Exhibit 10.5
1994 OMNIBUS EMPLOYEE INCENTIVE
PLAN
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of <Grant
Date> (the "Agreement"), is between MAXXAM INC., a Delaware
corporation (the "Company"), and <Grantee Name> , an
officer or employee of the Company and/or of one or more of its
subsidiaries (the "Grantee").
The Section 162(m) Compensation Committee of the
Company's Board of Directors (the "Committee") has determined that
the objectives of the Company's 1994 Omnibus Employee Incentive
Plan (the "Plan") will be furthered by granting to the Grantee
certain rights pursuant to the Plan.
In consideration of the foregoing and of the
mutual undertakings set forth in this Agreement, the Company and
the Grantee agree as follows:
Section 1.
Grant.
1.1 The
Company hereby grants to the Grantee <No. of Shares>
non-qualified stock options (the "Options"), with such Options
having tandem stock appreciation rights ("SARs"), in connection
with <No. of Shares.> shares of the Company's common
stock, $.50 par value (the "Common Stock"). The Options and tandem
SARs shall be collectively referred to hereinafter as the
"Rights."
1.2 The
appreciation base per share of Common Stock covered by the Rights
is $ <Price> , which was the Fair Market Value per
share of the Company's Common Stock on the date of this
Agreement.
Section
2. Exercisability.
2.1 No
portion of the Rights shall become exercisable prior to the first
anniversary of the date of this Agreement.
2.2 The
Rights shall become exercisable with respect to 20% of the Rights
initially subject thereto on the first anniversary of the date of
this Agreement, and with respect to an additional 20% of such
Rights on each of the second, third, fourth and fifth anniversaries
of the date of this Agreement, so that all of the Rights covered
hereby shall become exercisable in full on such fifth
anniversary.
2.3 The
Rights maybe partially exercised from time to time within the
percentage limitations on exercisability set forth in Section 2.2
above.
2.4 The
Rights shall expire and cease to be exercisable 10 years after the
date of this Agreement, or on such earlier date as may be provided
for herein or in accordance with the terms of the Plan.
2.5 The
exercise of Options or SARs which comprise the Rights shall have
the effect described in Section 8.3 of the Plan.
Section 3.
Method of Exercise of Options.
3.1 The
Option maybe exercised only by the giving of written notice to the
Company, which notice shall state the election to exercise the
Option and the number of whole shares of Common Stock with respect
to which the Option is being exercised. Such notice must be
accompanied by payment of the full purchase price for the number of
shares purchased. Such payment shall be made: (a) by certified or
official bank check (or the equivalent thereof acceptable by the
Company) for the full Option exercise price; or (b) with the
consent of the Committee, by delivery of shares of the Company's
Common Stock acquired at least six months prior to the Option
exercise date and having a Fair Market Value (determined as of the
exercise date) equal to all or part of the Option exercise price
and a certified or official bank check (or the equivalent thereof
acceptable by the Company) for any remaining portion of the full
Option exercise price; or (c) at the d
