Form of Directors Nonqualified Stock Option Agreement
Exhibit
10.1
ENGELHARD
CORPORATION
Name
of Optionee:
Number
of Shares Under the Long Term Incentive Plan of 2002:
Date
of Agreement:
Option
Price:
WITNESSETH:
WHEREAS,
this stock option has been granted to the Optionee pursuant to the Engelhard
Corporation 2002 Long Term Incentive Plan (the "Plan"); and
WHEREAS,
it is desired to set forth herein the terms and conditions of such
option;
NOW,
THEREFORE, the parties hereto agree as follows:
1. The
Company hereby confirms that it has granted to the Optionee on the Date of
Agreement set forth above, and on the terms set forth herein, an option to
purchase, pursuant to the Plan, the number of shares of Common Stock, $1 par
value, of the Company (the "Shares") set forth above. The option granted hereby
is not intended to be an incentive stock option for purposes of Section 422
of
the Internal Revenue Code of 1986, as amended (the "Code").
2. The
price
at which each Share subject to this option may be purchased (the "Option Price")
is set forth above and is not less than the fair market value of such shares
on
the Date of Agreement.
3. Subject
to the terms and conditions set forth in the Plan and herein, this option may
be
exercised to purchase the Shares covered hereby only in accordance with the
following schedule:
|
Period
of Exercise
|
Cumulative
Percentage
of
Total Shares Which May
be
Purchased
|
less,
in
the case of each period, the number of Shares, if any, previously purchased
hereunder; provided, however, that this option shall become immediately
exercisable in full at the time of a Change of Control (as defined in the Plan).
This option shall terminate and no Shares may be purchased hereunder after
ten
(10) years from the Date of Agreement.
4. Except
as
provided in Section 8 hereof or in the Plan, this option may not be exercised
unless the Optionee is serving as a Director of the Company at the time of
such
exercise and shall have been continuously so serving since the Date of
Agreement.
5. Subject
to the terms and conditions set forth herein, this option may be exercised
at
any time as to all or any of the shares then purchasable in accordance with
Section 3 hereof by giving written notice to the Company (or notice by such
means and to such representative(s) as the Company may otherwise designate)
specifying the number of whole shares to be purchased and accompanied by payment
in full (in a manner as set forth in the Plan) of the aggregate Option Price
of
such shares together with any amount which the Company may be required to
withhold upon such exercise with respect to applicable taxes, or, if so elected,
the Optionee's direction that the Company withhold Shares otherwise issuable
upon such exercise in order to satisfy such withholding obligation; provided
that this option may not be exercised for less than 10 Shares or the number
of
Shares remaining subject to the option, whichever is smaller. The amount of
tax
withholding to be satisfied by withholding Shares from the option exercise
shall
be limited to the minimum amount of taxes, including employment taxes, required
to be withheld under applicable Federal, state and local law. The Optionee
may
pay the Option Price of such Shares in whole or in part with Shares having
a
fair market value on the exercise date equal to the cash value for which such
Shares are substituted; provided that in no event may any portion of the Option
Price be paid with Shares acquired either under an award granted pursuant to
the
Plan, upon exercise of a stock option granted under another Company plan or
as a
stock bonus or other stock award granted under another Company plan unless,
in
any such case, the Shares were acquired and vested more than six months in
advance of the date of exercise hereunder. No holder of this option shall be
entitled to any rights of a stockholder of the Company in respect of any Shares
covered by this option until such Shares shall have been paid for in full and
issued to the holder of this option.
6. As
soon
as practicable after receipt by the Company or its representative of notice
of
exercise and payment in full for any Shares being purchased (in a manner as
set
forth in the Plan) upon exercise of this option, the Company will deliver or
transfer certificate(s) or account credit(s) to or at the direction of the
Optionee representing the fully paid and nonassessable Shares so
purchased.
7. This
option is personal to the Optionee and during the Optionee's lifetime may be
exercised only by the Optionee. This option shall not be transferable other
than
by will or the laws of descent and distribution.
8. Except
as
otherwise provided in the Plan, if the Optionee's service as a Director
terminates or the Optionee dies under any of the circumstances set forth below
but prior to the time this option has been fully exercised, this option shall
be
exercisable, as to any remaining Shares subject thereto, only in accordance
with
the following provisions; provided that this option in no event shall be
exercisable more than ten (10) years from the Date of Agreement:
(a) If
the
Optionee's service as a Director terminates by reason of his or her disability
or retirement after attaining age 65, this option may be exercised in full
by
the Optionee within ten (10) years from the Date of Agreement;
(b) If
the
Optionee’s service as a Director terminates other than as provided in
(i) above and other than by reason of his or her death, this option, to the
extent it is exercisable at the time of such termination of service, shall
continue to be exercisable for three (3) months following the date of such
termination of service;
(c) In
the
event of the death of the Optionee after termination of service as a Director
covered by (i) or (ii) above, the person or persons to whom the Optionee's
rights are transferred by will or the laws of descent and distribution may
exercise this option to the extent to which the Optionee could have exercised
this option had the Optionee survived for the remainder of the period under
(i)
or (ii) above during which the Optionee could have exercised this option if
the
Optionee had survived; and
(d) In
the
event of the death of the Optionee while serving as a Director, this option
shall thereupon become exercisable in full, and the person or persons to whom
the Optionee's rights are transferred by will or by the laws of descent and
distribution shall have a period ending on the tenth anniversary of the Date
of
Agreement to exercise this option.
9. This
option does not confer on the Optionee any right to continue to serve as a
Director.
10. In
the
event that the Committee shall determine that any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or
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other
similar corporate transaction or event, affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of participants under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate and, in such manner
as
it may deem equitable, adjust any or all of the number and kind of shares,
other
securities or other consideration issued or issuable in respect of this option
and the Option Price.
11. This
option shall be subject to the requirement that if at any time the Board shall
determine that the registration, listing, or qualification of Shares covered
hereby upon any securities exchange or under any federal or state law, or the
consent or approval of any governmental regulatory body is necessary or
desirable in connection with, the granting of this option or the purchase of
Shares hereunder, this option may not be exercised unless and until such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board. The
Board may require that the person exercising this option make such
representations and agreements and furnish such information as it deems
appropriate to assure compliance with or exemption from the foregoing or any
other applicable legal requirement and may cause the certificate or certificates
issued upon exercise of this option to bear a legend indicating the existence
of
any restriction resulting from such representations and agreements.
12. This
option and the terms and conditions herein set forth are subject in all respects
to the terms and conditions of the Plan, which shall be controlling and which
are incorporated herein by reference. All interpretations or determinations
of
the Committee shall be binding and conclusive upon the Optionee and the
Optionee's legal representatives on any question arising hereunder or under
the
Plan.
Please
indicate your understanding and acceptance of the foregoing by signing and
returning a copy of this Agreement.
ENGELHARD
CORPORATION
BY: _____________________________
I
confirm
my understanding of the foregoing and accept the option covering the above
Shares, subject to the terms and conditions described herein.
Signature: _________________________ Date: ___________________
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