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EXHIBIT 10.24
NONSTATUTORY STOCK OPTION AGREEMENT
AGREEMENT made as of the ____ day of _____, 19__, between NATCO GROUP INC.,
a Delaware corporation (the "Company" and ________________ ("Employee").
To carry out the purposes of the NATCO GROUP INC. EMPLOYEE STOCK INCENTIVE
PLAN (the "Plan"), by affording Employee the opportunity to purchase shares of
common stock of the Company ("Stock"), and in consideration of the mutual
agreements and other matters set forth herein and in the Plan, the Company and
Employee hereby agree as follows:
1. SURRENDER AND EXCHANGE OF PRIOR OPTION. Pursuant to a Nonstatutory Stock
Option Agreement between Employee and the Company dated JUNE 30,1998 (the "PRIOR
OPTION AGREEMENT"), Employee was granted an option (the "PRIOR OPTION") to
purchase a number of shares of Stock equal to the number listed in Paragraph 2
below under the Plan at an exercise price per share as indicated in the Prior
Option Agreement. Employee and the Company agree that the Prior Option Agreement
and the Prior Option shall be void and of no further force and effect and will
be surrendered and relinquished by Employee and canceled by the Company. In
exchange for the surrender, relinquishment and cancellation of the Prior Option,
the Company has granted Employee an option under the Plan which shall be
governed by the Plan and the terms and conditions set forth in this Agreement.
2. GRANT OF OPTION. The Company hereby irrevocably grants to Employee the right
and option ("Option") to purchase all or any part of an aggregate of 40,000
shares of Stock, on the terms and conditions set forth herein and in the Plan,
which Plan is incorporated herein by reference as a part of this Agreement. This
Option shall not be treated as an incentive stock option within the meaning of
section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code).
3. PURCHASE PRICE. The purchase price of Stock purchased pursuant to the
exercise of this Option shall be $8.81.
4. EXERCISE OF OPTION. Subject to the earlier expiration of this Option as
herein provided, this Option may be exercised, by written notice to the Company
at its principal executive office addressed to the attention of its Chief
Executive Officer, at any time and from time to time after the date of grant
hereof, but, except as otherwise provided below, this Option shall not be
exercisable for more than a percentage of the aggregate number of shares offered
by this Option determined by the number of full years from the date of the Prior
Option Agreement to the date of such exercise, in accordance with the following
schedule:
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PERCENTAGE OF SHARES
NUMBER OF FULL YEARS BEGINNING 6/30/98 THAT MAY BE PURCHASED
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Less than 1 year 0%
1 year 25%
2 years 50%
3 years 75%
4 years or more 100%
This Option may be exercised only while Employee remains an employee of the
Company and will terminate and cease to be exercisable upon Employee's
termination of employment with the Company, except that:
(a) If Employee's employment with the Company terminates by reason of
disability (within the meaning of section 22(e)(3) of the Code), this
Option may be exercised in full by Employee (or Employee's estate or the
person who acquires this Option by will or the laws of descent and
distribution or otherwise by reason of the death of Employee) at any time
during the period of one year following such termination.
(a) If Employee dies while in the employ of the Company, Employee's
estate, or the person who acquires this Option by will or the laws of
descent and distribution or otherwise by reason of the death of Employee,
may exercise this Option in full at any time during the period of one year
following the date of Employee's death.
(a) If Employee's employment with the Company terminates for any reason
other than as described in (a) or (b) above, unless Employee voluntarily
terminates such employment or such employment is terminated for cause, this
Option may be exercised by Employee at any time during the period of three
months following such termination, or by Employee's estate (or the person
who acquires this Option by will or the laws of descent and distribution or
otherwise by reason of the death of Employee) during a period of one year
following Employee's death if Employee dies during such three-month period,
but in each case only as to the number of shares Employee was entitled to
purchase hereunder upon exercise of this Option as of the date Employee's
employment so terminates. The Committee appointed by the Board of Directors
of the Company to administer the Plan (the "Committee") may, in its sole
discretion, advise Employee in writing, prior to a voluntary termination of
Employee's employment, that such termination will be treated for purposes
of this paragraph as an involuntary termination for a reason other than
cause. As used in this paragraph, the term "cause" shall mean Employee's
gross negligence or willful misconduct in performance of the duties of
Employee's employment, or Employee's final conviction of a felony or of a
misdemeanor involving moral turpitude.
