Exhibit 10.2

 

Gardner

                  Denver      

Gardner Denver, Inc.

Nonqualified Stock Option Agreement

 

RECIPIENT:   SHARES:   PURCHASE PRICE:    GRANT DATE:    EXPIRATION DATE:

This Nonqualified Stock Option Agreement (“Agreement”) is made between Gardner
Denver, Inc., a Delaware corporation (the “Company”), and the undersigned, an
employee of the Company or a subsidiary of the Company (the “Employee”).

WITNESSETH:

WHEREAS, the Management Development and Compensation Committee of the Board of
Directors of the Company (the “Committee”) desires to benefit the Company by
increasing motivation on the part of the Employee by creating an incentive to
remain employed by the Company and to work to the very best of the Employee’s
abilities; and

WHEREAS, to further this purpose, the Company desires to make a Nonqualified
Stock Option Award to the Employee under the terms of the Gardner Denver, Inc.
Long-Term Incentive Plan, as amended and restated (the “Plan”); and

WHEREAS, pursuant to official action of the Committee on the grant date
specified above (“Grant Date”), the Company undertook to grant the Award
contemplated by this Agreement to the Employee.

NOW, THEREFORE, in consideration of the premises, and of the mutual agreements
hereinafter set forth, it is covenanted and agreed as follows:

1. General Conditions. Pursuant to the terms and provisions of the Plan, which
terms and provisions are incorporated herein by reference, the Company grants to
the Employee a Nonqualified Stock Option to purchase the number of shares of the
Company’s Common Stock, par value $0.01 per share (the “Shares”), specified
above, at the Purchase Price specified above, subject to the following
conditions:

 

  (a) Defined Terms. Terms which are not specifically defined herein shall have
the meanings ascribed to them in the Plan.

 

  (i) For purposes of this Agreement, “Retirement” means cessation of employment
following a Participant’s attainment of age 55 and completion of five years of
service.

 

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  (ii) For purposes of this Agreement, “Cause” means (A) the Employee’s breach
of fiduciary duty involving personal profit, commission of a felony or a crime
involving fraud or moral turpitude, or material breach of any provision of this
Agreement; or (B) the willful engaging by the Employee in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this definition, no act or failure to act on the part of the
Employee shall be considered “willful” unless it is done, or omitted to be done,
by the Employee in bad faith or without a reasonable belief that the action or
omission was legal, proper, and in the best interests of the Company or its
affiliates. Any act, or failure to act, based on authority given pursuant to a
resolution duly adopted by the Board of Directors of the Company, the
instructions of a more senior officer of the Company or the advice of counsel to
the Company or its affiliates will be conclusively presumed to be done, or
omitted to be done, by the Employee in good faith and in the best interests of
the Company and its affiliates.

 

  (b) Status of Options. The Options granted hereunder are not intended to
qualify as Incentive Stock Options.

 

  (c) Vesting. Subject to Sections 2, 3 and 6 below, the Options shall be
exercisable only if and after the Employee shall have remained in the employ of
the Company for [one] year from the Grant Date specified above, at which time
such rights shall become exercisable to the extent of [33 1/3% of the aggregate
number of Shares specified above, which percentage shall increase to 66 2/3% of
such number after two years from the Grant Date and 100% of such number after
three years from the Grant Date][OR] [shall have remained in the employ of the
Company for one year from the Grant Date specified above, at which time such
rights shall become exercisable to the extent of [20% of the aggregate number of
Shares specified above, which percentage shall increase to 40% of such number
after two years from the Grant Date, 60% of such number after three years from
the Grant Date, 80% of such number after four years from the Grant Date and 100%
of such number after five years from the Grant Date].

 

  (d) Continued Employment Requirement. Subject to Sections 2, 3 and 7 below,
the Options shall be exercisable only by the Employee and only if the Employee
has remained continuously in the employ of the Company from the Grant Date until
the date on which such Options are exercised.

 

  (e) Expiration. The Options shall expire upon the earliest of: (i) the
Expiration Date specified above; (ii) as provided by Section 2, 3, 9 or 14
below; or (iii) cash payments made in complete or partial cancellation pursuant
to Section 10 below. Such Options shall not be exercisable after such
expiration.

