Exhibit 10(ss)
STOCK OPTION AGREEMENT
(Non-Assignable)
Date: Option Number: 01B-279
October 21, 2002 Number of Shares Purchasable
5,000
To Purchase Shares of
Class B Common Stock
-of-
K-V PHARMACEUTICAL COMPANY
THIS CERTIFIES THAT ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Participant") is hereby granted
the option to purchase, at the option price of $15.310 per share (the
"Option Price"), 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 five (5) years from the date hereof (hereinafter called the
"expiration date").
This Option and all rights hereunder shall be non-assignable and
non-transferable, except to the extent that the holder's legatees, personal
representatives or distributees in the event of the holder's death may be
permitted to exercise this Option as hereinafter set forth.
Any attempted transfer, assignment, pledge, hypothecation or other
disposition of this Option except as provided herein shall be null and void
and without effect.
As of October 21, 2002, and prior to its expiration or earlier
termination, this Option shall be exercisable from time to time in
cumulative installments as to all or any of the shares then purchasable
hereunder as follows: During the twelve-month period commencing October 21,
2002 and ending October 20, 2003, it may be exercised as to 20% of the
shares originally subject hereto; and during each additional consecutive
twelve-month period, it may be exercised as to an additional 20%; until the
fifth twelve-month period, during which this Option shall be exercisable as
to all 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
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shall be during the normal business hours of the Company on a regular
business day not less than fifteen (15) days after the giving of such notice
unless an earlier date has been mutually agreed upon; provided, however,
that not less than ten (10) shares may be purchased at any one time unless
the number purchased is the total number then purchasable hereunder; and
provided further that this Option may not be exercised at any time when this
Option or the granting or exercise hereof violates any law or governmental
order or regulation. At the time of delivery specified in such notice, the
Company shall, without transfer or issue tax to the holder (or other person
entitled to exercise this Option) transfer and set aside for the benefit of
the holder (or other person entitled to exercise this Option) a certificate
or certificates out of the Company's theretofore authorized but unissued or
reacquired shares of Class B Common Stock as the Company may elect (with
appropriate legend thereon, if deemed necessary by the Company, containing
the representation by the person exercising the Option that the shares
purchased shall be for investment purposes and not with a view to resale or
distribution) against payment of the option price in full for the number of
shares purchased by either (i) cash (including a certified or bank cashier's
check or the equivalent thereof), or (ii) at the discretion of the Board of
Directors of the Company (with the Participant abstaining from voting), by
delivering at fair market value, as determined by the Board of Directors of
the Company (with the Participant abstaining from voting), Company Common
Stock already owned by the holder, 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 of Directors of the Company (with the Participant abstaining from
voting).
Except as hereinafter provided, no Option may be exercised at any
time unless the holder hereof is a director of the Company.
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"). If the holder ceases to be a director of
the Company during the Holding Period for any reason, except death or
disability, the holder's purchase thereof shall be voidable at the Company's
sole option and discretion at any time within the Holding Period. If any
purchase of Class B Common Stock is so voided, the least of (i) the funds
paid by the holder in connection with the voided transaction; (ii) the value
in cash of Common Stock used to purchase such Class B Common Stock,
determined as of the date of such purchase, less any amount which would have
been forfeited relative to Stock used to purchase the forfeited stock if
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such Stock had not been so used and the Holding Period relative to such
stock had not expired; or (iii) the fair market value per shares, as
determined on the date of termination of the holder as director of the
Company shall be returned in full to the holder within thirty (30) days
after such purchase is voided provided, however, no payment shall be due
prior to the time that the Company is in possession of the Class B Common
Stock and an executed stock power with respect to such Stock. In order to
facilitate the repurchase of Class B Common Stock by the Company in
accordance with the terms of this Paragraph, exercise of any Option or
portion thereof, the holder shall, at the time of payment for such Class B
Common Stock, as provided hereinabove, deliver to the Company a form of
stock power and assignment signed by the holder in form and substance
satisfactory to the Company, rendering the certificate representing the
shares purchased negotiable to the Company. Notwithstanding the foregoing,
if the holder demonstrates to the Company a need to obtain financing for the
purchase of Class B Common Stock, and indicates his good faith intention to
remain a director of the Company during the Holding Period, the Company, may
permit delivery of any Class B Common Stock purchased hereunder to a
financial institution for use as collateral security for the purchase of the
Class B Common Stock, subject to any necessary or appropriate restrictions
with respect thereto as may be required to comply with applicable federal
and state securities laws and/or the listing requirements of any national
securities exchange, and the holder may use any Class B Common Stock so held
in payment of the Option Price for additional Class B Common Stock as
provided for herein.
