NONQUALIFIED STOCK OPTION AWARD AGREEMENT
UNDER THE CONGOLEUM CORPORATION
1995 STOCK OPTION PLAN
Congoleum Corporation, a Delaware corporation (the
"Company"), hereby grants to _________________ (the "Optionee"), an
employee of the Company, an option (the "Option") to purchase from the
Company up to, but not exceeding, in the aggregate, 150,000 shares (the
"Shares") of Class A Common Stock, par value $.01 per share, of the
Company ("Stock") at $13.00 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 (February 2, 1995), 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) or 4 hereof.
(b) In the event of the Optionee's term as officer of 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 such termination, but only to the extent that the Optionee may
be entitled to do so at such date of termination, except as may
otherwise be determined by the Committee. In the event of the
Optionee's term as officer of the Company shall terminate for cause,
the Option shall cease to be exercisable from and after such date of
termination, except as may otherwise be determined by the Committee.
(c) In the event of the death of the Optionee (i) while an officer
of the Company or any Subsidiary or Affiliate of the Company, (ii)
within three months after termination of term as officer of the
Company or any Subsidiary or Affiliate of the Company because of
retirement or (iii) within twelve months after termination of such
term as officer 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) 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(d) 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.
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 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.
Dated as of _______________
CONGOLEUM CORPORATION
By: ____________________________________
Name: Xxxxxx X. Xxxxx
Title: Sr. Vice President - Finance
The Option has been accepted by
the undersigned, subject to the
terms and provisions of the Plan
and of this Award Agreement.
________________________________
Optionee
