Exhibit 10.30
AGREEMENT COVERING NONQUALIFIED STOCK OPTION AWARD TO
THE CHAIRMAN OF THE BOARD
THIS AGREEMENT is made and entered into as of the 8th day of May, 2002 by and
between LYDALL, INC., a Delaware corporation, with its principal office in
Manchester, Connecticut (hereinafter called the "Company"), and Xxxxx X.
Xxxxxxx, the Chairman of the Board of Directors of the Company (hereinafter
called the "Optionee").
1. GRANT OF NONQUALIFIED STOCK OPTION. Subject to the terms and conditions set
forth herein, the Company grants to the Optionee, effective as of the day
and year first above written (hereinafter called the "date of grant"), an
option (hereinafter called the "option") to purchase from the Company, from
time to time, up to but not exceeding in the aggregate 25,000 shares of the
Common Stock of the Company to be issued upon the exercise hereof, fully
paid and nonassessable. The option shall become exercisable as follows:
(i) as to one-half of the total number of shares covered by the option,
i.e., 12,500 shares, on May 8, 2003;
(ii) as to the remaining one-half of the total number of shares covered by
the option, i.e., 12,500 shares, on May 8, 2004.
Shares not purchased on the above dates shall accumulate and remain
exercisable for the period hereinafter provided. Not withstanding the
foregoing, (i) the option shall be exercisable as to the total number of
shares covered by the option, i.e., 25,000 shares, immediately upon the
occurrence of a "Change in Control of the Company" as defined in Section 7
of this Agreement (but only if the Optionee does not cease to be the
Chairman of the Board of Directors of the Company prior to such "Change in
Control of the Company"), and (ii) the Board of Directors of the Company
may at any time, in its sole discretion, accelerate the time that the
option or any portion thereof becomes exercisable. The option, to the
extent then exercisable, shall remain exercisable until the earlier of ten
(10) years from the date of grant or the expiration of the three (3) year
period described in Section 5(a) of this Agreement. The option is subject
to the restriction that it be exercised as set forth in Section 4 of this
Agreement, and to other terms and conditions as set forth in Section 5 of
this Agreement.
2. TYPE OF OPTION. The option is a nonqualified stock option that does not
qualify for incentive stock option treatment under Section 422 of the
Internal Revenue Code of 1986, as amended.
3. OPTION PRICE. The purchase price of each share subject to the option shall
be $16.08, being 100 percent of the fair market value of the shares subject
to the option on the date of grant.
4. MANNER OF EXERCISE OF OPTION. The option shall be exercised by delivering
to the Vice President - Investor Relations of the Company, from time to
time, a signed statement of exercise specifying: (a) the election to
exercise the "Nonqualified Stock Option", (b) the number of shares elected
to be purchased, and (c) the date on which the signed statement of exercise
is delivered to the Company's Vice President - Investor Relations, together
with cash or a check to the order of the Company for an amount equal to the
purchase price of such shares. Within ten (10) days after any such exercise
of the option in whole or in part, the Company shall deliver to the
Optionee at the principal office of the Company certificates for the number
of shares with respect to which the option shall be so exercised, issued in
the Optionee's name, provided that if the stock transfer books of the
Company are closed for the whole or any part of said ten (10) day period,
then such period shall be extended accordingly. The exercise of the option
and the Company's obligation to issue shares hereunder shall also be
subject to additional terms and conditions as set forth in Section 5 of
this Agreement
5. ADDITIONAL TERMS AND CONDITIONS.
(a) Cessation of Service as Chairman. If the Optionee ceases to be the
Chairman of the Board of Directors of the Company for any reason, the
following provisions shall apply:
(i) The portion of the option that is exercisable on the date of
cessation of the Optionee's service as the Chairman of the Board
of Directors of the Company (including without limitation any
portion becoming exercisable on that date by reason of a "Change
in Control of the Company" as defined in Section 7 of this
Agreement) shall continue to be exercisable in accordance with
the terms of this Agreement until the earlier of: (A) ten (10)
years from the date of grant, or (B) three (3) years from the
date on which the Optionee ceases to be a member of the Board of
Directors of the Company (whether or not as Chairman and whether
by reason of death, disability, retirement or other
circumstance).
(ii) The portion of the option that is not exercisable on the date of
cessation of the Optionee's service as a member of the Board of
Directors of the Company (whether or not as Chairman) as
described in (i) above shall be forfeited immediately upon such
cessation of service as a member of the Board of Directors of the
Company.
(b) Limitations on Exercise of Option. Any obligation of the Company to
issue the shares as to which the option is being exercised shall be
conditioned upon the Company's ability at nominal expense to issue such
shares in compliance with all applicable statutes, rules or regulations
of any governmental authority. The Company may secure from the Optionee
any assurances or agreements which the Company's Board of Directors
shall reasonably deem necessary or advisable in order that the issuance
of such shares shall comply with any such statutes, rules or
regulations.
If at any time the Company's Board of Directors shall reasonably determine
that the listing, registration or qualification of the shares subject to
the option upon any securities exchange or under any state or federal law,
or that the consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with, the
granting of such option or the
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issue or purchase of shares thereunder, such option may not be exercisable
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 Board of Directors.
(c) Nontransferability. The option shall not be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution, and the
option shall be exercisable, during his lifetime, only by him.
