CLARCOR INC. STOCK OPTION AGREEMENT
Exhibit 10.7(a)
CLARCOR Inc., A Delaware corporation (the “Company”),
hereby grants
to
(the “Optionee”) as
of
(the “Option Date”), pursuant to the provisions of the
CLARCOR Inc. 2004 Incentive Plan (the “Plan”), a
non-qualified option to purchase from the Company (the
“Option”) shares
(“Option Stock”) of its Common Stock, $1 par
value (“Stock”), at the price of
$ per share upon and subject to
the terms and conditions set forth below. Capitalized terms not
defined herein shall have the meanings specified in the Plan.
1. Time and Manner of Exercise of Option.
| 1.1. | Maximum Term of Option. In no event may the Option be exercised, in whole or in part after (the “Expiration Date”). | |
| 1.2. | Exercise of Option. (a) Subject to Sections 1 (b), (c), (d) and 2.1 of this Agreement, this Option shall be exercisable in accordance with the following schedule: |
|
Percentage of |
||||
| Option Stock | ||||
|
From Option Date to 1st Anniversary of Option Date
|
0 | % | ||
|
From 1st Anniversary of Option Date to 2nd Anniversary of Option
Date
|
up to 25 | % | ||
|
From 2nd Anniversary of Option Date to 3rd Anniversary of Option
Date
|
up to 50 | % | ||
|
From 3rd Anniversary of Option Date to 4th Anniversary of
Option Date
|
up to 75 | % | ||
|
Thereafter through the Expiration Date
|
up to 100 | % | ||
The foregoing subject to Sections 1(b), (c), (d), and
(e) of this Agreement and Section VII 8. of the Plan.
(b) If the Optionee’s employment by the company
terminates by reason of Disability or death, the Option shall
become fully exercisable and may thereafter be exercised by the
Optionee or the Optionee’s Legal Representative for a
period of 2 years after the effective date of the
Optionee’s termination of employment or until the
Expiration Date, whichever period is shorter.
(c) If the Optionee’s employment by the Company
terminates by reason of retirement on or after age 60 (or
prior to such age with the consent of the Committee), the Option
shall become fully exercisable and may thereafter be exercised
by the Optionee or the Optionee’s Legal Representative for
a period of 5 years after the effective date of the
Optionee’s termination of employment or until the
Expiration Date, whichever period is shorter.
(d) Except as provided in Section 2.1, if the
Optionee’s employment by the Company terminates for any
reason other than Disability, retirement on or after age 60
(or prior to such age with the consent of the Committee) or
death, the Option shall terminate 90 days after the date of
such termination of employment or until the Expiration Date,
whichever period is shorter. The Option shall be exercisable
only to the extent the Option was exercisable on the date of
Optionee’s termination of employment.
(e) If the Optionee dies during the respective periods
specified and determined in accordance with
Sections 1.2(b), (c) or (d) above, the Option
shall be exercisable only to the extent the Option was
exercisable on the date of Optionee’s death and may
thereafter be exercised by Optionee’s Legal Representative
for a period of two years after the date of death or until the
Expiration Date whichever period is shorter.
