Exhibit 10.7
CLARCOR INC.
STOCK OPTION AGREEMENT
CLARCOR Inc., A Delaware
corporation (the “Company”), hereby grants to
«First — Name» «Last Name» (the
“Optionee”) as of «Option — Date»
(the “Option Date”), pursuant to the provisions of the
CLARCOR Inc. 2004 Incentive Plan (the “Plan”), a
non-qualified option to purchase from the Company (the
“Option”) «Units» shares (“Option
Stock”) of its Common Stock, $1 par value
(“Stock”), at the price of $«Price» per share
upon and subject to the terms and conditions set forth below.
Capitalized terms not defined herein shall have the meanings
specified in the Plan.
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1.
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Time and Manner of Exercise of
Option .
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1.1.
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Maximum Term of Option
. In no event
may the Option be exercised, in whole or in part after
«Expiration Date» (the “Expiration
Date”).
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1.2.
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Exercise of Option
. (a) Subject to
Sections 1 (b), (c), (d) and 2.1 of this Agreement, this
Option shall be exercisable in accordance with the following
schedule:
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Percentage
of
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Option
Stock
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From Option Date to
1st Anniversary of Option Date
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0
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%
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From 1st Anniversary of Option
Date to 2nd Anniversary of Option Date
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up to 25
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%
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From 2nd Anniversary of Option
Date to 3rd Anniversary of Option Date
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up to 50
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%
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From 3rd Anniversary of Option
Date to 4th Anniversary of Option Date
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up to 75
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%
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Thereafter through the Expiration
Date
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up to 100
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%
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The foregoing subject to
Sections 1(b), (c), (d), and (e) of this Agreement and
Section VII 8. of the Plan.
(b) If the
Optionee’s employment by the company terminates by reason of
Disability or death, the Option shall become fully exercisable and
may thereafter be exercised by the Optionee or the Optionee’s
Legal Representative for a period of 2 years after the
effective date of the Optionee’s termination of employment or
until the Expiration Date, whichever period is shorter.
(c) If the
Optionee’s employment by the Company terminates by reason of
retirement on or after age 60 (or prior to such age with the
consent of the Committee), the Option shall become fully
exercisable and may thereafter be exercised by the Optionee or the
Optionee’s Legal Representative for a period of 3 years
after the effective date of the Optionee’s termination of
employment or until the Expiration Date, whichever period is
shorter.
(d) Except as
provided in Section 2.1, if the Optionee’s employment by
the Company terminates for any reason other than Disability,
retirement on or after age 60 (or prior to such age with the
consent of the Committee) or death, the Option shall terminate
90 days after the date of such termination of employment or
until the Expiration Date, whichever period is shorter. The Option
shall be exercisable only to the extent the Option was exercisable
on the date of Optionee’s termination of
employment.
(e) If the Optionee
dies during the respective periods specified and determined in
accordance with Sections 1.2(b), (c) or (d) above,
the Option shall be exercisable only to the extent the Option was
exercisable on the date of Optionee’s death and may
thereafter be exercised by Optionee’s Legal Representative
for a period of two years after the date of death or until the
Expiration Date whichever period is shorter.
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1.3.
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Method of Exercise
. (a) Subject to the
limitations set forth in this Agreement, the Option may be
exercised by the Optionee (1) by giving written notice to the
Company specifying the number of whole shares of Stock to be
purchased and accompanied by payment therefore in full (or
arrangement made for such payment to the Committee’s
satisfaction) either (i) in cash, (ii) in previously
owned whole shares of Stock (which the Optionee has held for at
least six months prior to the delivery of such shares and for which
the Optionee has good title free and clear of all liens and
encumbrances) having a Fair Market Value, determined as of the date
of exercise, equal to the aggregate purchase price payable pursuant
to the Option by reason of such exercise or (iii) a
combination of (i) and (ii), and (2) by executing
such
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documents as the Company may
reasonably request. The Committee shall have sole discretion to
disapprove of an election pursuant to clauses (ii) and (iii).
No share of Stock shall be delivered until the full purchase price
therefore has been paid.
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2.
Additional Terms and Conditions of Option .
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2.1
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Special Forfeiture/Repayment
Rules . For so long as
Optionee continues as an employee with the Company and for two
years (or one year in the case of Triggering Conduct under
Section 2.1(c)(3)) following Optionee’s termination of
employment with the Company regardless of the reason
(“Restricted Period”), Optionee agrees not to engage in
Triggering Conduct. If Optionee engages in Triggering Conduct
during the Restricted Period, then:
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(a) the Option (or
any part thereof that has not been exercised) shall immediately and
automatically terminate, be forfeited, and shall cease to be
exercisable at any time; and
(b) Optionee shall,
within 30 days following written notice from the Company, pay
the Company an amount equal to (1) the gross option gain
realized or obtained by Optionee or any transferee resulting from
the exercise of such Option, measured by the greater of
(i) the difference between the Fair Market Value of the Option
Stock underlying the Option on the exercise date and the exercise
price paid for such Option Stock and (ii) the positive
difference, if any, between the Fair Market Value of the Option
Stock underlying the Option on the date of disposition of such
Option Stock and the exercise price paid for such Option Stock,
with respect to any portion of the Option that had already been
exercised at any time within two years prior to the Triggering
Conduct (the “Look-Back Period”), less (2) $1.00.
Optionee may be released from Optionee’s obligations under
this Section 2.1 only if the Company (or its duly appointed
desi
