KAYDON CORPORATION 1999 LONG TERM STOCK INCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT
EXHIBIT 10.2
NON-QUALIFIED STOCK OPTION AGREEMENT, dated as of , 200 ; between KAYDON
CORPORATION, a Delaware corporation (the “Corporation”), and (“Optionee”).
The Kaydon Corporation 1999 Long Term Stock Incentive Plan Committee (the Committee), pursuant
to the Corporation’s 1999 Long Term Stock Incentive Plan (the Plan), has granted to the Optionee,
on the date of this Agreement, an option under the Plan to purchase an aggregate of
shares of Common Stock of the Corporation par value $0.10 per share (“Common Stock”). To evidence
the option and to set forth its terms and conditions as provided in the Plan, the Corporation and
the Optionee agree as follows.
1.
Confirmation of Grant and Price. The Corporation, by this Agreement, evidences and
confirms its grant to the Optionee on the date of this Agreement of an option (the Option) to
purchase
shares of Common Stock, at an option price of
$ per share. The Option
is subject to all of the provisions of the Plan, whether or not explicitly stated in this
Agreement, except that the ability of the Board of Directors or the Committee to amend this
Agreement without the consent of Optionee is limited as provided in this Agreement.
(a) Percentage and Date Schedule
Percentage of Number | Date First Available | |
of Shares | for Exercise | |
20%
|
One year after the date of grant | |
20%
|
Two years after the date of grant | |
20%
|
Three years after the date of grant | |
20%
|
Four years after the date of grant | |
20%
|
Five years after the date of grant |
(b) Later Exercise. The right to purchase is cumulative. If the full number of shares
exercisable in any period is not exercised, the balance may be exercised at any time or from
time to time after that date, as long as the exercise occurs prior to the expiration or
termination of the Option.
(c) Expiration. The Option expires , 200 .
(a) Death. If the Optionee dies, the Option may be exercised, to the extent of the
number of shares of Common Stock with respect to which the Optionee could have exercised the
Option on the date of the Optionee’s death, by the Optionee’s estate or a person who
acquires the right to exercise the Option by bequest or inheritance or by reason of the
death of the Optionee, at any time prior to the earlier of one year after the Optionee’s
death and the expiration date specified in Section 2.
(b) Discretion to Amend. The Board of Directors or the Committee may, in its
discretion, amend this Agreement to accelerate the exercisability of any installments of the
Option which were not exercisable at the time of the Optionee’s death.
(a) General Rule. Unless governed by a special rule, below, the Option, to the extent
of the number of shares of Common Stock with respect to which the Optionee could have
exercised the Option at the date of termination of employment, terminates on the earlier of
the expiration date specified in Section 2 and the date which is 10 days after the date of
termination of employment.
(b) Exceptions for Involuntary Termination and Disability. In the case of involuntary
termination of employment or a Permanent and Total Disability within the meaning of the
Plan, the Option, to the extent of the number of shares of Common Stock with respect to
which the Optionee could have exercised the Option at the date of termination of employment,
terminates on the earlier of the expiration date specified in Section 2 and the date which
is three months after the date of termination of employment.
(c) Exception for Death. In the case of death, the Option, to the extent of the number
of shares of Common Stock with respect to which the Optionee could have exercised the Option
on the date of death, terminates on the earlier of the expiration date specified in Section
2 and the date which is one year from the date of death.
(d) Exception for Retirement. In the case of termination of employment by reason of
retirement, the Option will continue to vest in accordance with the Option vesting schedule
in effect on the date of retirement and will continue to be exercisable in accordance with
its terms as though the Optionee had continued in employment.
Notwithstanding the preceding rules, if the Committee determines that the Optionee engaged in
any activity detrimental to the interests of the Corporation or a subsidiary, the
2
Committee may terminate the unexercised portion of the Option concurrently with or at any time
following the termination of employment.
Further, nothing in the Plan or in this Agreement confers upon the Optionee any right to
continue in the employ of the Corporation or any of its affiliates, or interferes in any way with
the right of the Corporation or any of its affiliates to terminate the Optionee’s employment at any
time during the Option period or otherwise.
(a) General Limitation. The Option may not be exercised in whole or in part, and no
payment by the Corporation shall be made nor shall any certificates representing shares of
Common Stock subject to the Option be delivered, if:
i. Governmental Approval. At any time any requisite approval or consent of any
governmental authority of any kind having jurisdiction over the exercise of options
has not been effectively secured;
ii. Registration. The shares are not effectively registered under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended; or
iii. Withholding. Applicable federal, state and local tax withholding
requirements are not satisfied.
(b) Representation. The Corporation may require as a condition to the exercise of the
Option in whole or in part at any time that the Optionee or any person exercising the Option
after the Optionee’s death in accordance with the provisions of Section 4 (the Holder)
represent to the Corporation in writing that the shares are being acquired for the
Optionee’s or Holder’s own account for investment only and not with a view to distribution
or with any present intention of reselling any.
(c) Hardship. The Option is not exercisable for the period of at least twelve (12)
months to the extent provided under the hardship distribution provisions of the Kaydon
Corporation Employee Stock Ownership and Thrift Plan or other Corporation or affiliate plan
to the extent the Optionee receives a hardship distribution from that plan.
(d) Employment. Except as explicitly provided above, no part of an Option may be
exercised by an Optionee unless the Optionee is then in the employ of the Corporation or
subsidiary and was continuously so employed since the date of the grant.
