Exhibit 10.4(b)
 
 
 
 

     
 NON-QUALIFIED STOCK OPTION
AGREEMENT (this “Agreement”) dated as of
September ___, 2012, between WireCo
WorldGroup (Cayman) Inc., an exempted company
limited by shares and organized under the laws of
the Cayman Islands (the “Company”), and
__________ (the “Optionee”).
 
               

 
WHEREAS, the Company has agreed to grant to the Optionee pursuant to the WireCo
WorldGroup (Cayman) Inc. 2008 Long-Term Incentive Plan, as amended (the “Plan”)
(all capitalized terms not defined herein shall have the meanings ascribed to
them in the Plan), effective as of September ___, 2012 (the “Grant Date”), an
option to purchase Shares on the terms and subject to the conditions set forth
in this Agreement and the Plan; and
 
WHEREAS, the Company and the Optionee [are executing] [have previously executed]
an Adoption Agreement [as of the date hereof].
 
NOW, THEREFORE, in consideration of the promises and of the mutual agreements
contained in this Agreement, the parties hereto hereby agree as follows:
 
Section 1.                      The Plan.  The terms and provisions of the Plan
are hereby incorporated into this Agreement as if set forth herein in their
entirety.  In the event of a conflict between any provision of this Agreement
and the Plan, the provisions of the Plan shall control.
 
Section 2.                      Options.  Effective on the Grant Date, on the
terms and subject to the conditions of the Plan and this Agreement, the Company
hereby grants to the Optionee an option (the “Option”) to purchase _______
Shares at an exercise price of $[_____] per Share (the “Option Price”).  To the
extent permitted by the Committee, payment of the Option Price may be made in
any manner specified by Section 5.6 of the Plan.  The Option is not intended to
qualify for federal income tax purposes as an “incentive stock option” within
the meaning of Section 422 of the Code.  The term of the Option shall commence
on the Grant Date and expire on September [__], 2022, unless the Option shall
have sooner been terminated in accordance with the terms of the Plan or this
Agreement.
 
Section 3.                     Vesting.  Subject to the Optionee’s not having a
Termination of Relationship and except as otherwise set forth in Sections 4 and
5, 20% of the Option shall become a Vested Option on each of September [__],
2013, September [__], 2014, September [__], 2015, September [__], 2016 and
September [__], 2017 (each, a “Vesting Date”).
 
Section 4.                      Termination.
 
(a)           The Option shall automatically terminate and shall become null and
void, be unexercisable and be of no further force and effect upon the earlier of
September [__],  2022 or the 90th day following the Optionee’s Termination of
Relationship.  Subject to Sections 4(b) and 4(c), upon a Termination of
Relationship for any reason, any unvested portion of the Option shall terminate
on the date the Termination of Relationship occurs.
 

 
 

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(b)           Notwithstanding Section 4(a), in the event of a Termination of
Relationship due to the Optionee’s death, the installment of Option scheduled to
vest during the 12-month period immediately following the date of Termination of
Relationship due to the Optionee’s death shall become a Vested Option
immediately upon the date of such Termination of Relationship.
 
(c)           Notwithstanding Section 4(a), upon a Termination of Relationship
by the Company without Cause (as defined below) within the one-year period
following the consummation of a Liquidity Event pursuant to which any Person
(excluding the Investor) acquires 50 percent or more of (A) the then-outstanding
Shares and (B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors, the Option shall immediately become a fully Vested Option.  For the
purposes of this Section 4(c), “Cause” means: (i) “Cause” as defined in any
employment, consulting, or similar agreement between the Optionee and the
Company or one of its Subsidiaries or Affiliates, or (ii) if there is no such
agreement or if it does not define Cause:  (A) conviction of the Optionee for a
crime (other than a vehicular misdemeanor), (B) dishonesty in the course of
fulfilling the Optionee’s duties, or (C) willful and deliberate failure on the
part of the Optionee to perform his or her duties in any material respect.
 
Section 5.                      Liquidity Events.
 
(a)           Upon the consummation of a Liquidity Event (as defined below), a
portion of the then-unvested Option shall become a Vested Option concurrently
with the consummation of such event, such that the total percentage of Option
that has become a Vested Option immediately after the consummation of such
Liquidity Event shall, after taking into account any portion of the Option that
had become a Vested Option prior to such Liquidity Event, be equal to the
Liquidated Percentage (as defined below).  Following the acceleration of a
portion of the then-unvested Option upon the consummation of a Liquidity Event
pursuant to this Section 5(a), the vesting schedule of the Option that remains
an unvested Option immediately following such Liquidity Event shall be modified
such that such remaining unvested portion of the Option is scheduled to vest in
equal installments on each of the Vesting Dates occurring subsequent to such
Liquidity Event (subject to the vesting conditions set forth in Section 3).
 
