Exhibit 10.1

 

 

McCORMICK & COMPANY, INCORPORATED

2001  STOCK OPTION PLAN

NON-QUALIFIED STOCK OPTION  NO. {NUMBER}

 

 

                THIS AGREEMENT, made and entered into this __ day of January,
2005, by and between McCORMICK & COMPANY, INCORPORATED, a Maryland corporation,
with its principal offices in Baltimore County, Maryland (hereinafter called the
“Company”) and  {EMPLOYEE) (hereinafter called “Employee”).

 

R E C I T A L S:

 

 

                WHEREAS, the Board of Directors of the Company is of the opinion
that the interest of the Company and its shareholders will be advanced and the
Company’s overall managerial strength will be enhanced by encouraging its
officers, directors, and other key employees to become owners of capital stock
in the Company; and

 

                WHEREAS, the Board, on January 23, 2001, authorized and approved
the 2001 Stock Option Plan (the “Plan”), which provides for the grant of options
to certain key employees of the Company and its subsidiaries and affiliates to
purchase capital stock of the Company.

 

                NOW THEREFORE, in consideration of the foregoing and of the
covenants and agreements below set forth, the parties agree as follows:

 

 

                1.             The Company hereby grants to the Employee a
non-qualified stock option to purchase, on the terms and conditions hereinafter
set forth, an aggregate of {CS} shares of stock of the Company, consisting of
{CSV} shares of Common Stock, without par value, and  {CSNV} shares of Common
Stock Non-Voting, without par value, at a purchase price of $_____ per share,
which price is not less than 100% of the fair market value as of the date of
this grant.  In lieu of cash payments, the Employee may surrender shares of
Company stock owned by the Employee having a market value equal to the option
price for the number of shares to be purchased pursuant to the exercise of all
or part of this option.  The option granted hereunder shall be exercisable, as
hereinafter provided, between January __, 2005 and January __, 2015.  Employee
may exercise this option as follows:

 

January __, 2005 - January __, 2006

 

None of the shares granted hereunder;

 

 

 

January __, 2006 - January __, 2007

 

Not more than 25% of the shares granted hereunder;

 

 

 

January __, 2007 - January __, 2008

 

Not more than 50% of the shares granted hereunder less any shares for which the
option has been previously exercised;

 

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January __, 2008 - January __, 2009

 

Not more than 75% of the shares granted hereunder less any shares for which the
option has been previously exercised;

 

 

 

January __, 2009 - January __, 2015

 

100% of the shares granted hereunder less any shares for which the option has
been previously exercised.

 

                2.             This option is not transferable by the Employee
otherwise than by will or by the laws of descent and distribution and is
exercisable during the Employee’s lifetime only by the Employee.

 

                                (a)           Subject to the provisions of
subparagraphs 2(b) and 2(c), all rights to exercise this option shall terminate
thirty (30) days after the Employee ceases to be an employee of the Company or
of a subsidiary or affiliate of the Company.

 

                                (b)           If the Employee ceases to be an
employee on account of total and permanent disability or retirement, the
Employee may exercise this option in full, or from time to time in part,
regardless of the restrictions that might otherwise apply with respect to the
number of shares which may be purchased pursuant to Paragraph 1 hereof, for a
period of five (5) years after termination of employment or until the expiration
date of this option, if earlier.

 

                                (c)           If the Employee dies prior to
termination of this option without having exercised this option, the estate or
other representative may exercise this option in full, or from time to time in
part, regardless of the restrictions that might otherwise apply with respect to
the number of shares which may be purchased pursuant to Paragraph 1 hereof, for
a period of five (5) years after the Employee’s death or until the expiration
date of this option, if earlier.

 

                                (d)           In no event may either the
Employee or the estate exercise all or any portion of this option after its
expiration date.

 

                                (e)           An exercise of this option with
respect to a part of the shares to which it relates shall not preclude a
subsequent exercise as to any remaining part.

 

3.             Notwithstanding any provision of this Agreement to the contrary,
the option granted hereunder shall be exercisable for 100% of the shares subject
to the option, less any shares for which the option has been previously
exercised, upon the occurrence of any of the following events (each an “Event”)
at any time prior to the expiration or exercise of the option:

 

(a)           the consolidation or merger of the Company with or into another
entity where the Company is not the continuing or surviving corporation, or
pursuant to which shares of the Company’s capital stock are converted into cash,
securities or other property, except for any consolidation or merger of the
Company in which the holders (excluding any “Substantial Stockholders” as
defined in Section 4 Common Stock subsection (b)(2)(H) of the Certificate of

 

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Incorporation of the Company as in effect as of the date hereof (the “Charter”))
of the Company’s (i) voting common stock, (ii) non-voting common stock, and
(iii) other classes of voting stock, if any, immediately before the
consolidation or merger shall, upon consummation of the consolidation or merger,
own in excess of 50% of the voting stock of the surviving corporation;

 

(b)           any sale, lease, exchange or other transfer (in one transaction or
a series of transactions contemplated or arranged by any party as a single plan)
of all or substantially all of the assets of the Company;

 

