Exhibit 10.3
ATRION CORPORATION
2006 EQUITY INCENTIVE PLAN
FORM OF AWARD AGREEMENT FOR NON-QUALIFIED STOCK OPTION
THIS AWARD AGREEMENT (the "Agreement") is made and entered into effective as of
________________, ____, by and between Atrion Corporation, a Delaware
corporation (the "Company"), and ___________________ (the "Participant"),
pursuant to the Atrion Corporation 2006 Equity Incentive Plan, as it may be
amended and restated from time to time (the "Plan"). Capitalized terms used but
not defined herein shall have the meanings set forth in the Plan.
W I T N E S S E T H:
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WHEREAS, pursuant to the Plan and subject to the execution of this Agreement,
the Committee has granted, and the Participant desires to receive, an Award.
NOW, THEREFORE, for and in consideration of the premises, the mutual promises
and covenants herein contained, and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto do hereby agree as follows:
1. AWARD OF OPTION. On the date specified on Exhibit A attached hereto (the
"Date of Grant") but subject to the execution of this Agreement, the Company
granted to the Participant an Award in the form of a Non-Qualified Stock Option
(the "Option") to purchase from the Company the number of shares of Common Stock
(the "Shares") set forth on said Exhibit A for the price per Share (the "Option
Price") set forth on said Exhibit A.
2. EFFECT OF PLAN. The Option is in all respects subject to, and shall be
governed and determined by, the provisions of the Plan (all of the terms of
which are incorporated herein by reference) and to any rules which might be
adopted by the Board or the Committee with respect to the Plan to the same
extent and with the same effect as if set forth fully herein. The Participant
hereby acknowledges that all decisions and determinations of the Committee shall
be final and binding on the Participant, his beneficiaries and any other person
having or claiming an interest in the Option.
3. VESTING AND EXERCISABILITY OF OPTION. The Option may be exercised and Shares
may be purchased by the Participant as the result of such exercise only during
the term or terms set forth on Exhibit A attached hereto; provided, however,
that in no event shall the total number of Shares purchased hereunder pursuant
to the exercise of the Option exceed the number set forth on Exhibit A attached
hereto, as the same may be adjusted in accordance with the Plan.
(a) Limitations on Exercise of Option. The Option may not be exercised
after the earlier of (i) its expiration date, (ii) _________ (___)
months from the date of the Participant's Termination of Employment by
reason of his death, (iii) _________ (___) from the date of the
Participant's Termination of Employment by reason of his Permanent
Disability, or (iv) the expiration of _________ (___) months from the
date of the Participant's Termination of Employment for any reason
other than such Participant's death or Permanent Disability, unless the
Participant dies within said _________ (___) month period and the Award
Agreement or the Committee permits later exercise. Leaves of absence
for less than ninety (90) days shall not cause a Termination of
Employment for purposes hereof.
(b) No Vesting After Termination. Notwithstanding any other provision
hereof, in no event may the Option be exercised at any time after
Termination of Employment with respect to any number of Shares in
excess of the number of Shares as to which the Option was exercisable
at the time of Termination of Employment.
4. METHOD OF EXERCISE. The Option shall be exercised by delivery to the Company
at its principal office of written notice of the Participant's intent to
exercise the Option with respect to the number of Shares then being purchased,
accompanied by payment in full to the Company of the amount of the Option Price
for the number of Shares then being purchased. Full payment shall be payable to
the Company (in cash or by check) upon exercise of the Option for the Shares
with respect to which the Option or portion thereof is exercised. The Option
Price for the number of Shares then being purchased shall be paid directly by
the Participant; however, if the exercise of the Option is in accordance with
Section 220.3(e) of Regulation T promulgated by the Board of Governors of the
Federal Reserve System (a "cashless exercise"), the Option Price for the number
of Shares then being purchased may be paid directly by a registered
broker-dealer for the account of the Participant. With the prior written consent
of the Committee, the Option Price may be paid as follows:
(a) in whole or in part, through the delivery of shares of Common Stock
owned by the Participant, duly endorsed for transfer to the Company
with a Fair Market Value on the date of delivery equal to the aggregate
exercise price of the Option or exercised portion thereof, provided,
that shares of Common Stock used to exercise the Option have been held
by the Participant for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option;
(b) in whole or in part, through the surrender of Shares then issuable
upon exercise of the Option having a Fair Market Value on the date of
Option exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; or
(c) through any combination of the consideration provided for in this
Section 4 or such other method approved by the Committee consistent
with applicable law.
5. SURRENDER OF AGREEMENT ON EXERCISE. In case of any exercise of the Option,
this Agreement shall be surrendered to the Company. The Company shall thereupon
cause to be issued and delivered to the Participant (or, in the event of a
cashless exercise, to the Participant's broker-dealer), as soon as reasonably
may be done in accordance with the terms of the Plan, a certificate or
certificates, representing the Shares so purchased and fully paid for. In the
event of a partial exercise of the Option, the Company shall endorse on Exhibit
B attached hereto the fact that the Option has been partially exercised on such
date, setting forth the number of Shares as to which the Option has been
exercised on such date and the number of Shares then remaining subject to the
Option, and return this Agreement to the Participant.
6. NO ASSIGNMENT. The Option is personal to the Participant and may not in any
manner or respect be assigned or transferred otherwise than by will or the laws
of descent and distribution, and is exercisable during the Participant's
lifetime only by the Participant.
7. AUTHORITY OF COMMITTEE. Notwithstanding any provision of the Plan or of this
Award Agreement to the contrary, the Committee, in its sole and exclusive
discretion, shall have the power at any time to (a) accelerate the vesting and
exercisability of the Option including, without limitation, acceleration to such
a date that would result in the Option becoming fully and immediately vested and
exercisable or (b) waive any restrictions of the Option.
8. TERMINATION. This Agreement shall terminate on the earliest of:
(a) the date on which the Option is exercised with respect to all
of the Shares then subject to the Option;
(b) the date on which the Option is forfeited; and (c) _________ (___)
years from the Date of Grant.
9. GOVERNING LAW. This Agreement is intended to comply with Section 409A of the
Code. This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas, applied without giving effect to any conflict-of-law
principles. Any validity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provisions were
omitted.
10. BINDING EFFECT. This Agreement shall be binding upon and shall inure to the
benefit of each of the parties hereto and their respective executors,
administrators, personal representatives, legal representatives, heirs, and
successors in interest.
11. COUNTERPART EXECUTION. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original, and such
counterparts shall, together, constitute and be one and the same instrument.
12. NO RIGHT TO CONTINUED EMPLOYMENT. This Agreement shall not be deemed to
confer upon Participant any right to continue Participant's employment by the
Company, and the Company may terminate such employment at any time for any
reason, subject to the provisions of any applicable employment agreement.
IN WITNESS WHEREOF, the Company and the Participant have executed and delivered
this Agreement as of the day and year first written above.
[Signatures appear on the following page.]
ATRION CORPORATION
By:
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Name:
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Title:
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PARTICIPANT
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[Name]
EXHIBIT A
TO
AWARD AGREEMENT
Participant:
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Grant Date:
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Option Price: $
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Can Only Be Must Be
Shares Subject to Option Exercised After Exercised Before
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EXHIBIT B
TO
AWARD AGREEMENT
PARTIAL EXERCISE
Date of No. of Shares No. of Shares Signature of
Exercise Purchased Remaining Endorsing Officer
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