STOCK OPTION AGREEMENT FOR THE GRANT OF NON-QUALIFIED STOCK OPTIONS UNDER THE SCP POOL CORPORATION 2002 LONG-TERM INCENTIVE PLAN
FOR THE GRANT OF
NON-QUALIFIED STOCK OPTIONS UNDER THE
SCP POOL CORPORATION
2002 LONG-TERM INCENTIVE PLAN
THIS AGREEMENT is entered into and effective as of _DATE_by and between SCP Pool Corporation, a Delaware corporation (the “Company”), and First Name Last Name (the “Optionee”).
WHEREAS Optionee is a key employee of the Company and the Company considers it desirable and in its best interest that Optionee be given an inducement to acquire a proprietary interest in the Company and an incentive to advance the interests of the Company by possessing an option to purchase shares of the common stock of the Company, $.001 par value per share (the “Common Stock”) in accordance with the SCP Pool Corporation 2002 Long-Term Incentive Plan (the “Plan”).
NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties as follows:
I
Grant of Option
In consideration of future services, the Company hereby grants to Optionee effective as of the date hereof (the “Date of Grant”) the right, privilege and option to purchase # shares of Common Stock (the “Option”) at an exercise price of $$$$ per share (the “Exercise Price”). The Option shall be exercisable at the time specified in Section II below. The Option is a non-qualified stock option and shall not be treated as an incentive stock option under Section 422 of the Code. Any capitalized term used herein, but not defined herein, shall have the meaning provided in the Plan.
II
Time of Exercise
2.1 Subject to the provisions of the Plan and the other provisions of this Section II, the Option shall become vested and exercisable beginning on the dates set forth below, provided Optionee continues to be an employee or to perform services for the Company on such dates:
[50% of the Option will vest on Vesting Date 1 and the other 50% of the Option will vest on Vesting Date 2]
[the Option will vest on Vesting Date1]
2.2 During Optionee's lifetime, the Option may be exercised only by him, his guardian if he has been declared incompetent or by a permitted transferee under Article VI hereof. In the event of death, the Option may be exercised as provided herein by the Optionee’s estate or by the person to whom such right devolves as a result of the Optionee’s death.
2.3 If the Optionee ceases to be an employee of, or to perform other services for, the Company or a Subsidiary of the Company:
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(a) due to death or Disability, the Option shall become fully vested and exercisable and shall remain exercisable for one year following the date of such death or Disability;
(b) as a result of termination by the Company or a Subsidiary for Cause, the Option shall be forfeited immediately upon such cessation, whether or not then exercisable;
(c) due to Retirement, provided that the Optionee does not engage in Competition directly or indirectly against the Company, as determined by the Committee or the President of the Company (i) the Option, to the extent vested and exercisable on the date of Retirement, shall remain exercisable for, and shall otherwise terminate on the original expiration date of such Option; and (ii) the portion of the Option that was not vested and exercisable on the date of Retirement shall continue to vest in accordance with the original vesting schedule and shall remain exercisable for, and shall otherwise terminate on the original expiration date of such Option; and
(d) for any reason other than death, Disability, Retirement or Cause, provided that the Optionee does not engage in Competition directly or indirectly against the Company, as determined by the Committee or the President of the Company (i) the portion of the Option that was vested and exercisable on the date of such cessation shall remain exercisable for, and shall otherwise terminate on the original expiration date of such Option; and (ii) the portion of the Option that was not vested and exercisable on the date of such cessation shall immediately terminate, except that such unvested portion of the Option may continue to vest in accordance with the original vesting schedule and remain exercisable for, and otherwise terminate on the original expiration date of such Option, if so determined by 1) the President of the Company for employees with an unvested Option for less than 5,000 shares, or 2) the Committee for employees with an unvested Option of 5,000 shares or more.
provided, however, that under no circumstances may the Option be exercised later than ten years after the Date of Grant.
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2.4 |
For purposes of this Agreement: |
(a) “Cause” shall mean (i) conviction of a felony or any crime or offense lesser than a felony involving the property of the Company or a Subsidiary; (ii) conduct that has caused demonstrable and serious injury to the Company or a Subsidiary, monetary or otherwise; (iii) willful refusal to perform or substantial disregard of duties properly assigned, as determined by the Board; or (iv) breach of duty of loyalty to the Company or a Subsidiary or other act of fraud or dishonesty with respect to the Company or a Subsidiary. The determination as to whether the Optionee was terminated for Cause shall be made by the Board in its sole discretion.
