Exhibit 10.1
Form of Non-Incentive Stock Option Agreement
OM GROUP, INC.
2007 INCENTIVE COMPENSATION PLAN
STOCK OPTION AGREEMENT
          THIS STOCK OPTION AGREEMENT (“Agreement”), dated as of
                     (being the date this option is granted) by and between OM
GROUP, INC. (“Company”), and                      (“Participant”).
          WHEREAS, the Company maintains the 2007 Incentive Compensation Plan
(the “Plan”) for the purpose of (i) motivating key personnel by means of
incentive compensation, (ii) furthering the identity of interests of
participants with those of the stockholders of the Company through ownership and
performance of the common stock of the Company, and (iii) permitting the Company
to attract and retain key personnel and directors whose judgment is important to
the successful conduct of the business of the Company; and
          WHEREAS, pursuant to the terms of the Plan, the Compensation Committee
may grant stock option awards to key personnel of the Company and its
subsidiaries and non-employee directors of the Company; and
          WHEREAS, pursuant to the terms of the Plan, the terms, conditions and
restrictions of each stock option award are to be set forth in an award
agreement; and
          WHEREAS, the Compensation Committee has determined that it is
appropriate to grant Participant an award under the Plan on the terms,
conditions and restrictions provided in this Agreement.
          NOW, THEREFORE, the Company and the Participant agree as follows:
          Section 1. Grant of Option. The Company hereby grants to the
Participant the option of purchasing the number of shares of common stock of the
Company at the option exercise price and subject to the terms and conditions set
forth in this Agreement.
          Section 2. Number of Shares Subject to the Option. The aggregate
number of shares of common stock purchasable is                     .
          Section 3. Option Exercise Price. The option exercise price is
$                     per share.
          Section 4. Vesting and Exercise. Except as otherwise provided in
Sections 5, 6, 7, 8, 9, 10 and 12, the option rights granted under this option
shall vest and become exercisable in three equal installments on the first,
second and third annual anniversaries of the date of this option grant as set
forth above.

 

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     Section 5. Accelerated Vesting upon Change in Control.
     This option shall become exercisable as to all of the shares subject to
this option upon the occurrence of any Change in Control (as defined in the
Plan) of the Company occurring within the option period specified in Section 11.
     Section 6. Accelerated Vesting upon Retirement.
     In the event the Participant ceases to be employed by the Company or any of
its subsidiaries by reason of such individual’s retirement in accordance with
any retirement plan or policy of the Company or any of its subsidiaries, this
option shall vest and become fully exercisable to the extent not otherwise
exercisable at the time of such retirement, and the Participant may exercise
this option at any time within the five-year period following such retirement
(but only within the option period specified in Section 11).
     Section 7. Accelerated Vesting upon Death.
     If the Participant shall die while employed by the Company or any of its
subsidiaries or while serving as a non-employee director of the Company, this
option shall vest and become fully exercisable to the extent not otherwise
exercisable at the time of death, and the person entitled by will or the
applicable laws of descent and distribution may exercise this option at any time
within the three-year period following the Participant’s death (but only within
the option period specified in Section 11).
     Section 8. Accelerated Vesting upon Cessation of Employment or Directorship
due to Disability.
     If the Participant ceases to be employed by the Company or any of its
subsidiaries or ceases to be a non-employee director of the Company, in either
case due to the disability of the Participant, this option shall vest and become
fully exercisable to the extent not otherwise exercisable at the time of such
cessation of employment, and the Participant may exercise this option at any
time within the three-year period following the date of the Participant’s
cessation of employment or non-employee directorship (but only within the option
period set forth in Section 11).
     Section 9. Exercisability upon Death after Cessation of Employment or
Directorship due to Retirement or Disability.
     If the Participant shall die following the cessation of employment with the
Company or any of its subsidiaries or the cessation of serving as a non-employee
director but within the period provided for in Section 6 or 8, as applicable,
this option shall remain fully exercisable for the period set forth in the
applicable Section 6 or 8, and the person entitled by will or applicable laws of
descent and distribution may exercise this option at any time within such
applicable period following the Participant’s death (but only within the option
period set forth in Section 11).

