STOCK OPTION AGREEMENT
Date: Option Number: SP-16
June 1, 2000 Number of Shares Purchasable
50,000
To Purchase Shares of
Class B Common Stock
-of-
K-V PHARMACEUTICAL COMPANY
THIS CERTIFIES THAT Marc S. Hermelin is hereby granted the option to purchase,
at the option price of $21.725 per share, all or any part of that number of
fully paid and non-assessable shares of the Class B Common Stock, par value
$0.01 per share ("Class B Common Stock"), of K-V Pharmaceutical Company, a
Delaware corporation (hereinafter called the "Company") above set forth, upon
and subject to the following terms and conditions:
This Option and all rights to purchase shares hereunder shall expire
three (3) years from the date hereof (hereinafter called the "expiration date").
This Option and all rights hereunder shall be assignable and
transferable.
As of June 1, 2000, and prior to its expiration or earlier termination,
this Option shall be exercisable from time to time as to all or any of the
shares then purchasable hereunder as follows: During the three-year period
commencing June 1, 2000 and ending May 31, 2003, it may be exercised as to all
or any shares at any time during which this Option shall be exercisable as to
the shares subject hereto.
This Option may be exercised from time to time only by delivery to the
Company at its main office (attention of the Secretary) of a duly signed notice
in writing stating the number of shares with respect to which this Option is
being exercised and the time and date of delivery thereof, which time and date
of delivery shall be during the normal business hours of the Company on a
regular business day not less than fifteen (15) days after the giving of such
notice unless an earlier date has been mutually agreed upon; provided, however,
that not less than ten (10) shares may be purchased at any one time unless the
number purchased is the total number then purchasable hereunder; and provided
further that this Option may not be exercised at any time when this Option or
the granting or exercise hereof violates any law or governmental order or
regulation. At the time of delivery specified in such notice, the Company shall,
without transfer or issue tax to the holder (or other person entitled to
exercise this Option) transfer and set aside for the benefit of the holder (or
other person entitled to exercise this Option) a certificate or certificates out
of the Company's theretofore authorized but unissued or reacquired shares of
Class B Common Stock as the Company may elect (with appropriate legend thereon,
if deemed necessary by the Company, containing the representation by the person
exercising the Option that the shares purchased shall be for investment purposes
and not with a view to resale or distribution) against payment of the option
price in full for the number of shares purchased by either (i) cash (including a
certified or bank cashier's check or the equivalent thereof), or (ii) at the
discretion of the Board, by delivering at fair market value, as determined by
the Board, Company Common Stock already owned by the Participant, or (iii) any
combination of cash and Company Common Stock, to be held by the Company and
subsequently delivered to the holder (or such other person) as hereinafter
provided. If the holder fails to pay for any part of the number of shares
specified in such notice as required, the right to purchase such shares may be
terminated by the Board.
To the extent that this Option has not been exercised in full prior to
its termination or expiration date, whichever occurs sooner, it shall terminate
and become void and of no effect.
All Class B Common Stock purchased pursuant to the exercise of an
Option shall be held by the Company for a period of two years from the date of
exercise (the "Holding Period").
Upon completion of the Holding Period (under normal Company policies),
the Company shall deliver to the holder or the holder's personal representative,
as soon as practicable thereafter, certificates representing the Class B Common
Stock purchased hereunder (the "Certificates"), free and clear of restrictions
except for the restrictions which are necessary to assure compliance by the
Company and the holder with applicable federal and state securities laws and/or
the listing requirements of any national securities exchange.
This Option shall not confer upon the holder any right to remain in the
employ of the Company or any subsidiary thereof and shall not confer upon the
holder any rights in the stock of the Company prior to the issuance of a stock
certificate pursuant to the exercise of this Option. 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.
In the event that the outstanding shares of Class B Common Stock of the
Company are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation, or in the event that there is a "corporate transaction" as
that term is defined in the Regulations under Section 425 of the Internal
Revenue Code of 1986, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, spin-off, combination of
shares or dividend payable in capital stock, this Option shall, to the extent
that it has not been exercised, entitle the holder upon the subsequent exercise
of this Option to such number and kind of securities or other property, subject
to the terms of the Option, to which the holder would be entitled had the holder
actually owned the shares subject to the unexercised portion of this Option at
the time of the occurrence of such event, and the aggregate purchase price upon
the subsequent exercise of this Option shall be the same as if the Class B
Common Stock of the Company originally optioned were being purchased as provided
herein; provided, however, that each such adjustment in the number and kind of
shares subject to this Option, including any adjustment in the Option price,
shall be made in such manner as not to constitute a "modification" as defined in
Section 425 of the Internal Revenue Code of 1986. Any such adjustment made by
the Board of Directors shall be conclusive.
The Company may postpone the issuance and delivery of shares upon any
exercise of this Option, if necessary, until admission of such shares to listing
on any stock exchange and completion of registration and qualification of such
shares under any applicable state or federal law, rule or regulation.
The holder hereof shall make such representations and furnish such
information to the Company as may be appropriate to permit the Company to issue
such shares in compliance with the provisions of the Security Act of 1933, as
amended (the "Securities Act"), or any other applicable law, including state
securities laws. Without limiting the generality of the foregoing, if requested
by the Company, the holder will represent, in form acceptable to the Company,
that the holder is purchasing any shares issued pursuant hereto for investment
purposes and not with a view to resale or distribution.
This Option is issued pursuant to the resolutions duly adopted by the
Board of Directors, the receipt of a copy of which the holder acknowledges by
virtue of the acceptance hereof, and is subject to all the terms and conditions
of said resolutions.
A determination by the Board of Directors of any questions which may
arise with respect to the interpretation and construction of the provisions of
this Option shall be final.
WITNESS the seal of the Company and the signatures of its duly
authorized officers or agents.
Dated: June 1, 2000
K-V PHARMACEUTICAL COMPANY
By /s/ Gerald R. Mitchell
--------------------------------
Vice President & Treasurer
ACCEPTED:
/s/ Marc S. Hermelin
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Marc S. Hermelin