Exhibit 10.6
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE
STRATEGIC DISTRIBUTION,
INC.
1999 INCENTIVE STOCK OPTION
PLAN
THIS AGREEMENT, made as of this
day of
, 200 , by and
between STRATEGIC DISTRIBUTION, INC., a Delaware corporation (the
“Company”) and
(the “Optionee”).
WITNESSETH
:
WHEREAS, the Optionee is now
employed by the Company or a subsidiary of the Company in a key
capacity, and the Company desires to have the Optionee remain in
such employment and to afford the Optionee the opportunity to
acquire, or enlarge, the Optionee’s stock ownership in the
Company so that the Optionee may have a direct proprietary interest
in the Company’s success;
NOW, THEREFORE, in consideration of
the covenants and agreements herein contained, the parties hereto
hereby agree as follows:
1.
Grant of Option
. Subject to the terms and
conditions set forth herein and in the Company’s 1999
Incentive Stock Option Plan (the “Plan”), the Company
hereby grants to the Optionee the right and option (the
“Option”) to purchase from the Company, in compliance
with the exercise schedule set forth in Section 2 of this
Agreement, during the period commencing on the date of this
Agreement (the “Grant Date”) and ending ten (10) years
from the date hereof (the “Termination Date”), at a
price of $11.69 per share, up to, but not exceeding in the
aggregate, Seven Thousand Five Hundred (7,500) shares of the
Company’s Common Stock (the “Stock”). The
option granted hereunder shall be an “incentive stock
option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the
“Code”).
2.
Exercise of Option
. Subject to the terms and
conditions set forth herein, the Optionee may purchase
shares of Stock
referenced above commencing on
,
shares of Stock referenced above commencing on
and the remaining
shares of Stock referenced above commencing on
.
The aggregate number of shares indicated above will be 100% vested
on
.
3.
Termination of
Employment . (a)
If, prior to the Termination Date, the Optionee shall cease to be
employed by the Company for any reason other than death, disability
or for cause, this Option will remain exercisable by the Optionee
for a period of three (3) months after the date of cessation of
employment, but in no event later than the Termination Date, to the
extent the Option was exercisable at the date of cessation of
employment. If, prior to the Termination Date, the Optionee
shall cease to be employed by the Company for reasons of death or
disability, the Option will remain exercisable by the Optionee or,
in the event of his or her death, by the person or persons to whom
the Optionee’s rights under the Option would pass by will or
the applicable laws of descent and distribution for a period
extending one (1) year after the date of death or disability, but
in no event later than the Termination Date, to the extent the
Option was exercisable at the date of death or disability.
If, prior to the Termination Date, the Optionee shall cease to be
employed by the Company by reason of termination of employment by
the Company for “cause” (as defined in the Plan), this
Option shall terminate immediately.
(b)
Notwithstanding the foregoing
provisions of this Section 3, if prior to the Termination Date (i)
the Optionee’s employment with the Company terminates for any
reason other than a termination by the Company for
“cause” (a “Non-cause Termination”) and
(ii) within six months after such termination such person engages
in a “Competitive Action” (as hereafter defined)
without written consent of the Company, upon the first occurrence
of such Competitive Action (the “Competitive Action
Date”), the Optionee’s right to exercise the Option
will terminate and all rights under this Agreement will
cease.
(c)
Whether employment has been
terminated for the purposes of this Agreement and the reason for
any such termination (including whether such termination is for
“cause” or by reason of disability), and whether the
Optionee has engaged in a Competitive Action (and, if so, the
Competitive Action Date), will be determined by the Section 162(m)
Committee of the Company’s Board of Directors (the
“Committee”) in its sole discretion, whose
determination shall be final, binding and conclusive. If the
Committee does not make a determination with respect to any of such
foregoing events or occurrences in the case of the Optionee, such
event or occurrence shall, for all purposes of this Agreement, be
deemed to have not occurred.
(d)
For purposes of this Agreement, an
Optionee engages in a “Competitive Action” if such
person, directly or indirectly, and whether as an employee,
consultant, independent contractor, partner, joint venture or
otherwise, (i) in any geographical area where the Company is
engaged in business, engages in any business activity which is
competitive, to a material extent, with any substantial type or
kind of business activity conducted by the Company in such area,
(ii) on behalf of any person or entity engaged in any business
activity of the Company, solicits or induces, or in any manner
attempts to solicit or induce, any person employed by, or as an
agent of, the Company to terminate such person’s employment
or agency relationship, as the case may be, with the Company, (iii)
diverts, or attempts to divert, any person, concern or entity from
doing business with the Company or attempts to induce any such
person, concern or entity to cease being a customer or supplier of
the Company or (iv) makes use of, or attempts to make use of, any
of the Company’s property or proprietary
information.
Notwithstanding the foregoing
provisions of this subsection 3(d), the Committee has the
authority, in its discretion, to determine that an occurrence or
event otherwise described within the definition of
“cause” or “Competitive Action”, as the
case may be shall, for all purposes of this Agreement, nevertheless
be considered to not constitute a termination for
“cause” or the engaging in of a Competitive Action,
respectively. The Committee’s exercise, or non-exercise, of
such discretion with respect to any particular event or occurrence
by or with respect to a particular Optionee shall not in any way
reduce or eliminate the authority of the Committee to (i) determine
that any subsequent event or occurrence by or with respect to such
Optionee constitutes the engaging in by such person of a
Competitive Action and (ii) determine the related Competitive
Action Date.
4.
Recovery of Value of
Options . (a)
So as to minimize the substantial financial harm which the
Optionee recognizes and agrees that the Company will
