Exhibit 10.1

FORM OF

NON-QUALIFIED STOCK OPTION AGREEMENT

FOR EMPLOYEES UNDER THE

CIRCOR INTERNATIONAL, INC.

AMENDED AND RESTATED 1999 STOCK OPTION AND INCENTIVE PLAN

 

Name of Optionee:  

 

  No. of Option Shares:  

 

  Option Exercise Price per Share:  

 

  Grant Date:  

 

  Expiration Date:  

 

 

Pursuant to the CIRCOR International, Inc. Amended and Restated 1999 Stock
Option and Incentive Plan, as amended through the date hereof (the “Plan”),
CIRCOR International, Inc. (the “Company”) hereby grants to the Optionee named
above, who is an officer or employee of the Company or any of its Subsidiaries,
an option (the “Stock Option”) to purchase on or prior to the Expiration Date
specified above all or part of the number of shares (the “Option Shares”) of
Common Stock, par value $.01 per share (the “Stock”) of the Company specified
above 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 not
intended to be an “incentive stock option” under Section 422 of the Internal
Revenue Code of 1986, as amended.

1. Vesting Schedule. No portion of this Stock Option may be exercised until such
portion shall have vested. Except as set forth below, and subject to the
discretion of the Administrator (as defined in Section 2 of the Plan) to
accelerate the vesting schedule hereunder, this Stock Option shall be vested and
exercisable with respect to the following number of Option Shares on the dates
indicated:

 

Number of

Option Shares Exercisable

  

Vesting Date

[100%]    Grant Date + 3 years

In the event of a Sale Event as defined in Section 3(c) of the Plan, this Stock
Option shall become immediately vested and exercisable in full, whether or not
this Stock Option or any portion thereof is vested and exercisable at such time.
Once vested, this Stock Option shall continue to be exercisable at any time or
times prior to the close of business on the Expiration Date, subject to the
provisions hereof and of the Plan.

2. Manner of Exercise.

(a) The Optionee may exercise this Stock Option only in the following manner:
from time to time on or prior to the Expiration Date of this Stock Option, the
Optionee may give written notice to the Administrator of his or her election to
purchase some or all of the vested Option Shares purchasable at the time of such
notice. This notice shall specify the number of Option Shares to be purchased.

Payment of the purchase price for the Option Shares may be made by one or more
of the following methods: (i) in cash, by certified or bank check or other
instrument acceptable to the Administrator; (ii) by the Optionee delivering (or
attesting to the ownership of) shares of Stock that have been purchased by the
Optionee on the open market or that have been beneficially owned by the Optionee
for at least six months and that are not then subject to restrictions under any
Company plan; (iii) by the Optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable to the
Company to pay the option purchase price, provided that in the event the
Optionee chooses to pay the option purchase price as so provided, the Optionee
and the broker shall comply with such procedures and enter into such agreements
of indemnity and other agreements as the Administrator shall prescribe as a
condition of such payment procedure; or (iv) a combination of (i), (ii) and
(iii) above. Payment instruments will be received subject to collection.

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The transfer to the Optionee on the records of the Company or of the transfer
agent of the Option Shares will be contingent upon (i) the Company’s receipt
from the Optionee of the full purchase price for the Option Shares, as set forth
above, (ii) the fulfillment of any other requirements contained herein or in the
Plan or in any other agreement or provision of laws, and (iii) the receipt by
the Company of any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Stock to be purchased pursuant to
the exercise of Stock Options under the Plan and any subsequent resale of the
shares of Stock will be in compliance with applicable laws and regulations. In
the event the Optionee chooses to pay the purchase price by previously-owned
shares of Stock through the attestation method, the number of shares of Stock
transferred to the Optionee upon the exercise of the Stock Option shall be net
of the shares attested to.

(b) The shares of Stock purchased upon exercise of this Stock Option shall be
transferred to the Optionee on the records of the Company or of the transfer
agent upon compliance to the satisfaction of the Administrator with all
requirements under applicable laws or regulations in connection with such
transfer and with the requirements hereof and of the Plan. The determination of
the Administrator as to such compliance shall be final and binding on the
Optionee. The Optionee shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares of Stock subject to this
Stock Option unless and until this Stock Option shall have been exercised
pursuant to the terms hereof, the Company or the transfer agent shall have
transferred the shares to the Optionee, and the Optionee’s name shall have been
entered as the stockholder of record on the books of the Company. Thereupon, the
Optionee shall have full voting, dividend and other ownership rights with
respect to such shares of Stock.

