EXHIBIT 10-2
INCENTIVE STOCK OPTION AWARD AGREEMENT
PURSUANT TO THE
LEXINGTON PRECISION CORPORATION
2005 STOCK AWARD PLAN
Name of Option Holder:
Date of Grant:
Number of Shares:
Exercise Price per Share:
Expiration Date:
This INCENTIVE STOCK OPTION AWARD AGREEMENT (the "Award Agreement") is
made as of ____________, 20__ between Lexington Precision Corporation, a
Delaware corporation (the "Company"), and the above-named individual, an
employee of the Company or one of its Subsidiaries (the "Option Holder"), to
record the granting of an incentive stock option pursuant to the Company's 2005
Stock Award Plan (the "Plan"). Terms used herein that are defined in the Plan
shall have the meanings ascribed to them in the Plan. If there is any
inconsistency between the terms of this Award Agreement and the terms of the
Plan, the Plan's terms shall supersede and replace the conflicting terms herein.
1. Grant of Option. The Company hereby grants to the Option Holder,
subject to and pursuant to the terms and conditions of the Plan and this Award
Agreement, the option to purchase from the Company (this "Option") an aggregate
number of shares (the "Shares") of common stock of the Company, par value $0.25
per share (the "Common Stock"), set forth above at an exercise price per share
set forth above. Said exercise price is equal to the fair market value (110% of
fair market value in the case of a Ten Percent Shareholder) of the Company's
Common Stock on the date of grant of this Option. The parties intend this Option
to be treated as an incentive stock option under the Code.
2. Expiration Date. This Option shall expire on the expiration date set
forth above (the "Expiration Date") unless this Option expires earlier as
provided in Sections 5, 6 or 7 of this Award Agreement. The Expiration Date
shall not be more than 10 years (5 years in the case of a Ten Percent
Shareholder) from the date of grant.
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3. Exercisability. No Shares may be purchased under this Option and this
Option shall not be exercisable until the Option has vested pursuant to the
following vesting schedule. provided, in each case, any additional conditions
and performance goals set forth in Schedule I have been satisfied and the Option
Holder is still employed by the Company or one of its Subsidiaries:
Anniversary of Date of Grant Option Shares Vested
If the Option Holder's employment is terminated, Section 5 shall govern
the Option Holder's rights under this Option. Notwithstanding the foregoing or
any other provision of the Plan or this Award Agreement, this Option may not be
exercised after the Expiration Date.
4. Method of Exercising Options. The Option may be exercised from time to
time by written notice (in the form prescribed by the Company) delivered to and
received by the Company or its designated agent, which notice shall state the
election to exercise the Option and the number of whole Shares with respect to
which the Option is being exercised. Such notice must be accompanied by a check
payable to the Company or, subject to the Committee's approval, such other
consideration allowed pursuant to the Plan, in payment of the full Option Price
for the number of Shares purchased. As soon as practicable after it receives
such notice and payment, as applicable, and following receipt from the Option
Holder of payment for any taxes which the Company is required by law to withhold
by reason of such exercise, the Company will deliver to the Option Holder a
certificate or certificates for the Shares so purchased. The Committee, in its
sole discretion, may permit an Option Holder to exercise the Option pursuant to
a "cashless exercise" procedure (subject to securities law restrictions), or by
any other means the Committee determines is consistent with the Plan's purpose
and applicable law.
Upon the exercise of the Option Holder's right to purchase Shares under
this Option, the number of Shares subject to the Option shall be reduced on a
one-for-one basis.
5. Cancellation of Options.
(a) Expiration of Term. On the Expiration Date, the unexercised
Options shall be cancelled automatically.
(b) Termination of Employment. Except as provided in Sections 6 and
7 below, any unvested portion of the Option shall automatically be
cancelled upon termination of the Option Holder's employment with the
Company or any of its Subsidiaries for any reason. Any portion of the
Option vested at the time of termination may only be exercised by the
Option Holder at any time on or prior to the earlier of the Expiration
Date or the expiration of three (3) months after the date of termination.
Any vested portion of the Option that is not exercised within such time
period shall be automatically cancelled. A "termination" includes any
event which causes the Option
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Holder to lose his or her eligibility to participate in the Plan (e.g., an
individual is employed by a company that ceases to be a Subsidiary of the
Company).
