Exhibit 10.12
THE VALSPAR CORPORATION
FORM OF NONSTATUTORY STOCK OPTION
AGREEMENT
UNDER 1991 STOCK OPTION PLAN - OFFICER
(as amended through August 21, 2007)
By action of its shareholders, The Valspar
Corporation (“Valspar”) established the 1991 Stock
Option Plan (“1991 Plan”) authorizing the issue of not
more than 25,000,000 shares of its common stock (50 cents par
value) to key employees, designed to stimulate and reward interest
and initiative in their employment.
Pursuant to the provisions of the 1991 Plan and The
Valspar Corporation Key Employee Annual Bonus Plan, Valspar hereby
grants (Optionee”)
, an officer of Valspar, a nonstatutory option to
purchase from Valspar (specific
number) shares of its
common stock at a price of ($ specific
price) per share, all in accordance with
and subject to the following terms and conditions:
1.
Period of Exercise
- The Option becomes exercisable one year from the
date of grant and will expire ten (10) years from the date of this
Agreement. The Option may be exercised only while the Optionee is
actively employed by Valspar and as provided in Section 6, dealing
with termination of employment.
2.
Vesting of Rights
- The Option may be exercised for up to, but not in
excess of, the amounts of shares subject to the Option as specified
below, based on the Optionee’s number of years of continuous
employment with Valspar from the date hereof. In applying the
following limitations, the amount of shares, if any, previously
purchased by Optionee shall be counted in determining the amount of
shares the Optionee can purchase at any time in accordance with
said limitations. The Optionee may exercise the Option in the
amounts and in accordance with the conditions set forth
below:
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(a)
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After one (1) year of such continuous employment,
the Option may be exercised for one-third of the shares originally
subject to the Option;
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(b)
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After two (2) years of such continuous employment,
the Option may be exercised for two-thirds of the shares originally
subject to the Option;
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(c)
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At the expiration of the third (3rd) year of such
continuous employment, the Option may be exercised at any time and
from time to time in whole or in part, but it shall not be
exercisable after expiration of the exercise period set forth in
Section 1 above.
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Notwithstanding the foregoing, in the event that
Optionee’s employment with Valspar terminates as a result of
Optionee’s death, disability or retirement after the age of
sixty (60), Optionee shall be entitled to purchase all of the stock
covered by the Option at the time of such termination of
employment.
3. Definitions - For the
purposes of this Option, (i) disability shall mean permanent
disability as that term is defined under the long term disability
insurance coverage offered by Valspar to its employees at the time
the determination is to be made; (ii) retirement shall mean the
termination of employment with Valspar at any time after Optionee
has attained the age of sixty (60) years for any reason other than
cause; and (iii) termination for cause shall mean the termination
of employment with Valspar as a result of an illegal act, gross
insubordination, or willful violation of a Valspar policy by
Optionee.
4.
Method of Exercise
- The Optionee shall exercise his rights hereunder
by (i) delivering notice to Valspar stating the number of shares to
be purchased and (ii) payment to Valspar (through Mellon Investor
Services, Option Administrator) of the full amount of the purchase
price for the shares then being purchased. In lieu of cash, all or
part of the purchase price may be paid by surrender (or deemed
surrender through attestation) to Valspar of previously acquired
shares of common stock of Valspar, based on the fair market value
at the closing price on the day preceding the date of exercise.
Shares surrendered in lieu of cash must have been held by Optionee
for a minimum of six (6) months. Upon effective exercise of the
Option, Valspar shall promptly cause the shares being purchased to
be issued to the Optionee.
5.
Conditions - By Optionee’s acceptance of this Option, the Optionee
agrees that Optionee will during Optionee’s employment by
Valspar
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