NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER
1999 OMNIBUS SECURITIES PLAN
OF
TEMTEX INDUSTRIES, INC.
STOCK OPTION AGREEMENT (this "Agreement") entered into this
___ day of _______________, _____, between TEMTEX INDUSTRIES,
INC., a Delaware corporation (the "Corporation"), and
________________, an Eligible Person (as that term is defined by
the Corporation's 1999 Omnibus Securities Plan (the "Plan")) (the
"Optionee," which term as used herein shall be deemed to include
any successor to the Optionee by will or by the laws of descent
and distribution, unless the context shall otherwise require, as
provided in the Plan).
Pursuant to the Plan, the Administering Body approved the
issuance to the Optionee, effective as of the date set forth
above, of a Non-qualified Stock Option to purchase up to an
aggregate of __________ shares of common stock of the Corporation
(the "Common Stock"), at the price of $____ per share (the
"Option Price") which represents not less than 100% of the Fair
Market Value of a share of Common Stock determined in accordance
with the Plan, upon the terms and conditions hereinafter set
forth. (Capitalized terms used herein but not defined herein
shall have the meaning ascribed to them in the Plan).
NOW, THEREFORE, in consideration of the mutual premises and
undertakings hereinafter set forth, the parties hereto agree as
follows:
1. OPTION; OPTION PRICE. On behalf of the Corporation,
the Administering Body hereby grants as of the date of this
Agreement to the Optionee the option (the "Option") to purchase,
subject to the terms and conditions of this Agreement and the
provisions of the Plan (which is incorporated by reference herein
and which in all cases shall control in the event of any conflict
with the terms, definitions and provisions of this Agreement),
_________ shares of Common Stock of the Corporation at an
exercise price per share equal to the Option Price. A copy of
the Plan as in effect on the date hereof has been supplied to the
Optionee, and the Optionee by executing this Agreement hereby
acknowledges receipt thereof.
2. TERM. The term (the "Option Term") of the Option shall
commence on the date of this Agreement and shall terminate on the
_______ (___) anniversary of the date of this Agreement, [not to
exceed ten (10) years] unless such Option shall theretofore have
been terminated in accordance with the terms hereof or the
provisions of the Plan.
3. VESTING; RESTRICTIONS ON EXERCISE.
(a) Subject to the provisions of Sections 5 and 8 hereof,
and unless accelerated, as set forth in the Plan or as provided
herein, the Option granted hereunder shall vest and become
exercisable for the number of shares set forth opposite the dates
noted below (the "Option Vesting Schedule").
Cumulative
Date(s) Number of Vested Shares
______________ _______
______________ _______
______________ _______
______________ _______
______________ _______
(b) If the Corporation shall consummate any Reorganization
not involving a Change in Control in which holders of shares of
Common Stock are entitled to receive in respect of such shares
any securities, cash or other consideration (including, without
limitation, a different number of shares of Common Stock), the
Option shall thereafter be exercisable, in accordance with the
Plan and this Agreement, only for the kind and amount of
securities, cash and/or other consideration receivable upon such
Reorganization by a holder of the same number of shares of Common
Stock as are subject to the Option immediately prior to such
Reorganization, and any adjustments will be made to the terms of
the Option in the sole discretion of the Administering Body as it
may deem appropriate to give effect to the Reorganization. If
the Corporation shall consummate any Reorganization or other
corporate transaction which involves a Change of Control, the
rights of Optionee as to any adjustments or other matters
resulting therefrom shall be as set forth in the Plan.
(c) Subject to the provisions of Sections 5 and 8 hereof,
shares as to which the Option becomes exercisable pursuant to the
foregoing provisions may be purchased at any time thereafter
prior to the expiration or termination of the Option.
4. TERMINATION OF OPTION.
(a) The unexercised portion of the Option shall
automatically and without notice terminate and become null and
void at the time of the earliest to occur of:
(i) six (6) months after the Optionee's engagement
with the Corporation is terminated as a result of death or
Permanent Disability;
(ii) ninety (90) days after the Optionee's engagement
with the Corporation is terminated for any reason other than
death or Permanent Disability; or
(iii) the expiration date of the term of the Option.
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5. PROCEDURE FOR EXERCISE.
