Exhibit 10.2
LSB CORPORATION
2006 STOCK OPTION AND INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
Name of the Optionee:
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Date of Grant: Number of Option Shares:
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Expiration Date:[7 years from date of grant]
Option Exercise Price (Per Share):
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Pursuant to the LSB Corporation 2006 Stock Option and Incentive Plan (the
"Plan"), LSB Corporation (the "Company") hereby grants to the Optionee named
above (which Optionee is now a full-time employee of the Company or one or more
of the Company's Subsidiaries (hereinafter, a "Subsidiary") within the meaning
of Sections 422(a)(2) and 424(e)-(g) of the Internal Revenue Code of 1986, as
amended (the "Code")), as an incentive to promote the future success and growth
of the Company, an option (this "Stock Option") to purchase on or prior to the
Expiration Date specified above, all or any part of the number of shares of
common stock, par value $0.10 per share ("Common Stock"), of the Company
specified above (the "Option Shares"), at the Option Exercise Price per share
specified above, subject to the terms and conditions set forth herein and in the
Plan. This Stock Option is intended to qualify as an "incentive stock option"
under Section 422 of the Code. All capitalized terms in this instrument that are
not defined herein have the meanings given to them in the Plan.
1. Option Terms.
(a) Except as set forth below, and subject to the determination of the
Company in its sole discretion to accelerate the schedule on which this Stock
Option shall
LSB Corporation
Incentive Stock Option Agreement
become exercisable hereunder due to other circumstances, this Stock Option shall
be exercisable in accordance with the following schedule:
Percentage Option Shares Date Exercisable
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(b) In the event of a Change in Control of the Company, as defined in
Section 5(f) of the Plan, this Stock Option shall immediately become exercisable
in full, whether or not this Stock Option or any portion hereof is exercisable
at such time.
(c) This Stock Option shall continue to be exercisable at any time or times
prior to the Expiration Date provided above, subject to the provisions and
limitations contained herein and in the Plan.
(d) Notwithstanding any provision herein to the contrary, in no event may
the aggregate fair market value of Common Stock, determined as of the date
hereof, with respect to which incentive stock options, including this Stock
Option, is exercisable for the first time during any calendar year exceed
$100,000.
2. Exercise of Stock Option.
(a) The Optionee may exercise only those portions of this Stock Option that
have become exercisable hereunder and only at the times permitted hereunder and
under the Plan in the following manner. The Optionee shall give written notice
(the "Notice") to the Option Committee of the Company (as defined in the Plan)
of his or her election to purchase some or all of the shares purchasable at the
time of the Notice. Said Notice shall specify the number of Option Shares to be
purchased and shall be accompanied by (i)(A) payment therefore in cash or by
check in an amount equal to the aggregate option price for the number of shares
specified in the Notice (the "Total Option Price"), (B) actual or constructive
transfer to the Company of
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LSB Corporation
Incentive Stock Option Agreement
nonforfeitable, nonrestricted shares of Common Stock of the Company having a
fair market value, determined as provided in Section 5(d) of the Plan, equal to
or less than the Total Option Price, plus cash or certified check in an amount
equal to the excess, if any, of the Total Option Price over the fair market
value of such shares of Common Stock, or (C) a description of a "cashless
exercise" procedure acceptable to the Option Committee, whereby the Optionee
shall deliver an order to a registered broker-dealer or equivalent third party
to sell some or all of the Option Shares and to deliver enough of the proceeds
of such sale to the Company to pay the Total Option Price and any applicable
taxes required to be withheld upon such exercise of this Stock Option, and (ii)
such agreement, statement or other evidence as the Company may require in order
to satisfy itself that the issuance of the Option Shares being purchased
pursuant to such exercise and any subsequent resale thereof will be in
compliance with applicable laws and regulations, including without limitation
all applicable federal and state securities and banking laws and regulations.
(b) Certificates for the Option Shares so purchased will be issued to the
Optionee upon compliance to the satisfaction of the Company with all
requirements under applicable laws or regulations in connection with such
issuance. Until the Optionee shall have complied with the requirements hereof
and of the Plan, the Company shall be under no obligation to issue the Option
Shares subject to this Stock Option, and the determination of the Option
Committee as to such compliance shall be final and binding on the Optionee. The
Optionee shall not be deemed for any purpose to be the owner of any Option
Shares subject to this Stock Option until such Option Shares shall have been
issued in accordance with the foregoing provisions.
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Incentive Stock Option Agreement
(c) The minimum number of Option Shares with respect to which this Stock
Option may be exercised at any one time shall be 100 shares, or such lesser
number as is equal to the total number available at the time for purchase under
this Stock Option.
(d) Notwithstanding any other provision hereof or of the Plan, no portion
of this Stock Option shall be exercisable after the Expiration Date (which date
shall not be more than 7 years after the date hereof).
