Exhibit 10.2
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
UNDER THE CONGOLEUM CORPORATION
1995 STOCK OPTION PLAN
Congoleum Corporation, a Delaware corporation (the "Company"),
hereby grants to ________________ (the "Optionee"), an employee of the Company,
an option (the "Option") to purchase from the Company up to, but not exceeding,
in the aggregate, ______ shares (the "Shares") of Class A Common Stock, par
value $.01 per share, of the Company ("Stock") at $____ per share (the "Option
Price"), subject to the following terms and conditions:
1. The Option is granted pursuant to the Congoleum Corporation 1995 Stock
Option Plan (the "Plan"), as established by certain resolutions adopted by
the Board of Directors and stockholders of the Company. By executing this
Agreement, the Optionee acknowledges that he or she has received a copy
of, and is familiar with the terms of, the Plan, which is incorporated
herein by reference. Any capitalized terms not defined herein shall have
the same meanings assigned to them in the Plan.
2. The Option shall not be treated as an "incentive stock option" within the
meaning of Section 422 of the Code.
3. (a) Subject to the terms of the Plan and the other terms of this Agreement
regarding the exercisability of the Option, the Option may be exercised
with respect to 20% of the Shares upon each anniversary of the date of
grant of the Option (February 1, 2003), commencing on the first
anniversary of the date of grant of the Option. Once available for
purchase in accordance with the foregoing, unpurchased Shares shall remain
subject to purchase until the Option terminates in accordance with the
terms of Sections 3(b), 3(c), 3(d) or 4 hereof.
(b) In the event of the Optionee's employment by the Company shall
terminate for any reason other than for cause, death, disability or
retirement, the Optionee may exercise the Option within one month after
the termination of employment, but only to the extent that the Optionee
may be entitled to do so at the date of termination of employment, except
as may otherwise be determined by the Committee. In the event of the
Optionee's employment by the Company shall terminate for cause, the Option
shall cease to be exercisable from and after the date of termination of
employment, except as may otherwise be determined by the Committee.
(c) In the event of the death of the Optionee (i) while an employee of the
Company or any Subsidiary or Affiliate of the Company, (ii) within three
months after termination of employment with the Company or any Subsidiary
or Affiliate of the Company because of retirement or (iii) within twelve
months after termination of such employment because of disability, the
Option may be exercised, notwithstanding any installment schedule
otherwise applicable to the Option, by the person or persons to whom the
Optionee's rights under the Option pass by will or applicable law or, if
no such person has such right, by his or her executors or administrators,
at any time, or from time to time, within twelve months after the
Optionee's death, but not later than ten years after the date of the
granting of the Option.
(d) In the event the Optionee's employment by the Company shall terminate
because of disability or retirement, the Optionee may exercise the Option,
notwithstanding any installment schedule otherwise applicable to the
Option, at any time, or from time to time, within three months after the
termination of employment because of retirement or within twelve months
after the termination of employment because of disability, but not later
than ten years after the date of the granting of the Option.
(e) The Option Price of the Shares as to which the Option shall be
exercised shall be paid to the Company at the time of exercise in (i)
cash, (ii) Stock already owned by the Optionee having a total fair market
value on the date of such exercise equal to the Option Price, or (iii) a
combination of cash and Stock having a total fair market value on the date
of such exercise equal to the Option Price. The Committee, in its sole
discretion, may also provide that the Option Price may be paid by
delivering a properly executed exercise notice in a form approved by the
Committee, together with irrevocable instructions to a broker to promptly
deliver to the Company, against receipt of the certificates representing
the shares of Stock issuable upon such exercise, the amount of the
applicable sale or loan proceeds to pay the Option Price.
4. The Option shall terminate and be of no force or effect with respect to
any Shares not previously purchased by the Optionee upon the expiration of
ten years following the date the Option was granted.