(a) Subject to the requirements of Section 8, the Option
may be exercised, from time to time, in whole or in part (but for
the purchase of a whole number of shares only), by delivery of a
written notice, a form of which has been attached as Annex A
hereto (the "Notice"), from the Optionee to the Chief Financial
Officer of the Corporation, which Notice shall:
(i) state that the Optionee elects to exercise the
Option;
(ii) state the number of vested shares with respect to
which the Option is being exercised (the "Optioned Shares");
(iii) state the date upon which the Optionee
desires to consummate the purchase of the Optioned Shares
(which date must be prior to the termination of such Option
and no later than thirty (30) days after the date of receipt
of such Notice);
(iv) include any representations of the Optionee
required under Section 8(c); and
(v) if the Option shall be exercised pursuant to
Section 9 by any person other than the Optionee, include
evidence to the satisfaction of the Administering Body of
the right of such person to exercise the Option.
(b) Payment of the Option Price for the Optioned Shares
shall be made in U.S. dollars by personal check, bank draft or
money order payable to the order of the Corporation or by wire
transfer.
(c) The Corporation shall issue a stock certificate in the
name of the Optionee (or such other person exercising the Option
in accordance with the provisions of Section 9) for the Optioned
Shares as soon as practicable after receipt of the Notice and
payment of the aggregate Option Price for such shares.
6. NO RIGHTS AS A STOCKHOLDER. The Optionee shall have no
rights as a stockholder of the Corporation with respect to any
Optioned Shares until the date the Optionee or his nominee
(which, for purposes of this Agreement, shall include any third
party agent selected by the Administering Body to hold such
Optioned Shares on behalf of the Optionee), guardian or legal
representative is the holder of record of such Optioned Shares.
7. ADJUSTMENTS.
(a) If at any time while the Option is outstanding, (1)
there shall be any increase or decrease in the number of issued
and outstanding shares of Common Stock through the declaration of
a stock dividend, stock split, combination of shares or through
any recapitalization resulting in a stock split-up, spin-off,
combination or exchange of shares of Common Stock or (2) the
value of the outstanding shares of Common Stock is reduced by
reason of an
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extraordinary cash dividend, then, and in each such event,
appropriate adjustment shall be made in the number of shares and
the exercise price per share covered by the Option, so that the
same proportion of the Corporation's issued and outstanding
shares of Common Stock shall remain subject to purchase at the
same aggregate exercise price.
(b) Except as otherwise expressly provided herein, the
issuance by the Corporation of shares of its capital stock of any
class, or securities convertible into shares of capital stock of
any class, either in connection with a direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Corporation
convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with
respect to, the number of or exercise price of shares of Common
Stock covered by the Option.
(c) Without limiting the generality of the foregoing, the
existence of the Option shall not affect in any manner the right
or power of the Corporation to make, authorize or consummate (i)
any or all adjustments, recapitalizations, reorganizations or
other changes in the Corporation's capital structure or its
business; (ii) any merger or consolidation of the Corporation;
(iii) any issue by the Corporation of debt securities, or
preferred or preference stock that would rank above the shares of
Common Stock covered by the Option; (iv) the dissolution or
liquidation of the Corporation; (v) any sale, transfer or
assignment of all or any part of the assets or business of the
Corporation; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.
8. ADDITIONAL PROVISIONS RELATED TO EXERCISE.
(a) The Option shall be exercisable only in accordance with
this Agreement and the terms of the Plan, including the
provisions regarding the period when the Option may be exercised
and the number of shares of Common Stock that may be acquired
upon exercise.
(b) The Option may not be exercised as to less than one
hundred (100) shares of Common Stock at any one time unless less
than one hundred (100) shares of Common Stock remain to be
purchased upon the exercise of the Option.
(c) To exercise the Option, the Optionee shall follow the
provisions of Section 5 hereof. Upon the exercise of the Option
at a time when there is not in effect a registration statement
under the Securities Act of 1933, as amended (the "Securities
Act") relating to the shares of Common Stock issuable upon
exercise of the Option, the Administering Body in its discretion
may, as a condition to the exercise of the Option, require the
Optionee (i) to represent in writing that the shares of Common
Stock received upon exercise of the Option are being acquired for
investment and not with a view to distribution and (ii) to make
such other representations and warranties as are deemed
appropriate by counsel to the Corporation. No Option may be
exercised and no shares of Common Stock shall be issued and
delivered upon the exercise of the Option unless and until the
Corporation and/or the Optionee shall have complied
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with all applicable federal or state registration, listing and/or
qualification requirements and all other requirements of law or
of any regulatory agencies having jurisdiction.
(d) Stock certificates representing shares of Common Stock
acquired upon the exercise of the Option that have not been
registered under the Securities Act shall, if required by the
Administering Body, bear an appropriate legend which may, at the
discretion of the Administering Body, take the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO
THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED."
