Exhibit 10.2
PEERLESS MFG. CO.
2007 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
THIS OPTION AWARD AGREEMENT (this
“ Agreement ”), dated as of
, is entered into between PEERLESS MFG. CO., a Texas corporation
(the “ Company ”), and
(“ Optionee ”). Capitalized terms used
herein but not defined shall have the meanings assigned to those
terms in the Peerless Mfg. Co. 2007 Stock Incentive Plan (the
“ Plan ”).
1. Grant of Option Right
. Pursuant to the Plan, the Company hereby grants to Optionee, as a
Participant in the Plan and effective as of the Date of Grant (as
defined in Section 3), an option right (“ Option
Right ”) to purchase
shares (“ Option
Shares ”) of the Company’s common stock, par
value $1.00 per share (“ Common Shares
”), at the price of $
per share (the “ Option Price ”).
2. Type of Option Right
. The Option Right is intended to be a nonqualified stock option
and shall not be treated as an “incentive stock option”
within the meaning of Section 422 of the Code or any successor
provision.
3. Date of Grant . The
effective date of the grant of this Option Right is
(the “ Date of Grant ”).
4. Date of Expiration .
This Option Right shall expire on the [tenth] anniversary of the
Date of Grant (the “ Date of Expiration
”), unless earlier terminated under Section 7(a).
5. Vesting of Option
Right .
(a) Except as otherwise provided in
this Agreement, the Option Right shall become vested and
exercisable to the extent of
% of the Option Shares on each of the first
anniversaries of the Date of
Grant[; provided , however , that if the Board
determines that Optionee has satisfied the management objectives
established by the Board and attached as Appendix A hereto as
of the anniversary of the
Date of Grant, the Option Right shall become fully vested and
exercisable on the
anniversary of the Date of Grant].
(b) Notwithstanding the provisions of
Section 5(a) above, the Option Right shall become immediately
vested and exercisable in full upon the occurrence of a Change of
Control, as defined in the Plan.
(c) Notwithstanding Section 5(a)
above, the Board, in its sole discretion, may determine within
60 days following one of the events described in clauses
(i) through (iii) below that the Option Right shall become
immediately exercisable in full (i) if Optionee becomes
permanently disabled (as determined by the Board), (ii) if
Optionee dies while an employee of the Company or a Subsidiary,
(iii) if Optionee retires at or after the earliest voluntary
retirement age permitted by his or her employer or with the consent
of the Board, or (iv) under other special circumstances.
6. Manner of Exercise
.
(a) To the extent that the Option
Right is exercisable in accordance with Section 5, the Option
Right may be exercised by Optionee at any time, or from time to
time, in whole or in part on or prior to the Termination Date;
provided , however , that Optionee must exercise the
Option Right in multiples of 100 Option Shares unless fewer than
100 Option Shares are available for purchase by Optionee under this
Agreement at the time of exercise.
(b) Optionee shall exercise the
Option Right by delivering a signed written notice to the Company,
which notice shall specify the number of Option Shares to be
purchased and be accompanied by payment in full of the Option Price
and any required taxes (as provided in the Plan) for the number of
Option Shares specified for purchase; provided ,
however , that, with the prior approval of the Board,
payment of the Option Price may be deferred and paid from the
proceeds of sale through a bank or broker of some or all of the
shares to which such exercise relates.
(c) The Option Price shall be payable
in cash or by check acceptable to the Company or by wire transfer
of immediately available funds; provided that, if approved by the
Board, the Option Price may be payable (i) by the actual or
constructive transfer to the Company of Common Shares owned by
Optionee for at least six months having a Market Value Per Share at
the time of exercise equal to the total Option Price, or
(ii) by a combination of cash, check or wire transfer and the
payment method described in clause (i).
(d) The Company’s obligation to
deliver Option Shares to Optionee is subject to and conditioned
upon Optionee satisfying all tax obligations associated with
Optionee’s exercise of the Option Right. Unless otherwise
approved by the Board, all such tax obligations shall be payable in
cash or by check acceptable to the Company or by wire transfer of
immediately available funds. The Company and its Subsidiaries, as
applicable, shall be entitled to deduct from any payment otherwise
due to Optionee the amount necessary to satisfy all such
taxes.
(e) Upon full payment of the Option
Price and satisfaction of all applicable tax obligations, and
subject to the applicable terms and
