EXHIBIT (10b)
▇▇▇▇▇ YARNS, INC.
Stock Option Agreement
Under
1990 Incentive Stock Plan
Stock Option Agreement made this _____ day of ______________, 19___,
by and between ▇▇▇▇▇ Yarns, Inc., a Tennessee corporation (hereinafter
referred to as the "COMPANY"), and ______________________________, an
employee or Director of the Company (hereinafter referred to as the
"OPTIONEE");
W I T N E S S E T H:
WHEREAS, the shareholders of the Company approved the 1990 Incentive
Stock Plan effective May 3, 1990, and are scheduled to vote on the approval
of certain amendments thereto at the Company's 1997 Annual Meeting of
Shareholders, to be held on May 1, 1997 (the 1990 Incentive Stock Plan, as
amended to date, is hereinafter referred to as the "PLAN"), for the purpose
of providing long-term incentive compensation to directors and selected key
management employees performing services for the Company and to develop and
maintain a significant long-term ownership position in the common stock of
the Company on the part of such individuals; and
WHEREAS, the Company desires to grant to the Optionee the option(s) to
purchase the Company's common stock described herein; and
WHEREAS, the Optionee desires to accept such grant.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, for other good and valuable consideration, and subject to the terms
and conditions of the Plan (a copy of which is attached hereto) which are
hereby incorporated by reference, the parties hereto hereby agree as
follows:
1. ADMINISTRATION. The Compensation Committee (the "COMMITTEE") of
the Board of Directors of the Company (the "BOARD") shall administer the
Plan, grant stock options and other awards under the Plan, construe and
interpret the Plan, establish rules and regulations and perform all other
acts as it believes reasonable and proper. In accordance with the
conditions and limitations prescribed in the Plan, the Committee may also
delegate the administration of the Plan in whole or in part, on such terms
and conditions, and to such person or persons as it may determine in its
discretion. Whenever the context in this Agreement so permits, any
reference to the "Committee" shall include any successor or delegate of the
Committee, as applicable. Options granted hereunder may be canceled if an
Optionee violates the terms of either this Stock Option Agreement or the
Plan or acts in a manner which the Committee determines to be inimical to
the best interest of the Company. Any decision made, or action taken, by
the Committee shall be final, conclusive and binding on all parties to this
Agreement.
2. GRANT OF INCENTIVE STOCK OPTION. Effective _____________, 19 ___,
the Committee hereby grants to the Optionee, not in lieu of salary or any
other compensation for services, the right and option (hereinafter referred
to as the "ISO OPTION") to purchase from the Company _______________ shares
of the Company's Common Stock, three dollars ($3.00) par value per share,
as an incentive stock option (as defined in Section 422 of the Internal
Revenue Code) (hereinafter referred to as the "ISO Optioned Stock"),
subject to the terms and conditions hereinafter set forth.
3. GRANT OF NSO STOCK OPTION. Effective ________________, 19____,
the Committee hereby grants to the Optionee, not in lieu of salary or any
other compensation for services, the right and option (hereinafter referred
to as the "NSO OPTION") to purchase from the Company _____________ shares
of the Company's Common Stock, three dollars ($3.00) par value per share,
as a non-statutory stock option (hereinafter referred to as the "NSO
OPTIONED STOCK"), subject to the terms and conditions hereinafter set
forth.
4 PURCHASE PRICE. The purchase price of the ISO Optioned Stock
shall be $_____________ per share (hereinafter referred to as the "ISO
OPTION PRICE"). The purchase price of the NSO Optioned Stock shall be
$___________ per share (hereinafter referred to as the "NSO OPTION PRICE").
5. TIME AND MANNER OF EXERCISE.
(a) Vesting Schedule. Subject to the other provisions of this
Agreement, the ISO Option and/or the NSO Option (as applicable) shall
become exercisable as to the percentage of the aggregate number of shares
initially covered by each such option (as adjusted in accordance with
Section 8 hereof, if applicable) on and after each of the following dates:
If the above schedule results in a fractional number of shares
attributable to one or more installments, such fractions shall be added
together or apportioned in such a manner as to add one or more additional
whole shares to the first installment to become exercisable as set forth
above, leaving an equal number of whole shares assigned to each of the
remaining installments. To the extent not previously exercised in
accordance with the terms of this Agreement, both the ISO Option and the
NSO Option shall expire as of 11:59 p.m., Eastern Time, on the tenth (10th)
anniversary of the date of this Agreement.
(b) Minimum Exercise. A minimum of 100 shares, or such lesser number
as is exercisable if fewer than 100 shares are exercisable, may be
purchased by the Optionee from the Company at any one time under either the
ISO Option or the NSO Option.