3. Termination of Employment.
(a) This Stock Option, as to any unexercised portion hereof, shall
terminate whenever the Optionee is for any reason no longer employed by the
Company or a Subsidiary (other than by reason of the Optionee's death);
provided, however, that any portion of this Stock Option that was exercisable as
of the date of such termination of employment may be exercised as to any shares
not theretofore purchased for a period of 90 days following such termination
date, except that if such termination of employment occurs by reason of the
Optionee's death or the Optionee's becoming permanently and totally disabled
(within the meaning of Section 22(e)(3) of the Code), this Stock Option may be
exercised (in the case of the Optionee's death, by his executors or
administrators) as to any portion of this Stock Option that was exercisable as
of the date of such termination and not theretofore purchased for a period of 12
months following such termination date.
(b) Notwithstanding any provision to the contrary contained herein, if the
Optionee's employment with the Company or a Subsidiary is terminated by the
Company or such Subsidiary for "cause" in accordance with the provisions of any
applicable employment or other written agreement or, in the absence of any such
agreement, if such termination occurs for "cause" in accordance with the
applicable provisions of the by-laws of the Company or such
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Incentive Stock Option Agreement
Subsidiary, as the case may be, or if the Company's Board of Directors has
otherwise determined that the Optionee has materially violated any obligation or
covenant to the Company or a Subsidiary that the Optionee was required to
fulfill or satisfy, then this Stock Option shall terminate and the Optionee
shall forfeit all of such portion of this Stock Option, if any, that remains
unexercised as of the date of such termination or such determination as the case
may be.
(c) No Stock Option will confer upon the Optionee any right to continued
employment by the Company or a Subsidiary, nor will it interfere in any way with
the Optionee's right or the Company's right to terminate or to otherwise modify
the terms of the Optionee's employment at any time.
4. Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Stock Option shall be subject to and governed by all the terms and
conditions of the Plan. A copy of the Plan is attached hereto and is
incorporated herein in its entirety by reference.
5. Transferability. This Stock Option is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution, and is
exercisable, during the Optionee's lifetime, only by the Optionee.
6. Adjustment Upon Changes in Capitalization.
(a) The shares of capital stock covered by this Stock Option are shares of
the Common Stock of the Company. If the shares of the Company's Common Stock as
a whole are increased, decreased, changed into or exchanged for a different
number or kind of shares or securities of the Company after the date of this
Stock Option, whether through merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split, combination of
shares, exchange of shares, change in corporate structure or the like, an
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Incentive Stock Option Agreement
appropriate and proportionate adjustment shall be made in the number and kind of
shares, and the per share exercise price of shares, subject to any unexercised
portions of this Stock Option. In the event of any such adjustment in this Stock
Option, the Optionee thereafter shall have the right to purchase the number of
shares under this Stock Option at the per share price, as so adjusted, which the
Optionee could purchase at the total purchase price applicable to the
unexercised portion of this Stock Option immediately prior to such adjustment.
(b) Adjustments under this Section 6 shall be made by the Option Committee
of the Company and such determinations shall be conclusive.
7. Effect of Certain Transactions. In the case of (i) the dissolution or
liquidation of the Company, (ii) a reorganization, merger or consolidation in
which the Company is acquired by another entity or in which the Company is not
the surviving corporation, or (iii) the sale of all or substantially all of the
assets of the Company to another corporation, this Stock Option shall terminate
as of the effective date of such dissolution, liquidation, reorganization,
merger, consolidation or sale, unless provision is made in such transaction for
the assumption of this Stock Option or the substitution of a new stock option
for this Stock Option by the successor corporation or parent thereof, with
appropriate adjustment as to the number and kind of shares and the per share
exercise price, as provided in Section 6 above. In the event of any such
termination, any unexercised portion of this Stock Option, whether or not then
exercisable, shall be exercisable in full for at least 15 days prior to the date
of such termination whether or not otherwise exercisable during such period;
provided, however, that in no event shall this Stock Option be exercisable after
the Expiration Date.
8. Notice of Disqualifying Disposition. The Optionee agrees to notify the
Company promptly in the event that he or she sells, transfers, exchanges or
otherwise disposes of any
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Incentive Stock Option Agreement
Option Shares issued upon the exercise of this Stock Option before the later of
(i) the second anniversary of the date of grant of this Stock Option and (ii)
the first anniversary of the date on which such Option Shares were issued upon
the exercise of this Stock Option.
9. Miscellaneous. Notice hereunder shall be mailed or delivered to the
Company at its principal place of business, and shall be mailed or delivered to
the Optionee at the address set forth below, or in either case at such other
address as one party may subsequently furnish to the other party in writing.
LSB CORPORATION
By: ______________________
Gerald T. Mulligan
President & CEO
As Authorized Representative of the
Plan's Option Committee
The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.
Dated:
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Optionee
Optionee's Address
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