(b)           Certain Definitions.
 
(i)           “Liquidity Event” means a Public Offering or a disposition by the
Investor of any portion of the Investor Investment (excluding, for the avoidance
of doubt, a sale, transfer, or other disposition within the affiliate group
comprising the Investor); provided, that (x) prior to an initial public
offering, no such disposition will be deemed to constitute a Liquidity Event if,
immediately thereafter, the Investor continues to beneficially own 50 percent or
more of (A) the then-outstanding Shares and (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors, and (y) a disposition by the Investor pursuant to
which the Investor receives non-cash consideration shall not be considered a
disposition for purposes of this sentence until such consideration is disposed
of for cash.
 

 
 

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(ii)           “Investor Investment” means direct or indirect investments in
Shares or other capital stock of the Company made by the Investor on or after
December 31, 2010, but excluding any purchases or repurchases of Shares on any
securities exchange or any national market system after an initial public
offering.
 
(iii)           The “Liquidated Percentage” means, with respect to a Liquidity
Event, the percentage of the Investor Investment that has been liquidated for
cash (including pursuant to a disposition of non-cash consideration acquired
upon a disposition of a portion of the Investor Investment) as of immediately
following the applicable Liquidity Event.
 
Section 6.                      No Right To Employment.  Nothing in this
Agreement or in the Option shall confer upon the Optionee any right to continue
in the employ or service of the Company or any of its Subsidiaries or interfere
in any way with the right of the Company or its Subsidiaries, as the case may
be, in its sole discretion, to terminate the Optionee’s employment or service or
to increase or decrease the Optionee’s compensation at any time.
 
Section 7.                      Securities Law Representations.  The Optionee
acknowledges that the Option and the Shares are not being registered under the
Securities Act, based, in part, on either (i) reliance upon an exemption from
registration under Securities and Exchange Commission Rule 701 promulgated under
the Securities Act or (ii) the fact that the Optionee is an “accredited
investor” (as defined under the Securities Act), and, in each of (i) and (ii)
above, a comparable exemption from qualification under applicable state
securities laws, as each may be amended from time to time.  The Optionee, by
executing this Agreement, hereby makes the following representations to the
Company and acknowledges that the Company’s reliance on federal and state
securities law exemptions from registration and qualification is predicated, in
substantial part, upon the accuracy of these representations:
 
 
·
The Optionee is acquiring the Option and, if and when the Optionee exercises the
Option, will acquire the Shares solely for the Optionee’s own account, for
investment purposes only, and not with a view to or an intent to sell, or to
offer for resale in connection with any unregistered distribution, all or any
portion of the shares within the meaning of the Securities Act and/or any
applicable state securities laws.

 
 
·
The Optionee has had an opportunity to ask questions and receive answers from
the Company regarding the terms and conditions of the Option and the
restrictions imposed on any Shares purchased upon exercise of the Option.  The
Optionee has been furnished with, and/or has access to, such information as he
considers necessary or appropriate for deciding whether to exercise the Option
and purchase the Shares.  However, in evaluating the merits and risks of an
investment in the Shares, the Optionee has and will rely only upon the advice of
his own legal counsel, tax advisors, and/or investment advisors.

 
 
·
The Optionee is aware that the Option may be of no practical value, that any
value it may have depends on its vesting and exercisability as well as an
increase in the Fair Market Value of the underlying Shares to an amount in
excess of the Option

 

 
 

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Price, and that any investment in common shares of a private closely held
corporation such as the Company is non-marketable, non-transferable and could
require capital to be invested for an indefinite period of time, possibly
without return, and at substantial risk of loss.

 
 
·
The Optionee understands that any Shares acquired on exercise of the Option will
be characterized as “restricted securities” under the federal securities laws,
and that, under such laws and applicable regulations, such securities may be
resold without registration under the Securities Act only in certain limited
circumstances, including in accordance with the conditions of Rule 144
promulgated under the Securities Act, as presently in effect.  The Optionee
acknowledges receiving a copy of Rule 144 promulgated under the Securities Act,
as presently in effect, and represents that he is familiar with such rule, and
understands the resale limitations imposed thereby and by the Securities Act and
the applicable state securities law.

 
 
·
The Optionee has read and understands the restrictions and limitations set forth
in the Shareholders Agreement, the Plan and this Agreement.

 
 
·
The Optionee has not relied upon any oral representation made to the Optionee
relating to the Option or the purchase of the Shares on exercise of some or all
of the Option or upon information presented in any promotional meeting or
material relating to the Option or the Shares.

 
 
·
The Optionee understands and acknowledges that, if and when he exercises the
Option, (a) any certificate evidencing the Shares (or evidencing any other
securities issued with respect thereto pursuant to any stock split, stock
dividend, merger or other form of reorganization or recapitalization) when
issued shall bear any legends which may be required by applicable federal and
state securities laws, and (b) except as otherwise provided under the
Shareholders Agreement, the Company has no obligation to register the Shares or
file any registration statement under federal or state securities laws.

