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STOCK OPTION AGREEMENT

Stock Option Agreement

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Rockwood Holdings, Inc

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Title: STOCK OPTION AGREEMENT
Date: 12/20/2007

STOCK OPTION AGREEMENT, Parties: rockwood holdings  inc
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Exhibit 10.1

 

STOCK OPTION AGREEMENT

 

THIS AGREEMENT, dated as of December 14, 2007 is made by and between Rockwood Holdings, Inc., a Delaware corporation (hereinafter referred to as the “Company”), and [NAME] an employee of the Company or a Subsidiary (as defined below) or Affiliate (as defined below) of the Company, hereinafter referred to as “Optionee.”

 

WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase shares of its common stock, par value $0.01 per share (the “Common Stock”);

 

WHEREAS, the Company wishes to carry out the Plan (as hereinafter defined), the terms of which are hereby incorporated by reference and made a part of this Agreement; and

 

WHEREAS, the committee of the Company’s board of directors appointed to administer the Plan (the “Committee”) has determined that it would be to the advantage and best interest of the Company and its shareholders to grant the Option provided for herein to the Optionee as an incentive for increased efforts during his term of office with the Company or its Subsidiaries or Affiliates, and has advised the Company thereof and instructed the undersigned officers to issue said Option;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Whenever the following terms are used in this Agreement, they shall have the meaning specified in the Plan or below unless the context clearly indicates to the contrary.

 

Section 1.1.    - Affiliate

 

“Affiliate” shall mean, with respect to the Company, any entity directly or indirectly controlling, controlled by, or under common control with, the Company or any other entity designated by the Board of Directors in which the Company or an Affiliate has an interest.

 

Section 1.2.     - Cause

 

“Cause” shall mean (i) the Optionee’s willful and continued failure to perform duties, which are within the control of the Optionee and consistent with such Optionee’s title and position, that is not cured within 15 days following written notice of such failure, (ii) the Optionee’s conviction of or plea of guilty or no contest to a (x) felony or (y) crime involving moral turpitude, (iii) the Optionee’s willful malfeasance or misconduct which is injurious to the Company or its Subsidiaries, other than in a manner that is insignificant or inconsequential, (iv) a breach by Optionee of the material terms of any non-compete, non-solicitation or confidentiality covenants or agreements by which the Optionee may be bound, following notice of such breach (which notice may be oral or written) or (v) any violation by the Optionee of any material written Company policy after written notice of such breach, if such violation is shown by the Company to be reasonably expected to result in material injury to the business, reputation or financial condition of the Company.

 



 

Section 1.3.     - Change of Control

 

“Change of Control” shall mean (i) sales of all or substantially all of the assets of the Company to a Person who is not Kohlberg Kravis Roberts & Co. Ltd (“KKR”) or an affiliate of KKR (collectively, the “KKR Partnerships”), (ii) a sale by KKR or any of its respective affiliates resulting in more than 50% of the voting stock of the Company being held by a Person or Group that does not include KKR or any of its respective affiliates, or (iii) a merger, consolidation, recapitalization or reorganization of the Company with or into another Person which is not an affiliate of KKR; if, and only if, as a result of any of the foregoing events in clauses (i), (ii) or (iii) above, the KKR Partnerships lose the ability, without the approval of any Person (applicable to the respective foregoing events in clauses (i), (ii) or (iii) above) who is not an affiliate of KKR, to elect a majority of the Board of Directors (or the board of directors of the resulting entity).  Notwithstanding the foregoing, if any of the transactions described in clauses (i), (ii) or (iii) of the preceding sentence shall occur and the other Person involved in such transaction (or its ultimate parent entity) is an operating company controlled by KKR or an affiliate of KKR prior to such transaction (an “Alternate KKR Entity”), then the determination of whether a change of control has occurred shall be made by determining whether an event set forth in clauses (i), (ii) or (iii) above has occurred (including the ability to elect a majority of the Board or the board of directors of the resulting entity) if the Alternate KKR Entity is treated as being unaffiliated with KKR and by treating the voting power of the Alternate KKR Entity in the Company (or the resulting entity) as if it were held by a Person unaffiliated with KKR.

 

Section 1.4.    - Disability

 

“Disability” shall mean a determination, made at the request of the Optionee or upon the reasonable request of the Company set forth in a notice to the Optionee, by a physician selected by the Company and the Optionee, that the Optionee is unable to perform his duties as an employee of the Company or its subsidiaries and in all reasonable medical likelihood such inability will continue for a period in excess of 180 consecutive days.

