MATTHEWS INTERNATIONAL CORPORATION Two NorthShore Center Pittsburgh, PA 15212 Agreement for Nonstatutory Stock Options under 1992 Stock Incentive Plan, as amended through April 25, 2006
Exhibit
10.7
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INTERNATIONAL CORPORATION
Two
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Agreement
for Nonstatutory Stock Options under 1992
Stock Incentive Plan, as
amended through April 25, 2006
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INTERNATIONAL CORPORATION, a Pennsylvania corporation (the "Corporation"), and
__________________, an employee of the Corporation or a Subsidiary of the
Corporation (the "Optionee"), for good and valuable consideration the receipt
and adequacy of which are hereby acknowledged and intending to be legally bound
hereby, agree as follows:
1. Grant of
Option. The Corporation hereby confirms the grant to the
Optionee on ___________(the "Date of Grant") of an option (the "Option") to
purchase _________ shares of Class A Common Stock, par value $1.00 per
share, of the Corporation (the "Class A Common Stock") at an option price of
$_____ per share (the fair market value per share of the Class A Common Stock on
the Date of Grant), under and subject to the terms and conditions of the
Corporation's 1992 Stock Incentive Plan, as amended through April 25, 2006 (the
"Plan") and this Agreement. The Plan is incorporated by reference and
made a part of this Agreement as though set forth in full. Terms
which are capitalized but not defined in this Agreement have the same meaning as
in the Plan unless the context otherwise requires.
The
Option confirmed hereby is intended to be a nonstatutory stock option as that
term is defined in Section 4 of the Plan and will not be treated as an incentive
stock option under Section 422 or an option under Section 423 of the Internal
Revenue Code of 1986. Subject to the provisions of Section 5 of
the Plan (as modified by this Agreement) and Section 9 of the Plan, the Option
shall first become exercisable only in accordance with the following
schedule:
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(a)
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For
one-third (1/3) of the number of shares subject to the Option (rounded
upward to the nearest whole share) on the later of (i) the date on which
the fair market value per share of the Class A Common Stock equals or
exceeds one hundred ten percent (110%) of the fair market value per share
of the Class A Common Stock on the Date of Grant for a period of ten (10)
consecutive trading days, or
(ii) ______________;
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(b)
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For
an additional one-third (1/3) of the number of shares subject to the
Option (rounded upward to the nearest whole share) on the later of (i) the
date on which the fair market value per share of the Class A Common Stock
equals or exceeds one hundred thirty-three percent (133%) of the fair
market value per share of the Class A Common Stock on the Date of Grant
for a period of ten (10) consecutive trading days, or
(ii) _____________; and
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(c)
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For
the remaining number of shares subject to the Option on the later of (i)
the date on which the fair market value per share of the Class A Common
Stock equals or exceeds one hundred sixty percent (160%) of the fair
market value per share of the Class A Common Stock on the Date of Grant
for a period of ten (10) consecutive trading days, or
(ii) ______________;
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Subject
to the provisions of Section 5 of the Plan (as modified by this Agreement)
providing for earlier termination of the Option, the Option may not be exercised
after, and shall terminate at, the close of business
on ____________. Notwithstanding Sections 5(F)(iii) and
(iv) of the Plan, the Option shall be exercisable under Sections 5(F)(iii) and
(iv) of the Plan only to the extent that the stock performance conditions set
forth in this Section 1(a)(i), 1(b)(i) and 1(c)(i) have been satisfied prior to
termination of employment and death, respectively. Cash payment
rights are not granted with respect to the Option.