 

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2. Termination of Options upon Cessation of Employment, Retirement or
Disability. Options shall terminate if the Employee shall cease to be employed
by the Company, as follows:

 

  (a) If such cessation of employment is occasioned by any reason other than
Retirement, Disability or death, the Options shall terminate immediately, except
that the Employee shall be entitled to exercise his or her Options, to the
extent that the Employee was vested and otherwise entitled to exercise such
Options at the date of such termination of employment, at any time within 90
days after such termination (but not after the Expiration Date); provided,
however, that such 90 day period shall not apply and the Options shall terminate
immediately if Employee’s employment is terminated for Cause.

 

  (b) If such cessation of employment is occasioned by Retirement, then the
Options shall not be forfeited, but shall continue to vest and become
exercisable in accordance with the schedule set forth in Section 1(c) (but not
after the Expiration Date), and subject to the terms of the Agreement, including
Sections 3, 9, and 14 hereof, as though such termination of employment had never
occurred, so long as Employee at all times since the Grant Date complies with
the terms of this Agreement.

 

  (c) If such cessation of employment is occasioned by the Employee’s
Disability, then the Employee may, at any time within one year following such
cessation of employment (but not after the Expiration Date), exercise the Option
to the extent of 100% of the Shares covered by this Option (notwithstanding the
extent to which the Employee otherwise was entitled to exercise the same
immediately prior to such cessation of employment).

 

3. Termination of Options upon Death. If the Employee dies while in the employ
of the Company or within the applicable period during which his or her Options
may be exercised following Retirement or Disability, then within the year next
succeeding the Employee’s death (but not after the Expiration Date), the person
entitled by will or the applicable laws of descent and distribution may exercise
the Options to the extent of 100% of the Shares covered by this Option
(notwithstanding the extent to which the Employee otherwise was entitled to
exercise the same immediately prior to death). If the Employee dies within the
90 day period described in Section 2(a) during which his or her Options may be
exercised, then within the year next succeeding the Employee’s death (but not
after the Expiration Date), the person entitled by will or the applicable laws
of descent and distribution may exercise the Options to the extent that employee
would have been entitled to exercise such Options at the date of termination of
employment.

 

4.

Exercising Options. This Option may be exercised by delivering to the Company at
its principal executive office (directed to the attention of the Corporate
Secretary, or if the Corporate Secretary is the Employee at issue, then to the
attention of the President or a Vice President) a written notice, signed by the
Employee or a person entitled to exercise the Option, as the case may be, of the
election to exercise the Option and stating the number of Shares in respect of
which it is then being exercised. The Option shall be

 

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  deemed exercised as of the date the Company receives such notice. As an
essential part of such notice, it shall be accompanied by (a) payment of the
full purchase price of the Shares then being purchased and (b) satisfaction, or
agreement with the Company as to the manner of satisfaction, of any taxes
required by law to be withheld due to the exercise of the Option, including an
exercise by a transferee to whom the Employee has transferred the Option in
accordance with Section 7 below. In the event the Option shall be exercised by
any person other than the Employee, such notice shall be accompanied by
appropriate evidence of the right of such person to exercise the Option. Payment
of the full purchase price may be made in (a) cash, (b) Shares, or (c) any
combination of cash and Shares, provided that, other than with respect to any
optionee that is a reporting person under Section 16 of the Securities Exchange
Act of 1934, the Company reserves the right to prohibit the use of Shares as
payment of the purchase price. In the case of any Employee who is a reporting
person under Section 16(a) of the Securities Exchange Act of 1934, such Employee
shall be entitled to elect to utilize Shares as payment of the purchase price in
Employee’s discretion. Shares used in payment of the purchase price shall be
valued at the closing price of such Shares on the NYSE or as reported in the
consolidated transaction reporting system for the date of exercise. Upon the
proper exercise of the Option, the Company shall issue in the name of the person
exercising the Option, and deliver to such person, a certificate or certificates
for the Shares purchased, or shall otherwise properly evidence the purchase of
such Shares in the Company’s stock records. The Employee shall have no rights as
a stockholder in respect of any Shares as to which the Option shall not have
been effectively exercised as provided in this Agreement.