(c) Method of Exercise and Payment. Subject to the other provisions
of this Agreement, both the ISO Option and the NSO Option may be exercised,
in whole or in part, by giving written notice of such exercise, in the form
annexed to this Agreement, to the Secretary of the Company at the Company's
corporate headquarters office, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇. In order to be effective, such notice must be
accompanied by payment, in the form of a certified or bank cashier's check
made payable to "▇▇▇▇▇ Yarns, Inc.," of the full amount of the aggregate
ISO Option Price and/or NSO Option Price for the ISO Optioned Stock and/or
the NSO Optioned Stock then being purchased. Alternatively, payment of the
exercise price for either such option may be made (in accordance with such
procedures and limitations as the Committee may deem appropriate): (A) by
means of surrender to the Company of whole shares of the Company's Common
Stock owned by the Optionee having a fair market value (as defined in the
Plan) on the date of exercise at least equal to the aggregate ISO Option
Price or NSO Option Price of the stock then being purchased (provided, if
the shares to be tendered were previously acquired upon the exercise of
another ISO Option, such tendered shares must have been owned by the
Optionee for at least as long as the ISO Holding Period (as defined in
Section 9 hereof) applicable to such other ISO Option) or (B) by means of a
combination of the surrender of such Common Stock and payment of any
remaining balance of the aggregate exercise price with such a certified or
bank cashier's check.
(d) Certain Additional Restrictions. Except as provided in Section 7
hereof (and except for Optionees who are Directors of the Company), neither
the ISO Option nor the NSO Option may be exercised unless the Optionee is
an employee of the Company, as provided in Section 10 hereof, at the time
of exercise. Neither the Optionee nor his heirs, legatees, distributees,
or legal representatives of his estate shall have any rights of a
stockholder with respect to the ISO Optioned Stock or the NSO Optioned
Stock (as applicable) unless and until certificates for such shares have
been issued upon the exercise of the ISO Option or the NSO Option. Unless
otherwise provided herein, no adjustments shall be made for dividends or
other rights for which the record date is prior to the date of exercise of
the applicable option.
6. ANTI-ASSIGNMENT PROVISION. This Agreement shall be binding upon
and inure to the benefit of the parties hereto, and the successors and
assigns of the Company and its subsidiaries. However, except as may be
approved by the Committee where such approval will not adversely affect
compliance of the Plan with Rule 16b-3 under the Exchange Act, neither the
ISO Option nor the NSO Option shall be transferable by the Optionee
otherwise than by will or the laws of descent and distribution, and each
such option shall be exercisable, during the Optionee's lifetime, only by
him (or by a duly appointed guardian or personal representative). More
particularly (but without limiting the generality of the foregoing),
neither the ISO Option nor the NSO Option may be assigned, transferred,
pledged, hypothecated or encumbered in whole or in part either directly or
by operation of law or otherwise (except as otherwise permitted in this
Section 6) including, but not by way of limitation, by execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner. In the
event of any unapproved attempted assignment, transfer, pledge,
hypothecation or other disposition of any ISO Option or NSO Option contrary
to the provisions hereof, or the levy of any attachment or similar process
upon such option, such option shall automatically become null and void.
Any transfer of an ISO Option or NSO Option approved by the Committee shall
cause the transferee to be treated as the "Optionee" for all purposes of
the Plan and this Agreement unless the Committee directs otherwise.
7. TERMINATION OF EMPLOYMENT/SERVICE OR DEATH OF OPTIONEE.
(a) Termination Not Involving Death/Disability/Retirement. In the
event an Optionee (other than an Optionee who is a non-employee Director of
the Company) shall cease to be employed by, or performing services for, the
Company, in accordance with Section 10 hereof, while holding one or more
stock options (including both ISO Options and NSO Options), each option
held shall immediately cease to be exercisable on the date of such
termination of employment; provided, however, that, in the case of a period
of Related Employment pursuant to Paragraph 14 of the Plan, the Committee
may permit the Optionee to continue to be able to exercise the NSO Option
(as well as any ISO Option that becomes an NSO Option by virtue of its
continuation during a period of Related Employment which extends for more
than 90 days) in accordance with all of the other terms of such option.
Additionally, the Committee shall have the discretion, in the event of
termination for any reason other than the Optionee's death, disability or
retirement, to permit the Optionee to exercise any option that vested prior
to such termination for a period of up to 90 days following such
termination. Subject to Section 14 hereof, the Committee shall also have
discretion to vest some or all non-vested options, as it deems appropriate,
in the event of termination for any reason other than the Optionee's death,
disability or retirement (subject, however, in the case of ISO Options, to
the loss of favorable ISO treatment under federal tax laws to the extent
that such action causes options covering shares with a fair market value in
excess of $100,000 on the date such options were granted to first become
exercisable within a single calendar year.