If the holder remains a director of the Company throughout the
Holding Period, or ceases to be a director by reason of death or disability,
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. If the Company fails or declines to exercise its right
to void any purchase pursuant to the terms of the preceding paragraph
hereof, the Company shall deliver the Certificates to the holder as soon as
practicable after the expiration of two years from the date of exercise.
This Option 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.
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Except as provided in this paragraph, upon the date the holder
ceases to be a director for any reason, this Option shall terminate. If the
Participant's directorship is terminated by reason of death or disability,
any outstanding Option or unexercised portion thereof which was granted to
him may be fully exercised by the Participant, his personal representative,
executor, administrator, heirs or devisees, as applicable, at any time
within one (1) year from the date of termination be reason of death or
disability, provided that the Participant has completed five (5) full years
of service with the Company from the date the Option was granted. If the
Participant has not completed five (5) full years of service with the
Company from the date the Option was granted, the Option may be exercised
only to the extent exercisable as of the date of termination of services.
In the event that the outstanding shares of Class B Common Stock of
the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of
the Company or of another corporation, or in the event that there is a
"corporate transaction" as that term is defined in the Regulations under
Section 425 of the Internal Revenue Code of 1986, by reason of
reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, spin-off, combination of shares or dividend payable in
capital stock, this Option shall, to the extent that it has not been
exercised, entitle the holder upon the subsequent exercise of this Option to
such number and kind of securities or other property, subject to the terms
of the Option, to which the holder would be entitled had the holder actually
owned the shares subject to the unexercised portion of this Option at the
time of the occurrence of such event, and the aggregate purchase price upon
the subsequent exercise of this Option shall be the same as if the Class B
Common Stock of the Company originally optioned were being purchased as
provided herein; provided, however, that each such adjustment in the number
and kind of shares subject to this Option, including any adjustment in the
Option price, shall be made in such manner as not to constitute a
"modification" as defined in Section 425 of the Internal Revenue Code of
1986. Any such adjustment made by the Company shall be conclusive.
Upon the occurrence of: (i) the dissolution or liquidation of the
Company, (ii) a reorganization, merger or consolidation of the Company with
one or more corporations in which the Company is not the surviving
corporation, (iii) a sale of substantially all of the assets of the Company
or (iv) the transfer of more than 80% of the then outstanding Stock of the
Company to another entity or person in a single transaction or series of
transactions, this Agreement shall terminate, and any outstanding Options
shall terminate on the day before the consummation of the transaction;
provided that the Board of Directors of the Company (with the Participant
abstaining from voting) shall have the right, but shall not be obligated, to
accelerate the time in which any Options may be exercised prior to such a
termination. However, the Board of Directors of the Company (with the
Participant abstaining from voting) has the authority to amend this
Agreement to require that a successor corporation assume any outstanding
Options.
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The Board of Directors of the Company (with the Participant
abstaining from voting) 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. The holder, by acceptance of this Option, hereby consents to
the placing of restrictive legend on any stock certificate for shares
purchased hereunder, setting forth the restrictions applicable to the
further resale, transfer or other conveyance thereof without registration
under the Securities Act of other applicable law or the availability of an
exemption from registration thereunder and to the placing of transfer
restrictions on the records of the transfer agent for such shares. In
addition, the holder hereof will not thereafter resell, transfer or
otherwise convey any shares purchased hereunder without compliance with one
of the following three conditions: (1) an opinion of the holder's counsel is
received, in form and substance satisfactory to counsel for the Company,
that registration under the Security Act and applicable state securities
laws is not required; or (2) such shares have been registered for sale under
the Securities Act and any applicable state securities laws; or (3) a
"no-action" letter is received from the staff of the Securities and Exchange
Commission and from applicable state securities agencies, based on an
opinion of the holder's counsel in form and substance reasonably
satisfactory to counsel for the Company, advising that registration under
the Securities Act is not required.
A determination by the Board of Directors of the Company (with
the Participant abstaining from voting) of any question 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: October 21, 2002
K-V PHARMACEUTICAL COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
VP, Treasurer and CFO
ACCEPTED:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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