EXHIBIT 10.1
PROLIANCE INTERNATIONAL, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Agreement (this "Agreement") is made as of [date] (the "Date of
Grant"), by and between Proliance International, Inc., a Delaware corporation
(the "Company"), and [Grantee] (the "Optionee").
1. Grant of Stock Option. Subject to and upon the terms, conditions, and
restrictions set forth in this Agreement and in the Proliance
International, Inc. Equity Incentive Plan (the "Plan"), the Company hereby
grants to the Optionee as of the Date of Grant a stock option (the
"Option") to purchase [number] shares of Company common stock (the
"Optioned Shares"). The Option may be exercised from time to time in
accordance with the terms of this Agreement. The price at which the
Optioned Shares may be purchased pursuant to the Option will be $[price],
subject to adjustment as hereinafter provided (the "Option Price"). The
Option is intended to be a nonqualified stock option and will not be
treated as an "incentive stock option" within the meaning of that term
under Section 422 of the Internal Revenue Code, or any successor provision
thereto.
2. Term of Option. The term of the Option will commence on the Date of Grant
and, unless earlier terminated in accordance with Section 6 hereof, will
expire ten years from the Date of Grant.
3. Right to Exercise.
(a) Subject to Section 6 and Section 7 hereof, the Option will be
exercisable from time to time prior to the tenth anniversary of the
Date of Grant to the extent of 25% of the Optioned Shares on each of
the first four anniversaries of the Date of Grant.
(b) To the extent the Option is exercisable, it may be exercised in whole
or in part. The Optionee will be entitled to the privileges of
ownership with respect to Optioned Shares purchased and delivered to
the Optionee upon the exercise of all or part of the Option.
4. Option Nontransferable. The Option granted hereby will be neither
transferable nor assignable by the Optionee other than by will or by the
laws of descent and distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee, or in the event of his or her legal
incapacity, by his or her guardian or legal representative acting on behalf
of the Optionee in a fiduciary capacity under state or foreign law and
court supervision. In the event the Option is exercisable after the
Optionee's death as permitted by this Agreement, this Option may be
exercised by the Optionee's executor or administrator or by the distributee
or legatee to whom this Option was transferred by will or the laws of
descent and distribution.
5. Notice of Exercise; Payment.
(a) To the extent then exercisable, the Option may be exercised by written
notice to the Secretary of the Company stating the number of Optioned
Shares for which the Option is being exercised and the intended manner
of payment.
(b) Payment equal to the aggregate Option Price of the Optioned Shares for
which the Option is being exercised will be tendered in full with the
notice of exercise in cash in the form of currency or check or other
cash equivalent acceptable to the Company. The Optionee may also
tender the Option Price by (i) the actual or constructive transfer to
the Company of nonforfeitable, nonrestricted whole shares of the
Company's common stock ("Common Shares") that have been owned by the
Optionee for more than six months prior to the date of exercise or
(ii) any combination of the foregoing methods of payment, including a
partial tender in cash and a partial tender in nonforfeitable,
nonrestricted Common Shares. Nonforfeitable, nonrestricted Common
Shares that are transferred by the Optionee in payment of all or any
part of the Option Price will be valued on the basis of the last sales
price of the Common Shares on the principal national securities
exchange on which the Common Shares are traded or quoted (the "Market
Value Per Share") on the date the notice of exercise is received by
the Company (or if no sale of Common Shares was made on that date, on
the next preceding date on which there was a sale). Fractional Common
Shares may not be issued by the Company and any such fractional Common
Share will be eliminated by the Optionee paying the Company in cash an
amount necessary to round the fraction up to a full Common Share.
(c) If permitted by applicable law, the requirement of payment in cash
will be deemed satisfied if the Optionee makes arrangements that are
satisfactory to the Company with a broker to sell on the exercise date
a sufficient number of Optioned Shares that are being purchased
pursuant to the exercise, so that the net proceeds of the sale
transaction are at least equal to the amount of the aggregate Option
Price plus payment of any applicable withholding taxes, and pursuant
to which the broker undertakes to deliver to the Company the amount of
the aggregate Option Price plus payment of any applicable withholding
taxes on a date satisfactory to the Company, but not later than the
date on which the sale transaction will settle in the ordinary course
of business.