 

5. Regulatory Restrictions. This Option shall not be exercisable if such
exercise would violate (a) any applicable requirement under the Securities Act
of 1933, as amended (the “Act”), the Securities Exchange Act of 1934, as
amended, or the listing requirements of any stock exchange; (b) any applicable
state securities law; or (c) any other applicable legal requirement.
Furthermore, if a registration statement with respect to the Shares to be issued
upon the exercise of this Option is not in effect or if counsel for the Company
deems it necessary or desirable in order to avoid possible violation of the Act,
the Company may require, as a condition to its issuance of the Shares, the
delivery to the Company of a commitment in writing by the person exercising the
Option that at the time of such exercise it is the person’s intention to acquire
such Shares for the person’s own account for investment only and not with a view
to, or for resale in connection with, the distribution of such Shares, that such
person understands that the Shares may be “restricted securities” as defined in
Rule 144 issued under the Act, and that any resale, transfer or other
disposition of the Shares will be accomplished only in compliance with Rule 144,
the Act, or other or subsequent applicable rules and regulations under the Act.
The Company may place on the certificates evidencing such Shares an appropriate
legend reflecting such commitment and the Company may refuse to permit transfer
of such Shares until it has been furnished evidence satisfactory to it that no
violation of the Act or the applicable rules and regulations would be involved
in such transfer.

 

6.

Future and Continued Service. Nothing in this Agreement shall be deemed to
create any limitation or restriction on such rights as the Company otherwise
would have to terminate the employment of the Employee. The Employee
acknowledges that this Option has

 

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  been granted in anticipation of future services being rendered by the Employee
to the Company.

 

7. No Transfer. This Option may not be assigned, encumbered or transferred
except, in the event of the death of a Participant by will or by the laws of
descent and distribution. The Employee shall have the right, subject to the
provisions of this Section 7, to transfer all or any portion of the Option
granted under this Agreement (or an amendment thereto), for estate planning
purposes, to (a) the Employee’s Family Members, (b) entities that are
exclusively family-related, including trusts for the exclusive benefit of Family
Members and limited partnerships or limited liability companies in which Family
Members are the only partners or members, or (c) such other persons or entities
specifically approved by the Committee. The terms and conditions applicable to
the transfer of any such Options or portion of an Option transferred by the
Employee shall be established by the Committee, in its discretion but in
accordance with this Section 7 shall remain subject to the same terms and
conditions as were applicable immediately prior to the transfer, including those
provisions regarding exercisability of the Option following the cessation of
employment of the Employee by the Company and the death of the Employee, except
that no transferee may further transfer an Option or portion of an Option
transferred by the Employee in accordance with this Section 7, other than by
will or the laws of descent and distribution. In order to effect a transfer in
accordance with this Section 7, the Employee shall deliver to the Company (in
the manner set forth in Section 4) a Notice of Transfer of Option substantially
in the form attached to this Agreement.

 

8.

Arbitration. The Company and the Employee agree that any claim, dispute or
controversy arising under or in connection with this Agreement (including,
without limitation, any such claim, dispute or controversy arising under any
federal, state or local statute, regulation or ordinance or any of the Company’s
employee benefit plans, policies or programs) shall be resolved solely and
exclusively by binding arbitration. The arbitration shall be held in the city of
Philadelphia (or at such other location as shall be mutually agreed by the
parties). The arbitration shall be conducted in accordance with the Expedited
Employment Arbitration Rules (the “Rules”) of the American Arbitration
Association (the “AAA”) in effect at the time of the arbitration, except that
the arbitrator shall be selected by alternatively striking from a list of five
arbitrators supplied by the AAA. All fees and expenses of the arbitration,
including a transcript if either requests, shall be borne equally by the
parties. If the Employee prevails as to any material issue presented to the
arbitrator, the entire cost of such proceedings (including, without limitation,
the Employee’s reasonable attorneys’ fees) shall be borne by the Company. If the
Employee does not prevail as to any material issue, each party will pay for the
fees and expenses of its own attorneys, experts, witnesses, and preparation and
presentation of proofs and post-hearing briefs (unless the party prevails on a
claim for which attorney’s fees are recoverable under the Rules). Any action to
enforce or vacate the arbitrator’s award shall be governed by the Federal
Arbitration Act, if applicable, and otherwise by applicable state law. If either
the Company or the Employee pursues any claim, dispute or controversy against
the other in a proceeding other than the arbitration provided for herein, the
responding party shall be entitled to dismissal or injunctive relief regarding
such action and recovery of all costs, losses and attorney’s fees related to
such action. Notwithstanding the provisions of this paragraph, either party may
seek injunctive relief