6. Death of Option Holder. Upon the death of the Option Holder while the
Option Holder is an employee of the Company or a Subsidiary, any unvested
portion of the Option shall fully vest. The Option may be exercised by the
Option Holder's estate, or by a person who acquires the right to exercise the
Option by bequest or inheritance or by reason of the death of the Option Holder,
provided that such exercise occurs both on or before the Expiration Date and on
or before the first anniversary of the Option Holder's death. Any portion of the
Option not exercised within such time period will be cancelled.
7. Disability. Upon termination of the Option Holder's employment by
reason of the Option Holder's Disability, any unvested portion of the Option
shall fully vest. The Option may be exercised by the Option Holder, provided
that such exercise occurs both on or before the Expiration Date and on or before
the first anniversary of the Option Holder's Disability. Any portion of the
Option not exercised within such time period will be cancelled.
8. Non-Assignability. The Option shall not be assignable or transferable
by the Option Holder, except by will or by the laws of descent and distribution.
During the life of the Option Holder, the Option shall be exercisable only by
the Option Holder.
9. Rights as a Shareholder. The Option Holder shall have no rights as a
shareholder by reason of the Option unless and until certificates for shares of
Common Stock are issued to him or her.
10. Discretionary Plan; Employment. The Plan is discretionary in nature
and may be suspended or terminated by the Company at any time. With respect to
the Plan, (a) each grant of an Option is a one-time benefit which does not
create any contractual or other right to receive future grants of Options, or
benefits in lieu of Options; (b) all determinations with respect to any such
future grants, including, but not limited to, the times when the Option shall be
granted, the number of Shares subject to each Option, the Option Price, and the
times when each Option shall be exercisable, will be at the sole discretion of
the Company; (c) if the Option Holder is an Employee, the Option Holder's
participation in the Plan shall not create a right to further or continued
employment with the Option Holder's employer and shall not interfere with the
ability of the Option Holder's employer to terminate the Option Holder's
employment relationship at any time with or without cause; (d) the Option
Holder's participation in the Plan is voluntary; (e) the Option is not part of
normal and expected compensation for purposes of calculating any severance,
resignation, redundancy, end of service payment, bonuses, long-service awards,
pension or retirement benefits, or similar payments; (f) the future value of the
Shares underlying the Options is unknown and cannot be predicted with certainty;
(g) if the underlying Shares do not increase in value, the Option will have no
value; and (h) the ability of the Option Holder to sell Shares acquired pursuant
to this Option may be limited by applicable securities laws.
11. Effect of Plan. The Plan is hereby incorporated by reference into this
Award Agreement, and this Award Agreement is subject in all respects to the
provisions of the Plan, including without limitation the authority of the
Committee to adjust awards and to make
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interpretations and other determinations with respect to all matters relating to
this Award Agreement and the Plan.
12. Notice. Notices hereunder shall be in writing and if to the Company
shall be addressed to the Secretary of the Company at Lexington Precision
Corporation., 40 East 52nd Street, New York, NY 10022 or to such other person
and/or addresses the Company may provide by notice to Option Holder and if to
the Option Holder shall be addressed to the Option Holder at his or her address
as it appears on the Company's records.
13. Successors and Assigns. This Award Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company and, to the
extent provided in Section 6 hereof, to the heirs or legatees of the Option
Holder.
14. Grant/Exercise Subject to Applicable Regulatory Approvals. Any grant
of Options under the Plan is specifically conditioned on, and subject to, any
required regulatory approvals. If necessary approvals for the grant or exercise
are not obtained, the Options may be cancelled or rescinded, or they may expire,
as determined by the Company in its sole and absolute discretion. The Company
may restrict the exercise of any Option if the Shares issuable pursuant to the
Option have not yet been registered pursuant to the Securities Act of 1933, as
amended; provided, however, this limitation shall not apply during the six (6)
months immediately prior to the Expiration Date or if the Option Holder agrees
in writing that the Shares issuable upon the exercise will be restricted
securities and bear a restrictive legend.
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IN WITNESS WHEREOF, the Company and the Option Holder have caused this
Award Agreement to be executed on the date set forth opposite their respective
signatures, it being further understood that the date of grant may differ from
the date of signature.
Dated: ____________ LEXINGTON PRECISION CORPORATION
By: _____________________
Name:
Title:
Dated: ____________ OPTION HOLDER
_________________________
Name:
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SCHEDULE I VESTING CONDITIONS AND PERFORMANCE GOALS