<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 5, 2000
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VEECO INSTRUMENTS INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2989601
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Terminal Drive, Plainview, New York 11803
(Address of principal executive offices) (Zip Code)
CVC, INC.
1999 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN
CVC, INC.
AMENDED AND RESTATED 1997 STOCK OPTION PLAN
CVC HOLDINGS, INC. STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENTS
DATED AS OF MARCH 31, 1999 BETWEEN
COMMONWEALTH SCIENTIFIC CORPORATION, INC.
AND CERTAIN EMPLOYEES AND DIRECTORS
INCENTIVE STOCK OPTION AGREEMENTS BETWEEN COMMONWEALTH SCIENTIFIC
CORPORATION, INC. AND CERTAIN EMPLOYEES
CVC HOLDINGS, INC. STOCK OPTION AGREEMENTS BETWEEN CVC HOLDINGS, INC.
AND CERTAIN EMPLOYEES
(Full title of the plans)
Gregory A. Robbins, Esq.
Vice President and General Counsel
Veeco Instruments Inc.
Terminal Drive
Plainview, New York 11803
(Name and address of agent for service)
(516) 349-8300
(Telephone number, including area code, of agent for service)
Copies to:
Rory A. Greiss, Esq.
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
(212) 836-8000
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
PROPOSED PROPOSED MAXIMUM
AMOUNT OF SHARES MAXIMUM OFFERING AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED TO BE REGISTERED (1) PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
- ------------------------------------ --------------------- -------------------- -------------------- -----------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.01 per share 11,610 $44.451(2) $516,077(2) $ 136.24
Common Stock,
par value $.01 per share 283,815 $21.869(2) $6,206,816(2) $1,638.60
Common Stock,
par value $.01 per share 157,881 $10.51(2) $1,659,344(2) $ 438.07
Common Stock,
par value $.01 per share 42,289 $15.165(2) $641,302(2) $ 169.30
Common Stock,
par value $.01 per share 41,200 $16.16(2) $665,792(2) $ 175.77
Common Stock,
par value $.01 per share 24,863 $8.65(2) $215,065(2) $ 56.78
Common Stock,
par value $.01 per share 352,026 $2.89(2) $1,017,791(2) $ 268.70
========================================================================================================================
</TABLE>
(1) On May 5, 2000, pursuant to an Agreement and Plan of Merger dated
February 29, 2000, a wholly-owned subsidiary of the Registrant merged
(the "Merger") with and into CVC, Inc. ("CVC"). In connection with such
Merger, the Registrant assumed certain option plans and option
agreements of CVC. Accordingly, as of the effective time of the Merger,
the Common Stock of the Registrant was substituted for the common stock
of CVC previously issuable under such CVC option plans and option
agreements. Accordingly, the numbers of shares of the Registrant's
Common Stock listed in the above table represents in the aggregate (a)
11,610 shares of the Registrant's Common Stock reserved for issuance
pursuant to the CVC 1999 Nonemployee Directors' Stock Option Plan, (b)
283,815 shares of the Registrant's Common Stock reserved for issuance
pursuant to the CVC Amended and Restated 1997 Stock Option Plan, (c)
157,881 shares of the Registrant's Common Stock reserved for issuance
under the CVC Holdings, Inc. Stock Option Plan, (d) 42,289 shares of
the Registrant's Common Stock reserved for issuance pursuant to certain
stand-alone Stock Option Agreements between certain employees of
Commonwealth Scientific Corporation, Inc. ("Commonwealth") and
Commonwealth, which agreements were assumed by CVC in a prior merger
with Commonwealth, (e) 41,200 shares of the Registrant's Common Stock
reserved for issuance pursuant to certain stand-alone Incentive Stock
Option Agreements between certain employees of Commonwealth and
Commonwealth, which agreements were assumed by CVC in a prior merger
with Commonwealth, (f) 24,863 shares of the Registrant's Common Stock
reserved for issuance pursuant to certain stand-alone Incentive Stock
Option Agreements between certain employees of Commonwealth and
Commonwealth, which agreements were assumed by CVC in a prior merger
with Commonwealth, and (g) 352,026 shares of Common Stock reserved for
issuance pursuant to certain stand-alone Stock Option Agreements
between employees of CVC Holdings, Inc. and CVC Holdings, Inc. The
option plans and option agreements described in this Note (1) are
referred to collectively as the "CVC Option Plans."
(2) Calculated pursuant to Rule 457(h)(1), based upon the weighted average
exercise price payable by option holders upon option exercise to
purchase shares of the Registrant's Common Stock pursuant to the
relevant CVC Option Plan(s).
2
<PAGE>
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of this
Registration Statement on Form S-8 will be sent or given to participants in the
Plans as specified by Rule 428(b)(i) under the Securities Act of 1933, as
amended. Such documents are not required to be, and are not being, filed by the
Registrant with the Securities and Exchange Commission, either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424 under the Securities Act of 1933, as amended. Such documents, together
with the documents incorporated by reference herein pursuant to Item 3 of Part
II of this Registration Statement on Form S-8, constitute a prospectus that
meets the requirements of Section 10(a) of the Securities Act of 1933, as
amended.
3
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Veeco Instruments Inc. (the "Company")
with the Securities and Exchange Commission are hereby incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1999.
2. The Company's amendment on Form 8-K/A filed with the
Securities and Exchange Commission on January 12, 2000,
relating to its Current Report on Form 8-K previously filed
therewith.
3. The Company's amendment to its Annual Report for the fiscal
year ended December 31, 1999 on Form 10-K/A filed on April 4,
2000.
4. The Company's Current Report on Form 8-K filed with the
Securities and Exchange Commission on March 13, 2000.
5. The description of the Company's common stock, par value $.01
per share, contained in the Company's Registration Statement
on Form 8-A, dated November 18, 1994, and any amendments or
reports filed for the purpose of updating that description.
All documents filed by the Company with the Securities and Exchange
Commission after the date hereof pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior
to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed incorporated by reference herein and to be a part hereof
from the date of filing such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Amended and Restated Certificate of Incorporation permits
the Company to indemnify to the fullest extent permitted by Section 145 of the
Delaware General Corporation Law (the "DGCL") each person that such Section
grants the Company the power to indemnify. The Company's Amended and Restated
Certificate of Incorporation eliminates the personal liability of directors to
the Company or its stockholders for monetary damages for breaches of fiduciary
duty as directors to the fullest extent permitted by Delaware law. These
provisions of the Company's Amended and Restated Certificate of Incorporation
are consistent with the DGCL, which permits a Delaware corporation (i) to
include in its certificate of incorporation a provision limiting or eliminating
a director's liability for monetary damages for breach of the duty of care and
(ii) to indemnify certain individuals, including its directors, officers and
employees.
These provisions of the Company's Amended and Restated Certificate of
Incorporation protect the Company's directors against personal liability for
monetary damages resulting from breaches of their fiduciary duty of care, except
4
<PAGE>
as set forth below. Under the DGCL, absent these provisions, directors could be
held liable for gross negligence in the performance of their duty of care but
not for simple negligence. These provisions of the Company's Amended and
Restated Certificate of Incorporation absolve directors of liability for
negligence in the performance of their duties, including gross negligence.
Directors remain liable for breaches of their duty of loyalty to the Company and
its stockholders, as well as acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law and transactions
from which a director derives improper personal benefit. These provisions also
do not absolve directors of liability under Section 174 of the DGCL, which makes
directors personally liable for unlawful dividends or unlawful stock repurchases
or redemptions and expressly sets forth a negligence standard with respect to
such liability.
Under the DGCL, current and former directors and officers as well as
other employees and individuals (and persons serving at the request of the
Company as a director, officer, employee or agent for another entity) may be
indemnified against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation -- a "derivative action"),
if they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interest of the Company and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard of care is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) actually and reasonably incurred in connection with the defense
or settlement of such an action and the DGCL requires court approval before
there can be any indemnification of expenses where the person seeking
indemnification has been found liable to the Company.
The DGCL provides that the indemnification and advancement of expenses
granted pursuant to it shall, unless otherwise provided when authorized,
continue as to each person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
The Company maintains insurance to cover directors and officers against
liability which they may incur in such capacity.
Except to the extent hereinabove set forth, there is no charter
provision, by-law, contract, arrangement or statute under which any director or
officer of the Company is insured or indemnified in any manner against any
liability which he may incur in his capacity as such.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 CVC, Inc. 1999 Non-employee Directors' Stock Option Plan.*
4.2 CVC, Inc. Amended and Restated 1997 Stock Option Plan.*
4.3 Stock Option Plan of CVC Holdings, Inc.*
5
<PAGE>
4.4 Form of Commonwealth Scientific Corporation, Inc.
Non-Qualified Stock Option Agreement.*
4.5 Form of Commonwealth Scientific Corporation, Inc. Incentive
Stock Option Agreement.*
4.6 Stock Option Agreement Between CVC Holdings, Inc. and Thomas
Omstead, effective September 4, 1997.*
4.7 Stock Option Agreement Between CVC Holdings, Inc. and Emilio
O. DiCataldo, effective August 28, 1995.*
4.8 Stock Option Agreement Between CVC Holdings, Inc. and Richard
Chicotka, effective August 11, 1995.*
4.9 Stock Option Agreement Between CVC Holdings, Inc. and Lino
Velo, effective October 17, 1994.*
4.10 Stock Option Agreement Between CVC Holdings, Inc. and Phillip
Chapados, effective August 15, 1994.*
4.11 Stock Option Agreement Between CVC Holdings, Inc. and Cecil
Davis, effective December 19, 1994.*
4.12 Stock Option Agreement Between CVC Holdings, Inc. and Ahmad
Kermani, effective October 15, 1993.*
4.13 Stock Option Agreement Between CVC Holdings, Inc. and
Christopher Mann, effective December 21, 1990.*
4.14 Stock Option Agreement Between CVC Holdings, Inc. and
Christine B. Whitman, effective December 21, 1990.*
5.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP with
respect to the legality of securities being registered.*
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of Arthur Andersen LLP.*
23.3 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP
(included in Exhibit 5.1).
24 Powers of Attorney.*
- ---------------------------
* Filed herewith.
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
A. 1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
6
<PAGE>
2. That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed the initial
bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Plainview, State of New York on May 5, 2000.
VEECO INSTRUMENTS INC.
By: /s/ EDWARD H. BRAUN
-------------------------------
Edward H. Braun
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities indicated on May 5, 2000.
NAME AND TITLE
- --------------
/s/ EDWARD H. BRAUN
- ------------------------
Edward H. Braun
Chairman, Chief Executive Officer
and Director (principal executive officer)
*
- ------------------------
Richard A. D'Amore
Director
*
- ------------------------
Joel A. Elftman
Director
*
- ------------------------
Heinz K. Friedrich
Director
*
- ------------------------
Dr. Paul R. Low
Director
*
- ------------------------
Roger D. McDaniel
Director
*
- ------------------------
Irwin H. Pfister
Director
8
<PAGE>
*
- ------------------------------
Walter J. Scherr
Director
/s/ JOHN F. REIN, JR.
- ------------------------------
John F. Rein, Jr.
Executive Vice President-Finance,
Chief Financial Officer, Secretary and
Treasurer (principal financial officer)
/s/ JOHN P. KIERNAN
- ------------------------------
John P. Kiernan
Vice President - Corporate Controller
(principal accounting officer)
* By: /s/ GREGORY A. ROBBINS
------------------------
Gregory A. Robbins
Attorney-in-Fact
9
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 CVC, Inc. 1999 Nonemployee Directors' Stock Option Plan.*
4.2 CVC, Inc. Amended and Restated 1997 Stock Option Plan.*
4.3 Stock Option Plan of CVC Holdings, Inc..*
4.4 Form of Commonwealth Scientific Corporation, Inc.
Non-Qualified Stock Option Agreement.*
4.5 Form of Commonwealth Scientific Corporation, Inc. Incentive
Stock Option Agreement.*
4.6 Stock Option Agreement Between CVC Holdings, Inc. and Thomas
Omstead, effective September 4, 1997.*
4.7 Stock Option Agreement Between CVC Holdings, Inc. and Emilio
O. DiCataldo, effective August 28, 1995.*
4.8 Stock Option Agreement Between CVC Holdings, Inc. and Richard
Chicotka, effective August 11, 1995.*
4.9 Stock Option Agreement Between CVC Holdings, Inc. and Lino
Velo, effective October 17, 1994.*
4.10 Stock Option Agreement Between CVC Holdings, Inc. and Phillip
Chapados, effective August 15, 1994.*
4.11 Stock Option Agreement Between CVC Holdings, Inc. and Cecil
Davis, effective December 19, 1994.*
4.12 Stock Option Agreement Between CVC Holdings, Inc. and Ahmad
Kermani, effective October 15, 1993.*
4.13 Stock Option Agreement Between CVC Holdings, Inc. and
Christopher Mann, effective December 21, 1990.*
4.14 Stock Option Agreement Between CVC Holdings, Inc. and
Christine B. Whitman, effective December 21, 1990.*
5.1 Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP with
respect to the legality of securities being registered.*
23.1 Consent of Ernst & Young LLP.*
23.2 Consent of Arthur Andersen LLP.*
23.3 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP
(included in Exhibit 5.1).
24.1 Powers of Attorney.*
- ------------------------
* Filed herewith.
10
<PAGE>
Exhibit 4.1
CVC, INC.
1999 NONEMPLOYEE DIRECTORS'
STOCK OPTION PLAN
ARTICLE I
PURPOSE
The CVC, Inc. 1999 Nonemployee Directors' Stock Option Plan is
intended to advance the interests of CVC, Inc., and its stockholders by
attracting, retaining and motivating the performance of nonemployee directors of
CVC, Inc., and to encourage and enable such directors to acquire and retain a
proprietary interest in CVC, Inc., by ownership of its stock.
ARTICLE II
DEFINITIONS
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" means the Company's Common Stock, par value $.015
per share.
(d) "Company" means CVC, Inc., a Delaware corporation.
(e) "Date of Grant" means the date on which an Option is granted in
accordance with Section 5.1 hereof.
(f) "Fair Market Value" means the closing price of the Common Stock
on the Nasdaq National Market on the date as of which fair market value is to be
determined or, in the absence of any reported sales of Common Stock on such
date, on the first preceding date on which any such sale shall have been
reported. If Common Stock is not listed on Nasdaq National Market on the date as
of which fair market value is to be determined, the Board shall determine in
good faith the fair market value in whatever manner it considers appropriate.
<PAGE>
(g) "Nonemployee Director" means any member of the Board who is not
an employee of the Company.
(h) "Option" means a stock option granted under the Plan.
(i) "Optionee" means a person to whom an Option has been granted,
which Option has not expired under the Plan.
(j) "Option Price" means the price at which each share of Common
Stock subject to an Option may be purchased, determined in accordance with
Section 5.2 hereof.
(k) "Plan" means this CVC, Inc. 1999 Nonemployee Directors' Stock
Option Plan.
(l) "Stock Option Agreement" means an agreement between the Company
and an Optionee under which the Optionee may purchase Common Stock under the
Plan.
ARTICLE III
ADMINISTRATION
Subject to the express provisions of the Plan, the Board shall have
discretionary authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the details and provisions of
each Stock Option Agreement, and to make all the determinations necessary or
advisable in the administration of the Plan. All such actions and determinations
by the Board shall be conclusively binding for all purposes and upon all
persons. The Board shall not be liable for any action or determination made in
good faith with respect to the Plan, any Option or any Stock Option Agreement
entered into hereunder.
ARTICLE IV
SHARES OF STOCK SUBJECT TO PLAN
4.1 Number of Shares. Subject to adjustment pursuant to the
provisions of this Article IV, the maximum number of shares of Common Stock
which may be issued and sold hereunder shall be 200,000 shares. Shares of Common
Stock issued and sold under the Plan may be either authorized but unissued
shares or shares held in the Company's treasury. Shares of Common Stock covered
by an Option that shall have been exercised shall not again be available for an
Option grant. If an Option shall terminate for any reason without being wholly
exercised, the number of shares to which such Option termination relates shall
again be available for grant hereunder.
4.2 Antidilution. In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger or
consolidation, or the sale,
2
<PAGE>
conveyance, lease or other transfer by the Company of all or substantially all
of its property, or any other change in the corporate structure or shares of the
Company, pursuant to any of which events the then outstanding shares of Common
Stock are split up or combined, or are changed into, become exchangeable at the
holder's election for, or entitle the holder thereof to, other shares of stock,
or in the case of any other transaction described in Section 424(a) of the Code,
the Board may change the number and kind of shares (including by substitution of
shares of another corporation) subject to the Options and/or the Option Price of
such shares in the manner that it shall deem to be equitable and appropriate.
ARTICLE V
OPTIONS
5.1 Grant of Options. Each Nonemployee Director shall receive a
grant of an Option to purchase 7,500 shares of Common Stock on the date
following the effective date of the Plan that he or she first becomes a member
of the Board, or any later date specified by the Board (the "Initial Grant"). In
addition to the foregoing, each Nonemployee Director shall receive a grant of an
Option to purchase 2,000 shares of Common Stock on the March 31 of each calendar
year following the effective date of the Plan (the "Annual Grant"). The Company
and the Optionee shall execute a Stock Option Agreement which shall set forth
such terms and conditions of an Option granted hereunder as may be determined by
the Board to be consistent with the Plan, and which may include additional
provisions and restrictions that are not inconsistent with the Plan.
5.2 Option Price. The Option Price of each share of Common Stock
subject to an Option shall be 100 percent of the Fair Market Value of a share of
Common Stock on the trading date immediately preceding the Date of Grant.
5.3 Vesting; Term of Option. Each Initial Grant of an Option shall
vest and become exercisable in cumulative annual installments, each of which
shall relate to one-third of the total number of shares of the Initial Grant, on
the first, second, and third anniversaries of the Date of Grant, provided that
the Optionee is a member of the Board on each such date. Each Annual Grant of an
Option shall become 100 percent vested and exercisable on the first anniversary
of the Date of Grant, provided that the Optionee is a member of the Board on
such date. The period during which a vested Option may be exercised shall be ten
years from the Date of Grant.
5.4 Option Exercise. An Option may be exercised in whole or in part
at any time, with respect to whole shares only, within the period permitted for
the exercise thereof, and shall be exercised by written notice of intent to
exercise the Option with respect to a specified number of shares delivered to
the Company at its principal office, and payment in full to the Company at said
office of the amount of the Option Price for the number of shares of the Common
Stock with respect to which the Option is then being exercised. Payment of the
Option Price shall be made (i) in cash or by cash equivalent, (ii) in Common
Stock valued at the Fair Market Value of such shares on the trading date
3
<PAGE>
immediately preceding the date of exercise or (iii) by a combination of such
cash and such Common Stock.
5.5 Limited Transferability of Option. All Options shall be
nontransferable except (i) upon the Optionee's death, by the Optionee's will or
the laws of descent and distribution or (ii) on a case-by-case basis as may be
approved by the Board in its discretion, in accordance with the terms provided
below. Each Option Agreement shall provide that the Optionee may, during his or
her lifetime and subject to the prior approval of the Board at the time of
proposed transfer, transfer all or part of the Option to a Permitted Transferee
(as defined below), provided that such transfer is made by the Optionee for
estate and tax planning purposes or donative purposes and no consideration
(other than nominal consideration) is received by the Optionee therefor. The
transfer of an Option shall be subject to such other terms and conditions as the
Board may in its discretion impose from time to time, including a condition that
the portion of the Option to be transferred be vested and exercisable by the
Optionee at the time of the transfer. Subsequent transfers of an Option
transferred under this Section 5.5 shall be prohibited other than by will or the
laws of descent and distribution upon the death of the transferee.
For purposes hereof, a "Permitted Transferee" shall be any member of
the Optionee's immediate family or a charitable institution (each defined
below), or a trust for the exclusive benefit of such immediate family members
and/or charitable institution, or to a partnership or limited liability company
the equity interests of which are owned exclusively by the Optionee and/or one
or more members of his or her immediate family. For purposes of the preceding
definition, (i) the "immediate family" of the Optionee shall mean and include
the Optionee's spouse, any descendant of the Optionee or his or her spouse
(including descendants by adoption), and any descendant of either parent of the
Optionee (including descendants by adoption), and (ii) a "charitable
institution" shall mean and include any organization described in each of
section 170(b)(1)(A), 170(c), 2055(a) and 2522(a) of the Code, as well as any
charitable remainder trust created under section 664 of the Code, the income
beneficiary of which is a member of the Optionee's immediate family or a trust
or other entity described above in this Section 5.5.
No transfer of an Option by the Optionee by will or by laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as the Board may deem
necessary to establish the validity of the transfer. During the lifetime of an
Optionee, the Option shall be exercisable only by him, except that, in the case
of an Optionee who is legally incapacitated, the Option shall be exercisable by
his guardian or legal representative.
4
<PAGE>
ARTICLE VI
TERMINATION OF SERVICE
6.1 Death. If an Optionee shall die at any time after the Date of
Grant and while he is a member of the Board, the executor or administrator of
the estate of the decedent, or the person or persons to whom an Option shall
have been validly transferred in accordance with Section 5.5 hereof pursuant to
will or the laws of descent and distribution, shall have the right, during the
period ending one year after the date of the Optionee's death (subject to
Section 5.3 hereof concerning the maximum term of an Option), to exercise the
Optionee's Option to the extent that it was exercisable at the date of such
Optionee's death and shall not have been previously exercised.
6.2 Disability. If an Optionee's service as a member of the Board
shall be terminated as a result of his permanent and total disability (within
the meaning of Section 22(e)(3) of the Code) at any time after the Date of
Grant, the Optionee (or in the case of an Optionee who is legally incapacitated,
his guardian or legal representative) shall have the right, during a period
ending one year after the date of his disability (subject to Section 5.3 hereof
concerning the maximum term of an Option), to exercise an Option to the extent
that it was exercisable at the date of such Optionee's disability and shall not
have been previously exercised.
6.3 Removal for Cause. If an Optionee shall be removed from the
Board for cause, the Optionee's right to exercise any unexercised portion of an
Option shall immediately terminate and all rights thereunder shall cease. An
Optionee shall be considered to have been removed for "cause" for purposes of
this Section 6.3 when he shall have been removed from the Board by the
stockholders of the Company for cause in accordance with applicable state law
and the Certificate of Incorporation and By-Laws of the Company.
6.4 Other Termination of Service. If an Optionee's service as a
member of the Board shall be terminated for any reason other than death,
permanent and total disability or removal for cause, the Optionee shall have the
right, during the period ending 90 days after such termination (subject to
Section 5.3 hereof concerning the maximum term of an Option), to exercise an
Option to the extent that it was exercisable at the date of such termination of
service and shall not have been previously exercised.
ARTICLE VII
CHANGE IN CONTROL
7.1 Change in Control. Upon a "change in control" of the Company (as
defined below), each outstanding Option, to the extent that it shall not
otherwise have become exercisable, shall become fully and immediately vested and
exercisable (without regard to the otherwise applicable installment exercise
requirement under Section 5.3 hereof).
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7.2 Definition. For purposes of Section 7.1 hereof, a "change in
control" of the Company shall mean:
(i) an acquisition subsequent to the date hereof by any person,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person"),
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (A) the then outstanding shares of Common
Stock or (B) the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); excluding, however, the following: (1)
any acquisition directly from the Company, other than an acquisition by virtue
of the exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company, (2) any acquisition by the
Company and (3) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company;
(ii) a change in the composition of the Board such that during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board, and any new director (other than a director designated by
a person who has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii) or (iv) of this paragraph) whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the members thereof;
(iii) the approval by the stockholders of the Company of a merger,
consolidation, reorganization or similar corporate transaction, whether or not
the Company is the surviving corporation in such transaction, in which
outstanding shares of Common Stock are converted into (A) shares of stock of
another company, other than a conversion into shares of voting common stock of
the successor corporation (or a holding company thereof) representing 80% of the
voting power of all capital stock thereof outstanding immediately after the
merger or consolidation or (B) other securities (of either the Company or
another company) or cash or other property;
(iv) the approval by the stockholders of the Company of (A) the sale
or other disposition of all or substantially all of the assets of the Company or
(B) a complete liquidation or dissolution of the Company; or
(v) the adoption by the Board of a resolution to the effect that any
person has acquired effective control of the business and affairs of the
Company.
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ARTICLE VIII
STOCK CERTIFICATES
8.1 Issuance of Certificates. Subject to Section 8.2 hereof, the
Company shall issue a stock certificate in the name of the Optionee (or other
person exercising the Option in accordance with the provisions of the Plan) for
the shares of Common Stock purchased by exercise of an Option as soon as
practicable after due exercise and payment of the aggregate Option Price for
such shares.
8.2 Conditions. The Company shall not be required to issue or
deliver any certificate for shares of Common Stock purchased upon the exercise
of any Option granted hereunder or any portion thereof prior to fulfillment of
all of the following conditions:
(a) the completion of any registration or other qualification of
such shares, under any federal or state law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body, that the Board shall in its sole discretion deem necessary or advisable;
(b) the obtaining of any approval or other clearance from any
federal or state governmental agency that the Board shall in its sole discretion
determine to be necessary or advisable;
(c) the lapse of such reasonable period of time following the
exercise of the Option as the Board from time to time may establish for reasons
of administrative convenience;
(d) satisfaction by the Optionee of any applicable withholding taxes
or other withholding liabilities; and
(e) if required by the Board, in its sole discretion, the receipt by
the Company from an Optionee of (i) a representation in writing that the shares
of Common Stock received upon exercise of an Option are being acquired for
investment and not with a view to distribution and (ii) such other
representations and warranties as are deemed necessary by counsel to the
Company.
8.3 Legends. The Company reserves the right to legend any
certificate for shares of Common Stock, conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.
ARTICLE IX
EFFECTIVE DATE, TERMINATION AND AMENDMENT
9.1 Effective Date. The Plan shall become effective upon its
adoption by the Board and its approval by the stockholders of the Company;
provided, however, that the Plan shall not be effective and any Options granted
hereunder shall be null and void if,
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prior to March 31, 2000, an initial public offering of the Common Stock shall
not have been consummated.
9.2 Termination. The Plan shall terminate on the tenth anniversary
of the date the Plan is approved by the stockholders of the Company. The Board
may, in its sole discretion and at any earlier date, terminate the Plan.
Notwithstanding the foregoing, no termination of the Plan shall in any manner
affect any Option theretofore granted without the consent of the Optionee or the
permitted transferee of the Option.
9.3 Amendment. The Board may at any time and from time to time and
in any respect, amend or modify the Plan. Solely to the extent deemed necessary
or advisable by the Board, for purposes of complying with rules of any
securities exchange or for any other reason, the Board may seek the approval of
any such amendment by the Company's stockholders. Any such approval shall be by
the affirmative votes of the stockholders of the Company present, or
represented, and entitled to vote at a meeting duly held in accordance with
applicable state law and the Certificate of Incorporation and By-Laws of the
Company. Notwithstanding the foregoing, no amendment or modification of the Plan
shall in any manner affect any Option theretofore granted without the consent of
the Optionee or the permitted transferee of the Option.
ARTICLE IX
MISCELLANEOUS
10.1 Service on Board. Nothing in the Plan, in the grant of any
Option or in any Stock Option Agreement shall confer upon any Nonemployee
Director the right to continue service as a member of the Board.
10.2 Rights as Shareholder. An Optionee or the permitted transferee
of an Option shall have no rights as a shareholder with respect to any shares
subject to such Option prior to the purchase of such shares by exercise of such
Option as provided herein. Nothing contained herein or in the Stock Option
Agreement relating to any Option shall create an obligation on the part of the
Company to repurchase any shares of Common Stock purchased hereunder.
10.3 Plan Binding on Successors. The Plan shall be binding upon the
Company, its successors and assigns, and the Optionee, his executor,
administrator and permitted transferees.
10.4 Construction and Interpretation. Whenever used herein, nouns in
the singular shall include the plural, and the masculine pronoun shall include
the feminine gender. Headings of Articles and Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.
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10.5 Severability. If any provision of the Plan or any Stock Option
Agreement shall be determined to be illegal or unenforceable by any court of law
in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.
10.6 Governing Law. The validity and construction of this Plan and
of the Stock Option Agreements shall be governed by the laws of the State of
Delaware.
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Exhibit 4.2
CVC, INC.
AMENDED AND RESTATED 1997 STOCK OPTION PLAN
ARTICLE I
PURPOSE
This CVC, Inc. Amended and Restated 1997 Stock Option Plan is
intended to advance the interests of the Company and its stockholders and
subsidiaries by attracting, retaining and motivating the performance of selected
officers, employees and consultants of the Company of high caliber and potential
upon whose judgment, initiative and effort the Company is largely dependent for
the successful conduct of its business, and to encourage and enable such persons
to acquire and retain a proprietary interest in the Company by ownership of its
stock. Options granted under the Plan may either be "incentive stock options"
intended to qualify as such under the Internal Revenue Code, or "nonqualified
stock options," which are not intended to so qualify. The Plan, as amended and
restated provided herein, is effective as of September 30, 1999, subject to the
approval of the Plan by the holders of at least a majority of the outstanding
shares of Common Stock.
ARTICLE II
DEFINITIONS
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" means the Company's Common Stock, par value $.01
per share.
(d) "Committee" means the Compensation Committee of the Board or any
other committee of the Board appointed by the Board to administer the Plan from
time to time.
(e) "Company" means CVC, Inc., a Delaware corporation.
(f) "Date of Grant" means the date on which an Option becomes
effective in accordance with Section 6.1 hereof.
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(g) "Eligible Person" means any person who is an officer, employee
or consultant of the Company or any Subsidiary, or any person who is determined
by the Committee to be a prospective officer, employee or consultant of the
Company or any Subsidiary.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(i) "Fair Market Value" of a share of Common Stock as of a given
date means the closing sales price of the Common Stock on the Nasdaq National
Market on the trading day immediately preceding the date as of which Fair Market
Value is to be determined or, in the absence of any reported sales of Common
Stock on such date, on the first preceding date on which any such sale shall
have been reported. If Common Stock is not listed on the Nasdaq National Market
on the date as of which Fair Market Value is to be determined, the Committee
shall determine in good faith the Fair Market Value in whatever manner it
considers appropriate.
(j) "Incentive Stock Option" means a stock option granted under the
Plan that is intended to meet the requirements of Section 422 of the Code and
the regulations promulgated thereunder.
(k) "Nonqualified Stock Option" means a stock option granted under
the Plan that is not an Incentive Stock Option.
(l) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option granted under the Plan.
(m) "Optionee" means an Eligible Person to whom an Option has been
granted, which Option has not expired, under the Plan.
(n) "Option Price" means the price at which each share of Common
Stock subject to an Option may be purchased, determined in accordance with
Section 6.2 hereof.
(o) "Plan" means this CVC, Inc. Amended and Restated 1997 Stock
Option Plan.
(p) "Stock Option Agreement" means an agreement between the Company
and an Optionee under which the Optionee may purchase Common Stock under the
Plan.
(q) "Subsidiary" means a subsidiary corporation of the Company,
within the meaning of Section 424(f) of the Code.
(r) "Ten Percent Owner" means an Optionee who, at the time an
Incentive Stock Option is granted, owns stock possessing more than ten percent
of the total combined voting power of all classes of stock of the Company, its
parent, if any, or any Subsidiary, within the meaning of Sections 422(b)(6) and
424(d) of the Code.
