Exhibit 10.1
FORM OF
INCENTIVE STOCK OPTION
AGREEMENT
UNDER THE
ORCHIDS PAPER PRODUCTS COMPANY
STOCK INCENTIVE PLAN
THIS AGREEMENT, made this ____ day
of _______, 20__, by and between Orchids Paper Products Company
(“Company”), and __________________
(“Optionee”),
WITNESSETH THAT:
WHEREAS, the Board of Directors of
the Company (“Board of Directors”) has adopted the
Orchids Paper Products Company Stock Incentive Plan (the
“Plan”) pursuant to which options covering shares of
the common stock of the Company may be granted to employees of the
Company; and
WHEREAS, Optionee is now an employee
of the Company; and
WHEREAS, the Company desires to
grant to Optionee the option to purchase certain shares of its
stock under the terms of the Plan, which option is intended to
qualify as an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended
(“Code”);
NOW, THEREFORE, in consideration of
the premises and of the mutual agreements hereinafter set forth, it
is covenanted and agreed as follows:
1.
Grant Subject to the
Plan . This option is
granted under and is expressly subject to all the terms and
provisions of the Plan, and the terms of the Plan are incorporated
herein by reference. Optionee hereby acknowledges receipt of a copy
of the Plan and agrees to be bound by all the terms and provisions
of the Plan. Terms not defined herein shall have the meaning
ascribed thereto in the Plan. The Committee referred to in Section
5 of the Plan (“Committee”) has been appointed by the
Board of Directors, and designated by it, as the Committee to make
grants of options.
2.
Grant and Terms of Option . Pursuant to action of the
Committee, the Company grants to Optionee, effective _________,
20__ (“Date of Grant”), the option to purchase all or
any part of ___________ (________) shares of the common stock of
the Company (“Common Stock”), for a period of ten (10)
years (five (5) years in the case of a 10% shareholder, as
described in the Plan) from the Date of Grant, at the purchase
price of _____________ per share, which is the Fair Market Value of
such stock on the Date of Grant (110% of the Fair Market Value on
the Date of Grant in the case of a 10% shareholder, as described in
the Plan) (the “Option”); provided, however, that the
right to exercise this Option shall be, and is hereby, restricted
as follows:
(a) At
any time during the term of this Option on or after the Date of
Grant, the Option shall be exercisable for up to __% of the total
number of shares to which this Option relates, and, thereafter,
this Option shall become exercisable for an
additional __% of the total number
of shares to which this Option relates on each annual anniversary
of the Date of Grant on which the Optionee remains employed with
the Company (each, a “Vesting Date”), so that the
Option shall be exercisable for 100% of the total number of shares
to which this Option relates on the _______ annual anniversary of
the Date of Grant, provided that the Optionee continues to be
employed with the Company on the Date of Grant and each such annual
anniversary thereof and subject to all terms and conditions of this
Agreement and the Plan. In the event that Optionee’s
employment with the Company is terminated for any reason, whether
voluntarily or involuntarily, before any Vesting Date, the portion
of the Option that has not yet vested as of such date shall not
vest and shall be forfeited immediately, except to the extent
otherwise provided herein.
(b) Notwithstanding
the above, in the event of a Change in Control, as defined in the
Plan, Optionee may purchase 100% of the total number of shares to
which this Option relates.
(c) In
no event may the Option or any part thereof be exercised after the
expiration of ten (10) years (five (5) years in the case of a 10%
shareholder, as described in the Plan) from the Date of
Grant.
(d) The
purchase price of the shares subject to the Option may be paid for
(i) in cash, (ii) in the discretion of the Committee, by tender of
shares of Common Stock already owned by Optionee, or (iii) in the
discretion of the Committee, by a combination of methods of payment
specified in clauses (i) and (ii), all in accordance with Section 6
of the Plan.
(e) No
shares of Common Stock may be tendered in exercise of this Option
if such shares were acquired by the Optionee through the exercise
of an Incentive Stock Option unless (i) such shares have been held
by the Optionee for at least one year and (ii) at least two years
have elapsed since such prior Incentive Stock Option was
granted.
3.
Anti-Dilution Provisions . In the event that, during the
term of this Agreement, there is any change in the number of shares
of outstanding Common Stock of the Company by reason of stock
dividends, recapitalizations, mergers, consolidations, split-ups,
combinations or exchanges of shares and the like, the number of
shares covered by this Agreement and the price thereof may be
adjusted, to the same proportionate number of shares and price as
in this original Agreement.
4.
Investment Purpose and Other Restrictions on Transfer .
Optionee represents that, in the event of the e