In
accordance with the express authorization granted by the Plan, the following
changes in this paragraph to the vesting and exercisability of the Option (and
only this Option, not other options which may be held by the Optionee) are being
made. If the employment of the Optionee is voluntarily terminated
with the consent of the Corporation or the Optionee retires under any retirement
plan of the Corporation, then for any Applicable Option Group (as defined below)
in which the stock performance conditions set forth in subsections 1(a)(i),
1(b)(i) or 1(c)(i), as the case may be, have not been met on the date of such
termination of employment or retirement, the Options in such Applicable Option
Group shall continue to be eligible for vesting under the stock performance
conditions set forth in this Section 1(a)(i), 1(b)(i), and 1(c)(i) and shall be
exercisable (to the extent such Options vest as described above) at any time
prior to the expiration date of the Option or within two years after the date of
termination of employment of the Optionee, whichever is the shorter
period. As used herein, “Applicable Option
Group” shall mean such of the groups of Options available under
subsections 1(a), 1(b) or 1(c) above in which the date of termination of
employment of the Optionee (in the case of the Optionee being voluntarily
terminated with the consent of the Corporation or retiring under any retirement
plan of the Corporation) is on or after the date set forth in subsection (ii) of
such subsections 1(a), (b) or (c). For the avoidance of doubt, any of
the groups of Options available under subsections 1(a), 1(b) or 1(c) above in
which the date of termination of employment of the Optionee is prior to the date
set forth in subsection (ii) of such subsections 1(a), (b) or (c) shall
terminate.
2. Acceptance of Grant of
Option. The Optionee accepts the grant of the Option confirmed
hereby, acknowledges having received a copy of the Plan and agrees to be bound
by the terms and provisions of the Plan (as modified by this Agreement), as the
Plan may be modified or amended from time to time; provided, however, that no
termination, modification or amendment of the Plan shall, without the consent of
the Optionee, adversely affect the rights of the Optionee with respect to the
Option.
3. Option Not
Transferable. The Option shall not be transferable otherwise
than by Will or by the laws of descent and distribution, and the Option shall be
exercisable during the lifetime of the Optionee only by the
Optionee.
4. Procedure for Exercise of
Option. The Option may be exercised only by execution and
delivery by the Optionee to the Corporation of an exercise form or forms
prescribed by the Stock Compensation Committee of the Board of Directors that
administers the Plan (the "Stock Compensation Committee"). Each
exercise form must set forth the number of whole shares of Class A Common Stock
as to which the Option is exercised, must be dated and signed by the person
exercising the Option and must be accompanied by cash in United States dollars
(including check, bank draft or money order or cash forwarded through a broker
or other agent-sponsored exercise or financing program), shares of already-owned
Class A Common Stock at the fair market value of such shares on the date of
exercise, an attestation of ownership of such shares of already-owned Class A
Common Stock in the form prescribed by the Stock Compensation Committee, or any
combination thereof, in the amount of the full purchase price for the number of
shares of Class A Common Stock as to which the Option is exercised; provided,
however, that any portion of the option price representing a fraction of a share
shall be paid by the Optionee in cash and no shares of the Class A Common Stock
which have been held for less than one year may be delivered in payment of the
option price. If the option price is paid in shares of already-owned
Class A Common Stock, in lieu of actual delivery of certificates for such shares
to the Corporation the person exercising the Option may complete and deliver to
the Corporation the exercise form containing an attestation of stock ownership
as prescribed by the Stock Compensation Committee. Such form must
certify that such person owns the shares to be used to pay the option price (and
must be executed by any joint owner of the shares) and that such shares are free
and clear of all liens, claims and encumbrances of every kind and are not
subject to any pledge or security interest. Receipt of such form and
verification by the Corporation of the share ownership reflected in such form
will eliminate the need of the person exercising the Option to
deliver certificates for such shares to the Corporation.
The
Corporation shall advise any person exercising the Option in whole or in part
with shares of already-owned Class A Common Stock as to the amount of any cash
required to be paid to the Corporation representing a fraction of a share, and
such person will be required to pay any such cash directly to the Corporation
before any distribution of certificates representing shares of Class A Common
Stock will be made. The person exercising the Option should deliver
an executed Assignment Separate from Certificate with respect to each stock
certificate physically delivered in payment of the option price. The
signature on all Assignments Separate from Certificate must be guaranteed by a
commercial bank or trust company, by a firm having membership in the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. or the National
Association of Securities Dealers, Inc. or by any other person acceptable to the
Corporation's Transfer Agent.
The
person exercising the Option may choose to exercise the Option by participating
in a broker or other agent-sponsored exercise or financing
program. If the person so chooses, the Corporation will deliver the
shares of the Class A Common Stock acquired pursuant to the exercise of the
Option to the broker or other agent, as designated by the person exercising the
Option, and will cooperate with all other reasonable procedures of the broker or
other agent to permit participation in the sponsored exercise or financing
program. Notwithstanding any procedures of the broker or other
agent-sponsored exercise or financing program, if the option price is paid in
cash, no exercise of an Option shall be deemed to occur and no shares of the
Class A Common Stock will be issued or delivered until the Corporation has
received full payment in cash (including check, bank draft or money order) for
the option price from the broker or other agent.
