Exhibit 10.29
AGREEMENT COVERING NONQUALIFIED STOCK OPTION AWARD
TO THE CHAIRMAN OF THE BOARD
THIS AGREEMENT is made and entered into as of the 12th day of January, 2000 by
and between LYDALL, INC., a Delaware corporation, with its principal office in
Manchester, Connecticut (hereinafter called the "Company"), and Xxxxx X.
Xxxxxxx, the Chairman of the Board of Directors of the Company (hereinafter
called the "Optionee").
1. GRANT OF NONQUALIFIED STOCK OPTION. Subject to the terms and conditions set
forth herein, the Company grants to the Optionee, effective as of the day
and year first above written (hereinafter called the "date of grant"), an
option (hereinafter called the "option") to purchase from the Company, from
time to time, up to but not exceeding in the aggregate 50,000 shares of the
Common Stock of the Company to be issued upon the exercise hereof, fully
paid and nonassessable. The option shall become exercisable as follows:
(i) as to one-quarter of the total number of shares covered by the option,
i.e., 12,500 shares, on the date of grant;
(ii) as to an additional one-quarter of the total number of shares covered
by the option, i.e., 12,500 shares, on December 31, 2000 (but only if
the Optionee does not cease to be the Chairman of the Board of
Directors of the Company prior to that date);
(iii) as to an additional one-quarter of the total number of shares covered
by the option, i.e., 12,500 shares, on December 31, 2001 (but only if
the Optionee does not cease to be the Chairman of the Board of
Directors of the Company prior to that date); and
(iv) as to the remaining one-quarter of the total number of shares covered
by the option, i.e., 12,500 shares, on December 31, 2002 (but only if
the Optionee does not cease to be the Chairman of the Board of
Directors of the Company prior to that date).
Shares not purchased on the above dates shall accumulate and remain
exercisable for the period hereinafter provided. Notwithstanding the
foregoing, (i) the option shall be exercisable as to the total number of
shares covered by the option, i.e., 50,000 shares, immediately upon the
occurrence of a "Change in Control of the Company" as defined in Section 7
of this Agreement (but only if the Optionee does not cease to be the
Chairman of the Board of Directors of the Company prior to such "Change in
Control of the Company"), and (ii) the Board of Directors of the Company
may at any time in its sole discretion accelerate the time that the option
or any portion thereof becomes exercisable. The option, to the extent then
exercisable, shall remain exercisable until the earlier of ten (10) years
from the date of grant or the expiration of the three (3) year period
described in Section 5(a) of this Agreement. The option is subject to the
restriction that it be exercised as set forth in Section 4 of this
Agreement, and to other terms and conditions as set forth in Section 5 of
this Agreement.
2. TYPE OF OPTION. The option is a nonqualified stock option which does not
qualify for incentive stock option treatment under Section 422 of the
Internal Revenue Code of 1986, as amended.
3. OPTION PRICE. The purchase price of each share subject to the option shall
be $7.375, being 100 percent of the fair market value of the shares subject
to the option on the date of grant.
4. MANNER OF EXERCISE OF OPTION. The option shall be exercised by delivering
to the Vice President - Investor Relations of the Company from time to time
a signed statement of exercise specifying (a) the election to exercise the
"Nonqualified Stock Option", (b) the number of shares elected to be
purchased, and (c) the date on which the signed statement of exercise is
delivered to the Company's Vice President - Investor Relations, together
with cash or a certified check to the order of the Company for an amount
equal to the purchase price of such shares. Within ten (10) days after any
such exercise of the option in whole or in part, the Company shall deliver
to the Optionee at the principal office of the Company certificates for the
number of shares with respect to which the option shall be so exercised,
issued in the Optionee's name, provided that if the stock transfer books of
the Company are closed for the whole or any part of said ten (10) day
period, then such period shall be extended accordingly. The exercise of the
option and the Company's obligation to issue shares hereunder shall also be
subject to additional terms and conditions as set forth in Section 5 of
this Agreement.
5. ADDITIONAL TERMS AND CONDITIONS.
(a) Cessation of Service as Chairman. If the Optionee ceases to be the
Chairman of the Board of Directors of the Company for any reason, the
following provisions shall apply:
(i) The portion of the option that is exercisable on the date of
cessation of the Optionee's service as the Chairman of the Board
of Directors of the Company (including without limitation any
portion becoming exercisable on that date by reason of a "Change
in Control of the Company" as defined in Section 7 of this
Agreement) shall continue to be exercisable in accordance with
the terms of this Agreement until the earlier of: (A) ten (10)
years from the date of grant, or (B) three (3) years from the
date on which the Optionee ceases to be a member of the Board of
Directors of the Company (whether or not as Chairman).
