Exhibit 10.24
ISO/NSO
TO BE PRINTED ON COMPANY LETTERHEAD
[Date]
[Name] [Street]
[City, State]
Dear [Employee's Name]:
Stanley Furniture Company, Inc. (the "Company") grants you this stock
option pursuant to its 2000 Incentive Compensation Plan (the "Plan").
This Agreement incorporates the terms of the Plan and in the case of
any conflict between the Plan and this Agreement, the terms of the Plan will
control.
1. Option. The Company grants you an incentive stock option (the "ISO")
to purchase from the Company ________ shares of common stock of the Company
("Company Stock"), at $________ per share. The Company additionally grants you a
nonstatutory stock option (the "NSO") to purchase from the Company ________
shares of Company Stock at $ ________ per share. This option price is the fair
market value of Company Stock on ________________ (the "Grant Date"). The ISO
and the NSO will be referred to collectively as the Option.
(a) The shares covered by the ISO shall vest, and shall be
exercisable, under the following schedule:
---------------------- ----------------------------------------------
Number of Shares That May Be Exercised
Date (Vested Portion of Option)
--------------------- -----------------------------------------------
[Date] [maximum allowable # up to 20%
of Total ISO Shares Granted)
[Date] [maximum allowable # up to 40%
of Total ISO Shares Granted)
[Date] [maximum allowable # up to 60%
of Total ISO Shares Granted)
[Date] [maximum allowable # up to 80%
of Total ISO Shares Granted)
[Date] [maximum allowable # up to 100%
of Total ISO Shares Granted)
---------------------- ----------------------------------------------
(b) The shares covered by the NSO shall vest, and shall be
exercisable, under the following schedule:
---------------------- ----------------------------------------------
Number of Shares That May Be Exercised
Date (Vested Portion of Option)
---------------------- ----------------------------------------------
[Date] [20% of Total Shares Granted
Minus ISO Shares Vested]
[Date] [40% of Total Shares Granted
Minus ISO Shares Vested]
[Date] [60% of Total Shares Granted
Minus ISO Shares Vested]
[Date] [80% of Total Shares Granted
Minus ISO Shares Vested]
[Date] [100% of Total Shares Granted
Minus ISO Shares Vested]
----------------------- ---------------------------------------------
(c) Subject to the limitations set forth in this letter and in
the Plan, you may exercise the exercisable portion of the Option in
whole or in part at any time, or from time to time, from the date of
this letter until the first to occur of: (i) 10 years from the Grant
Date, (ii) three months from the date on which your employment with the
Company (including its parent and subsidiary corporations) terminates
for any reason other than your permanent disability or your death, or
(iii) one year from the date on which your employment with the Company
(including its parent and subsidiary corporations) terminates on
account of your death or your permanent disability (as determined by
the Committee). In no event may the Option be exercised after the tenth
anniversary of the Grant Date.
(d) Except as provided in Section 4 with respect to the NSO,
the Option may be exercised during your lifetime only by you. If you
die while you are in the employ of the Company or a parent or
subsidiary corporation and at a time when you hold any part of the
Option that is fully vested and exercisable, then the person to whom
your rights under the Option shall have passed by will or by the laws
of descent and distribution may exercise the Option.
(e) You must be employed by the Company (or a parent or
subsidiary corporation) on the relevant date for any shares to vest. If
your employment with the Company (or a parent or subsidiary
corporation) terminates, you will forfeit any unvested shares.
(f) Notwithstanding the provisions of subsection (a) and (b),
your Option will be fully vested and exercisable in the event of a
Change in Control as defined in the Plan or upon your death or
Disability as defined in the Plan, if you are employed by the Company
on the relevant date.
2. Limitation on Incentive Stock Option. The aggregate fair market
value (determined at the time the options are granted) of the stock with respect
to which the ISO granted to you is exercisable for the first time during a
calendar year may not exceed $100,000 (the "Limitation Amount"). The ISO granted
under this letter, the Plan and all other plans of the Company and any parent
and subsidiary corporations are aggregated for purposes of the Limitation
Amount. The portion of an Option that fails to qualify as an ISO in a calendar
year because of the Limitation Amount shall be treated as a NSO that does not
receive special tax treatment under Code Section 422.
3. Payment For Option. Any person entitled to exercise the Option may
do so by giving written notice of the exercise to the Company, stating the
number of shares that he is purchasing and transmitting the exercise price in
cash.
