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EXHIBIT 10.18
CENTRUM INDUSTRIES, INC.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of this 29th day of February, 1996, by and
between Centrum Industries, Inc., a Delaware corporation ("Centrum") and
Anthony A. Montani ("Employee").
WHEREAS, pursuant to the Agreement and Plan of Reorganization between
Centrum, Centrum Merging Corporation, and McInnes Steel Company ("McInnes")
dated December 5, 1995, as amended February 5, 1996, Centrum has agreed, upon
the Employee's election to defer cash payment for the Employee's options for
McInnes common stock, to grant an option to purchase shares of Centrum's common
stock, effective upon the Effective Date of Merger, as defined therein,
according to the terms and conditions of this Stock Option Agreement; and
NOW THEREFORE, in consideration of the mutual covenants contained in
this Agreement, the parties hereto agree as follows:
SECTION 1 - GRANT OF OPTION. Centrum hereby grants to Employee the
right and option to purchase from it, on the following terms and conditions,
all or any part of an aggregate of Sixty-Six Thousand Two Hundred (66,200)
shares of Centrum's common stock $.05 value (the "Shares"). The purchase price
for all Shares shall be 64/00 Dollar ($.64) per share, exercisable and payable
as hereinafter provided.
SECTION 2 - EXERCISE OF OPTION; CHANGE OF CONTROL. Except as
otherwise expressly set forth herein, the Employee may elect to exercise the
option at any time after the Effective Date of Merger. Notwithstanding the
above, if Centrum's officers or directors execute a letter of intent (binding
or non-binding) by which Centrum will become a party to a transaction which
will effect a "Change of Control" of Centrum, Employee must exercise his
options within the thirty (30) day period following the date of notice to
Employee that a letter of intent has been entered into, or else the option and
all rights granted by this Agreement, to the extent those rights have not been
exercised, will terminate and become null and void. No partial exercise of
such option may be for less than one (1) full Share. For purposes of this
Agreement "Change of Control" shall be effected if (i) Centrum merges with or
into or consolidates with another corporation following the requisite approval
of the shareholders of Centrum of such merger or consolidation and, after
giving effect to such merger or consolidation, less than fifty-one (51%) of the
then outstanding voting securities of the surviving or resulting corporation
represent or were issued in exchange for voting securities of Centrum
outstanding immediately prior to such merger or consolidation; (ii) there is a
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of Centrum
following the requisite approval of the shareholders of Centrum of such
transaction or series of transactions; or (iii) the requisite approval of the
shareholders
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of Centrum is obtained to approve any plan or proposal for the liquidation or
dissolution of Centrum. The option shall be exercisable only by Employee
during his lifetime and only if Employee was an employee of McInnes, Centrum or
a Centrum affiliate on the date three (3) months prior to the date of exercise.
If Employee is disabled within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"), the reference to the three (3)
month period above shall be read as one (1) year.
SECTION 3 - METHOD OF EXERCISE. The option granted under this
Agreement shall be exercisable as provided above, upon written notice to
Centrum and the payment in cash to Centrum of the full purchase price of the
Shares which the Employee elects to purchase.
SECTION 4 - TERMINATION OF EMPLOYMENT. In the event that an Employee
shall cease to be employed by McInnes, Centrum, or a Centrum affiliate, whether
voluntarily or involuntarily, for any reason other than death or disability,
all of Employee's rights to further exercise his option(s) shall expire ten
(10) days after the date of termination of employment; provided, however, that
no option shall be exercisable after the expiration date set forth in Section
6. A leave of absence with the express written consent of Centrum shall not be
considered termination of employment for purposes of this Section 4.
SECTION 5 - DEATH OR DISABILITY OF EMPLOYEE. In the event of the
death or disability of an Employee while employed by McInnes, Centrum, or a
Centrum affiliate, his right to purchase Shares may be exercised (to the extent
that Employee was entitled to do so at the date of his death or disability) by
him or, in the case of the death of Employee, by his personal representative or
by any person or persons who shall have acquired the option directly from
Employee by will or by the laws of descent and distribution, at any time within
three (3) months after the date of his death or disability; provided that if an
Employee is disabled as defined in Section 2 of this Agreement, the three (3)
month period referred to above shall be read as one (1) year. Notwithstanding
anything herein to the contrary, no option shall be exercisable after the
expiration of the term of the option set forth in Section 6.
SECTION 6 - TERMINATION OF OPTION. The option and all rights granted
by this Agreement, to the extent those rights have not been exercised will
terminate and become null and void at 5:00 p.m. on February 28, 2006.