| 1.3. | Method of Exercise. (a) Subject to the limitations set forth in this Agreement, the Option may be exercised by the Optionee (1) by giving written notice to the Company specifying the number of whole shares of Stock to be purchased and accompanied by payment therefore in full (or arrangement made for such payment to the Committee’s satisfaction) either (i) in cash, (ii) in previously owned whole shares of Stock (which the Optionee has held for at least six months prior to the delivery of such shares and for which the Optionee has good title free and clear of all liens and encumbrances) having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable pursuant to the Option by reason of such exercise or (iii) a combination of (i) and (ii), and (2) by executing such documents as the Company may reasonably request. The Committee shall have sole discretion to |
| disapprove of an election pursuant to clauses (ii) and (iii). No share of Stock shall be delivered until the full purchase price therefore has been paid. |
| 2. | Additional Terms and Conditions of Option. |
| 2.1 | Special Forfeiture/Repayment Rules. For so long as Optionee continues as an employee with the Company and for two years (or one year in the case of Triggering Conduct under Section 2.1(c)(3)) following Optionee’s termination of employment with the Company regardless of the reason (“Restricted Period”), Optionee agrees not to engage in Triggering Conduct. If Optionee engages in Triggering Conduct during the Restricted Period, then: |
(a) the Option (or any part thereof that has not been
exercised) shall immediately and automatically terminate, be
forfeited, and shall cease to be exercisable at any time;
and
(b) Optionee shall, within 30 days following written
notice from the Company, pay the Company an amount equal to
(1) the gross option gain realized or obtained by Optionee
or any transferee resulting from the exercise of such Option,
measured by the greater of (i) the difference between the
Fair Market Value of the Option Stock underlying the Option on
the exercise date and the exercise price paid for such Option
Stock and (ii) the positive difference, if any, between the
Fair Market Value of the Option Stock underlying the Option on
the date of disposition of such Option Stock and the exercise
price paid for such Option Stock, with respect to any portion of
the Option that had already been exercised at any time within
two years prior to the Triggering Conduct (the “Look-Back
Period”), less (2) $1.00. Optionee may be released
from Optionee’s obligations under this Section 2.1
only if the Company (or its duly appointed designee) determines,
in writing and in its sole discretion, that such action is in
the best interests of the Company. Nothing in this
Section 2.1 prohibits Optionee from engaging in Triggering
Conduct. Violation of this Section 2.1 shall, however,
result in the economic forfeiture or repayment of the benefits
granted by this Agreement, as provided above, under certain
circumstances, including, but not limited to, Optionee’s
acceptance of employment with an entity that is in competition
with the business conducted by the Company or any of its
subsidiaries or affiliates (a “Competitor”). Optionee
agrees to provide the Company with at least 10 days written
notice prior to directly or indirectly accepting employment with
or serving as a consultant or advisor or in any other capacity
to a Competitor, and further agrees to inform any such
Competitor, before accepting employment or other service
engagement, of the terms of this Section 2.1 and
Optionee’s continuing obligations contained herein. No
provision of this Agreement shall diminish, negate, modify or
otherwise impact any separate restrictive covenant or other
Agreement to which Optionee may be a party. Optionee
acknowledges and agrees that the restrictions contained in this
Agreement are being made for the benefit of the Company in
consideration of the Option grant hereunder and for exposing
Optionee to the Company’s business operations and
Confidential Information, and for other good and valuable
consideration, the adequacy of which consideration is hereby
expressly confirmed. Optionee further acknowledges that the
receipt of the Option and execution of this Agreement are
voluntary actions on the part of Optionee and that the Company
is unwilling to grant the Option to Optionee without including
the restrictions and covenants of Optionee contained in this
Agreement.
(c) Triggering Conduct. As used in this
Agreement, “Triggering Conduct” shall include:
(1) disclosing or using in any capacity other than as
necessary in the performance of duties assigned by the Company
any Confidential Information or trade secrets of the Company;
(2) directly or indirectly employing, contacting concerning
employment, or participating in any way in the recruitment for
employment or other service-provider relationship of (whether as
an employee, officer, director, agent, consultant or independent
contractor) any person who was or is an employee or director of
the Company at any time within the 12 months prior to the
termination of Optionee’s employment with the Company; or
(3) accepting employment with or serving as a consultant or
advisor or in any substantially similar capacity for any
Competitor either during Optionee’s employment or within
one year following Optionee’s termination of employment
with the Company. For purposes of this section,
“Confidential Information” shall mean all information
in documents or computer storage media which has been disclosed
to or obtained by Employee during or as a consequence of
employment with the Company and which concerns in any way:
(i) the Company’s business, financial condition,
results of operations, practices, strategies, forecasts or plans
with respect to pricing, marketing, manufacturing, purchasing,
research and development, and the purchase or sale of equipment,
inventory, stock or other assets;
(ii) persons or entities which purchase, or have been
solicited or identified for solicitation to purchase, the
Company’s products or services, including but not limited
to information concerning the nature of their business, the
identity of their purchasing agents, their purchasing and
stocking requirements, purchasing and resale patterns and
procedures, product applications, uses, preferences and needs,
prices paid for particular products, and other information
obtained by the Company through contacts with, or inquiries or
research about, the customers;
(iii) the engineering, performance, manufacturing and cost
characteristics of the Company’s products and services;
(iv) the identity of the Company’s suppliers and the
production, distribution or pricing of their products or
services;
(v) the identity of other employees of the Company, and
their responsibilities, background, training, competence,
abilities or compensation; and
(vi) any other information not available in the public
domain which is useful or of value to the Company and which has
been identified to or is understood by the Company as being
confidential to the Company.