If a
person other than the Optionee exercises the Option, the exercise material must
include proof satisfactory to the Corporation of the right of such person to
exercise the Option.
The
exercise material should be hand delivered or mailed to the Chief Financial
Officer of the Corporation at the address set forth on the cover page of this
Agreement, Attention: Chief Financial Officer. In the case
of hand delivery, the date of exercise is the date on which the exercise form or
forms, proof of right to exercise (if required) and payment of the option price
in cash or shares of already-owned Class A Common Stock (or a proper attestation
of ownership of such shares in the exercise form) are hand
delivered. In the case of mailing, the date of exercise is the date
of the postmark on the envelope containing the exercise form or forms, proof of
right to exercise (if required) and payment (or a proper attestation of
ownership of shares in the exercise form). For purposes of
determining the date of exercise where payment of the option price is made in
shares of already-owned Class A Common Stock (by physical delivery of
certificates or attestation), any cash required to be paid to the Corporation
with respect to a fraction of a share shall not be taken into account in
determining whether payment of the option price has been made. If
exercise is made by mail and the option price is paid in whole or in part by
physical delivery of certificates for shares of already-owned Class A Common
Stock to the Corporation, the executed Assignments Separate from Certificate
should be mailed to the Corporation at the same time in a separate envelope from
the other exercise material.
5. Determination of Fair Market
Value. For purposes of this Agreement, the fair market value
of the Class A Common Stock shall be determined as provided in Section 5(H) of
the Plan.
6. Issuance of
Certificates. Subject to Sections 4 and 7 of this Agreement
and this Section 6, the Corporation will issue a certificate or certificates
representing the number of shares of Class A Common Stock to which the person
exercising the Option is entitled as soon as practicable after the date of
exercise. Unless the person exercising the Option otherwise directs
the Corporation in writing, the certificate or certificates will be registered
in the name of the person exercising the Option and delivered to such
person.1 If the Option is exercised and the
option price is paid in whole or in part by physical delivery of certificates
for shares of already-owned Class A Common Stock to the Corporation, the
Corporation will issue at the same time and return to the person exercising the
Option a certificate representing the number of any excess shares included in
any certificate or certificates physically delivered to the Corporation at the
time of exercise. If attestation of stock ownership is
used to pay the option price in shares, the Corporation will issue a certificate
or certificates representing the number of shares of Class A Common Stock for
which the Option is exercised less the number of shares of already-owned Class A
Common Stock used to pay the option price through attestation.
Under
Section 7 of the Plan, the obligation of the Corporation to issue or deliver
shares on exercise of an option is subject to the effectiveness of a
Registration Statement under the Securities Act of 1933, as amended, with
respect to such shares, if deemed necessary or appropriate by counsel to the
Corporation. The Corporation is not obligated to file such a
Registration Statement. If at the time of exercise of the Option, no
such Registration Statement is in effect, the issuance of shares on exercise of
the Option (including any shares of already-owned Class A Common Stock used to
pay the option price and returned to or retained by the person exercising the
Option) may also be made subject to such restrictions on the transfer of the
shares, including the placing of an appropriate legend on the certificates
restricting the transfer thereof, and to such other restrictions as the Stock
Compensation Committee, on the advice of counsel, may deem necessary or
appropriate to prevent a violation of applicable securities laws.