(ii) The portion of the option that is not exercisable on the date of
cessation of the Optionee's service as the Chairman of the Board
of Directors of the Company as described in (i) above shall be
forfeited immediately upon such cessation of service as the
Chairman of the Board of Directors of the Company.
(b) Limitations on Exercise of Option. Any obligation of the Company to
issue the shares as to which the option is being exercised shall be
conditioned upon the Company's ability at nominal expense to issue such
shares in compliance with all applicable statutes, rules or regulations
of any governmental authority. The Company may secure from the Optionee
any assurances or agreements which the Company's Board of Directors
shall reasonably
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deem necessary or advisable in order that the issuance of such shares
shall comply with any such statutes, rules or regulations.
If at any time the Company's Board of Directors shall reasonably
determine that the listing, registration or qualification of the shares
subject to the option upon any securities exchange or under any state
or federal law, or that the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in
connection with, the granting of such option or the issue or purchase
of shares thereunder, such option may not be exercisable in whole or in
part unless such listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions
not acceptable to the Board of Directors.
(c) Nontransferability. The option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and
distribution, and the option shall be exercisable, during his lifetime,
only by him.
(d) Stockholder Rights. The Optionee shall not be entitled to any rights as
a stockholder with respect to any shares subject to the option prior to
the date of issuance to him of a stock certificate representing such
shares. The Company shall not be required to deliver any certificate
upon the exercise of the option until the Company has been furnished
with such representation or opinion or other document as it may
reasonably deem necessary to insure compliance with any rule or
regulation of the New York Stock Exchange, or the Securities and
Exchange Commission, or any law, rule, or regulation of any other
governmental authority having jurisdiction over the Company or the
shares to be issued upon exercise of the option.
(e) Treasury Shares. The Company shall use shares of Common Stock held by
the Company as treasury shares to satisfy its obligation to issue
shares of Common Stock of the Company upon exercise of the option.
6. COMPLIANCE WITH LAWS. Notwithstanding any of the provisions hereof, the
Optionee agrees for himself and his legal representatives, legatees and
distributees that the option shall not be exercisable by him or them, and
that the Company shall not be obligated to issue any shares hereunder, if
the exercise of said option or the issuance of such shares shall constitute
a violation by the option holder or the Company of any provision of any law
or regulation or any governmental authority.
7. DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement, a "Change
in Control of the Company" means (i) an acquisition of the Company by means
of a merger or consolidation or purchase of substantially all of its assets
if and when incident thereto (a) the composition of the Board of Directors
or its successor changes so that a majority of the Board is not comprised
of individuals who were members of the Board immediately prior to such
merger, consolidation or purchase of assets or (b) the stockholders of the
Company acquire a right to receive, in exchange for or upon surrender of
their stock, cash or other securities or a combination of the two, or (ii)
the acquisition by a "Person" (as that term is hereafter defined) of the
voting rights with respect to 25 percent or more of the outstanding Common
Stock of the Company if such person was not an officer or director of the
Company on January 1, 2000. For purposes of
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this definition, "Person" means an individual, corporation, trust or other
legal or commercial entity and includes two or more persons acting as a
partnership, limited partnership, syndicate or other group for the purpose
of acquiring, holding, or disposing of securities of the Company.
8. NOTICES. Every notice or other communication relating to this Agreement
shall be in writing, and shall be mailed or delivered to the party for whom
it is intended at such address as may from time to time be designated by
such party in a notice mailed or delivered to the other party as herein
provided; provided that, unless and until some other address be so
designated, all notices or communications to the Company shall be mailed to
or delivered to its Vice President - Investor Relations at Xxx Xxxxxxxx
Xxxx, X.X. Xxx 000, Xxxxxxxxxx, Xxxxxxxxxxx, 00000-0000, and all notices by
the Company to the Optionee may be given to the Optionee personally or may
be mailed to him at the last address designated for the Optionee on the
records of the Company.
9. INTERPRETATION. The determination or the interpretation and construction of
any provision of this Agreement by the Board of Directors of the Company
shall be final and conclusive upon all concerned.
IN WITNESS WHEREOF, LYDALL, INC. has caused these presents to be executed in its
corporate name and its corporate seal to be hereunto affixed, and the Optionee
has signed on his own behalf as of the day and year first above written.
LYDALL, INC.
/s/ XXXXXXXXXXX X. XXXXXXXXXXX
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Xxxxxxxxxxx X. Xxxxxxxxxxx
President and Chief Executive Officer
/s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
Optionee
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