(b) Disability or Retirement of Optionee. In the event that an
Optionee (other than an Optionee who is a non-employee Director of the
Company) shall cease to be employed by, or performing services for, the
Company, in accordance with Section 10 hereof due to the Optionee's
disability or retirement (as contemplated by Paragraph 5(e)(iii)(B) of the
Plan), then each option then held by the Optionee may be exercised by the
Optionee (or by his successor, in the event of the Optionee's death or
legal incapacity), to the extent that such option was exercisable at the
time of such termination of employment (and subject to Section 7(c) and
Section 14 hereof), at any time during a period of one (1) year following
the date of such termination.
(c) Death of Optionee. Subject to Section 14 hereof, in the event
that an Optionee should die while any portion of the ISO Option and/or the
NSO Option remains exercisable, such option may be exercised by the
Optionee's designated beneficiary to the same extent that such option was
exercisable by the Optionee immediately prior to his death (or to the
extent that such option would have been exercisable in the year immediately
following Optionee's death had he survived, if subsequent installments
would have vested) at any time during a period of one (1) year following
Optionee's death. If Optionee has not made any designation of beneficiary,
then the duly appointed legal representative of Optionee's estate shall be
entitled to exercise such options in accordance with this Section 7(c).
(d) Non-employee Directors. In the case of an Optionee who is a non-
employee Director of the Company, if such Optionee should cease (for any
reason) to serve as a member of the Board of Directors while any portion of
the NSO Option granted to him remains exercisable, then such Optionee (or
his successor, in the event of the Optionee's death or legal incapacity)
may exercise the option during a period of up to one (1) year following the
cessation of his service as a Director (or such other period determined by
the Committee, but in no event after the option has expired) with respect
to any shares as to which the Optionee could have exercised the option on
the date when he ceased to serve as a Director of the Company, or with
respect to such greater number of shares as determined by the Committee up
to the total number of shares subject to the option.
(e) Expiration of Options. All vested (as well as any non-vested)
options shall expire at (a) the expiration of such option's term or (b)
such earlier date as may be fixed by the Committee pursuant hereto. None
of the provisions of this Section 7 shall be construed as permitting the
exercise of either an ISO Option or an NSO Option, or any part thereof, at
any time after 10 years from the date of this Agreement.
8. ADJUSTMENT IN NUMBER OF SHARES OF OPTIONED STOCK AND OPTION PRICE.
In the event of any change in the outstanding Common Shares of the Company
by reason of any stock split, reverse stock split, stock dividend, split-
up, split-off, spin-off, recapitalization, merger, consolidation, rights
offering, reorganization, combination or exchange of shares, a sale by the
Company of all or part of its assets, a change in control (as defined in
Paragraph 17(o) of the Plan), any distribution to shareholders other than a
normal cash dividend, or other extraordinary or unusual event, if the
Committee shall determine that such change equitably requires an adjustment
in the terms of any ISO Option or NSO Option granted pursuant to this
Agreement, such adjustment may be made by the Committee. In the case of
any such adjustment by the Committee regarding the shares subject to any
option, the exercise price per share also shall be appropriately adjusted
to reflect the adjustment in the number of shares subject to such option.
No fractional share of Common Stock shall be issued upon the exercise of
any ISO Option or NSO Option as a result of any such adjustment. In the
discretion of the Committee, the minimum number of full shares which may be
purchased upon exercise of any such option pursuant to Section 5(b) hereof
also may be adjusted in connection with such event. Any such adjustments
made by the Committee shall be final, conclusive and binding for all
purposes of this Agreement and the Plan.
9. DISPOSAL OF ISO OPTION SHARES. Any Optionee who disposes of
shares of Common Stock acquired on the exercise of an ISO Option by sale or
exchange either (i) within two years after the date of the grant of the ISO
Option under which the stock was acquired or (ii) within one year after the
acquisition of such shares ((i) and (ii), collectively, the "ISO HOLDING
PERIOD") must notify the Company of such disposition and of the amount
realized upon such disposition. Optionee hereby covenants and agrees with
the Company that Optionee will fully comply with the requirements of this
Section 9. Any failure by Optionee to fulfill this requirement will be
grounds for the Committee's exclusion of such Optionee from eligibility to
receive any future Awards under the Plan.
10. EMPLOYMENT. As used herein, the term "employment" shall mean the
employment by an individual performing services for the Company or any of
its Affiliates (as defined in the Plan) and shall also include periods of
"Related Employment" (as described in Paragraph 14 of the Plan) as
designated by the Committee. Any transfer of the Optionee from employment
by the Company to an Affiliate of the Company (as defined in the Plan) or
from employment by an Affiliate to the Company shall not be deemed to be a
termination of employment for purposes of this Agreement.
