Exhibit 10.4
KADANT INC.
AMENDED AND RESTATED NONQUALIFIED
STOCK OPTION PLAN
This Nonqualified Stock Option Plan
(the “Plan”) is intended to encourage ownership of
Common Stock (the “Common Stock”), of Kadant Inc.
(“Company”), by persons selected by the Board of
Directors (or a committee thereof) in its sole discretion,
including directors, executive officers, key employees and
consultants of the Company and its subsidiaries, and to provide
additional incentive for them to promote the success of the
business of the Company. The Plan is intended to be a nonstatutory
stock option plan.
|
2.
|
Effective
Date of the Plan
|
The Plan shall become effective when
adopted by the Board of Directors of the Company.
Subject to adjustment as provided in
Section 11, the total number of shares of Common Stock
reserved and available for issuance under the Plan and the
Company’s Incentive Stock Option Plan in the aggregate shall
be 720,000 shares. Shares to be issued upon the exercise of options
granted under the Plan may be either authorized but unissued shares
or shares held by the Company in its treasury. If any option
expires or terminates for any reason without having been exercised
in full, the unpurchased shares subject thereto shall again be
available for options thereafter to be granted.
The Plan will be administered by the
Board of Directors of the Company (the “Board”).
Subject to the provisions of the Plan, the Board shall have
complete authority, in its discretion, to make the following
determinations with respect to each option to be granted by the
Company: (a) the person to receive the option (the
“Optionee”); (b) the time of granting the option;
(c) the number of shares subject thereto; (d) the option
price; (e) the option period; (f) the terms and
conditions of options granted under the Plan (including terms and
conditions relating to events of merger, consolidation, dissolution
and liquidation, change of control, vesting, forfeiture,
restrictions, dividends and interest, if any, on deferred amounts);
(g) waive compliance by an optionee with any obligation to be
performed by him or her under an option; (h) waive any term or
condition of an option; (i) cancel an existing option in whole
or in part with the consent of an Optionee; (j) grant
replacement options; (k) accelerate the vesting or lapse of
any restrictions of any option; and (l) adopt the form of
instruments evidencing options under the Plan and change such forms
from time to time. In making such determinations, the Board may
take into account
1
the nature of the services rendered by the
Optionees, their present and potential contributions to the success
of the Company and/or one or more of its subsidiaries, and such
other factors as the Board in its discretion shall deem relevant.
Subject to the provisions of the Plan, the Board shall also have
complete authority to interpret the Plan, to prescribe, amend, and
rescind rules and regulations relating to it, to determine the
terms and provisions of the respective option agreements (which
need not be identical), and to make all other determinations
necessary or advisable for the administration of the Plan. Any
interpretation by the Board of the terms and provisions of the Plan
or any Award thereunder and the administration thereof, and all
action taken by the Board, shall be final, binding and conclusive
on all parties and any person claiming under or through any party.
No Director shall be liable for any action or determination made in
good faith. The Board may, to the full extent permitted by law,
delegate any or all of its responsibilities under the Plan to a
committee (the “Committee”) appointed by the Board and
consisting of two or more members of the Board, each of whom shall
be deemed a “disinterested person” within the meaning
of Rule 16b-3 (or any successor rule) of the Securities Exchange
Act of 1934 (the “Exchange Act”).
An option may be granted to any
person selected by the Board in its sole discretion.
|
6.
|
Time of
Granting Options
|
The granting of an option shall take
place at the time specified by the Board. Only if expressly so
provided by the Board shall the granting of an option be regarded
as taking place at the time when a written option agreement shall
have been duly executed and delivered by or on behalf of the
Company and the Optionee to whom such option shall be granted. The
agreement shall provide, among other things, that it does not
confer upon an Optionee any right to continue in the employ of the
Company and/or one or more of its subsidiaries or to continue as a
director or consultant of the Company, and that it does not
interfere in any way with the right of the Company or any such
subsidiary to terminate the employment of the Optionee at any time
if the Optionee is an employee, to remove the Optionee as a
director of the Company if the Optionee is a director, or to
terminate the services of the Optionee if the Optionee is a
consultant.
