EXHIBIT 10.3
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR EMPLOYEES UNDER THE
CIRCOR INTERNATIONAL, INC.
1999 STOCK OPTION AND INCENTIVE PLAN
(Five Year Graduated Vesting Schedule)
Name of Optionee:_____________________________
No. of Option Shares:___________________________
Option Exercise Price per Share:_______________________
[minimum 80% of FMV, unless a replacement grant]
Grant Date:____________________
Expiration Date:_______________________________
[up to 10 years and 1 day]
Pursuant to the CIRCOR International, Inc. 1999 Stock Option and Incentive
Plan (the "Plan"), CIRCOR International, Inc. (the "Company") hereby grants to
the Optionee named above, who is an officer or employee of the Company or any of
its Subsidiaries, an option (the "Stock Option") to purchase on or prior to the
Expiration Date specified above all or part of the number of shares (the "Option
Shares") of Common Stock, par value $.01 per share (the "Stock") of the Company
specified above at the Option Exercise Price per Share specified above, subject
to the terms and conditions set forth herein and in the Plan.
1. Vesting Schedule. No portion of this Stock Option may be exercised
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until such portion shall have vested. Except as set forth below, and subject to
the discretion of the Committee (as defined in Section 2 of the Plan) to
accelerate the vesting schedule hereunder, this Stock Option shall be vested and
exercisable with respect to the following number of Option Shares on the dates
indicated:
Number of
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Option Shares Exercisable Vesting Date
------------------------- ------------
_________ (20%) ________
_________ (20%) ________
_________ (20%) ________
_________ (20%) ________
_________ (20%) ________
In the event of a Covered Transaction as defined in Section 3(c) of the
Plan, this Stock Option shall become immediately vested and exercisable in full,
whether or not this Stock Option or any portion thereof is vested and
exercisable at such time. Once vested, this Stock Option shall continue to be
exercisable at any time or times prior to the close of business on the
Expiration Date, subject to the provisions hereof and of the Plan.
2. Manner of Exercise.
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(a) The Optionee may exercise this Stock Option only in the following
manner: from time to time on or prior to the Expiration Date of this Stock
Option, the Optionee may give written notice to the Committee of his or her
election to purchase some or all of the vested Option Shares purchasable at the
time of such notice. This notice shall specify the number of Option Shares to
be purchased.
Payment of the purchase price for the Option Shares may be made by one or
more of the following methods: (i) in cash, by certified or bank check or other
instrument acceptable to the Committee; (ii) by the Optionee delivering (or
attesting to the ownership of) shares of Stock that have been purchased on the
open market or that have been held by the Optionee for at least six months and
that are not then subject to restrictions under any Company plan; (iii) by the
Optionee delivering to the Company a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company to pay the option purchase
price, provided that in the event the Optionee chooses to pay the option
purchase price as so provided, the Optionee and the broker shall comply with
such procedures and enter into such agreements of indemnity and other agreements
as the Committee shall prescribe as a condition of such payment procedure; or
(iv) a combination of (i), (ii) and (iii) above. Payment instruments will be
received subject to collection.
The delivery of certificates representing the Option Shares will be
contingent upon the Company's receipt from the Optionee of full payment for the
Option Shares, as set forth above and any agreement, statement or other evidence
that the Company may require to satisfy itself that the issuance of Stock to be
purchased pursuant to the exercise of Stock Options under the Plan and any
subsequent resale of the shares of Stock will be in compliance with applicable
laws and regulations.
(b) Certificates for the shares of Stock purchased upon exercise of
this Stock Option shall be issued and delivered to the Optionee upon compliance
to the satisfaction of the Committee with all requirements under applicable laws
or regulations in connection with such issuance and with the requirements hereof
and of the Plan. The determination of the Committee as to such compliance shall
be final and binding on the Optionee. The Optionee shall not be deemed to be
the holder of, or to have any of the rights of a holder with respect to, any
shares of Stock subject to this Stock Option unless and until this Stock Option
shall have been exercised pursuant to the terms hereof, the Company shall have
issued and delivered the shares to the Optionee, and the Optionee's name shall
have been entered as the stockholder of
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record on the books of the Company. Thereupon, the Optionee shall have full
voting, dividend and other ownership rights with respect to such shares of
Stock.
(c) The minimum number of shares with respect to which this Stock
Option may be exercised at any one time shall be 100 shares, unless the number
of shares with respect to which this Stock Option is being exercised is the
total number of shares subject to exercise under this Stock Option at the time.
(d) Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date
hereof.
3. Termination of Employment. If the Optionee's employment by the
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Company or a Subsidiary (as defined in the Plan) is terminated, the period
within which to exercise this Stock Option may be subject to earlier termination
as set forth below.