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ARTICLE III
ELIGIBILITY
All Eligible Persons are eligible to receive a grant of an Option
under the Plan. The Committee shall, in its sole discretion, determine and
designate from time to time those Eligible Persons who are to be granted an
Option.
ARTICLE IV
ADMINISTRATION
4.1 Committee Members. The Plan shall be administered by a Committee
comprised of no fewer than two persons selected by the Board. Solely to the
extent deemed necessary or advisable by the Board, each Committee member shall
meet the definition of a "nonemployee director" for purposes of such Rule 16b-3
under the Exchange Act and of an "outside director" under Section 162(m) of the
Code. The Board shall also have the authority to exercise the powers and duties
of the Committee under the Plan.
4.2 Committee Authority. Subject to the express provisions of the
Plan, the Committee shall have the authority, in its discretion, to determine
the Eligible Persons to whom an Option shall be granted, the time or times at
which an Option shall be granted, the number of shares of Common Stock subject
to each Option, the Option Price of the shares subject to each Option and the
time or times when each Option shall become exercisable and the duration of the
exercise period. Subject to the express provisions of the Plan, the Committee
shall also have discretionary authority to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it, to determine the details
and provisions of each Stock Option Agreement, and to make all the
determinations necessary or advisable in the administration of the Plan. All
such actions and determinations by the Committee shall be conclusively binding
for all purposes and upon all persons. No Committee member shall be liable for
any action or determination made in good faith with respect to the Plan, any
Option or any Stock Option Agreement entered into hereunder.
4.3 Delegation of Authority. The Committee shall have the right,
from time to time, to delegate to one or more officers of the Company the
authority of the Committee to grant and determine the terms and conditions of
Options awarded under the Plan, subject to such limitations as the Committee
shall determine; provided, however, that no such authority may be delegated with
respect to Options awarded to any Optionee who the Committee determines may be
subject to Rule 16b-3 under the Exchange Act or Section 162(m) of the Code.
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ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Number of Shares. Subject to adjustment pursuant to the
provisions of Section 5.2 hereof, the number of shares of Common Stock which may
be issued and sold hereunder shall initially be 2,750,000 shares, provided that,
effective as of each fiscal year beginning on October 1, 2000, a number of
shares shall be added to the number of shares available for issuance under the
Plan that is equal to 5% of the total number of shares of Common Stock issued by
the Company during the immediately preceding fiscal year. Notwithstanding the
foregoing, the maximum aggregate number of shares of Common Stock issued and
sold under the Plan shall not exceed 5,000,000 shares. Shares of Common Stock
issued and sold under the Plan may be either authorized but unissued shares or
shares held in the Company's treasury. The number of shares of Common Stock
reserved for issuance under the Plan shall at no time be less than the maximum
number of shares which may be purchased at any time pursuant to outstanding
options. Shares of Common Stock covered by an Option that shall have been
exercised shall not again be available for an Option grant. If an Option shall
terminate or expire for any reason (including, without limitation, the
cancellation of an Option pursuant to Section 6.7 hereof) without being wholly
exercised, the number of shares to which such Option termination relates shall
again be available for grant hereunder.
5.2 Adjustments. In the event of a reorganization, recapitalization,
stock split, stock dividend, combination of shares, merger or consolidation, or
the sale, conveyance, or other transfer by the Company of all or substantially
all of its property, or any other change in the corporate structure or shares of
the Company, pursuant to any of which events the then outstanding shares of
Common Stock are split up or combined, or are changed into, become exchangeable
at the holder's election for, or entitle the holder thereof to, other shares of
stock or any other consideration, or in the case of any other transaction
described in Section 424(a) of the Code, the Committee may change the number and
kind of shares (including by substitution of shares of another corporation)
subject to the Options and/or the Option Price of such shares in the manner that
it shall deem to be equitable and appropriate. In no event may any such change
be made to an Incentive Stock Option which would constitute a "modification"
within the meaning of Section 424(h)(3) of the Code without the consent of any
affected Optionee. In the event of any merger, consolidation, reorganization, or
similar corporate event in which shares of the Common Stock are to be exchanged
for payment of cash (the "Cash Consideration") the Committee may, in its
discretion, (i) make equitable adjustments as provided above, or (ii) cancel any
outstanding Option in exchange for payment in cash, if any, equal to the excess
of the Cash Consideration for the shares underlying such Option over the Option
Price for such shares.
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ARTICLE VI
OPTIONS
6.1 Grant of Option. An Option may be granted to any Eligible Person
selected by the Committee. The grant of an Option shall first be effective upon
the date it is approved by the Committee, except to the extent the Committee
shall specify a later date upon which the grant of an Option shall first be
effective. Each Option shall be designated, at the discretion of the Committee,
as an Incentive Stock Option or a Nonqualified Stock Option, provided that
Incentive Stock Options may only be granted to Eligible Persons who are
considered employees of the Company or any Subsidiary for purposes of Section
422 of the Code. The Company and the Optionee shall execute a Stock Option
Agreement which shall set forth such terms and conditions of the Option as may
be determined by the Committee to be consistent with the Plan, and which may
include additional provisions and restrictions that are not inconsistent with
the Plan.
6.2 Maximum Limit. Notwithstanding anything elsewhere in the Plan to
the contrary, the maximum number of shares of Common Stock that may be subject
to Options granted to any Optionee during any one calendar year shall be 500,000
shares (subject to adjustment as provided in Section 5.2 hereof).
6.3 Option Price. The Option Price shall be determined by the
Committee; provided, however, that the Option Price shall not be less than 100
percent of the Fair Market Value of a share of Common Stock on the trading date
immediately preceding the Date of Grant.
6.4 Vesting; Term of Option. Unless otherwise specified by the
Committee in the Stock Option Agreement for an Optionee, an Option shall vest
and become exercisable in cumulative annual installments, each of which shall
relate to one-fifth of the number of shares of Common Stock originally covered
thereby (as may be adjusted in accordance with Section 5.2 hereof), on the
first, second, third, fourth and fifth anniversaries of the Date of Grant,
respectively, provided that the Optionee remains an Eligible Person on each such
anniversary. Notwithstanding the foregoing, the Committee, in its sole
discretion, may accelerate the exercisability of any Option at any time, and an
Option may become vested and exercisable in accordance with the provisions of
Articles VII and IX hereof. The period during which a vested Option may be
exercised shall be ten years from the Date of Grant, unless a shorter exercise
period is specified by the Committee in the Stock Option Agreement for an
Optionee.
6.5 Option Exercise; Withholding. Subject to such terms and
conditions as shall be specified in a Stock Option Agreement, an Option may be
exercised in whole or in part at any time, with respect to whole shares only,
within the period permitted for the exercise thereof, and shall be exercised by
written notice of intent to exercise the Option with respect to a specified
number of shares delivered to the Company at its principal office, and payment
in full to the Company at said office of the amount of the Option Price for the
number of shares of the Common Stock with respect to which the Option is then
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being exercised. Payment of the Option Price shall be made (i) in cash or by
cash equivalent, (ii) at the discretion of the Committee, in Common Stock that
has been held by the Optionee for at least six months (or such other period as
the Committee may deem appropriate for purposes of applicable accounting rules),
valued at the Fair Market Value of such shares determined on the date of
exercise, (iii) at the discretion of the Committee, by a delivery of a notice
that the Optionee has placed a market sell order (or similar instruction) with a
broker with respect to shares of Common Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option Price
(conditioned upon the payment of such net proceeds), (iv) at the discretion of
the Committee, by a combination of the methods described above, or (v) by such
other method as may be approved by the Committee and set forth in the Stock
Option Agreement. In addition to and at the time of payment of the Option Price,
the Optionee shall pay to the Company the full amount of all federal and state
withholding and other employment taxes required to be withheld in connection
with such exercise, in any manner consistent with the foregoing that is approved
by the Committee and set forth in the Stock Option Agreement.
6.6 Limited Transferability of Option. All Options shall be
nontransferable except (i) upon the Optionee's death, by the Optionee's will or
the laws of descent and distribution or (ii) in the case only of Nonqualified
Stock Options on a case-by-case basis as may be approved by the Committee in its
discretion, in accordance with the terms provided below. Each Option Agreement
for a Nonqualified Stock Option shall provide that the Optionee may, during his
or her lifetime and subject to the prior approval of the Committee at the time
of proposed transfer, transfer all or part of the Option to a family member (as
defined below), provided that any such transfer is made by the Optionee for
estate and tax planning, donative purposes, or pursuant to a domestic relations
order, and no consideration (other than nominal consideration or interests in a
family partnership, family corporation or other family-related entity) is
received by the Optionee therefor. The transfer of a Nonqualified Stock Option
shall be subject to such other terms and conditions as the Committee may in its
discretion impose from time to time, including a condition that the portion of
the Option to be transferred be vested and exercisable by the Optionee at the
time of the transfer. Subsequent transfers of an Option transferred under this
Section 6.6 shall be prohibited other than by will or the laws of descent and
distribution upon the death of the transferee.
For purposes hereof, a "family member" shall mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the participant's household (other than a
tenant or employee), a trust in which these persons have more than fifty percent
of the beneficial interest, a foundation in which these persons (or the
participant) control the management of assets, and any other entity in which
these persons (or the participant) own more than fifty percent of the voting
interests.
No transfer of an Option by the Optionee by will or by laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been
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furnished with written notice thereof and an authenticated copy of the will
and/or such other evidence as the Committee may deem necessary to establish the
validity of the transfer. During the lifetime of an Optionee, the Option shall
be exercisable only by him, except that, in the case of an Optionee who is
legally incapacitated, the Option shall be exercisable by his guardian or legal
representative.
6.7 Cancellation, Substitution and Amendment of Options. The
Committee 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 and the grant in substitution therefor of new Options
covering the same or different numbers of shares of Common Stock and having an
Option Price which may be the same as or different than the Option Price of the
cancelled Options or (ii) the amendment of the terms of any and all outstanding
Options.
ARTICLE VII
ADDITIONAL RULES FOR ISOs
7.1 Ten Percent Owners. Notwithstanding any other provisions of this
Plan to the contrary, in the case of an Incentive Stock Option granted to a Ten
Percent Owner, (i) the period during which any such Incentive Stock Option may
be exercised shall not be greater than five years from the Date of Grant and
(ii) the Option Price of such Incentive Stock Option shall not be less than 110
percent of the Fair Market Value of a share of Common Stock on the Date of
Grant.
7.2 Annual Limits. No Incentive Stock Option shall be granted to an
Optionee as a result of which the aggregate fair market value (determined as of
the date of grant) of the stock with respect to which incentive stock options
are exercisable for the first time in any calendar year under the Plan, and any
other stock option plans of the Company, any Subsidiary or any parent
corporation, would exceed $100,000, determined in accordance with Section 422(d)
of the Code. This limitation shall be applied by taking options into account in
the order in which granted.
7.3 Termination of Employment. An Incentive Stock Option may provide
that such Option may be exercised not later than three months following
termination of employment of the Optionee with the Company and all Subsidiaries,
subject to special rules relating to death and disability, as and to the extent
determined by the Committee to be consistent with the requirements of Section
422 of the Code and Treasury Regulations thereunder.
7.4 Disqualifying Dispositions. If shares of Common Stock acquired
by exercise of an Incentive Stock Option are disposed of within two years
following the Date of Grant or one year following the transfer of such shares to
the Optionee upon exercise, the Optionee shall, within 10 days after such
disposition, notify the Company in writing of the date and terms of such
disposition and provide such other information regarding the disposition as the
Committee may reasonably require.
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7.5 Other Terms and Conditions. Any Incentive Stock Option granted
hereunder shall contain such additional terms and conditions, not inconsistent
with the terms of this Plan, as are deemed necessary or desirable by the
Committee, which terms, together with the terms of this Plan, shall be intended
and interpreted to cause such Incentive Stock Option to qualify as an "incentive
stock option" under Section 422 of the Code. A Stock Option Agreement for an
Incentive Stock Option may provide that such Option shall be treated as a
Nonqualified Stock Option to the extent that certain requirements applicable to
"incentive stock options" under the Code shall not be satisfied. An Incentive
Stock Option shall by its terms be nontransferable otherwise than by will or by
the laws of descent and distribution, and shall be exercisable during the
lifetime of an Optionee only by such Optionee.
ARTICLE VIII
TERMINATION OF SERVICE
8.1 Death. Unless otherwise provided and set forth in the Stock
Option Agreement, if an Optionee shall die at any time after the Date of Grant
and while he is an Eligible Person, the executor or administrator of the estate
of the decedent, or the person or persons to whom an Option shall have been
validly transferred in accordance with Section 6.6 hereof pursuant to will or
the laws of descent and distribution, shall have the right, during the period
ending one year after the date of the Optionee's death (subject to Sections 6.4
and 7.1 hereof concerning the maximum term of an Option), to exercise the
Optionee's Option to the extent that it was exercisable at the date of the
Optionee's death and shall not have been previously exercised. The Committee may
determine at or after grant to make any portion of his Option that is not
exercisable at the date of death immediately vested and exercisable.
8.2 Disability. Unless otherwise provided by the Committee and set
forth in the Stock Option Agreement, if an Optionee's employment or other
service with the Company or any Subsidiary shall be terminated as a result of
his permanent and total disability (within the meaning of Section 22(e)(3) of
the Code) at any time after the Date of Grant and while he is an Eligible
Person, the Optionee (or in the case of an Optionee who is legally
incapacitated, his guardian or legal representative) shall have the right,
during a period ending one year after the date of his disability (subject to
Sections 6.4 and 7.1 hereof concerning the maximum term of an Option), to
exercise an Option to the extent that it was exercisable at the date of such
termination of employment or other service and shall not have been exercised.
The Committee may determine at or after grant to make any portion of his Option
that is not exercisable at the date of termination of employment or other
service due to disability immediately vested and exercisable.
8.3 Termination for Cause. Unless otherwise provided by the
Committee and set forth in the Stock Option Agreement, if an Optionee's
employment or other service
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with the Company or any Subsidiary shall be terminated for cause, the Optionee's
right to exercise any unexercised portion of an Option shall immediately
terminate and all rights thereunder shall cease. For purposes of this Section
8.3, termination for "cause" shall include, but not be limited to, embezzlement
or misappropriation of corporate funds, any acts of dishonesty resulting in
conviction for a felony, misconduct resulting in material injury to the Company
or any Subsidiary, significant activities harmful to the reputation of the
Company or any Subsidiary, a significant violation of Company or Subsidiary
policy, willful refusal to perform, or substantial disregard of, the duties
properly assigned to the Optionee, or a significant violation of any
contractual, statutory or common law duty of loyalty to the Company or any
Subsidiary. Notwithstanding the foregoing, in the event an Optionee is party to
an employment (or similar) agreement with the Company or any Subsidiary that
defines the term "cause," such definition shall apply for purpose of the Plan.
The Committee shall have the power to determine whether the Optionee has been
terminated for cause and the date upon which such termination for cause occurs.
Any such determination shall be final, conclusive and binding upon the Optionee.
8.4 Other Termination of Service. Unless otherwise provided by the
Committee and set forth in the Stock Option Agreement, if an Optionee's
employment or other service with the Company or any Subsidiary shall be
terminated for any reason other than death, permanent and total disability or
termination for cause, the Optionee shall have the right, during the period
ending 90 days after such termination (subject to Sections 6.4 and 7.1 hereof
concerning the maximum term of an Option and subject to the terms of any
employment agreement between the Company or a Subsidiary and the Optionee), to
exercise an Option to the extent that it was exercisable at the date of such
termination and shall not have been exercised. For purposes of this Section 8.4,
an Optionee shall not be considered to have terminated employment or other
service with the Company or any Subsidiary until the expiration of the period of
any military, sick leave or other bona fide leave of absence, up to a maximum
period of 90 days (or such greater period during which the Optionee is
guaranteed reemployment either by statute or contract).
ARTICLE IX
CHANGE IN CONTROL
9.1 Change in Control. Unless otherwise provided by the Committee
and set forth in the Stock Option Agreement, upon a "change in control" of the
Company (as defined below), each outstanding Option, to the extent that it shall
not otherwise have become vested and exercisable, shall automatically become
fully and immediately vested and exercisable, without regard to any otherwise
applicable vesting requirement under Section 6.4 hereof; provided, however, that
no such vesting shall occur if provision has been made in writing in connection
with such transaction for (a) the continuation of the Plan and/or the assumption
of such Options by a successor corporation (or a parent or subsidiary thereof)
or (b) the substitution for such Options of new options covering the stock of a
successor corporation (or a parent or subsidiary thereof), with appropriate
adjustments as to the number and kinds of shares and exercise prices. In the
event of any
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such continuation, assumption or substitution, the Plan and/or such Options
shall continue in the manner and under the terms so provided.
9.2 Definition. For purposes of Section 9.1 hereof, a "change in
control" of the Company shall mean:
(i) an acquisition subsequent to the date hereof by any person,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person"), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more of either (A) the then
outstanding shares of Common Stock or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (1) any acquisition
directly from the Company, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted
was itself acquired directly from the Company, (2) any acquisition by the
Company and (3) any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company;
(ii) a change in the composition of the Board such that during any
period of two consecutive years, individuals who at the beginning of such
period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company
to effect a transaction described in paragraphs (i), (iii) or (iv) of this
section) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a
majority of the members thereof;
(iii) the consummation of a merger, consolidation, reorganization or
similar corporate transaction which has been approved by the stockholders
of the Company, whether or not the Company is the surviving company in
such transaction, in which outstanding shares of Common Stock are
converted into (A) shares of stock of another company, other than a
conversion into shares of voting common stock of the successor corporation
(or a holding company thereof) representing 80% of the voting power of all
capital stock thereof outstanding immediately after the merger or
consolidation or (B) other securities (of either the Company or another
company) or cash or other property;
(iv) the approval by the stockholders of the Company of (A) the sale
or other disposition of all or substantially all of the assets of the
Company or (B) a complete liquidation or dissolution of the Company; or
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(v) the adoption by the Board of a resolution to the effect that any
person has acquired effective control of the business and affairs of the
Company.
ARTICLE X
STOCK CERTIFICATES
10.1 Issuance of Certificates. Subject to Section 10.2 hereof, the
Company shall issue a stock certificate in the name of the Optionee (or other
person exercising the Option in accordance with the provisions of the Plan) for
the shares of Common Stock purchased by exercise of an Option as soon as
practicable after due exercise and payment of the aggregate Option Price for
such shares. A separate stock certificate or separate stock certificates shall
be issued for any shares of Common Stock purchased pursuant to the exercise of
an Option that is an Incentive Stock Option, which certificate or certificates
shall not include any shares of Common Stock that were purchased pursuant to the
exercise of an Option that is a Nonqualified Stock Option.
10.2 Conditions. The Company shall not be required to issue or
deliver any certificate for shares of Common Stock purchased upon the exercise
of any Option granted hereunder or any portion thereof prior to fulfillment of
all of the following conditions:
(i) the completion of any registration or other qualification of
such shares, under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body, that the Committee shall in its sole
discretion deem necessary or advisable;
(ii) the obtaining of any approval or other clearance from any
federal or state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable;
(iii) the lapse of such reasonable period of time following the
exercise of the Option as the Committee from time to time may establish
for reasons of administrative convenience;
(iv) satisfaction by the Optionee of all applicable withholding
taxes or other withholding liabilities; and
(v) if required by the Committee, in its sole discretion, the
receipt by the Company from an Optionee of (i) a representation in writing
that the shares of Common Stock received upon exercise of an Option are
being acquired for investment and not with a view to distribution and (ii)
such other representations and warranties as are deemed necessary by
counsel to the Company.
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10.3 Legends. The Company reserves the right to legend any
certificate for shares of Common Stock, conditioning sales of such shares upon
compliance with applicable federal and state securities laws and regulations.
ARTICLE XI
EFFECTIVE DATE, TERMINATION AND AMENDMENT
11.1 Effective Date. The Plan shall become effective upon its
adoption by the Board and its approval by the stockholders of the Company.
11.2 Termination. The Plan shall terminate on the date immediately
preceding the tenth anniversary of the date the Plan is adopted by the Board.
The Board may, in its sole discretion and at any earlier date, terminate the
Plan. Notwithstanding the foregoing, no termination of the Plan shall in any
manner affect any Option theretofore granted without the consent of the Optionee
or the permitted transferee of the Option.
11.3 Amendment. The Board may at any time and from time to time and
in any respect, amend or modify the Plan. Solely to the extent deemed necessary
or advisable by the Board, for purposes of complying with Sections 422 or 162(m)
of the Code or rules of any securities exchange or for any other reason, the
Board may seek the approval of any such amendment by the Company's stockholders.
Any such approval shall be by the affirmative votes of the stockholders of the
Company present, or represented, and entitled to vote at a meeting duly held in
accordance with applicable state law and the Certificate of Incorporation and
By-Laws of the Company. Notwithstanding the foregoing, no amendment or
modification of the Plan shall in any manner affect any Option theretofore
granted without the consent of the Optionee or the permitted transferee of the
Option.
ARTICLE XII
MISCELLANEOUS
12.1 Employment or other Service. Nothing in the Plan, in the grant
of any Option or in any Stock Option Agreement shall confer upon any Eligible
Person the right to continue in the capacity in which he is employed by or
otherwise provides services to the Company or any Subsidiary. Notwithstanding
anything contained in the Plan to the contrary, unless otherwise provided in a
Stock Option Agreement, no Option shall be affected by any change of duties or
position of the Optionee (including a transfer to or from the Company or any
Subsidiary), so long as such Optionee continues to be an Eligible Person.
12.2 Rights as Shareholder. An Optionee or the permitted transferee
of an Option shall have no rights as a shareholder with respect to any shares
subject to such Option prior to the purchase of such shares by exercise of such
Option as provided herein. Nothing contained herein or in the Stock Option
Agreement relating to any Option shall
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create an obligation on the part of the Company to repurchase any shares of
Common Stock purchased hereunder.
12.3 Other Compensation and Benefit Plans. The adoption of the Plan
shall not affect any other stock option or incentive or other compensation plans
in effect for the Company or any Subsidiary, nor shall the Plan preclude the
Company from establishing any other forms of incentive or other compensation for
employees of the Company or any Subsidiary. The amount of any compensation
deemed to be received by an Optionee as a result of the exercise of an Option or
the sale of shares received upon such exercise shall not constitute compensation
with respect to which any other employee benefits of such Optionee 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 or the Committee or provided by the terms
of such plan.
12.4 Plan Binding on Successors. The Plan shall be binding upon the
Company, its successors and assigns, and the Optionee, his executor,
administrator and permitted transferees.
12.5 Construction and Interpretation. Whenever used herein, nouns in
the singular shall include the plural, and the masculine pronoun shall include
the feminine gender. Headings of Articles and Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.
12.6 Severability. If any provision of the Plan or any Stock Option
Agreement shall be determined to be illegal or unenforceable by any court of law
in any jurisdiction, the remaining provisions hereof and thereof shall be
severable and enforceable in accordance with their terms, and all provisions
shall remain enforceable in any other jurisdiction.
12.7 Governing Law. The validity and construction of this Plan and
of the Stock Option Agreements shall be governed by the laws of the State of
Delaware.
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Exhibit 4.3
CVC HOLDINGS, INC.
STOCK OPTION PLAN
ARTICLE I
PURPOSE OF PLAN
The Amended and Restated Stock Option Plan (the "Plan") of CVC
Holdings, Inc. (the "Company"), adopted by the Board of Directors of the Company
effective as of June 30, 1996, is intended to advance the best interests of the
Company by providing directors or executive and other key employees (as defined
below) of, or consultants to, the Company or any Subsidiary who have management
responsibility for the Company or any Subsidiary with additional incentives by
allowing such employees to acquire an ownership interest in the Company. The
Plan is a compensatory benefit plan within the meaning of Rule 701 under the
Securities Act of 1933, as amended (the "Securities Act"). The issuance of
Common Stock pursuant to the Plan is intended to qualify for the exemption from
registration under the Securities Act provided by Rule 701.
Stockholder approval of the Plan shall be obtained within twelve
(12) months after the Plan is adopted. Any option exercised under the Plan
before stockholder approval is obtained must be rescinded if stockholder
approval is not obtained within twelve (12) months after the Plan is adopted.
Shares of Common Stock issued upon any such exercise shall not be counted in
determining whether stockholder approval of the Plan has been obtained.
ARTICLE II
DEFINITIONS
For purposes of the Plan the following terms have the indicated
meanings:
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Committee" means the Compensation Committee of the Board.
"Common Stock" means the Common Stock, par value $.01 per share, of
CVC Holdings, Inc.
"Fair Market Value" of the Common Stock as of any date means the
average of the closing prices of the sales of Common Stock on all securities
exchanges on which the Common Stock is listed or, if on any day the Common Stock
is not so listed, the sales price of the Common Stock as reported on the NASDAQ
National Market System as of 4:00 P.M., New York time, on
<PAGE>
such day or, if the Common Stock is not reported on the NASDAQ National Market
System, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, on such day, in each such case
averaged over a period of 21 trading days consisting of the day as of which Fair
Market Value is being determined and the 20 consecutive trading days prior to
such day. If at any time the Common Stock is not listed on any securities
exchange or quoted in the NASDAQ System, Fair Market Value will be determined in
good faith by the Committee. Fair Market Value will be determined without regard
to any restriction on transferability of the Common Stock other than any such
restriction which by its terms will never lapse.
"Participant" means any director or executive or other key employee
of, or consultant to, the Company or any Subsidiary who has been selected to
participate in the Plan by the Committee. "Key employee" means an employee who
has management responsibility for the Company or any Subsidiary.
"Stockholders Agreement" means the Amended and Restated
Stockholders' Agreement dated as of May 22, 1995 among the Company and the
stockholders signatory thereto.
"Sale of the Company" means a merger or consolidation effecting a
change in control of the Company (defined as the acquisition of securities of
the Company possessing a majority or more of the total combined ordinary voting
power of the Company's securities by persons who were not stockholders of the
Company immediately prior to such transaction or affiliates of such
stockholders), or a sale of a majority of the outstanding voting securities of
the Company effecting a change in control of the Company.
"Subsidiary" means any subsidiary corporation (as such term is
defined in Section 424(f) of the Code) of the Company.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the
limitations of the Plan, the Committee shall have the sole and complete
authority to: (i) select Participants, (ii) grant Options (as defined in Article
IV) to Participants in such forms and amounts as it shall determine, (iii)
impose such limitations, restrictions and conditions upon such Options as it
shall deem appropriate, (iv) interpret the Plan and adopt, amend and rescind
administrative guidelines and other rules and regulations relating to the Plan,
(v) correct any defect or omission or reconcile any inconsistency in the Plan or
in any Options granted under the Plan, and (vi) make all other determinations
and take all other actions necessary or advisable for the implementation and
administration of the Plan. The Committee's determinations on matters within its
authority shall be conclusive and binding upon the Participants, the Company and
all other persons. All expenses associated with the administration of the Plan
shall be borne by the Company. The Committee may,
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as approved by the Board and to the extent permissible by law, delegate any of
its authority hereunder to such persons or entities as it deems appropriate.
ARTICLE IV
LIMITATION ON AGGREGATE SHARES
The number of shares of Common Stock with respect to which stock
purchase options ("Options") may be granted under the Plan shall not exceed, in
the aggregate, 200,000 shares of Common Stock, subject to adjustment in
accordance with paragraph 6.5. To the extent any Options expire unexercised or
are cancelled, terminated or forfeited in any manner without the issuance of
Common Stock thereunder, the shares of Common Stock underlying such Options
shall again be available under the Plan. The shares of Common Stock available
under the Plan may consist of authorized and unissued shares, treasury shares or
a combination thereof, as the Committee shall determine.
ARTICLE V
AWARDS
5.1 Grant of Options. The Committee may grant Options to
Participants from time to time in accordance with this Article V. Options
granted under the Plan may be nonqualified stock options or "incentive stock
options" within the meaning of Section 422 of the Code or any successor
provision, as specified by the Committee. The exercise price per share of Common
Stock under each Option shall be fixed by the Committee in its sole discretion
at the time of grant of the Option; provided, however, that the exercise price
of an incentive stock option shall equal at least 100% of the Fair Market Value
of a share of Common Stock on the date of grant, and the exercise price of a
non-incentive stock option shall equal at least 85% of the Fair Market Value of
a share of Common Stock on the date of grant; provided, however, that the
exercise price of a stock option granted to any Participant who, at the time of
grant, owns stock of the Company (or any Subsidiary) representing more than 10%
of the total combined voting power of all classes of stock of the Company (or
each Subsidiary), shall equal at least 110% of the Fair Market Value of a share
of Common Stock on the date of grant. Options shall be exercisable at such time
or times as the Committee shall determine; provided, however, that to the extent
that the aggregate Fair Market Value of the shares with respect to which
incentive stock options are exercisable for the first time by the Participant
during any calendar year (under all plans of the Company and any parent or
Subsidiary) exceeds $100,000, such Options shall be treated as nonqualified
stock options. For purposes of the preceding sentence, incentive stock options
shall be taken into account in the order in which they were granted. The Fair
Market Value of the shares shall be determined as of the time the Option with
respect to such shares is granted.
5.2 Vesting and Earning of Options. Options shall be exercisable
only to the extent vested and earned, provided, that vesting shall occur at a
minimum rate of at least 20% per year over five (5) years from the date of
grant. Subject to the Participant's continued employment
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with the Company, a Participant's Options shall vest and become exercisable as
determined by the Committee at the time of grant only if earned based on the
targets set by the Committee at the time of grant.
5.3 Exercise Procedure. Options shall be exercisable by written
notice to the Company (to the attention of the Company's Secretary) accompanied
by payment in full of the applicable exercise price. Payment of such exercise
price may be (i) in cash (including check, bank draft or money order), (ii)
other shares of Common Stock which (x) in the case of shares acquired upon
exercise of an Option have been owned by the Participant for more than six
months on the date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the shares as to which said
Option shall be exercised, (iii) delivery of a properly executed exercise notice
together with such other documentation as the Committee and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price, or
(iv) a combination of the foregoing.
5.4 Conditions and Limitations on Exercise. At the discretion of the
Committee, as a condition to the receipt of Options hereunder, each Participant
may be required to execute and deliver to the Company a counterpart of, or
otherwise agree to be bound by the terms of, the Stockholders Agreement. In the
event of a Sale of the Company, the Committee may provide, in its discretion,
that the vested portion of outstanding Options shall become immediately
exercisable and that such Options shall terminate if not exercised as of the
date of the Sale of the Company or any other designated date or that such
Options shall thereafter represent only the right to receive the excess of the
consideration per share of Common Stock offered in such Sale of the Company over
the exercise price of such Options. The Committee may provide in connection with
the issuance of an Option for the Company's ability to repurchase, in connection
with termination of a Participant's employment with the Company, any or all (but
not less than all, unless the Participant consents) shares of Common Stock
acquired upon exercise of such Options, and/or for the Company's right of first
refusal with respect to such shares.
5.5 Expiration of Options.
(a) Normal Expiration. In no event shall any part of any
Option be exercisable after the stated date of expiration thereof.