An option may become exercisable
immediately or in such installments, cumulative or noncumulative,
as the Board may determine.
An option may be exercised in
accordance with its terms by written notice of intent to exercise
the option, specifying the number of shares of stock with respect
to which the option is then being exercised. The notice shall be
accompanied by payment in the form of cash or shares of Common
Stock (the “Tendered Shares”) with a then current
market value equal to the option price of the shares to be
purchased; provided, however, that such Tendered Shares shall have
been acquired by the Optionee more than six months prior to the
date of exercise, unless such
2
requirement is waived in writing by the Company.
Against such payment the Company shall deliver or cause to be
delivered to the Optionee a certificate for the number of shares
then being purchased, registered in the name of the Optionee or
other person exercising the option. If any law or applicable
regulation of the Securities and Exchange Commission or other body
having jurisdiction in the premises shall require the Company or
the Optionee to take any action in connection with shares being
purchased upon exercise of the option, exercise of the option and
delivery of the certificate or certificates for such shares shall
be postponed until completion of the necessary action, which shall
be taken at the Company’s expense.
Except as may be authorized by the
Board, in its sole discretion, no Option may be transferred other
than by will or the laws of descent and distribution, and during a
Optionee’s lifetime an option requiring exercise may be
exercised only by him or her (or in the event of incapacity, the
person or persons properly appointed to act on his or her behalf).
The Board may, in its discretion, determine the extent to which
options granted to an Optionee shall be transferable, and such
provisions permitting or acknowledging transfer shall be set forth
in the written agreement evidencing the option executed and
delivered by or on behalf of the Company and the
Optionee.
|
10.
|
Vesting,
Restrictions and Termination of Options
|
The Board, in its sole discretion,
may determine the manner in which options shall vest, the rights of
the Company to repurchase the shares issued upon the exercise of
any option and the manner in which such rights shall lapse, and the
terms upon which any option granted shall terminate. The Board
shall have the right to accelerate the date of exercise of any
installment or to accelerate the lapse of the Company’s
repurchase rights. All of such terms shall be specified in a
written option agreement executed and delivered by or on behalf of
the Company and the Optionee to whom such option shall be
granted.
|
11.
|
Adjustments in the Event of Certain
Transactions
|
(a) In the event of a stock
dividend, stock split or combination of shares, or other
distribution with respect to holders of Common Stock other than
normal cash dividends, the Board will make (i) appropriate
adjustments to the maximum number of shares that may be delivered
under the Plan under Section 3 above, and
(ii) appropriate adjustments to the number and kind of shares
of stock or securities subject to Options then outstanding or
subsequently granted, any exercise prices relating to Options and
any other provisions of Awards affected by such change.
(b) In the event of any
recapitalization, merger or consolidation involving the Company,
any transaction in which the Company becomes a subsidiary of
another entity, any sale or other disposition of all or a
substantial portion of the assets of the Company or any similar
transaction, as determined by the Board, the Board in its
discretion may make appropriate adjustments to outstanding Options
to avoid distortion in the operation of the Plan.
3
In the event of a “Change in
Control” as defined in Section 12.2 or
Section 12.3, as applicable, the following provisions shall
apply, unless the agreement evidencing the Award otherwise provides
(by specific explicit reference to Section 12.2 and
Section 12.3 below). If a Change in Control occurs while any
Awards are outstanding, then, effective upon the Change in Control,
(i) each outstanding stock option or other stock-based Award
awarded under the Plan that was not previously exercisable and
vested shall become immediately exercisable in full and vested, and
will no longer be subject to a right of repurchase by the Company,
(ii) each outstanding restricted stock award or other
stock-based Award subject to restrictions and to the extent not
fully vested, shall be deemed to be fully vested, free of
restrictions and conditions and no longer subject to a right of
repurchase by the Company, and (iii) deferral limitations and
conditions that relate solely to the passage of time, continued
employment or affiliation will be waived and removed as to deferred
stock Awards and performance Awards; performance of other
conditions (other than conditions relating solely to the passage of
time, continued employme