(a) Termination Due to Death. If the Optionee's employment terminates
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by reason of the Optionee's death, this Stock Option shall become fully
exercisable and may thereafter be exercised by the Optionee's legal
representative or legatee for a period of 1 year from the date of death or
until the Expiration Date, if earlier.
(b) Termination Due to Disability. If the Optionee's employment
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terminates by reason of the Optionee's Disability (within the meaning of Section
22(e)(3) of the Code), this Stock Option shall become fully exercisable and may
thereafter be exercised by the Optionee for a period of 12 months from the date
of termination or until the Expiration Date, if earlier. The death of the
Optionee during the 12-month period provided in this Section 3(b) shall extend
such period for another 12 months from the date of death or until the Expiration
Date, if earlier.
(c) Termination for Cause. If the Optionee's employment terminates
---------------------
for Cause (as defined below), this Stock Option shall terminate immediately and
be of no further force and effect.
(d) Other Termination. If the Optionee's employment terminates for
-----------------
any reason other than death, Disability, or Cause, and unless otherwise
determined by the Committee, any portion of this Stock Option may be exercised
by the Optionee, to the extent exercisable on the date of termination, for a
period of three months from the date of termination or until the Expiration
Date, if earlier. Any portion of this Stock Option that is not exercisable at
such time shall terminate immediately and be of no further force or effect.
(e) Definition. For purposes hereof, a termination of employment for
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"Cause" shall mean the occurrence of one or more of the following: (i) the
Optionee is convicted of, pleads guilty to, or confesses to any felony or any
act of fraud, misappropriation or embezzlement which has an immediate and
materially adverse effect on the Company or any Subsidiary, as determined by the
Administrator in good faith in its sole discretion; (ii) the
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Optionee engages in a fraudulent act to the material damage or prejudice of the
Company or any Subsidiary or in conduct or activities materially damaging to the
property, business or reputation of the Company or any Subsidiary, all as
determined by the Administrator in good faith in its sole discretion; (iii) any
material act or omission by the Optionee involving malfeasance or negligence in
the performance of the Optionee's duties to the Company or any Subsidiary to the
material detriment of the Company or any Subsidiary, as determined by the
Administrator in good faith in its sole discretion, which has not been corrected
by the Optionee within thirty (30) days after written notice from the Company of
any such act or omission; (iv) failure by the Optionee to comply in any material
respect with any written policies or directives of the Company as determined by
the Administrator in good faith in its sole discretion, which has not been
corrected by the Optionee within ten (10) days after written notice from the
Company of such failure; or (v) material breach by the Optionee of any non-
competition, confidentiality or similar agreements between the Optionee and the
Company as determined by the Administrator in good faith in its sole discretion.
(f) Miscellaneous. The Administrator's determination of the reason
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for termination of the Optionee's employment shall be conclusive and binding on
the Optionee and his or her representatives or legatees. Any portion of this
Stock Option that is unvested after the application of this Section 3 shall be
canceled immediately upon any termination of employment and shall not be
exercisable by the Optionee.
4. Incorporation of Plan. Notwithstanding anything herein to the
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contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.
5. Transferability. This Agreement is personal to the Optionee, is non-
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assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Stock Option is exercisable, during the Optionee's lifetime, only by the
Optionee, and thereafter, only by the Optionee's legal representative or
legatee.
6. Tax Withholding. The Optionee shall, not later than the date as of
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which the exercise of this Stock Option becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements satisfactory to the
Committee for payment of any Federal, state, and local taxes required by law to
be withheld on account of such taxable event. The Optionee may elect to have
the minimum tax withholding obligation satisfied, in whole or in part, by (i)
authorizing the Company to withhold from shares of Stock to be issued, or (ii)
transferring to the Company, a number of shares of Stock with an aggregate Fair
Market Value that would satisfy the minimum required tax withholding amount due.
7. Effect of Employment Agreement. If the Optionee is a party to an
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employment agreement with the Company and any provisions set forth in such
employment agreement
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conflict with the provisions set forth in this Stock Option Agreement, the
provisions set forth in such employment agreement shall override such
conflicting provisions set forth herein.
8. Miscellaneous.
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(a) Notice hereunder shall be given to the Company at its principal
place of business, and shall be given to the Optionee at the address set forth
below, or in either case at such other address as one party may subsequently
furnish to the other party in writing.
(b) This Stock Option does not confer upon the Optionee any rights
with respect to continuance of employment by the Company or any Subsidiary.
(c) Pursuant to Section 14 of the Plan, the Committee may at any time
amend or cancel any outstanding portion of this Stock Option, but no such action
may be taken which adversely affects the Optionee's rights under this Agreement
without the Optionee's consent.
CIRCOR INTERNATIONAL, INC.
By: ___________________________
Title:
The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.
Date: ________________________ _____________________________
Optionee's Signature
Optionee's name and address:
_____________________________
_____________________________
_____________________________
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