(b) Early Expiration Upon Termination of Employment or
Consulting Relationship. Except as otherwise provided by the Committee at the
time of grant of such Options, upon termination for any reason (subject to the
proviso of this sentence) of a Participant's employment or consulting
relationship by the Company and its Subsidiaries, all unvested Options or
portions thereof held by such Participant shall expire and be forfeited as of
such date and all vested Options held by such Participant shall expire to the
extent not theretofore exercised for a period of thirty (30) days (or such
longer period not to exceed a period of three (3) months as shall be determined
appropriate by the Committee at the time of grant) after the date of such
termination; provided, if such termination was caused by the death or disability
of the Participant (in the case of a disability, whether or not such disability
is a "disability" as such term is defined in Section 22(e)(3)
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of the Code), all vested Options held by such Participant shall expire to the
extent not theretofore exercised one year after the date of such termination. In
the event that an incentive stock option is exercised more than three months
following termination of a Participant's employment, it shall be treated as a
nonqualified stock option, unless such termination of employment was due to the
Participant's death or "disability" (as defined in Section 22(e)(3) of the
Code).
ARTICLE VI
GENERAL PROVISIONS
6.1 Written Agreement. The grant of each Option hereunder shall be
embodied in a written option agreement which shall be signed by the Participant
to whom the Option is granted and shall be subject to the terms and conditions
set forth herein and therein.
6.2 Listing, Registration and Legal Compliance. If at any time the
Committee determines, in its discretion, that the listing, registration or
qualification of the shares subject to Options upon any securities exchange or
under any state or federal securities or other law or regulation, or the consent
or approval of any governmental regulatory body, is necessary as a condition to
or in connection with the granting of Options or the purchase or issuance of
shares thereunder, no Options may be granted or exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee. The holders of such Options will supply the Company with such
certificates, representations and information as the Company shall request and
shall otherwise cooperate with the Company in obtaining such listing,
registration, qualification, consent or approval. In the case of officers and
other persons subject to Section 16(b) of the Securities Exchange Act of 1934,
as amended, the Committee may at any time impose any limitations upon the
exercise of Options that, in the Committee's discretion, are necessary in order
to comply with such Section 16(b) and the rules and regulations thereunder. If
the Company, as part of an offering of securities or otherwise, finds it
necessary because of federal or state regulatory requirements to reduce the
period during which any Options may be exercised, the Committee may, in its
discretion and without the Participant's consent, so reduce such period on not
less than 15 days' written notice to the holders thereof.
6.3 Options Not Transferable. Options may not be transferred other
than by will or the laws of descent and distribution and, during the lifetime of
the Participant to whom they were granted, may be exercised only by such
Participant (or his or her legal guardian or legal representative). In the event
of the death of a Participant, exercise of Options granted hereunder to such
Participant may be made only by the executor or administrator of such
Participant's estate or the person or persons to whom such Participant's rights
under the Options will pass by will or the laws of descent and distribution.
6.4 Withholding of Taxes. The Company may, if necessary or
desirable, withhold from any amounts due and payable by the Company to any
Participant (or secure payment from such Participant in lieu of withholding) the
amount of any withholding or other tax due from the
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Company with respect to any issuance or exercise of Options granted under the
Plan to such Participant, and the Company may defer such issuance or exercise
unless indemnified to its satisfaction against the payment of any such amount.
6.5 Adjustments. In the event of a reorganization, recapitalization,
stock dividend or stock split, or combination or other change in the shares of
Common Stock, the Board or the Committee shall, in order to prevent the dilution
or enlargement of rights under outstanding Options, make such adjustments in the
number and type of shares authorized by the Plan, the number and type of shares
covered by outstanding Options and the exercise prices specified therein as may
be determined to be appropriate and equitable.
6.6 Rights of Participation. Nothing in the Plan shall interfere
with or limit in any way the right of the Company or any Subsidiary to terminate
any Participant's employment or affiliation at any time (with or without cause),
or confer upon any Participant any right to continue in the employ of or to be
affiliated with the Company or any Subsidiary for any period of time or to
continue to receive such Participant's current (or other) rate of compensation.
No employee shall have a right to be selected as a Participant or, having been
so selected, to be selected again as a Participant. A Participant shall have no
rights as a stockholder with respect to any shares covered by Options until such
Participant becomes the record holder thereof.
6.7 Amendment, Suspension and Termination of Plan. The Committee may
suspend or terminate the Plan or any portion thereof at any time and may amend
it from time to time in such respects as the Committee may deem advisable;
provided, however, that no such amendment shall be made without stockholder
approval to the extent such approval is required by law, agreement or the rules
of any exchange upon which the Common Stock is listed, and no such amendment,
suspension or termination shall impair the rights of Participants under
outstanding Options without the consent of the Participants affected thereby,
except as provided below. No Options shall be granted hereunder after the tenth
anniversary of the effective date of this Amendment and Restatement.
6.8 Amendment of Outstanding Options. The Committee may amend or
modify any Option in any manner to the extent that the Committee would have had
the authority under the Plan initially to grant such Option; provided that,
except as expressly contemplated herein or in any agreement evidencing such
Option, no such amendment or modification shall impair the rights of any
Participant under any outstanding Option without the consent of such
Participant.
6.9 Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or the Committee, the
members of the Committee shall be indemnified by the Company against all costs
and expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted under the Plan, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding; provided, however, that any such Committee
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member shall be entitled to the indemnification rights set forth in this
paragraph 6.9 only if such member has acted in good faith and in a manner that
such member reasonably believed to be in or not opposed to the best interests of
the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that such conduct was unlawful, and further provided
that upon the institution of any such action, suit or proceeding a Committee
member shall give the Company written notice thereof and an opportunity to
handle and defend the same before such Committee member undertakes to handle and
defend it on his or her own behalf.
6.10 Annual Financial Statements. The Company shall provide any
Participant with a copy of the Company's annual financial statements for any
fiscal year of the Company (after such financial statements have been prepared)
if, as of the end of such fiscal year, any portion of the Participant's Options
or any shares issued upon exercise thereof, are outstanding.
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Exhibit 4.4
FORM OF
COMMONWEALTH SCIENTIFIC CORPORATION, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
NO. OF SHARES SUBJECT TO THIS AGREEMENT: [TOTAL OPTIONS]
EXPIRATION DATE: MARCH 31, 2004
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT") is made
and entered into as of March 31, 1999, by and between COMMONWEALTH SCIENTIFIC
CORPORATION, INC., a Virginia corporation (the "COMPANY"), and [FIRST NAME]
[LAST NAME] (the "OPTIONEE").
1. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, and without regard to any termination of Optionee's employment or other
affiliation with the Company, on March 31, 1999 (the "DATE OF GRANT"), the
Company granted to the Optionee an option to purchase (the "OPTION") all or any
part of an aggregate of [[TOTAL OPTIONS]] shares of common stock of the
Company, $1.00 par value per share ("COMMON STOCK") (which, together with any
securities issued with respect to those shares by way of stock dividend, stock
split, share transfer, merger, consolidation, or other change in capitalization,
whether before or after the date of exercise of the Option, are referred to as
"PURCHASE SHARES"), at the purchase price of [[PRICE]] per share ("EXERCISE
PRICE"). This Option is not intended to be an incentive stock option under
Section 422 of the Code.
2. TERMS AND CONDITIONS. This Option is subject to the following
terms and conditions:
(a) EXPIRATION DATE. This Option shall expire on March 31, 2004
("EXPIRATION DATE"). No part of this Option may be exercised after that date.
(b) EXERCISE OF OPTION BY OPTIONEE. This Option shall be
immediately exercisable as of the Date of Grant with respect to all shares. Once
the Option has become exercisable, it will remain so until the Expiration Date
subject to Section 2(c) hereof. This option can be exercised only with respect
to full shares and only with respect to a minimum of 100 shares at the time of
any exercise. A partial exercise of this Option shall not affect the Optionee's
right to exercise this Option with respect to the remaining shares, subject to
the conditions of this Agreement.
(c) EXERCISE OF OPTION UPON THE OPTIONEE'S DEATH. If the Optionee
dies before the Expiration Date, this Option may be exercised for the number of
shares the Optionee was entitled to purchase on the date of his death by the
Optionee's estate, personal representative, person(s) or entity to whom his
rights under this Option shall pass by will or the laws of descent and
distribution. The estate, personal representative, or other such person or
entity must exercise the Option in accordance with the procedures set forth in
this Agreement no later than the earlier of (i) three (3) months after the date
of the Optionee's death, or (ii) the Expiration Date.
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(d) METHOD OF EXERCISING OPTION AND PAYMENT FOR SHARES. This
Option, or any portion thereof, shall be exercised by written notice delivered
to the attention of the Company's Secretary at the Company's principal office.
The exercise date shall be (i) the date of postmark, in the case of notice by
mail, or (ii) the date of delivery, if delivered in person. The exercise notice
shall be accompanied by payment of the Exercise Price in full and any required
Tax Withholding (as defined in Section 6 below). As a condition to exercise of
this Option, the Optionee shall, in the Company's sole discretion, enter into
the Company's Shareholders Agreement, if any, then in effect. Payment shall be
made in cash, in the form of currency or check or other cash equivalent
acceptable to the Company.
3. NONTRANSFERABILITY. The Option may not be transferred except by
will or by the laws of descent and distribution. During the Optionee's lifetime,
the Option may be exercised only by the Optionee.
4. REDEMPTION OF PURCHASE SHARES. Upon the Optionee's separation from
service with the Company or an Affiliate, the Company shall have the option (but
not the obligation) to purchase any Purchase Shares that have been acquired upon
exercise of the Option, and the Optionee, his estate, personal representative,
or other person or entity who acquires the shares by will or by the laws of
descent and distribution shall be required to sell such shares to the Company.
The redemption price for the Purchase Shares will be the Fair Market Value
(defined below) of the shares on the date of redemption. The Company's
acquisition of the Purchase Shares, and payment of the redemption price, to the
Optionee, his representative or other person(s) or entity will occur on a date
determined by the Company (which, in the event of the Optionee's death, will be
no earlier than three months after the date of death) and will be completed no
later than six (6) months after the date of separation from service. For purpose
of this Agreement, "Fair Market Value" shall mean the last reported sales prices
of the Common Stock on the Nasdaq National Market on the date as of which fair
market value is to be determined or, in the absence of any reported sales of
Common Stock on such date, on the first preceding date on which any such sale
shall have been reported. If Common Stock is not listed on the Nasdaq National
Market on the date as of which fair market value is to be determined, the Board
of Directors of the Company or any successor thereto (the "Board") shall
determine in good faith the fair market value in whatever manner it considers
appropriate.
5. TRANSFER OF SHARES. Prior to the consummation of an initial public
offering that is registered under the 1933 Act (but subject to Section 15
hereof), the Optionee shall not transfer, or permit the transfer of, any of his
Purchase Shares, except in accordance with SECTION 4 of this Agreement. Any
non-authorized transfer of shares will be void and of no legal force.
6. WITHHOLDING TAXES. If the Company shall be required to withhold
any federal, state, local or foreign tax ("TAX WITHHOLDING") in connection with
any exercise of the Option, Optionee shall, as a condition of delivery of the
Purchase Shares, pay the tax or make provisions that are satisfactory to the
Company for the payment thereof concurrent with the payment of the Exercise
Price.
2
<PAGE>
7. NO RIGHTS AS A SHAREHOLDER. The Optionee shall have no rights as a
shareholder with respect to the Common Stock until the Optionee has exercised
the Option, paid the Exercise Price, and paid any Tax Withholding in accordance
with the requirements of this Agreement.
8. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee represents
and warrants to the Company that:
(a) AGREES TO TERMS OF THIS AGREEMENT. Optionee has received a
copy of this Agreement, has read and understands the terms of this Agreement,
and agrees to be bound by their terms and conditions. Optionee acknowledges that
there may be adverse tax consequences upon acquisition of the Purchase Shares,
and that Optionee should consult a tax adviser prior to such acquisition or
disposition.
(b) UNREGISTERED STOCK. Optionee acknowledges and understands
that any shares of Common Stock acquired upon the exercise of this Option will
not be registered under the Securities Act of 1933, as amended ("1933 ACT"), or
any applicable state securities laws by reason of claimed exemptions from
registration thereunder which depend in part on Optionee's investment intentions
and is aware that no federal or state agency has made any review, finding or
determination regarding the Common Stock nor any recommendation or endorsement
of the Common Stock as an investment, and Optionee must forego the security, if
any, that such a review would provide.
(c) PARTY TO INTEREST; KNOWLEDGE AND EXPERIENCE. Optionee is the
sole party in interest with respect to the Common Stock subject to the Option
and has sufficient knowledge and experience in financial and business matters to
enable Optionee to evaluate the merits and risks of this investment. Optionee My
understands the substantial risks associated with the Company's business.
(d) SPECULATIVE NATURE OF PURCHASE. Optionee recognizes the
speculative nature and the high risk of loss associated with the acquisition of
Common Stock upon the exercise of this Option and the operation of the Company
and affirms that Optionee is willing and able to bear the high risk of this
investment for an indefinite period of time.
(e) RESTRICTED SECURITIES. Optionee acknowledges that the shares
of Common Stock acquired upon the exercise of this Option will be "restricted"
securities under the 1933 Act, and that Optionee will therefore not be able to
transfer, sell, assign or otherwise dispose of the shares unless the shares are
registered under the 1933 Act and applicable state securities laws or unless an
exemption is available. In addition to any legend required by any Shareholders'
Agreement, Optionee acknowledges that the certificate(s) representing any shares
of Common Stock acquired upon the exercise of this Option may bear a restrictive
legend as follows:
The shares represented by this certificate have not been
registered under the Securities Act of 1933 or any state
securities laws. These shares may not be
3
<PAGE>
sold, exchanged, made subject to a security interest, pledged,
hypothecated or otherwise transferred without an effective
registration statement for such shares under the Securities Act of
1933 and applicable state securities laws, or an opinion of
counsel acceptable to the corporation that such registration is
not required.
The securities represented by this certificate are subject to the
terms and conditions of a Stockholders Agreement, by and among
Company and the stockholders of Company, which Agreement includes
certain restrictions on transfer. A copy of such Stockholders
Agreement is on file and available for inspection at the principal
office of Company, and no transfer of the interests represented by
this certificate shall be valid or effective unless or until the
terms and conditions of such Agreement shall have been complied
with.
9. REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents
and warrants to the Optionee that:
(a) AUTHORITY. This Agreement has been duly authorized and is a
valid and binding instrument against the Company, enforceable in accordance with
its terms.
(b) COMPLIANCE WITH LAW. The Company shall make reasonable
efforts to comply with all applicable federal and state securities laws;
PROVIDED, HOWEVER, that notwithstanding any other provision of this Agreement,
the Option shall not be exercisable if the exercise thereof would result in a
violation of any such laws.
(c) PURCHASE SHARES. Upon the Optionee's payment for the Purchase
Shares and any Tax Withholding, the Purchase Shares shall be duly authorized and
issued, fully paid and nonassessable, and the Purchase Shares shall have good
marketable title, free and clear of all liens, security interests and other
encumbrances. Once payment has been made for the Purchase Shares and any Tax
Withholding, the Company will release the applicable certificate to the
Optionee. The Optionee shall have the right to vote the Purchase Shares and
receive dividends thereon after the Exercise Price and any Tax Withholding has
been paid to the Company and prior to their forfeiture.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, covenants, and agreements contained herein or made in writing by the
Optionee or the Company in connection with the transaction contemplated hereby,
except any representation, warranty or
4
<PAGE>
agreement as to which compliance may have been appropriately waived, shall
survive the execution and delivery of this Agreement.
11. RIGHT TO TERMINATE EMPLOYMENT AND ADJUST COMPENSATION. This Option
does not confer upon the Optionee any right to continued employment with the
Company or an Affiliate (as applicable), nor does any provision of this
Agreement limit in any way any right that the Company or an Affiliate may
otherwise have to terminate the employment or adjust the compensation of the
Optionee at any time.
12. CHANGE IN CAPITAL STRUCTURE. The terms of this Option, including
the number of Purchase Shares covered thereby and the Exercise Price thereof,
shall be adjusted if the Company determines, in its sole discretion, that such
adjustment is required in the event the Company effects one or more stock
dividends, stock split-ups, subdivisions or consolidations of shares or other
similar changes in capitalization, whether subject to an agreement of merger,
consolidation or share exchange between the Company and an unaffiliated party,
or otherwise, and in all events subject to the terms of Section 13 of this
Agreement. The issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
terms of this Option.
13. MERGER, CONSOLIDATIONS, ACQUISITIONS OR DISSOLUTION OF THE
COMPANY. In the event of the merger or consolidation of the Company with or into
another unaffiliated entity, or the acquisition by another unaffiliated entity
or person of all or substantially all of the Company's assets or more than fifty
percent (50%) of the Company's then outstanding voting stock, or the
liquidation, dissolution, or winding up of the Company (other than in a
restructuring transaction which results in the continuation of the Company's
business by an affiliated entity), then the Exercise of the Option, and
Optionee's rights thereunder, shall be subject to the applicable terms and
conditions of the agreement by and between the Company and such unaffiliated
entity or person (including without limitation an agreement and plan of merger)
governing such transaction.
14. FRACTIONAL SHARES. Fractional shares shall not be issued
hereunder, and when any provision hereof may entitle Optionee to a fractional
share, such fraction shall be disregarded.
15. LOCK-UP AGREEMENT. Notwithstanding anything contrary in this
Agreement, in the event the Company's Common Stock is registered under the 1933
Act in an initial public offering (a "Public Security"), Optionee agrees, if
requested by the Company's underwriters, to execute a lockup agreement pursuant
to which the Optionee agrees, for a period of 180 days (or such longer or
shorter period as may be required by the Company's underwriters) following, the
date such Common Stock becomes a Public Security, not to sell, transfer or
otherwise dispose of any Purchase Shares held by the Optionee.
5
<PAGE>
16. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Optionee under this Agreement shall not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Company or
any subsidiary and shall not affect the amount of any life insurance coverage
available to any beneficiary under any life insurance plan covering, employees
of the Company or any subsidiary.
17. NOTICE. Any notice or other communication given pursuant to this
Agreement shall be in writing and shall be personally delivered or mailed by
United States registered or certified mail, postage prepaid, return receipt
requested, if to the Optionee, at the address on the signature page hereto, and
if to the Company, at the following address:
18. Any such notice shall be deemed to have been given (a) on the date
of postmark, in the case of notice by mail, or (b) on the date of delivery, if
delivered in person.
19. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of legatees, distributees, and personal representatives of the
Optionees and the successors of the Company.
20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each signed by different persons and all of said counterparts
together shall constitute one and the same instrument, and such instrument shall
be deemed to have been made, executed and delivered on the date first
herein-above written, irrespective of the time or times when the same or any
counterparts hereof actually may have been executed and delivered. This
Agreement shall become effective when the Company shall have executed and
delivered a counterpart hereof to the Optionee and the Optionee shall have
executed and delivered a counterpart hereof to the Company.
21. SEVERABILITY. In the event that one or more of the provisions of
this Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
22. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement with respect to the subject matter hereof.
23. HEADING. The section, subsection and paragraph headings utilized
throughout this Agreement are for convenience and reference only, and the words
contained herein shall not be held to expand, modify, amplify or aid in the
interpretation, construction, or meaning of this Agreement.
24. CONSTRUCTION. The construction of this Agreement shall be vested
in the Board, and the Board's construction shall be final and conclusive.
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<PAGE>
25. GOVERNING LAW. This Agreement shall be governed by the laws of the
Commonwealth of Virginia.
This Non-Qualified Stock Option Agreement is executed by the Company as
of this 31st day of March, 1999.
COMMONWEALTH SCIENTIFIC CORPORATION, INC.
By:
--------------------------------------
Christine B. Whitman
Chief Executive Officer
The undersigned Optionee hereby acknowledges receipt of an executed original of
this Non-Qualified Stock Option Agreement and accepts the Option granted
hereunder, subject to the terms and conditions set forth above.
Signature: Date:
--------------------- ----------
[FIRST NAME] [LAST NAME]
[ADDRESS]
[CITY], [STATE] [ZIP]
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<PAGE>
Exhibit 4.5
Form of
Commonwealth Scientific Corporation
INCENTIVE STOCK OPTION
COMMONWEALTH SCIENTIFIC CORPORATION (the "Company") a Virginia
corporation, hereby certifies that
-------------------------------
(name of employee)
an employee of the Company (the "Employee"), is entitled to purchase from the
Company
-------------------------------
(number of shares)
fully-paid and non-assessable shares of the Company's Common Stock (the
"Shares"), at a price per share of
$____________
(exercise price (per share))
(the "Exercise Price"), subject to the terms and conditions set forth herein and
in the Company's 1984 Employee Stock Option Plan (the "Plan") adopted by the
Company's Directors February 22, 1984, and by its Stockholders December 27,
1984, and amended as of May 7, 1987.
1. PREMISES. This option is granted pursuant to the Plan, in recognition
of the Employee's faithful and effective services to the Company, as an
inducement for Employee to acquire or increase his/her proprietary interest in
the Company, and as an added incentive to advance the interests of the Company.
2. OPTION PERIOD. Subject to Section 5, the period for exercising this
option (the "Exercise Period") shall be the period beginning two years and
ending five years from the date the option is granted, except that:
(a) If Employee retires during, but more than three months before the
expiration of, the Exercise Period, such option shall be exercisable
only during the three months following such retirement.
(b) If Employee dies during the Exercise Period, such option shall be
exercisable by the executors, administrators, legatees or
distributees of his/her estate only during the 12 months following
his/her death, but in no event after the expiration of the Exercise
Period.
<PAGE>
(c) If Employee ceases to be an employee of the Company for any cause
other than retirement or death, such option shall terminate as of
the date of the cessation of employment.
Subject to Section 5 and clauses (a), (b) and (c) of this Section 2, an option
may be exercised at any time and from time to time, in whole or in part, during
the Exercise Period.
3. PAYMENT FOR SHARES. Full payment for Share purchased, together with the
amount of any tax or excise due in respect of the sale and issue thereof, shall
be made in cash or by certified or bank cashier's check at the time of the
exercise of the option. The Company will issue no certificates for Shares until
full payment therefor has been made, and Employee shall have none of the rights
of a stockholder until certificates for the Shares purchased are issued to
him/her.
4. NONASSIGNABILITY. (a) Options granted pursuant to this plan shall be
nontransferable except by will or pursuant to laws of descent and distribution,
and shall be exercisable, during an Employee's lifetime, only by him/her.
(b) Certificates for any Shares issued pursuant to this option shall bear
a notice on the face thereof to the effect that such Shares have not been
registered under state or federal securities laws and may not be transferred
unless so registered or, in the opinion of counsel satisfactory to the Company,
there are applicable exemptions from the registration requirements of such laws.
5. CONDITIONS TO EXERCISE OF OPTION. (a) As a condition of exercise, the
Company may require Employee to (a) represent, warrant and agree, in form and
substance satisfactory to the Company, that he/she is acquiring the Shares for
his/her own account, for investment and not with a view to or in connection with
any distribution, (b) agree to restrictions on transfer in form and substance
satisfactory to the Company, and (c) agree to an endorsement which makes
appropriate reference to such representations, warranties, agreements and
restrictions on the certificate representing the Shares.
(b) No option shall be exercised if the exercise and the issuance of
Shares pursuant hereto would be contrary to law or to the regulations of any
duly constituted authority having jurisdiction.
6. EFFECT OF CHANGES IN COMMON STOCK. If the Company shall combine,
subdivide or reclassify the Shares of Common Stock which have been or may be
optioned, or shall declare thereon any dividend payable in shares of Common
Stock, or shall reclassify or take any other action of a similar nature
affecting the Common Stock, then the number and class of Shares which may be
purchased pursuant to this option and the Option Price per Share shall be
adjusted to such extent as the Board may determine is necessary to preserve
unimpaired the rights of the Employee, and such determination shall be
conclusive and binding upon the Employee.
2
<PAGE>
7. REORGANIZATION. In case of any one or more reclassification, changes or
exchanges of outstanding shares of Common Stock or other stock (other than as
provided in Section 6), or consolidations of the Company with, or mergers of the
Company into other corporations, or other recapitalizations or reorganizations
(other than transactions in which the Company continues to exist and which do
not result in any reclassification, change or exchange of outstanding shares of
the Company), or in case of any one or more sales or conveyances to another
corporation of the property of the Company as an entirety, or substantially as
an entirety (any and all of which are hereinafter called "Reorganization"), the
Employee shall have the right, upon any subsequent exercise hereof, to acquire
the same kind and amount of securities and property which he/she would then hold
if Employee had exercised such option immediately before the first of any such
Reorganization, and continued to hold all securities and property which came to
him/her as a result of that and subsequent Reorganizations, less all securities
and property surrendered or cancelled pursuant to any of same, the adjustment
rights in Sections 6 and 7 being continuing and cumulative, except that,
notwithstanding any provision of clauses (a) or (b) in Section 2 to the
contrary, the Board shall have the right in connection with any such
Reorganization, to terminate the Exercise Period upon not less than 30 days'
written notice to the Employee and in such event this option (except to the
extent one of the events referred to in clauses (a) and (b) of Section 2 have
occurred), may be exercised only to the extent thereby permitted, in each case
only at a time prior to such Reorganization. A liquidation shall be deemed a
Reorganization for the foregoing purposes.
THIS OPTION shall be construed in accordance with the laws of the
Commonwealth of Virginia.
Dated: COMMONWEALTH
SCIENTIFIC CORPORATION
Attest: By:
-----------------------------
George R. Thompson, President
- --------------------------
Thomas Hennigan, Secretary
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<PAGE>
Exhibit 4.6
THE OPTIONS GRANTED PURSUANT TO THIS AGREEMENT ARE NOT TRANSFERABLE EXCEPT
TO THE ESTATE OF THE HOLDER UPON HIS DEATH IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT. THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF ANY
SUCH OPTIONS MAY NOT BE TRANSFERRED, NOR WILL ANY ASSIGNEE OR ENDORSEE OF
SUCH SHARES OF COMMON STOCK BE RECOGNIZED AS AN OWNER THEREOF BY THE ISSUER
FOR ANY PURPOSE, UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, WITH RESPECT TO SUCH SHARES SHALL THEN BE IN EFFECT OR
UNLESS THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION WITH RESPECT TO
ANY PROPOSED TRANSFER OR DISPOSITION OF SUCH SHARES SHALL BE ESTABLISHED TO
THE SATISFACTION OF THE ISSUER. WITHOUT LIMITING THE FOREGOING, (I) NO
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF ANY SUCH OPTIONS MAY BE
SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR SIMILAR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR UNLESS
IT IS ESTABLISHED TO THE SATISFACTION OF THE ISSUER THAT SUCH SALE OR
TRANSFER IS IN A TRANSACTION WHICH IS EXEMPT UNDER, OR OTHERWISE IN
COMPLIANCE WITH, SUCH LAWS, AND (II) NO SHARES OF COMMON STOCK ISSUABLE UPON
THE EXERCISE OF ANY SUCH OPTIONS MAY BE SOLD, TRANSFERRED, ASSIGNED OR
OTHERWISE DISPOSED OF, NOR WILL ANY ASSIGNEE OR ENDORSEE OF SUCH SHARES OF
COMMON STOCK BE RECOGNIZED AS AN OWNER THEREOF BY THE ISSUER FOR ANY
PURPOSE, EXCEPT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT. THE SHARES
OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTIONS GRANTED HEREUNDER
ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHTS OF REPURCHASE AND
FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THIS
AGREEMENT. SUCH TRANSFER RESTRICTIONS AND RIGHTS OF REPURCHASE AND FIRST
REFUSAL ARE BINDING ON TRANSFEREES OF SUCH SHARES. IT IS UNLAWFUL TO
CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR
TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS
PERMITTED IN THE COMMISSIONER'S RULES.
CVC HOLDINGS, INC.
525 LEE ROAD
ROCHESTER, NEW YORK 14606
To: Thomas Omstead
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of the date of grant set forth on TABLE A (the "Date of
Grant"), as a matter of separate inducement and not in lieu of any salary or
other compensation for your services, the option (this "Option") to purchase, in
accordance with and subject to the terms and conditions set forth herein, an
aggregate of the number of shares set forth on TABLE A (the "Shares") of Common
Stock, $.01 par value per share ("Common Stock"), of the Company, at the
exercise price per Share set forth on TABLE A, subject to adjustment as
hereinafter provided (the "Option Price"). Subject to the provisions and
limitations set forth herein, this Option shall be earned and shall vest, and
may be exercised by you, on a cumulative basis, in the amounts and for the
periods set forth in TABLE A; provided, however, that if your employment
terminates for any reason, the currently exercisable
<PAGE>
portion of this Option will be exercisable through the end of the applicable
period set forth in clauses (a) and (b) of Section 2 below and the unvested
portion of this Option will automatically and without notice terminate and
become null and void. This Option is intended to be an incentive or nonqualified
stock option as indicated on TABLE A. If designated as an incentive stock option
in the preceding sentence, this Option is intended to qualify as an "incentive
stock option" under Section 422(b) of the Code. Nevertheless, to the extent that
this Option exceeds the $100,000 per year limitation rule of Code Section
422(d), this Option shall be treated as an option which is not an incentive
stock option.
2. TERMINATION OF OPTION. Notwithstanding the foregoing, the
unexercised portion of this Option will automatically and without notice
terminate and become null and void on the tenth anniversary of the Date of Grant
(the "Outside Date"), subject to earlier termination as hereinafter provided
(the date on which the earliest of such events shall occur being herein referred
to as the "Expiration Date"). If, however, your employment with the Company or
any parent or subsidiary thereof terminates for any reason before the Outside
Date, this Option will terminate on the applicable date as described below;
provided, however, that none of the events described below shall extend the
period of exercisability of this Option beyond the Outside Date:
(a) the expiration of thirty (30) days after the termination of
your employment for any reason, except as set forth in clause (b) of this
Section 2; or
(b) the expiration of one (1) year from the date of termination
of your employment by reason of your death, retirement (in accordance with the
applicable company policy respecting retirement), dismissal other than for
"cause" (as hereafter defined), or your "disability" (as hereafter defined),
except that your Option will be exercisable during such one year period only to
the extent that it would have been exercisable immediately prior to the
termination of your employment.
In the case of an incentive stock option, if termination of your employment is
by reason of (I) a disability referred to in clause (b) of this Section 2 which
is not a "disability" as such term is defined in Section 22(e)(3) of the Code,
or (II) your retirement, then such incentive stock option shall be treated as a
nonqualified stock option on the day three months and one day following the
termination of your employment. For purposes hereof, (i) the term "cause" is
defined as (A) the commission by you of a felony, your engaging in theft,
embezzlement, fraud, obtaining funds or property under false pretenses, or
similar acts of misconduct with respect to the property of the Company and/or
its subsidiaries or its employees, stockholders, affiliates, customers or
suppliers, (B) your material breach of Company or subsidiary written policies or
terms and conditions of employment, or (C) your material failure to successfully
fulfill your duties or obligations of employment.
3. OPTION EXERCISE. The vested and currently exercisable portion of
this Option may be exercised by you from time to time, in part or in full (but
subject to the provisions of Section 2, subsections 3(a) and 3(b) and Section 4
of this Agreement), at any time on or after the Date of Grant.
2
<PAGE>
(a) This Option can be exercised only with respect to full Shares
and only with respect to a minimum of 100 Shares at the time of any exercise.
(b) Any exercise of this Option must be in writing addressed to
the Board of Directors of the Company at the principal place of business of the
Company and delivered at least ten (10) business days prior to the proposed date
of exercise, which writing shall indicate the number of Shares as to which this
Option is being exercised and shall be accompanied by a certified or bank
cashier's check payable to the order of the Company in the full amount of the
aggregate Option Price of the Shares covered by such exercise.