(d) As a further condition precedent to the exercise of the Option, the
Optionee will comply with all regulations and requirements of any
regulatory authority having control of, or supervision over, the
issuance of Common Shares and in connection therewith will execute any
documents that the Compensation Committee in its sole discretion deems
necessary
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or advisable. The date of the Optionee's written notice will be the
exercise date.
6. Termination of Agreement.
(a) Subject to Section 6(b), this Agreement and the Option granted hereby
will terminate automatically and without further notice on the
earliest of the following dates:
(i) subject to Section 6(a)(ii), three months after the Optionee's
employment by the Company or any subsidiary of the Company
terminates for any reason;
(ii) one year from the date of the Optionee's death if the Optionee
dies within the three-month period described in Section 6(a)(i)
or if the termination of the Optionee's employment with the
Company or any subsidiary of the Company terminates due to the
Optionee's death; or
(iii) ten years from the Date of Grant.
The Option will only be exercisable under this Section 6(a) to the extent
that it would have been exercisable by the Optionee on the date of the
termination of the Optionee's employment.
(b) Notwithstanding anything to the contrary herein, if upon the
Optionee's termination of employment the Optionee becomes a senior
management consultant to the Company and/or its subsidiaries under a
post-employment consulting arrangement, the Option will continue to
vest under its original vesting schedule set forth in Section 3(a),
and this Agreement and the Option will not terminate pursuant to
Section 6(a) until (i) if the Optionee permanently ceases to render
consulting services to the Company and/or its subsidiaries under such
post-employment consulting arrangement for any reason other than
cessation by reason of death, the 90th calendar day following the date
of such cessation of services and (ii) if the Optionee ceases to
render consulting services on account of his or her death, the date
that is one year after the 90th calendar day following the date of the
cessation of the Optionee's services; provided, however, that in no
event may this Option be exercised beyond, and the Option will
terminate upon, the earlier of (A) the date that is the fifth
anniversary of the date the Optionee terminates employment with the
Company and its subsidiaries and (B) the tenth anniversary of the Date
of Grant.
(c) For the purposes of this Agreement, the continuous employment of the
Optionee with the Company or a Subsidiary will not be deemed to have
been interrupted, and the Optionee will not be deemed to have ceased
to be an employee of the Company or a Subsidiary, by reason of the
transfer
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of his or her employment among the Company and its subsidiaries or a
leave of absence approved by the Company.
7. Acceleration of Option. Notwithstanding Section 3 hereof, the Option
granted hereby will become immediately exercisable in full in the event of
a Change in Control. For purposes of this Agreement, a "Change in Control"
will occur (a) upon the public announcement that any "person" (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of the stock of the Company) is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing 30% or more of the combined
voting power of the Company's then outstanding securities, (b) if, during
any period of two consecutive years, individuals who at the beginning of
such period constitute the Company's Board of Directors (the "Board"), and
any new director (other than a director designated by a person that has
entered into an agreement with the Company to effect a transaction
described in clause (a), (c) or (d) of this sentence) whose election by the
Board or nomination for election by the Company's stockholders was approved
by a vote of at least 2/3 of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute at least a majority thereof, (c) if the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than (i) a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 80% of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation
or (ii) a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no "person" (as defined
above) acquires more than 30% of the combined voting power of the Company's
then outstanding securities, or (d) if the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or substantially all of the
Company's assets.
8. No Employment Contract. Nothing contained in this Agreement will confer
upon the Optionee any right with respect to continuance of employment by
the Company or any of its subsidiaries, nor will it interfere in any way
with any right the Company or any of its subsidiaries would otherwise have
to terminate the employment or other service or to adjust the compensation
of the Optionee.
