Exhibit 10.4
FORM OF DIRECTOR NON-QUALIFIED STOCK OPTION AGREEMENT
Between Registrant and Hendrick J. Hartong, Jr., Andrew L. Lewis, IV,
Richard T. Niner, O. Curtis Noel and Charles E. Mitchell Rentschler
DIRECTOR NON-QUALIFIED STOCK OPTION AGREEMENT
This Director Non-Qualified Stock Option Agreement
("Agreement") has been entered into as of the 15th day of December 1998, between
Hurco Companies, Inc., an Indiana corporation (the "Company") and __________ a
director of the Company ("Director").
WHEREAS, the Board of Directors of the Company has granted to
Director an option to purchase shares of the Company's common stock, no par
value (the "Common Stock"), pursuant to the terms and conditions as provided in
this Agreement; and
WHEREAS, the Company and Director desire to set forth the
terms and conditions of the option;
WHEREAS, the option evidenced by this Agreement is separate
and distinct from options granted pursuant to the 1997 Stock Option Plan of the
Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, the Company and Director agree as
follows:
1. Grant of Option and Exercise Price. Subject to the terms
and conditions stated in this Agreement, on December 15, 1998 (the "Date of
Grant"), the Committee granted to Director an option (the "Option") to purchase
15,000 shares of the Company's Common Stock (the "Shares") at an exercise price
of $5.813 per Share (the "Exercise Price").
2. Non-Qualified Stock Option. The Option is not
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code of 1986, as amended.
3. Exercise of Option. The Option shall become fully
exercisable on December 15, 1999. Notwithstanding the foregoing, the Option
shall become immediately exercisable upon a Change in Control of the Company.
For purposes of this Agreement, a Change in Control of the Company means (a) the
acquisition of 25% or more of the outstanding shares of Common Stock of the
Company; (b) any merger or consolidation involving the Company, if following
such merger or consolidation, the persons who were the shareholders of the
Company prior to such transaction own less than 50% of the outstanding capital
stock of the surviving or consolidated corporation; (c) individuals who are
currently Directors of the Company cease for any reason to constitute at least a
majority of the Board of Directors of the Company (provided, however, that any
individual becoming a Director whose election or nomination for election was
approved by a vote of at least a majority of the Directors then comprising the
current Directors, shall be considered a current Director); or (d) approval by
the shareholders of the Company of a complete liquidation or dissolution of the
Company or the sale or other disposition of all or substantially all of the
assets of the Company.
4. Term of Option. Unless sooner terminated as provided in
this Agreement, the Option shall expire on December 14, 2004. In the event that
Director ceases to serve as a director of the Company for any reason other than
his death or total disability, the Option shall terminate six (6) months after
termination of service. In the event that Director ceases to serve as a director
because of his death or total disability, the Option shall terminate twelve (12)
months after termination of service.
5. Reclassification, Consolidation or Merger. If and to the
extent that the number of issued shares of the Common Stock of the Company shall
be increased or reduced by change in par value, split up, reclassification,
distribution of a stock dividend of 5% or more, or the like, the number of
shares subject to the Option and the Exercise Price per share shall be
proportionately adjusted.
If the Company is the surviving corporation in any
reorganization, consolidation or merger with another corporation, Director shall
be entitled to receive options covering shares of such reorganized,
consolidated, or merged company in the same proportion, at an equivalent price,
and subject to the same conditions, provided, however, that the new option or
assumption of the Option shall not give the Director additional benefits which
he did not have under the Option, or deprive him of benefits which he had under
the Option.
6. Rights Prior to Exercise of Option. The Option is
non-transferable by Director and is exercisable only by him during his lifetime,
except that in the case of his judicially declared incompetence or disability
the Option may be exercised by the legally appointed guardian or conservator of
his estate. In the case of the Director's death while any part of the Option is
outstanding, the Option may be exercised by the executor of his will or
administrator of his estate or, if the administration of his estate has been
closed, by his heirs or legatees entitled thereto. Neither Director nor any
person claiming under or through him shall have any rights as a shareholder of
the Company with respect to any of the option shares until full payment of the
Exercise Price and delivery to him or certificates for such shares as herein
provided.
7. Restrictions on Disposition. All shares acquired by
Director pursuant to this Agreement shall be subject to the following
restrictions: The shares will be "restricted securities" as defined in Rule 144
under the Securities Act of 1933 ("Act") and must be held unless subsequently
registered under the Act or an exemption from such registration is available.
The Company is not obligated to register the shares under the Act. The shares
acquired pursuant to exercise of the Option shall be acquired for Director's own
account for investment for an indefinite period and not with a view to the sale
or distribution of any part or all thereof, by public or private sale or other
disposition. Notwithstanding the foregoing, the Company may refuse to transfer
the shares until it receives an opinion of counsel for the Company that such
transfer is exempt from registration under the Act or qualification under any
other securities law.
8. Payment of Taxes on Exercise of Option. Whenever shares of
Common Stock are to be issued to Director in connection with the exercise of the
Option, the Company shall have the right to require him to remit to the Company
an amount sufficient to satisfy federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. In the alternative, the Company may elect to withhold from the shares to
be issued that number of shares (based on the market value of the stock at that
time) which would satisfy the tax withholding amount due.
9. Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
10. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Indiana.
11. Notices. All notices and other communications required or
permitted under this Agreement shall be written and shall be delivered
personally or sent by registered or certified first-class mail, postage prepaid
and return receipt required, addressed as follows: if to the Company, to the
Company's principal office at One Technology Way, Indianapolis, Indiana 46268,
and if to the Director or his or her successor, to the address last furnished by
the Director to the Company. Each notice and communication shall be deemed to
have been given when received by the Company or the Director.
IN WITNESS WHEREOF, the Company and Director have executed
this Agreement as of the date first written above.
HURCO COMPANIES, INC.
By: ______________________________________
Brian D. McLaughlin, President & CEO
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Signature of Director