7. Manner of Exercise. To the extent the Option has become and remains exercisable as
provided in this Agreement, and subject to any additional administrative regulations the Committee
may from time to time adopt, the Option may be exercised from time to time, in whole or in part, by
a signed written notice to the Secretary of the Corporation on a form supplied by the Corporation.
The notice must specify the number of shares of Common Stock with respect to which the Option is
being exercised and be accompanied by full payment
3
of the option price for the shares.
(a) Payment. Payment must be made in:
i. Cash or Shares. Cash; provided, however, that with the consent of the
Committee, payment may be made in whole or in part with shares of Common Stock,
represented by certificates duly endorsed to the Corporation or its nominees, valued
at fair market value, or other awards or property having a fair market value on the
exercise date equal to the exercise price;
ii. Instructions. With the consent of the Committee, by delivering with a
properly executed exercise notice irrevocable instructions to a third party to
promptly deliver to the Corporation the amount of sale or loan proceeds to pay the
exercise price;
iii. Combination. With the consent of the Committee, a combination of the
above; or
iv. Other. With the consent of the Committee, other consideration.
(b) Prior Holdings Limitation. The option price may not be paid in:
i. Option. Shares of Common Stock received upon the exercise of any option
under the Plan or any option under another stock option plan of the Corporation
which shares have been held by the Optionee or other Holder for less than one year
prior to payment; or
ii. Stock. Shares of Common Stock that have been held by the Optionee for
less than six months.
(c) Withholding Limitation. The portion of the option price equal to the amount of any
applicable federal, state and local tax liability required to be withheld at the time of
exercise must be paid in cash.
(d) Right to Exercise. In the event that the Option is exercised by a person other
than the Optionee in accordance with Section 4, the person must furnish to the Corporation
evidence satisfactory to it of the person’s right to exercise the Option.
(e) Other Documents. The Corporation may require the Optionee or any other person
exercising the Option to furnish or execute any documents the Corporation deems necessary to
evidence the exercise or to comply with any requirements of this Agreement, the Plan, or any
law.
(f) Cash or Stock Alternative. The Committee may, in its discretion, at any time that
the fair market value of the Common Stock subject to the Option exceeds the option price, in
lieu of accepting payment of the option price and delivering any or all shares of Common
Stock as to which the Option has been exercised, elect to pay the Optionee or other Holder
an amount in cash or shares of Common Stock equal to the
4
amount by which the fair market value on the date of exercise of the shares of Common
Stock as to which the Option has been exercised exceeds the option price that would
otherwise be payable by the Optionee or other Holder upon the exercise.
(a) Acceptable Assignments. Subject to subsection b., the Option may be assigned by
the Optionee:
i. Death. By will or by the laws of descent and distribution to the extent
provided in section 4;
ii. Grantor Trust. To a revocable grantor trust established by the Optionee
for the Optionee’s sole benefit during the Optionee’s life, subject to the terms of
the Plan; or
iii. Other. To a beneficiary designated by the Optionee in writing on a form
approved by the Committee.
(b) Limitation. Notwithstanding those general rules, the Option may not be assigned by
Optionee if Optionee is a director or officer of the Corporation or an affiliate for
purposes of the securities laws, except as permitted under Rule 16b-3 of those laws.
12. Capital and Other Adjustments. In the event of any change in the number of outstanding
shares of Common Stock by reason of any stock dividend, stock split, combination or exchange of
shares, recapitalization, reclassification, merger, consolidation, reorganization, or other similar
transaction, the Committee may adjust the number, type and option price of shares of Common Stock
covered by the Option, by means of a grant of a substitute option or an additional option or
otherwise, as it in its discretion deems appropriate. In addition, in the event of any unusual or
nonrecurring event (including, but not limited to, the events described in the
5
preceding sentence) affecting the Corporation, any subsidiary, or the financial statements of
the Corporation or any subsidiary, or of changes in applicable laws, regulations, or accounting
principles, the Committee may adjust the terms and conditions of, and the criteria included in this
Agreement if the Committee determines that such adjustments are appropriate to prevent dilution or
enlargement of the benefits or potential benefits of the Option.
(a) Purchase. Provide for the purchase of the Option, at the Optionee’s request, for
an amount of cash equal to the amount that could have been attained upon exercise had the
Option been exercisable at that time;
(b) Adjust. Adjust the Option as the Committee deems appropriate to reflect the Change
in Control; and
(c) Cause Assumption. Cause the Option to be assumed, or replaced with a new option,
by the acquiring or surviving corporation after the Change in Control.
(a) Withholding. The withholding obligation may not be satisfied by reducing the
number of shares of Common Stock otherwise deliverable.
(b) Fractional Shares. Any fraction of a share of Common Stock required to
6
satisfy a tax obligation shall be disregarded and the amount due must be paid instead
in cash.
19. Governing Law. The words “exercise”, “subsidiary”, “outstanding” and any other words or
terms used in this Agreement which are defined or used in Section 421, 422 or 425 of the Code have
the meanings assigned to them in those Sections, unless the context clearly requires otherwise. In
all other respects this Agreement shall be construed and enforced in accordance with, and governed
by, the laws of the State of Delaware.
Executed day of , effective as of the date first set forth above.
KAYDON CORPORATION | OPTIONEE | |||||||||
By | ||||||||||
Name: |
||||||||||
Its:
|
7