(d) Stockholder Rights. The Optionee shall not be entitled to any rights as a
stockholder with respect to any shares subject to the option prior to the
date of issuance to him of a stock certificate representing such shares.
The Company shall not be required to deliver any certificate upon the
exercise of the option until the Company has been furnished with such
representation or opinion or other document as it may reasonably deem
necessary to insure compliance with any rule or regulation of the New York
Stock Exchange, the Securities and Exchange Commission, or of any other
governmental authority having jurisdiction over the Company or the shares
to be issued upon exercise of the option
(e) Treasury Shares. The Company shall use shares of Common Stock held by the
Company as Treasury Shares to satisfy its obligation to issue shares of
Common Stock of the Company upon exercise of the option.
6. CAPITAL ADJUSTMENTS AND CORPORATE REORGANIZATIONS.
(a) If the outstanding shares of stock of the class then subject to this
option are increased or decreased, or changed into or exchanged for a
different number or kind of shares or securities or other forms of
property (including cash) or rights, as a result of one or more
reorganizations, recapitalizations, spin-offs, stock splits, reverse
stock splits, stock dividends or the like, appropriate adjustments
shall be made in the number and/or kind of shares or securities or
other forms of property (including cash) or rights for which this
option may thereafter be exercised, all without any change in the
aggregate exercise price applicable to the unexercised portion of this
option, but with a corresponding adjustment in the exercise price per
share or other unit. No fractional share of stock shall be issued
under this option or in connection with any such adjustment. Such
adjustments shall be made by or under authority of the Company's Board
of Directors whose determinations as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company as a result of
which the outstanding securities of the class then subject to this
option are changed into or exchanged for property (including cash),
rights or securities not of the Company's issue, or any combination
thereof, or upon a sale of substantially all the property of the
Company to, or the acquisition of stock representing more than eighty
percent (80%) of the voting power of the stock of the Company then
outstanding by, another corporation or person, this option shall
terminate, unless provision be made in writing in connection with such
transaction for the
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assumption of this option, or the substitution for this option of an
option covering the stock of a successor employer corporation, or a
parent or a subsidiary thereof, with appropriate adjustments in
accordance with the provisions of the preceding paragraph as to the
number and kind of shares optioned and their exercise prices, in which
event this option shall continue in the manner and under the terms so
provided. If this option shall terminate pursuant to the provisions of
this paragraph, the optionee or other person then entitled to exercise
this option shall have the right, at such time prior to the
consummation of the transaction causing such termination as the Company
shall designate, to exercise the unexercised portion of this option,
including the portions thereof which would, but for this paragraph, not
yet be exercisable.
7. COMPLIANCE WITH LAWS. Notwithstanding any of the provisions hereof, the
Optionee agrees for himself and his legal representatives, legatees and
distributees that the option shall not be exercisable by him or them, and
that the Company shall not be obligated to issue any shares hereunder, if
the exercise of said option or the issuance of such shares shall constitute
a violation by the option holder or the Company of any provision of any law
or regulation or any governmental authority.
8. DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement, a "Change
in Control of the Company" means (i) an acquisition of the Company by means
of a merger, consolidation, or purchase of substantially all of its assets
if and when incident thereto (a) the composition of the Board of Directors
or its successor changes so that a majority of the Board is not comprised
of individuals who were members of the Board immediately prior to such
merger, consolidation or purchase of assets or (b) the stockholders of the
Company acquire a right to receive, in exchange for or upon surrender of
their stock, cash or other securities or a combination of the two, or (ii)
the acquisition by a "Person" (as that term is hereafter defined) of the
voting rights with respect to 25 percent or more of the outstanding Common
Stock of the Company if such person was not an officer or director of the
Company on January 1, 2002. For purposes of this definition, "Person" means
an individual, corporation, trust or other legal or commercial entity and
includes two or more persons acting as a partnership, limited partnership,
syndicate or other group for the purpose of acquiring, holding, or
disposing of securities of the Company.
9. NOTICES. Every notice or other communication relating to this Agreement
shall be in writing, and shall be mailed or delivered to the party for whom
it is intended at such address as may from time to time be designated by
such party in a notice mailed or delivered to the other party as herein
provided; provided that, unless and until some other address be so
designated, all notices or communications to the Company shall be mailed to
or delivered to its Vice President - Investor Relations at Xxx Xxxxxxxx
Xxxx, X.X. Xxx 000, Xxxxxxxxxx, Xxxxxxxxxxx, 00000-0000, and all notices by
the Company to the Optionee may be given to the Optionee personally or may
be mailed to him at the last address designated for the Optionee on the
records of the Company.
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10. INTERPRETATION. The determination or the interpretation and construction of
any provision of this Agreement by the Board of Directors of the Company
shall be final and conclusive upon all concerned.
IN WITNESS WHEREOF, LYDALL, INC. has caused these presents to be executed in its
corporate name and its corporate seal to be hereunto affixed, and the Optionee
has signed on his own behalf as of the day and year first above written.
LYDALL, INC.
/s/ XXXXXXXXXXX X. XXXXXXXXXXX
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Xxxxxxxxxxx X. Xxxxxxxxxxx
President and Chief Executive Officer
/s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
Optionee
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