Exhibit 10.9
FORM OF NON-STATUTORY STOCK OPTION
AGREEMENT
THIS
NON-STATUTORY STOCK OPTION AGREEMENT is entered into and effective
as of this ____ day of ____________, ______ (the “Date
of Grant”), by and between Northern Technologies
International Corporation (the “Company”) and
----_________________ (the “Optionee”).
A. The
Company has adopted the Northern Technologies International
Corporation 2007 Stock Incentive Plan (the “Plan”)
authorizing the Board of Directors of the Company, or a committee
as provided for in the Plan (the Board or such a committee to be
referred to as the “Committee”), to grant non-statutory
stock options to employees (including, without limitation, officers
and directors who are also employees) of the Company or any
Subsidiary, and any non-employee directors, consultants, advisors
and independent contractors of the Company or any Subsidiary (as
defined in the Plan).
B. The
Company desires to give the Optionee an inducement to acquire a
proprietary interest in the Company and an added incentive to
advance the interests of the Company by granting to the Optionee an
option to purchase shares of common stock of the Company pursuant
to the Plan.
Accordingly,
the parties agree as follows:
1. Grant of
Option .
The
Company hereby grants to the Optionee the right, privilege, and
option (the “Option”) to purchase _______________
(______) shares (the “Option Shares”) of the
Company’s common stock, $0.02 par value (the “Common
Stock”), according to the terms and subject to the conditions
hereinafter set forth and as set forth in the Plan. The
Option is not intended to be an “incentive stock
option,” as that term is used in Section 422 of the Internal
Revenue Code of 1986, as amended (the
“Code”).
2. Option
Exercise Price .
The
per share price to be paid by Optionee in the event of an exercise
of the Option will be $______.
3. Duration
of Option and Time of Exercise .
3.1
Initial Period of Exercisability . The Option will
become exercisable with respect to the Option Shares
[immediately/in _____ installments]. [The following table
sets forth the initial dates of exercisability of each installment
and the number of Option Shares as to which this Option will become
exercisable on such dates:
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Exercisability
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Available for Exercise
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___________________
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_______
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___________________
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_______
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___________________
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_______
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___________________
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_______]
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[The foregoing rights to exercise
this Option will be cumulative with respect to the Option Shares
becoming exercisable on each such date.] In no event will
this Option be exercisable after, and this Option will become void
and expire as to all unexercised Option Shares at 5:00 p.m. Circle
Pines, Minnesota time on ______________________ (the “Time of
Termination”).
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3.2
Termination of Employment or Service .
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(a)
Termination Due to Death, Disability or Retirement .
In the event the Optionee’s employment or service
relationship with the Company and all Subsidiaries is terminated by
reason of death, Disability or Retirement, this Option will remain
exercisable, to the extent exercisable as of the date of such
termination, for a period of 12 months after such termination (but
in no event after the Time of Termination).
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(b)
Termination for Reasons Other Than Death, Disability or
Retirement . In the event that the Optionee’s
employment or service relationship with the Company and all
Subsidiaries is terminated for any reason other than death,
Disability or Retirement, or the Optionee is in the employ of or
perform services to a Subsidiary and the Subsidiary ceases to be a
Subsidiary of the Company (unless the Optionee continues in the
employ of or performs services to the Company or another
Subsidiary), all rights of the Optionee under the Plan and this
Agreement will immediately terminate without notice of any kind,
and this Option will no longer be exercisable; provided, however,
that if such termination is due to any reason other than
termination by the Company or any Subsidiary for
“cause” (as defined in the Plan), this Option will
remain exercisable to the extent exercisable as of such termination
for a period of three months after such termination (but in no
event after the Time of Termination).
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(c)
Breach of Employment, Service, Confidentiality, Non-Compete or
Non-Solicitation Agreements . Notwithstanding anything in
this Agreement to the contrary and in addition to the rights of the
Committee under Section 12.4 of the Plan, in the event that the
Optionee materially breaches the terms of any employment, service,
confidentiality, non-compete or non-solicitation agreement entered
into with the Company or any Subsidiary (including an employment,
service, confidentiality, non-compete or non-solicitation agreement
made in connection with the grant of the Option), whether such
breach occurs before or after termination of such
Participant’s employment or other service with the Company or
any Subsidiary, the Committee in its sole discretion may require
the Participant to surrender shares of Common Stock received, and
to disgorge any profits (however defined by the Committee), made or
realized by the Participant in connection with this Option or any
shares issued upon the exercise or vesting of this
Option.
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3.3
Change in Control .
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(a)
Impact of Change in Control . If a Change in Control
(as defined in the Plan) of the Company occurs, this Option will
become immediately exercisable in full and will remain exercisable
until the Time of Termination, regardless of whether the Optionee
remains in the employ or service of the Company or any
Subsidiary. In addition, if a Change in Control of the
Company occurs, the Committee, in its sole discretion and without
the consent of the Optionee, may determine that the Optionee will
receive, with respect to some or all of the Option Shares, as of
the effective date of any such Change in Control of the Company,
cash in an amount equal to the excess of the Fair Market Value (as
defined in the Plan) of such Option Shares immediately prior to the
effective date of such Change in Control of the Company over the
option exercise price per share of this Option.
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(b)
Limitation on Change in Control Payments .
Notwithstanding anything in this Section 3.3 to the contrary,
if, with respect to the Optionee, the acceleration of the vesting
of this Option or the payment of cash in exchange for all or part
of the Option Shares as provided above (which acceleration or
payment could be deemed a “payment” within the meaning
of Section 280G(b)(2) of the Code), together with any other
“payments” that the Optionee has the
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2
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right to receive from the Company
or any corporation that is a member of an “affiliated
group” (as defined in Section 1504(a) of the Code
without regard to Section 1504(b) of the Code) of which the
Company is a member, would constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Code),
then the “payments” to the Optionee as set forth herein
will be reduced to the largest amount as will result in no portion
of such “payments” being subject to the excise tax
imposed by Section 4999 of the Code; provided, that such reduction
shall be made only if the aggregate amount of the payments after
such reduction exceeds the difference between (A) the amount of
such payments absent such reduction minus (B) the aggregate amount
of the excise tax imposed under Section 4999 of the Code
attributable to any such excess parachute payments.
Notwithstanding the foregoing sentence, if the Optionee is subject
to a separate agreem
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