(b) “Competition” is deemed to occur if an Optionee, who ceases to be employed by the Company or its Subsidiaries or who ceases to provide services to the Company or its Subsidiaries, obtains a position as a full-time or part-time employee of, as a member of the board of directors of, or as a consultant or advisor with or to, or acquires an ownership interest in excess of 5% of, a corporation, partnership, firm or other entity (i) that engages in any of the businesses of the Company or any Subsidiary with which the Optionee was involved at any time during employment with or other service for the Company or any Subsidiary; (ii) that serves as a supplier to the Company, a Subsidiary or a competitor of the Company or a Subsidiary; or (iii) that is a customer of the Company, a Subsidiary or a competitor of the Company or a Subsidiary.
(c) “Disability” shall mean a disability that would entitle Optionee to payment of disability payments under any Company or a Subsidiary disability plan or as otherwise determined by the Committee.
(d) “Retirement” shall mean termination of the Optionee’s employment if the Optionee has been employed by the Company or a Subsidiary on a continuous basis for a period of at least ten years and the Optionee has attained the age of 55 years.
(e) “Subsidiary” shall mean any corporation or other entity of which the Company owns securities having a majority of the ordinary voting power in electing the board of directors or similar governing body, either directly or through one or more Subsidiaries.
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2.5 |
The Option shall expire and may not be exercised later than ten years following the Date of Grant. |
III
Method of Exercise of Option
3.1 Optionee may exercise all or a portion of the Option by delivering to the Company a signed written notice of his intention to exercise the Option, specifying therein the number of shares to be purchased. Upon receiving such notice, and after the Company has received full payment of the Exercise Price, the appropriate officer of the Company shall cause the transfer of title of the shares purchased to Optionee on the Company's stock records and cause to be issued to Optionee a stock certificate for the number of shares being acquired. Optionee shall not have any rights as a shareholder until the stock certificate is issued to him.
3.2 The Option may be exercised by the payment of the Exercise Price in cash, in shares of Common Stock held for six months or in a combination of cash and shares of Common Stock held for six months. The Optionee may also pay the Exercise Price by delivering a properly executed exercise notice together with irrevocable instructions to a broker approved by the Company (with a copy to the Company) to promptly deliver to the Company the amount of sale or loan proceeds to pay the Exercise Price.
IV
No Contract of Employment Intended
Nothing in this Agreement shall confer upon Optionee any right to continue in the employment of the Company or any of its subsidiaries, or to interfere in any way with the right of the Company or any of its subsidiaries to terminate Optionee's employment relationship with the Company or any of its subsidiaries at any time.
V
Binding Effect
This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators and successors.
VI
Non-Transferability
The Option granted hereby may not be transferred, assigned, pledged or hypothecated in any manner, by operation of law or otherwise, other than by will, by the laws of descent and distribution or pursuant to a domestic relations order, as defined in the Code, or as permitted by the Committee and so provided herein, (i) to Immediate Family Members, (ii) to a partnership in which the participant and/or Immediate Family Members, or entities in which the participant and/or Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole partners, (iii) to a limited liability company in which the participant and/or Immediate Family Members, or entities in which the participant and/or Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole members, (iv) to a trust for the sole benefit of the participant and/or Immediate Family Members or (v) to a charitable organization. “Immediate Family Members” shall be defined as the spouse and natural or adopted children or grandchildren of the participant and their spouses. To the extent that an incentive stock option is permitted to be transferred during the lifetime of the participant, it shall be treated thereafter as a nonqualified stock option. Any attempted assignment, transfer, pledge, hypothecation or other disposition of Incentives, or levy of attachment or similar process upon Incentives not specifically permitted herein, shall be null and void and without effect.
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VII
Inconsistent Provisions
The Option granted hereby is subject to the provisions of the Plan as in effect on the date hereof and as it may be amended. In the event any provision of this Agreement conflicts with such a provision of the Plan, the Plan provision shall control.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed on the day and year first above written.
SCP POOL CORPORATION
By:
Chairman, Compensation Committee
Optionee
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