9. Taxes and Withholding. To the extent that the Company or any of its
subsidiaries is required to withhold federal, state, local or foreign taxes
in
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connection with the exercise of the Option, and the amounts available to
the Company or such subsidiary for such withholding are insufficient, it
will be a condition to the exercise of the Option that the Optionee makes
arrangements that are satisfactory to the Company or such subsidiary for
the payment thereof. The Optionee may elect to satisfy all or any part of
any such withholding obligation by (a) surrendering to the Company a
portion of the Optioned Shares that are issued or transferred to the
Optionee upon the exercise of the Option, and the Optioned Shares so
surrendered by the Optionee will be credited against any such withholding
obligation at the Market Value per Share of such shares on the date of such
surrender or (b) utilizing the broker assistance arrangement provided in
Section 5.
10. Compliance with Law. The Company will make reasonable efforts to comply
with all applicable federal and state securities laws; provided, however,
that notwithstanding any other provision of this Agreement, the Option will
not be exercisable if the exercise thereof would result in a violation of
any such law.
11. Adjustments. The Compensation Committee may make or provide for such
adjustments in the Option in light of any stock split, subdivision of
shares or other change in the Company's capital structure as provided in
the Plan. In the event of any such transaction or event, the Compensation
Committee, in its discretion, may provide in substitution for the Option
such alternative consideration as it may determine to be equitable and may
require in connection therewith the surrender of the Option.
12. Availability of Common Shares. The Company will at all times until the
expiration of the Option reserve and keep available, either in its treasury
or out of its authorized but unissued Common Shares, the full number of
Optioned Shares deliverable upon the exercise of the Option.
13. Amendments. Any amendment to the Plan will be deemed to be an amendment to
this Agreement to the extent that the amendment is applicable hereto;
provided, however, that no amendment will impair the rights of the Optionee
under this Agreement without the Optionee's consent.
14. Severability. In the event that one or more of the provisions of this
Agreement is invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated will be deemed to be separable
from the other provisions hereof, and the remaining provisions hereof will
continue to be valid and fully enforceable.
15. Relation to Plan. This Agreement is subject to the terms and conditions of
the Plan. In the event of any inconsistency between the provisions of this
Agreement and the Plan, the Plan as interpreted and construed by the
Compensation Committee will govern. Capitalized terms used herein without
definition will have the meanings assigned to them in the Plan. The
Compensation Committee acting pursuant to the Plan, as constituted from
time to time, will, except as
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expressly provided otherwise herein, have the right to determine any
questions which arise in connection with the Option or its exercise.
16. Successors and Assigns. Without limiting Section 4 hereof, the provisions
of this Agreement will inure to the benefit of, and be binding upon, the
successors, administrators, heirs, legal representatives and assigns of the
Optionee, and the successors and assigns of the Company.
17. Governing Law. The interpretation, performance and enforcement of this
Agreement will be governed by the laws of the State of Delaware, without
giving effect to the principles of conflict of laws thereof. Each party to
this Agreement hereby consents and submits himself, herself or itself to
the jurisdiction of the courts of the State of Delaware for the purposes of
any legal action or proceeding arising out of this Agreement.
18. Notices. Any notice to the Company provided for herein will be in writing
to the Company and any notice to the Optionee will be addressed to the
Optionee at his or her address on file with the Company. Except as
otherwise provided herein, any written notice will be deemed to be duly
given if and when delivered personally or sent by courier service,
registered mail or electronic means of communication, and addressed as
aforesaid. Any party may change the address to which notices are to be
given hereunder by notice to the other party as herein specified (provided
that for this purpose any mailed notice will be deemed given on the third
business day following deposit of the same in the mail).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer and Optionee has also executed this
Agreement in duplicate, as of the day and year first above written.
PROLIANCE INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
The undersigned Optionee hereby acknowledges receipt of an executed original of
this Stock Option Agreement and accepts the Option granted hereunder, subject to
the terms and conditions of the Plan and the terms and conditions set forth
herein.
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[Grantee]
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