EXHIBIT 10.1
PROLIANCE INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
(DIRECTOR'S REPLACEMENT OPTION)
This Agreement (this "Agreement") is made as of July 22, 2005 (the "Date of
Grant"), by and between Proliance International, Inc., a Delaware corporation
(the "Company"), and [Optionee] (the "Optionee") who (1) is a member of the
Company's Board of Directors and (2) is not an employee of the Company or its
subsidiaries.
1. Grant of Stock Option. Subject to and upon the terms, conditions, and
restrictions set forth in this Agreement and in the Proliance
International, Inc. Equity Incentive Plan (the "Plan"), the Company hereby
grants to the Optionee as of the Date of Grant a stock option (the
"Option") to purchase [ ] Common Shares (the "Optioned Shares"). The
Option may be exercised from time to time in accordance with the terms of
this Agreement. The price at which the Optioned Shares may be purchased
pursuant to the Option will be $[ the exercise price of the option under
the 1995 Nonemployee Directors Stock Option Plan that this Option is
replacing], subject to adjustment as hereinafter provided (the "Option
Price"). The Option is intended to be a nonqualified stock option and will
not be treated as an "incentive stock option" within the meaning of that
term under Section 422 of the Internal Revenue Code, or any successor
provision thereto.
2. Term of Option. Subject to earlier termination provided in Section 6
hereof, this Option will expire on the later to occur of the third
anniversary of the Date of Grant and the date that the option under the
1995 Nonemployee Directors Stock Option Plan that this Option is replacing
would expire (i.e., ) (the "Expiration Date").
3. Right to Exercise.
a) Subject to Section 6 hereof, the Option will be immediately
exercisable in full from time to time prior to the expiration date
hereof.
b) To the extent the Option is exercisable, it may be exercised in whole
or in part. The Optionee will be entitled to the privileges of
ownership with respect to Optioned Shares purchased and delivered to
the Optionee upon the exercise of all or part of the Option. If the
Optionee subsequently becomes an employee of the Company while
remaining a member of the Company's Board of Directors, the Option
will not be affected thereby.
4. Option Nontransferable. The Option granted hereby will be neither
transferable nor assignable by the Optionee other than by will or by the
laws of descent and distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee, or in the event of his or her legal
incapacity, by his or her guardian or legal representative acting on behalf
of the Optionee in a fiduciary capacity under state or foreign law and
court supervision. In the event the Option is exercisable after the
Optionee's death as permitted by this Agreement, this Option may be
exercised by the Optionee's executor or administrator or by the distributee
or legatee to whom this Option was transferred by will or the laws of
descent and distribution.
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5. Notice of Exercise; Payment.
a) To the extent then exercisable, the Option may be exercised by written
notice to the Secretary of the Company stating the number of Optioned
Shares for which the Option is being exercised and the intended manner
of payment.
b) Payment equal to the aggregate Option Price of the Optioned Shares for
which the Option is being exercised will be tendered in full with the
notice of exercise in cash in the form of currency or check or other
cash equivalent acceptable to the Company. The Optionee may also
tender the Option Price by (i) the actual or constructive transfer to
the Company of nonforfeitable, nonrestricted whole shares of the
Company's common stock ("Common Shares") that have been owned by the
Optionee for more than six months prior to the date of exercise or
(ii) any combination of the foregoing methods of payment, including a
partial tender in cash and a partial tender in nonforfeitable,
nonrestricted Common Shares. Nonforfeitable, nonrestricted Common
Shares that are transferred by the Optionee in payment of all or any
part of the Option Price will be valued on the basis of the last sales
price of the Common Shares on the principal national securities
exchange on which the Common Shares are traded or quoted (the "Market
Value Per Share") on the date the notice of exercise is received by
the Company (or if no sale of Common Shares was made on that date, on
the next preceding date on which there was a sale). Fractional Common
Shares may not be issued by the Company and any such fractional Common
Share will be eliminated.
c) If permitted by applicable law, the requirement of payment in cash
will be deemed satisfied if the Optionee makes arrangements that are
satisfactory to the Company with a broker to sell on the exercise date
a sufficient number of Optioned Shares that are being purchased
pursuant to the exercise, so that the net proceeds of the sale
transaction are at least equal to the amount of the aggregate Option
Price plus payment of any applicable withholding taxes, and pursuant
to which the broker undertakes to deliver to the Company the amount of
the aggregate Option Price plus payment of any applicable withholding
taxes on a date satisfactory to the Company, but not later than the
date on which the sale transaction will settle in the ordinary course
of business.
d) As a further condition precedent to the exercise of the Option, the
Optionee will comply with all regulations and requirements of any
regulatory authority having control of, or supervision over, the
issuance of Common Shares and in connection therewith will execute any
documents that the Compensation Committee in its sole discretion deems
necessary or advisable. The date of the Optionee's written notice will
be the exercise date.
6. Termination of Agreement.
a) Subject to Section 6(b) and Section 6(c), this Agreement and the
Option granted hereby will terminate automatically and without further
notice on the earliest of the following dates:
i. three years after the Optionee's cessation of service as a member
of the Company's Board of Directors for any reason; or
ii. the Expiration Date.
