Exhibit 10.16
This
translation is an informal Dutch translation of the English Stock
Option Agreement. The original English text remains for all
purposes the determining text and in case of discrepancy between
the Dutch translation and the original English text, the English
formulation will prevail.
GRACO INC. STOCK INCENTIVE
PLAN
STOCK OPTION AGREEMENT
(BELGIUM)
THIS AGREEMENT , made this _____ day of ________, 2____, by
and between Graco Inc., a corporation organized under the laws of
the State of Minnesota, USA (the “Company”), and
, an employee of Graco
NV a company organized under the laws of Belgium which is a
subsidiary of the Company (the “Employee”).
WITNESSETH
THAT:
WHEREAS , the Company pursuant to the Graco Inc. Stock
Incentive Plan (the “Plan”) wishes to grant this stock
option to Employee;
WHEREAS , by delivery of this Agreement, the Company has
offered this stock option to Employee on the date set forth in the
first paragraph of this Agreement (the “Offer
Date”);
NOW THEREFORE , in consideration of the premises and of the
mutual covenants herein contained, the parties agree as
follows:
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The Company
grants to Employee, the right and option (the “Option”)
to purchase all or any part of an aggregate of
shares of Common Stock of the Company, par value USD$1.00 per
share, at the price of USD$
per share, on the terms and conditions set forth herein.
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2.
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Duration and
Exercisability
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A.
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This Option may
not be exercised by Employee until the expiration of one (1) year
from the Offer Date, and this Option shall in all events terminate
ten (10) years after the Offer Date. During the first year from the
Offer Date, no portion of this Option may be exercised. Thereafter
this Option shall become exercisable in four cumulative
installments of 25% as follows:
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Vesting
Date
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Portion of
Option Exercisable
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One Year after
Offer Date
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25%
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Two Years after
Offer Date
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50%
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Three Years after
Offer Date
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75%
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Four Years after
Offer Date
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100%
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In the event
that Employee does not purchase in any one year the full number of
shares of Common Stock of the Company to which he/she is entitled
under this Option, he/she may, subject to the terms and conditions
of Section 3 hereof, purchase such shares of Common Stock in any
subsequent year during the term of this Option.
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B.
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During the
lifetime of the Employee, the Option shall be exercisable only by
him/her and shall not be assignable or transferable by him/her
otherwise than by will or the laws of descent and
distribution.
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C.
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Under no
circumstances may the Option granted by this Agreement be exercised
after the term of the Option expires.
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3.
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Effect of
Termination of Employment
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A.
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If
Employee’s employment terminates for any reason other than
Employee’s gross and willful misconduct, death, retirement
(as defined in Section 3D), or disability (as defined in Section
3D), Employee shall have the right to exercise that portion of the
Option exercisable upon the date of termination of employment at
any time within the period beginning on the day after termination
of employment and ending at 5:00 p.m. Central Time thirty (30) days
later.
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B.
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If
Employee’s employment terminates by reason of
Employee’s gross and willful misconduct during employment,
including, but not limited to, wrongful appropriation of Company
funds, serious violations of Company policy, breach of fiduciary
duty or the conviction of a felony, the unexercised portion of the
Option shall terminate as of the time of the misconduct. If the
Company determines subsequent to the termination of
Employee’s employment for whatever reason, that Employee
engaged in conduct during employment that would constitute gross
and willful misconduct justifying termination, the Option shall
terminate as of the time of such misconduct. Furthermore, if the
Option is exercised in whole or in part and the Company thereafter
determines that Employee engaged in gross and willful misconduct
during employment which would have justified termination at any
time prior to the date of such exercise, the Option shall be deemed
to have terminated as of the time of the misconduct and the Company
may elect to rescind the Option exercise.
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C.
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If Employee
shall die while employed by the Company or an affiliate or within
thirty (30) days after a termination of employment which meets the
criteria of Section 3A, and shall not have fully exercised the
Option, all shares remaining under the Option shall become
immediately exercisable. The executor(s) or administrator(s) of the
Employee’s estate, or any person(s) to whom the Option was
transferred by will or the applicable laws of distribution and
descent, may exercise the remaining shares at any time during a
period beginning on the day after the date of Employee’s
death and ending at 5:00 p.m. Central Time on the anniversary of
death one (1) year later.
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D.
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If
Employee’s termination of employment is due to retirement or
disability, all shares remaining under the Option shall become
immediately exercisable. Employee shall be deemed to have retired
if the termination of employment occurs for reasons other than the
Employee’s gross and willful misconduct, death, or disability
after Employee (i) has attained age 55 and 10 years of service with
the Company or an affiliate, or (ii) has attained age 65. Employee
shall be deemed to be disabled if the termination of employment
occurs because Employee is unable to do the material and
substantial duties of the Employee’s occupation because of an
injury or illness, has received appropriate evaluation and
treatment by a physician for such injury or illness, and incurs a
loss of earnings from actual work directly resulting from such
injury or illness of more than 80% of the Employee’s indexed
pre-disability monthly earnings. Employee may exercise the shares
remaining unexercised at any time during a period beginning on the
day after the date of Employee’s termination of employment
and ending at 5:00 p.m. Central Time three (3) years later. If
Employee should die during this three (3) year period, the
executor(s) or administrator(s) of the Employee’s estate, or
any person(s) to whom the Option was transferred by will or the
applicable laws of distribution and descent may exercise the
unexercised portion of the Option at any time during a period
beginning the day after the date of Employee’s death and
ending at 5:00 p.m. Central Time on the anniversary of death one
(1) year later.
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E.
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Notwithstanding
anything to the contrary contained in this Section 3, if the
Employee’s employment is terminated by retirement (as defined
in Section 3D) and Employee has not given the Company written
notice to his/her immediate supervisor and the Chief Executive
Officer, of Employee’s intention to retire not less than six
(6) months prior to the date of his/her retirement, then in such
event, for purposes of this Agreement only, said termination of
employment shall be deemed to be not a retirement but a termination
subject to the provisions of Section 3A, provided, however,
that in the event that the Chief Executive Officer determines that
said termination of employment without six (6) months prior written
notice is in the best interests of the Company, such termination
shall be deemed to be a retirement and shall be subject to Section
3D.
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F.
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In the event
the Option is exercised by the executors, administrators, legatees,
or distributees of the estate of a deceased optionee, the Company
shall be under no obligation to issue stock thereunder unless and
until the Company is satisfied that the person(s) exercising the
Option is the duly appointed legal representative of the deceased
optionee’s estate or the proper legatee or distributee
thereof.
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A.
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Employee or
other proper party may exercise the Option only by delivering
within the term of the Option written notice to the Company at its
principal office in Minneapolis, Minnesota, stating the number of
shares as to which the Option is being exercised and, except as
provided in Sections 4B(2) and 4C, accompanied by payment-in-full
of the Option price for all shares designated in the
notice.
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B.
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The Employee
may, at Employee’s election, pay the Option price as
follows:
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(1)
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by cash or
check (bank check, certified check, or personal check)
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(2)
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by delivering
to the Company for cancellation, shares of Common Stock of the
Company which have been held by the Employee for not less than six
(6) months with a fair market value equal to the Option
price.
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For these
purposes, the fair market value of the Company’s Common Stock
shall be the closing price of the Common Stock on the day
immediately preceding the date of exercise on the New York Stock
Exchange (the “NYSE”) or on the principal national
securi
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