11. NO RIGHT TO CONTINUED EMPLOYMENT OR OTHER RELATIONSHIP. It is
understood that this Agreement shall not be construed as an agreement or
commitment by the Company or any subsidiary or Affiliate to employ the
Optionee during the term of the ISO Option and/or the NSO Option or for any
fixed period of time. It is further understood that this Agreement does
not interfere in any way with the right of the Company or of any Affiliate
of the Company to terminate the employment of the Optionee (or any other
relationship with the Optionee) at any time, with or without cause.
12. WITHHOLDING. Upon the exercise of either the ISO Option or the
NSO Option, the Company shall not deliver or otherwise make shares of
Common Stock available to the Optionee or his beneficiary or representative
until the Company has received from the applicable party, in cash or any
other form acceptable to the Committee, the amount necessary to enable the
Company to remit to the appropriate governmental entity, on behalf of the
applicable party, any amounts required to be withheld for taxes with
respect to such transaction.
13. AVAILABILITY OF SHARES; PAYMENT OF EXPENSES. The Company shall
at all times during the term of the ISO Option and/or the NSO Option,
reserve and keep available such number of shares of common stock as will be
sufficient to satisfy the requirements of this Agreement, shall pay all
fees and expenses necessarily incurred by the Company in connection with
the issue of shares pursuant hereto and will use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for the
Company, shall be applicable.
14. SEC REGISTRATION AND SHAREHOLDER APPROVAL. This Agreement has
been entered into pursuant to Paragraph 5 of the Plan. Notwithstanding
anything to the contrary contained in this Agreement, the ISO Option and/or
the NSO Option (as applicable) granted hereby shall not be exercisable
unless and until: (A) a registration statement under the Securities and
Exchange Act of 1934 as amended has been filed and has become effective
with respect to the shares of Common Stock covered by such option; (B) any
required approval of the Company's shareholders has been obtained in
accordance with the terms of the Plan; and (C) any other applicable laws,
rules and regulations, and such approvals by any governmental agencies as
may be required, shall have been complied with or obtained.
15. GOVERNING LAW. This Option Agreement has been entered into
pursuant to and shall be governed by the laws of the State of Tennessee.
16. GENDER AND NUMBER. Any use of the masculine includes the
feminine and the neuter; and any use of the singular includes the plural,
whenever such meanings are appropriate.
17. HEADINGS AND DEFINITIONS. The headings appearing at the
beginning of each Section in this Agreement are intended only as an index
and are not to be construed to vary the meaning of the provision to which
they refer. Any capitalized terms used but not defined herein shall have
the meanings assigned to such terms the Plan.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
Optionee and the Company has caused this Agreement to be duly executed by
its officers thereunto duly authorized on the date and year above written.
ATTEST: ▇▇▇▇▇ YARNS, INC.
__________________________ By:____________________________________
Name:
Title:
_______________________________________
OPTIONEE
Social Security No.: __________________
EXERCISE FORM FOR STOCK OPTION AGREEMENT UNDER
▇▇▇▇▇ YARNS, INC. INCENTIVE STOCK PLAN
Date:___________________________
▇▇▇▇▇ Yarns, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
Ladies and Gentlemen:
Enclosed are (i) my check for $_________________ and/or (ii) my stock
certificate(s) (or other evidence of ownership) representing ______________
shares of ▇▇▇▇▇ Yarns, Inc. Common Stock and duly endorsed for transfer to
▇▇▇▇▇ Yarns, Inc., which are hereby tendered in payment for the purchase
of:
(A) ______________ shares of ▇▇▇▇▇ Yarns, Inc. Common Stock at $ __________
per share pursuant to the exercise of ISO Options granted under the terms
of my Stock Option Agreement with ▇▇▇▇▇ Yarns, Inc., dated _____________,
19 ______, and/or
(B) ______________ shares of ▇▇▇▇▇ Yarns, Inc. Common Stock at $ __________
per share pursuant to the exercise of NSO Options granted under the terms
of my Stock Option Agreement with ▇▇▇▇▇ Yarns, Inc., dated _______________,
19______.
Please register said stock in the name(s) of _________________________
________________________________________________________ (you can either
have the stock registered in your name only or in your and your spouse's
names as joint tenants with right of survivorship) and forward the stock
certificates, dividends, and all other stockholder information to (give
exact address) ___________________________________________________________
__________________________________________________________________________
__________________________________________________________________________.
________________________________
Signature
Social Security Number: ______________________
Spouse's Social Security Number
(if stock to be registered as joint tenants): ____________________________