SECTION 7 - SHARES AS INVESTMENT. By accepting this option, the
Employee acknowledges that any and all Shares purchased pursuant to the
exercise of the option under this Agreement shall be acquired for investment
and not for distribution, and upon the delivery of any and all of the Shares
due to the exercise of the option granted hereunder, the Employee shall deliver
to Centrum a representation in writing and in a form acceptable to Centrum that
such Shares are being acquired in good faith for investment and not for
distribution. This Section 7 shall not apply in the event that the Shares have
been registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
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SECTION 8 - RESTRICTIONS ON SHARES. The Shares issued pursuant to the
exercise of the option granted in Section 1 shall not be registered under
federal securities laws or the securities of any state and will, therefore, be
deemed restricted and certain restrictions will be applicable upon the resale
of such security. Each Share will, upon issuance, contain a restrictive legend
in substantially the following form:
The common stock represented by this certificate has not been
registered under the Securities Act of 1933, as amended or
under the securities laws of any state. Each holder desiring
to transfer the common stock must furnish Centrum with a
written opinion reasonably satisfactory to Centrum in the form
and substance from counsel reasonably satisfactory to Centrum
by reason of experience to the effect that the holder may
transfer the common stock as desired without registration
under the Securities Act or the securities laws of any state.
This Section 8 shall not apply in the event that the Shares have been
registered pursuant to the Securities Act of 1933 and applicable state
securities laws.
SECTION 9 - DILUTION OR OTHER AGREEMENT. In the event that
additional Shares are issued pursuant to a stock split or a stock dividend, the
number of Shares then covered by each outstanding option granted hereunder
shall be increased proportionately with no increase in the total purchase price
of the Shares then so covered. If the issued and outstanding Shares are
reduced by a reverse stock split or other combination of Shares, (other than by
a transaction described in Section 3 of this Agreement), the number of Shares
then covered by each outstanding option granted hereunder shall be reduced
proportionately with no reduction in the total price of the Shares then so
covered. In the event that Centrum should transfer assets to another
corporation and distribute the stock of such other corporation without the
surrender of Shares, and if such distribution is not taxable as a dividend and
no gain or loss is recognized by reason of Section 355 of the Code, or some
similar section, then the total purchase price of the Shares shall be reduced
by an amount which bears the same ratio to the total purchase price then in
effect as the market value of the stock distributed with respect to the Shares
immediately following the distribution, bears to the aggregate of the market
value of such time of a Share and the stock distributed in respect thereof. No
fractional shares shall be issued, and any fractional Shares resulting from the
computations pursuant to this Section 10, shall be eliminated from the option.
No adjustment shall be made for cash dividends or the issuance to stockholders
of rights to subscribe for additional Shares or other securities.
SECTION 10 - RIGHT OF SHAREHOLDER. The Employee shall not have any
rights or privileges of a shareholder of Centrum in respect with the Shares
transferable upon exercise of the option granted under this Agreement, unless
and until certificates representing such Shares shall have been endorsed,
transferred, and delivered and the transferee has caused his name to be entered
as the shareholder of record on the books of Centrum.
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SECTION 11 - NON-TRANSFERABILITY. The option shall not be
transferable and the option may be exercised, during the lifetime of the
Employee only by him. Except as specifically provided in this Agreement, the
option may not be assigned, transferred, pledged or hypothecated in any way,
shall not be assignable by operation of law, including but not limited to a
decree in a domestic relations proceeding, and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the option, and the levy of any
execution, attachment, or similar process upon the option in violation of this
Agreement, shall be null and void and without effect.
SECTION 12 - AFFILIATE. As used herein, the term "affiliate" shall
mean any present or any future corporation which would be deemed an affiliate
of Centrum in Rule 12b-2 of the regulations promulgated pursuant to the
Securities Exchange Act of 1934.
SECTION 13 - NOTICES. Any notice to be given under the terms of this
Agreement shall be addressed to Centrum in care of its President at 6135 Trust
Drive, Suite 104A, Holland, Ohio 43528 with a copy to John W. Hilbert, Esq.,
Fuller & Henry P.L.L., One SeaGate, 17th Floor, P.O. Box 2088, Toledo, Ohio
43603 and any notice to be given to Employee shall be addressed to him at 691
Wayne St., Corry, Pennsylvania 16407, or at such other address as either party
may hereafter designate in writing to the other. Any such notice shall be
deemed duly given when mailed by prepaid regular, registered, or certified
mail.
SECTION 14 - BINDING EFFECT. This Agreement shall be binding upon
Employee and his executors administrators, and representatives and assigns, and
upon Centrum and its successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above.
CENTRUM INDUSTRIES, INC.
By: /s/ George H. Wells
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George H. Wells, President and
Chief Executive Officer
"EMPLOYEE"
/s/ Anthony A. Montani
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Anthony A. Montani
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