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if such exercise would
subject the Company or any of its subsidiaries to any substantial risk under
governmental programs restricting ownership or control or similar requirements
or would subject the Company or any of its subsidiaries to other regulatory
problems, in each case, as determined by the Compensation Committee of the
Company's Board of Directors (the "Committee"); provided, however, that any
period of delayed exercise will not exceed 90 days without the consent of the
Committee.
(c) This Option may not be exercised unless and until you or,
upon your death, the person to whom this Option is transferred in accordance
with Section 9 hereof, shall have executed and delivered such subscription
documents as the Company shall from time to time require, including, without
limitation, a subscription agreement and a prospective purchaser's
questionnaire. You acknowledge your receipt of a copy of the Amended and
Restated Stockholders' Agreement dated as of May 22, 1995 (the "Stockholders
Agreement"), by and among CVC Holdings, Inc. and the stockholders named in such
Stockholders Agreement, as may have been amended through the date hereof.
Nothing in this Agreement shall be deemed to require the Company to deliver to
you copies of, or to seek your approval for, any amendments made to such
Stockholders Agreement. You further agree that you shall not be considered a
"Stockholder" (as defined in the Stockholders Agreement) with respect to any of
the Shares.
5. SHARE REPURCHASE RIGHT. At any time prior to later of the
expiration of (a) ninety (90) days from termination of your employment with the
Company for any reason, or (b) ninety (90) days after your latest exercise of
this Option, the Company shall have the right, but shall not be obligated, to
repurchase any or all (but not less than all, unless you so consent) Shares
acquired pursuant to the terms of this Option (the "Repurchase Right") by giving
you or the holder of such Shares written notice of the Company's intention to
exercise such Repurchase Right prior to the later expiration (the "Notice").
(a) The per-share purchase price for the Shares shall be equal to
the applicable "Fair Market Price." The "Fair Market Price" per Share shall be
(A) the average of the
3
<PAGE>
Annualized Net After-Tax Income per Share for each of the four (4) most recently
completed fiscal quarters of the Company prior to the date of the Notice
multiplied by (B) seven (7). For purposes hereof, the "Annualized Net After-Tax
Income" of the Company for any fiscal period shall be the consolidated income
after taxes of the Company for such period on an annualized basis, determined in
accordance with generally accepted accounting principles, consistently applied.
The calculations required by this Section 5 shall be made on a fully-diluted,
as-converted basis by the independent certified public accountants for the
Company, whose determination shall be final and binding on all parties hereto.
The Repurchase Right shall terminate when the Company's securities become
publicly traded.
(b) The closing for all purchases and sales of Shares provided
for in this Section 5 shall be held at the office of the Company at 10:00
o'clock a.m. on the 90th day after the giving of the Notice or such earlier date
as the Company shall specify. If the aforesaid closing date falls on a Saturday,
Sunday or legal holiday, then the closing shall be held on the next succeeding
business day. Except as hereinafter provided, the purchase price for the
purchase and sale of Shares determined pursuant to the provisions of Section 5
hereof shall be paid in eight equal quarterly installments, the first such
payment to be made on the date of the closing under Section 5 hereof and the
remaining seven installments to be made on the last day of each of the seven
immediately succeeding 90-day periods. Such installment obligations shall bear
interest on the outstanding balance at a rate equal to the prime rate announced
from time to time by the Company's principal lending bank (or, in the absence of
any such bank, The Chase Manhattan Bank), payable together with each principal
installment. Contemporaneously with the receipt of the first installment as
aforesaid, you or the seller(s) shall duly endorse to the Company and deliver to
the Company for cancellation the certificate or certificates representing the
Shares sold hereunder, together with all necessary documentary transfer stamps,
if any. The Company, at its option, may prepay any or all of such obligations
without penalty or premium.
6. COMPANY'S RIGHT OF FIRST REFUSAL. Without limitation of the
Company's other rights, including, without limitation, under Section 5 hereof,
before any Shares held by you or any transferee (either being sometimes referred
to herein as the "Holder") may be sold or otherwise transferred (including
transfer by gift or operation of law), the Company or its assignee(s) shall have
a right of first refusal to purchase the Shares on the terms and conditions set
forth in this Section (the "Right of First Refusal").
(a) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration per Share for which the Holder
proposes to transfer the Shares (the "Offered Price"), and the Holder shall
offer the Shares at the Offered Price to the Company or its assignee(s).
(b) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within sixty
(60) days after receipt of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the
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Holder, elect to purchase all or any portion of the Shares proposed to be
transferred to any one or more of the Proposed Transferees, at the purchase
price determined in accordance with subsection (c) below.
(c) PURCHASE PRICE. The purchase price ("Purchase Price") for the
Shares purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.
(d) PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty (30) days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(e) HOLDER'S RIGHT TO TRANSFER. If any of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section, then the Holder
may sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price, provided that such sale or other transfer is consummated within
sixty (60) days after the expiration of the right of refusal period and provided
further than any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall be
given to the Company, and the Company and/or its assignees shall again be
offered the Right of First Refusal before any Shares held by the Holder may be
sold or otherwise transferred.
(f) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. The restrictions of
this Section 6 shall not apply to any transfer permitted pursuant to Section
9(a)(ii) of this Agreement.
(g) TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal shall terminate as to any Shares ninety (90) days after the first sale
of Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended.
7. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
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8. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC. (a)
Notwithstanding any other provisions contained in this Agreement, in the event
of the merger or consolidation of the Company, or reorganization,
reclassification or recapitalization of, stock dividend on, stock split, reverse
stock split, split-up, split-off, spin-off or combination of, shares of Common
Stock, appropriate adjustments shall be made by the Committee as to the number
of Shares and/or the exercise price per Share subject to this Option, as shall
be equitable to prevent reduction or enlargement of rights under this Option,
and the determination of the Committee as to such matters shall be conclusive
and binding. References in this Agreement to Shares shall include any such
securities or other property (including cash) into which Shares of Common Stock
may be changed pursuant to or in accordance with the preceding sentence through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, split-up, split-off, spin-off, or combination of shares.
(b) If (i) the Board of Directors of the Company approves a
merger or consolidation effecting a change in control of the Company (defined as
the acquisition of securities of the Company possessing a majority or more of
the total combined ordinary voting power of the Company's securities by persons
who were not stockholders of the Company immediately prior to such transaction
or affiliates of such stockholders), or a sale of a majority of the outstanding
voting securities of the Company effecting a change in control of the Company (a
"Sale of the Company"), then the Committee shall have the right to terminate
this Option (in which event such Option shall not be subject to the above
described adjustments in subsection (a)) by causing written notice of such
termination to be given to you at least fifteen (15) days prior to the earlier
of (A) the date on which such Sale of the Company is expected to become
effective, or (B) if different from the date specified in subclause (A) above,
the date as of which a record will be taken to determine the holders of shares
of Common Stock who shall be entitled to exchange such shares for securities or
other property (including cash) deliverable upon such Sale of the Company. Such
notice shall be deemed duly given when given as provided below, and failure to
give such notice, or a defect therein, shall not affect the termination of this
Option.
(c) If the Committee shall determine to cause the termination of
this Option pursuant to subsection (b) above upon the occurrence of an event
described in said subsection (b) and the restrictions set forth in subsections
4(a) and/or 4(b) shall apply to the Options to be terminated, then, upon the
occurrence of such event and the actual consummation of the Sale of the Company,
this Option shall terminate and you shall receive, with respect to each Share
subject to this Option which is vested as of the date of the consummation of
such role of the Company, an amount per Share equal to the excess of the Fair
Market Value of each such Share immediately prior to the occurrence of such
transaction over the exercise Option Price per Share; such amount to be payable
in cash, in one or more of the kinds of property payable in such transaction, or
in a combination thereof, as the Committee, in its sole discretion, shall
determine.
9. RESTRICTIONS ON TRANSFERS. (a) This Option and any Shares issued
upon exercise thereof are not transferable by you, and this Option is
exercisable only by you, and this Option and any Shares issued upon exercise
thereof, may not be sold, assigned, transferred, pledged or hypothecated in any
way (whether by operation of law or otherwise) except that, (i) Shares may
6
<PAGE>
be transferred in accordance with Section 6 of this Agreement, and (ii) upon
your death this Option or such Shares may be transferred subject to all of the
terms and conditions contained in this Agreement, (A) to your then-current
spouse, parents or lineal descendants, or to trusts or custodianships
established for any such person, (B) by operation of the laws of descent and
distribution, (C) by disposition pursuant to the terms of your last will and
testament, to such spouse, parent or lineal descendant or (D) otherwise to your
estate. Neither this Option nor any Shares shall be subject to execution,
attachment or similar proceeding. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of this Option or such Shares or any interest
therein, and the levy of any attachment or similar proceeding upon this Option
or such Shares or any interest therein, shall be null and void and without
effect except as provided in the preceding sentence.
(b) The Company may postpone the time of delivery of certificates
for the shares issuable upon the exercise of this Option for such additional
time as the Company shall deem necessary or desirable to enable it to comply
with the listing requirements of any securities exchange or the National
Association of Securities Dealers, Inc. upon which shares of the Company may
then or are then contemplated to be listed or quoted, or the requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or any rules or regulations of the Securities and Exchange Commission
promulgated thereunder or the requirements of applicable state laws relating to
the authorization, issuance or sale of securities.
(c) (i) You hereby represent and warrant to the Company that (A)
this Option and all Shares hereafter purchased or otherwise acquired by you have
been and are being acquired by you for your own account for investment, without
any intention of selling or further distributing the same, (B) you do not
presently have any reason to anticipate any change in circumstances or any other
particular occasion or event which would cause you to sell the Option or any of
such Shares, and (C) you are fully aware that in agreeing to grant the Option
and/or sell or issue such Shares to you, and in entering into this Agreement,
the Company has relied and is relying upon the truth and accuracy of these
representations and warranties.
(ii) Each instrument, agreement or certificate the
Company has issued or will issue to represent this Option shall prominently bear
a legend making reference to this Agreement and securities laws applicable to
the Shares acquired upon exercise hereof.
10. NOT A CONTRACT OF EMPLOYMENT. NOTHING IN THIS OPTION AGREEMENT
SHALL CONFER ANY RIGHT TO CONTINUE IN THE EMPLOY OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR AFFECT THE RIGHT WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
HAVE TO TERMINATE YOUR EMPLOYMENT.
11. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
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(b) Each notice relating to this Option shall be in writing and
delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement. Anyone to whom a
notice may be given under this Agreement may designate a new address by notice
to that effect given to the other party in accordance with this subsection (b).
Each such notice shall be deemed given upon the receipt thereof when delivered
in person and on the second business day after the mailing when sent by mail as
aforesaid.
(c) You understand that, upon exercise of this Option, you may
recognize income for tax purposes in an amount equal to the excess of the then
fair market value of the Shares purchased over the Option Price for such Shares.
Your employer may withhold tax from your current compensation with respect to
such income or any other income which it deems you to have received in
connection therewith; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option. You understand that you may suffer adverse tax consequences as a
result of your purchase or disposition of the Shares. You represent that you
have consulted with any tax consultants you deem advisable in connection with
the purchase or disposition of the Shares and that you are not relying on the
Company for any tax advice.
(d) If this Option shall be mutilated, lost, stolen or
destroyed, the Company shall issue in exchange and substitution for and upon
cancellation of the mutilated Option, or in lieu of and in substitution for
the Option lost, stolen or destroyed, a new Option of like tenor and
denomination, but only upon receipt of evidence satisfactory to the Company
of such loss, theft or destruction of such Option and such indemnity and, if
requested by the Company, such bond, as shall in each case be satisfactory to
the Company. You must also comply with such other reasonable requirements and
pay such other reasonable charges as the Company may prescribe in connection
with such issuance.
(e) This Option shall be governed and construed in accordance
with the internal laws of the State of New York applicable to contracts
executed, delivered and to be fully performed in the State of New York,
without giving effect to contrary provisions regarding conflict of laws.
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators and legal representatives,
and shall inure to the benefit of and be binding upon the Company and its
successors and assigns. You may not assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement, or any of your rights
hereunder except if and to the extent expressly permitted by Section 9 of
this Agreement, and any such attempted prohibited delegation or disposition
shall be null and void and without effect.
(g) This Agreement constitutes the complete understanding
between the parties with respect to the subject matter hereof, and no
statement, representation, warranty or covenant has been made by either party
with respect thereto except as expressly set forth herein. This Agreement
shall not be altered, modified, amended or terminated except by written
instrument signed by each of the parties hereto.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
(i) The section headings contained herein are for the purposes of
convenience only, are not intended to define or limit the contents of said
sections and are not part of this Agreement.
(j) You agree that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.
(k) The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement or (ii) to treat as the owner of such
Shares or to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such Shares shall have been so transferred.
(l) The Company shall provide you with a copy of the Company's
annual financial statements for any fiscal year of the Company (after such
financial statements have been prepared) if, as of the end of such fiscal year,
any portion of this Option or any Shares issued upon exercise of this Option are
outstanding.
(m) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
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IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the date first above set forth.
CVC HOLDINGS, INC.
By: /s/ Christine B. Whitman
-------------------------
Name:
Title:
ACCEPTED AND AGREED TO:
/s/ Thomas Omstead
- -----------------------
Thomas Omstead
4201 Bowstring Cove
- -----------------------
AUSTIN, TX 78735
- -----------------------
[Address]
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OPTION AGREEMENT - TABLE A
CVC HOLDINGS, INC.
525 LEE ROAD
ROCHESTER, NEW YORK 14606
Optionee Name: Thomas Omstead
Date of Grant: September 4, 1997
Aggregate Number of Shares subject to option ("Share"): 16,000
Exercise price per share: $6.00
Option incentive Non-Qualified X
Vesting Schedule:
January 15, 1998 3,000
January 15, 1999 3,000
January 15, 2000 3,000
January 15, 2001 7,000
Note: Minimum number of Shares for each exercise: 100 shares
ACCEPTED AND AGREED TO:
/s/ Thomas R. Omstead /s/ Christine B. Whitman
- ------------------------- ------------------------
Thomas R. Omstead Christine B. Whitman
Chairman, President, &
Chief Executive Officer
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Exhibit 4.7
The options granted pursuant to this Agreement are not transferrable except
to the estate of the holder upon his death in accordance with the terms of
this Agreement. The shares of Common Stock issuable upon the exercise of any
such options may not be transferred, nor will any assignee or endorsee of
such shares of Common Stock be recognized as an owner thereof by the issuer
for any purpose, unless a registration statement under the Securities Act of
1933, as amended, with respect to such shares shall then be in effect or
unless the availability of an exemption from registration with respect to
any proposed transfer or disposition of such shares shall be established to
the satisfaction of the issuer. Without limiting the foregoing, (i) no
shares of Common Stock issuable upon the exercise of any such options may be
sold or transferred except pursuant to an effective registration statement
or similar qualification under applicable State securities laws, or unless
it is established to the satisfaction of the issuer that such sale or
transfer is in a transaction which is exempt under, or otherwise in
compliance with, such laws, and (ii) no shares of Common Stock issuable upon
the exercise of any such options may be sold, transferred, assigned or
otherwise disposed of, nor will any assignee or endorsee of such shares of
Common Stock be recognized as an owner thereof by the issuer for any
purpose, except in accordance with the terms of this Agreement. The shares
of Common Stock issuable upon the exercise of the options granted hereunder
are subject to certain restrictions on transfer and rights of repurchase and
first refusal held by the issuer or its assignee(s) as set forth in this
Agreement. Such transfer restrictions and rights of repurchase and first
refusal are binding on transferees of such shares.
CVC HOLDINGS, INC.
c/o CVC Products, Inc.
525 Lee Road
Rochester, New York 14603
To: Emilio O. DiCataldo
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of August 28, 1995 (the "Date of Grant"), as a matter of
separate inducement and not in lieu of any salary or other compensation for your
services, the option (this "Option") to purchase, in accordance with and subject
to the terms and conditions set forth herein, an aggregate of 2000 shares
(pre-split) (the "Shares") of Common Stock, $.0l par value per share ("Common
Stock"), of the Company, at the exercise price of $127.40 per Share, subject to
adjustment as hereinafter provided (the "Option Price"), such Option Price
being, in the judgment of the Company, (a) not less than eighty five percent
(85%) of the fair market value of each such Share on the Date of Grant, and (b)
in the event that this Option is intended to be an incentive stock option, not
less than one hundred percent (100%) of the fair market value of each such Share
on the Date of Grant, and (c) in the event that you are the owner, at the time
of grant, of stock of the Company (or any Subsidiary) representing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company (or each Subsidiary), not less than one hundred and ten percent (110%)
of the fair market value of each such Share on the Date of Grant. Subject to the
provisions and limitations set forth herein, this Option shall be earned and
shall vest, and may be exercised by you, on a
<PAGE>
cumulative basis, in the amounts and for the periods set forth in TABLE A (which
vesting shall occur at a minimum rate of at least 20% per year over five (5)
years from the Date of Grant); provided, however, that if your employment
terminates for any reason, the currently exercisable portion of this Option will
be exercisable through the end of the applicable period set forth in clauses (a)
and (b) of Section 2 below and the unvested portion of this Option will
automatically and without notice terminate and become null and void. This Option
is intended to be an [ ] incentive [ x ] nonqualified stock option. If
designated as an incentive stock option in the preceding sentence, this Option
is intended to qualify as an "incentive stock option" under Section 422(b) of
the Code. Nevertheless, to the extent that this Option exceeds the $100,000 per
year limitation rule of Code Section 422(d), this Option shall be treated as an
option which is not an incentive stock option.
2. TERMINATION OF OPTION. Notwithstanding the foregoing, the
unexercised portion of this Option will automatically and without notice
terminate and become null and void on the tenth anniversary of the Date of Grant
(the "Outside Date"), subject to earlier termination as hereinafter provided
(the date on which the earliest of such events shall occur being herein referred
to as the "Expiration Date"). If, however, your employment with the Company or
any parent or subsidiary thereof terminates for any reason before the Outside
Date, this Option will terminate on the applicable date as described below;
provided, however, that none of the events described below shall extend the
period of exercisability of this Option beyond the Outside Date:
(a) the expiration of thirty (30) days after the termination of
your employment in the case of a voluntary termination or immediately upon
termination in the case of a termination for "cause" (as hereafter defined); or
(b) the expiration of one (1) year from the date of termination
of your employment by reason of your death, retirement (in accordance with the
applicable company policy respecting retirement), dismissal other than for
"cause", or your "disability" (as hereafter defined), except that your Option
will be exercisable during such one year period only to the extent that it would
have been exercisable immediately prior to the termination of your employment.
In the event that an incentive stock option is exercised more than three months
following termination of your employment, it shall be treated as a nonqualified
stock option, unless such termination of employment was due to your death or
disability. For purposes hereof, (i) the term "cause" is defined as (A) the
commission by you of a felony, your engaging in theft, embezzlement, fraud,
obtaining funds or property under false pretenses, or similar acts of misconduct
with respect to the property of the Company and/or its subsidiaries or its
employees, stockholders, affiliates, customers or suppliers, (B) your material
breach of Company or subsidiary written policies or terms and conditions of
employment, or (C) your material failure to successfully fulfill your duties or
obligations of employment; and (ii) "disability" shall be determined in
accordance with Internal Revenue Code Section 22(e)(3).
3. OPTION EXERCISE. The vested and currently exercisable portion of
this Option may be exercised by you from time to time, in part or in full (but
subject to the provisions of
2
<PAGE>
Section 2, subsections 3(a) and 3(b) and Section 4 of this Agreement), at any
time on or after the Date of Grant.
(a) This Option can be exercised only with respect to full Shares
and only with respect to a minimum of 100 Shares at the time of any exercise.
(b) Any exercise of this Option must be in writing addressed to
the Board of Directors of the Company at the principal place of business of the
Company and delivered at least ten (10) business days prior to the proposed date
of exercise, which writing shall indicate the number of Shares as to which this
Option is being exercised and shall be accompanied by a certified or bank
cashier's check payable to the order of the Company in the full amount of the
aggregate Option Price of the Shares covered by such exercise.
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if such exercise would
subject the Company or any of its subsidiaries to any substantial risk under
governmental programs restricting ownership or control or similar requirements
or would subject the Company or any of its subsidiaries to other regulatory
problems, in each case, as determined by the Compensation Committee of the
Company's Board of Directors (the "Committee"); provided, however, that any
period of delayed exercise will not exceed 90 days without the consent of the
Committee.
(c) This Option may not be exercised unless and until you or,
upon your death, the person to whom this Option is transferred in accordance
with Section 9 hereof, shall have executed and delivered such subscription
documents as the Company shall from time to time require, including, without
limitation, a subscription agreement and a prospective purchaser's
questionnaire. You acknowledge your receipt of a copy of the Amended and
Restated Stockholders' Agreement dated as of May 22, 1995 (the "Stockholders
Agreement"), by and among CVC Holdings, Inc. and the stockholders named in such
Stockholders Agreement, as may have been amended through the date hereof.
Nothing in this Agreement shall be deemed to require the Company to deliver to
you copies of, or to seek your approval for, any amendments made to such
Stockholders Agreement. You further agree that you shall not be considered a
"Stockholder" (as defined in the Stockholders Agreement) with respect to any of
the Shares.
5. SHARE REPURCHASE RIGHT. At any time prior to later of the
expiration of (a) ninety (90) days from termination of your employment with the
Company for any reason, or (b) ninety (90) days after your latest exercise of
this Option, the Company shall have the right, but shall not be obligated, to
repurchase any Shares acquired pursuant to the terms of this Option (the
"Repurchase Right") by giving you or the holder of such Shares written notice of
the Company's intention to exercise such Repurchase Right prior to the later
expiration (the "Notice"). The per-share purchase price for the Shares shall be
determined as follows:
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<PAGE>
(a) in the event your employment with the Company is terminated
for "cause" as defined above or if the Committee shall determine that at the
time of such termination your employment could then have been terminated for
cause, the per-share purchase price for the Shares shall be equal to the lesser
of (i) your Option Price; or (ii) the applicable Fair Market Price, as
determined below; and
(b) in the event your employment with the Company terminates for
other than any of the reasons specified in Section 5(a) above, the per-share
purchase price for the Shares shall be equal to the applicable "Fair Market
Price." The "Fair Market Price" per Share shall be (A) the average of the
Annualized Net After-Tax Income per Share for each of the four (4) most recently
completed fiscal quarters of the Company prior to the date of the Notice
multiplied by (B) seven (7). For purposes hereof, the "Annualized Net After-Tax
Income" of the Company for any fiscal period shall be the consolidated income
after taxes of the Company for such period on an annualized basis, determined in
accordance with generally accepted accounting principles, consistently applied.
The calculations required by this Section 5(b) shall be made on a fully-diluted,
as-converted basis by the independent certified public accountants for the
Company, whose determination shall be final and binding on all parties hereto.
The Repurchase Right shall terminate when the Company's securities become
publicly traded.
(c) The closing for all purchases and sales of Shares provided
for in this Section 5 shall be held at the office of the Company at 10:00
o'clock a.m. on the 90th day after the giving of the Notice or such earlier date
as the Company shall specify. If the aforesaid closing date falls on a Saturday,
Sunday or legal holiday, then the closing shall be held on the next succeeding
business day. Except as hereinafter provided, the purchase price for the
purchase and sale of Shares determined pursuant to the provisions of Section 5
hereof shall be paid in eight equal quarterly installments, the first such
payment to be made on the date of the closing under Section 5 hereof and the
remaining seven installments to be made on the last day of each of the seven
immediately succeeding 90-day periods. Such installment obligations shall bear
interest on the outstanding balance at a rate equal to the prime rate announced
from time to time by the Company's principal lending bank (or, in the absence of
any such bank, The Chase Manhattan Bank), payable together with each principal
installment. Contemporaneously with the receipt of the first installment as
aforesaid, you or the seller(s) shall duly endorse to the Company and deliver to
the Company for cancellation the certificate or certificates representing the
Shares sold hereunder, together with all necessary documentary transfer stamps,
if any. The Company, at its option, may prepay any or all of such obligations
without penalty or premium.
6. COMPANY'S RIGHT OF FIRST REFUSAL. Without limitation of the
Company's other rights, including, without limitation, under Section 5 hereof,
before any Shares held by you or any transferee (either being sometimes referred
to herein as the "Holder") may be sold or otherwise transferred (including
transfer by gift or operation of law), the Company or its assignee(s) shall have
a right of first refusal to purchase the Shares on the terms and conditions set
forth in this Section (the "Right of First Refusal").
4
<PAGE>
(a) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration per Share for which the Holder
proposes to transfer the Shares (the "Offered Price"), and the Holder shall
offer the Shares at the Offered Price to the Company or its assignee(s).
(b) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within sixty
(60) days after receipt of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all or any portion of
the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.
(c) PURCHASE PRICE. The purchase price ("Purchase Price") for the
Shares purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.
(d) PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty (30) days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(e) HOLDER'S RIGHT TO TRANSFER. If any of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section, then the Holder
may sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price, provided that such sale or other transfer is consummated within
sixty (60) days after the expiration of the right of refusal period and provided
further than any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall be
given to the Company, and the Company and/or its assignees shall again be
offered the Right of First Refusal before any Shares held by the Holder may be
sold or otherwise transferred.
(f) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. The restrictions of
this Section 6 shall not apply to any transfer permitted pursuant to Section
9(a)(ii) of this Agreement.
(g) TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal shall terminate as to any Shares ninety (90) days after the first sale
of Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended.
5
<PAGE>
7. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
8. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC.
(a) Notwithstanding any other provisions contained in this
Agreement, in the event of the merger or consolidation of the Company, or
reorganization, reclassification or recapitalization of, stock dividend on,
stock split, reverse stock split, split-up, split-off, spin-off or combination
of, shares of Common Stock, appropriate adjustments shall be made by the
Committee as to the number of Shares and/or the exercise price per Share subject
to this Option, as shall be equitable to prevent reduction or enlargement of
rights under this Option, and the determination of the Committee as to such
matters shall be conclusive and binding. References in this Agreement to Shares
shall include any such securities or other property (including cash) into which
Shares of Common Stock may be changed pursuant to or in accordance with the
preceding sentence through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off, or
combination of shares.
(b) If (i) the Board of Directors of the Company approves a
merger or consolidation effecting a change in control of the Company (defined as
the acquisition of securities of the Company possessing a majority or more of
the total combined ordinary voting power of the Company's securities by persons
who were not stockholders of the Company immediately prior to such transaction
or affiliates of such stockholders), or a sale of a majority of the outstanding
voting securities of the Company effecting a change in control of the Company (a
"Sale of the Company"), then the Committee shall have the right to terminate
this Option (in which event such Option shall not be subject to the above
described adjustments in subsection (a)), by causing written notice of such
termination to be given to you at least fifteen (15) days prior to the earlier
of (A) the date on which such Sale of the Company is expected to become
effective, or (B) if different from the date specified in subclause (A) above,
the date as of which a record will be taken to determine the holders of shares
of Common Stock who shall be entitled to exchange such shares for securities or
other property (including cash) deliverable upon such Sale of the Company,
provided, however, that any such Options as to which notice of termination has
been sent by the Company as aforesaid in respect of any of the events described
above, which are not otherwise exercisable during the aforesaid fifteen (15) day
period solely because they are not then vested and which have not otherwise
lapsed or expired, shall have the vesting period thereof accelerated to permit
the exercise thereof subject to the consummation of such transactions during the
aforesaid fifteen (15) day period if all other conditions to exercise (other
than vesting) are met. Such notice shall be deemed duly given when given as
provided below, and failure to give such notice, or a defect therein, shall not
affect the termination of this Option.
6
<PAGE>
(c) If the Committee shall determine to cause the termination of
this Option pursuant to subsection (b) above upon the occurrence of an event
described in said subsection (b) and the restrictions set forth in subsections
4(a) and/or 4(b) shall apply to the Options to be terminated, then, upon the
occurrence of such event and the actual consummation of the Sale of the Company,
this Option shall terminate and you shall receive, with respect to each Share
subject to this Option (including those Shares as to which vesting has been
accelerated pursuant to subsection (b) above), an amount per Share equal to the
excess of the Fair Market Value of each such Share immediately prior to the
occurrence of such transaction over the exercise Option Price per Share; such
amount to be payable in cash, in one or more of the kinds of property payable in
such transaction, or in a combination thereof, as the Committee, in its sole
discretion, shall determine.
9. RESTRICTIONS ON TRANSFERS. (a) This Option and any Shares issued
upon exercise thereof are not transferable by you, and this Option is
exercisable only by you, and this Option and any Shares issued upon exercise
thereof, may not be sold, assigned, transferred, pledged or hypothecated in any
way (whether by operation of law or otherwise) except that, (i) Shares may be
transferred in accordance with Section 6 of this Agreement, and (ii) upon your
death this Option or such Shares may be transferred subject to all of the terms
and conditions contained in this Agreement, (A) to your then-current spouse,
parents or lineal descendants, or to trusts or custodianships established for
any such person, (B) by operation of the laws of descent and distribution, (C)
by disposition pursuant to the terms of your last will and testament, to such
spouse, parent or lineal descendant or (D) otherwise to your estate. Neither
this Option nor any Shares shall be subject to execution, attachment or similar
proceeding. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of this Option or such Shares or any interest therein, and the levy
of any attachment or similar proceeding upon this Option or such Shares or any
interest therein, shall be null and void and without effect except as provided
in the preceding sentence.
(b) The Company may postpone the time of delivery of certificates for
the shares issuable upon the exercise of this Option for such additional time as
the Company shall deem necessary or desirable to enable it to comply with the
listing requirements of any securities exchange or the National Association of
Securities Dealers, Inc. upon which shares of the Company may then or are then
contemplated to be listed or quoted, or the requirements of the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any
rules or regulations of the Securities and Exchange Commission promulgated
thereunder or the requirements of applicable state laws relating to the
authorization, issuance or sale of securities.
(c) (i) You hereby represent and warrant to the Company that (A) this
Option and all Shares hereafter purchased or otherwise acquired by you have been
and are being acquired by you for your own account for investment, without any
intention of selling or further distributing the same, (B) you do not presently
have any reason to anticipate any change in circumstances or any other
particular occasion or event which would cause you to sell the Option or any of
such Shares, and (C) you are fully aware that in agreeing to grant the Option
and/or sell or issue such Shares to you, and in entering into this Agreement,
the Company has relied and is relying upon the truth and accuracy of these
representations and warranties.
7
<PAGE>
(ii) Each instrument, agreement or certificate the
Company has issued or will issue to represent this Option shall prominently bear
a legend making reference to this Agreement and securities laws applicable to
the Shares acquired upon exercise hereof.
10. NOT A CONTRACT OF EMPLOYMENT. NOTHING IN THIS OPTION AGREEMENT
SHALL CONFER ANY RIGHT TO CONTINUE IN THE EMPLOY OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR AFFECT THE RIGHT WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
HAVE TO TERMINATE YOUR EMPLOYMENT.
11. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
(b) Each notice relating to this Option shall be in writing and
delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement with a copy to
Golenbock, Eiseman, Assor & Bell, 437 Madison Avenue, New York, New York 10022
Attention: A.C. Peskoe, Esq. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect given to the
other party in accordance with this subsection (b). Each such notice shall be
deemed given upon the receipt thereof when delivered in person and on the second
business day after the mailing when sent by mail as aforesaid.
