ALAMO GROUP
INC.
2009 EQUITY
INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS OPTION AGREEMENT (the “Option Agreement”) is made
and entered into as of ________________, 20___ (the “Date of
Grant”), by and between Alamo Group Inc., a Delaware
corporation (the “Company”), and __________________
(the “Optionee”). Capitalized terms not defined
herein shall have the meaning ascribed to them in the
Company’s 2009 Equity Incentive Plan (the
“Plan”).
1. Notice of
Stock Option Grant . Pursuant to the Plan, the
Committee has determined that the Optionee is to be granted a
nonqualified stock option (the “Option”) to purchase
Shares, subject to the terms and conditions set forth in the Plan
and herein, and hereby grants such Option.
2.
Number of Shares and Exercise Price . The Option
hereby entitles the Optionee to purchase ____ Shares (the
“Option Shares”) at a price of $_______ per Share (the
“Option Exercise Price.”).
3.
Option Term . The term of the Option and of the
Option Agreement (the “Option Term”) shall commence on
the Date of Grant and, unless the Option is previously terminated
pursuant to Section 6 hereof, shall terminate upon the expiration
of ten (10) years from the Date of Grant (the “Expiration
Date”). As of the Expiration Date, all rights of the
Optionee hereunder shall terminate.
4.
Conditions of Exercise .
a. Subject to Sections 6 and 7(b) hereof, the
Option shall become vested and exercisable as to 20% of the Option
Shares on the first anniversary of the Date of Grant, and as to an
additional 20% of the Option Shares on each of the four succeeding
anniversaries of the Date of Grant, provided that the Optionee has
continuously been a Service Provider through each such date.
b. Except as otherwise provided herein, the right
of the Optionee to purchase Option Shares with respect to which the
Option has become exercisable and vested may be exercised in whole
or in part at any time or from time to time prior to the Expiration
Date; provided, however, that the Option may not be exercised for a
fraction of a Share.
5.
Method of Exercise . This Option may be exercised,
in whole or in part, by delivery of a written notice of exercise to
the Company in such form as may be approved by the Committee from
time to time and which may be obtained from the Company’s
Administrative department, accompanied by payment in full of the
aggregate Option Exercise Price for the exercised Option Shares,
together with applicable withholding taxes, in the form of: (i)
cash, (ii) to the extent permitted by applicable law, by
means of any cash or cashless exercise procedure through the use of
a brokerage arrangement approved by the Committee, (iii) electing
to remit unrestricted Shares already owned by the Optionee to the
extent the unrestricted Shares have a Fair Market Value on the date
of exercise equal to the aggregate Option Exercise Price of the
exercised Option Shares, together with applicable withholding
taxes, or (iv) any combination of the foregoing.
6.
Effect of Termination of Relationship as a Service
Provider .
a. Termination other than for Death
. If the Optionee ceases to be a Service Provider,
other than upon the Optionee’s termination as a Service
Provider as a result of the Optionee’s death, the Optionee
may exercise this Option within ninety (90) days of such
termination of service to the extent this Option is vested on the
date the Optionee ceases to be a Service Provider, but in no event
later than the expiration of the term set forth in Section 3
hereof. If on the date the Optionee ceases to be a Service
Provider the Optionee is not vested as to this entire Option, the
Shares covered by the unvested portion of this Option will revert
to the Plan. If, after the Optionee ceases to be a Service
Provider, the Optionee does not exercise this Option within the
ninety (90) days described above, the Option will terminate, and
the Shares covered by this Option will revert to the Plan.
b. Termination by Reason of Death .
If the Optionee either (i) dies while a Service Provider, or (ii)
dies within the ninety (90) day period following the date the
Optionee ceases to be a Service Provider as described in Section
6(a) hereof, this Option may be exercised within twelve (12) months
following the Optionee’s death to the extent this Option is
vested on the date of the Optionee’s death, but in no event
later than the expiration of the term set forth in Section 3
hereof. Such Option may be exercised by the personal
representative of the Optionee’s estate, or by the person(s)
to whom the Option is transferred pursuant to the Optionee’s
will or in accordance with the laws of descent and distribution,
provided that documentation satisfactory to the Committee
establishing the right of such personal representative or heir to
receive the Option from Optionee is provided to the Committee.
If on the date the Optionee dies the Optionee is not
vested as this entire Option, the Shares covered by the unvested
portion of this Option will revert to the Plan. If, after the
Optionee dies, this Option is not exercised within the twelve (12)
months described above, this Option will terminate, and the Shares
covered by this Option will revert to the Plan.
7.
Adjustments; Change in Control .
a. Adjustments . This Option and all
rights and obligations under this Option Agreement are subject to
Section 9 of the Plan.
b. Change in Control . In the event of a Change
in Control, any portion of the Option that is outstanding at such
time shall become fully and immediately vested and exercisable,
unless
