STOCK OPTION AGREEMENT
Agreement, made as of the 6th day of May, 1994, between Safety
Components International, Inc. (the "Company"), a Delaware Corporation, and
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The Company has duly adopted the Safety Components International, Inc.
1994 Stock Option Plan (the "Plan"), the terms of which are hereby incorporated
by reference. In the case of any conflict between the provisions hereof and
those of the Plan, the provisions of the Plan shall be controlling. A copy of
the Plan (as such may have been amended to date) will be made available for
inspection by the Optionee during normal business hours at the principal office
of the Company. All capitalized terms used but not defined herein shall have the
respective meanings ascribed to them in the Plan.
In accordance with Section 3 of the Plan, a committee of the Board of
Directors of the Company which administers the Plan (the "Committee") has
adopted a resolution granting the Optionee a stock option (the "Option) under
the Plan to purchase 1,500 shares (the "Shares") of the Company's Common Stock,
par value $.01 per share (the "Common Stock"), for the price and on the terms
and conditions set forth in this Agreement and in the Plan.
The Option is not intended to satisfy the requirements for an incentive
stock option (an "ISO") under the Internal Revenue Code of 1986, as amended (the
"Code"). The Company makes no representations or warranties as to the income,
estate or other tax consequences to the Optionee of the grant or exercise of the
Option or the sale or other disposition of the Shares acquired pursuant to the
exercise thereof.
1. (a) The price at which the Optionee shall have the right to purchase
the Shares under this Agreement is $10.00 per share subject to adjustment as
provided in Paragraph 4 below.
(b) Unless the Option is previously terminated pursuant to the Plan or
this Agreement and subject to the terms of any other agreement between Optionee
and the Company (including, without limitation, any employment or other
agreement which may provide for, among other things, an accelerated vesting
schedule), the Option shall be exercisable in four equal installments of 375
Shares each on the first, second, third, and fourth anniversary of the date of
grant. In no event shall any Shares be purchasable under this Agreement after
May 6, 2004 (ten years from the date of grant) (the "Expiration Date"). Except
as provided in subparagraph (c) hereof, the Option shall cease to be exercisable
thirty (30) days after the date the Optionee terminates services as an employee
of the Company or any Affiliate of the Company for reasons other than cause and
immediately upon the termination of the employee for cause, and all rights of
the Optionee hereunder shall thereupon terminate.
(c) If the Optionee ceases to be an employee of the Company or any
Affiliate of the Company and this cessation is due to retirement (as defined by
the Committee in its sole discretion), or to disability (as defined in each case
by the Committee in its sole discretion) or to death, the Option shall be
exercisable as provided in this subparagraph. The Optionee, or in the event of
his disability, his duly appointed guardian or conservator, or in the event of
his death, his executor or administrator shall have the privilege of exercising
the unexercised portion of the Option which the Optionee could have exercised on
the day on which he ceased to be an employee of the Company or any Affiliate of
the Company, provided, however, that such exercise must be in accordance with
the terms of this Agreement and within (i) three (3) months after the Optionee's
retirement or disability or (ii) (A) twelve (12) months after the Optionee's
death or (B) three (3) months after the Optionee's death if such death occurs
during the three (3) month period following the termination of the Optionee's
employment by reason of retirement or mental or physical disability, as the case
may be. In no event, however, shall the Optionee or his executor or
administrator, as the case may be, exercise the option after the Expiration Date
specified in subparagraph 1 (b). For all purposes of this Agreement, an approved
leave of absence shall not constitute an interruption or cessation of the
Optionee's service as an employee of the Company or any Affiliate of the
Company.
2. Nothing contained herein shall be construed to confer on the
Optionee any right to continue as an employee of the Company or any Affiliate of
the Company or to derogate from any right of the Company or any Affiliate
thereof to retire, request the resignation thereof or discharge the Optionee, or
to layoff or require a leave of absence of the Optionee, with or without pay, at
any time, with or without cause.
3. The Option shall not be sold, pledged, assigned, or transferred in
any manner except to the extent that the Option may be exercised by an executor
or administrator as provided in subparagraph 1 (c) above. The Option may be
exercised, during the lifetime of the Optionee, only by the Optionee, or in the
event of his disability, his duly appointed guardian or conservator.