(c) You understand that, upon exercise of this Option, you may
recognize income for tax purposes in an amount equal to the excess of the then
fair market value of the Shares purchased over the Option Price for such Shares.
Your employer may withhold tax from your current compensation with respect to
such income or any other income which it deems you to have received in
connection therewith; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option. You understand that you may suffer adverse tax consequences as a result
of your purchase or disposition of the Shares. You represent that you have
consulted with any tax consultants you deem advisable in connection with the
purchase or disposition of the Shares and that you are not relying on the
Company for any tax advice.
(d) If this Option shall be mutilated, lost, stolen or destroyed,
the Company shall issue in exchange and substitution for and upon cancellation
of the mutilated Option, or in lieu of and in substitution for the Option lost,
stolen or destroyed, a new Option of like tenor and denomination, but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Option and such indemnity and, if requested by the Company,
such bond, as shall in each case be satisfactory to the Company. You must also
comply with such other reasonable requirements and pay such other reasonable
charges as the Company may prescribe in connection with such issuance.
8
<PAGE>
(e) This Option shall be governed and construed in accordance
with the internal laws of the State of New York applicable to contracts
executed, delivered and to be fully performed in the State of New York, without
giving effect to contrary provisions regarding conflict of laws.
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators and legal representatives,
and shall inure to the benefit of and be binding upon the Company and its
successors and assigns. You may not assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement, or any of your rights
hereunder except if and to the extent expressly permitted by Section 9 of this
Agreement, and any such attempted prohibited delegation or disposition shall be
null and void and without effect.
(g) This Agreement constitutes the complete understanding between
the parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto.
(h) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
(i) The section headings contained herein are for the purposes of
convenience only, are not intended to define or limit the contents of said
sections and are not part of this Agreement.
(j) You agree that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.
(k) The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement or (ii) to treat as the owner of such
Shares or to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such Shares shall have been so transferred.
(l) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
9
<PAGE>
IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the date first above set forth.
CVC HOLDINGS, INC.
By: /s/ Christine B. Whitman
-------------------------
Name:
Title:
ACCEPTED AND AGREED TO:
/s/ Emilio Dicataldo
- --------------------
- ---------------------
- ---------------------
[Address]
10
<PAGE>
TABLE A
<TABLE>
<CAPTION>
Number of Shares Vesting Pursuant and
Subject to Options Subject to This Option On:
- ------------------ --------------------------
<S> <C>
667 August 28, 1996
667 August 28, 1997
666 August 28, 1998
</TABLE>
/s/ Emilio Dicataldo
-------------------------
/s/ Christine B. Whitman
-------------------------
11
<PAGE>
Exhibit 4.8
THE OPTIONS GRANTED PURSUANT TO THIS AGREEMENT ARE NOT TRANSFERRABLE EXCEPT
TO THE ESTATE OF THE HOLDER UPON HIS DEATH IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT. THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF ANY
SUCH OPTIONS MAY NOT BE TRANSFERRED, NOR WILL ANY ASSIGNEE OR ENDORSEE OF
SUCH SHARES OF COMMON STOCK BE RECOGNIZED AS AN OWNER THEREOF BY THE ISSUER
FOR ANY PURPOSE, UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, WITH RESPECT TO SUCH SHARES SHALL THEN BE IN EFFECT OR
UNLESS THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION WITH RESPECT TO
ANY PROPOSED TRANSFER OR DISPOSITION OF SUCH SHARES SHALL BE ESTABLISHED TO
THE SATISFACTION OF THE ISSUER. WITHOUT LIMITING THE FOREGOING, (I) NO
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF ANY SUCH OPTIONS MAY BE
SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
OR SIMILAR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR UNLESS
IT IS ESTABLISHED TO THE SATISFACTION OF THE ISSUER THAT SUCH SALE OR
TRANSFER IS IN A TRANSACTION WHICH IS EXEMPT UNDER, OR OTHERWISE IN
COMPLIANCE WITH, SUCH LAWS, AND (II) NO SHARES OF COMMON STOCK ISSUABLE UPON
THE EXERCISE OF ANY SUCH OPTIONS MAY BE SOLD, TRANSFERRED, ASSIGNED OR
OTHERWISE DISPOSED OF, NOR WILL ANY ASSIGNEE OR ENDORSEE OF SUCH SHARES OF
COMMON STOCK BE RECOGNIZED AS AN OWNER THEREOF BY THE ISSUER FOR ANY
PURPOSE, EXCEPT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT. THE SHARES
OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE OPTIONS GRANTED HEREUNDER
ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHTS OF REPURCHASE AND
FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THIS
AGREEMENT. SUCH TRANSFER RESTRICTIONS AND RIGHTS OF REPURCHASE AND FIRST
REFUSAL ARE BINDING ON TRANSFEREES OF SUCH SHARES.
CVC HOLDINGS, INC.
c/o CVC Products, Inc.
525 Lee Road
Rochester, New York 14603
To: Richard Chicotka
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of August 11, 1995 (the "Date of Grant"), as a matter of
separate inducement and not in lieu of any salary or other compensation for your
services, the option (this "Option") to purchase, in accordance with and subject
to the terms and conditions set forth herein, an aggregate of 2000 shares
(pre-split) (the "Shares") of Common Stock, $.01 par value per share ("Common
Stock"), of the Company, at the exercise price of $127.40 per Share, subject to
adjustment as hereinafter provided (the "Option Price"), such Option Price
being, in the judgment of the Company, (a) not less than eighty five percent
(85%) of the fair market value of each such Share on the Date of Grant, and (b)
in the event that this Option is intended to be an incentive stock option, not
less than one hundred percent (100%) of the fair market value of each such Share
on the Date of Grant, and (c) in the event that you are the owner, at the time
of grant, of stock of the Company (or any Subsidiary) representing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company (or each of the total combined voting power of all classes of stock of
the Company
<PAGE>
(or each Subsidiary), not less than one hundred and ten percent (110%) of the
fair market value of each such Share on the Date of Grant. Subject to the
provisions and limitations set forth herein, this Option shall be earned and
shall vest, and may be exercised by you, on a cumulative basis, in the amounts
and for the periods set forth in TABLE A (which vesting shall occur at a minimum
rate of at least 20% per year over five (5) years from the Date of Grant);
provided, however, that if your employment terminates for any reason, the
currently exercisable portion of this Option will be exercisable through the end
of the applicable period set forth in clauses (a) and (b) of Section 2 below and
the unvested portion of this Option will automatically and without notice
terminate and become null and void. This Option is intended to be an [ ]
incentive [ x ] nonqualified stock option. If designated as an incentive stock
option in the preceding sentence, this Option is intended to qualify as an
"incentive stock option" under Section 422(b) of the Code. Nevertheless, to the
extent that this Option exceeds the $100,000 per year limitation rule of Code
Section 422(d), this Option shall be treated as an option which is not an
incentive stock option.
2. TERMINATION OF OPTION. Notwithstanding the foregoing, the
unexercised portion of this Option will automatically and without notice
terminate and become null and void on the tenth anniversary of the Date of Grant
(the "Outside Date"), subject to earlier termination as hereinafter provided
(the date on which the earliest of such events shall occur being herein referred
to as the "Expiration Date"). If, however, your employment with the Company or
any parent or subsidiary thereof terminates for any reason before the Outside
Date, this Option will terminate on the applicable date as described below;
provided, however, that none of the events described below shall extend the
period of exercisability of this Option beyond the Outside Date:
(a) the expiration of thirty (30) days after the termination of
your employment in the case of a voluntary termination or immediately upon
termination in the case of a termination for "cause" (as hereafter defined); or
(b) the expiration of one (1) year from the date of termination
of your employment by reason of your death, retirement (in accordance with the
applicable company policy respecting retirement), dismissal other than for
"cause", or your "disability" (as hereafter defined), except that your Option
will be exercisable during such one year period only to the extent that it would
have been exercisable immediately prior to the termination of your employment.
In the event that an incentive stock option is exercised more than three months
following termination of your employment, it shall be treated as a nonqualified
stock option, unless such termination of employment was due to your death or
disability. For purposes hereof, (i) the term "cause" is defined as (A) the
commission by you of a felony, your engaging in theft, embezzlement, fraud,
obtaining funds or property under false pretenses, or similar acts of misconduct
with respect to the property of the Company and/or its subsidiaries or its
employees, stockholders, affiliates, customers or suppliers, (B) your material
breach of Company or subsidiary written policies or terms and conditions of
employment, or (C) your material failure to successfully fulfill your duties or
obligations of employment; and (ii) "disability" shall be determined in
accordance with Internal Revenue Code Section 22(e)(3).
2
<PAGE>
3. OPTION EXERCISE. The vested and currently exercisable portion of
this Option may be exercised by you from time to time, in part or in full (but
subject to the provisions of Section 2, subsections 3(a) and 3(b) and Section 4
of this Agreement), at any time on or after the Date of Grant.
(a) This Option can be exercised only with respect to full Shares
and only with respect to a minimum of 100 Shares at the time of any exercise.
(b) Any exercise of this Option must be in writing addressed to
the Board of Directors of the Company at the principal place of business of the
Company and delivered at least ten (10) business days prior to the proposed date
of exercise, which writing shall indicate the number of Shares as to which this
Option is being exercised and shall be accompanied by a certified or bank
cashier's check payable to the order of the Company in the full amount of the
aggregate Option Price of the Shares covered by such exercise.
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if such exercise would
subject the Company or any of its subsidiaries to any substantial risk under
governmental programs restricting ownership or control or similar requirements
or would subject the Company or any of its subsidiaries to other regulatory
problems, in each case, as determined by the Compensation Committee of the
Company's Board of Directors (the "Committee"); provided, however, that any
period of delayed exercise will not exceed 90 days without the consent of the
Committee.
(c) This Option may not be exercised unless and until you or,
upon your death, the person to whom this Option is transferred in accordance
with Section 9 hereof, shall have executed and delivered such subscription
documents as the Company shall from time to time require, including, without
limitation, a subscription agreement and a prospective purchaser's
questionnaire. You acknowledge your receipt of a copy of the Amended and
Restated Stockholders' Agreement dated as of May 22, 1995 (the "Stockholders
Agreement"), by and among CVC Holdings, Inc. and the stockholders named in such
Stockholders Agreement, as may have been amended through the date hereof.
Nothing in this Agreement shall be deemed to require the Company to deliver to
you copies of, or to seek your approval for, any amendments made to such
Stockholders Agreement. You further agree that you shall not be considered a
"Stockholder" (as defined in the Stockholders Agreement) with respect to any of
the Shares.
5. SHARE REPURCHASE RIGHT. At any time prior to later of the
expiration of (a) ninety (90) days from termination of your employment with the
Company for any reason, or (b) ninety (90) days after your latest exercise of
this Option, the Company shall have the right, but shall not be obligated, to
repurchase any Shares acquired pursuant to the terms of this Option (the
"Repurchase Right") by giving you or the holder of such Shares written notice of
the Company's
3
<PAGE>
intention to exercise such Repurchase Right prior to the later expiration (the
"Notice"). The per-share purchase price for the Shares shall be determined as
follows:
(a) in the event your employment with the Company is terminated
for "cause" as defined above or if the Committee shall determine that at the
time of such termination your employment could then have been terminated for
cause, the per-share purchase price for the Shares shall be equal to the lesser
of (i) your Option Price; or (ii) the applicable Fair Market Price, as
determined below; and
(b) in the event your employment with the Company terminates for
other than any of the reasons specified in Section 5(a) above, the per-share
purchase price for the Shares shall be equal to the applicable "Fair Market
Price." The "Fair Market Price" per Share shall be (A) the average of the
Annualized Net After-Tax Income per Share for each of the four (4) most recently
completed fiscal quarters of the Company prior to the date of the Notice
multiplied by (B) seven (7). For purposes hereof, the "Annualized Net After-Tax
Income" of the Company for any fiscal period shall be the consolidated income
after taxes of the Company for such period on an annualized basis, determined in
accordance with generally accepted accounting principles, consistently applied.
The calculations required by this Section 5(b) shall be made on a fully-diluted,
as-converted basis by the independent certified public accountants for the
Company, whose determination shall be final and binding on all parties hereto.
The Repurchase Right shall terminate when the Company's securities become
publicly traded.
(c) The closing for all purchases and sales of Shares provided
for in this Section 5 shall be held at the office of the Company at 10:00
o'clock a.m. on the 90th day after the giving of the Notice or such earlier date
as the Company shall specify. If the aforesaid closing date falls on a Saturday,
Sunday or legal holiday, then the closing shall be held on the next succeeding
business day. Except as hereinafter provided, the purchase price for the
purchase and sale of Shares determined pursuant to the provisions of Section 5
hereof shall be paid in eight equal quarterly installments, the first such
payment to be made on the date of the closing under Section 5 hereof and the
remaining seven installments to be made on the last day of each of the seven
immediately succeeding 90-day periods. Such installment obligations shall bear
interest on the outstanding balance at a rate equal to the prime rate announced
from time to time by the Company's principal lending bank (or, in the absence of
any such bank, The Chase Manhattan Bank), payable together with each principal
installment. Contemporaneously with the receipt of the first installment as
aforesaid, you or the seller(s) shall duly endorse to the Company and deliver to
the Company for cancellation the certificate or certificates representing the
Shares sold hereunder, together with all necessary documentary transfer stamps,
if any. The Company, at its option, may prepay any or all of such obligations
without penalty or premium.
6. COMPANY'S RIGHT OF FIRST REFUSAL. Without limitation of the
Company's other rights, including, without limitation, under Section 5 hereof,
before any Shares held by you or any transferee (either being sometimes referred
to herein as the "Holder") may be sold or otherwise transferred (including
transfer by gift or operation of law), the Company or its assignee(s) shall have
4
<PAGE>
a right of first refusal to purchase the Shares on the terms and conditions set
forth in this Section (the "Right of First Refusal").
(a) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "Notice") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration per Share for which the Holder
proposes to transfer the Shares (the "Offered Price"), and the Holder shall
offer the Shares at the Offered Price to the Company or its assignee(s).
(b) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within sixty
(60) days after receipt of the Notice, the Company and/or its assignee(s) may,
by giving written notice to the Holder, elect to purchase all or any portion of
the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection (c)
below.
(c) PURCHASE PRICE. The purchase price ("Purchase Price") for the
Shares purchased by the Company or its assignee(s) under this Section shall be
the Offered Price. If the Offered Price includes consideration other than cash,
the cash equivalent value of the non-cash consideration shall be determined by
the Board of Directors of the Company in good faith.
(d) PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness of the Holder to the Company
(or, in the case of repurchase by an assignee, to the assignee), or by any
combination thereof within thirty (30) days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
(e) HOLDER'S RIGHT TO TRANSFER. If any of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section, then the Holder
may sell or otherwise transfer such Shares to that Proposed Transferee at the
Offered Price, provided that such sale or other transfer is consummated within
sixty (60) days after the expiration of the right of refusal period and provided
further that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall be
given to the Company, and the Company and/or its assignees shall again be
offered the Right of First Refusal before any Shares held by the Holder may be
sold or otherwise transferred.
(f) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. The restrictions of
this Section 6 shall not apply to any transfer permitted pursuant to Section
9(a)(ii) of this Agreement.
5
<PAGE>
(g) TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal shall terminate as to any Shares ninety (90) days after the first sale
of Common Stock of the Company to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended.
7. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
8. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC.
(a) Notwithstanding any other provisions contained in this
Agreement, in the event of the merger or consolidation of the Company, or
reorganization, reclassification or recapitalization of, stock dividend on,
stock split, reverse stock split, split-up, split-off, spin-off or combination
of, shares of Common Stock, appropriate adjustments shall be made by the
Committee as to the number of Shares and/or the exercise price per Share subject
to this Option, as shall be equitable to prevent reduction or enlargement of
rights under this Option, and the determination of the Committee as to such
matters shall be conclusive and binding. References in this Agreement to Shares
shall include any such securities or other property (including cash) into which
Shares of Common Stock may be changed pursuant to or in accordance with the
preceding sentence through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off, or
combination of shares.
(b) If (i) the Board of Directors of the Company approves a
merger or consolidation effecting a change in control of the Company (defined as
the acquisition of securities of the Company possessing a majority or more of
the total combined ordinary voting power of the Company's securities by persons
who were not stockholders of the Company immediately prior to such transaction
or affiliates of such stockholders), or a sale of a majority of the outstanding
voting securities of the Company effecting a change in control of the Company (a
"Sale of the Company"), then the Committee shall have the right to terminate
this Option (in which event such Option shall not be subject to the above
described adjustments in subsection (a)) by causing written notice of such
termination to be given to you at least fifteen (15) days prior to the earlier
of (A) the date on which such Sale of the Company is expected to become
effective, or (B) if different from the date specified in subclause (A) above,
the date as of which a record will be taken to determine the holders of shares
of Common Stock who shall be entitled to exchange such shares for securities or
other property (including cash) deliverable upon such Sale of the Company,
provided, however, that any such Options as to which notice of termination has
been sent by the Company as aforesaid in respect of any of the events described
above, which are not otherwise exercisable during the aforesaid fifteen (15) day
period solely because they are not then vested and which have not otherwise
lapsed or expired, shall have the vesting period thereof accelerated to permit
the exercise thereof subject to the consummation of such transactions during the
aforesaid fifteen (15) day period if all other
6
<PAGE>
conditions to exercise (other than vesting) are met. Such notice shall be deemed
duly given when given as provided below, and failure to give such notice, or a
defect therein, shall not affect the termination of this Option.
(c) If the Committee shall determine to cause the termination of
this Option pursuant to subsection (b) above upon the occurrence of an event
described in said subsection (b) and the restrictions set forth in subsections
4(a) and/or 4(b) shall apply to the Options to be terminated, then, upon the
occurrence of such event and the actual consummation of the Sale of the Company,
this Option shall terminate and you shall receive, with respect to each Share
subject to this Option (including those Shares as to which vesting has been
accelerated pursuant to subsection (b) above), an amount per Share equal to the
excess of the Fair Market Value of each such Share immediately prior to the
occurrence of such transaction over the exercise Option Price per Share; such
amount to be payable in cash, in one or more of the kinds of property payable in
such transaction, or in a combination thereof, as the Committee, in its sole
discretion, shall determine.
9. RESTRICTIONS ON TRANSFERS. (a) This Option and any Shares issued
upon exercise thereof are not transferable by you, and this Option is
exercisable only by you, and this Option and any Shares issued upon exercise
thereof, may not be sold, assigned, transferred, pledged or hypothecated in any
way (whether by operation of law or otherwise) except that, (i) Shares may be
transferred in accordance with Section 6 of this Agreement, and (ii) upon your
death this Option or such Shares may be transferred subject to all of the terms
and conditions contained in this Agreement, (A) to your then-current spouse,
parents or lineal descendants, or to trusts or custodianships established for
any such person, (B) by operation of the laws of descent and distribution, (C)
by disposition pursuant to the terms of your last will and testament, to such
spouse, parent or lineal descendant or (D) otherwise to your estate. Neither
this Option nor any Shares shall be subject to execution, attachment or similar
proceeding. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of this Option or such Shares or any interest therein, and the levy
of any attachment or similar proceeding upon this Option or such Shares or any
interest therein, shall be null and void and without effect except as provided
in the preceding sentence.
(b) The Company may postpone the time of delivery of certificates
for the shares issuable upon the exercise of this Option for such additional
time as the Company shall deem necessary or desirable to enable it to comply
with the listing requirements of any securities exchange or the National
Association of Securities Dealers, Inc. upon which shares of the Company may
then or are then contemplated to be listed or quoted, or the requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or any rules or regulations of the Securities and Exchange Commission
promulgated thereunder or the requirements of applicable state laws relating to
the authorization, issuance or sale of securities.
(c) (i) You hereby represent and warrant to the Company that (A)
this Option and all Shares hereafter purchased or otherwise acquired by you have
been and are being acquired by you for your own account for investment, without
any intention of selling or further distributing the same, (B) you do not
presently have any reason to anticipate any change in circumstances or any other
particular occasion or event which would cause you to sell the Option
7
<PAGE>
or any of such Shares, and (C) you are fully aware that in agreeing to grant the
Option and/or sell or issue such Shares to you, and in entering into this
Agreement, the Company has relied and is relying upon the truth and accuracy of
these representations and warranties.
(ii) Each instrument, agreement or certificate the
Company has issued or will issue to represent this Option shall prominently bear
a legend making reference to this Agreement and securities laws applicable to
the Shares acquired upon exercise hereof.
10. NOT A CONTRACT OF EMPLOYMENT. NOTHING IN THIS OPTION AGREEMENT
SHALL CONFER ANY RIGHT TO CONTINUE IN THE EMPLOY OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR AFFECT THE RIGHT WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
HAVE TO TERMINATE YOUR EMPLOYMENT.
11. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
(b) Each notice relating to this Option shall be in writing and
delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement with a copy to
Golenbock, Eiseman, Assor & Bell, 437 Madison Avenue, New York, New York 10022
Attention: A.C. Peskoe, Esq. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect given to the
other party in accordance with this subsection (b). Each such notice shall be
deemed given upon the receipt thereof when delivered in person and on the second
business day after the mailing when sent by mail as aforesaid.
(c) You understand that, upon exercise of this Option, you may
recognize income for tax purposes in an amount equal to the excess of the then
fair market value of the Shares purchased over the Option Price for such Shares.
Your employer may withhold tax from your current compensation with respect to
such income or any other income which it deems you to have received in
connection therewith; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option. You understand that you may suffer adverse tax consequences as a result
of your purchase or disposition of the Shares. You represent that you have
consulted with any tax consultants you deem advisable in connection with the
purchase or disposition of the Shares and that you are not relying on the
Company for any tax advice.
(d) If this Option shall be mutilated, lost, stolen or destroyed,
the Company shall issue in exchange and substitution for and upon cancellation
of the mutilated Option, or in lieu of and in substitution for the Option lost,
stolen or destroyed, a new Option of like tenor and denomination, but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Option and such indemnity and, if requested by the Company,
such bond, as
8
<PAGE>
shall in each case be satisfactory to the Company. You must also comply with
such other reasonable requirements and pay such other reasonable charges as the
Company may prescribe in connection with such issuance.
(e) This Option shall be governed and construed in accordance
with the internal laws of the State of New York applicable to contracts
executed, delivered and to be fully performed in the State of New York, without
giving effect to contrary provisions regarding conflict of laws.
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators and legal representatives,
and shall inure to the benefit of and be binding upon the Company and its
successors and assigns. You may not assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement, or any of your rights
hereunder except if and to the extent expressly permitted by Section 9 of this
Agreement, and any such attempted prohibited delegation or disposition shall be
null and void and without effect.
(g) This Agreement constitutes the complete understanding between
the parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto.
(h) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
(i) The section headings contained herein are for the purposes of
convenience only, are not intended to define or limit the contents of said
sections and are not part of this Agreement.
(j) You agree that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate "stop
transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.
(k) The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of
any of the provisions of this Agreement or (ii) to treat as the owner of such
Shares or to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such Shares shall have been so transferred.
(l) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
9
<PAGE>
IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the date first above set forth.
CVC HOLDINGS, INC.
By: /s/ Christine B. Whitman
-------------------------
Name:
Title:
ACCEPTED AND AGREED TO:
/s/ Richard Chicotka
- -------------------------
18 CHELSEA PARK
- -------------------------
PITTSFORD, NY 14534
- -------------------------
[Address]
10
<PAGE>
TABLE A
<TABLE>
<CAPTION>
Number of Shares Vesting Pursuant and
Subject to Options Subject to This Option On:
- ------------------ --------------------------
<S> <C>
667 August 11, 1996
667 August 11, 1997
666 August 11, 1998
</TABLE>
/s/ Richard Chicotka
/s/ Christine B. Whitman
11
<PAGE>
Exhibit 4.9
THE OPTIONS GRANTED PURSUANT TO THIS AGREEMENT ARE NOT TRANSFERRABLE
EXCEPT TO THE ESTATE OF THE HOLDER UPON HIS DEATH IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT. THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE OF ANY SUCH OPTIONS MAY NOT BE TRANSFERRED, NOR WILL ANY ASSIGNEE
OR ENDORSEE OF SUCH SHARES OF COMMON STOCK BE RECOGNIZED AS AN OWNER
THEREOF BY THE ISSUER FOR ANY PURPOSE, UNLESS A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH SHARES
SHALL THEN BE IN EFFECT OR UNLESS THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION WITH RESPECT TO ANY PROPOSED TRANSFER OR DISPOSITION OF SUCH
SHARES SHALL BE ESTABLISHED TO THE SATISFACTION OF THE ISSUER. NO SHARES
OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF ANY SUCH OPTIONS MAY BE SOLD
OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
SIMILAR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR UNLESS IT
IS ESTABLISHED TO THE SATISFACTION OF THE ISSUER THAT SUCH SALE OR
TRANSFER IS IN A TRANSACTION WHICH IS EXEMPT UNDER, OR OTHERWISE IN
COMPLIANCE WITH, SUCH LAWS. NO SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE OF ANY SUCH OPTIONS MAY BE SOLD, TRANSFERRED, ASSIGNED OR
OTHERWISE DISPOSED OF, NOR WILL ANY ASSIGNEE OR ENDORSEE OF SUCH SHARES OF
COMMON STOCK BE RECOGNIZED AS AN OWNER THEREOF BY THE ISSUER FOR ANY
PURPOSE, EXCEPT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF A CERTAIN
STOCKHOLDERS' AGREEMENT DATED AS OF DECEMBER 21, 1990, AS SAME MAY BE
AMENDED FROM TIME TO TIME, BY AND AMONG THE ISSUER AND THE STOCKHOLDERS
NAMED IN SUCH STOCKHOLDERS' AGREEMENT.
CVC HOLDINGS, INC.
c/o CVC Products, Inc.
525 Lee Road
Rochester, N.Y. 14603
To: Lino Velo
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of October 17, 1994 (the "Date of Grant"), as a matter of
separate inducement and not in lieu of any salary or other compensation for your
services, the option (this "Option") to purchase, in accordance with and subject
to the terms and conditions set forth herein, an aggregate of 500 shares (the
"Shares") of Common Stock, $.01 par value per share ("Common Stock"), of the
Company, at the exercise price of $25 per Share, subject to adjustment as
hereinafter provided (the "Option Price"), such Option Price being, in the
judgment of the Company, not less than one hundred percent (100%) of the fair
market value of each such Share on the Date of Grant. Subject to the provisions
and limitations set forth herein, this Option shall vest, and may be exercised
by you, on a cumulative basis, in the amounts and for the periods set forth in
TABLE A, beginning on October 17, 1995; provided, however, that if your
employment terminates for any reason, the currently exercisable portion of this
Option will be exercisable through the end of the applicable period set forth in
clauses (a) through (c) below and the unvested portion of this Option will
automatically and without notice terminate and become null and void.
<PAGE>
2. TERMINATION OF OPTION. Notwithstanding the foregoing, the
unexercised portion of this Option will automatically and without notice
terminate and become null and void on the tenth anniversary of the effective
date hereof, subject to earlier termination as hereinafter provided (the date on
which the earliest of such events shall occur being herein referred to as the
"Expiration Date"). If, however, your employment with the Company or any
subsidiary thereof terminates for any reason before the Expiration Date, this
Option will terminate on the applicable date as described below; provided,
however, that none of the events described below shall extend the period of
exercisability of this Option beyond the Expiration Date:
(a) immediately upon the termination of your employment in the
case of a voluntary termination or a termination for "cause" (as hereafter
defined);
(b) the expiration of three (3) months after your death if
your death occurs during your employment or within the three-month period after
the termination of your employment specified in clause (c) below, except that
your Option will be exercisable during such three-month period only to the
extent that it would have been exercisable on the date of your death; and
(c) the expiration of three (3) months from the date of
termination of your employment by reason of your retirement (in accordance with
the applicable company policy respecting retirement), dismissal other than for
"cause" or your "disability" (as hereafter defined), except that your Option
will be exercisable during such three-month period only to the extent that it
would have been exercisable immediately prior to the termination of your
employment.
For purposes hereof, (i) the term "cause" is defined as (A) the commission by
you of a felony, your engaging in theft, embezzlement, fraud, obtaining funds or
property under false pretenses, or similar acts of misconduct with respect to
the property of the Company and/or its subsidiaries or its employees,
stockholders, affiliates, customers or suppliers, (B) your material breach of
Company or subsidiary written policies or terms and conditions of employment, or
(C) your material failure to successfully fulfill your duties or obligations of
employment; and (ii) you shall be deemed "disabled" if, at the Company's option,
it gives notice to you or your representative that due to a disabling mental or
physical condition, you have been prevented, for a continuous period of 90 days
or for an aggregate of 120 days during any six month period, from substantially
performing those duties which you were required to perform prior to incurring
such disability. The existence of a disabling mental or physical condition shall
be confirmed by a medical doctor selected by the Company.
3. OPTION EXERCISE. The currently exercisable portion of this Option
may be exercised by you from time to time, in part or in full (but subject to
the provisions of subsection 3(b) and of Section 4 below), at any time on or
after the date hereof.
(a) This Option can be exercised only with respect to full
Shares and only with respect to a minimum of 100 Shares at the time of any
exercise.
2
<PAGE>
(b) Any exercise of this Option must be in writing addressed
to the Board of Directors of the Company at the principal place of business of
the Company and delivered at least ten (10) business days prior to the proposed
date of exercise, which writing shall indicate the number of Shares as to which
this Option is being exercised and shall be accompanied by a certified or bank
cashier's check payable to the order of the Company in the full amount of the
aggregate Option Price of the Shares covered by such exercise.
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if and so long as such
exercise would subject the Company or any of its subsidiaries to any substantial
risk under contracts or programs restricting ownership or control or similar
requirements or would subject the Company or any of its subsidiaries to other
regulatory problems, in each case, as determined by the Company's Board of
Directors.
(c) This Option may not be exercised unless and until you or,
upon your death, the person to whom this Option is transferred in accordance
with Section 8 hereof, shall have executed and delivered: (i) a written consent
in the form of EXHIBIT A hereto, to be bound by all of the terms of the
Stockholders' Agreement (the "Stockholders' Agreement") dated as of December 21,
1990, as amended and as the same may be amended from time to time, among the
Company and the holders of shares of capital stock of the Company named therein;
and (ii) such subscription documents as the Company shall require, including,
without limitation, a subscription agreement and a prospective purchaser's
questionnaire. You acknowledge your receipt of a copy of the Stockholders'
Agreement, as amended, through the date hereof. Nothing in this Agreement shall
be deemed to require the Company to deliver to you copies of, or to seek your
approval for, any amendments made to such Stockholders' Agreement. You further
agree that any time period for you to exercise rights under the Stockholders'
Agreement shall be deemed to have commenced for you on the same date as such
time period commenced to run for the other Stockholders having the same rights
thereunder regardless of the date on which you first acquire Shares.
