Exhibit (d)(4)
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
UNDER THE CONGOLEUM CORPORATION
1995 STOCK OPTION PLAN
Congoleum Corporation, a Delaware corporation (the "Company"),
hereby grants to (Name) (the "Optionee"), an employee of the Company, an
option (the "Option") to purchase from the Company up to, but not
exceeding, in the aggregate, (Number of Shares) shares (the "Shares") of
Class A Common Stock, par value $.01 per share, of the Company ("Stock") at
$______ per share (the "Option Price"), subject to the following terms and
conditions:
1. The Option is granted pursuant to the Congoleum Corporation 1995
Stock Option Plan (the "Plan"), as established by certain
resolutions adopted by the Board of Directors and stockholders of
the Company. By executing this Agreement, the Optionee
acknowledges that he or she has received a copy of, and is
familiar with the terms of, the Plan, which is incorporated herein
by reference. Any capitalized terms not defined herein shall have
the same meanings assigned to them in the Plan.
2. The Option shall not be treated as an "incentive stock option"
within the meaning of Section 422 of the Code.
3. (a) Subject to the terms of the Plan and the other terms of this
Agreement regarding the exercisability of the Option, the Option
may be exercised with respect to 20% of the Shares upon each
anniversary of the date of grant of the Option (November 8, 2001),
commencing on the first anniversary of the date of grant of the
Option. Once available for purchase in accordance with the
foregoing, unpurchased Shares shall remain subject to purchase
until the Option terminates in accordance with the terms of
Sections 3(b), 3(c), 3(d) or 4 hereof.
(b) In the event of the Optionee's employment by the Company shall
terminate for any reason other than for cause, death, disability
or retirement, the Optionee may exercise the Option within one
month after the termination of employment, but only to the extent
that the Optionee may be entitled to do so at the date of
termination of employment, except as may otherwise be determined
by the Committee. In the event of the Optionee's employment by the
Company shall terminate for cause, the Option shall cease to be
exercisable from and after the date of termination of employment,
except as may otherwise be determined by the Committee.
(c) In the event of the death of the Optionee (i) while an
employee of the Company or any Subsidiary or Affiliate of the
Company, (ii) within three months after termination of employment
with the Company or any Subsidiary or Affiliate of the Company
because of retirement or (iii) within twelve months after
termination of such employment because of disability, the Option
may be exercised, notwithstanding any installment schedule
otherwise applicable to the Option, by the person or persons to
whom the Optionee's rights under the Option pass by will or
applicable law or, if no such person has such right,
by his or her executors or administrators, at any time, or from
time to time, within twelve months after the Optionee's death, but
not later than ten years after the date of the granting of the
Option.
(d) In the event the Optionee's employment by the Company shall
terminate because of disability or retirement, the Optionee may
exercise the Option, notwithstanding any installment schedule
otherwise applicable to the Option, at any time, or from time to
time, within three months after the termination of employment
because of retirement or within twelve months after the
termination of employment because of disability, but not later
than ten years after the date of the granting of the Option.
(e) The Option Price of the Shares as to which the Option shall be
exercised shall be paid to the Company at the time of exercise in
(i) cash, (ii) Stock already owned by the Optionee having a total
fair market value on the date of such exercise equal to the Option
Price, or (iii) a combination of cash and Stock having a total
fair market value on the date of such exercise equal to the Option
Price. The Committee, in its sole discretion, may also provide
that the Option Price may be paid by delivering a properly
executed exercise notice in a form approved by the Committee,
together with irrevocable instructions to a broker to promptly
deliver to the Company, against receipt of the certificates
representing the shares of Stock issuable upon such exercise, the
amount of the applicable sale or loan proceeds to pay the Option
Price.
4. The Option shall terminate and be of no force or effect with
respect to any Shares not previously purchased by the Optionee
upon the expiration of ten years following the date the Option was
granted.