(c) The minimum number of shares with respect to which this Stock Option may be
exercised at any one time shall be 100 shares, unless the number of shares with
respect to which this Stock Option is being exercised is the total number of
shares subject to exercise under this Stock Option at the time.

(d) Notwithstanding any other provision hereof or of the Plan, no portion of
this Stock Option shall be exercisable after the Expiration Date hereof.

3. Termination of Employment. If the Optionee’s employment by the Company or a
Subsidiary (as defined in the Plan) is terminated, the period within which to
exercise this Stock Option may be subject to earlier termination as set forth
below.

(a) Termination Due to Death. If the Optionee’s employment terminates by reason
of the Optionee’s death, this Stock Option shall become fully exercisable and
may thereafter be exercised by the Optionee’s legal representative or legatee
for a period of 12 months from the date of death or until the Expiration Date,
if earlier.

(b) Termination Due to Disability. If the Optionee’s employment terminates by
reason of the Optionee’s Disability (within the meaning of Section 22(e)(3) of
the Code), this Stock Option shall become fully exercisable and may thereafter
be exercised by the Optionee for a period of 12 months from the date of
termination or until the Expiration Date, if earlier.

(c) Termination for Cause. If the Optionee’s employment terminates for Cause (as
defined below), this Stock Option shall terminate immediately and be of no
further force and effect. For purposes hereof, unless otherwise provided in an
employment agreement between the Company and the Optionee, a termination of
employment for “Cause” shall mean, the occurrence of one or more of the
following: (i) the Optionee is convicted of, pleads guilty to, or confesses to
any felony or any act of fraud, misappropriation or embezzlement which has an
immediate and materially adverse effect on the Company or any Subsidiary, as
determined by the Administrator in good faith in its sole discretion; (ii) the
Optionee engages in a fraudulent act to the material damage or prejudice of the
Company or any Subsidiary or in conduct or activities materially damaging to the
property, business or reputation of the Company or any Subsidiary, all as
determined by the Administrator in good faith in its sole discretion; (iii) any
material act or omission by the Optionee involving malfeasance or negligence in
the performance of the Optionee’ s duties to the Company or any Subsidiary to
the material detriment of the Company or any Subsidiary, as determined by the
Administrator in good faith in its sole discretion, which has not been corrected
by the Optionee within thirty (30) days after written notice from the Company of
any such act or omission; (iv) failure by the Optionee to comply in any material
respect with any written policies or directives of the Company as determined by
the Administrator in good faith in its sole discretion, which has not been
corrected by the Optionee within ten (10) days after written notice from the
Company of such failure; or (v) material breach by the Optionee of any
non-competition, confidentiality or similar agreements between the Optionee and
the Company as determined by the Administrator in good faith in its sole
discretion.

(d) Termination Without Cause. If the Optionee’s employment is terminated by the
Company without Cause and unless otherwise determined by the Administrator, any
portion of this Stock Option may be exercised by the Optionee, to the extent
exercisable on the date of termination, for a period of three months from the
date of termination or until the Expiration Date, if earlier. Any portion of the
Stock Option that is not exercisable at such time shall terminate immediately
and be of no further force and effect.

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(e) Termination of Employment by Optionee. If the Optionee terminates his or her
employment, this Stock Option shall terminate immediately upon notice by the
Optionee of such termination and be of no further force and effect.

(f) Miscellaneous. The Administrator’s determination of the reason for
termination of the Optionee’s employment shall be conclusive and binding on the
Optionee and his or her representatives or legatees. Any portion of this Stock
Option that is unvested after the application of this Section 3 shall be
canceled immediately upon any termination of employment and shall not be
exercisable by the Optionee.

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. Capitalized terms in this Agreement shall have the meaning specified
in the Plan, unless a different meaning is specified herein.

5. Transferability. This Agreement 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. This
Stock Option is exercisable, during the Optionee’s lifetime, only by the
Optionee, and thereafter, only by the Optionee’s legal representative or
legatee.