 
Section 8.                      Designation of Beneficiary.  Subject to the
provisions of any applicable national laws, the Optionee may appoint any
individual or legal entity in writing as his beneficiary to receive any Option
(to the extent not previously terminated or forfeited) under this Agreement upon
the Optionee’s death.  The Optionee may revoke his designation of a beneficiary
at any time and appoint a new beneficiary in writing.  To be effective, the
Optionee must complete the designation of a beneficiary or revocation of a
beneficiary by written notice to the Company under Section 9 of this Agreement
before the date of the Optionee’s death.  In the absence of a beneficiary
designation, the legal representative of the Optionee’s estate shall be deemed
the beneficiary.
 
Section 9.                      Notices.  All notices, claims, certifications,
requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given and delivered if personally delivered or
if sent by nationally-recognized overnight courier, by
 

 
 

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telecopy, or by registered or certified mail, return receipt requested and
postage prepaid, addressed as follows:
 
If to the Company, to it at:
 
WireCo WorldGroup (Cayman) Inc.
c/o Mitchell Presser
Paine & Partners, LLC
461 Fifth Avenue, 17th Floor
New York, NY 10017
Fax:  (212) 379-7251

If to the Optionee, to the most recent address in the Company’s records; or to
such other address as the party to whom notice is to be given may have furnished
to the other party in writing in accordance herewith.  Any such notice or other
communication shall be deemed to have been received (a) in the case of personal
delivery, on the date of such delivery (or if such date is not a business day,
on the next business day after the date of delivery), (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
sent, (c) in the case of telecopy transmission, when received (or if not sent on
a business day, on the next business day after the date sent), and (d) in the
case of mailing, on the third business day following that on which the piece of
mail containing such communication is posted.
 
Section 10.                      Waiver of Breach.  The waiver by either party
of a breach of any provision of this Agreement must be in writing and shall not
operate or be construed as a waiver of any other or subsequent breach.
 
Section 11.                      Optionee’s Undertaking.  The Optionee hereby
agrees to take whatever additional actions and execute whatever additional
documents the Company may in its reasonable judgment deem necessary or advisable
in order to carry out or effectuate one or more of the obligations or
restrictions imposed on the Optionee pursuant to the express provisions of this
Agreement and the Plan.
 
Section 12.                      Modification of Rights.  The rights of the
Optionee are subject to modification and termination in certain events as
provided in this Agreement and the Plan (with respect to the Option granted
hereby).  Notwithstanding the foregoing, the Optionee’s rights under this
Agreement and the Plan may not be materially impaired without the Optionee’s
prior written consent.
 
Section 13.                      Governing Law.  This agreement will be governed
by and construed in accordance with the laws of the state of New York, without
giving effect to any choice or conflict of law provision or rule (whether of the
state of New York or any other jurisdiction) that would cause the laws of any
jurisdiction other than the state of New York to be applied.  In furtherance of
the foregoing, the internal law of the state of New York will control the
interpretation and construction of this agreement, even if under such
jurisdiction’s choice of law or conflict of law analysis, the substantive law of
some other jurisdiction would ordinarily apply.
 

 
 

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Section 14.                      Withholding.  As a condition to exercising the
Option in whole or in part, the Optionee will pay, or make provisions
satisfactory to the Company for payment of, any Federal, state and local taxes
required to be withheld in connection with such exercise.
 
Section 15.                      Adjustment.  In the event of any change in the
outstanding shares of the Company after the Grant Date or any other event
described in Article IX of the Plan occurring after the Grant Date, the Board or
the Committee may make such substitution or adjustment (including cash payments)
as provided for under Article IX of the Plan.
 
Section 16.                      Counterparts.  This Agreement may be executed
in one or more counterparts, and each such counterpart shall be deemed to be an
original, but all such counterparts together shall constitute but one agreement.
 
Section 17.                      Entire Agreement.  This Agreement and the Plan
(and the other writings referred to herein) constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof and
supersede all prior written or oral negotiations, commitments, representations
and agreements with respect thereto.
 
Section 18.                      Severability.  It is the desire and intent of
the parties hereto that the provisions of this Agreement be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought.  Accordingly, if any particular
provision of this Agreement shall be adjudicated by a court of competent
jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.  Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
 
Section 19.                      Waiver of Jury Trial.  Each party hereto hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, trial by jury in any suit, action or proceeding arising
hereunder.
 

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Non-Qualified Stock
Option Agreement as of the date first written above.
 
 

    WIRECO WORLDGROUP (CAYMAN) INC.          

 

    By:           Name:         Title:  

 
 

    OPTIONEE:          

 

                [______________________]