4. (a) If the outstanding shares of Common Stock are affected by any
(i) subdivision or consolidation of shares, (ii) dividend or other distribution
(whether in the form of cash, shares of Common Stock, other securities, or other
property), (iii) recapitalization or other capital adjustment of the Company of
(iv) merger, consolidation or other reorganization of the Company or other
rights to purchase shares of Common Stock or other securities of the Company, or
other similar corporate transaction or event, such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
necessary to prevent dilution or enlargement of the benefits or potential
benefits intended to be made under the Plan, adjust any or all of (x) the number
and type of Shares subject to the unexercised portion of the Option, and (y) the
exercise price with respect to the unexercised portion of the Option, or if
deemed appropriate, make provision for a cash payment with respect to the
unexercised portion of the Option. In computing any adjustment under this
paragraph, any fractional share shall be eliminated.
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(b) In the event of (i) a merger or consolidation to which the
Corporation is a party of (ii) a sale by the Company of all or substantially all
of its assets, the Option shall, after such merger, consolidation or sale, be
exercisable into the kind and number of shares of stock and/or securities, cash
or other property which Optionee would have been entitled to receive if Optionee
had held the Common Stock issuable upon the exercise of the Option immediately
prior to such consolidation, merger or sale.
5. The Option shall be exercised when written notice of such exercise,
signed by the person entitled to exercise the Option, has been delivered or
transmitted by registered or certified mail, to the Secretary of the Company at
its principal office. Said written notice shall specify the number of Shares
purchasable under the Option which such person then wishes to purchase and shall
be accompanied by such documentation, if any, as may be required by the Company
as provided in Paragraph 7 below and be accompanied by payment of the aggregate
Option price. Such payment shall be, without limitation, in the form of (i)
cash, shares of Common Stock, outstanding options or other consideration, or any
combination thereof, having a Fair Market Value (as defined in the Plan) on the
exercise date equal to the exercise price of the Option or portion thereof being
exercised or (ii) a broker-assisted cashless exercise program established by the
Committee. Delivery of said notice and such documentation shall constitute an
irrevocable election to purchase the Shares specified in said notice and the
date on which the Company receives said notice and documentation shall, subject
to the provisions of Paragraphs 6 and 7, be the date as of which the Shares so
purchased shall be deemed to have been issued. The person entitled to exercise
the Option shall not have the right or status as a holder of the Shares to which
such exercise relates prior to receipt by the Company of such payment, notice
and documentation.
6. Anything in this Agreement to the contrary notwithstanding, in no
event may the Option be exercisable if the Company shall, at any time and in its
sole discretion, determine that (i) the listing, registration or qualification
of any shares otherwise deliverable upon such exercise, upon any securities
exchange or under any state or federal law, or (ii) the consent or approval of
any regulatory body or the satisfaction of withholding tax or other withholding
liabilities is necessary or desirable in connection with such exercise. In such
event, such exercise shall be held in abeyance and shall not be effective unless
and until such withholding, listing, registration, qualification, or approval
shall have been affected or obtained free of any conditions not acceptable to
the Company.
7. The Committee may require as a condition to the right to exercise
the Option hereunder that the Company receive from the person exercising the
Option, representations, warranties and agreements, at the time of any such
exercise, to the effect that the Shares are being purchased for investment only
and without any present intention to sell or otherwise distribute such Shares
and that the Shares will not be disposed of in transactions which, in the
opinion of counsel to the Company, would violate the registration provisions of
the Securities Act of 1933, as then amended, and the rules and regulations
thereunder. The certificate issued to evidence such Shares shall bear
appropriate legends summarizing such restrictions on the disposition thereof.
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8. This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware and applicable Federal law. Subject to
subparagraph 1 (c) hereof, this Agreement shall be binding upon and shall insure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors or assigns, as the case may be.
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IN WITNESS WHEREOF, the parties have witnessed this Agreement to be
duly executed and delivered as of the date first above written.
SAFETY COMPONENTS INTERNATIONAL, INC.
By:
Optionee