Exhibit 10(g)
CLEAN DIESEL TECHNOLOGIES, INC.
1994 INCENTIVE PLAN - - INCENTIVE STOCK OPTION AWARD AGREEMENT
INCENTIVE STOCK OPTION AWARD AGREEMENT dated as of [DATE] between Clean
Diesel Technologies, Inc., a Delaware corporation (the "Company")of 300 Atlantic
Street, Stamford Connecticut 06902 U.S.A., and {NAME] (the "Participant"), an
employee of the Company.
WHEREAS, the Company desires to afford to the Participant an opportunity to
purchase shares of the Company's Common Stock pursuant to the grant of an
incentive stock option award under the Company's 1994 Incentive Plan (the
"Plan") and the participant desires to obtain such opportunity;
NOW THEREFORE, the parties agree, as follows:
1. Option Grant. The Company grants to the Participant as of the date
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first written above (the "Grant Date") the right and option pursuant to Section
422 of the Internal Revenue Code ("this Option"), to purchase XXX (XXX) shares
of Common Stock of the Company, par value $0.05 per share ("the Stock") at the
exercise price per share of U.S. $XX.XX, subject, in all respects, to the terms
and conditions of the Plan and to the following terms and conditions.
2. Vesting. This Option shall only be first exercisable, in whole or in
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part, with respect to the shares optioned, as to 33 1/3% thereof, immediately on
the Grant Date, and, as to 66 2/3% and 100% thereof, after 5:00 p.m. on the day
preceding the first and second anniversaries, respectively, of the Grant Date.
Pursuant to and as defined in the Plan, however, this Option shall immediately
vest upon a Change of Control of the Company.
3. Term and Termination. (a) The term of this Option shall be a period
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commencing on the Grant Date and ending at 5:00 p.m. on the date preceding the
tenth anniversary thereof ("Expiration Date"). (b) Upon the termination of the
Participant's status as an employee of the Company on account of:
(i) reasons other than normal retirement, death, total disability and cause,
such portion of this option that has not then vested shall terminate and become
non-exercisable immediately but such portion of this option that has then vested
shall continue and become non-exercisable immediately at 5:00 p.m. upon a date
(in no event later than the Expiration Date) after such termination of the
Participant's status which is determined under the following table and
corresponds to the Participant's length of service with the Company:
Length of Service Time Within Which to Exercise
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Less than three (3) years One hundred eighty (180) days
Between three (3) and five (5) years Two (2) years
Between five (5) and seven (7) years Three (3) years
More than seven (7) years Five (5) years
Notwithstanding the foregoing, however, if there shall be a change of control of
the Company in which seventy five per cent (75%) or more of the capital stock or
assets of the Company shall have been acquired by a single person or a control
group, then the time within which to exercise this option shall be limited to
one hundred eighty (180) days following the Participant's change in status.
(ii) death, total disability or normal retirement, such portion of this option
that has not then vested shall terminate immediately but such portion of this
Option that has then vested may be exercised by the Participant or, pursuant to
and as defined in the Plan, the Participant's Beneficiary, at any time during
the period ending on the Expiration Date (provided that such option would have
Stock Option Agreement, [DATE]
been able to have been exercised according to its terms absent such death,
total disability or normal retirement); or
(iii) cause, in which case all options granted hereunder shall terminate and be
immediately nonexercisable.
(c) Notwithstanding the foregoing, where termination shall not have been for
cause, of which the Board shall be the sole judge, the Board may in its sole
discretion permit options hereunder to be exercised by the Participant at any
time during the period ending not later than the Expiration Date as the Board
shall agree, provided such option would have been able to have been exercised
according to its terms absent termination.
(d) "Normal Retirement" shall mean resignation of the Participant's status as an
employee of the Company or a subsidiary thereof on or after attaining age
sixty-five (65) or such earlier age as to which the Board shall consent. "Cause"
shall mean, in the sole judgement of the Board, conviction of the Participant
under, or a plea of guilty by the participant to any State or Federal felony
charge (or the equivalent thereof outside of the United States); any instance of
fraud, embezzlement, self-dealing, insider trading or similar malfeasance with
respect to the Company regardless of amount; substance or alcohol abuse; or
other conduct for which dismissal has been identified in any employee handbook,
or other writing, as a potential disciplinary measure.
4. Method of Exercise. This Option may be exercised only by one or more
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notices from time to time in writing of the Participant's intent to exercise
this Award, or a portion thereof, delivered to the Secretary or the Chief
Financial Officer of the Company, or their delegates, accompanied by the
Participant's check or a bank check in the amount of the exercise price, or, in
lieu thereof, by delivery to the Company of that number of shares of the Stock
equal in value (determined on the same basis as for the grant of Awards under
the Plan) to the exercise price and any required withholdings provided in
Section 5 below, or by surrendering to the Company of the shares exercised so
many as shall equal such value, unless the Participant has within a period of
six months previously exercised a Company stock option by delivering or
surrendering shares of the Stock.
5. Taxes. At the time of exercise of this Option, the Participant shall
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deliver to the Company, if required by the Company, a check payable to the
Company equal, in the sole opinion of the Company, to the applicable national,
state, provincial and local income or other taxes and other payroll related
items legally required to be withheld or stopped by reason of such exercise.
6. Securities Laws; Governing Law; Arbitration. The Stock may only be
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purchased if there is with respect to the Stock a registration statement or
qualification in effect under applicable U.S. or State securities laws or an
exemption therefrom. This Option is governed by Connecticut Law and any disputes
relating to this Option shall be determined in arbitration as provided in the
Plan.
7. Transferability; Disqualifying Dispositions. In order that this Option
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shall continue as an Incentive Stock Option, this Option may not be transferred
otherwise than by will or the laws of descent and distribution and may not be
exercised by any person other than the Participant during the Participant's
lifetime. In order that shares acquired by exercise hereunder shall not be the
subject of a disqualifying disposition and ineligible for the tax treatment
afforded under Section 421 of the Internal Revenue Code, the Participant shall
have been an employee of the Company at all times during the period beginning on
the Date of Grant and ending not later than the day three months before
exercise,
Stock Option Agreement [DATE]
and, (ii) the Participant shall hold such shares for a period which is at least
two years from the Date of Grant and one year from the transfer of such shares
to the Participant. Any transfer of such shares whatsoever by the Participant to
any person, including a nominee or a brokerage account for the benefit of the
Participant in the name of the Broker, prior to the expiration of the foregoing
two and one year periods may be treated by the Company as a disqualifying
disposition. The Participant shall notify the Board through the Secretary of any
disposition whatsoever of this option within ten (10) days of such disposition.
IN WITNESS WHEREOF, the Company and the Participant have each executed this
Agreement, all as of the day and year first above written.
Clean Diesel Technologies, Inc.
By:
(Vice) President