 

Section 1.5.     - Good Reason

 

“Good Reason” shall mean without the Optionee’s consent, (i) a reduction in the Optionee’s base salary or annual bonus opportunity (other than a reduction in base salary that is offset by an increase in bonus opportunity upon the attainment of reasonable financial targets, which reduction may not exceed 10% of the Optionee’s base salary in any 12 month period), (ii) a substantial reduction in the Optionee’s duties and responsibilities, which continues beyond 15 days after written notice by the Optionee to the Company of such reduction, (iii) the elimination or reduction of the Optionee’s eligibility to participate in the Company’s benefit programs that is inconsistent with the eligibility of similarly situated employees of the Company to participate therein, (iv) a transfer of the Optionee’s primary workplace by more than 35 miles from the current workplace, (v) any serious chronic mental or physical illness of an immediate family member that requires the Optionee to terminate his or her employment with the Company because of a substantial interference with his or her duties at the Company or (vi) any failure by the Company to pay when due any payment owed to the Optionee within 15 days after the date such payment becomes due.

 

Section 1.6.    - Grant Date

 

“Grant Date” shall mean December 14, 2007, the date on which the Option provided for in this Agreement is granted.

 

Section 1.7.     - Group

 

“Group” shall mean two or more Persons acting together as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of securities of the Company.

 



 

Section 1.8.    - Option

 

“Option” shall mean the Option (which shall, in part and to the extent permitted by applicable law and as set forth on the signature page hereto, be an “incentive stock option”, within the meaning of Section 422 of the Code) to purchase Common Stock granted under this Agreement.  To the extent that, for any reason, an Option intended to be an incentive stock option does not qualify as an incentive stock option, it shall be deemed an option that is not an incentive stock option.

 

Section 1.9.    - Person

 

“Person” shall mean “person”, as such term is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (or any successor section thereto).

 

Section 1.10.     - Plan

 

“Plan” shall mean the Amended and Restated 2005 Stock Purchase and Option Plan of Rockwood Holdings, Inc. and Subsidiaries.

 

Section 1.11.      - Retirement

 

“Retirement” shall mean retirement at age 62 or over (or such other age as may be approved by the Board of Directors) after having been employed by the Company or a Subsidiary for at least five full years.

 

 Section 1.12.     - Secretary

 

“Secretary” shall mean the Secretary of the Company.

 

ARTICLE II

 

GRANT OF OPTIONS

 

Section 2.1.      - Grant of Option

 

For good and valuable consideration, on and as of the date hereof the Company irrevocably grants to the Optionee an Option to purchase any part or all of an aggregate of the number of shares set forth on the signature page hereof of its Common Stock upon the terms and conditions set forth in this Agreement.

 

Section 2.2.       - Exercise Price

 

Subject to Section 2.4, the exercise price of the shares of Common Stock covered by the Option shall be $32.39 per share without commission or other charge (which is the fair market value per share of the Common Stock on the Grant Date).

 

Section 2.3.       - No  Guarantee of Employment

 

Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue in the employ of the Company or any Subsidiary or Affiliate or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries or Affiliates, which are hereby expressly reserved, to terminate the employment of the Optionee at any time for any reason whatsoever, with or without cause.

 



 

Section 2.4.       - Adjustments in Option Pursuant to Merger, Consolidation, etc.

 

(a) Subject to Sections 8 and 9 of the Plan, in the event that the outstanding shares of the stock subject to the Option, are, from time to time, changed into or exchanged for a different number or kind of shares of the Company or other securities of the Company by reason of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares, or other corporate event, the Committee shall make, as appropriate and equitable, an adjustment in the number and kind of shares and/or the amount of consideration as to which or for which, as the case may be, such Option, or portions thereof then unexercised, shall be exercisable and/or, other than in an event that is a Change of Control, shall pay to the Optionee a dividend in respect of the shares of Common Stock subject to the Option, in any event in order to allow the Optionee to participate in such corporate event in an equitable manner.  Any such adjustment made by the Committee shall be final and binding upon the Optionee, the Company and all other interested persons.

 

(b) Subject to Sections 8 and 9 of the Plan, in the event of a Change of Control in which all of the then outstanding Common Stock will be cancelled and converted into the right to receive a cash payment per share of Common Stock (such cash payment, the “Change of Control Consideration”), the Committee may, in its discretion, either: (i) cause the Option (to the extent then outstanding and not previously exercised) to, effective as of the effective date of such a Change of Control, be converted into a right to receive a cash payment (payable as soon as practicable after the Change of Control) equal to the product of (x) the excess, if any, of (A) the Change of Control Consideration, over (B) the exercise price per share of Common Stock subject to such Option, multiplied by (y) the total number of shares of Common Stock subjec





 
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