EXHIBIT 10.46
INCENTIVE STOCK OPTION
AGREEMENT
CECO ENVIRONMENTAL CORP.
1997 STOCK OPTION
PLAN
THIS AGREEMENT is dated and made
effective as of June 21, 2006 (“ Effective Date
”) by and between CECO ENVIRONMENTAL CORP. a Delaware
corporation (the “ Company ”), and DENNIS W.
BLAZER (“ Optionee ”).
WITNESSETH:
WHEREAS, Optionee on the date hereof
is an officer of the Company or one of its Subsidiaries;
and
WHEREAS, the Company desires to
grant an incentive stock option to Optionee to purchase shares of
the Company’s Common Stock pursuant to the Company’s
1997 Stock Option Plan, as amended (the “ Plan
”); and
WHEREAS, the Stock Option Plan
Committee and Compensation Committee of the Company has authorized
the grant of an incentive stock option to Optionee and has
determined that, on the Effective Date, the Fair Market Value of
Option Stock of the Company is $7.30 per share.
NOW, THEREFORE, in consideration of
the premises and of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Grant of Option .
The Company hereby grants to Optionee as of the Effective Date the
right and option (the “ Option ”) to purchase as
many as fifteen thousand (15,000) shares of Option Stock
(“ Shares ”) at an exercise price of $7.30 per
share on the terms and conditions set forth herein and subject to
the terms and conditions of the Plan. This Option is intended to
qualify as an “incentive stock option” within the
meaning of Section 422, or any successor provision, of the
Internal Revenue Code of 1986, as amended (the “ Code
”), and the regulations thereunder.
All capitalized terms not defined in
this Agreement shall have the meaning set forth in the
Plan.
2. Duration and
Exercisability .
a. Vesting/Exercise Period .
The Option shall become exercisable as to portions of the Shares as
follows: (i) the Option shall not be exercisable with respect
to any of the Shares until June 21, 2007 (the “ First
Vesting Date ”); (ii) if Optionee has continuously
provided services to the Company or any Subsidiary of the Company
from the Effective Date through the First Vesting Date and has not
been Terminated (as hereafter defined) on or before the First
Vesting Date, then on the First Vesting Date the Option shall
become exercisable as to one-third of the Shares (5,000 Shares);
and (iii) thereafter, provided that Optionee continuously
provides services to the Company or any Subsidiary of the Company
and is not Terminated, upon each successive anniversary of the
First Vesting Date, the Option shall become exercisable as to an
additional one-third of the Shares (5,000 Shares); provided, that
the Option shall in no event ever become exercisable with respect
to more than 100% of the Shares. The Shares vesting under the
Option have been limited to the number of Shares allowed to conform
to the $100,000 limit set forth at Section 9(c) of the
Plan.
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b. Expiration. The Option
shall expire on June 21, 2016 (“ Expiration
Date”) and must be exercised, if at all, on or before the
earlier of the Expiration Date and any date on which the Option
terminated in accordance with the provisions of
Section 3.
c. Lapse Upon Expiration . To
the extent that this Option is not exercised prior to the
applicable expiration date set forth in Section 2(b) or
Section 3 of this Agreement, all rights of Optionee under this
Option shall thereupon be forfeited.
3. Termination
.
a. Termination for Any Reason
Other than Death, Disability or a Change of Control . If
Optionee is Terminated for any reason other than his death,
Disability or a Change of Control (both terms as hereafter
defined), this Option shall be exercisable only to the extent the
Option was exercisable on the date of Termination, but had not
previously been exercised, and shall expire on the earlier of
(i) the close of business three months after the Termination
Date (as hereafter defined) and (ii) the Expiration Date.
Notwithstanding the foregoing, if the Optionee is terminated for
Cause, then the Option shall terminate immediately on the
Optionee’s Termination Date.
b. Termination Because of Death
or Disability . If Optionee is Terminated because of his death
or his Disability (or Optionee dies within three (3) months
after a Termination other than because of his Disability or for
Cause), then this Option shall be exercisable by Optionee, or the
person or persons to whom Optionee’s rights under this Option
shall have passed by Optionee’s will or by the laws of
descent and distribution, only to the extent the Option was
exercisable on the date of Optionee’s Termination, but had
not previously been exercised, and shall expire on the earlier of:
(i) the close of business six months after Optionee’s
Termination Date and (ii) the Expiration Date.
c. Change of Control .
Notwithstanding the provisions of Section 2(a), upon a Change
of Control (and without regard for any Termination or absence
thereof), the Option shall be fully vested and exercisable by
Optionee. The provisions of Section 3(a) or 3(b) shall govern
such Option thereafter, as the case may be.
A “ Change of Control
” shall mean a sale, assignment or other transfer
(collectively, “ Transfer ”) of legal or
beneficial ownership of shares of the voting stock of the Company
(other than as security for a loan), representing more than
one-half of the votes of all such shares of stock then outstanding,
to one or more persons other than the owners of stock in the
Company or their affiliates or its Subsidiaries on the Effective
Date (collectively, the “ present owners ”). A
Change of Control will occur on the date that the present owners
cease to own more than one-half of the shares of the voting stock
of the Company then outstanding. For this purpose, an “
affiliate ” is an ancestor or lineal descendant of an
individual shareholder of the Company; the grantor, trustee or
beneficiary of a shareholder of the Company that is a trust; or any
person that directly, or indirectly controls, or is controlled by,
or is under common control with a shareholder of the
Company.
d. Definitions .
“ Termination ”
or “ Terminated ” means that Optionee has for
any reason ceased to provide services as an employee of the Company
or Subsidiary of the Company, except in the case of sick leave,
military leave, or any other leave of absence approved by the
Administrator, provided that such leave is for a period of not more
than ninety (90) days, or reinstatement upon the expiration
of
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such leave is guaranteed by contract or statute.
The Administrator shall have sole discretion to determine whether
Optionee has ceased to provide services and the effective date on
which Optionee ceased to provide services (the “
Termination Date ”).
“ Disability ”
means a permanent and total disability within the meaning of
Section 22(e)(3) of the Code (as provided under
Section 422(c)(6), or such applicable successor provision, of
the Code), as determined by the Administrator.
“ Cause ” means
that Optionee:
(a) shall have been convicted of any
felony or a crime involving fraud, theft, misappropriation,
dishonesty, or embezzlement;
(b) shall have committed
in