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          Section 10. Exercisability upon Other Cessation of Employment or
Non-employee Directorship.
          If the Participant ceases to be employed by the Company or any of its
subsidiaries or ceases to be a non-employee director, in either case for any
reason other than retirement, death or disability, the Participant may exercise
this option at any time within the three-month period following such cessation
of employment or non-employee directorship (but only within the option period
specified in Section 11), to the same extent the Participant was entitled to
exercise this option immediately prior to such cessation of employment or
non-employee directorship.
          Section 11. Option Period. Notwithstanding any other provisions of
this Agreement, this option shall not be exercisable after                     .
          Section 12. Forfeiture upon Termination due to Violation of the Code
of Conduct and Ethics.
          Notwithstanding any other provisions of this Agreement, if the
Participant’s employment with the Company or any of its subsidiaries is
terminated on account of a violation of the Company’s Code of Conduct and
Ethics, this option shall be forfeited upon such termination to the full extent
not exercised at the time of such termination.
          Section 13. Transferability.
          This option is not transferable by the Participant otherwise than by
will or by the laws of descent and distribution, and is exercisable, during the
lifetime of the Participant, only by the Participant or the Participant’s
guardian or legal representative. Upon any attempt to transfer, assign, pledge,
hypothecate, or otherwise dispose of this option or the related option rights
contrary to the provisions of this Agreement, or upon the levy of any attachment
or similar process upon such option or rights, such option and rights shall
immediately become null and void.
          Section 14. Prevented Exercise.
          If the Participant’s exercise of this option is prevented by the terms
of subsections (a), (b) or (c) of Section 18 and the Participant’s option
terminates pursuant to Section 6 or 8, then the Participant may, notwithstanding
the provisions of Section 6 or 8 but only within the period set forth in
Section 11, exercise such option to the extent it would have been exercisable
immediately prior to its termination but for the operation of Section 18 at any
time within 30 days after such Participant is notified by the Company that such
exercise is no longer prevented by Section 18.
          Section 15. Adjustments upon Changes in Capitalization.
          In the event that at any time prior to the expiration of this option
each of the outstanding shares of common stock of the Company (except shares
held by dissenting stockholders) shall be changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another corporation, whether through reorganization, recapitalization,
stock split-up, combination of shares, merger or consolidation, then for all
purposes of this option there shall be substituted for each share of common
stock purchasable under this option the number

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and kind of shares of stock or other securities into which each such share of
common stock of the Company shall be so changed, or for which each such share
shall be so exchanged, and the shares or securities so substituted for each such
share of common stock shall be subject to purchase at an appropriately adjusted
option exercise price and subject to the terms and conditions of this Agreement.
          In the event that the Company shall issue a stock dividend in common
stock with respect to the common stock of the Company, the number of shares then
purchasable under this option shall be adjusted by adding to each such share the
number of shares that would have been distributed as a stock dividend on such
share had such share been outstanding on the record date for payment of the
stock dividend, and each such share together with said additional shares shall
be purchasable at the option exercise price as above provided and as may be
appropriately adjusted.
          In the event that there shall be any other change in the number or
kind of outstanding shares of common stock or other securities of the Company,
or of any shares of stock or other securities into which such shares of common
stock shall have been changed or for which they shall have been exchanged, or
the Company shall make an Extraordinary Distribution (as defined in the Plan) or
a Pro Rata Repurchase (as defined in the Plan), then the Compensation Committee
shall make such adjustment in the number or kind of shares of stock or other
securities covered by this option and in the number or kind of shares of stock
or other securities subject to purchase at the option exercise price as above
provided and with any such adjustment in the option exercise price to reflect
the effect of such Extraordinary Distribution or Pro Rata Repurchase as the
Compensation Committee, in its sole discretion, may determine is equitably
required by such change, and such adjustment so made shall be effective and
binding for all purposes of this option.
          Notwithstanding anything to the contrary contained in this Agreement,
the Participant shall not be entitled to purchase a fraction of a share under
this option.
          Section 16. Certain Rights upon the Liquidation, Dissolution, Merger
or Consolidation of the Company.
          If the Company shall liquidate or dissolve, or shall be a party to a
merger or consolidation with respect to which the Company shall not be the
surviving corporation, the Company shall give written notice to the Participant
at least 30 days prior to such event. The Participant shall have the right
within said 30-day period (but only within the period specified in Section 11)
to exercise this option to the extent such Participant was entitled to exercise
the option on the date of the notice; provided, however, that if the Participant
is employed by the Company or is a non-employee director of the Company on the
date of the notice, then notwithstanding the provisions of Section 4, the
Participant shall have the right to exercise this option in full to the extent
not previously exercised. To the extent that this option shall not have been
exercised on or prior to the effective date of such liquidation, dissolution,
merger or consolidation, then notwithstanding any other provisions of this
Agreement, this option shall terminate on said date, unless it is assumed by
another corporation within the meaning of Section 424(a) of the Internal Revenue
Code of 1986, as amended.