5. Subject to the limitations set forth herein and in the Plan, the Option
may be exercised by written notice mailed or delivered to Congoleum
Corporation, 0000 Xxxxxxxxxxxx Xxxx, X.X. Xxx 0000, Xxxxxxxxxxx, Xxx
Xxxxxx 00000-0000, Attention: Corporate Secretary, which notice shall (a)
state the number of Shares with respect to which the Option is being
exercised and (b) be accompanied by payment of the full amount of the
Option Price for the Shares being purchased as set forth in Section 3(e)
hereof. The Optionee shall not be or have any of the rights or privileges
of a stockholder of the Company in respect of any Shares unless and until
certificates representing such Shares shall have been issued or
transferred by the Company to the Optionee. The Company may require an
Optionee to pay, prior to the delivery of any Option Shares to which such
Optionee shall be entitled upon exercise of any Option, an amount equal to
the federal, state and local income taxes and other amounts required by
law to be withheld by the Company with respect to any Option.
Alternatively, the Optionee may authorize the Company to withhold from the
number of Option Shares he or she would otherwise receive upon exercise of
an Option, that number of Option Shares having a Fair Market Value equal
to the amount of such required tax.
6. The Optionee hereby represents and acknowledges that he or she is
acquiring the Option and the underlying Shares for his or her own account
for investment and not with a view to, or for sale in connection with, the
distribution of any interest therein or part thereof, provided that
nothing shall prohibit or restrict the sale of such Shares by the Optionee
in compliance with the Securities Act of 1933, as amended, and the rules
and regulations thereunder. If any law or regulation requires the Company
to take any action with respect to the Option or the Shares, the time for
delivery thereof, which would otherwise be as promptly as possible, shall
be postponed for the period of time necessary to take such action.
7. The Option shall not be transferable, other than under a qualified
domestic relations order (as defined under Section 414(p) of the Code) (a
"QDRO"), by will or by the laws of descent and distribution, and no
transfer under a QDRO, by will or by the laws of descent and distribution
shall be effective to bind the Company, unless the Committee shall have
been furnished with a copy of such QDRO, such will or such other evidence
as the Committee may deem necessary to establish the validity of the
transfer. During the lifetime of the Optionee, only the Optionee or his or
her guardian, custodian or legal representative may exercise the Option
and receive cash payments and deliveries of Shares of Stock pursuant to
the Option.
8. (a) Neither the existence of the Plan nor the existence of the Option
shall affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting the Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(b) In the event of any change in the Stock by reason of any stock
dividend, recapitalization, reorganization, merger, consolidation,
split-up, combination or exchange of shares, or any rights offering to
purchase Stock at a price substantially below fair market value, or of any
similar change affecting the Stock, the number and kind of Shares subject
to the Option and the Option Price per Share thereof shall be
appropriately adjusted consistent with such change in such manner as the
Committee may deem equitable to prevent substantial dilution or
enlargement of the rights granted to the Optionee hereunder. The Committee
shall give notice to the Optionee of any adjustment made pursuant to this
Section 8(b), and, upon notice, such adjustment shall be effective and
binding for all purposes of the Option and the Plan.
(c) Notwithstanding any other provision of the Option, in the event of a
Change in Control, the following rules shall apply:
i. The Option shall be accelerated immediately prior to or
concurrently with the occurrence of the Change in Control and
the Optionee shall have the right to exercise the Option
notwithstanding any installment schedule otherwise applicable
to the Option, at any time, or from time to time.
ii. The obligations of the Company under the Plan and this
Agreement shall be binding upon any successor corporation or
organization resulting from the merger, consolidation or other
reorganization of the Company and upon any successor
corporation or organization succeeding to substantially all of
the assets and business of the Company. The Company agrees
that it will make appropriate provisions for the preservation
of Optionee's rights under the Plan and this Agreement in any
agreement or plan which it may enter into or adopt to effect
any such merger, consolidation, reorganization or transfer of
assets.
iii. Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class, rights or warrants to
purchase shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or
property, or for labor or services, either upon direct sale or
upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company
convertible into such shares or other securities shall not
affect, and no adjustment by reason thereof shall be made with
respect to, the number of Shares subject to the Option.
iv. Neither the Plan nor any action taken thereunder, including
the grant of the Option, shall be construed as giving the
Optionee the right to be retained in the employ of the
Company, nor shall they interfere in any way with the right of
the Company to terminate the Optionee's employment at any
time.
Dated as of ________________
CONGOLEUM CORPORATION
By: ____________________________________
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
The Option has been accepted by
the undersigned, subject to the
terms and provisions of the Plan
and of this Award Agreement.
_________________________________
Optionee