5. SHARE REPURCHASE RIGHT. At any time prior to the expiration of
six (6) months from termination of your employment with the Company for any
reason, the Company shall have the right, but shall not be obligated, to
repurchase any Shares (and/or any securities acquired in connection with or
exchange for the Shares) acquired pursuant to the terms of this Option (the
"Repurchase Right") by giving you or the holder of such Shares written notice of
the Company's intention to exercise such Repurchase Right prior to the
expiration of such six-month period (the "Notice"). The per-share purchase price
for the Shares shall be determined as follows:
(a) in the event your employment with the Company terminates
for any of the reasons specified in Section 2(a) above, the per-share purchase
price for the Shares shall be
3
<PAGE>
equal to the lesser of (i) your Option Price; or (ii) the applicable NATI
Multiple Price, as determined below; and
(b) in the event your employment with the Company terminates
for any of the reasons specified in Section 2(b) or 2(c) above, the per-share
purchase price for the Shares shall be equal to the applicable "NATI Multiple
Price." The "NATI Multiple Price" per Share shall be (A) the average of the
Annualized Net After-Tax Income per Share for each of the eight most recently
completed fiscal quarters of the Company prior to the date of the termination of
such employment multiplied by (B) seven (7). For purposes hereof, the
"Annualized Net After-Tax Income" of the Company for any fiscal period shall be
the consolidated income after taxes of the Company for such period on an
annualized basis, determined in accordance with generally accepted accounting
principles, consistently applied. The calculations required by this Section 5(b)
shall be made on a fully-diluted, as-converted basis by the independent
certified public accountants for the Company, whose determination shall be final
and binding on all parties hereto.
(c) The closing for all purchases and sales of Shares provided
for in this Section 5 shall be held at the office of the Company at 10:00
o'clock a.m. on the 90th day after the giving of the Notice or such earlier date
as the Company shall specify. If the aforesaid closing date falls on a Saturday,
Sunday or legal holiday, then the closing shall be held on the next succeeding
business day.
(d) Except as hereinafter provided, the purchase price for the
purchase and sale of Shares determined pursuant to the provisions of Section 5
hereof shall be paid in eight equal quarterly installments, the first such
payment to be made on the date of the closing under Section 5(c) hereof and the
remaining seven installments, to be made on the last day of each of the seven
immediately succeeding 90-day periods. Such installment obligations shall bear
interest on the outstanding balance at a rate equal to the prime rate announced
from time to time by the Company's principal lending bank (or, in the absence of
any such bank, Citibank, N.A.), payable together with each principal
installment. Contemporaneously with the receipt of the first installment as
aforesaid, you or the seller(s) shall duly endorse to the Company and delivery
to the Company for cancellation the certificate or certificates representing the
Shares sold hereunder, together with all necessary documentary transfer stamps,
if any. The Company, at its option, may pre-pay any or all amounts without
penalty or premium.
6. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
7. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC.
4
<PAGE>
(a) Notwithstanding any other provisions contained in this
Agreement, in the event of the merger or consolidation of the Company, or
reorganization or recapitalization of, stock dividend on, stock split, split-up,
split-off, spin-off or combination of, shares of Common Stock, appropriate
adjustments shall be made by the Board of Directors of the Company as to the
number of Shares and/or the exercise price per Share subject to this Option, as
shall be equitable to prevent reduction or enlargement of rights under this
Option, and the determination of the Board of Directors as to such matters shall
be conclusive and binding. References in this Agreement to Shares shall include
any such securities or other property (including cash) into which Shares of
Common Stock may be changed pursuant to or in accordance with the preceding
sentence through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, or combination of shares.
(b) If (i) the Board of Directors of the Company approves a
consolidation or merger of the Company or any substantial subsidiary of the
Company with another corporation and a change in control in the Company is
effected in connection therewith, or (ii) the Board of Directors approves the
sale of all or substantially all of the property or assets of the Company or of
any substantial subsidiary of the Company, or (iii) more than fifty percent
(50%) of the total combined voting power of all classes of stock of the Company
or any substantial subsidiary of the Company normally entitled to vote for the
election of directors of the Company or such subsidiary is acquired by a person,
firm or corporation or cooperating group of such individuals or entities, other
than the Initial Stockholders or their Groups (as such terms are defined in the
Stockholder's Agreement), or, in the case of such subsidiary other than the
Company, then the Board of Directors shall have the right to terminate this
Option (in which event such Option shall not be subject to the above described
adjustments in subsection (a)) by causing written notice of such termination to
be given to you at least fifteen (15) days prior to the earlier of (A) the date
on which such consolidation, merger or acquisition of assets or stock is
expected to become effective, or (B) if different from the date specified in
subclause (A) above, the date as of which a record will be taken to determine
the holders of shares of Common Stock who shall be entitled to exchange such
shares for securities or other property (including cash) deliverable upon such
consolidation, merger or acquisition of assets or stock, provided, however, that
any such Options as to which notice of termination has been sent by the Company
as aforesaid in respect of any of the events described above, which are not
otherwise exercisable during the aforesaid fifteen (15) day period solely
because they are not then vested and which have not otherwise lapsed or expired,
shall be either assumed by the acquiror or surviving entity upon the
consummation of such event or shall have the vesting period thereof accelerated
to permit the exercise thereof subject to the consummation of such transactions
during the aforesaid fifteen (15) day period if all other conditions to exercise
(other than vesting) are met. Such notice shall be deemed duly given when given
as provided below, and failure to give such notice, or a defect therein, shall
not affect the termination of this Option.
(c) If the Board of Directors shall determine to cause the
termination of this Option pursuant to subsection (b) above upon the occurrence
of an event described in said subsection (b), and shall not provide a period
during which this Option will be exercisable in full prior to such termination
of this Option or in the event the restrictions set forth in subsections 4(a)
and/or 4(b) shall apply to the Options to be terminated, then, upon the
occurrence of such event and
5
<PAGE>
the actual consummation of the applicable consolidation, merger or sale, this
Option shall terminate and you shall receive, with respect to each Share subject
to this Option (including those Shares as to which vesting has been accelerated
pursuant to subsection (b) above), an amount per Share equal to the excess of
the fair market value of each such Share immediately prior to the occurrence of
such transaction over the exercise Option Price per Share; such amount to be
payable in cash, in one or more of the kinds of property payable in such
transaction, or in a combination thereof, as the Board of Directors, in its sole
discretion, shall determine.
8. RESTRICTIONS ON TRANSFERS. (a) This Option is not transferable by
you, and is exercisable only by you, and may not be sold, assigned, transferred,
pledged or hypothecated in any way (whether by operation of law or otherwise)
except that upon your death this Option may be transferred subject to all of the
terms and conditions contained in this Agreement, (A) to your then-current
spouse, parents or lineal descendants, or to trusts or custodianships
established for any such person, (B) by operation of the laws of descent and
distribution, (C) by disposition pursuant to the terms of your last will and
testament, to such spouse, parent or lineal descendant or (D) otherwise to your
estate. This Option shall not be subject to execution, attachment or similar
proceeding. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of this Option or any interest herein, and the levy of any
attachment or similar proceeding upon this Option or any interest herein, shall
be null and void and without effect except as provided in the preceding
sentence.
(b) The Company may postpone the time of delivery of
certificates for the shares issuable upon the exercise of this Option for such
additional time as the Company shall deem necessary or desirable to enable it to
comply with the listing requirements of any securities exchange or the National
Association of Securities Dealers, Inc. upon which shares of the Company may
then or are then contemplated to be listed or quoted, or the requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or any rules or regulations of the Securities and Exchange Commission
promulgated thereunder or the requirements of applicable state laws relating to
the authorization, issuance or sale of securities.
(c) (i) You hereby represent and warrant to the Company that
(A) this Option and all Shares hereafter purchased or otherwise acquired by you
have been and are being acquired by you for your own account for investment,
without any intention of selling or further distributing the same, (B) you do
not presently have any reason to anticipate any change in circumstances or any
other particular occasion or event which would cause you to sell the Option or
any of such Shares, and (C) you are fully aware that in agreeing to grant the
Option and/or sell or issue such Shares to you, and in entering into this
Agreement, the Company has relied and is relying upon the truth and accuracy of
these representations and warranties.
(ii) Each instrument, agreement or certificate the
Company has issued or will issue to represent this Option shall prominently bear
a legend making reference to this Agreement and securities laws applicable to
the Shares acquired upon exercise hereof and to the Stockholders' Agreement.
6
<PAGE>
9. NOT A CONTRACT OF EMPLOYMENT. NOTHING IN OPTION AGREEMENT SHALL
CONFER ANY RIGHT TO CONTINUE IN THE EMPLOY OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR AFFECT ANY RIGHT WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
MAY HAVE TO TERMINATE YOUR EMPLOYMENT.
10. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
(b) Each notice relating to this Option shall be in writing
and delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement with a copy to
Golenbock, Eiseman, Assor & Bell, 437 Madison Avenue, New York, New York 10022
Attention: A.C. Peskoe, Esq. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect given to the
other party in accordance with this subsection (b). Each such notice shall be
deemed given upon the receipt thereof when delivered in person and on the second
business day after the mailing when sent by mail as aforesaid.
(c) You understand that, upon exercise of this Option, you may
recognize income for tax purposes in an amount equal to the excess of the then
fair market value of the Shares purchased over the Option Price for such Shares.
Your employer may withhold tax from your current compensation with respect to
such income or any other income which it deems you to have received in
connection therewith; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option.
(d) If this Option shall be mutilated, lost, stolen or
destroyed, the Company shall issue in exchange and substitution for and upon
cancellation of the mutilated Option, or in lieu of and in substitution for the
Option lost, stolen or destroyed, a new Option of like tenor and denomination,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Option and such indemnity and, if requested by the
Company, such bond, as shall in each case be satisfactory to the Company. You
must also comply with such other reasonable requirements and pay such other
reasonable charges as the Company may prescribe in connection with such
issuance.
(e) This Option shall be governed and construed in accordance
with the substantive laws of the State of New York applicable to contracts
executed, delivered and to be fully performed in the State of New York, without
giving effect to contrary provisions regarding conflict of laws.
7
<PAGE>
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators and legal representatives,
and shall inure to the benefit of and be binding upon the Company and its
successors and assigns. You may not assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement, or any of your rights
hereunder except if and to the extent expressly permitted by Section 8 of this
Agreement, and any such attempted prohibited delegation or disposition shall be
null and void and without effect.
(g) This Agreement constitutes the complete understanding
between the parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
(i) The section headings contained herein are for the purposes
of convenience only, are not intended to define or limit the contents of said
sections and are not part of this Agreement.
(j) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the date first above set forth.
CVC HOLDINGS, INC.
By: /s/ CHRISTINE B. WHITMAN
----------------------------
ACCEPTED AND AGREED TO:
/s/ LINO VELO
- ---------------------------------
Lino Velo
Mail: P.O. Box 25240
Rochester, NY 14625
Home: 29 Russet Court
Rochester, NY 14625
8
<PAGE>
TABLE A
<TABLE>
<CAPTION>
Number of Shares Vesting Pursuant and
Subject to Options Subject to this Option on:
- ------------------ --------------------------
<S> <C>
167 October 17, 1995
167 October 17, 1996
166 October 17, 1997
</TABLE>
9
<PAGE>
EXHIBIT A
CONSENT TO
BE BOUND BY THE TERMS OF
A STOCKHOLDERS' AGREEMENT
Upon the consummation of his acquisition of any shares of capital
stock of CVC Holdings, Inc. (the "Corporation") pursuant to the Option Agreement
between the undersigned and the Corporation dated as of ______________, 1994,
the undersigned agrees to be bound by all of the terms, conditions, limitations
and provisions of the Stockholders' Agreement, dated as of December 21, 1990, as
the same may be amended from time to time, among the Corporation and the
stockholders of the Corporation named therein as a (i) signatory, (ii)
"Stockholder," (iii) *["Initial Stockholder", and (vi) "Management
Stockholder"]* for the purposes of such agreement as if he had been an original
signatory thereto.
IN WITNESS WHEREOF, the undersigned has subscribed his name below as
of the __ day of ___________, 19__.
/s/ LINO VELO
------------------------------
Lino Velo
<PAGE>
Exhibit 4.10
The options granted pursuant to this Agreement are not transferrable
except to the estate of the holder upon his death in accordance with
the terms of this Agreement. The shares of Common Stock issuable
upon the exercise of any such options may not be transferred, nor
will any assignee or endorsee of such shares of Common Stock be
recognized as an owner thereof by the issuer for any purpose, unless
a registration statement under the Securities Act of 1933, as
amended, with respect to such shares shall then be in effect or
unless the availability of an exemption from registration with
respect to any proposed transfer or disposition of such shares shall
be established to the satisfaction of the issuer. No shares of
Common Stock issuable upon the exercise of any such options may be
sold or transferred except pursuant to an effective registration
statement or similar qualification under applicable State securities
laws, or unless it is established to the satisfaction of the issuer
that such sale or transfer is in a transaction which is exempt
under, or otherwise in compliance with, such laws. No shares of
Common Stock issuable upon the exercise of any such options may be
sold, transferred, assigned or otherwise disposed of, nor will any
assignee or endorsee of such shares of Common Stock be recognized as
an owner thereof by the issuer for any purpose, except in accordance
with the terms and conditions of a certain Stockholders' Agreement
dated as of December 21, 1990, as same may be amended from time to
time, by and among the issuer and the stockholders named in such
Stockholders' Agreement.
CVC HOLDINGS, INC.
c/o CVC Products, Inc.
525 Lee Road
Rochester, N.Y. 14603
To: Phillip Chapados
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of August 15, 1994 (the "Date of Grant"), as a matter of
separate inducement and not in lieu of any salary or other compensation for your
services, the option (this "Option") to purchase, in accordance with and subject
to the terms and conditions set forth herein, an aggregate of 500 shares (the
"Shares") of Common Stock, $.01 par value per share ("Common Stock"), of the
Company, at the exercise price of $25 per Share, subject to adjustment as
hereinafter provided (the "Option Price"), such Option Price being, in the
judgment of the Company, not less than one hundred percent (100%) of the fair
market value of each such Share on the Date of Grant. Subject to the provisions
and limitations set forth herein, this Option shall vest, and may be exercised
by you, on a cumulative basis, in the amounts and for the periods set forth in
TABLE A, beginning on August 15, 1995; provided, however, that if your
employment terminates for any reason, the currently exercisable portion of this
Option will be exercisable through the end of the applicable
1
<PAGE>
period set forth in clauses (a) through (c) below and the unvested portion of
this Option will automatically and without notice terminate and become null and
void.
2. TERMINATION OF OPTION. Notwithstanding the foregoing, the
unexercised portion of this Option will automatically and without notice
terminate and become null and void on the tenth anniversary of the effective
date hereof, subject to earlier termination as hereinafter provided (the date on
which the earliest of such events shall occur being herein referred to as the
"Expiration Date"). If, however, your employment with the Company or any
subsidiary thereof terminates for any reason before the Expiration Date, this
Option will terminate on the applicable date as described below; provided,
however, that none of the events described below shall extend the period of
exercisability of this Option beyond the Expiration Date:
(a) immediately upon the termination of your employment in the
case of a voluntary termination or a termination for "cause" (as hereafter
defined);
(b) the expiration of three (3) months after your death if
your death occurs during your employment or within the three-month period after
the termination of your employment specified in clause (c) below, except that
your Option will be exercisable during such three-month period only to the
extent that it would have been exercisable on the date of your death; and
(c) the expiration of three (3) months from the date of
termination of your employment by reason of your retirement (in accordance with
the applicable company policy respecting retirement), dismissal other than for
"cause" or your "disability" (as hereafter defined), except that your Option
will be exercisable during such three-month period only to the extent that it
would have been exercisable immediately prior to the termination of your
employment.
For purposes hereof, (i) the term "cause" is defined as (A) the commission by
you of a felony, your engaging in theft, embezzlement, fraud, obtaining funds or
property under false pretenses, or similar acts of misconduct with respect to
the property of the Company and/or its subsidiaries or its employees,
stockholders, affiliates, customers or suppliers, (B) your material breach of
Company or subsidiary written policies or terms and conditions of employment, or
(C) your material failure to successfully fulfill your duties or obligations of
employment; and (ii) you shall be deemed "disabled" if, at the Company's option,
it gives notice to you or your representative that due to a disabling mental or
physical condition, you have been prevented, for a continuous period of 90 days
or for an aggregate of 120 days during any six month period, from substantially
performing those duties which you were required to perform prior to incurring
such disability. The existence of a disabling mental or physical condition shall
be confirmed by a medical doctor selected by the Company.
3. OPTION EXERCISE. The currently exercisable portion of this Option
may be exercised by you from time to time, in part or in full (but subject to
the provisions of subsection 3(b) and of Section 4 below), at any time on or
after the date hereof.
2
<PAGE>
(a) This Option can be exercised only with respect to full
Shares and only with respect to a minimum of 100 Shares at the time of any
exercise.
(b) Any exercise of this Option must be in writing addressed
to the Board of Directors of the Company at the principal place of business of
the Company and delivered at least ten (10) business days prior to the proposed
date of exercise, which writing shall indicate the number of Shares as to which
this Option is being exercised and shall be accompanied by a certified or bank
cashier's check payable to the order of the Company in the full amount of the
aggregate Option Price of the Shares covered by such exercise.
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if and so long as such
exercise would subject the Company or any of its subsidiaries to any substantial
risk under contracts or programs restricting ownership or control or similar
requirements or would subject the Company or any of its subsidiaries to other
regulatory problems, in each case, as determined by the Company's Board of
Directors.
(c) This Option may not be exercised unless and until you or,
upon your death, the person to whom this Option is transferred in accordance
with Section 8 hereof, shall have executed and delivered: (i) a written consent
in the form of EXHIBIT A hereto, to be bound by all of the terms of the
Stockholders' Agreement (the "Stockholders' Agreement") dated as of December 21,
1990, as amended and as the same may be amended from time to time, among the
Company and the holders of shares of capital stock of the Company named therein;
and (ii) such subscription documents as the Company shall require, including,
without limitation, a subscription agreement and a prospective purchaser's
questionnaire. You acknowledge your receipt of a copy of the Stockholders'
Agreement, as amended, through the date hereof. Nothing in this Agreement shall
be deemed to require the Company to deliver to you copies of, or to seek your
approval for, any amendments made to such Stockholders' Agreement. You further
agree that any time period for you to exercise rights under the Stockholders'
Agreement shall be deemed to have commenced for you on the same date as such
time period commenced to run for the other Stockholders having the same rights
thereunder regardless of the date on which you first acquire Shares.
5. SHARE REPURCHASE RIGHT. At any time prior to the expiration of
six (6) months from termination of your employment with the Company for any
reason, the Company shall have the right, but shall not be obligated, to
repurchase any Shares (and/or any securities acquired in connection with or
exchange for the Shares) acquired pursuant to the terms of this Option (the
"Repurchase Right") by giving you or the holder of such Shares written notice of
the Company's intention to exercise such Repurchase Right prior to the
expiration of such six-month period (the "Notice"). The per-share purchase price
for the Shares shall be determined as follows:
3
<PAGE>
(a) in the event your employment with the Company terminates
for any of the reasons specified in Section 2(a) above, the per-share purchase
price for the Shares shall be equal to the lesser of (i) your Option Price; or
(ii) the applicable NATI Multiple Price, as determined below; and
(b) in the event your employment with the Company terminates
for any of the reasons specified in Section 2(b) or 2(c) above, the per-share
purchase price for the Shares shall be equal to the applicable "NATI Multiple
Price." The "NATI Multiple Price" per Share shall be (A) the average of the
Annualized Net After-Tax Income per Share for each of the eight most recently
completed fiscal quarters of the Company prior to the date of the termination of
such employment multiplied by (B) seven (7). For purposes hereof, the
"Annualized Net After-Tax Income" of the Company for any fiscal period shall be
the consolidated income after taxes of the Company for such period on an
annualized basis, determined in accordance with generally accepted accounting
principles, consistently applied. The calculations required by this Section 5(b)
shall be made on a fully-diluted, as-converted basis by the independent
certified public accountants for the Company, whose determination shall be final
and binding on all parties hereto.
(c) The closing for all purchases and sales of Shares provided
for in this Section 5 shall be held at the office of the Company at 10:00
o'clock a.m. on the 90th day after the giving of the Notice or such earlier date
as the Company shall specify. If the aforesaid closing date falls on a Saturday,
Sunday or legal holiday, then the closing shall be held on the next succeeding
business day.
(d) Except as hereinafter provided, the purchase price for the
purchase and sale of Shares determined pursuant to the provisions of Section 5
hereof shall be paid in eight equal quarterly installments, the first such
payment to be made on the date of the closing under Section 5(c) hereof and the
remaining seven installments, to be made on the last day of each of the seven
immediately succeeding 90-day periods. Such installment obligations shall bear
interest on the outstanding balance at a rate equal to the prime rate announced
from time to time by the Company's principal lending bank (or, in the absence of
any such bank, Citibank, N.A.), payable together with each principal
installment. Contemporaneously with the receipt of the first installment as
aforesaid, you or the seller(s) shall duly endorse to the Company and delivery
to the Company for cancellation the certificate or certificates representing the
Shares sold hereunder, together with all necessary documentary transfer stamps,
if any. The Company, at its option, may prepay any or all amounts without
penalty or premium.
6. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
4
<PAGE>
7. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC.
(a) Notwithstanding any other provisions contained in this
Agreement, in the event of the merger or consolidation of the Company, or
reorganization or recapitalization of, stock dividend on, stock split, split-up,
split-off, spin-off or combination of, shares of Common Stock, appropriate
adjustments shall be made by the Board of Directors of the Company as to the
number of Shares and/or the exercise price per Share subject to this Option, as
shall be equitable to prevent reduction or enlargement of rights under this
Option, and the determination of the Board of Directors as to such matters shall
be conclusive and binding. References in this Agreement to Shares shall include
any such securities or other property (including cash) into which Shares of
Common Stock may be changed pursuant to or in accordance with the preceding
sentence through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, or combination of shares.
(b) If (i) the Board of Directors of the Company approves a
consolidation or merger of the Company or any substantial subsidiary of the
Company with another corporation and a change in control in the Company is
effected in connection therewith, or (ii) the Board of Directors approves the
sale of all or substantially all of the property or assets of the Company or of
any substantial subsidiary of the Company, or (iii) more than fifty percent
(50%) of the total combined voting power of all classes of stock of the Company
or any substantial subsidiary of the Company normally entitled to vote for the
election of directors of the Company or such subsidiary is acquired by a person,
firm or corporation or cooperating group of such individuals or entities, other
than the Initial Stockholders or their Groups (as such terms are defined in the
Stockholders' Agreement), or, in the case of such subsidiary other than the
Company, then the Board of Directors shall have the right to terminate this
Option (in which event such Option shall not be subject to the above described
adjustments in subsection (a)) by causing written notice of such termination to
be given to you at least fifteen (15) days prior to the earlier of (A) the date
on which such consolidation, merger or acquisition of assets or stock is
expected to become effective, or (B) if different from the date specified in
subclause (A) above, the date as of which a record will be taken to determine
the holders of shares of Common Stock who shall be entitled to exchange such
shares for securities or other property (including cash) deliverable upon such
consolidation, merger or acquisition of assets or stock, provided, however, that
any such Options as to which notice of termination has been sent by the Company
as aforesaid in respect of any of the events described above, which are not
otherwise exercisable during the aforesaid fifteen (15) day period solely
because they are not then vested and which have not otherwise lapsed or expired,
shall be either assumed by the acquiror or surviving entity upon the
consummation of such event or shall have the vesting period thereof accelerated
to permit the exercise thereof subject to the consummation of such transactions
during the aforesaid fifteen (15) day period if all other conditions to exercise
(other than vesting) are met. Such notice shall be deemed duly given when given
as provided below, and failure to give such notice, or a defect therein, shall
not affect the termination of this Option.
(c) If the Board of Directors shall determine to cause the
termination of this Option pursuant to subsection (b) above upon the occurrence
of an event described in said subsection (b), and shall not provide a period
during which this Option will be exercisable in full
5
<PAGE>
prior to such termination of this Option or in the event the restrictions set
forth in subsections 4(a) and/or 4(b) shall apply to the Options to be
terminated, then, upon the occurrence of such event and the actual consummation
of the applicable consolidation, merger or sale, this Option shall terminate and
you shall receive, with respect to each Share subject to this Option (including
those Shares as to which vesting has been accelerated pursuant to subsection (b)
above), an amount per Share equal to the excess of the fair market value of each
such Share immediately prior to the occurrence of such transaction over the
exercise Option Price per Share; such amount to be payable in cash, in one or
more of the kinds of property payable in such transaction, or in a combination
thereof, as the Board of Directors, in its sole discretion, shall determine.
8. RESTRICTIONS ON TRANSFERS. (a) This Option is not transferrable
by you, and is exercisable only by you, and may not be sold, assigned,
transferred, pledged or hypothecated in any way (whether by operation of law or
otherwise) except that upon your death this Option may be transferred subject to
all of the terms and conditions contained in this Agreement, (A) to your
then-current spouse, parents or lineal descendants, or to trusts or
custodianships established for any such person, (B) by operation of the laws of
descent and distribution, (C) by disposition pursuant to the terms of your last
will and testament, to such spouse, parent or lineal descendant or (D) otherwise
to your estate. This Option shall not be subject to execution, attachment or
similar proceeding. Any attempted assignment, transfer, pledge, hypothecation or
other disposition of this Option or any interest herein, and the levy of any
attachment or similar proceeding upon this Option or any interest herein, shall
be null and void and without effect except as provided in the preceding
sentence.
(b) The Company may postpone the time of delivery of
certificates for the shares issuable upon the exercise of this Option for such
additional time as the Company shall deem necessary or desirable to enable it to
comply with the listing requirements of any securities exchange or the National
Association of Securities Dealers, Inc. upon which shares of the Company may
then or are then contemplated to be listed or quoted, or the requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or any rules or regulations of the Securities and Exchange Commission
promulgated thereunder or the requirements of applicable state laws relating to
the authorization, issuance or sale of securities.
(c) (i) You hereby represent and warrant to the Company that
(A) this Option and all Shares hereafter purchased or otherwise acquired by you
have been and are being acquired by you for your own account for investment,
without any intention of selling or further distributing the same, (B) you do
not presently have any reason to anticipate any change in circumstances or any
other particular occasion or event which would cause you to sell the Option or
any of such Shares, and (C) you are fully aware that in agreeing to grant the
Option and/or sell or issue such Shares to you, and in entering into this
Agreement, the Company has relied and is relying upon the truth and accuracy of
these representations and warranties.
(ii) Each instrument, agreement or certificate the
Company has issued or will issue to represent this Option shall prominently bear
a legend making reference to this
6
<PAGE>
Agreement and securities laws applicable to the Shares acquired upon exercise
hereof and to the Stockholders' Agreement.
9. NOT A CONTRACT OF EMPLOYMENT. NOTHING IN OPTION AGREEMENT SHALL
CONFER ANY RIGHT TO CONTINUE IN THE EMPLOY OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR AFFECT ANY RIGHT WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
MAY HAVE TO TERMINATE YOUR EMPLOYMENT.
10. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
(b) Each notice relating to this Option shall be in writing
and delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement with a copy to
Golenbock, Eiseman, Assor & Bell, 437 Madison Avenue, New York, New York 10022,
Attention: A.C. Peskoe, Esq. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect given to the
other party in accordance with this subsection (b). Each such notice shall be
deemed given upon the receipt thereof when delivered in person and on the second
business day after the mailing when sent by mail as aforesaid.
(c) You understand that, upon exercise of this Option, you may
recognize income for tax purposes in an amount equal to the excess of the then
fair market value of the Shares purchased over the Option Price for such Shares.
Your employer may withhold tax from your current compensation with respect to
such income or any other income which it deems you to have received in
connection therewith; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option.
(d) If this Option shall be mutilated, lost, stolen or
destroyed, the Company shall issue in exchange and substitution for and upon
cancellation of the mutilated Option, or in lieu of and in substitution for the
Option lost, stolen or destroyed, a new Option of like tenor and denomination,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Option and such indemnity and, if requested by the
Company, such bond, as shall in each case be satisfactory to the Company. You
must also comply with such other reasonable requirements and pay such other
reasonable charges as the Company may prescribe in connection with such
issuance.
(e) This Option shall be governed and construed in accordance
with the substantive laws of the State of New York applicable to contracts
executed, delivered and to be fully
7
<PAGE>
performed in the State of New York, without giving effect to contrary provisions
regarding conflict of laws.
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators and legal representatives,
and shall inure to the benefit of and be binding upon the Company and its
successors and assigns. You may not assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement, or any of your rights
hereunder except if and to the extent expressly permitted by Section 8 of this
Agreement, and any such attempted prohibited delegation or disposition shall be
null and void and without effect.
(g) This Agreement constitutes the complete understanding
between the parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
(i) The section headings contained herein are for the purposes
of convenience only, are not intended to define or limit the contents of said
sections and are not part of this Agreement.
(j) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the date first above set forth.
CVC HOLDINGS, INC.
By: /s/ CHRISTINE B. WHITMAN
ACCEPTED AND AGREED TO:
/s/ PHILLIP CHAPADOS
- ------------------------------
Phillip Chapados
64 MANITOU BEACH RD.
HILTON, NY 14468
- ------------------------------
[Address]
8
<PAGE>
TABLE A
<TABLE>
<CAPTION>
Number of Shares Vesting Pursuant and
Subject to Options Subject to this Option on:
- ------------------ --------------------------
<S> <C>
167 August 15, 1995
167 August 15, 1996
166 August 15, 1997
</TABLE>
<PAGE>
EXHIBIT A
CONSENT TO
BE BOUND BY THE TERMS OF
A STOCKHOLDERS' AGREEMENT
Upon the consummation of his acquisition of any shares of capital
stock of CVC Holdings, Inc. (the "Corporation") pursuant to the Option Agreement
between the undersigned and the Corporation dated as of August 15, 1994, the
undersigned agrees to be bound by all of the terms, conditions, limitations and
provisions of the Stockholders' Agreement, dated as of December 21, 1990, as the
same may be amended from time to time, among the Corporation and the
stockholders of the Corporation named therein as a (i) signatory, (ii)
"Stockholder," (iii) ["Initial Stockholder", and (iv) "Management Stockholder"]
for the purposes of such agreement as if he had been an original signatory
thereto.
IN WITNESS WHEREOF, the undersigned has subscribed his name below as
of the 20 day of April, 1995.
/s/ PHILLIP CHAPADOS
--------------------------------
Phillip Chapados
<PAGE>
Exhibit 4.11
The options granted pursuant to this Agreement are not transferrable
except to the estate of the holder upon his death in accordance with
the terms of this Agreement. The shares of Common Stock issuable
upon the exercise of any such options may not be transferred, nor
will any assignee or endorsee of such shares of Common Stock be
recognized as an owner thereof by the issuer for any purpose, unless
a registration statement under the Securities Act of 1933, as
amended, with respect to such shares shall then be in effect or
unless the availability of an exemption from registration with
respect to any proposed transfer or disposition of such shares shall
be established to the satisfaction of the issuer. No shares of
Common Stock issuable upon the exercise of any such options may be
sold or transferred except pursuant to an effective registration
statement or similar qualification under applicable State securities
laws, or unless it is established to the satisfaction of the issuer
that such sale or transfer is in a transaction which is exempt
under, or otherwise in compliance with, such laws. No shares of
Common Stock issuable upon the exercise of any such options may be
sold, transferred, assigned or otherwise disposed of, nor will any
assignee or endorsee of such shares of Common Stock be recognized as
an owner thereof by the issuer for any purpose, except in accordance
with the terms and conditions of a certain Stockholders' Agreement
dated as of December 21, 1990, as same may be amended from time to
time, by and among the issuer and the stockholders named in such
Stockholders' Agreement.
