Exhibit 99.2.5
HEADWATERS INCORPORATED
STOCK OPTION AGREEMENT
You have been granted an Option to purchase shares of common stock of
Headwaters Incorporated, a Delaware corporation ("Headwaters Incorporated"). The
terms and conditions of the Option are set forth in this cover sheet, in the
attachment and otherwise governed by, but not issued under the Headwaters
Incorporated 2002 Stock Incentive Plan (the "Plan").
Name of Optionee: Craig Hickman
Total Number of Shares Granted: 50,000
Exercise Price Per Share: $13.85
Date of Grant: 15 June 2002
Vesting Start Date: 15 June 2003
Vesting Schedule: This Option vests over a three-year
period as follows: One-third of the
Option vests on each of 15 June 2003,
15 June 2004, and 15 June 2005.
Expiration Date: 15 June 2012
By your signature and the signature of Headwaters Incorporated's representative
below, you and Headwaters Incorporated agree that this Option is granted under
and governed by the terms and conditions described in the attachment and in the
Plan.
OPTIONEE: Headwaters Incorporated
/s/ Craig Hickman By: /s/ Kirk A. Benson
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Craig Hickman Title: CEO
Print Name
HEADWATERS INCORPORATED
STOCK OPTION AGREEMENT
Tax Treatment This Option is intended to be a nonstatutory option,
and will not qualify as an incentive stock option
under section 422 of the Internal Revenue Code.
Vesting Your Option vests in installments, as provided in the
cover sheet of this Agreement. After your Service has
terminated for any reason, vesting of your Option
immediately stops.
Term Your Option will expire in any event at the close of
business at Headwaters Incorporated headquarters on
the day before the 10th anniversary of the Date of
Grant shown on the cover sheet (fifth anniversary for
a 10% owner if the Option is an ISO). It will expire
earlier if your Headwaters Incorporated service
terminates, as described below.
Regular Termination If your service as an employee, director, consultant
or advisor of Headwaters Incorporated (or any
subsidiary) terminates for any reason except death or
total and permanent disability, then your Option will
expire at the close of business at Headwaters
Incorporated headquarters three months after your
termination date.
Death If you die as an employee, director, consultant or
advisor of Headwaters Incorporated or one of its
subsidiaries, then your Option will expire at the
close of business at Headwaters Incorporated's
headquarters on the day before the anniversary of
your date of death. During that one-year period, your
estate or heirs may exercise your Option.
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Disability If your service as an employee, director, consultant
or advisor of Headwaters Incorporated (or any
subsidiary) terminates because of your total and
permanent disability, then your Option will expire at
the close of business at Headwaters Incorporated's
headquarters on the day before the six month
anniversary of your termination date.
"Total and permanent disability" means that you are
unable to engage in any substantial gainful activity
by reason of any medically determinable physical or
mental impairment that can be expected to result in
death or that has lasted, or can be expected to last,
for a continuous period of not less than 12 months.
Leaves of Absence For purposes of this Option, your service does not
terminate when you go on a military leave, a sick
leave or another bona fide leave of absence that was
approved by Headwaters Incorporated in writing.
However, your service will be treated as terminating
90 days after you went on leave, unless your right to
return to active work is guaranteed by law or by a
contract. Your service terminates in any event when
the approved leave ends, unless you immediately
return to active work.
Headwaters Incorporated determines which leaves count
for this purpose.
Restrictions Headwaters Incorporated will not permit you to
on Exercise exercise this Option if the issuance of shares at
that time would violate any law or regulation.
Notice of Exercise When you wish to exercise this Option, you must
notify Headwaters Incorporated by submitting the
"Notice of Exercise" form provided by Headwaters
Incorporated to the address given on the form by mail
or facsimile. Your notice must specify how many
shares you wish to purchase and how your shares
should be registered (in your name only or in your
and your spouse's names as community property or as
joint tenants with right of survivorship). The notice
will be effective when it is received by Headwaters
Incorporated, together with the exercise price.
If someone else wants to exercise this Option after
your death, that person must prove to Headwaters
Incorporated' satisfaction that he or she is entitled
to do so.
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Form of Payment When you submit your notice of exercise, you must
include payment of the Option price for the shares
you are purchasing. Payment may be made in one (or a
combination) of the following forms:
o Your personal check, a cashier's check or a
money order.
o Certificates for Headwaters Incorporated
stock that you have owned more than six
months, along with any forms needed to
effect a transfer of the shares to
Headwaters Incorporated. The value of the
shares, determined as of the effective date
of the Option exercise, will be applied to
the Option price. Instead of surrendering
shares of Headwaters Incorporated stock, you
may attest to ownership of those shares on a
form provided by the Company and have the
same number of shares subtracted from the
number of option shares issued to you.
Withholding Taxes You will not be allowed to exercise this Option
unless you make acceptable arrangements to pay any
withholding taxes that may be due as a result of the
Option exercise.
Restrictions on Resale By signing this Agreement, you agree not to sell any
Option shares at a time when applicable laws or
Headwaters Incorporated policies prohibit a sale.
This restriction will apply as long as you are an
employee, director, consultant or advisor of
Headwaters Incorporated or a subsidiary of Headwaters
Incorporated.
Transfer of Option Prior to your death, only you may exercise this
Option. You cannot transfer or assign this Option.
For instance, you may not sell this Option or use it
as security for a loan. If you attempt to do any of
these things, this Option will immediately become
invalid. You may, however, dispose of this Option in
your will or a written beneficiary designation. Such
a designation must be filed with Headwaters
Incorporated on the proper form and will be
recognized only if it is received at Headwaters
Incorporated headquarters before your death.
Regardless of any marital property settlement
agreement, Headwaters Incorporated is not obligated
to honor a notice of exercise from your former
spouse, nor is Headwaters Incorporated obligated to
recognize your former spouse's interest in your
Option in any other way.
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Retention Rights Your Option or this Agreement do not give you the
right to be retained by Headwaters Incorporated or
its subsidiaries in any capacity. Headwaters
Incorporated and its subsidiaries reserve the right
to terminate your service at any time, with or
without cause.
Stockholder Rights You, or your estate or heirs, have no rights as a
stockholder of Headwaters Incorporated until a
certificate for your Option shares has been issued.
No adjustments are made for dividends or other rights
if the applicable record date occurs before your
stock certificate is issued, except as described in
the Plan.
Adjustments In the event of a stock split, stock dividend or a
similar change in Headwaters Incorporated stock, the
number of shares covered by this Option and the
exercise price per share may be adjusted pursuant to
the Plan.
Applicable Law This Agreement will be interpreted and enforced under
the laws of the State of Delaware.
The Plan and Other This Option is not issued under the Plan. However,
Agreements the terms and conditions of the Option will be the
same as the terms and conditions contained in the
Plan. The text of the Headwaters Incorporated 2002
Stock Incentive Plan is incorporated in this
Agreement by reference. This Agreement and the Plan
constitute the entire understanding between you and
Headwaters Incorporated regarding this Option. Any
prior agreements, commitments or negotiations
concerning this Option are superseded.
By signing the cover sheet of this Agreement, you agree to all
of the terms and conditions described above and in the Plan.
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