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          Section 17. Manner of Exercise.
          Subject to the terms and conditions of this Agreement, this option
shall be exercised in whole or in part by delivering to the Company at its
principal place of business a written notice, signed by the person entitled to
exercise the option, of the election to exercise the option and stating the
number of shares to be purchased. Such notice shall, as an essential part, be
accompanied by the payment of the full option exercise price of the shares then
to be purchased, except as provided below. Payment of the full option exercise
price may be made, at the election of the Participant, in (a) cash, (b) common
stock of the Company, or (c) any combination of cash or common stock of the
Company. A Participant using common stock of the Company to pay the purchase
price of shares being purchased may do so either by actual delivery of share
certificate(s) for such common stock or by attesting as to the ownership of such
common stock. Shares of common stock used in payment of the purchase price shall
be valued at their closing price on the New York Stock Exchange on the trading
day immediately preceding the date of exercise. The Participant may elect to pay
the purchase price upon the exercise of this option by authorizing a third party
to sell all the shares (or a sufficient portion of the shares) acquired upon the
exercise of the option and to remit to the Company a sufficient portion of the
sale proceeds to pay the entire purchase price and any tax withholding resulting
from such exercise. Upon the proper exercise of this 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, provided that if
any applicable law or regulation requires the Company to take any action with
respect to the shares specified in such notice before the issuance of such
shares, the date of delivery of the shares shall be extended for the period
necessary to take such action. The Participant agrees that as holder of this
option, the Participant shall have no rights as a stockholder or otherwise in
respect of any of the option shares until the option is effectively exercised as
provided in this Agreement. The Participant agrees to pay in cash, within the
time period specified by the Company, the amount (if any) required to be
withheld for federal, state and local tax purposes on account of the exercise of
the option or to make such arrangements to satisfy such withholding requirements
as the Company deems appropriate.
          Section 18. Compliance with Laws.
          This option shall not be exercisable if such exercise would violate:

  (a)   Any applicable state securities law;     (b)   Any applicable
registration or other requirements under the Securities Act of 1933, as amended
(the “Act”), the Securities Exchange Act of 1934, as amended, or applicable
listing requirements of any stock exchange; or     (c)   Any applicable legal
requirement of any other governmental authority.

          The Company agrees to make reasonable efforts to comply with the
foregoing laws and requirements so as to permit the exercise of this option.
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 and delivery of
certificates for 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 such person’s intention to acquire such shares for

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such person’s own account for investment only and not with a view to, or for
resale in connection with, the distribution thereof; that such person
understands the shares may be “restricted securities” as defined in Rule 144 of
the Securities and Exchange Commission; and that any resale, transfer or other
disposition of said shares will be accomplished only in compliance with
Rule 144, the Act, and any other 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 certificates until it has been furnished evidence satisfactory to it
that no violation of the Act or the rules and regulations under the Act would be
involved in such transfer.
          Section 19. Relationship to the Plan.
          This Agreement is subject to the terms of the Plan. If there is any
inconsistency between this Agreement and the Plan, the Plan shall govern.
Nothing in this Agreement shall interfere with or affect the rights of the
Company or the Participant under any employment agreement or confer upon the
Participant any right to continued employment or directorship with the Company.
          IN WITNESS WHEREOF, the parties have executed this Agreement in
duplicate as of the day and year first above written.

                     
 
                    “PARTICIPANT”       OM GROUP, INC.    
 
                   
By:
          By:        
 
                   
 
                   
Title:
          Title:        
 
                   

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