4. Transferability. The Option is not transferable by you except by
will or by the laws of descent and distribution, and is exercisable only by you
during your lifetime, except that the vested portion of the NSO is transferable
during your lifetime subject to the following conditions:
(i) Transfers may be made only to the following individuals
and entities: (x) your spouse, child(ren), step-child(ren), grandchild(ren), or
step-grandchild(ren), including relationships that arise from legal adoption
("Immediate Family Members"); (y) a trust or trusts for the exclusive benefit of
any one or more of your Immediate Family Members; or (z) a partnership, limited
liability company or other entity the only partners, members, interest holders
of which are you, or are among your Immediate Family Members;
(ii) There may be no consideration for the transfer;
(iii) You must have a fully vested right, as of the date of
the transfer, to exercise that portion of the NSO that is transferred;
(iv) There may be no subsequent transfer of the portion of the
NSO being transferred except by will or the laws of descent or distribution;
(v) Following transfer, the NSO will remain subject to the
same terms and conditions as were applicable immediately before the transfer,
including conditions under which the NSO may terminate prior to expiration;
except that (1) the transferee may deliver the NSO exercise notice and payment
of the exercise price with respect to that portion of the NSO that has been
transferred, and (2) the right to consent to modification or amendment of only
that portion of the NSO which has not been transferred will remain with you,
while the right to consent to modification or amendment of the remainder of the
NSO will rest solely with the transferee;
(vi) You will remain responsible for the payment of Applicable
Withholding Taxes as described in Section 7, notwithstanding any transfer of the
NSO. In the event you fail to pay or provide for the Applicable Withholding
Taxes, the transferee may direct the Company to withhold sufficient shares from
those that would otherwise be transferable to the transferee in order to pay
such taxes.
(vii) Written notice of any transfer must be delivered to the
Company at the address specified in Section 6.
Your estate may transfer the NSO to the beneficiaries of your estate,
subject to the limitations set forth in subsections (i) through (vii) above.
5. Adjustments. If the number of outstanding shares of Company Stock is
increased or decreased as a result of a stock dividend, stock split or
combination of shares, recapitalization, merger in which the Company is the
surviving corporation, or other change in the capitalization, the number and
kind of shares with respect to which you have an unexercised Option and the
Option price shall be appropriately adjusted by the Committee, whose
determination shall be binding.
6. Exercise and Notices. To exercise your Option, you must deliver to
the [Company Treasurer or Similar Corporate Officer] of the Company written
notice, signed by you, stating the number of shares you have elected to
purchase, and payment to the Company as described in paragraph 3. Any notice to
be given under the terms of this letter shall be addressed to the [Company
Treasurer or Similar Corporate Officer] at Stanley Furniture Company, Inc., 1641
Fairystone Park Highway, Stanleytown, Virginia 24168. Any notice to be given to
you shall be given to you or your personal representative, legatee or
distributee, and shall be addressed to him or her at the address set forth above
or your last known address at the time notice is sent. Notices shall be deemed
to have been duly given if mailed first class, postage prepaid, addressed as
above.
7. Withholding. By signing this letter, you agree to make arrangements
satisfactory to the Company to comply with any income tax withholding
requirements that may apply upon the exercise of the Option or the disposition
of Company Stock received upon the exercise of the Option. The Company agrees to
allow you to pay the Applicable Withholding Taxes (as defined in the Plan) (i)
with cash, (ii) by delivery of Mature Shares (as defined in the Plan), or (iii)
by having the Company retain the number of shares of Company Stock that will
satisfy all or a specified portion of the Applicable Withholding Taxes.
8. Continuation of Employee of the Company. Neither the Plan nor the
Option confers upon you any right to continue as an employee of the Company or
limits in any respect the right of the Company to terminate your employment.
9. Delivery of Certificate. The Company may delay delivery of the
certificate for shares purchased pursuant to the exercise of an Option until (i)
the admission of such shares to listing on any stock exchange on which the
Company Stock may then be listed, (ii) receipt of any required representation by
you or completion of any registration or other qualification of such shares
under any state or federal law or regulation that the Company's counsel shall
determine as necessary or advisable, and (iii) receipt by the Company of advice
by counsel that all applicable legal requirements have been complied with.
STANLEY FURNITURE COMPANY, INC.
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