 

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  in a court of competent jurisdiction, whether or not the case is then pending
before the panel of arbitrators. Following the court’s determination of the
injunction issue, the case shall continue in arbitration as provided herein.

 

9. Forfeiture of Award. If the Employee (or the Employee’s estate) shall
initiate a legal proceeding against the Company in connection with this
Agreement (including, without limitation, any such claim, dispute or controversy
arising under any federal, state of local statute, regulation or ordinance or
any of the Company’s employee benefit plans, policies or programs) other than
pursuant to the terms of Arbitration Procedure described in Section 8 above,
then the Company in its sole discretion, may require Employee (or the Employee’s
estate, as applicable), for no consideration, to forfeit immediately all Options
granted under this Agreement which were not exercised prior to the initiation of
such legal proceeding. If the Employee’s employment with the Company is
terminated for Cause, the Employee shall, for no consideration, forfeit
immediately all Options granted under this Agreement which were not exercised
prior to such termination. If, at any time, whether or not Employee remains
employed by the Company, the Employee (A) materially breaches any provision of
this Agreement, or (B) willfully engages in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the Company, then the Company,
in its sole discretion, may require Employee, for no consideration, to forfeit
immediately all Options granted under this Agreement which were not exercised
prior to such event.

 

10. Change in Control. If a Change in Control occurs during the term of this
Agreement, the Employee shall receive, with respect to any Option which is not
exercisable in full, a cash payment in an amount to be determined pursuant to
Section 21 of the Plan in lieu of the exercise of the portion of the Option
which is not exercisable.

 

11. Employment by the Company. For purposes of this Agreement, employment by a
parent or subsidiary of or a successor to the Company shall be considered
employment by the Company.

 

12. Committee Discretion. The Committee shall have authority, subject to the
express provisions of the Plan, to construe this Agreement and the Plan, to
establish, amend and rescind rules and regulations relating to the Plan, and to
make all other determinations in the judgment of the Committee necessary or
desirable for the administration of the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
this Agreement in the manner and to the extent it shall deem expedient to carry
the Plan into effect. All action by the Committee under the provisions of this
paragraph shall be conclusive for all purposes.

 

13.

Effect of the Plan. This Agreement and the Option granted under this Agreement
shall be subject to all of the provisions of the Plan as are in effect from time
to time, which provisions of the Plan shall govern if there is any inconsistency
between this Agreement and the Plan. The Company hereby reserves the right to
amend, modify, restate, supplement, suspend or terminate the Plan without the
consent of the Employee, so long as such amendment, modification, restatement,
supplement, suspension or termination shall not impair the rights and benefits
available to the Employee hereunder, and this

 

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  Award shall be subject, without further action by the Company or the Employee,
to such amendment, modification, restatement, supplement, suspension or
termination unless provided otherwise therein.

 

14. Non-competition, Non-solicitation, and Non-disclosure. The Committee in its
sole discretion, may require the Employee to forfeit immediately, without
consideration from the Company, any portion of the Option rights granted to him
or her (including the right to purchase the underlying shares of Common Stock
relating to such portion) which was not exercised prior to any of the following
events: (a) the Employee, as individual or as a partner, employee, agent,
advisor, consultant or in any other capacity of or to any person, firm,
corporation or other entity, directly or indirectly, carries on any business, or
becomes involved in any business activity, competitive with the Company or any
subsidiary, in violation of the Company’s Code of Ethics and Business Conduct
(CP-10-002), as may be amended from time to time (or any successor policy);
(b) the Employee solicits or entices any other employee of the Company or its
affiliates to leave the Company or its affiliates to go to work for any other
business or organization which is in direct or indirect competition with the
Company or any of its affiliates, or requests or advises a customer or client of
the Company or its affiliates to curtail or cancel such customer’s business
relationship with the Company or its affiliates; or (c) the Employee fails to
abide by the contractual terms of the Employee Nondisclosure Agreement and/or
Invention Assignment Agreement, as applicable, which were executed in accordance
with the Company’s Security of Confidential and Proprietary Information Policy
(CP-10-013), as may be amended from time to time (or any successor policy),
during the Employee’s employment with the Company.