6. Tax Withholding. The Optionee shall, not later than the date as of which the
exercise of this Stock Option becomes a taxable event for Federal income tax
purposes, pay to the Company or make arrangements satisfactory to the
Administrator for payment of any Federal, state, and local taxes required by law
to be withheld on account of such taxable event. The Company is authorized to
cause the minimum required tax withholding obligation to be satisfied, in whole
or in part, by withholding from shares of Stock to be issued to the Optionee a
number of shares of Stock with an aggregate Fair Market Value that would satisfy
the minimum required tax withholding amount due.

7. Non-Compete Agreement. Optionee is receiving the Stock Option provided for
herein in part because the Company has determined that Optionee is a key
contributor to the continued success of the Company. As such, Optionee is privy
to certain proprietary information which the Company considers to be competition
sensitive. The Company, therefore, would be materially harmed were Optionee to
leave the Company and perform services on behalf of a competitor or if the
Optionee were to solicit (i) customers to do business with a competitor of the
Company or (ii) employees of the Company to leave the Company and work for a
competitor. Accordingly, in consideration of Optionee’s receipt of the Stock
Option, Optionee covenants and agrees that, for a period of two (2) years
following the termination of Optionee’s affiliation with the Company (whether as
an employee or non-employee director), Optionee shall not, anywhere in the
world, own, manage, operate, join, control, promote, invest or participate in or
be connected with in any capacity (either as an employee, employer, trustee,
consultant, agent, principal, partner, corporate officer, director, creditor,
owner or shareholder or in any other individual or representative capacity) with
any business individual, partnership, firm, corporation or other entity which is
engaged wholly or partly in the design, manufacture, development, distribution,
marketing or sales of any products which compete with the Company’s then current
lines of business for which Optionee, during the two year period immediately
preceding termination of affiliation with the Company, had managerial
responsibility or otherwise provided regular services. Optionee agrees that this
provision is reasonable in view of the relevant market for the Company’s
products and services and that any breach hereof would result in continuing and
irreparable harm to the Company. The foregoing, however, shall not prevent
Optionee from making passive investments in a competitive enterprise whose
shares are publicly traded if such investment constitutes less than five percent
(5%) of such enterprise’s outstanding capital stock. In addition, Optionee, for
a period of two years following the termination of Optionee’s affiliation with
the Company shall not directly or indirectly (1) induce, solicit, request or
advise any Customers (as defined below) to patronize any business which competes
with any business of the Company for which Optionee has had any management
responsibility or otherwise provided regular services during his affiliation
with Company; or (2) entice, solicit, request or advise any employee of the
business of the Company for which Optionee has had management responsibility or
otherwise provided regular services during his affiliation with Company to
accept employment (or other affiliation) with any person, firm or business which
competes with any such business of the Company. As used above, “Customers” means
all customers of any business of the Company for which the Optionee had contact
or management responsibility or otherwise provided regular services during the
last two years of his affiliation with Company. Notwithstanding the provisions
of this paragraph 7, if Optionee is an employee or resident of a state in which
non-compete provisions of the type set forth in this paragraph 7 are not
enforceable, then the non-compete provisions of this paragraph 7 shall not
apply; the non-solicitation provisions of this paragraph 7, however, shall
continue to apply. In addition, in the event that a court of competent
jurisdiction determines that any of the restrictions set forth in this paragraph
7 are impermissible in scope and/or duration, Optionee and the Company intend
that such court shall revise such scope and/or duration as the court deems
reasonable rather than invalidating any such restrictions.

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8. Effect of Employment Agreement. If the Optionee is a party to an employment
agreement with the Company and any provisions set forth in such employment
agreement conflict with the provisions set forth in this Stock Option Agreement,
the provisions set forth in such employment agreement shall override such
conflicting provisions set forth herein.

9. Miscellaneous.

(a) Notice hereunder shall be given to the Company at its principal place of
business, and shall be given 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.

(b) Neither the Plan nor this Stock Option confers upon the Optionee any rights
with respect to continuance of employment by the Company or any Subsidiary.

(c) Pursuant to Section 16 of the Plan, the Administrator may at any time amend
or cancel any outstanding portion of this Stock Option, but no such action may
be taken which adversely affects the Optionee’s rights under this Agreement
without the Optionee’s consent.

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CIRCOR INTERNATIONAL, INC. By:  

 

  Name:   Title:

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

 

   

 

Date:                          Optionee’s Signature     Optionee’s Name and
Address: