Exhibit 10.13
GLOBE MANUFACTURING CO.
MANAGEMENT INCENTIVE PLAN
(Adopted April 1, 1993)
1. Purpose.
The purpose of this plan (the "Plan") is to secure for Globe Manufacturing
Co. (the "Company") and its stockholders the benefits arising from capital stock
ownership by key employees and officers of the Company and its parent and
subsidiary corporations who are expected to contribute to the Company's future
growth and success. Except where the context otherwise requires, the term
"Company" shall include the parent and all present and future subsidiaries of
the Company as defined in Sections 424(e) and 424(f) of the Internal Revenue
Code of 1986, as amended or replaced from time to time (the "Code"). Those
provisions of the Plan which make express reference to Section 422 of the Code
shall apply only to Incentive Stock Options (as that term is defined in the
Plan).
2. Type of Options and Administration.
(a) Types of Options. Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Company (or a Committee
designated by the Board of Directors) and may be either incentive stock options
("Incentive Stock Options") meeting the requirements of Section 422 of the Code
or non-qualified options which are not intended to meet the requirements of
Section 422 of the Code. Of the options to be granted by the Board of
Directors, it is anticipated that approximately one half will be service options
which will become exercisable based on the length of service to the Company of
the optionee ("Service Options") and approximately one half will be performance
options which will become exercisable based on the financial performance of the
Company ("Performance Options"). However, the Board of Directors of the Company
shall be authorized to grant options on other terms and conditions in its
discretion.
(b) Administration. The Plan will be administered by the Board of
Directors of the Company, whose construction and interpretation of the terms and
provisions of the Plan shall be final and conclusive. The Board of Directors
may in its sole discretion grant options to purchase shares of the Company's
Class B Common Stock, par value $.01 per share ("Common Stock") and issue shares
upon exercise of such options as provided in the Plan. The Board shall have
authority, subject to the express provisions of the Plan, to construe the
respective option agreements and the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan, to determine the terms and provisions of
the respective option agreements, which need not be identical, and to make all
other determinations in the judgment of the Board of Directors necessary or
desirable for the administration of the Plan. The Board of Directors may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any option agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect and it shall be the sole and final judge
of such expediency. No director or person acting pursuant to authority
delegated by the Board of Directors shall be liable for any action or
determination made in good faith. The Board of Directors may, to
the full extent permitted by or consistent with applicable laws or regulations
delegate any or all of its powers under the Plan to a committee (the
"Committee") appointed by the Board of Directors, and if the Committee is so
appointed all references to the Board of Directors in the Plan shall mean and
relate to such Committee.
3. Eligibility.
Options may be granted to persons who are, at the time of grant, employees
or officers of the Company; provided, that Incentive Stock Options may be
granted only to persons who are eligible to receive such options under Section
422 of the Code. No person shall be granted any Incentive Stock Option under
the Plan who, at the time such option is granted, owns, directly or indirectly,
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company, unless the requirements of Section 11(b) are satisfied.
The attribution of stock ownership provisions of Section 424(d) of the Code, and
any successor provisions thereto, shall be applied in determining the shares of
stock owned by a person for purposes of applying the foregoing percentage
limitation. A person who has been granted an option may, if he or she is
otherwise eligible, be granted an additional option or options if the Board of
Directors shall so determine.
4. Stock Subject to Plan.
Subject to adjustment as provided in Section 15 below, the maximum number
of shares of Common Stock of the Company which may be issued and sold under the
Plan is 102,570 shares. Such shares may be authorized and unissued shares or may
be shares issued and thereafter acquired by the Company. If an option granted
under the Plan shall expire or terminate for any reason without having been
exercised in full, the unpurchased shares subject to such option shall again be
available for subsequent option grants the Plan. If shares issued upon exercise
of an option under the Plan are tendered to the Company in payment of the
exercise price of an option granted under the Plan, such tendered shares shall
again be available for subsequent option grants under the Plan; provided, that
in no event shall total number of shares issued pursuant to the exercise of
Incentive Stock Options under the Plan, on a cumulative basis, exceed the
maximum number of shares authorized for issuance under the Plan.
5. Forms of Option.
As a condition to the grant of an option under the Plan, each recipient of
an option shall execute an option agreement in such form not inconsistent with
the Plan as may be approved by the Board of Directors. Each option agreement
shall specifically state whether the options granted thereby are intended to be
Incentive Stock Options or non-qualified options. Such option agreements may
differ among recipients. Service Options shall be granted pursuant to a Service
Option Agreement substantially in the form attached hereto as Exhibit A and the
Performance Options shall be granted pursuant to a Performance Option Agreement
substantially in the form attached hereto as Exhibit B.
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6. Purchase Price.
(a) General. The purchase price per share of stock deliverable upon the
exercise of an option shall be determined by the Board of Directors, provided,
however, that (i) in the case of an Incentive Stock Option, the exercise price
shall not be less than 100% of the fair market value of such stock, as
determined by the Board of Directors, at the time of grant of such option, or
less than 110% of such fair market value in the case of options described in
Section 11(b), and (ii) in the case of a non-qualified option, the exercise
price shall not be less than $1.00.
(b) Payment of Purchase Price. Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Company in an amount equal to the exercise price of such options,
or, to the extent provided in the applicable option agreement, (i) by delivery
to the Company of shares of Common Stock of the Company already owned by the
optionee having a fair market value equal in amount to the exercise price of the
options being exercised, (ii) by any other means which the Board of Directors
determines are consistent with the purpose of the Plan and with applicable laws
and regulations (including, without limitation, the provisions of Regulation T
promulgated by the Federal Reserve Board) or (iii) by any combination of such
methods of payment. The fair market value of any shares of the Company's Common
Stock or other non-cash consideration which may be delivered upon exercise of an
option shall be determined by the Board of Directors.
7. Option Period
Each option and all rights thereunder shall expire on such date as the
Board of Directors shall determine, except that (i) in the case of an Incentive
Stock Option, such date shall not be later than ten years after the date on
which the option is granted, (ii) in the case of an Incentive Stock Option
described in Section 11(b), such date shall not be later than five years after
the date on which the option is granted and (iii) in all cases, options shall be
subject to earlier termination as provided in the Plan.
8. Exercise of Options.
Each option granted under the Plan shall be exercisable either in full or
in installments at such time or times and during such period as shall be set
forth in the agreement evidencing such option, subject to the provisions of the
Plan.
9. Transferability of Options.
Options granted under the Plan shall be assignable or transferable in
accordance with the provisions of the option agreement covering such grant.
10. Effect of Termination of Employment or Other Relationship.
Except as provided in Section 11(d) with respect to Incentive Stock
Options, the Board of Directors shall determine the period of time during which
an optionee may exercise an option
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following (i) the termination of the optionee's employment or other relationship
with the Company or (ii) the death or disability of the optionee. Such periods
shall be set forth in the agreement evidencing such option.
11. Incentive Stock Options.
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(a) Express Designation. All Incentive Stock Options granted under the
Plan shall, at the time of grant, be specifically designated as such in the
option agreement covering such Incentive Stock Options.
(b) 10% Stockholder. If any employee to whom an Incentive Stock Option is
to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (after taking into account the attribution
of stock ownership rules of Section 424(d) of the Code), then the following
special provisions shall be applicable to the Incentive Stock Option granted to
such individual:
(i) The purchase price per share of the Common Stock subject to such
Incentive Stock Option shall not be less than 110% of the fair market value
of one share of Common Stock at the time of grant; and
(ii) The option exercise period shall not exceed five years from the
date of grant.
(c) Dollar Limitation. For so long as the Code shall so provide, options
granted to any employee under the Plan (and any other incentive stock option
plans of the Company) which are intended to constitute Incentive Stock Options
shall not constitute Incentive Stock Options to the extent that such options, in
the aggregate, become exercisable for the first time in any one calendar year
for shares of Common Stock with an aggregate fair market value (determined as of
the respective date or dates of grant) of more than $100,000.
(d) Termination of Employment, Death or Disability. No Incentive Stock
Option may be exercised unless, at the time of such exercise, the optionee is,
and has been continuously since the date of grant of his or her option, employed
by the Company, except that:
(i) an Incentive Stock Option may be exercised within the period of
three months after the date the optionee ceases to be an employee of the
Company (or within such lesser period as may be specified in the applicable
option agreement), provided, that the agreement with respect to such option
may designate a longer exercise period and that the exercise after such
three-month period shall be treated as the exercise of a non-qualified
option under the Plan;
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(ii) if the optionee dies while in the employ of the Company, or
within three months after the optionee ceases to be such an employee, the
Incentive Stock Option may be exercised by the person to whom it is
transferred by will or the laws of descent and distribution within the
period of one year after the date of death (or within such lesser period as
may be specified in the applicable option agreement); and
(iii) if the optionee becomes disabled (within the meaning of Section
22(e) (3) of the Code or any successor provision thereto) while in the
employ of the Company, the Incentive Stock Option may be exercised within
the period of one year after the date the optionee ceases to be such an
employee because of such disability (or within such lesser period as may be
specified in the applicable option agreement).
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
12. Additional Provisions.
(a) Additional Option Provisions. The Board of Directors may, in its sole
discretion, include additional provisions in any option agreement covering
options granted under the Plan, including without limitation restrictions on
transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange
for or guaranty loans or to transfer other property to optionees upon exercise
of options, or such other provisions as shall be determined by the Board of
Directors; provided that such additional provisions shall not be inconsistent
with any other term or condition of the Plan and such additional provisions
shall not cause any Incentive Stock Option granted under the Plan to fail to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code.
(b) Acceleration, Extension, Etc. The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular option or options granted under the
Plan may be exercised; provided, however, that no such extension shall be
permitted if it would cause the Plan to fail to comply with Section 422 of the
Code.
13. General Restrictions
(a) Investment Representations. The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option for his or her
own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws, or with covenants or representations made by the Company in
connection with any public offering of its Common Stock.
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(b) Compliance With Securities Laws. Each option shall be subject to the
requirement that if, at any time counsel to the Company shall determine that the
listing, registration or qualification of the shares subject to such option upon
any securities exchange or under any state or federal law; or the consent or
approval of any governmental or regulatory body, or that the disclosure of non-
public information or the satisfaction of any other condition is necessary as a
condition of , or in connection with, the issuance or purchase of shares
thereunder, such option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require the Company
to apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.
14. Rights as a Stockholder
The holder of an option shall have no rights as a stockholder with respect
to any shares covered by the option (including, without limitation, any rights
to receive dividends or non-cash distributions with respect to such shares)
until the date of issue of a stock certificate to him or her for such shares.
No adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
15. Adjustment Provisions for Recapitalizations and Related Transactions
(a) General. If, through or as a result of any merger, consolidation, sale
of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other similar transaction, (i) the outstanding shares of Common Stock
are increased or decreased or are exchanged for a different number of kind of
shares or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment may be made in (x) the maximum number
and kind of shares reserved for issuance under the Plan, (y) the number and kind
of shares or other securities subject to then outstanding options under the
Plan, and/or (z) the price for each share subject to any then outstanding
options under the Plan, without changing the aggregate purchase price as to
which such options remain exercisable, provided that no adjustment shall be made
pursuant to this Section 15 if such adjustment would cause the Plan to fail to
comply with Section 422 of the Code.
(b) Board Authority to Make Adjustments. Any adjustments under this
Section 15 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
16. Merger, Consolidation, Asset Sale, Liquidation, etc.
(a) General. In the event of a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for
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securities, cash or other property of any other corporation or business entity
or in the event of a liquidation of the Company, the Board of Directors of the
Company, or the board of directors of any corporation assuming the obligations
of the Company, may, in its discretion, take any one or more of the following
actions, as to outstanding options: (i) provide that such options shall be
assumed, or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), provided that any such options
substituted for Incentive Stock Options shall meet the requirements of Section
425 (a) of the Code, (ii) upon written notice to the optionees, provide that all
unexercised options will terminate immediately prior to the consummation of such
transaction unless exercised by the optionee within a specified period following
the date of such notice, (iii) in the event of a merger under the terms of which
holders of the Common Stock of the Company will receive upon consummation
thereof a cash payment for each share surrendered in the merger (the "Merger
Price"), make or provide for a cash payment to the optionees equal to the
difference between (A) the Merger Price times the number of shares of Common
Stock subject to such outstanding options (to the extent then exercisable at
prices not in excess of the Merger Price) and (B) the aggregate exercise price
of all outstanding options (to the extent then exercisable at prices not in
excess of the Merger Price) in exchange for the termination of such options and
(iv) provide that all or any outstanding options shall become exercisable in
full immediately prior to such event.
(b) Substitute Options. Subject to the maximum number of shares of Common
Stock issuable under the Plan, the Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, or a subsidiary of the Company, as the result of a
merger or consolidation of the employing corporation with the Company or a
subsidiary of the Company, or as a result of the acquisition by the Company, or
one of its subsidiaries, or property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board of Directors considers appropriate in the circumstances.
17. No Special Employment Rights
Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
18. Other Employee Benefits.
Except as to plans which by their terms include such amounts as
compensation, the amount of any compensation deemed to be received by an
employee as a result of the exercise of an option or the sale of shares received
upon such exercise will not constitute compensation with respect to which any
other employee benefits of such employee are determined, including, without
limitation, benefits under any bonus, pension, profit-sharing, life insurance or
salary continuation plan, except as otherwise specifically determined by the
Board of Directors.
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19. Amendment of the Plan.
(a) The Board of Directors may at any time, and from time to time, modify
or amend the Plan in any respect, except that if at any time the approval of the
stockholders of the Company is required under Section 422 of the Code or any
successor provision with respect to Incentive Stock Options, the Board of
Directors may not effect such modification or amendment without such approval.
(b) The termination or any modification or amendment of the Plan shall not,
without the consent of an optionee, affect his or her rights under an option
previously granted to him or her. With the consent of the optionee affected, the
Board of Directors may amend outstanding option agreements in a manner not
inconsistent with the Plan. The Board of Directors shall have the right to
amend or modify the terms and provisions of the Plan and of any outstanding
Incentive Stock Options granted under the Plan to the extent necessary to
qualify any or all such options for such favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded incentive
stock options under Section 422 of the Code.
20. Withholding.
The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the optionee may elect
to satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a fair
market value equal to such withholding obligation. The fair market value of the
shares used to satisfy such withholding obligation shall be determined by the
Company as of the date that the amount of tax to be withheld is to be
determined. An optionee who has made an election pursuant to this Section 20(a)
may only satisfy his or her withholding obligation with shares of Common Stock
which are not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements.
21. Cancellation and New Grant of Options, Etc.
The Board of Directors shall have the authority to effect, at any time and
from time to time, with the consent of the affected optionees, (i) the
cancellation of any or all outstanding options under the Plan and the grant in
substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
canceled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.
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22. Effective date and Duration of the Plan.
(a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, but no Incentive Stock Option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Company's stockholders. If such stockholder approval is not obtained within
twelve months after the date of the Board's adoption of the Plan, no options
previously granted under the Plan shall be deemed to be Incentive Stock Options
and no further Incentive Stock Options shall be granted. Amendments to the Plan
not requiring stockholder approval shall become effective when adopted by the
Board of Directors; amendments requiring stockholder approval (as provided in
Section 19) shall become effective when adopted by the Board of Directors, but
no Incentive Stock Option granted after the date of such amendment shall become
exercisable (to the extent that such amendment to the Plan was required to
enable the Company to grant such Incentive Stock Option to a particular
optionee) unless and until such amendment shall have been approved by the
Company's stockholders. If such stockholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any Incentive Stock
Options granted on or after the date of such amendment shall terminate to the
extent that such amendment to the Plan was required to enable the Company to
grant such option to a particular optionee. Subject to this limitation, options
may be granted under the Plan at any time after the effective date and before
the date fixed for termination of the Plan.
(b) Termination. Unless sooner terminated in accordance with Section 16,
the Plan shall terminate, with respect to Incentive Stock Options, upon the
earlier of (i) the close of business on the day next preceding the tenth
anniversary of the date of its adoption by the Board of Directors, or (ii) the
date on which all share available for issuance under the Plan shall have been
issued pursuant to the exercise or cancellation of options granted under the
Plan. Unless sooner terminated in accordance with Section 16, the Plan shall
terminate with respect to options which are not Incentive Stock Options on the
date specified in (ii) above. If the date of termination is determined under
(i) above, then options outstanding on such date shall continue to have force
and effect in accordance with the provisions of the instruments evidencing such
options.
23. Provision for Foreign Participants.
The Board of Directors may, without amending the Plan, modify awards or
options granted to participants who are foreign nationals or employed outside
the United States to recognize differences in laws, rules, regulations or
customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.
Adopted by Board of Directors: April 1, 1993
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Exhibit A
GLOBE MANUFACTURING CO.
Service Option Agreement
under the
Management Incentive Plan
1. Grant of Option. Globe Manufacturing co., a Massachusetts corporation
(the "Company"), hereby grants to ________________________ (the "Optionee") an
option, pursuant to the Company's Management Incentive Plan (the "Plan"), to
purchase an aggregate of ________ shares of Class B Common Stock, par value $.01
per share ("Common Stock"), of the Company at a purchase price of $1.00 per
share, purchasable as set forth in, and subject to the terms and conditions of,
this option and the Plan. Except where the context otherwise requires, the term
"Company" shall include the parent and all present and future subsidiaries of
the Company as defined in Sections 424(3) and 424(f) of the Internal Revenue
Code of 986, as amended or replaced from time to time (the "Code").
2. Non-Qualified Stock Option. This option is not intended to qualify as
an incentive stock option under Section 422 of the Code.
3. Exercise of Option and Provisions for Termination.
3.1 Vesting Schedule. Subject to the last sentence of this Section
3.1 and except as otherwise provided in this Agreement, this option may be
exercised in installments as to not more than the number of shares and during
the respective installment periods set forth in the table below.
Percentage of Shares as to
Exercise Period which Option is Exercisable
--------------- ---------------------------
Prior to _________________, 1994 -0-
On or after ______________, 1994 20%
But prior to ______________, 1995
On or after ______________, 1995 40%
But prior to ______________, 1996
On or after ______________, 1996 60%
But prior to ______________, 1997
On or after ______________, 1997 80%
But prior to ______________, 1998
On or after ______________, 1998 100%
The right of exercise shall be cumulative so that if the option is not exercised
to the maximum extent permissible during any exercise period, it shall be
exercisable, in whole or in part, with respect to
all shares not so purchased at any time prior to the termination of this option.
Notwithstanding any provision to the contrary herein, this option may be
exercised only if, on the date of exercise of this option, the Fair Value (as
defined in Section 6.5(a) below) per share of Common Stock is equal to or
greater than $60.00 (as appropriately adjusted to reflect the Fair Value of any
dividends or distributions received or to be received by the holders of Common
Stock).
3.2 Exercise Procedure. Subject to the conditions set forth in this
Agreement, this Option shall be exercised by the Optionee's delivery of written
notice of exercise to the Treasurer of the Company specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 4. Such exercise
shall be effective upon receipt by the Treasurer of the Company of such written
notice together with the required payment. The Optionee may purchase fewer than
the total number of shares covered hereby, provided that no partial exercise of
this option may be for any fractional share or for fewer than one hundred whole
shares.
3.3 Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Optionee, at the time he or she exercises this option, is, and has been at
all times since the date of grant of this option, an employee or officer of the
Company (an "Eligible Optionee").
3.4 Discharge for Cause. If the Optionee ceases his or her
relationship with the Company because such relationship is terminated by the
Company for "cause" (as defined below), the right to exercise this option shall
terminate immediately upon such cessation. "Cause" may exist upon the
Optionee's (i) continued willful failure to perform the duties of his or her
employment in any material respect, (ii) malfeasance or gross negligence in the
performance of his or her duties with respect to the Company, (iii) conviction
for a felony under the laws of the United States or any state thereof or (iv)
intentional disclosure of confidential information concerning the Company's
business to any individual or entity not entitled to such information, as
determined by the Company, which determination shall be conclusive.
3.5 Retirement from the Company. If the Optionee ceases his or her
relationship with the Company as a result of his or her retirement (as
determined in good faith by the Board of Directors), then, except as provided in
Section 3.8 below, the right to exercise this option shall terminate upon the
earlier of (i) three years after such cessation and (ii) the day the Optionee
ends his or her retirement (as determined in good faith by the Board of
Directors), provided that this option shall be exercisable only to the extent
that the Optionee was entitled to exercise this option on the date of such
cessation.
3.6 Voluntary Termination of Employment. If the Optionee ceases his
or her relationship with the Company because such relationship is voluntarily
terminated by the Optionee other than for retirement (and other than to preclude
the imminent involuntary termination of the relationship by the Company for
cause, as determined in good faith by the Board of Directors, in which case the
Optionee shall be deemed to have been terminated for cause), then, except as
provided in Section 3.8 below, the right to exercise this option shall terminate
three months after
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such cessation, provided that this option shall be exercisable only to the
extent that the Optionee was entitled to exercise this option on the date of
such cessation.
3.7 Involuntary Termination of Employment. If the Optionee ceases
his or her relationship with the Company because such relationship is terminated
by the Company without cause, then, except as provided in Section 3.8 below, the
right to exercise this option shall terminate one year after such cessation,
provided that this option shall be exercisable only to the extent that the
Optionee was entitled to exercise this option on the date of such cessation.
3.8 Termination Resulting from Death or Disability. If the Optionee
dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
while he or she is an Eligible Optionee, this option shall be exercisable,
within the period of three years following the date of death or disability of
the Optionee, by the Optionee or by the person to whom this option is
transferred by will or the laws of descent and distribution, provided that this
option shall be exercisable only to the extent that this option was exercisable
by the Optionee on the date of his or her death or disability. If the Optionee
dies or becomes disabled during any post-termination exercise period, as
described in Sections 3.5, 3.6 or 3.7 above, this option shall be exercisable,
within the period of 60 days following the date of death or disability of the
Optionee or (if longer) for the remainder of such post-termination exercise
period, by the Optionee or by the person to whom this option is transferred by
will or the laws of descent and distribution, provided that this option shall be
exercisable by the Optionee on the date of his or her death or was exercisable
by the Optionee on the date of his or her death or disability. Except as
otherwise indicated by the context, the term "Optionee," as used in this option,
shall be deemed to include the estate of the Optionee or any person who acquires
the right to exercise this option by bequest or inheritance or otherwise by
reason of the death of the Optionee.
4. Payment of Purchase Price.
4.1 Method of Payment. Payment of the purchase price for shares
purchased upon exercise of this option shall be made by (i) delivery to the
Company of cash or a check to the order of the Company in an amount equal to the
purchase price of such shares, (ii) subject to the consent of the Company, by
delivery to the Company of shares of Common Stock of the Company then owned by
the Optionee having a Fair Value (as defined in Section 6.5(a) below) equal in
amount to the purchase price of such shares, (iii) by any other means which the
Board of Directors determines are consistent with the purpose of the Plan and
applicable laws and regulations (including, without limitation, Regulation T
promulgated by the Federal Reserve Board), or (iv) by any combination of such
methods of payment.
4.2 Delivery of Shares Tendered in Payment of Purchase Price. If the
Company permits the Optionee to exercise options by delivery of shares of Common
Stock of the Company, the certificate or certificates representing the shares of
Common Stock of the Company to be delivered shall be duly executed in blank by
the Optionee or shall be accompanied by a stock power duly executed in blank
suitable for purposes of transferring such shares to the Company. Fractional
shares of Company will not be accepted in payment of the purchase price of
shares acquired upon exercise of this option.
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4.3 Restrictions Upon Use of Option Stock. Notwithstanding the
foregoing, no shares of Common Stock of the Company may be tendered in payment
of the purchase price of shares purchased upon exercise of this option if the
shares to be so tendered were acquired within twelve (12) months before the date
of such tender, through the exercise of an option granted under the Plan or any
other stock option or restricted stock plan of the Company.
5. Delivery of Shares: Compliance With Securities law, Etc.
5.1 General. The Company shall, upon payment of the option price for
the number of shares purchased and paid for, make prompt delivery of such shares
to the Optionee, provided that if any law or regulation requires the Company to
take any action with respect to such shares before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to complete such action.
5.2 Listing, Qualification, Etc. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of non-
public information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure, or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure or satisfy such other condition.
6. Transfer of Shares.
6.1 Restrictions on Transfers; Permitted Transferees.
(a) The Optionee shall not directly or indirectly, offer, sell,
assign, pledge, encumber or otherwise transfer this option or any shares of
Common Stock issued upon exercise of this option (this option and such shares of
Common Stock are hereinafter referred to collectively as the "Shares") without
the prior written consent of the Board of Directors, unless such offer, sale,
assignment, pledge or other transfer (i) is pursuant to the effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") and has been registered under all applicable state securities
or "blue sky" laws or (ii) is pursuant to a transaction complying with Rule 144
promulgated under the Securities Act.
(b) Except in the case of a sale of Shares pursuant to an
effective registration statement under the Securities Act or a sale of Shares
pursuant to a transaction complying with Rule 144 promulgated under the
Securities Act, no Optionee shall sell, assign, pledge, encumber or otherwise
transfer any Shares to any person unless (i) such Shares bear legends as
provided in Section 6.4 and (ii) such transferee shall have executed and
delivered to the Company, as a condition precedent to any acquisition of Shares,
an instrument in form and substance
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satisfactory to the Company confirming that such transferee takes such Shares
subject to the restrictions set forth in this Agreement and agrees to be bound
by the terms of this Agreement.
(c) None of the restrictions contained in this Agreement with
respect to transfers of Shares (other than those set forth in Section 6.1(a),
6.1(b) and 6.8) shall apply: (i) to any transfer or assignment for consideration
or to any gift by the Optionee to any spouse, child, parent, or grandchild of
the Optionee, or by any of such relatives to the Optionee or any such relatives
to a trust of which there are no principal beneficiaries other than the Option
or one or more of such relatives; (ii) to any gift by the Optionee to a bona
fide charity or foundation approved by the Board of Directors (such approval not
to be unreasonably withheld); (iii) to any transfer to a legal representative in
the event the Optionee becomes mentally incompetent; and (iv) to any transfer by
will or the laws of descent; provided that in each of cases (i) through (iv)
each transferee, donee or distributee (a "Permitted Transferee") agrees to take
subject to and comply with the provisions of this Section 6.1. For purposes
hereof, the Permitted Transferees of the Optionee shall include the Permitted
Transferees of the Optionee's Permitted Transferees.
6.2 Right of First Offer.
(a) Except as provided in Sections 6.1(c), 6.3 and 6.5(b) if the
Optionee desires to sell, assign or otherwise transfer any Shares he or she
shall first give written notice (a "Seller's Notice") to the Company stating the
Optionee's desire to make such transfer, the number of Shares to be transferred
(the "Offered Shares") and the cash price which the Optionee proposes to be paid
for the Offered Shares (the "First Offer Price").
(b) Upon receipt of the Seller's Notice (the "First Offer"), the
Company shall have the irrevocable and exclusive option to purchase up to all of
the Offered Shares at the First Offer Price; provided that the Company shall not
have the right to purchase any of the Offered Shares unless either (i) the
Company purchases all such Offered Shares; or (ii) the Optionee consents to the
purchase of less than all of the Offered Shares. The Company's option under
this Section 6.2(b) shall be exercisable by a written notice to the Optionee,
given within 15 days from the date of the Seller's Notice.
(c) If the Seller's Notice shall be duly given, and if the
Company shall not exercise its option to purchase the Offered Shares at the
First Offer Price or does not purchase all Shares offered by the Optionee, then
the Optionee shall be free for a period of 90 days from the 15th day following
the date of the Seller's Notice to sell the Offered Shares to any third party
transferee at a cash price equal to or greater than the First Offer Price;
provided that such sale complies with the provisions of Section 6.1 of this
Agreement.
(d) If the proposed purchase price of a transferee for the
Offered Shares is less than the First Offer Price, the Optionee shall not sell
or otherwise transfer any of the Offered Shares unless the Optionee shall first
reoffer the Offered Shares at such lesser price to the Company by giving written
notice (the "Reoffer Notice") thereof, stating the Optionee's intention to make
such transfer at such lower price (the "Reoffer Price"). The Company shall then
have the irrevocable and exclusive option to purchase all of the Offered Shares
at the Reoffer Price, exercisable in the same
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manner as provided in Section 6.2(b). If the Company does not then purchase all
the Offered Shares, such Offered Shares may be sold by the Optionee within 60
days following the 15th day from the date of the Reoffer Notice, at a cash price
equal to or greater than the Reoffer Price; provided that such sale complies
with the provisions of Section 6.1 of this Agreement.
(e) If the Company does not exercise its option to purchase the
Offered Shares at a First Offer Price or at the Reoffer Price, and the Optionee
shall not have sold the Offered Shares to any transferee for any reason before
the expiration of the 60-day period described in Section 6.2(d) in the event of
a Reoffer or, if no Reoffer Notice is given, the 90-day period described in
Section 6.2(c), then the Optionee shall not give a Seller's Notice with respect
to a transaction which would require compliance with this Section 6.2 for a
period of 90 days from the last day of such 60- or 90-day period, as the case
may be.
(f) The closing of all purchases pursuant to the first offer
rights granted under this Section 6.2 shall take place at the principal offices
of the Company at 10 a.m. on the tenth Business Day following the delivery to
the Optionee of all notices exercising such first offer rights with respect to
all of the Offered Shares to be sold by the Optionee unless otherwise mutually
agreed. At such closing, (i) the Optionee shall assign and transfer to the
Company good and valid title to the Shares being purchased by it, by delivery of
the certificates representing the Shares to be sold and transferred, duly
endorsed in blank, with the requisite stock transfer tax stamps attached,
together with such stock powers, certificate, legal opinions and other
instruments of transfer as the Company shall reasonably request; and (ii) the
Company shall pay to the Optionee the purchase price for the Shares being
purchased by it in cash, by delivery of a certified or bank check or by wire
transfer of immediately available funds to such account as the Optionee shall
direct.
6.3 Merger Transactions. Notwithstanding any other provision of this
Agreement to the contrary, the Company may enter into an agreement to
consolidate with or merge with or into any other corporation if such agreement
is duly approved by the Board of Directors and by the requisite vote of the
stockholders in accordance with the Articles of Organization of the Company. In
such event, Section 6.2 of this Agreement shall not be applicable and all Shares
may be transferred pursuant to such merger or consolidation for such
consideration in accordance with the terms thereof.
6.4 Legend on Certificates. Each outstanding certificate
representing Shares that are subject to this Agreement shall bear legends
substantially in the following form:
These securities have not been registered under the
Securities Act of 1933. They may not be offered or
transferred by sale, assignment, pledge or otherwise
unless (i) a registration statement for the securities
under the Securities Act of 1933 is in effect or (ii)
the corporation has received an opinion of counsel, which
opinion is satisfactory to the corporation, to the effect
that such registration is not required under the Securities
Act of 1933.
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The sale, assignment, pledge, encumbrance or other transfer
of the securities represented by this certificate is subject
to the provisions of an option agreement among the
corporation and the holder of such securities, a copy of
which is on file at the principal executive office of the
corporation.
6.5 Purchase Option on Shares.
(a) In the event the Optionee shall cease to be employed by the
Company or a subsidiary of the Company for any reason, or no reason, with or
without cause, including involuntary termination, death or temporary or
permanent disability (a "Termination"), the Optionee and his or her Permitted
Transferees shall be required to offer all of the Shares owned by the Optionee
and his or her Permitted Transferees to the Company in accordance with the
procedures set forth in Section 6.2, provided, however, that the Company's
option to purchase such shares shall be exercisable by a written notice to the
Seller, given within six (6) months from the date of the Seller's Notice. For
purpose of such offer, the First Offer Price for such Shares shall be the Fair
Value (as defined below) of such Shares as of the date of the Termination of the
Optionee (appropriately adjusted to reflect the Fair Value of any dividends or
distributions received or to be received by the holder of such Shares subsequent
to such date); provided, that if the Optionee's employment is terminated by the
Company for cause, the First Offer Price for such Shares shall be the lower of
the original purchase price paid by the Optionee or his or her Permitted
Transferees to the Company for such Shares (appropriately adjusted to reflect
the Fair Value of all dividends or distributions received or to be received in
respect of such Shares subsequent to the original purchase of such Shares) or
the Fair Value of such Shares as of the date of the Termination of the Optionee
(appropriately adjusted as provided above). The Board of Directors shall make
or obtain a determination of the Fair Value of such Shares no later than thirty
(30) days following the date of the Termination of the Optionee, and the
Seller's Notice with respect to such Shares shall be given as promptly as
practicable following such determination. For purposes of this Agreement, Fair
Value shall have the meaning ascribed to it in the Shareholders' Agreement dated
as of December 22, 1992 among the Company and the shareholders and other
individuals named on the signature pages thereto (the "Shareholders Agreement").
(b) In the event of the death of the Optionee, the Optionee's
estate (the "Estate") shall have the right, at its option, for a period of six
(6) months from the date of the Optionee's death, to sell to the Company, and
the Company shall be required to purchase, all of the Shares held by the Estate.
If it desires to sell such Shares to the Company, the Estate shall, within the
six (6) month period, send written notice thereof to the Company pursuant to
this Section 6.5(b) (the "Put Notice"). The purchase price for such Shares shall
be the Fair Value of such Shares as of the date of the Put Notice (appropriately
adjusted to reflect the Fair Value of any dividends or distributions received or
to be received by the holder of such Shares subsequent to such date). The Board
of Directors shall make or obtain a determination of the Fair Value of such
Shares no later than ninety (90) days following its receipt of a Put Notice. The
closing of such purchase shall take place at the principal office of the Company
no later than the tenth Business Day following the making of such determination
of Fair Value.
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6.6 Involuntary Transfers. If the Optionee involuntarily transfers
directly or indirectly any or all of his or her Shares for any reason and such
transfer is not to a Permitted Transferee, the transferee of such Shares and its
Permitted Transferees shall be required to offer all of the Shares held by such
Transferee and its Permitted Transferees to the Company in accordance with the
procedures set forth in Section 6.2, provided, however, that the Company's
option to purchase such shares shall be exercisable by a written notice to the
Seller, given within six (6) months from the date of the Seller's Notice. For
purposes of such offer, the First Offer Price for such Shares shall be the Fair
Value of such Shares as of the date of the involuntary transfer of such Shares
to such transferee (appropriately adjusted to reflect the Fair Value of any
dividends or distributions received or to be received by the holder of such
Shares subsequent to the date of such involuntary transfer). The Board of
Directors shall make or obtain a determination of the Fair Value of such Shares
no later than thirty (30) days following the date of any such involuntary
transfer, and the Seller's Notice with respect to such Shares shall be given by
such transferee or by the Company on behalf of such transferee as promptly as
practicable following such determination.
6.7 Consideration for Certain Purchases of Shares by the Company.
Notwithstanding any provision hereof to the contrary, in the event that the
Company exercises its option to purchase Shares offered to the Company as
required by the provisions of Section 6.5 or 6.6, and at such time the Company
is prohibited by the terms of then outstanding indebtedness of the Company from
purchasing such Shares for cash, the Company may, in lieu of paying cash for
such Shares, instead pay for such Shares by delivering a promissory note of the
Company, substantially in the form attached hereto as Exhibit A, having a
principal amount equal to the cash purchase price for such Shares.
6.8 Drag-Along Right. If, after compliance with the appropriate
provisions of the Shareholders Agreement and provided that Section 4.6 of the
Shareholders Agreement remains in effect, any shareholder or group of
shareholders of the Company acting together or pursuant to a common plan or
arrangement propose to make a bona fide sale of shares of capital stock (other
than pursuant to a registered public offering) representing 70% or more of the
issued and outstanding shares of capital stock of the Company to a third party
which is not, and following such sale will not be, affiliated with any of such
shareholders, such shareholders shall have the right (a "Drag-Along Right"),
exercisable upon fifteen (15) days' prior written notice to the Optionee and his
or her Permitted Transferees, to require the Optionee and his or her Permitted
Transferees to sell the same proportion of their Share as such proposing
shareholders propose to sell to such third party on the same terms as such
proposing shareholders, provided that the exercise of such Drag-Along Right is
required by the third party. Section 6.2 shall not apply to sales of shares by
the Optionee resulting from the exercise of a Drag-Along Right in accordance
with this Section 6.8.
7. No Special Employment or Similar Rights. Nothing contained in the
Plan or this option shall be construed or deemed by any person under any
circumstances to bind the Company to continue the employment or other
relationship of the Optionee with the Company for the period within which this
option may be exercised.
8. Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this option (including, without
limitation, any rights to receive dividends or non-cash distributions with
respect to such shares) unless and until a certificate representing such shares
is duly issued and delivered to the Optionee. No adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
9. Adjustment Provisions.
9.1 General. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, conversion or other similar transaction, other than those
described in Section 10 below (i) the outstanding shares of Common Stock are
increased or decreased or are exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, the
Optionee shall, with respect to this option or any unexercised portion hereof,
be entitled to the rights and benefits, and be subject to the limitations, set
forth in Section 15(a) of the Plan.
9.2 Board Authority to Make Adjustments. Any adjustments under this
Section 9 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued under this option on
account of any such adjustments.
10. Mergers, Consolidation, Distributions, Liquidations, Etc. In the
event of a merger or consolidation (other than for the purpose of change of
state of incorporation) or sale of all or substantially all of the assets of the
Company, in which outstanding shares of Common Stock are exchanged for
securities, cash or other property of any other corporation or business entity
or in the event of a liquidation of the Company, prior to the termination of
this option, this option shall become exercisable in full immediately prior to
such event.
11. Withholding Taxes. The Company's obligation to deliver shares upon
the exercise of this option shall be subject to the Optionee's satisfaction of
all applicable federal, state and local income and employment tax withholding
requirements.
12. Miscellaneous.
12.1 Except as provided in herein, this option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
12.2 All notices under this option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designed in writing by either of the
parties to one another.
12.3 This option shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
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Date of Grant: GLOBE MANUFACTURING CO.
_________________, 1993 By:________________________________
Title:_____________________________
Address: 156 Bedford Street
Fall River, MA 02720
-10-
Exhibit B
GLOBE MANUFACTURING CO.
Performance Option Agreement
under the
Management Incentive Plan
1. Grant of Option. Globe Manufacturing Co., a Massachusetts corporation
(the "Company"), hereby grants to ________________________ (the "Optionee") an
option, pursuant to the Company's Management Incentive Plan (the "Plan"), to
purchase an aggregate of ________ shares of Class B Common Stock, par value $.01
per share ("Common Stock"), of the Company at a purchase price of $30.00 per
share, purchasable as set forth in, and subject to the terms and conditions of,
this option (including Exhibit A hereto) and the Plan. Except where the context
otherwise requires, the term "Company" shall include the parent and all present
and future subsidiaries of the Company as defined in Sections 424(e) and 424(f)
of the Internal Revenue Code of 986, as amended or replaced from time to time
(the "Code").
2. Non-Qualified Stock Option. This option is not intended to qualify as
an incentive stock option under Section 422 of the Code.
3. Exercise of Option and Provisions for Termination.
3.1 Vesting Schedule. Subject to the last sentence of this Section
3.1 and except as otherwise provided in this Agreement, this option may be
exercised in installments as to not more than the number of shares and during
the respective installment periods set forth in Exhibit A, attached hereto. The
right of exercise shall be cumulative so that if the option is not exercised to
the maximum extent permissible during any exercise period, it shall be
exercisable, in whole or in part, with respect to all shares not so purchased at
any time prior to the termination of this option. Notwithstanding any provision
to the contrary herein, this option may be exercised only if, on the date of
exercise of this option, the Fair Value (as defined in Section 6.5(a) below) per
share of Common Stock is equal to or greater than $60.00 (as appropriately
adjusted to reflect the Fair Value of any dividends or distributions received or
to be received by the holders of Common Stock).
3.2 Exercise Procedure. Subject to the conditions set forth in this
Agreement, this option shall be exercised by the Optionee's delivery of written
notice of exercise to the Treasurer of the Company specifying the number of
shares to be purchased and the purchase price to be paid therefor and
accompanied by payment in full in accordance with Section 4. Such exercise
shall be effective upon receipt by the Treasurer of the Company of such written
notice together with the required payment. The Optionee may purchase fewer than
the total number of shares covered hereby, provided that no partial exercise of
this option may be for any fractional share or for fewer than one hundred whole
shares.
3.3 Continuous Relationship with the Company Required. Except as
otherwise provided in this Section 3, this option may not be exercised unless
the Optionee, at the time he or
she exercises this option, is, and has been at all times since the date of grant
of this option, an employee or officer of the Company (an "Eligible Optionee").
3.4 Discharge for Cause. If the Optionee ceases his or her
relationship with the Company because such relationship is terminated by the
Company for "cause" (as defined below), the right to exercise this option shall
terminate immediately upon such cessation. "Cause" may exist upon the
Optionee's (i) continued willful failure to perform the duties of his or her
employment in any material respect, (ii) malfeasance or gross negligence in the
performance of his or her duties with respect to the Company, (iii) conviction
for a felony under the laws of the United States or any state thereof or (iv)
intentional disclosure of confidential information concerning the Company's
business to any individual or entity not entitled to such information, as
determined by the Company, which determination shall be conclusive.
3.5 Retirement from the Company. If the Optionee ceases his or her
relationship with the Company as a result of his or her retirement (as
determined in good faith by the Board of Directors), then, except as provided in
Section 3.8 below, the right to exercise this option shall terminate upon the
earlier of (i) three years after such cessation and (ii) the day the Optionee
ends his or her retirement (as determined in good faith by the Board of
Directors), provided that this option shall be exercisable only to the extent
that the Optionee was entitled to exercise this option on the date of such
cessation.
3.6 Voluntary Termination of Employment. If the Optionee ceases his
or her relationship with the Company because such relationship is voluntarily
terminated by the Optionee other than for retirement (and other than to preclude
the imminent involuntary termination of the relationship by the Company for
cause, as determined in good faith by the Board of Directors, in which case the
Optionee shall be deemed to have been terminated for cause), then, except as
provided in Section 3.8 below, the right to exercise this option shall terminate
three months after such cessation, provided that this option shall be
exercisable only to the extent that the Optionee was entitled to exercise this
option on the date of such cessation.
3.7 Involuntary Termination of Employment. If the Optionee ceases
his or her relationship with the Company because such relationship is terminated
by the Company without cause, then, except as provided in Section 3.8 below, the
right to exercise this option shall terminate one year after such cessation,
provided that this option shall be exercisable only to the extent that the
Optionee was entitled to exercise this option on the date of such cessation.
3.8 Termination Resulting from Death or Disability. If the Optionee
dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code)
while he or she is an Eligible Optionee, this option shall be exercisable,
within the period of three years following the date of death or disability of
the Optionee, by the Optionee or by the person to whom this option is
transferred by will or the laws of descent and distribution, provided that this
option shall be exercisable only to the extent that this option was exercisable
by the Optionee on the date of his or her death or disability. If the Optionee
dies or becomes disabled during any post-termination exercise period as
described in Sections 3.5, 3.6 or 3.7 above, this option shall be exercisable,
within the period of 60 days following the date of death or disability of the
Optionee or (if longer) for the remainder of such post-
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termination exercise period, by the Optionee or by the person to whom this
option is transferred by will or the laws of descent and distribution, provided
that this option shall be exercisable only to the extent that this option was
exercisable by the Optionee on the date of his or her death or disability.
Except as otherwise indicated by the context, the term "Optionee," as used in
this option, shall be deemed to include the estate of the Optionee or any person
who acquires the right to exercise this option by bequest or inheritance or
otherwise by reason of the death of the Optionee.
4. Payment of Purchase Price.
4.1 Method of Payment. Payment of the purchase price for shares
purchased upon exercise of this option shall be made by (i) delivery to the
Company of cash or a check to the order of the Company in an amount equal to the
purchase price of such shares, (ii) subject to the consent of the Company, by
delivery to the Company of shares of Common Stock of the Company then owned by
the Optionee having a Fair Value (as defined in Section 6.5(a) below) equal in
amount to the purchase price of such shares, (iii) by any other means which the
Board of Directors determines are consistent with the purpose of the Plan and
applicable laws and regulations (including, without limitation, Regulation T
promulgated by the Federal Reserve Board), or (iv) by any combination of such
methods of payment.
4.2 Delivery of Shares Tendered in Payment of Purchase Price. If the
Company permits the Optionee to exercise options by delivery of shares of Common
Stock of the Company, the certificate or certificates representing the shares of
Common Stock of the Company to be delivered shall be duly executed in blank by
the Optionee or shall be accompanied by a stock power duly executed in blank
suitable for purposes of transferring such shares to the Company. Fractional
shares of Company will not be accepted in payment of the purchase price of
shares acquired upon exercise of this option.
4.3 Restrictions Upon Use of Option Stock. Notwithstanding the
foregoing, no shares of Common Stock of the Company may be tendered in payment
of the purchase price of shares purchased upon exercise of this option if the
shares to be so tendered were acquired within twelve (12) months before the date
of such tender, through the exercise of an option granted under the Plan or any
other stock option or restricted stock plan of the Company.
5. Delivery of Shares: Compliance With Securities Law, Etc.
5.1 General. The Company shall, upon payment of the option price for
the number of shares purchased and paid for, make prompt delivery of such shares
to the Optionee, provided that if any law or regulation requires the Company to
take any action with respect to such shares before the issuance thereof, then
the date of delivery of such shares shall be extended for the period necessary
to complete such action.
5.2 Listing, Qualification, Etc. This option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of
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non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure, or
satisfaction of such other condition shall have been effected or obtained on
terms acceptable to the Board of Directors. Nothing herein shall be deemed to
require the Company to apply for, effect or obtain such listing, registration,
qualification, or disclosure or satisfy such other condition.
6. Transfer of Shares.
6.1 Restrictions on Transfers; Permitted Transferees.
(a) The Optionee shall not directly or indirectly, offer, sell,
assign, pledge, encumber or otherwise transfer this option or any shares of
Common Stock issued upon exercise of this option (this option and such shares of
Common Stock are hereinafter referred to collectively as the "Shares") without
the prior written consent of the Board of Directors, unless such offer, sale,
assignment, pledge or other transfer (i) is pursuant to the effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") and has been registered under all applicable state securities
or "blue sky" laws or (ii) is pursuant to a transaction complying with Rule 144
promulgated under the Securities Act.
(b) Except in the case of a sale of Shares pursuant to an
effective registration statement under the Securities Act or a sale of Shares
pursuant to a transaction complying with Rule 144 promulgated under the
Securities Act, no Optionee shall sell, assign, pledge, encumber or otherwise
transfer any Shares to any person unless (i) such Shares bear legends as
provided in Section 6.4 and (ii) such transferee shall have executed and
delivered to the Company, as a condition precedent to any acquisition of Shares,
an instrument in form and substance satisfactory to the Company confirming that
such transferee takes such Shares subject to the restrictions set forth in this
Agreement and agrees to be bound by the terms of this Agreement.
(c) None of the restrictions contained in this Agreement with
respect to transfers of Shares (other than those set forth in Section 6.1(a),
6.1(b) and 6.8) shall apply: (i) to any transfer or assignment for consideration
or to any gift by the Optionee to any spouse, child, parent, or grandchild of
the Optionee, or by any of such relatives to the Optionee or any such relatives
to a trust of which there are no principal beneficiaries other than the Option
or one or more of such relatives; (ii) to any gift by the Optionee to a bona
fide charity or foundation approved by the Board of Directors (such approval not
to be unreasonably withheld); (iii) to any transfer to a legal representative in
the event the Optionee becomes mentally incompetent; and (iv) to any transfer by
will or the laws of descent; provided that in each of cases (i) through (iv)
each transferee, donee or distributee (a "Permitted Transferee") agrees to take
subject to and comply with the provisions of this Section 6.1. For purposes
hereof, the Permitted Transferees of the Optionee shall include the Permitted
Transferees of the Optionee's Permitted Transferees.
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6.2 Right of First Offer.
(a) Except as provided in Sections 6.1(c), 6.3 and 6.5(b) if the
Optionee desires to sell, assign or otherwise transfer any Shares he or she
shall first give written notice (a "Seller's Notice") to the Company stating the
Optionee's desire to make such transfer, the number of Shares to be transferred
(the "Offered Shares") and the cash price which the Optionee proposes to be paid
for the Offered Shares (the "First Offer Price").
(b) Upon receipt of the Seller's Notice (the"First Offer"), the
Company shall have the irrevocable and exclusive option to purchase up to all of
the Offered Shares at the First Offer Price; provided that the Company shall not
have the right to purchase any of the Offered Shares unless either (i) the
Company purchases all such Offered Shares; or (ii) the Optionee consents to the
purchase of less than all of the Offered Shares. The Company's option under
this Section 6.2(b) shall be exercisable by a written notice to the Optionee,
given within 15 days from the date of the Seller's Notice.
(c) If the Seller's Notice shall be duly given, and if the
Company shall not exercise its option to purchase the Offered Shares at the
First Offer Price or does not purchase all Shares offered by the Optionee, then
the Optionee shall be free for a period of 90 days from the 15th day following
the date of the Seller's Notice to sell the Offered Shares to any third party
transferee at a cash price equal to or greater than the First Offer Price;
provided that such sale complies with the provisions of Section 6.1 of this
Agreement.
(d) If the proposed purchase price of a transferee for the
Offered Shares is less than the First Offer Price, the Optionee shall not sell
or otherwise transfer any of the Offered Shares unless the Optionee shall first
reoffer the Offered Shares at such lesser price to the Company by giving written
notice (the "Reoffer Notice") thereof, stating the Optionee's intention to make
such transfer at such lower price (the "Reoffer Price"). The Company shall then
have the irrevocable and exclusive option to purchase all of the Offered Shares
at the Reoffer Price, exercisable in the same manner as provided in Section
6.2(b). If the Company does not then purchase all the Offered Shares, such
Offered Shares may be sold by the Optionee within 60 days following the 15th day
from the date of the Reoffer Notice, at a cash price equal to or greater than
the Reoffer Price; provided that such sale complies with the provisions of
Section 6.1 of this Agreement.
(e) If the Company does not exercise its option to purchase the
Offered Shares at a First Offer Price or at the Reoffer Price, and the Optionee
shall not have sold the Offered Shares to any transferee for any reason before
the expiration of the 60-day period described in Section 6.2(d) in the event of
a Reoffer or, if no Reoffer Notice is given, the 90-day period described in
Section 6.2(c), then the Optionee shall not give a Seller's Notice with respect
to a transaction which would require compliance with this Section 6.2 for a
period of 90 days from the last day of such 60- or 90-day period, as the case
may be.
(f) The closing of all purchases pursuant to the first offer
rights granted under this Section 6.2 shall take place at the principal offices
of the Company at 10 a.m. on the tenth
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Business Day following the delivery to the Optionee of all notices exercising
such first offer rights with respect to all of the Offered Shares to be sold by
the Optionee unless otherwise mutually agreed. At such closing, (i) the
Optionee shall assign and transfer to the Company good and valid title to the
Shares being purchased by it, by delivery of the certificates representing the
Shares to be sold and transferred, duly endorsed in blank, with the requisite
stock transfer tax stamps attached, together with such stock powers,
certificate, legal opinions and other instruments of transfer as the Company
shall reasonably request; and (ii) the Company shall pay to the Optionee the
purchase price for the Shares being purchased by it in cash, by delivery of a
certified or bank check or by wire transfer of immediately available funds to
such account as the Optionee shall direct.
6.3 Merger Transactions. Notwithstanding any other provision of this
Agreement to the contrary, the Company may enter into an agreement to
consolidate with or merge with or into any other corporation if such agreement
is duly approved by the Board of Directors and by the requisite vote of the
stockholders in accordance with the Articles of Organization of the Company. In
such event, Section 6.2 of this Agreement shall not be applicable and all Shares
may be transferred pursuant to such merger or consolidation for such
consideration in accordance with the terms thereof.
6.4 Legend on Certificates. Each outstanding certificate
representing Shares that are subject to this Agreement shall bear legends
substantially in the following form:
These securities have not been registered under the
Securities Act of 1933. They may not be offered or
transferred by sale, assignment, pledge or otherwise
unless (i) a registration statement for the securities
under the Securities Act of 1933 is in effect or (ii) the
corporation has received an opinion of counsel, which
opinion is satisfactory to the corporation, to the effect
that such registration is not required under the
Securities Act of 1933.
The sale, assignment, pledge, encumbrance or other transfer
of the securities represented by this certificate is
subject to the provisions of an option agreement among the
corporation and the holder of such securities, a copy of
which is on file at the principal executive office of the
corporation.
6.5 Purchase Option on Shares.
(a) In the event the Optionee shall cease to be employed by the
Company or a subsidiary of the Company for any reason, or no reason, with or
without cause, including involuntary termination, death or temporary or
permanent disability (a "Termination"), the Optionee and his or her Permitted
Transferees shall be required to offer all of the Shares owned by the Optionee
and his or her Permitted Transferees to the Company in accordance with the
procedures set forth in Section 6.2, provided, however, that the Company's
option to purchase such shares shall be exercisable by a written notice to the
Seller, given within six (6) months from the date of the Seller's Notice. For
purpose of such offer, the First Offer Price for such Shares shall be the Fair
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Value (as defined below) of such Shares as of the date of the Termination of the
Optionee (appropriately adjusted to reflect the Fair Value of any dividends or
distributions received or to be received by the holder of such Shares subsequent
to such date); provided, that if the Optionee's employment is terminated by the
Company for cause, the First Offer Price for such Shares shall be the lower of
the original purchase price paid by the Optionee or his or her Permitted
Transferees to the Company for such Shares (appropriately adjusted to reflect
the Fair Value of all dividends or distributions received or to be received in
respect of such Shares subsequent to the original purchase of such Shares) or
the Fair Value of such Shares as of the date of the Termination of the Optionee
(appropriately adjusted as provided above). The Board of Directors shall make or
obtain a determination of the Fair Value of such Shares no later than thirty
(30) days following the date of the Termination of the Optionee, and the
Seller's Notice with respect to such Shares shall be given as promptly as
practicable following such determination. For purposes of this Agreement, Fair
Value shall have the meaning ascribed to it in the Shareholders' Agreement dated
as of December 22, 1992 among the Company and the shareholders and other
individuals named on the signature pages thereto (the "Shareholders Agreement").
(b) In the event of the death of the Optionee, the Optionee's
estate (the "Estate") shall have the right, at its option, for a period of six
(6) months from the date of the Optionee's death, to sell to the Company, and
the Company shall be required to purchase, all of the Shares held by the Estate.
If it desires to sell such Shares to the Company, the Estate shall, within the
six (6) month period, send written notice thereof to the Company pursuant to
this Section 6.5(b) (the "Put Notice"). The purchase price for such Shares shall
be the Fair Value of such Shares as of the date of the Put Notice (appropriately
adjusted to reflect the Fair Value of any dividends or distributions received or
to be received by the holder of such Shares subsequent to such date). The Board
of Directors shall make or obtain a determination of the Fair Value of such
Shares no later than ninety (90) days following its receipt of a Put Notice. The
closing of such purchase shall take place at the principal office of the Company
no later than the tenth Business Day following the making of such determination
of Fair Value.
6.6 Involuntary Transfers. If the Optionee involuntarily transfers
directly or indirectly any or all of his or her Shares for any reason and such
transfer is not to a Permitted Transferee, the transferee of such Shares and its
Permitted Transferees shall be required to offer all of the Shares held by such
Transferee and its Permitted Transferees to the Company in accordance with the
procedures set forth in Section 6.2, provided, however, that the Company's
option to purchase such shares shall be exercisable by a written notice to the
Seller, given within six (6) months from the date of the Seller's Notice. For
purposes of such offer, the First Offer Price for such Shares shall be the Fair
Value of such Shares as of the date of the involuntary transfer of such Shares
to such transferee (appropriately adjusted to reflect the Fair Value of any
dividends or distributions received or to be received by the holder of such
Shares subsequent to the date of such involuntary transfer). The Board of
Directors shall make or obtain a determination of the Fair Value of such Shares
no later than thirty (30) days following the date of any such involuntary
transfer, and the Seller's Notice with respect to such Shares shall be given by
such transferee or by the Company on behalf of such transferee as promptly as
practicable following such determination.
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6.7 Consideration for Certain Purchases of Shares by the Company.
Notwithstanding any provision hereof to the contrary, in the event that the
Company exercises its option to purchase Shares offered to the Company as
required by the provisions of Section 6.5 or 6.6, and at such time the Company
is prohibited by the terms of then outstanding indebtedness of the Company from
purchasing such Shares for cash, the Company may, in lieu of paying cash for
such Shares, instead pay for such Shares by delivering a promissory note of the
Company, substantially in the form attached hereto as Exhibit B, having a
principal amount equal to the cash purchase price for such Shares.
6.8 Drag-Along Right. If, after compliance with the appropriate
provisions of the Shareholders Agreement and provided that Section 4.6 of the
Shareholders Agreement remains in effect, any shareholder or group of
shareholders of the Company acting together or pursuant to a common plan or
arrangement propose to make a bona fide sale of shares of capital stock (other
than pursuant to a registered public offering) representing 70% or more of the
issued and outstanding shares of capital stock of the Company to a third party
which is not, and following such sale will not be, affiliated with any of such
shareholders, such shareholders shall have the right (a "Drag-Along Right"),
exercisable upon fifteen (15) days' prior written notice to the Optionee and his
or her Permitted Transferees, to require the Optionee and his or her Permitted
Transferees to sell the same proportion of their Share as such proposing
shareholders propose to sell to such third party on the same terms as such
proposing shareholders, provided that the exercise of such Drag-Along Right is
required by the third party. Section 6.2 shall not apply to sales of shares by
the Optionee resulting from the exercise of a Drag-Along Right in accordance
with this Section 6.8.
7. No Special Employment or Similar Rights. Nothing contained in the
Plan or this option shall be construed or deemed by any person under any
circumstances to bind the Company to continue the employment or other
relationship of the Optionee with the Company for the period within which this
option may be exercised.
8. Rights as a Shareholder. The Optionee shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this option (including, without limitation, any rights to receive dividends or
non-cash distributions with respect to such shares) unless and until a
certificate representing such shares is duly issued and delivered to the
Optionee. No adjustment shall be made for dividends or other rights for which
the record date is prior to the date such stock certificate is issued.
9. Adjustment Provisions.
9.1 General. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split, conversion or other similar transaction, other than those
described in Section 10 below (i) the outstanding shares of Common Stock are
increased or decreased or are exchanged for a different number or kind of shares
or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, the
Optionee shall, with respect to this option or any unexercised portion hereof,
be
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entitled to the rights and benefits, and be subject to the limitations, set
forth in Section 15(a) of the Plan.
9.2 Board Authority to Make Adjustments. Any adjustments under this
Section 9 will be made by the Board of Directors, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued under this option on
account of any such adjustments.
10. Mergers, Consolidation, Distributions, Liquidations, Etc. In the
event of a merger or consolidation (other than for the purpose of change of
state of incorporation) or sale of all or substantially all of the assets of the
Company, in which outstanding shares of Common Stock are exchanged for
securities, cash or other property of any other corporation or business entity
or in the event of a liquidation of the Company, prior to the termination of
this option, the Optionee shall, with respect to this option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 16(a) of the Plan, provided, however, that if
at the time of such merger, consolidation, sale or liquidation, the applicable
cumulative target EBITDA set forth on Exhibit A has been achieved, this option
shall become exercisable in full immediately prior to such event.
11. Withholding Taxes. The Company's obligation to deliver shares upon
the exercise of this option shall be subject to the Optionee's satisfaction of
all applicable federal, state and local income and employment tax withholding
requirements.
12. Miscellaneous.
12.1 Except as provided in herein, this option may not be amended or
otherwise modified unless evidenced in writing and signed by the Company and the
Optionee.
12.2 All notices under this option shall be mailed or delivered by
hand to the parties at their respective addresses set forth beneath their names
below or at such other address as may be designed in writing by either of the
parties to one another.
12.3 This option shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
Date of Grant: GLOBE MANUFACTURING CO.
___________________, 1993 By:______________________________
Title:___________________________
Address: 156 Bedford Street
Fall River, MA 02720
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OPTIONEE'S ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy of
the Company's Management Incentive Plan.
OPTIONEE
______________________________________
ADDRESS: _____________________________
______________________________________
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Exhibit A
Vesting Schedule
"EBITDA" shall mean the Company's earnings before interest, taxes,
depreciation and amortization.
A percentage (the "Annual Percentage") of the total number of shares of
Common Stock subject to this option shall become exercisable with respect to
each fiscal year listed below on April 1 following the end of each such year
based on a comparison of the Company's actual EBITDA and Cumulative EBITDA with
the Target EBITDA and Target Cumulative EBITDA as follows:
Fiscal Years
-------------------------------------------------------
1993 1994 1995 1996 1997
----------- ---- ---- ---- ----
Annual Percentage 20% 20% 20% 20% 20%
Cumulative Percentage 20% 40% 60% 80% 100%
Target EBITDA $24 million * * * *
Target Cumulative EBITDA $24 million ** ** ** **
_______________
* To be determined by the Board of Directors after approval of each fiscal
year's budget.
** The Target Cumulative EBITDA shall equal the sum of the Target EBITDA for
all prior fiscal years covered by the vesting schedule.
If the Target EBITDA is achieved, the full Annual Percentage of shares of
Common Stock subject to this option will become exercisable.
If the Actual EBITDA divided by the Target EBITDA is less than 100%, the
percentage of the Annual Percentage of shares of Common Stock subject to this
option which shall become exercisable shall be as follows:
If Actual EBITDA divided
by Target EBITDA equals: Percentage
------------------------ ----------
95% up to 100% 80%
90% up to 95% 60%
85% up to 90% 35%
80% up to 85% 10%
Less than 80% 0%
If the Actual EBITDA divided by the Target EBITDA is greater than 100%, and
the actual Cumulative EBITDA divided by the Target Cumulative EBITDA is also
greater than 100%, then any shares subject to this option which previously did
not become exercisable because of an EBITDA shortfall shall then become
exercisable.
Promptly after April 1 following the end of each fiscal year listed above,
the Company will notify the Optionee as to the portion of this option which has
become exercisable. Any portion of this option not vested on December 31, 2003
shall terminate effective as of such date.
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