(c)           any person (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall as
of the date hereof become the beneficial owner (as defined in Section 4 Common
Stock subsection (b)(2)(C) of the Charter), directly or indirectly, of
securities of the Company representing more than 13% (the “Specified
Percentage”) of the voting power of all the outstanding securities of the
Company having the right to vote in an election of the Board (after giving
effect, to the extent applicable, to the operation of Section 4 Common Stock
subsection (b) of the Charter) (including, without limitation, any securities of
the Company that any such person has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or options, or
otherwise, which shall be deemed beneficially owned by such person), provided,
however, that in the event that the vote limitation with respect to Substantial
Stockholders set forth in Section 4 Common Stock subsection (b) of the Charter
becomes inoperative by virtue of the operation of Section 4 Common Stock
subsection (b)(12) of the Charter or otherwise, the “Specified Percentage” shall
be increased, without requirement for further action, to 35%; or

 

(d)           individuals who as of the date hereof constitute the entire Board
and any new directors whose election by the Board, or whose nomination by the
Board to stand for election by the Company’s stockholders, shall have been
approved by a vote of at least a majority of the directors then in office (which
directors then in office either were directors as of the date hereof or whose
election or nomination for election shall have been so approved), shall cease
for any reason to constitute a majority of the members of the Board.

 

                                Upon the occurrence of an Event, the Employee
shall have the right to surrender the option outstanding immediately prior to
the Event in exchange for a cash payment equal to the excess of the Transaction
Value (defined below) of the shares subject to the option over the option
exercise price.  If the Employee has more than one option subject to the terms
set forth in this Paragraph 3, such right with respect to each option may be
exercised independently of the other option(s).  No later than five days
following the Event, the Company shall provide the Employee with written notice
of the Event.  The Employee may exercise such right by surrendering such options
to the Company either within 30 days after receipt of the notice or within 10
days after the consummation of the Event, whichever is later.  The Company shall
make the payment in a cash lump sum within 30 days after the Employee surrenders
such options.  The Employee’s option shall terminate upon receipt of payment
therefor pursuant to this provision.

                                The Transaction Value shall be equal to the
greater of (i) the highest fair market value of a share of the Company’s Common
Stock at the time of, or at any time during the 60

 

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days preceding, the Event, or (ii) the highest price paid for a share of the
Company’s Common Stock in any bona fide transaction related to the Event
occurring no later than the closing date of the Event.

 

                                In connection with an Event, and solely with
respect to options not surrendered in connection with such Event as provided
above, the Company may make provision for the assumption of outstanding options
by, or the substitution for outstanding options of new options covering the
stock of, a surviving or successor corporation or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and
prices so as to prevent dilution or enlargement of the value of the original
options, all as determined by the Company at its discretion.

 

                4.             The Company shall not be required to issue or
deliver any certificate or certificates for shares of its capital stock
purchased upon the exercise of the option herein granted until and unless the
offering and sale of the shares represented thereby may legally be made under
the Securities Act of 1933, as amended, and the applicable rules and regulations
of the Securities and Exchange Commission.

 

                5.             The Company may require the Employee to agree
that any shares of capital stock purchased upon the exercise of this option
shall be acquired for investment and not for distribution and that each notice
of the exercise of any portion of this option shall be accompanied by a written
representation that the shares of capital stock are being acquired in good faith
for investment and not for distribution.

 

                6.             In the event that, prior to the delivery by the
Company of all the shares of the capital stock in respect of which this option
is hereby granted, there is any change in the Common Stock or Common Stock
Non-Voting of the Company through the declaration of stock dividends, or through
recapitalization resulting in stock splits, or combinations or exchanges of
shares, or otherwise, the number of shares subject to this option and the option
price shall be proportionately adjusted.

 

                7.             The Employee shall not have any of the rights or
privileges of a stockholder of the Company in respect of any of the shares
issuable upon the exercise of the option herein granted unless and until
certificates representing such shares have been issued and delivered.

 

                8.             Except as otherwise herein provided, the option
herein granted and the rights and privileges conferred hereby shall not be
transferred, assigned, pledged, or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment, or
similar process.  Upon any attempt to transfer, assign, pledge, hypothecate, or
otherwise dispose of said option or of any right or privilege conferred hereby
contrary to the provisions hereof or upon the levy of any attachment or similar
process upon the rights and privileges conferred hereby, this option and the
rights and privileges conferred hereby shall immediately become null and void.

 

                9.             This option may be exercised by sending a written
notice together with full payment for the number of shares to be purchased to
the Company or Agents designated by the

 

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Company.  Such notice and any other notice to be given under the terms of this
agreement shall be addressed to the Company in care of its Treasurer at 18
Loveton Circle, Sparks, Maryland 21152-6000 or to Agents of the Company at
addresses designated by the Company, and any notice to be given to the Employee
shall be sent  to the address the Employee has given to the Company or at such
other address as either party may hereafter designate in writing to the other. 
Any such notice shall be deemed to have been duly given if it is personally
delivered to the Treasurer or when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, registered and deposited, postage and registry
fee prepaid, in a post office or branch post office regularly maintained by the
United States Government, or maintained by the government of the country in
which the Employee resides.

 

                10.           This option shall be binding upon and inure to the
benefit of any successor or successors of the Company.

 

                IN WITNESS WHEREOF, the Company has caused this document to be
executed on its behalf by its duly authorized officers.

 

 

ATTEST:

 

 

McCORMICK & COMPANY, INCORPORATED

 

 

 

 

 

 

 

By:

 

Robert W. Skelton

 

 

Robert J. Lawless

Secretary

 

 

Chairman, President

 

 

 

 

& Chief Executive Officer

 

 

 

 

 

WITNESS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee

 

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