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b) Notwithstanding anything to the contrary herein, if upon the
Optionee's cessation of service as a member of the Company's Board of
Directors the Optionee becomes an employee of, or senior management
consultant to, the Company and/or its subsidiaries, this Agreement and
the Option will not terminate pursuant to Section 6(a)(i) until (i) if
the Optionee permanently ceases to render employment or consulting
services to the Company and/or its subsidiaries for any reason other
than cessation by reason of death, the third anniversary of the date
of such cessation of services and (ii) if the Optionee ceases to
render employment or consulting services on account of his or her
death, the third anniversary of the date of the cessation of the
Optionee's services; provided, however, that in no event may this
Option be exercised beyond, and the Option will terminate upon, the
Expiration Date.
c) If the Optionee dies prior to the date provided in Section 6(a), or if
cessation of service is due to the Optionee's death, this Option may
be exercised at any time within such period by the Optionee's executor
or administrator or by his or her distributee to whom this Option may
have been transferred by will or by the laws of descent and
distribution.
7. No Right to Continue. None of the Plan, the granting of the Option or any
other action taken pursuant to the Plan will constitute or be evidence of
any grant or understanding, express or implied, that the Optionee has a
right to continue as a director for any period of time or at any particular
rate of compensation.
8. Taxes and Withholding. To the extent that the Company or any of its
subsidiaries is required to withhold federal, state, local or foreign taxes
in connection with the exercise of the Option, and the amounts available to
the Company or such subsidiary for such withholding are insufficient, it
will be a condition to the exercise of the Option that the Optionee makes
arrangements that are satisfactory to the Company or such subsidiary for
the payment thereof. The Optionee may elect to satisfy all or any part of
any such withholding obligation by (a) surrendering to the Company a
portion of the Optioned Shares that are issued or transferred to the
Optionee upon the exercise of the Option, and the Optioned Shares so
surrendered by the Optionee will be credited against any such withholding
obligation at the Market Value per Share of such shares on the date of such
surrender or (b) utilizing the broker assistance arrangement provided in
Section 5.
9. Compliance with Law. The Company will make reasonable efforts to comply
with all applicable federal and state securities laws; provided, however,
that notwithstanding any other provision of this Agreement, the Option will
not be exercisable if the exercise thereof would result in a violation of
any such law.
10. Adjustments. The Compensation Committee may make or provide for such
adjustments in the Option in light of any stock split, subdivision of
shares or other change in the Company's capital structure as provided in
the Plan. In the event of any such transaction or event, the Compensation
Committee, in its discretion, may provide in substitution for the Option
such alternative consideration as it may determine to be equitable and may
require in connection therewith the surrender of the Option.
11. Availability of Common Shares. The Company will at all times until the
expiration of the Option reserve and keep available, either in its treasury
or out of its authorized but unissued Common Shares, the full number of
Optioned Shares deliverable upon the exercise of the Option.
12. Amendments. Any amendment to the Plan will be deemed to be an amendment to
this Agreement to the extent that the amendment is applicable hereto;
provided, however, that no amendment will impair the rights of the Optionee
under this Agreement without the Optionee's consent.
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13. Severability. In the event that one or more of the provisions of this
Agreement is invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated will be deemed to be separable
from the other provisions hereof, and the remaining provisions hereof will
continue to be valid and fully enforceable.
14. Relation to Plan. This Agreement is subject to the terms and conditions of
the Plan. In the event of any inconsistency between the provisions of this
Agreement and the Plan, the Plan as interpreted and construed by the
Compensation Committee will govern. Capitalized terms used herein without
definition will have the meanings assigned to them in the Plan. The
Compensation Committee acting pursuant to the Plan, as constituted from
time to time, will, except as expressly provided otherwise herein, have the
right to determine any questions which arise in connection with the Option
or its exercise. Except as set forth in the Plan, all other terms of this
Option will be governed by the terms of the 1995 Nonemployee Directors
Stock Option Plan.
15. Successors and Assigns. Without limiting Section 4 hereof, the provisions
of this Agreement will inure to the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and assigns of the
Optionee, and the successors and assigns of the Company.
16. Governing Law. The interpretation, performance and enforcement of this
Agreement will be governed by the laws of the State of Delaware, without
giving effect to the principles of conflict of laws thereof. Each party to
this Agreement hereby consents and submits himself, herself or itself to
the jurisdiction of the courts of the State of Delaware for the purposes of
any legal action or proceeding arising out of this Agreement.
17. Notices. Any notice to the Company provided for herein will be in writing
to the Company and any notice to the Optionee will be addressed to the
Optionee at his or her address on file with the Company. Except as
otherwise provided herein, any written notice will be deemed to be duly
given if and when delivered personally or sent by registered mail or
electronic means of communication, and addressed as aforesaid. Any party
may change the address to which notices are to be given hereunder by notice
to the other party as herein specified (provided that for this purpose any
mailed notice will be deemed given on the third business day following
deposit of the same in the mail).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer and Optionee has also executed this
Agreement in duplicate, as of the day and year first above written.
PROLIANCE INTERNATIONAL, INC.
By:
-------------------------
Name:
Title:
The undersigned Optionee hereby acknowledges receipt of an executed original of
this Stock Option Agreement and accepts the Option granted hereunder, subject to
the terms and conditions of the Plan and the terms and conditions set forth
herein.
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