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This Option shall not be exercisable in any event after the expiration of ten
years from the date of grant hereof. Except as provided in Paragraph 4, the
purchase price of shares as to which this Option is exercised shall be paid in
full at the time of exercise (a) in cash (including check, bank draft or money
order payable to the order of the Company), (b) by delivering to the Company
shares of Stock having a fair market value equal to the purchase price, (c) any
combination of cash or Stock, or (d) in a broker-financed "cashless exercise"
pursuant to the procedures established by the Committee. No fraction of a share
of Stock shall be issued by the Company upon exercise of an Option or accepted
by the Company in payment of the purchase price thereof, rather, Employee shall
provide a cash payment for such amount as is necessary to effect the issuance
and acceptance of only whole shares of Stock. Unless and until a certificate or
certificates representing such shares shall have been issued by the Company to
Employee, Employee (or the person permitted to exercise this Option in the event
of Employee's death) shall not be or have any of the rights or privileges of a
shareholder of the Company with respect to shares acquirable upon an exercise
of this Option.
5. WITHHOLDING OF TAX. To the extent that the exercise of this Option or the
disposition of shares of Stock acquired by exercise of this Option results in
compensation income to Employee for federal or state income tax purposes,
Employee shall deliver to the Company at the time of such exercise or
disposition such amount of money or shares of Stock as the Company may require
to meet its obligation under applicable tax laws or regulations, and, if
Employee fails to do so, the Company is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Employee any tax required to be
withheld by reason of such resulting compensation income. Upon an exercise of
this Option, the Company is further authorized in its discretion to satisfy any
such withholding requirement out of any cash or shares of Stock distributable to
Employee upon such exercise.
6. STATUS OF STOCK. Employee understands that at the time of the execution of
this Agreement the shares of Stock to be issued upon exercise of this Option
have not been registered under the Securities Act of 1933, as amended (the
"Act), or any state securities law, and that the Company does not currently
intend to effect any such registration. Until the shares of Stock acquirable
upon the exercise of the Option have been registered for issuance under the Act,
the Company will not issue such shares unless the holder of the Option provides
the Company with a written opinion of legal counsel, who shall be satisfactory
to the Company, addressed to the Company and satisfactory in form and substance
to the Company's counsel, to the effect that the proposed issuance of such
shares to such Option holder may be made without registration under the Act. In
the event exemption from registration under the Act is available upon an
exercise of this Option, Employee (or the person permitted to exercise this
Option in the event of Employee's death), if requested by the Company to do so,
will execute and deliver to the Company in writing an agreement containing such
provisions as the Company may require to assure compliance with applicable
securities laws.
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Employee agrees that the shares of Stock which Employee may acquire by
exercising this Option shall be acquired for investment without a view to
distribution, within the meaning of the Act, and shall not be sold, transferred,
assigned, pledged or hypothecated in the absence of an effective registration
statement for the shares under the Act and applicable state securities laws or
an applicable exemption from the registration requirements of the Act and any
applicable state securities laws. Employee also agrees that the shares of Stock
which Employee may acquire by exercising this Option will not be sold or
otherwise disposed of in any manner which would constitute a violation of any
applicable securities laws, whether federal or state.
In addition, Employee agrees (i) that the certificates representing the
shares of Stock purchased under this Option may bear such legend or legends as
the Committee deems appropriate in order to assure compliance with applicable
securities laws, (ii) that the Company may refuse to register the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the Company if such proposed transfer would in the opinion of counsel
satisfactory to the Company constitute a violation of any applicable securities
law and (iii) that the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the shares of Stock
purchased under this Option.
7. EMPLOYMENT RELATIONSHIP. For purposes of this Agreement Employee shall be
considered to be in the employment of the Company as long as Employee remains an
employee of either the Company, a parent or subsidiary corporation (as defined
in section 424 of the Code) of the Company, or a corporation or a parent or
subsidiary of such corporation assuming or substituting a new option for this
Option. Any question as to whether and when there has been a termination of such
employment, and the cause of such termination, shall be determined by the
Committee, and its determination shall be final.
8. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit
of any successors to the Company and all persons lawfully claiming under
Employee.
9. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Employee has executed
this Agreement, all as of the day and year first above written.
NATCO GROUP INC.
BY:
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TITLE:
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EMPLOYEE
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