not governed by the
laws of the United States, shall be governed by the laws of the State of
Michigan and construed in accordance therewith without giving effect to
principles of conflicts of laws.
7.6. Counterparts. This
Agreement may be executed in two counterparts, each of which shall be deemed an
original and both of which together shall constitute one and the same
instrument.
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By:
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/s/ Xxxxxxx X. Xxxxxxxx
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Name:
Xxxxxxx X. Xxxxxxxx
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Title:
Chairman of the Compensation
Committee
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Accepted
this 23rd day of
March, 2010.
Xxxx
Xxxxx Xxxxxxx
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