(e) The exercise of each Option and the issuance of shares
in connection with the exercise of an Option shall, in all cases,
be subject to each of the following conditions: (i) compliance
with the terms of the Plan and this Agreement, (ii) the
satisfaction of withholding tax or other withholding liabilities,
(iii) as necessary, the listing, registration or qualification of
any to-be-issued shares upon any securities exchange, The Nasdaq
Stock Market or other trading or quotation system or under any
federal or state law and (iv) the consent or approval of any
regulatory body. The Administering Body shall in its sole
discretion determine whether one or more of these conditions is
necessary or desirable to be satisfied in connection with the
exercise of an Option and prior to the delivery or purchase of
shares pursuant to the exercise of an Option. The exercise of an
Option shall not be effective unless and until such condition(s)
shall have been satisfied or the Administering Body shall have
waived such conditions, in its sole discretion.
9. RESTRICTION ON TRANSFER. The Option may not be
assigned or transferred except by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations
order as defined in the IRC, and may be exercised during the
lifetime of the Optionee only by the Optionee or the Optionee's
guardian or legal representative or assignee pursuant to a
qualified domestic relations order. If the Optionee dies, the
Option shall thereafter be exercisable, during the period
specified in Section 4(a)(i), by his executors or administrators
or by a person who acquired the right to exercise such Option by
bequest or inheritance to the full extent to which the Option was
exercisable by the Optionee at the time of his death. If the
Optionee becomes inflicted with a Permanent Disability, the
Option shall thereafter be exercisable, during the period
specified in Section 4(a)(i), by his legal representatives to the
full extent to which the Option was exercisable by the Optionee
at the time of his Permanent Disability. The Option shall not be
subject to execution, attachment or similar process. Any
attempted assignment or transfer
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of the Option contrary to the provisions hereof, and the levy of
any execution, attachment or similar process upon the Option,
shall be null and void and without effect.
10. NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and
sufficient if (i) personally delivered, (ii) sent by nationally-
recognized overnight courier or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Optionee, to the address set forth on the
signature page hereto; and
if to the Corporation, to:
Temtex Industries, Inc.
0000 XXX Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Attention: Chief Financial Officer
or to such other address as the party to whom notice is to be
given may have furnished to each other party in writing in
accordance herewith. Any such communication shall be deemed to
have been given (i) when delivered, if personally delivered, (ii)
on the first Business Day (as hereinafter defined) after
dispatch, if sent by nationally-recognized overnight courier and
(iii) on the third Business Day following the date on which the
piece of mail containing such communication is posted, if sent by
mail. As used herein, "Business Day" means a day that is not a
Saturday, Sunday or a day on which banking institutions in the
city to which the notice or communication is to be sent are not
required to be open.
11. NO WAIVER. No waiver of any breach or condition of
this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition, whether of like or different
nature.
12. OPTIONEE UNDERTAKING. The Optionee hereby agrees to
take whatever additional actions and execute whatever additional
documents the Corporation or its counsel may in their reasonable
judgment deem necessary or advisable in order to carry out or
effect one or more of the obligations or restrictions imposed on
the Optionee pursuant to the express provisions of this Agreement
or the Plan.
13. 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.
14. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of
Delaware applicable to contracts made and to be wholly performed
therein.
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15. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the
same instrument.
16. ENTIRE AGREEMENT. This Agreement and the Plan
constitute the entire agreement between the parties with respect
to the subject matter hereof, and supersede all previously
written or oral negotiations, commitments, representations and
agreements with respect thereto.
TEMTEX INDUSTRIES, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
OPTIONEE:
____________________________________
Name:_______________________________
Address:____________________________
____________________________
____________________________
Annexes
Annex A - Form of Exercise Notice
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ANNEX A
-------
EXERCISE NOTICE
Ladies/Gentlemen:
I hereby exercise my Stock Option to purchase _________ shares of
Common Stock of TEMTEX INDUSTRIES, INC. at the option price of
$____ per share as provided in the Non-qualified Stock Option
Agreement dated the ___ day of ________________.
I acknowledge that I previously received a copy of the 1999
Omnibus Securities Plan of Temtex Industries, Inc. and executed a
Stock Option Agreement, and I have carefully reviewed both
documents.
I have considered the tax implications of my option and the
exercise thereof. I hereby tender my personal check, bank draft
or money order payable to TEMTEX INDUSTRIES, INC. in the amount
of $____________ or, I have wire transferred $_______________ to
TEMTEX INDUSTRIES, INC., which transfer shall be subject to the
confirmation of receipt of funds by the Corporation. [If payment
is to be made by wire transfer, the Optionee should contact the
Corporation's Chief Financial Officer or Controller in advance to
obtain wiring instructions.]
______________________________
Optionee
______________________________
Date