5. Subject to the limitations set forth herein and in the Plan, the
Option may be exercised by written notice mailed or delivered to
Congoleum Corporation, 0000 Xxxxxxxxxxxx Xxxx, X.X. Xxx 0000,
Xxxxxxxxxxx, Xxx Xxxxxx 00000-0000, Attention: Corporate
Secretary, which notice shall (a) state the number of Shares with
respect to which the Option is being exercised and (b) be
accompanied by payment of the full amount of the Option Price for
the Shares being purchased as set forth in Section 3(e) hereof.
The Optionee shall not be or have any of the rights or privileges
of a stockholder of the Company in respect of any Shares unless
and until certificates representing such Shares shall have been
issued or transferred by the Company to the Optionee.
6. The Optionee hereby represents and acknowledges that he or she is
acquiring the Option and the underlying Shares for his or her own
account for investment and not with a view to, or for sale in
connection with, the distribution of any interest therein or part
thereof, provided that nothing shall prohibit or restrict the sale
of such Shares by the Optionee in compliance with the Securities
Act of 1933, as amended, and the rules and regulations thereunder.
If any law or regulation requires the Company to take any action
with respect to the Option or the Shares, the time for delivery
thereof, which would otherwise be as promptly as possible, shall
be postponed for the period of time necessary to take such action.
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7. The Option shall not be transferable, other than under a qualified
domestic relations order (as defined under Section 414(p) of the
Code) (a "QDRO"), by will or by the laws of descent and
distribution, and no transfer under a QDRO, by will or by the laws
of descent and distribution shall be effective to bind the
Company, unless the Committee shall have been furnished with a
copy of such QDRO, such will or such other evidence as the
Committee may deem necessary to establish the validity of the
transfer. During the lifetime of the Optionee, only the Optionee
or his or her guardian, custodian or legal representative may
exercise the Option and receive cash payments and deliveries of
Shares of Stock pursuant to the Option.
8. (a) Neither the existence of the Plan nor the existence of the
Option shall affect in any way the right or power of the Company
or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stocks ahead of or affecting the
Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
(b) In the event of any change in the Stock by reason of any stock
dividend, recapitalization, reorganization, merger, consolidation,
split-up, combination or exchange of shares, or any rights
offering to purchase Stock at a price substantially below fair
market value, or of any similar change affecting the Stock, the
number and kind of Shares subject to the Option and the Option
Price per Share thereof shall be appropriately adjusted consistent
with such change in such manner as the Committee may deem
equitable to prevent substantial dilution or enlargement of the
rights granted to the Optionee hereunder. The Committee shall give
notice to the Optionee of any adjustment made pursuant to this
Section 8(b), and, upon notice, such adjustment shall be effective
and binding for all purposes of the Option and the Plan.
(c) Notwithstanding any other provision of the Option, in the
event of a Change in Control, the following rules shall apply:
i. The Option shall be accelerated immediately prior to
or concurrently with the occurrence of the Change in
Control and the Optionee shall have the right to
exercise the Option notwithstanding any installment
schedule otherwise applicable to the Option, at any
time, or from time to time.
ii. The obligations of the Company under the Plan and
this Agreement shall be binding upon any successor
corporation or organization resulting from the
merger, consolidation or other reorganization of the
Company and upon any successor corporation or
organization succeeding to substantially all of the
assets and business of the Company. The Company
agrees that it will make appropriate provisions for
the preservation of Optionee's rights
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under the Plan and this Agreement in any agreement
or plan which it may enter into or adopt to effect
any such merger, consolidation, reorganization or
transfer of assets.
iii. Except as hereinbefore expressly provided, the
issuance by the Company of shares of stock of any
class, rights or warrants to purchase shares of stock
of any class, or securities convertible into shares
of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon
the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations
of the Company 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 Shares subject to the Option.
iv. Neither the Plan nor any action taken thereunder,
including the grant of the Option, shall be construed
as giving the Optionee the right to be retained in
the employ of the Company, nor shall they interfere
in any way with the right of the Company to terminate
the Optionee's employment at any time.
Dated as of ______________________
CONGOLEUM CORPORATION
By: _________________________________
Name:
Title:
The Option has been accepted by
the undersigned, subject to the
terms and provisions of the Plan
and of this Award Agreement.
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Optionee
