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STOCK OPTION AGREEMENT
DATE: OPTION NUMBER: SP-13
APRIL 1, 1999 NUMBER OF SHARES PURCHASABLE
75,000
TO PURCHASE SHARES OF
CLASS B COMMON STOCK
-OF-
K-V PHARMACEUTICAL COMPANY
THIS CERTIFIES THAT Marc S. Hermelin is hereby granted the option to
purchase, at the option price of $16.563 per share, all or any part of that
number of fully paid and non-assessable shares of the Class B Common Stock,
par value $0.01 per share ("Class B Common Stock"), of K-V Pharmaceutical
Company, a Delaware corporation (hereinafter called the "Company") above set
forth, upon and subject to the following terms and conditions:
This Option and all rights to purchase shares hereunder shall expire four
(4) years from the date hereof (hereinafter called the "expiration date").
This Option and all rights hereunder shall be assignable and
transferable.
As of April 1, 1999, and Prior to its expiration or earlier termination,
this Option shall be exercisable from time to time as to all or any of the
shares then purchasable hereunder as follows: During the four-year period
commencing April 1, 1999 and ending March 31, 2003, it may be exercised as to
all or any shares at any time during which this Option shall be exercisable
as to the shares subject hereto.
This Option may be exercised from time to time only by delivery to the
Company at its main office (attention of the Secretary) of a duly signed
notice in writing stating the number of shares with respect to which this
Option is being exercised and the time and date of delivery thereof, which
time and date of delivery shall be during the normal business hours of the
Company on a regular business day not less than fifteen (15) days after the
giving of such notice unless an earlier date has been mutually agreed upon:
provided, however, that not less than ten (10) shares may be purchased at any
one time unless the number purchased is the total number then purchasable
hereunder: and provided further that this Option may not be exercised at any
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time when this Option or the granting or exercise hereof violates any law or
governmental order or regulation. At the time of delivery specified in such
notice, the Company shall, without transfer or issue tax to the holder (or
other person entitled to exercise this Option) transfer and set aside for the
benefit of the holder (or other person entitled to exercise this Option) a
certificate or certificates out of the Company's theretofore authorized but
unissued or reacquired shares of Class B Common Stock as the Company may
elect (with appropriate legend thereon, if deemed necessary by the Company,
containing the representation by the person exercising the Option that the
shares purchased shall be for investment purposes and not with a view to
resale or distribution) against payment of the option price in full for the
number of shares purchased by either (i) cash (including a certified or bank
cashier's check or the equivalent thereof), or (ii) at the discretion of the
Board, by delivering at fair market value, as determined by the Board,
Company Common Stock already owned by the Participant, or (iii) any
combination of cash and Company Common Stock, to be held by the Company and
subsequently delivered to the holder (or such other person) as hereinafter
provided. If the holder fails to pay for any part of the number of shares
specified in such notice as required, the right to purchase such shares may
be terminated by the Board.
To the extent that this Option has not been exercised in full prior to
its termination or expiration date, whichever occurs sooner, it shall
terminate and become void and of no effect.
All Class B Common Stock purchased pursuant to the exercise of an Option
shall be held by the Company for a period of two years from the date of
exercise (the "Holding Period").
Upon completion of the Holding Period (under normal Company policies),
the Company shall deliver to the holder or the holder's personal
representative, as soon as practicable thereafter, certificates representing
the Class B Common Stock purchased hereunder (the "Certificates"), free and
clear of restrictions except for the restrictions which are necessary to
assure compliance by the Company and the holder with applicable federal and
state securities laws and/or the listing requirements of any national
securities exchange.
This Option shall not confer upon the holder any right to remain in the
employ of the Company or any subsidiary thereof and shall not confer upon the
holder any rights in the stock of the Company prior to the issuance of a
stock certificate pursuant to the exercise of this Option. No adjustment
shall be made for dividends or other rights for which the record date is
prior to the date such stock certificate is issued.
In the event that the outstanding shares of Class B Common Stock of
the Company are hereafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company
or of another corporation, or in the event that there is a "corporate
transaction" as that term is defined in the Regulations under Section 425
of the Internal Revenue Code of 1986, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, spin-off,
combination of shares or dividend payable in capital stock, this Option
shall, to the extent that it has not been exercised, entitle the holder upon
the subsequent exercise of this Option to such number and kind of securities
or other property, subject to the terms of the Option, to which the holder
would be entitled had the holder
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actually owned the shares subject to the unexercised portion of this Option
at the time of the occurrence of such event, and the aggregate purchase price
upon the subsequent exercise of this Option shall be the same as if the Class
B Common Stock of the Company originally optioned were being purchased as
provided herein; provided, however, that each such adjustment in the number
and kind of shares subject to this Option, including any adjustment in the
Option price, shall be made in such manner as not to constitute a
"modification" as defined in Section 425 of the Internal Revenue Code of
1986. Any such adjustment made by the Board of Directors shall be conclusive.
The Company may postpone the issuance and delivery of shares upon any
exercise of this Option, if necessary, until admission of such shares to
listing on any stock exchange and completion of registration and
qualification of such shares under any applicable state or federal law, rule
or regulation.
The holder hereof shall make such representations and furnish such
information to the Company as may be appropriate to permit the Company to
issue such shares in compliance with the provisions of the Security Act of
1933, as amended (the "Securities Act"), or any other applicable law,
including state securities laws. Without limiting the generality of the
foregoing, if requested by the Company, the holder will represent, in form
acceptable to the Company, that the holder is purchasing any shares issued
pursuant hereto for investment purposes and not with a view to resale or
distribution.
This Option is issued pursuant to the resolutions duly adopted by the
Board of Directors, the receipt of a copy of which the holder acknowledges by
virtue of the acceptance hereof, and is subject to all the terms and
conditions of said resolutions.
A determination by the Board of Directors of any questions which may
arise with respect to the interpretation and construction of the provisions
of this Option shall be final.
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WITNESS the seal of the Company and the Signatures of its duly authorized
officers or agents.
Dated: April 1, 1999
K-V PHARMACEUTICAL COMPANY
By: /s/ Gerald R. Mitchell
-----------------------------
Vice President, Finance
ACCEPTED:
/s/ Marc S. Hermelin
-----------------------------
Marc S. Hermelin