 

15. Community Interest of Spouse. The community interest, if any, of any spouse
of the Employee in any of the Options shall be subject to all of the terms,
conditions and restrictions of this Agreement and the Plan, and shall be
forfeited and surrendered to the Company upon the occurrence of any of the
events requiring the Employee’s interest in such Options to be so forfeited and
surrendered pursuant to this Agreement.

 

16. Tax Matters.

(a) The exercise of an Option and the issuance of any shares of Common Stock
pursuant to an Option shall be subject to the satisfaction of all applicable
federal, state and local income and employment tax withholding requirements (the
“Required Withholding”). By execution of this Agreement, the Employee shall be
deemed to have authorized the Company to withhold from the shares of Common
Stock issued the number of shares necessary to satisfy the Employee’s required
minimum statutory withholding taxes, if any. Notwithstanding the foregoing, the
Company may require that the Employee satisfy the Employee’s Required
Withholding, if any, by any other means the Company, in its sole discretion,
considers reasonable. The obligations of the Company under this Agreement shall
be conditioned on such satisfaction of the Required Withholding. Notwithstanding
the foregoing, in the case of any Employee who is a reporting person under
Section 16(a) of the Securities Exchange Act of 1934, such Employee shall be
entitled to elect to satisfy such withholding obligations, in Employee’s
discretion, by having the Company withhold shares of Common Stock.

 

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(b) The Employee acknowledges that the tax consequences associated with the
Award are complex and that the Company has urged the Employee to review with the
Employee’s own tax advisors the federal, state, and local tax consequences of
this Award. The Employee is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. The Employee
understands that the Employee (and not the Company) shall be responsible for the
Employee’s own tax liability that may arise as a result of this Agreement.

 

17. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without reference
to its principles of conflict of laws.

 

18. Entire Agreement. This Agreement sets forth the entire agreement, and
supersedes all other agreements and understandings, whether oral or written, by
and between the parties relating to the subject matter hereof.

 

19. Severability. In the event any provision of this Agreement is found to be
unlawful, void or unenforceable, the remaining provisions of this Agreement
shall remain in force and valid.

THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT THE OPTIONS SUBJECT TO THIS OPTION
AWARD SHALL VEST AND BECOME EXERCISABLE, IF AT ALL, ONLY DURING THE PERIOD OF
THE EMPLOYEE’S SERVICE TO THE COMPANY OR AS OTHERWISE PROVIDED IN THIS AGREEMENT
(NOT THROUGH THE ACT OF BEING GRANTED THE OPTIONS). THE EMPLOYEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT OR THE PLAN SHALL CONFER
UPON THE EMPLOYEE ANY RIGHT WITH RESPECT TO FUTURE OPTION AWARDS OR CONTINUATION
OF THE EMPLOYEE’S SERVICE TO THE COMPANY. The Employee acknowledges receipt of a
copy of the Plan, represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option Award subject to all of the
terms and provisions hereof and thereof, including the mandatory Dispute
Resolution Procedure. The Employee has reviewed this Agreement and the Plan in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement, and fully understands all provisions of this Agreement
and the Plan.

THE EMPLOYEE ACKNOWLEDGES AND UNDERSTANDS THAT THIS AGREEMENT CONTAINS A BINDING
ARBITRATION PROVISION THAT MAY BE ENFORCED BY THE PARTIES.

 

GARDNER DENVER, INC.

By:

 

 

Title:

 

 

 

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EMPLOYEE Signed:  

 

Dated:  

 

 

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