CVC HOLDINGS, INC.
c/o CVC Products, Inc.
525 Lee Road
Rochester, N.Y. 14603
To: Cecil Davis
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of December 19, 1994 (the "Date of Grant"), as a matter of
separate inducement and not in lieu of any salary or other compensation for your
services, the option (this "Option") to purchase, in accordance with and subject
to the terms and conditions set forth herein, an aggregate of 2000 shares (the
"Shares") of Common Stock, $.01 par value per share ("Common Stock"), of the
Company, at the exercise price of $50 per Share, subject to adjustment as
hereinafter provided (the "Option Price"), such Option Price being, in the
judgment of the Company, not less than one hundred percent (100%) of the fair
market value of each such Share on the Date of Grant. Subject to the provisions
and limitations set forth herein, this Option shall vest, and may be exercised
by you, on a cumulative basis, in the amounts and for the periods set forth in
TABLE A, beginning on April 1, 1996; provided, however, that if your employment
terminates for any reason, the currently exercisable portion of this Option will
be exercisable through the end of the applicable period set
1
<PAGE>
forth in clauses (a) through (c) below and the unvested portion of this Option
will automatically and without notice terminate and become null and void.
2. TERMINATION OF OPTION. Notwithstanding the foregoing, the
unexercised portion of this Option will automatically and without notice
terminate and become null and void on the tenth anniversary of the effective
date hereof, subject to earlier termination as hereinafter provided (the date on
which the earliest of such events shall occur being herein referred to as the
"Expiration Date"). If, however, your employment with the Company or any
subsidiary thereof terminates for any reason before the Expiration Date, this
Option will terminate on the applicable date as described below; provided,
however, that none of the events described below shall extend the period of
exercisability of this Option beyond the Expiration Date:
(a) immediately upon the termination of your employment in the
case of a voluntary termination or a termination for "cause" (as hereafter
defined);
(b) the expiration of three (3) months after your death if
your death occurs during your employment or within the three-month period after
the termination of your employment specified in clause (c) below, except that
your Option will be exercisable during such three-month period only to the
extent that it would have been exercisable on the date of your death; and
(c) the expiration of three (3) months from the date of
termination of your employment by reason of your retirement (in accordance with
the applicable company policy respecting retirement), dismissal other than for
"cause" or your "disability" (as hereafter defined), except that your Option
will be exercisable during such three-month period only to the extent that it
would have been exercisable immediately prior to the termination of your
employment.
For purposes hereof, (i) the term "cause" is defined as (A) the commission by
you of a felony, your engaging in theft, embezzlement, fraud, obtaining funds or
property under false pretenses, or similar acts of misconduct with respect to
the property of the Company and/or its subsidiaries or its employees,
stockholders, affiliates, customers or suppliers, (B) your material breach of
Company or subsidiary written policies or terms and conditions of employment, or
(C) your material failure to successfully fulfill your duties or obligations of
employment; and (ii) you shall be deemed "disabled" if, at the Company's option,
it gives notice to you or your representative that due to a disabling mental or
physical condition, you have been prevented, for a continuous period of 90 days
or for an aggregate of 120 days during any six month period, from substantially
performing those duties which you were required to perform prior to incurring
such disability. The existence of a disabling mental or physical condition shall
be confirmed by a medical doctor selected by the Company.
3. OPTION EXERCISE. The currently exercisable portion of this Option
may be exercised by you from time to time, in part or in full (but subject to
the provisions of subsection 3(b) and of Section 4 below), at any time on or
after the date hereof.
2
<PAGE>
(a) This Option can be exercised only with respect to full
Shares and only with respect to a minimum of 200 Shares at the time of any
exercise.
(b) Any exercise of this Option must be in writing addressed
to the Board of Directors of the Company at the principal place of business of
the Company and delivered at least ten (10) business days prior to the proposed
date of exercise, which writing shall indicate the number of Shares as to which
this Option is being exercised and shall be accompanied by a certified or bank
cashier's check payable to the order of the Company in the full amount of the
aggregate Option Price of the Shares covered by such exercise.
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if and so long as such
exercise would subject the Company or any of its subsidiaries to any substantial
risk under contracts or programs restricting ownership or control or similar
requirements or would subject the Company or any of its subsidiaries to other
regulatory problems, in each case, as determined by the Company's Board of
Directors.
(c) This Option may not be exercised unless and until you or,
upon your death, the person to whom this Option is transferred in accordance
with Section 8 hereof, shall have executed and delivered: (i) a written consent
in the form of EXHIBIT A hereto, to be bound by all of the terms of the
Stockholders' Agreement (the "Stockholders' Agreement") dated as December 21,
1990, as amended and as the same may be amended from time to time, among the
Company and the holders of shares of capital stock of the Company named therein;
and (ii) such subscription documents as the Company shall require, including,
without limitation, a subscription agreement and a prospective purchaser's
questionnaire. You acknowledge your receipt of a copy of the Stockholders'
Agreement, as amended, through the date hereof. Nothing in this Agreement shall
be deemed to require the Company to deliver to you copies of, or to seek your
approval for, any amendments made to such Stockholders' Agreement. You further
agree that any time period for you to exercise rights under the Stockholders'
Agreement shall be deemed to have commenced for you on the same date as such
time period commenced to run for the other Stockholders having the same rights
thereunder regardless of the date on which you first acquire Shares.
5. SHARE REPURCHASE RIGHT. At any time prior to the expiration of
six (6) months from termination of your employment with the Company for any
reason, the Company shall have the right, but shall not be obligated, to
repurchase any Shares (and/or any securities acquired in connection with or
exchange for the shares) acquired pursuant to the terms of this Option (the
"Repurchase Right") by giving you or the holder of such Shares written notice of
the Company's intention to exercise such Repurchase Right prior to the
expiration of such six-month period (the "Notice"). The per-share purchase price
for the Shares shall be determined as follows:
3
<PAGE>
(a) in the event your employment with the Company terminates
for any of the reasons specified in Section 2(a) above, the per-share purchase
price for the Shares shall be equal to the lesser of (i) your Option Price; or
(ii) the applicable NATI Multiple Price, as determined below; and
(b) in the event your employment with the Company terminates
for any of the reasons specified in Section 2(b) or 2(c) above, the per-share
purchase price for the Shares shall be equal to the applicable "NATI Multiple
Price." The "NATI Multiple Price" per Share shall be (A) the average of the
Annualized Net After-Tax Income per Share for each of the eight most recently
completed fiscal quarters of the Company prior to the date of the termination of
such employment multiplied by (B) seven (7). For purposes hereof, the
"Annualized Net After-Tax Income" of the Company for any fiscal period shall be
the consolidated income after taxes of the Company for such period on an
annualized basis, determined in accordance with generally accepted accounting
principles, consistently applied. The calculations required by this Section 5(b)
shall be made on a fully-diluted, as-converted basis by the independent
certified public accountants for the Company, whose determination shall be final
and binding on all parties hereto.
(c) The closing for all purchases and sales of Shares provided
for in this Section 5 shall be held at the office of the Company at 10:00
o'clock a.m. on the 90th day after the giving of the Notice or such earlier date
as the Company shall specify. If the aforesaid closing date falls on a Saturday,
Sunday or legal holiday, then the closing shall be held on the next succeeding
business day.
(d) Except as hereinafter provided, the purchase price for the
purchase and sale of Shares determined pursuant to the provisions of Section 5
hereof shall be paid in eight equal quarterly installments, the first such
payment to be made on the date of the closing under Section 5(c) hereof and the
remaining seven installments, to be made on the last day of each of the seven
immediately succeeding 90-day periods. Such installment obligations shall bear
interest on the outstanding balance at a rate equal to the prime rate announced
from time to time by the Company's principal lending bank (or, in the absence of
any such bank, Citibank, N. A.), payable together with each principal
installment. Contemporaneously with the receipt of the first installment as
aforesaid, you or the seller(s) shall duly endorse to the Company and delivery
to the Company for cancellation the certificate or certificates representing the
Shares sold hereunder, together with all necessary documentary transfer stamps,
if any. The Company, at its option, may pre-pay any or all amounts without
penalty or premium.
6. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
4
<PAGE>
7. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC.
(a) Notwithstanding any other provisions contained in this
Agreement, in the event of the merger or consolidation of the Company, or
reorganization or recapitalization of, stock dividend on, stock split, split-up,
split-off, spin-off or combination of, shares of Common Stock, appropriate
adjustments shall be made by the Board of Directors of the Company as to the
number of Shares and/or the exercise price per Share subject to this Option, as
shall be equitable to prevent reduction or enlargement of rights under this
Option, and the determination of the Board of Directors as to such matters shall
be conclusive and binding. References in this Agreement to Shares shall include
any such securities or other property (including cash) into which Shares of
Common Stock may be changed pursuant to or in accordance with the preceding
sentence through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, or combination of shares.
(b) If (i) the Board of Directors of the Company approves a
consolidation or merger of the Company or any substantial subsidiary of the
Company with another corporation and a change in control in the Company is
effected in connection therewith, or (ii) the Board of Directors approves the
sale of all or substantially all of the property or assets of the Company or of
any substantial subsidiary of the Company, or (iii) more than fifty percent
(50%) of the total combined voting power of all classes of stock of the Company
or any substantial subsidiary of the Company normally entitled to vote for the
election of directors of the Company or such subsidiary is acquired by a person,
firm or corporation or cooperating group of such individuals or entities, other
than the Initial Stockholders or their Groups (as such terms are defined in the
Stockholders' Agreement), or, in the case of such subsidiary other than the
Company, then the Board of Directors shall have the right to terminate this
Option (in which event such Option shall not be subject to the above described
adjustments in subsection (a)) by causing written notice of such termination to
be given to you at least fifteen (15) days prior to the earlier of (A) the date
on which such consolidation, merger or acquisition of assets or stock is
expected to become effective, or (B) if different from the date specified in
subclause (A) above, the date as of which a record will be taken to determine
the holders of shares of Common Stock who shall be entitled to exchange such
shares for securities or other property (including cash) deliverable upon such
consolidation, merger or acquisition of assets or stock, provided, however, that
any such Options as to which notice of termination has been sent by the Company
as aforesaid in respect of any of the events described above, which are not
otherwise exercisable during the aforesaid fifteen (15) day period solely
because they are not then vested and which have not otherwise lapsed or expired,
shall be either assumed by the acquiror or surviving entity upon the
consummation of such event or shall have the vesting period thereof accelerated
to permit the exercise thereof subject to the consummation of such transactions
during the aforesaid fifteen (15) day period if all other conditions to exercise
(other than vesting) are met. Such notice shall be deemed duly given when given
as provided below, and failure to give such notice, or a defect therein, shall
not affect the termination of this Option.
(c) If the Board of Directors shall determine to cause the
termination of this Option pursuant to subsection (b) above upon the occurrence
of an event described in said subsection (b), and shall not provide a period
during which this Option will be exercisable in full
5
<PAGE>
prior to such termination of this Option or in the event the restrictions set
forth in subsections 4(a) and/or 4(b) shall apply to the Options to be
terminated, then, upon the occurrence of such event and the actual consummation
of the applicable consolidation, merger or sale, this Option shall terminate and
you shall receive, with respect to each Share subject to this Option (including
those Shares as to which vesting has been accelerated pursuant to subsection (b)
above), an amount per Share equal to the excess of the fair market value of each
such Share immediately prior to the occurrence of such transaction over the
exercise Option Price per Share; such amount to be payable in cash, in one or
more of the kinds of property payable in such transaction, or in a combination
thereof, as the Board of Directors, in its sole discretion, shall determine.
8. RESTRICTIONS ON TRANSFERS. (a) This Option is not transferable by
you, and is exercisable only by you, and may not be sold, assigned, transferred,
pledged or hypothecated in any way (whether by operation of law or otherwise)
except that upon your death this Option may be transferred subject to all of the
terms and conditions contained in this Agreement, (A) to your then-current
spouse, parents or lineal descendants, or to trusts or custodianships
established for any such person, (B) by operation of the laws of descent and
distribution, (C) by disposition pursuant to the terms of your last will and
testament, to such spouse, parent or lineal descendant or (D) otherwise to your
estate. This Option shall not be subject to execution, attachment or similar
proceeding. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of this Option or any interest herein, and the levy of any
attachment or similar proceeding upon this Option or any interest herein, shall
be null and void and without effect except as provided in the preceding
sentence.
(b) The Company may postpone the time of delivery of
certificates for the shares issuable upon the exercise of this Option for such
additional time as the Company shall deem necessary or desirable to enable it to
comply with the listing requirements of any securities exchange or the National
Association of Securities Dealers, Inc. upon which shares of the Company may
then or are then contemplated to be listed or quoted, or the requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or any rules or regulations of the Securities and Exchange Commission
promulgated thereunder or the requirements of applicable state laws relating to
the authorization, issuance or sale of securities.
(c) (i) You hereby represent and warrant to the Company that
(A) this Option and all Shares hereafter purchased or otherwise acquired by you
have been and are being acquired by you for your own account for investment,
without any intention of selling or further distributing the same, (B) you do
not presently have any reason to anticipate any change in circumstances or any
other particular occasion or event which would cause you to sell the Option or
any of such Shares, and (C) you are fully aware that in agreeing to grant the
Option and/or sell or issue such Shares to you, and in entering into this
Agreement, the Company has relied and is relying upon the truth and accuracy of
these representations and warranties.
(ii) Each instrument, agreement or certificate the
Company has issued or will issue to represent this Option shall prominently bear
a legend making reference to this
6
<PAGE>
Agreement and securities laws applicable to the Shares acquired upon exercise
hereof and to the Stockholders' Agreement.
9. NOT A CONTRACT OF EMPLOYMENT. NOTHING IN OPTION AGREEMENT SHALL
CONFER ANY RIGHT TO CONTINUE IN THE EMPLOY OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR AFFECT ANY RIGHT WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
MAY HAVE TO TERMINATE YOUR EMPLOYMENT.
10. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
(b) Each notice relating to this Option shall be in writing
and delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement with a copy to
Golenbock, Eiseman, Assor & Bell, 437 Madison Avenue, New York, New York 10022,
Attention: A.C. Peskoe, Esq. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect given to the
other party in accordance with this subsection (b). Each such notice shall be
deemed given upon the receipt thereof when delivered in person and on the second
business day after the mailing when sent by mail as aforesaid.
(c) You understand that, upon exercise of this Option, you may
recognize income for tax purposes in an amount equal to the excess of the then
fair market value of the Shares purchased over the Option Price for such Shares.
Your employer may withhold tax from your current compensation with respect to
such income or any other income which it deems you to have received in
connection therewith; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option.
(d) If this Option shall be mutilated, lost, stolen or
destroyed, the Company shall issue in exchange and substitution for and upon
cancellation of the mutilated Option, or in lieu of and in substitution for the
Option lost, stolen or destroyed, a new Option of like tenor and denomination,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Option and such indemnity and, if requested by the
Company, such bond, as shall in each case be satisfactory to the Company. You
must also comply with such other reasonable requirements and pay such other
reasonable charges as the Company may prescribe in connection with such
issuance.
(e) This Option shall be governed and construed in accordance
with the substantive laws of the State of New York applicable to contracts
executed, delivered and to be fully
7
<PAGE>
performed in the State of New York, without giving effect to contrary provisions
regarding conflict of laws.
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators and legal representatives,
and shall inure to the benefit of and be binding upon the Company and its
successors and assigns. You may not assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement, or any of your rights
hereunder except if and to the extent expressly permitted by Section 8 of this
Agreement, and any such attempted prohibited delegation or disposition shall be
null and void and without effect.
(g) This Agreement constitutes the complete understanding
between the parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
(i) The section headings contained herein are for the purposes
of convenience only, are not intended to define or limit the contents of said
sections and are not part of this Agreement.
(j) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the date first above set forth.
CVC HOLDINGS, INC.
By: /s/ CHRISTINE B. WHITMAN
----------------------------------
ACCEPTED AND AGREED TO:
/s/ CECIL DAVIS 4/21/95
- ---------------------------
Cecil Davis
RTE. #4, BOX 113C
GREENVILLE, TX 75402
- ---------------------------
[Address]
8
<PAGE>
TABLE A
<TABLE>
<CAPTION>
Number of Shares Vesting Pursuant and
Subject to Options Subject to this Option on:
- ------------------ --------------------------
<S> <C>
667 April 1, 1996
667 April 1, 1997
666 April 1, 1998
</TABLE>
9
<PAGE>
EXHIBIT A
CONSENT TO
BE BOUND BY THE TERMS OF
A STOCKHOLDERS' AGREEMENT
Upon the consummation of his acquisition of any shares of capital
stock of CVC Holdings, Inc. (the "Corporation") pursuant to the Option Agreement
between the undersigned and the Corporation dated as of _______ , 1995, the
undersigned agrees to be bound by all of the terms, conditions, limitations and
provisions of the Stockholders' Agreement, dated as of December 21, 1990, as the
same may be amended from time to time, among the Corporation and the
stockholders of the Corporation named therein as a (i) signatory, (ii)
"Stockholder," (iii) *["Initial Stockholder", and (iv) "Management
Stockholder"]* for the purposes of such agreement as if he had been an original
signatory thereto.
IN WITNESS WHEREOF, the undersigned has subscribed his name below as
of the 21 day of April, 1995.
/s/ CECIL DAVIS
--------------------------------
Cecil Davis
<PAGE>
Exhibit 4.12
The options granted pursuant to this Agreement are not transferrable except
to the estate of the holder upon his death in accordance with the terms of
this Agreement. The shares of Common Stock issuable upon the exercise of any
such options may not be transferred, nor will any assignee or endorsee of
such shares of Common Stock be recognized as an owner thereof by the issuer
for any purpose, unless a registration statement under the Securities Act of
1933, as amended, with respect to such shares shall then be in effect or
unless the availability of an exemption from registration with respect to
any proposed transfer or disposition of such shares shall be established to
the satisfaction of the issuer. No shares of Common Stock issuable upon the
exercise of any such options may be sold or transferred except pursuant to
an effective registration statement or similar qualification under
applicable State securities laws, or unless it is established to the
satisfaction of the issuer that such sale or transfer is in a transaction
which is exempt under, or otherwise in compliance with, such laws. No shares
of Common Stock issuable upon the exercise of any such options may be sold,
transferred, assigned or otherwise disposed of, nor will any assignee or
endorsee of such shares of Common Stock be recognized as an owner thereof by
the issuer for any purpose, except in accordance with the terms and
conditions of a certain Stockholders' Agreement dated as of December 21,
1990, as same may be amended from time to time, by and among the issuer and
the stockholders named in such Stockholders' Agreement.
CVC HOLDINGS, INC.
c/o CVC Products, Inc.
525 Lee Road
Rochester, N.Y. 14603
To: Ahmad Kermani
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of October 15, 1993 (the "Date of Grant"), as a matter of
separate inducement and not in lieu of any salary or other compensation for your
services, the option (this "Option") to purchase, in accordance with and subject
to the terms and conditions set forth herein, an aggregate of 500 shares (the
"Shares") of Common Stock, $.01 par value per share ("Common Stock"), of the
Company, at the exercise price of $25 per Share, subject to adjustment as
hereinafter provided (the "Option Price"), such Option Price being, in the
judgment of the Company, not less than one hundred percent (100%) of the fair
market value of each such Share on the Date of Grant. Subject to the provisions
and limitations set forth herein, this Option shall vest, and may be exercised
by you, on a cumulative basis, in the amounts and for the periods set forth in
TABLE A, beginning on October 15, 1994; provided, however, that if your
employment terminates for any reason, the currently exercisable portion of this
Option will be exercisable through the end of the applicable period set forth in
clauses (a) through (c) below and the unvested portion of this Option will
automatically and without notice terminate and become null and void.
2. TERMINATION OF OPTION. Notwithstanding the foregoing, the
unexercised portion of this Option will automatically and without notice
terminate and become null and void on the tenth
<PAGE>
anniversary of the effective date hereof, subject to earlier termination as
hereinafter provided (the date on which the earliest of such events shall occur
being herein referred to as the "Expiration Date"). If, however, your employment
with the Company or any subsidiary thereof terminates for any reason before the
Expiration Date, this Option will terminate on the applicable date as described
below; provided, however, that none of the events described below shall extend
the period of exercisability of this Option beyond the Expiration Date:
(a) immediately upon the termination of your employment in the
case of a voluntary termination or a termination for "cause" (as hereafter
defined);
(b) the expiration of three (3) months after your death if your
death occurs during your employment or within the three-month period after the
termination of your employment specified in clause (c) below, except that your
Option will be exercisable during such three-month period only to the extent
that it would have been exercisable on the date of your death; and
(c) the expiration of three (3) months from the date of
termination of your employment by reason of your retirement (in accordance with
the applicable company policy respecting retirement), dismissal other than for
"cause" or your "disability" (as hereafter defined), except that your Option
will be exercisable during such three-month period only to the extent that it
would have been exercisable immediately prior to the termination of your
employment.
For purposes hereof, (i) the term "cause" is defined as (A) the commission by
you of a felony, your engaging in theft, embezzlement, fraud, obtaining funds or
property under false pretenses, or similar acts of misconduct with respect to
the property of the Company and/or its subsidiaries or its employees,
stockholders, affiliates, customers or suppliers, (B) your material breach of
Company or subsidiary written policies or terms and conditions of employment, or
(C) your material failure to successfully fulfill your duties or obligations of
employment; and (ii) you shall be deemed "disabled" if, at the Company's option,
it gives notice to you or your representative that due to a disabling mental or
physical condition, you have been prevented, for a continuous period of 90 days
or for an aggregate of 120 days during any six month period, from substantially
performing those duties which you were required to perform prior to incurring
such disability. The existence of a disabling mental or physical condition shall
be confirmed by a medical doctor selected by the Company.
3. OPTION EXERCISE. The currently exercisable portion of this Option
may be exercised by you from time to time, in part or in full (but subject to
the provisions of subsection 3(b) and of Section 4 below), at any time on or
after the date hereof.
(a) This Option can be exercised only with respect to full Shares
and only with respect to a minimum of 100 Shares at the time of any exercise.
(b) Any exercise of this Option must be in writing addressed to
the Board of Directors of the Company at the principal place of business of the
Company and delivered at least ten (10) business days prior to the proposed date
of exercise, which writing shall indicate the number
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<PAGE>
of Shares as to which this Option is being exercised and shall be accompanied by
a certified or bank cashier's check payable to the order of the Company in the
full amount of the aggregate Option Price of the Shares covered by such
exercise.
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if and so long as such
exercise would subject the Company or any of its subsidiaries to any substantial
risk under contracts or programs restricting ownership or control or similar
requirements or would subject the Company or any of its subsidiaries to other
regulatory problems, in each case, as determined by the Company's Board of
Directors.
(c) This Option may not be exercised unless and until you or,
upon your death, the person to whom this Option is transferred in accordance
with Section 8 hereof, shall have executed and delivered: (i) a written consent
in the form of EXHIBIT A hereto, to be bound by all of the terms of the
Stockholders' Agreement (the "Stockholders' Agreement") dated as of December 21,
1990, as amended and as the same may be amended from time to time, among the
Company and the holders of shares of capital stock of the Company named therein;
and (ii) such subscription documents as the Company shall require, including,
without limitation, a subscription agreement and a prospective purchaser's
questionnaire. You acknowledge your receipt of a copy of the Stockholders'
Agreement, as amended, through the date hereof. Nothing in this Agreement shall
be deemed to require the Company to deliver to you copies of, or to seek your
approval for, any amendments made to such Stockholders' Agreement. You further
agree that any time period for you to exercise rights under the Stockholders'
Agreement shall be deemed to have commenced for you on the same date as such
time period commenced to run for the other Stockholders having the same rights
thereunder regardless of the date on which you first acquire Shares.
5. SHARE REPURCHASE RIGHT. At any time prior to the expiration of six
(6) months from termination of your employment with the Company for any reason,
the Company shall have the right, but shall not be obligated, to repurchase any
Shares (and/or any securities acquired in connection with or exchange for the
Shares) acquired pursuant to the terms of this Option (the "Repurchase Right")
by giving you or the holder of such Shares written notice of the Company's
intention to exercise such Repurchase Right prior to the expiration of such
six-month period (the "Notice"). The per-share purchase price for the Shares
shall be determined as follows:
(a) in the event your employment with the Company terminates for
any of the reasons specified in Section 2(a) above, the per-share purchase price
for the Shares shall be equal to the lesser of (i) your Option Price; or (ii)
the applicable NATI Multiple Price, as determined below; and
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<PAGE>
(b) in the event your employment with the Company terminates for
any of the reasons specified in Section 2(b) or 2(c) above, the per-share
purchase price for the Shares shall be equal to the applicable "NATI Multiple
Price." The "NATI Multiple Price" per Share shall be (A) the average of the
Annualized Net After-Tax Income per Share for each of the eight most recently
completed fiscal quarters of the Company prior to the date of the termination of
such employment multiplied by (B) seven (7). For purposes hereof, the
"Annualized Net After-Tax Income" of the Company for any fiscal period shall be
the consolidated income after taxes of the Company for such period on an
annualized basis, determined in accordance with generally accepted accounting
principles, consistently applied. The calculations required by this Section 5(b)
shall be made on a fully-diluted, as-converted basis by the independent
certified public accountants for the Company, whose determination shall be final
and binding on all parties hereto.
(c) The closing for all purchases and sales of Shares provided
for in this Section 5 shall be held at the office of the Company at 10:00
o'clock a. m. on the 90th day after the giving of the Notice or such earlier
date as the Company shall specify. If the aforesaid closing date falls on a
Saturday, Sunday or legal holiday, then the closing shall be held on the next
succeeding business day.
(d) Except as hereinafter provided, the purchase price for the
purchase and sale of Shares determined pursuant to the provisions of Section 5
hereof shall be paid in eight equal quarterly installments, the first such
payment to be made on the date of the closing under Section 5(c) hereof and the
remaining seven installments, to be made on the last day of each of the seven
immediately succeeding 90-day periods. Such installment obligations shall bear
interest on the outstanding balance at a rate equal to the prime rate announced
from time to time by the Company's principal lending bank (or, in the absence of
any such bank, Citibank, N.A.), payable together with each principal
installment. Contemporaneously with the receipt of the first installment as
aforesaid, you or the seller(s) shall duly endorse to the Company and deliver to
the Company for cancellation the certificate or certificates representing the
Shares sold hereunder, together with all necessary documentary transfer stamps,
if any. The Company, at its option, may pre-pay any or all amounts without
penalty or premium.
6. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
4
<PAGE>
7. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC.
(a) Notwithstanding any other provisions contained in this
Agreement, in the event of the merger or consolidation of the Company, or
reorganization or recapitalization of, stock dividend on, stock split, split-up,
split-off, spin-off or combination of, shares of Common Stock, appropriate
adjustments shall be made by the Board of Directors of the Company as to the
number of Shares and/or the exercise price per Share subject to this Option, as
shall be equitable to prevent reduction or enlargement of rights under this
Option, and the determination of the Board of Directors as to such matters shall
be conclusive and binding. References in this Agreement to Shares shall include
any such securities or other property (including cash) into which Shares of
Common Stock may be changed pursuant to or in accordance with the preceding
sentence through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, or combination of shares.
(b) If (i) the Board of Directors of the Company approves a
consolidation or merger of the Company or any substantial subsidiary of the
Company with another corporation and a change in control in the Company is
effected in connection therewith, or (ii) the Board of Directors approves the
sale of all or substantially all of the property or assets of the Company or of
any substantial subsidiary of the Company, or (iii) more than fifty percent
(50%) of the total combined voting power of all classes of stock of the Company
or any substantial subsidiary of the Company normally entitled to vote for the
election of directors of the Company or such subsidiary is acquired by a person,
firm or corporation or cooperating group of such individuals or entities, other
than the Initial Stockholders or their Groups (as such terms are defined in the
Stockholder's Agreement), or, in the case of such subsidiary other than the
Company, then the Board of Directors shall have the right to terminate this
Option (in which event such Option shall not be subject to the above described
adjustments in subsection (a)) by causing written notice of such termination to
be given to you at least fifteen (15) days prior to the earlier of (A) the date
on which such consolidation, merger or acquisition of assets or stock is
expected to become effective, or (B) if different from the date specified in
subclause (A) above, the date as of which a record will be taken to determine
the holders of shares of Common Stock who shall be entitled to exchange such
shares for securities or other property (including cash) deliverable upon such
consolidation, merger or acquisition of assets or stock, provided, however, that
any such Options as to which notice of termination has been sent by the Company
as aforesaid in respect of any of the events described above, which are not
otherwise exercisable during the aforesaid fifteen (15) day period solely
because they are not then vested and which have not otherwise lapsed or expired,
shall be either assumed by the acquiror or surviving entity upon the
consummation of such event or shall have the vesting period thereof accelerated
to permit the exercise thereof subject to the consummation of such transactions
during the aforesaid fifteen (15) day period if all other conditions to exercise
(other than vesting) are met. Such notice shall be deemed duly given when given
as provided below, and failure to give such notice, or a defect therein, shall
not affect the termination of this Option.
(c) If the Board of Directors shall determine to cause the
termination of this Option pursuant to subsection (b) above upon the occurrence
of an event described in said subsection (b), and shall not provide a period
during which this Option will be exercisable in full
5
<PAGE>
prior to such termination of this Option or in the event the restrictions set
forth in subsections 4(a) and/or 4(b) shall apply to the Options to be
terminated, then, upon the occurrence of such event and the actual consummation
of the applicable consolidation, merger or sale, this Option shall terminate and
you shall receive, with respect to each Share subject to this Option (including
those Shares as to which vesting has been accelerated pursuant to subsection (b)
above), an amount per Share equal to the excess of the fair market value of each
such Share immediately prior to the occurrence of such transaction over the
exercise Option Price per Share; such amount to be payable in cash, in one or
more of the kinds of property payable in such transaction, or in a combination
thereof, as the Board of Directors, in its sole discretion, shall determine.
8. RESTRICTIONS ON TRANSFERS. (a) This Option is not transferable by
you, and is exercisable only by you, and may not be sold, assigned, transferred,
pledged or hypothecated in any way (whether by operation of law or otherwise)
except that upon your death this Option may be transferred subject to all of the
terms and conditions contained in this Agreement, (A) to your then-current
spouse, parents or lineal descendants, or to trusts or custodianships
established for any such person, (B) by operation of the laws of descent and
distribution, (C) by disposition pursuant to the terms of your last will and
testament, to such spouse, parent or lineal descendant or (D) otherwise to your
estate. This Option shall not be subject to execution, attachment or similar
proceeding. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of this Option or any interest herein, and the levy of any
attachment or similar proceeding upon this Option or any interest herein, shall
be null and void and without effect except as provided in the preceding
sentence.
(b) The Company may postpone the time of delivery of certificates
for the shares issuable upon the exercise of this Option for such additional
time as the Company shall deem necessary or desirable to enable it to comply
with the listing requirements of any securities exchange or the National
Association of Securities Dealers, Inc. upon which shares of the Company may
then or are then contemplated to be listed or quoted, or the requirements of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or any rules or regulations of the Securities and Exchange Commission
promulgated thereunder or the requirements of applicable state laws relating to
the authorization, issuance or sale of securities.
