BRADY CORPORATION DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT
Exhibit 10.31
XXXXX CORPORATION
DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT
DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT
Option granted on , ___, by Xxxxx Corporation, a Wisconsin corporation (hereinafter
called the “Company”), to
(hereinafter called the “Director”) pursuant to
the terms of the Xxxxx Corporation 2010 Nonqualified Stock Option Plan for Non-Employee Directors.
The Corporation’s records shall be the official record of the Option grant described herein and, in
the event of any conflict between this description and Corporation’s records, the Corporation’s
records shall control.
1. Number of Shares Optioned; Option Price. The Company grants to the Director the
right and option to purchase, on the terms and conditions hereof, all or any part of an aggregate
of ( ) shares of the presently authorized Class A Common Stock of the
Company, $.01 par value, whether unissued or issued and reacquired by the Company, at the price of
($___) per share (the “Option Price”).
2. Conditions of Exercise of Options During Director’s Lifetime; Vesting of Option.
Except as provided hereinafter in this paragraph and in paragraph 3, this Option may not be
exercised (a) unless Director is at the date of the exercise a Director of the Company and (b)
until Director shall have been continuously a Director for a period of at least one year from the
date hereof. Thereafter, this Option shall be exercisable for any amount of shares up to the
maximum percentage of shares covered by this Option (rounded up to the nearest whole share) as
follows (but in no event shall this Option be exercisable for any shares after the expiration date
provided in paragraph 7):
| Maximum Percentage | ||||
| Number of Completed Years | of Shares for Which | |||
| After Date of Grant of this Option | Option is Exercisable | |||
Less than 1 |
Zero | |||
At least 1 but less than 2 |
33-1/3 | % | ||
At least 2 but less than 3 |
66-2/3 | % | ||
At least 3 |
100 | % | ||
If Director shall cease to be a Director of the Company for any reason (except death or
disability, or if the Director has been a member of the Board of Directors for at least three
years) after Director shall have been continuously a Director for one year after the grant of this
Option, Director may, at any time within three months of such termination, but in no event later
than the date of expiration of this Option, exercise this Option to the extent Director was
entitled to do so on the date of such termination. This Agreement does not confer upon Director
any right to continue as a Director of the Company.
3. Termination of Directorship, Etc. A. Notwithstanding the provisions of paragraph 2
hereof, in the event of the termination of the Directorship with the Company prior to
three years from date of grant, due to death or disability, this Option shall become 100%
vested and fully exercisable.
For purposes of this Agreement, “Disability” means that the Director is disabled as a result
of sickness or injury, such that he is unable satisfactorily to perform the Director’s duties as
determined by the Board of Directors, on the basis of medical evidence satisfactory to it.
B. (i) If the Directorship is terminated by the death of the Director, any unexercised,
unexpired Stock Options granted hereunder to the Director shall be exercisable, in whole or in
part, at any time within one year after the date of death, by the Director’s personal
representative or by the person to whom the Stock Options are transferred under the Director’s last
will and testament or the applicable laws of descent and distribution. (ii) If the Directorship is
terminated as a result of the disability of the Director, any unexercised, unexpired Stock Options
granted hereunder to the Director shall be exercisable, in whole or in part, at any time within one
year after the date of disability. (iii) If the Directorship is terminated after the Director has
been a member of the Board for at least three years, any unexercised, unexpired Stock Options
granted hereunder to the Director shall continue to vest as provided in paragraph 2 and any option
that is or becomes vested may be exercised within the term of such option.
C. In the event of (a) the merger or consolidation of the Company with or into another
corporation or corporations in which the Company is not the surviving corporation, (b) the adoption
of any plan for the dissolution of the Company, or (c) the sale or exchange of all or substantially
all the assets of the Company for cash or for shares of stock or other securities of another
corporation, this Option shall become fully vested and exercisable immediately prior to any such
event in which the Company is not the surviving corporation.
4. Deferral of Exercise. Although the Company intends to exert its best efforts so
that the shares purchasable upon the exercise of this Option will be registered under, or exempt
from the registration requirements of, the Federal Securities Act of 1933 (the “Act”) and any
applicable state securities law at the time or times this Option (or any portion of this Option)
first becomes exercisable, if the exercise of this Option would otherwise result in the violation
by the Company of any provision of the Act or of any state securities law, the Company may require
that such exercise be deferred until the Company has taken appropriate action to avoid any such
violation.
5. Method of Exercising Option. This Option shall be exercised by delivering to the
Company, at the office of its Treasurer, a written notice of the number of shares with respect to
which this Option is at the time being exercised and by paying the Company in full the Option Price
of the shares being acquired at the time.