7. Withholding of
Taxes. The Optionee will be advised by the Corporation as to
the amount of any Federal income or employment taxes required to be withheld by
the Corporation or a Subsidiary of the Corporation on any compensation income
resulting from the exercise of the Option. State, local or foreign
income or employment taxes may also be required to be withheld by the
Corporation or Subsidiary on any compensation income resulting from the exercise
of the Option. The Optionee shall pay any such taxes required to be
withheld to the Corporation or Subsidiary upon request by one or more of the
following methods, at the election of the Optionee:
(a) in
cash;
(b) by
having the Corporation withhold from the shares of Class A Common Stock to which
the Optionee would otherwise be entitled from the exercise of the Option, a
number of such shares with a fair market value on the date of exercise of the
Option equal to the amount of such taxes (rounded down to the next whole number
of shares) and with payment in cash by the Optionee to the Corporation or
Subsidiary of the difference between the amount of such taxes and the fair
market value of such whole number of shares on such date of exercise;
or
(c) by
delivery and transfer to the Corporation or Subsidiary by the Optionee of
certificates for a number of unencumbered shares of Class A Common Stock with a
fair market value on the date of exercise of the Option equal to the amount of
such taxes (rounded down to the next whole number of shares) and with payment in
cash by the Optionee to the Corporation or Subsidiary of the difference between
the amount of such taxes and the fair market value of such whole number of
shares on such date of exercise;
provided,
however, that payment of such taxes through the methods described in (b) or (c)
above shall only be permitted if payment of such taxes through such methods, in
itself, will not result in liability accounting for the Option by the
Corporation. Shares of Class A Common Stock may not be withheld under
(b) above or delivered under (c) above in excess of the number of shares with a
fair market value equal to the required tax withholding (based on the minimum
statutory withholding rates for federal, state and local tax purposes, including
rates for payroll taxes, applicable to taxable income from the
Option). If the Optionee does not pay any taxes required to be
withheld directly to the Corporation or Subsidiary within ten days after any
such request, the Corporation and any of its Subsidiaries may withhold such
taxes by retaining shares of Class A Common Stock to which the Optionee is
entitled from the exercise of the Option or from any other compensation to which
the Optionee is entitled from the Corporation or Subsidiary. The
Optionee shall hold the Corporation or Subsidiary harmless in acting to satisfy
the withholding obligation in this manner if it becomes necessary to do
so.
8. Interpretation of Plan and
Agreement. This Agreement is the written agreement referred to
in Section 5(G) of the Plan. If there is any conflict between the
Plan and this Agreement, the provisions of the Plan shall
control. However, there may be provisions in this Agreement not
contained in the Plan, which provisions shall nevertheless be
effective. In addition, to the extent that provisions in the Plan are
expressly modified for purposes of this Agreement pursuant to authorization in
the Plan, the provisions of this Agreement shall control. Any dispute
or disagreement which shall arise under or in any way relate to the
interpretation or construction of the Plan or this Agreement shall be resolved
by the Stock Compensation Committee and the decision of the Stock Compensation
Committee shall be final, binding and conclusive for all purposes.
9. Effect of Agreement on
Rights of Corporation and Optionee. This Agreement does not
confer any right on the Optionee to continue in the employ of the Corporation or
a Subsidiary or interfere in any way with the rights of the Corporation or a
Subsidiary to terminate the employment of the Optionee.
10. Effect of Agreement on Other
Employee Benefit Plans of the Corporation. The Optionee hereby
acknowledges and agrees that no amount of income received by the Optionee under
this Agreement shall be considered compensation for purposes of any pension or
retirement plan, insurance plan or any other employee benefit plan of the
Corporation (notwithstanding the definition of compensation provided in such
plans), including but not limited to, the ▇▇▇▇▇▇▇▇ International Corporation
Employee Retirement Plan and the ▇▇▇▇▇▇▇▇ International Supplemental Retirement
Plan.
11. Binding
Effect. This Agreement shall be binding upon the successors
and assigns of the Corporation and upon the legal representatives, heirs and
legatees of the Optionee.
12. Entire
Agreement. This Agreement constitutes the entire agreement
between the Corporation and the Optionee and supersedes all prior agreements and
understandings, oral or written, between the Corporation and the Optionee with
respect to the subject matter of this Agreement.
13. Amendment. This
Agreement may be amended only by a written instrument signed by the Corporation
and the Optionee.
14. Section
Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of any of the provisions of this Agreement.
15. Governing
Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of
Pennsylvania.
IN
WITNESS WHEREOF, the Corporation and the Optionee have executed this Agreement
or caused this Agreement to be executed as of the Date of Grant.
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INTERNATIONAL CORPORATION
By: ▇▇▇▇▇▇
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Chief Executive
Officer
WITNESS: OPTIONEE:
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