(c) (i) You hereby represent and warrant to the Company that (A)
this Option and all Shares hereafter purchased or otherwise acquired by you have
been and are being acquired by you for your own account for investment, without
any intention of selling or further distributing the same, (B) you do not
presently have any reason to anticipate any change in circumstances or any other
particular occasion or event which would cause you to sell the Option or any of
such Shares, and (C) you are fully aware that in agreeing to grant the Option
and/or sell or issue such Shares to you, and in entering into this Agreement,
the Company has relied and is relying upon the truth and accuracy of these
representations and warranties.
(ii) Each instrument, agreement or certificate the
Company has issued or will issue to represent this Option shall prominently bear
a legend making reference to this
6
<PAGE>
Agreement and securities laws applicable to the Shares acquired upon exercise
hereof and to the Stockholders' Agreement.
9. NOT A CONTRACT OF EMPLOYMENT. NOTHING IN OPTION AGREEMENT SHALL
CONFER ANY RIGHT TO CONTINUE IN THE EMPLOY OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR AFFECT ANY RIGHT WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES
MAY HAVE TO TERMINATE YOUR EMPLOYMENT.
10. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
(b) Each notice relating to this Option shall be in writing and
delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement with a copy to
Golenbock, Eiseman, Assor & Bell, 437 Madison Avenue, New York, New York 10022,
Attention: A.C. Peskoe, Esq. Anyone to whom a notice may be given under this
Agreement may designate a new address by notice to that effect given to the
other party in accordance with this subsection (b). Each such notice shall be
deemed given upon the receipt thereof when delivered in person and on the second
business day after the mailing when sent by mail as aforesaid.
(c) You understand that, upon exercise of this Option, you may
recognize income for tax purposes in an amount equal to the excess of the then
fair market value of the Shares purchased over the Option Price for such Shares.
Your employer may withhold tax from your current compensation with respect to
such income or any other income which it deems you to have received in
connection therewith; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option.
(d) If this Option shall be mutilated, lost, stolen or destroyed,
the Company shall issue in exchange and substitution for and upon cancellation
of the mutilated Option, or in lieu of and in substitution for the Option lost,
stolen or destroyed, a new Option of like tenor and denomination, but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Option and such indemnity and, if requested by the Company,
such bond, as shall in each case be satisfactory to the Company. You must also
comply with such other reasonable requirements and pay such other reasonable
charges as the Company may prescribe in connection with such issuance.
(e) This Option shall be governed and construed in accordance
with the substantive laws of the State of New York applicable to contracts
executed, delivered and to be fully
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<PAGE>
performed in the State of New York, without giving effect to contrary provisions
regarding conflict of laws.
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators and legal representatives,
and shall inure to the benefit of and be binding upon the Company and its
successors and assigns. You may not assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of this Agreement, or any of your rights
hereunder except if and to the extent expressly permitted by Section 8 of this
Agreement, and any such attempted prohibited delegation or disposition shall be
null and void and without effect.
(g) This Agreement constitutes the complete understanding between
the parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto.
(h) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
(i) The section headings contained herein are for the purposes of
convenience only, are not intended to define or limit the contents of said
sections and are not part of this Agreement.
(j) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the date first above set forth.
CVC HOLDINGS, INC.
By: /s/ Christine B. Whitman
ACCEPTED AND AGREED TO:
/s/ Ahmad Kermani
- -----------------------
Ahmad Kermani
186 BELGIAN DR.
- -----------------------
DANVILLE, CA 94526
- -----------------------
[Address]
8
<PAGE>
TABLE A
<TABLE>
<CAPTION>
Number of Shares Vesting Pursuant and
Subject to options subject to this option on:
- ------------------ --------------------------
<S> <C>
167 October 15, 1994
167 October 15, 1995
166 October 15, 1996
</TABLE>
9
<PAGE>
EXHIBIT A
CONSENT TO
BE BOUND BY THE TERMS OF
A STOCKHOLDERS' AGREEMENT
Upon the consummation of his acquisition of any shares of capital stock
of CVC Holdings, Inc. (the "Corporation") pursuant to the Option Agreement
between the undersigned and the Corporation dated as of _______, 1994, the
undersigned agrees to be bound by all of the terms, conditions, limitations and
provisions of the Stockholders' Agreement, dated as of December 21, 1990, as the
same may be amended from time to time, among the Corporation and the
stockholders of the Corporation named therein as a (i) signatory, (ii)
"Stockholder," (iii)* ["Initial Stockholder", and (vi) "Management
Stockholder"]* for the purposes of such agreement as if he had been an original
signatory thereto.
IN WITNESS WHEREOF, the undersigned has subscribed his name below as of
the ___ day of ______, 19__.
/s/ Ahmad Kermani
-----------------
Ahmad Kermani
10
<PAGE>
Exhibit 4.13
Neither the options granted pursuant to this Agreement nor any shares of
Common Stock issuable upon the exercise of any such options have been
registered under the Securities Act of 1933 and none of them may be
transferred, nor will any assignee or endorsee of such options or shares
of Common Stock be recognized as an owner thereof by the issuer for any
purpose, unless a registration statement under the Securities Act of 1933,
as amended, with respect to such options or shares shall then be in effect
or unless the availability of an exemption from registration with respect
to any proposed transfer or disposition of such options or shares shall be
established to the satisfaction of the issuer. Neither the options granted
pursuant to this Agreement nor any shares of Common Stock issuable upon
the exercise of any such options may be sold or transferred except
pursuant to an effective registration statement or similar qualification
under applicable State securities laws, or unless it is established to the
satisfaction of the issuer that such sale or transfer is in a transaction
which is exempt under, or otherwise in compliance with, such laws. Neither
the options granted pursuant to this Agreement nor any shares of Common
Stock issuable upon the exercise of any such options may be sold,
transferred, assigned or otherwise disposed of, except in accordance with
the terms and conditions of a certain Stockholders' Agreement dated as of
December 21, 1990 by and among the issuer, the holder of this option and
the other stockholders named in such Stockholders' Agreement.
CVC HOLDINGS, INC.
c/o CVC Products, Inc.
525 Lee Road
Rochester, N.Y. 14603
To: Christopher Mann
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of December 21, 1990 (the "Date of Grant"), in consideration
of the payment to the Company of $3,350 (such being an aggregate of $.67 for
each option to purchase a Share (as hereinafter defined) granted hereby), the
receipt of which is hereby acknowledged by the Company, the option (this
"Option") to purchase, in accordance with and subject to the terms and
conditions set forth herein, 5,000 shares (the "Shares") of Common Stock, $.01
par value per share ("Common Stock"), of the Company, at the exercise price of
$25 per Share, subject to adjustment as hereinafter provided ("the Option
Price"), such Option Price being, in the judgment of the Company, not less than
one hundred percent (100%) of the fair market value of each such Share on the
Date of Grant and intended to reflect the parties' best estimate as to what is
likely to be not less than the fair market value of each such Share on the date
of exercise of this Option.
2. OPTION EXERCISE. This Option may be exercised by you from time to
time, in part or in full (but subject to the provisions of subparagraph 2(b) and
of Paragraph 4 below), at any time on or after the date hereof.
<PAGE>
(a) This Option can be exercised only with respect to full
Shares and only with respect to a minimum of 200 Shares at the time of any
exercise.
(b) Any exercise of this Option must be in writing addressed
to the Board of Directors of the Company at the principal place of business of
the Company and delivered at least ten (10) business days prior to the proposed
date of exercise, which writing shall indicate the number of Shares as to which
this Option is being exercised and shall be accompanied by a certified or bank
cashier's check payable to the order of the Company in the full amount of the
aggregate Option Price of the Shares covered by such exercise.
3. TERMINATION OF OPTION. The unexercised portion of this Option
will automatically and without notice terminate and become null and void on the
tenth anniversary of the date hereof, subject to earlier termination as
hereinafter provided (the date on which the earliest of such events shall occur
being herein referred to as the "Expiration Date").
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if and so long as such
exercise would subject the Company or any of its subsidiaries to any substantial
risk under contracts or programs restricting foreign ownership or control of the
Company or any of its subsidiaries or would subject the Company or any of its
subsidiaries to other regulatory problems, in each case, as determined by the
Company's Board of Directors.
5. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
6. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC. (a)
Notwithstanding any other provisions contained in this Agreement, in the event
of the merger or consolidation of the Company, or reorganization or
recapitalization of, stock dividend on, stock split, split-up, split-off,
spin-off or combination of, shares of Common Stock, appropriate adjustments
shall be made by the Board of Directors of the Company as to the number of
Shares and/or the exercise price per Share subject to this Option, as shall be
equitable to prevent reduction or enlargement of rights under this Option, and
the determination of the Board of Directors as to such matters shall be
conclusive and binding. References in this Agreement to Shares shall include any
such securities or other property (including cash) into which Shares of Common
Stock may be changed pursuant to or in accordance with the preceding sentence
through merger, consolidation,
2
<PAGE>
reorganization, recapitalization, stock dividend, stock split, split-up,
split-off, spin-off, or combination of shares.
(b) If (i) the Board of Directors of the Company approves a
consolidation or merger of the Company or any substantial subsidiary of the
Company with another corporation and a change in control in the Company is
effected in connection therewith, or (ii) the Board of Directors approves the
sale of all or substantially all of the property or assets of the Company or of
any substantial subsidiary of the Company, or (iii) more than fifty percent
(50%) of the total combined voting power of all classes of stock of the Company
normally entitled to vote for the election of directors of the Company is
acquired by a person, firm or corporation or cooperating group of such
individuals or entities, other than the Initial Stockholders or their Groups (as
such terms are defined in the Stockholder's Agreement (as hereinafter defined)),
the Board of Directors shall have the right to terminate this Option (in which
event such Option shall not be subject to the above described adjustments in
subparagraph (a)) by causing written notice of such termination to be given to
you at least fifteen (15) days prior to the earlier of (A) the date on which
such consolidation, merger or acquisition of assets or stock is expected to
become effective, or (B) if different from the date specified in subclause (A)
above, the date as of which a record will be taken to determine the holders of
shares of Common Stock who shall be entitled to exchange such shares for
securities or other property (including cash) deliverable upon such
consolidation, merger or acquisition of assets or stock. Such notice shall be
deemed duly given when given as provided below, and failure to give such notice,
or a defect therein, shall not affect the termination of this Option.
(c) If the Board of Directors shall determine to cause the
termination of this Option pursuant to subparagraph (b) above upon the
occurrence of an event described in said subparagraph (b), and shall not provide
a period during which this Option will be exercisable in full prior to such
termination of this Option or in the event the restrictions set forth in
Paragraph 4 shall apply to the Options to be terminated, then, upon the
occurrence of such event and the actual consummation of the applicable
consolidation, merger or sale, this Option shall terminate and you shall
receive, with respect to each Share subject to this Option, an amount per Share
equal to the excess of the fair market value of each such Share immediately
prior to the occurrence of such transaction over the exercise Option Price per
Share; such amount to be payable in cash, in one or more of the kinds of
property payable in such transaction, or in a combination thereof, as the Board
of Directors, in its sole discretion, shall determine.
7. RESTRICTIONS ON TRANSFERS. (a) This Option is not transferable by
you, and is exercisable only by you, and may not be sold, assigned, transferred,
pledged or hypothecated in any way (whether by operation of law or otherwise)
except if and to the extent expressly permitted pursuant to the Stockholders'
Agreement (the "Stockholders' Agreement") dated as of the date hereof among the
Company and each of the holders of shares of capital stock of the Company named
therein, and shall not be subject to execution, attachment or similar
proceeding. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of this Option or any interest herein, and the levy of any
attachment or similar proceeding upon this Option or any
3
<PAGE>
interest herein, shall be null and void and without effect except as provided in
the preceding sentence.
(b) The Company may postpone the time of delivery of
certificates for the shares issuable upon the exercise of this Option for such
additional time as the Company shall deem necessary or desirable to enable it to
comply with the listing requirements of any securities exchange or the National
Association of Securities Dealers, Inc. upon which shares of the Company may
then or are then contemplated to be listed, or the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended, or any rules or regulations of the Securities
and Exchange Commission promulgated thereunder or the requirements of applicable
state laws relating to the authorization, issuance or sale of securities.
(c) You acknowledge that all of the restrictions on the sales
of the Options and/or shares acquirable upon the exercise of any Options and the
representations and warranties made by you in the Stockholders' Agreement and in
the Subscription Agreement, dated as of the date hereof, between you and the
Company are incorporated herein by reference as if set forth in full herein.
8. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such Shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
(b) Each notice relating to this Option shall be in writing
and delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement. Anyone to whom a
notice may be given under this Agreement may designate a new address by notice
to that effect given to the other party in accordance with this subparagraph
(b).
(c) You understand that, upon exercise of this Option, you
will recognize income for tax purposes in an amount equal to the excess of the
then fair market value of the Shares purchased over the Option Price for such
Shares. Your employer may withhold tax from your current compensation with
respect to such income; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option.
(d) If this Option shall be mutilated, lost, stolen or
destroyed, the Company shall issue in exchange and substitution for and upon
cancellation of the mutilated Option, or in lieu of and in substitution for the
Option lost, stolen or destroyed, a new Option of like tenor and denomination,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Option and such indemnity and, if requested by the
4
<PAGE>
Company, such bond, as shall in each case be satisfactory to the Company. You
must also comply with such other reasonable regulations and pay such other
reasonable charges as the Company may prescribe in connection with such
issuance.
(e) This Option shall be governed and construed in accordance
with the substantive laws of the State of New York applicable to contracts
executed, delivered and to be fully performed in the State of New York, without
giving effect to contrary provisions regarding conflict of laws.
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators, successors and legal
representatives, and shall inure to the benefit of and be binding upon the
Company and its successors and assigns. You may not assign, transfer, pledge,
encumber, hypothecate or otherwise dispose of this Agreement, or any of your
rights hereunder except if and to the extent expressly permitted by the
Stockholders' Agreement referred to above, and any such attempted prohibited
delegation or disposition shall be null and void and without effect.
(g) This Agreement constitutes the complete understanding
between the parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
(i) The paragraph headings contained herein are for the
purposes of convenience only, are not intended to define or limit the contents
of said paragraphs and are not part of this Agreement.
5
<PAGE>
(j) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the day of December 21, 1990.
CVC HOLDINGS, INC.
By: /s/ CHRISTINE B. WHITMAN
---------------------------------
ACCEPTED AND AGREED TO:
/s/ CHRISTOPHER MANN
- -------------------------------
(716) 225-7248
702 WERTH GREECE RD
ROCHESTER, NY 14026
- -------------------------------
[Address]
6
<PAGE>
Exhibit 4.14
Neither the options granted pursuant to this Agreement nor any shares of
Common Stock issuable upon the exercise of any such options have been
registered under the Securities Act of 1933 and none of them may be
transferred, nor will any assignee or endorsee of such options or shares
of Common Stock be recognized as an owner thereof by the issuer for any
purpose, unless a registration statement under the Securities Act of 1933,
as amended, with respect to such options or shares shall then be in effect
or unless the availability of an exemption from registration with respect
to any proposed transfer or disposition of such options or shares shall be
established to the satisfaction of the issuer. Neither the options granted
pursuant to this Agreement nor any shares of Common Stock issuable upon
the exercise of any such options may be sold or transferred except
pursuant to an effective registration statement or similar qualification
under applicable State securities laws, or unless it is established to the
satisfaction of the issuer that such sale or transfer is in a transaction
which is exempt under, or otherwise in compliance with, such laws. Neither
the options granted pursuant to this Agreement nor any shares of Common
Stock issuable upon the exercise of any such options may be sold,
transferred, assigned or otherwise disposed of, except in accordance with
the terms and conditions of a certain Stockholders' Agreement dated as of
December 21, 1990 by and among the issuer, the holder of this option and
the other stockholders named in such Stockholders' Agreement.
CVC HOLDINGS, INC.
c/o CVC Products, Inc.
525 Lee Road
Rochester, N.Y. 14603
To: Christine B. Whitman
1. OPTION GRANT. CVC Holdings, Inc. (the "Company") hereby grants to
you, effective as of December 21, 1990 (the "Date of Grant"), in consideration
of the payment to the Company of $5,695 (such being an aggregate of $.67 for
each option to purchase a Share (as hereinafter defined) granted hereby), the
receipt of which is hereby acknowledged by the Company, the option (this
"Option") to purchase, in accordance with and subject to the terms and
conditions set forth herein, 8,500 shares (the "Shares") of Common Stock, $.01
par value per share ("Common Stock"), of the Company, at the exercise price of
$25 per Share, subject to adjustment as hereinafter provided (the "Option
Price"), such Option Price being, in the judgment of the Company, not less than
one hundred percent (100%) of the fair market value of each such Share on the
Date of Grant and intended to reflect the parties' best estimate as to what is
likely to be not less than the fair market value of each such Share on the date
of exercise of this Option.
2. OPTION EXERCISE. This Option may be exercised by you from time to
time, in part or in full (but subject to the provisions of subparagraph 2(b) and
of Paragraph 4 below), at any time on or after the date hereof.
<PAGE>
(a) This Option can be exercised only with respect to full
Shares and only with respect to a minimum of 200 Shares at the time of any
exercise.
(b) Any exercise of this Option must be in writing addressed
to the Board of Directors of the Company at the principal place of business of
the Company and delivered at least ten (10) business days prior to the proposed
date of exercise, which writing shall indicate the number of Shares as to which
this Option is being exercised and shall be accompanied by a certified or bank
cashier's check payable to the order of the Company in the full amount of the
aggregate Option Price of the Shares covered by such exercise.
3. TERMINATION OF OPTION. The unexercised portion of this Option
will automatically and without notice terminate and become null and void on the
tenth anniversary of the date hereof, subject to earlier termination as
hereinafter provided (the date on which the earliest of such events shall occur
being herein referred to as the "Expiration Date").
4. CERTAIN CONDITIONS TO EXERCISE. (a) This Option may be exercised
by you only if on the date of exercise you satisfy the Company in such manner as
the Company shall reasonably specify, that the Shares issuable upon such
exercise may be issued to you pursuant to an exemption from the registration
requirements of applicable federal and state securities laws.
(b) This Option may not be exercised if and so long as such
exercise would subject the Company or any of its subsidiaries to any substantial
risk under contracts or programs restricting foreign ownership or control of the
Company or any of its subsidiaries or would subject the Company or any of its
subsidiaries to other regulatory problems, in each case, as determined by the
Company's Board of Directors.
5. RESERVATION OF SHARES. The Company will at all times through the
close of business on the Expiration Date reserve and keep available free from
preemptive rights, out of the aggregate of its authorized but unissued or
treasury shares of Common Stock, for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Option, the
number of Shares deliverable upon the exercise of this Option. The Company
covenants that all Shares issued upon exercise of this Option shall, upon
issuance in accordance with the terms of this Option, be fully paid and
nonassessable.
6. CERTAIN ADJUSTMENTS; MERGERS, CONSOLIDATIONS, ETC. (a)
Notwithstanding any other provisions contained in this Agreement, in the event
of the merger or consolidation of the Company, or reorganization or
recapitalization of, stock dividend on, stock split, split-up, split-off,
spin-off or combination of, shares of Common Stock, appropriate adjustments
shall be made by the Board of Directors of the Company as to the number of
Shares and/or the exercise price per Share subject to this Option, as shall be
equitable to prevent reduction or enlargement of rights under this Option, and
the determination of the Board of Directors as to such matters shall be
conclusive and binding. References in this Agreement to Shares shall include any
such securities or other property (including cash) into which Shares of Common
Stock may be changed pursuant to or in accordance with the preceding sentence
through merger, consolidation,
2
<PAGE>
reorganization, recapitalization, stock dividend, stock split, split-up,
split-off, spin-off, or combination of shares.
(b) If (i) the Board of Directors of the Company approves a
consolidation or merger of the Company or any substantial subsidiary of the
Company with another corporation and a change in control in the Company is
effected in connection therewith, or (ii) the Board of Directors approves the
sale of all or substantially all of the property or assets of the Company or of
any substantial subsidiary of the Company, or (iii) more than fifty percent
(50%) of the total combined voting power of all classes of stock of the Company
normally entitled to vote for the election of directors of the Company is
acquired by a person, firm or corporation or cooperating group of such
individuals or entities, other than the Initial Stockholders or their Groups (as
such terms are defined in the Stockholder's Agreement (as hereinafter defined)),
the Board of Directors shall have the right to terminate this Option (in which
event such Option shall not be subject to the above described adjustments in
subparagraph (a)) by causing written notice of such termination to be given to
you at least fifteen (15) days prior to the earlier of (A) the date on which
such consolidation, merger or acquisition of assets or stock is expected to
become effective, or (B) if different from the date specified in subclause (A)
above, the date as of which a record will be taken to determine the holders of
shares of Common Stock who shall be entitled to exchange such shares for
securities or other property (including cash) deliverable upon such
consolidation, merger or acquisition of assets or stock. Such notice shall be
deemed duly given when given as provided below, and failure to give such notice,
or a defect therein, shall not affect the termination of this Option.
(c) If the Board of Directors shall determine to cause the
termination of this Option pursuant to subparagraph (b) above upon the
occurrence of an event described in said subparagraph (b), and shall not provide
a period during which this Option will be exercisable in full prior to such
termination of this Option or in the event the restrictions set forth in
Paragraph 4 shall apply to the Options to be terminated, then, upon the
occurrence of such event and the actual consummation of the applicable
consolidation, merger or sale, this Option shall terminate and you shall
receive, with respect to each Share subject to this Option, an amount per Share
equal to the excess of the fair market value of each such Share immediately
prior to the occurrence of such transaction over the exercise Option Price per
Share; such amount to be payable in cash, in one or more of the kinds of
property payable in such transaction, or in a combination thereof, as the Board
of Directors, in its sole discretion, shall determine.
7. RESTRICTIONS ON TRANSFERS. (a) This Option is not transferable by
you, and is exercisable only by you, and may not be sold, assigned, transferred,
pledged or hypothecated in any way (whether by operation of law or otherwise)
except if and to the extent expressly permitted pursuant to the Stockholders'
Agreement (the "Stockholders' Agreement") dated as of the date hereof among the
Company and each of the holders of shares of capital stock of the Company named
therein, and shall not be subject to execution, attachment or similar
proceeding. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of this Option or any interest herein, and the levy of any
attachment or similar proceeding upon this Option or any
3
<PAGE>
interest herein, shall be null and void and without effect except as provided in
the preceding sentence.
(b) The Company may postpone the time of delivery of
certificates for the shares issuable upon the exercise of this Option for such
additional time as the Company shall deem necessary or desirable to enable it to
comply with the listing requirements of any securities exchange or the National
Association of Securities Dealers, Inc. upon which shares of the Company may
then or are then contemplated to be listed, or the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended, or any rules or regulations of the Securities
and Exchange Commission promulgated thereunder or the requirements of applicable
state laws relating to the authorization, issuance or sale of securities.
(c) You acknowledge that all of the restrictions on the sales
of the Options and/or shares acquirable upon the exercise of any Options and the
representations and warranties made by you in the Stockholders' Agreement and in
the Subscription Agreement, dated as of the date hereof, between you and the
Company are incorporated herein by reference as if set forth in full herein.
8. MISCELLANEOUS. (a) You shall not have any rights to dividends or
any other rights of a stockholder with respect to any shares subject to this
Option, except to the extent that you have paid for such Shares and a
certificate for such shares shall have been actually issued in your name upon
the due, proper and timely exercise of this Option as provided for herein.
(b) Each notice relating to this Option shall be in writing
and delivered in person or by certified mail, return receipt requested, to the
proper address. All notices to you shall be addressed to you at your address
below specified. All notices to the Company shall be addressed to the Company at
the address set forth on the first page of this Agreement. Anyone to whom a
notice may be given under this Agreement may designate a new address by notice
to that effect given to the other party in accordance with this subparagraph
(b).
(c) You understand that, upon exercise of this Option, you
will recognize income for tax purposes in an amount equal to the excess of the
then fair market value of the Shares purchased over the Option Price for such
Shares. Your employer may withhold tax from your current compensation with
respect to such income; to the extent that your then current compensation is
insufficient to satisfy the withholding tax liability, you will be required to
make a cash payment to cover such liability as a condition of exercise of this
Option.
(d) If this Option shall be mutilated, lost, stolen or
destroyed, the Company shall issue in exchange and substitution for and upon
cancellation of the mutilated Option, or in lieu of and in substitution for the
Option lost, stolen or destroyed, a new Option of like tenor and denomination,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Option and such indemnity and, if requested by the
4
<PAGE>
Company, such bond, as shall in each case be satisfactory to the Company. You
must also comply with such other reasonable regulations and pay such other
reasonable charges as the Company may prescribe in connection with such
issuance.
(e) This Option shall be governed and construed in accordance
with the substantive laws of the State of New York applicable to contracts
executed, delivered and to be fully performed in the State of New York, without
giving effect to contrary provisions regarding conflict of laws.
(f) This Agreement shall inure to the benefit of and shall be
binding upon your heirs, executors, administrators, successors and legal
representatives, and shall inure to the benefit of and be binding upon the
Company and its successors and assigns. You may not assign, transfer, pledge,
encumber, hypothecate or otherwise dispose of this Agreement, or any of your
rights hereunder except if and to the extent expressly permitted by the
Stockholders' Agreement referred to above, and any such attempted prohibited
delegation or disposition shall be null and void and without effect.
(g) This Agreement constitutes the complete understanding
between the parties with respect to the subject matter hereof, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by written instrument signed by
each of the parties hereto.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
(i) The paragraph headings contained herein are for the
purposes of convenience only, are not intended to define or limit the contents
of said paragraphs and are not part of this Agreement.
5
<PAGE>
(j) By signing below, you hereby accept this Option subject to
all of the terms and provisions hereof and acknowledge all of the
representations, warranties and agreements set forth above. This Option shall
not be effective until you have signed this Option and delivered it to the
Company.
IN WITNESS WHEREOF, CVC Holdings, Inc. has caused this Option to be
executed as of the day of December 21, 1990.
CVC HOLDINGS, INC.
By: /s/ CHRISTINE B. WHITMAN
----------------------------
ACCEPTED AND AGREED TO:
/s/ CHRISTINE B. WHITMAN
- -------------------------------
[ILLEGIBLE]
- -------------------------------
[ILLEGIBLE]
- -------------------------------
[Address]
6
<PAGE>
EXHIBIT 5.1
[KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP LETTERHEAD]
(212) 836-8000
May 5, 2000
Veeco Instruments Inc.
Terminal Drive
Plainview, New York 11803
Ladies and Gentlemen:
We have acted as special counsel to Veeco Instruments Inc., a
Delaware corporation (the "Company"), in connection with the Company's
registration statement on Form S-8 (the "Registration Statement") to be filed
pursuant to the Securities Act of 1933, as amended. The Registration Statement
relates to an aggregate of 913,684 shares of the Company's common stock, par
value $.01 per share (the "Common Stock"), (a) 11,610 of which may be issued
upon the exercise of stock options granted pursuant to the CVC, Inc. 1999
Nonemployee Directors' Stock Option Plan, (b) 283,815 of which may be issued
upon the exercise of stock options granted pursuant to the CVC, Inc. Amended and
Restated 1997 Stock Option Plan, (c) 108,352 of which may be issued upon the
exercise of stock options granted pursuant to individual stock option agreements
between employees of Commonwealth Scientific Corporation, Inc. ("Commonwealth")
and Commonwealth, (d) 352,026 of which may be issued upon the exercise of stock
options granted pursuant to individual stock option agreements between certain
employees of CVC, Inc. and CVC, Inc. and (e) 157,881 of which may be issued
pursuant to the CVC Holdings, Inc. Stock Option Plan. The CVC and Commonwealth
stock option plans and stock option agreements described in clauses (a) through
(e) above are referred to in this opinion collectively as the "Option Plans".
The Option Plans have been assumed by the Company pursuant to the terms of the
Agreement and Plan of Merger (the "Merger Agreement") among the Company, Veeco
Acquisition Corp. and CVC, Inc. dated as of, February 29, 2000, whereby Veeco
Acquisition Corp., a wholly-owned subsidiary of Veeco, merged with and into CVC,
Inc. (the "Merger"). The Merger was consummated on May 5, 2000.
In that connection, we have reviewed the Company's Amended and
Restated Certificate of Incorporation, its Amended and Restated By-laws,
resolutions adopted by its Board of Directors and its stockholders, the
Registration Statement, the Option Plans, the Merger Agreement and such other
documents and proceedings as we have deemed appropriate.
On the basis of such review, and having regard to legal
considerations that we deem relevant, we are of the opinion that, assuming the
due authorization and valid issuance of the options being assumed by Veeco in
the Merger under the Option Plans, the shares of Common Stock to be offered
pursuant to the Registration Statement have been duly authorized and, when
issued in accordance with the terms set forth in the Option Plans, will be
validly issued, fully paid and nonassessable.
We advise you that we are members only of the Bar of the State
of New York and that our opinion set forth above is based as to matters of law
solely on applicable provisions of the General Corporation Law of the state of
Delaware, and we express no opinions as to any other laws, statutes, ordinances,
rules or regulations.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. In giving this opinion, we do not thereby admit
that we are within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Securities and Exchange
Commission.
Very truly yours,
/s/ Kaye, Scholer, Fierman, Hays & Handler, LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of our report dated February 10, 2000, with respect to the consolidated
financial statements and schedule of Veeco Instruments Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1999, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Melville, New York
May 3, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form S-8 of our
report on the combined financial statements of Digital Instruments, Inc. and
affiliates dated February 28, 1998 included in Veeco Instruments Inc.'s Form
10-K for the year ended December 31, 1999and all references to our firm included
in this registration statement.
/s/ Arthur Andersen LLP
Los Angeles, California
May 3, 2000
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
The undersigned, in the capacities relative to Veeco Instruments Inc. ("Veeco")
stated below, hereby appoints Edward H. Braun, John F. Rein, Jr. and Gregory A.
Robbins, and each of them acting individually, his true and lawful attorneys in
fact, with full power of substitution, to sign and file with the Securities and
Exchange Commission (a) a Registration Statement on Form S-8 relating to the
issuance of shares of common stock of Veeco upon the exercise of stock options
assumed by Veeco in connection with the merger of CVC, Inc. into Veeco, (b) a
Registration Statement on Form S-8 relating to the issuance of shares of common
stock of Veeco upon the exercise of stock options granted under Veeco's 2000
Stock Option Plan and (c) any and all amendments, including post-effective
amendments, to such Registration Statements.
In witness whereof, the undersigned has executed this Power of Attorney as of
April 28, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ EDWARD H. BRAUN
- -------------------------------------------
Edward H. Braun Director, Chairman and Chief Executive Officer
/s/ RICHARD A. D'AMORE
- -------------------------------------------
Richard A. D'Amore Director
/s/ JOEL A. ELFTMANN
- -------------------------------------------
Joel A. Elftmann Director
/s/ HEINZ K. FREIDRICH
- -------------------------------------------
Heinz K. Freidrich Director
/s/ PAUL R. LOW
- -------------------------------------------
Paul R. Low Director
/s/ ROGER D. MCDANIEL
- -------------------------------------------
Roger D. McDaniel Director
/s/ IRWIN H. PFISTER
- -------------------------------------------
Irwin H. Pfister Director
/s/ WALTER J. SHERR
- -------------------------------------------
Walter J. Sherr Director
</TABLE>