6. Method of Payment. Payment shall be made either (i) in cash; (ii) by delivering
shares of the Company’s Class A Common Stock which have been beneficially owned by the Director,
the spouse of the Director, or both of them, for a period of at least six months prior to the time
of exercise (“Delivered Stock”); (iii) by surrendering to the Company shares of Class A Common
Stock otherwise receivable upon exercise of the Option (a “Net Exercise”); or (iv) any combination
of the foregoing. Payment in the form of Delivered Stock shall be in the amount of
the Fair Market Value of the stock at the date of exercise, determined in accordance with
paragraph 9.
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7. Expiration Date. This Option shall expire ten years after the date on which this
Option was granted.
8. Withholding Taxes. The Company may require payment of or withhold any tax which it
believes is payable as a result of the exercise of this Option, and the Company may defer making
delivery with respect to the shares until arrangements satisfactory to the Company have been made
with regard to any such withholding obligations. In lieu of part or all of any such payment, the
Director, in satisfaction of all withholding taxes (including, without limitation, Federal income,
FICA (Social Security and Medicare) and any state and local income taxes) payable as a result of
such exercise, may elect, subject to such rules and regulations as the Company may adopt from time
to time, to have the Company withhold that number of shares (valued at Fair Market Value on the
date of exercise and rounded upward) required to settle such withholding taxes.
9. Method of Valuation of Stock. The “Fair Market Value” of the Class A Common Stock
of the Company on any date shall mean, if the stock is then listed and traded on a registered
national securities exchange, or is quoted in the NASDAQ National Market System, the average of the
high and low sale prices recorded in composite transactions for such date or, if such date is not a
business day or if no sales of shares shall have been reported with respect to such date, the next
preceding business date with respect to which sales were reported. In the absence of reported
sales or if the stock is not so listed or quoted, but is traded in the over-the-counter market,
Fair Market Value shall be the average of the closing bid and asked prices for such shares on the
relevant date.
10. No Rights in Shares Until Certificates Issued. Neither the Director nor his heirs
nor his personal representative shall have any of the rights or privileges of a stockholder of the
Company in respect of any of the shares issuable upon the exercise of the Option herein granted,
unless and until certificates representing such shares shall have been issued.
11. Option Not Transferable During Director’s Lifetime. This Option shall not be
transferable by the Director other than by his will or by the laws of descent and distribution and
shall be exercisable during his lifetime only by him.
12. Prohibition Against Pledge, Attachment, Etc. Except as otherwise herein provided,
the Option herein granted and the rights and privileges pertaining thereto shall not be
transferred, assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process.
13. Changes in Stock. In the event there are any changes in the Class A Common Stock
of the Company through merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares, rights offering or any other change affecting the
Class A Common Stock of the Company, appropriate changes shall be made by the Board of Directors of
the Company, in the aggregate number of shares and the purchase price
and kind of shares subject to this Option, to prevent substantial dilution or enlargement of
the rights granted to or available for Director.
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14. Dissolution or Merger. Anything contained herein to the contrary notwithstanding,
upon the dissolution or liquidation of the Company, or upon any merger in which the Company is not
the surviving corporation, at any time prior to the expiration date of the termination of this
Option, the Director shall have the right immediately prior to the effective date of such
dissolution, liquidation or merger, to surrender all or any unexercised portion of this Option to
the Company for cash, subject to the discretion of the Board of Directors as to the exact timing of
said surrender. Notwithstanding the foregoing, however, in the event Director has retired or died,
Director’s right to surrender all or any unexercised portion of this Option under this paragraph
shall be available only to the extent that at the time of any such surrender, Director would have
been entitled to exercise this Option under paragraphs 2 or 3 hereof, as the case may be. The
amount of cash to be paid to Director for the portion of this Option so surrendered, shall be equal
to the number of shares of Class A Common Stock subject to the surrendered Option multiplied by the
difference between the Option Price per share, as described in paragraph 1 hereof, and the Fair
Market Value per share, determined in accordance with paragraph 9 hereof, as of the time of
surrender.
15. Notices. Any notice to be given to the Company under the terms of this Agreement
shall be addressed to the Company in care of its Vice President and Chief Financial Officer, and
any notice to be given to the Director may be addressed at the address as it appears on the
Company’s records, or at such other address as either party may hereafter designate in writing to
the other. Any such notice shall be deemed to have been duly given if and when enclosed in a
properly sealed envelope addressed as aforesaid, and deposited, postage prepaid, in the United
States mail.
16. Provisions of Plan Controlling. This Option is subject in all respects to the
provisions of the Plan. In the event of any conflict between any provisions of this Option and the
provisions of the Plan, the provisions of the Plan shall control, except to the extent the Plan
permits the Committee to modify the terms of an Option grant and has done so herein. Terms defined
in the Plan where used herein shall have the meanings as so defined. Director acknowledges receipt
of a copy of the Plan.
17. Wisconsin Contract. This Option has been granted in Wisconsin and shall be
construed under the laws of that state.
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