KAYDON CORPORATION 1999 LONG TERM
STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
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.
2. Term for Exercise . The Option
becomes available for exercise, subject to the provisions of this
Agreement, as to the percentage of the aggregate number of shares
of Common Stock subject to the Option and on the dates set forth
below:
(a)
Percentage and Date Schedule
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Percentage of Number
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Date First Available
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of
Shares
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for Exercise
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20%
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One year after the date of grant
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20%
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Two years after the date of grant
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20%
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Three years after the date of grant
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20%
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Four years after the date of grant
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20%
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Five years after the date of grant
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(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
.
3. Non-Qualified Stock Option . The
Option evidenced by this Agreement is not intended to be an
incentive stock option as that term is defined in Section 422
of the Internal Revenue Code of 1986, as amended (the
Code).
4. Who May Exercise . During the
lifetime of the Optionee, the Option may be exercised only by the
Optionee. If the Optionee dies, the Option may be exercised, to the
extent provided in Section 5 hereof, 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.
5. Exercise After Termination of
Employment . Except as explicitly provided below, no part of an
Option may be exercised by an Optionee unless the Optionee is then
in the employ of the Corporation or any parent or subsidiary and
was continuously so employed since the date of the grant. It is not
a termination of employment for purposes of this section if the
Optionee transfers employment from the Corporation to any
subsidiary or vice versa, or from one subsidiary to another,
without an intervening period, if the Optionee is absent on sick
leave or is granted a leave of absence (not to exceed one year), or
if the Optionee changes status to become a consultant to the
Corporation or a subsidiary. Termination will include termination
by reason of the fact that an entity employing Optionee is no
longer a subsidiary of the Company.
(a) General Rules . Unless governed by a
special rule, below, the Option 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. Unless
acceleration of or continued vesting is specifically provided for
in this Section 5 or in an Employment Agreement between
Optionee and the Corporation which specifically addresses vesting
of stock based awards upon termination, vesting of awards shall
cease and no further installments of the Option will become
exercisable following termination of employment by the Corporation
or any parent or subsidiary and the Option shall be exercisable
pursuant to the rules set forth in this Section 5 only with
respect to the number of shares of Common Stock as to which the
Optionee could have exercised the Option at the date of
termination. 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.
(b) Exceptions for Involuntary Termination
and Disability . In the case of involuntary termination of
employment or a Disability within the meaning of the Plan or as
defined in any employment agreement between Optionee and the
Corporation, the Option 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 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 at or
after age 65, 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 unless otherwise
provided in an Employment Agreement between Optionee and the
Company.
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(e) Termination following Change in
Control . If the Optionee is a party to a Change in Control
Compensation Agreement or an Employment Agreement which explicitly
provides for acceleration of vesting and exercisability of options
upon events of termination following a “Change in
Control,” the vesting and exercisability of the Option for
terminations following a Change in Control (as defined in such
other agreement) will be governed by the terms of such Change in
Control Compensation Agreement or Employment Agreement to the
extent such provisions are different than or conflict with the
provisions of this Agreement. Such acceleration is not subject to
cancellation under the Plan and is also irrevocable as long as the
Optionee is a party to such a Change in Control Compensation
Agreement or Employment Agreement.
Notwithstanding the foregoing, if at any time
upon or following termination of employment the Committee
determines that reason to terminate the Optionee for cause, as
defined in the Plan, exists at the time of termination or existed
at such time, the 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.
6. Restrictions on Exercise . The
Option may be exercised only with respect to full shares. No
fractional shares of Common Stock will be issued.
(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
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