| 2.2. | Withholding Taxes. (a) As a condition precedent to any exercise of the Option, the Optionee shall, upon request by the Company, pay to the Company in addition to the purchase price of the Option Stock, such amount of cash as may be determined, under all applicable federal, state, local or other laws or regulations, to withhold and pay over as income or other withholding taxes (the “Tax Payments”) with respect to such exercise of the Option. If the Optionee shall fail to advance the Tax Payments after request by the Company, the Company may, in its discretion, deduct any Tax Payments from any amount then or thereafter payable by the Company to the Optionee. |
(b) The Optionee may elect to satisfy his or her obligation
to advance the Tax Payments by any of the following means:
(1) a cash payment to the Company pursuant to
Section 2.1(a), (2) delivery to the Company of
previously owned whole shares of Stock (which the Optionee has
held for at least six months prior to the delivery of such
shares and for which the Optionee has good title, free and clear
of all liens and encumbrances) having a Fair Market Value
determined as of the date the obligation to withhold or pay
taxes first arises in connection with the Option (the “Tax
Date”), (3) authorizing the Company to withhold whole
shares of Stock which would otherwise be delivered to the
Optionee upon exercise of the Option having a Fair Market Value
determined as of the Tax Date, (4) any combination of (1),
(2) and (3). The Committee shall have sole discretion to
disapprove of an election pursuant to any of clauses
(2) — (4). Shares of Stock to be delivered or withheld
may not have a Fair Market Value in excess of the minimum amount
of the Tax Payments, but not in excess of the amount determined
by applying the Optionee’s maximum marginal tax rate.
| 2.3. | Compliance with Applicable Law. The Option is subject to the condition that if the listing, registration or qualification of the shares subject to the Option upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the purchase or delivery of shares hereunder, the Option may not be exercised, 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 Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent or approval. | |
| 2.4. | Option Confers No Rights as Stockholder. The Optionee shall not be entitled to any privileges of ownership with respect to shares of Stock subject to the Option unless and until purchased and delivered upon the exercise of the Option, in whole or in part, and the Optionee becomes a stockholder of record with respect to such delivered shares; and the Optionee shall not be considered a stockholder of the Company with respect to any such shares not so purchased and delivered. | |
| 2.5. | Option Confers No Rights to Continued Employment. In no event shall the granting of the Option or its acceptance by the Optionee give or be deemed to give the Optionee any right to continued employment by the Company or any affiliate of the Company. | |
| 2.6. | Agreement Subject to the Plan. All of the terms and conditions applicable to this Agreement and the Option are not set forth herein. Reference is made to the Plan for a complete statement of such terms and |
| conditions. This Agreement is subject to the provisions of the Plan, and shall be interpreted in accordance therewith. The Optionee hereby acknowledges receipt of a copy of the Plan. |
| 2.7. | Meaning of “Legal Representative”. As used herein, the term “Legal Representative” shall include an executor, administrator, guardian, legal representative or other person acting in a similar capacity. | |
| 2.8. | Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Optionee, acquire any rights hereunder in accordance with this Agreement or the Plan. | |
| 2.9. | Governing Law. The Option, this Agreement, and all determinations made and legal actions taken pursuant hereto and thereto, to the extent not governed by the laws of the United States, shall be governed by the laws of the State of Tennessee and construed in accordance therewith without regard to principles of conflicts of laws. |
By:
Accepted
this
day of
,
200
