Exhibit 10.1
RAVEN INDUSTRIES, INC.
INCENTIVE STOCK OPTION AGREEMENT
(Employee)
     This INCENTIVE STOCK OPTION AGREEMENT is made and entered into as of the
_____ day of ________________, 20__, between Raven Industries, Inc., a South
Dakota corporation (the “Company”) and ______________________ (“Employee”).
BACKGROUND
     A. Employee has either been hired to serve as an employee to the Company or
the Company desires to induce Employee to continue to serve the Company as an
employee.
     B. The Company has adopted the 2010 Stock Incentive Plan (the “Plan”)
pursuant to which shares of common stock of the Company have been reserved for
issuance under the Plan.
     NOW, THEREFORE, the parties hereto agree as follows:
     1. Grant of Option; Purchase Price. Subject to the terms and conditions
herein set forth, the Company hereby irrevocably grants from the Plan to
Employee the right and option, hereinafter called the “Option”, to purchase all
or any part of an aggregate of the number of shares of common stock, $1.00 par
value, of the Company (the “Shares”) set forth at the end of this Agreement
after “Number of Shares” at the price per Share set forth at the end of this
Agreement after “Purchase Price.”
     2. Exercise and Vesting of Option. The Option shall be exercisable only to
the extent that all, or any portion thereof, has vested in Employee. Except as
provided herein in Section 4, the Options shall vest in Employee in four
(4) cumulative installments, with twenty-five percent (25%) of the total grant
becoming exercisable on the first anniversary of the date of this Agreement,
with an additional twenty-five percent (25%) of the total grant becoming
exercisable on each of the next three (3) successive anniversaries of such date
(each such date is hereinafter referred to singularly as a “Vesting Date” and
collectively as “Vesting Dates”), so long as Employee remains an employee of the
Company or has elected “Retirement” (as defined below) from the Company after
the first anniversary of the date of this Agreement.
     3. Termination of Employment. Except as provided in Section 5(a) below, in
the event that Employee ceases to be employed by the Company, for any reason or
no reason, with or without cause, prior to any Vesting Date, that part of the
Option scheduled to vest on such Vesting Date, and all parts of the Option
scheduled to vest in the future, shall not vest and all of Employee’s rights to
and under such non-vested parts of the Option shall terminate.
     4. Term of Option. To the extent vested, and except as otherwise provided
in this Agreement, the Option shall be exercisable for five (5) years from the
date of this Agreement (the “term”); provided, however, that, except as provided
in Section 5(a) below, in the event Employee ceases to be employed by the
Company, for any reason or no reason, Employee or

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his/her legal representative shall have three (3) months from the date of such
termination of his/her position as an employee to exercise any part of the
Option vested pursuant to Section 3 of this Agreement. Upon the expiration of
such three (3) month period, except as provided in Section 5(a) or, if earlier,
upon the expiration date of the Option as set forth above, the Option shall
terminate and become null and void.
     5. Retirement or Death of Employee.
     (a) “Retirement” is defined as Employee voluntarily terminating employment
with the Company on the first day of any month after Employee’s years of
service, plus his/her attained age, equals or exceeds the sum of 80.
Notwithstanding anything to the contrary contained herein, in the event of
Employee’s Retirement after the first anniversary of the date of this Agreement,
the Option shall, to the extent not exercised, continue to vest as provided in
Section 3 hereof and shall be exercisable through the full term of the Option.
Employee acknowledges that any exercise of the Option more than three (3) months
after a Retirement will likely result in the Option being treated as
non-qualified under federal tax law and may result in additional tax payments by
Employee.
     (b) In the event of Employee’s death, the person designated in Employee’s
will, or in the absence of such designation, Employee’s legal representative
may, in like manner, exercise the Option to the extent of the number of Shares
which were vested at the time of his/her death, but such right shall expire
unless exercised by such designated person or legal representative within the
earlier of (i) three (3) months after the death of Employee, or (ii) the
expiration of the Option.
     6. Method of Exercising Option. Subject to the terms and conditions of this
Agreement and the Plan, the Option may be exercised by written notice to the
Company. Such notice shall state the election to exercise the Option and the
number of Shares in respect of which it is being exercised, and shall be signed
by the person or persons so exercising the Option. Such notice shall be
accompanied by payment of the full purchase price of such Shares, in which event
the Company shall deliver a certificate or certificates representing such Shares
as soon as practicable after the notice shall be received. Payment of such
purchase price may take the form of cash, shares of stock of the Company, the
total market value of which equals the total purchase price, or any combination
of cash and shares of the Company, the total market value of which equals the
total purchase price. In the event that the Option becomes “non-qualified” under
Section 5(a), Employee may deliver additional Shares to satisfy Employee’s
minimum statutory tax withholding requirements with respect to any exercise of
the Option. Any such notice shall be deemed given when received by the Company
at its principal place of business. All Shares that shall be purchased upon the
exercise of the Option as provided herein shall be fully paid and
non-assessable.
     7. Rights of Option Holder. Employee, as holder of the Option, shall not
have any of the rights of a shareholder with respect to the Shares covered by
the Option except to the

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extent that one or more certificates for such Shares shall be delivered to him
or her upon the due exercise of all or any part of the Option.
     8. Incentive Stock Option. Subject to Section 5(a) hereof, the Company
intends that the Option shall be an incentive stock option governed by the
provisions of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”). The terms of the Plan and the Option shall be interpreted and
administered so as to satisfy the requirements of the Code.
     9. Limitations on Transferability. The Option shall not be transferred,
pledged or otherwise assigned; and the Company shall not be required to
recognize any attempted assignment of the Option. Notwithstanding the preceding
sentence, the Option may be transferred, in the event of Employee’s death, by
will or the laws of descent and distribution to the limited extent provided in
the Plan, or otherwise transferred consistent with the Plan and treatment of the
Option as an incentive stock option pursuant to the Code. During Employee’s
lifetime, the Option may be exercised only by him or her, by his or her guardian
or legal representative or by any transferee permitted by this Section 9.
     10. No Continued Employment or Right to Corporate Assets. Nothing contained
in this Agreement shall be deemed to grant Employee any right to continue in the
employ of the Company for any period of time or to any right to continue his or
her present or any other rate of compensation, nor shall this Agreement be
construed as giving Employee, Employee’s beneficiaries or any other person any
equity or interests of any kind in the assets of the Company or creating a trust
of any kind or a fiduciary relationship of any kind between the Company and any
such person.
     11. Securities Law Matters. Employee acknowledges that the Shares to be
received by him or her upon exercise of the Option may not have been registered
under the Securities Act of 1933 or the Blue Sky laws of any state
(collectively, the “Acts”). If such Shares have not been so registered, Employee
acknowledges and understands that the Company is under no obligation to
register, under the Acts, the Shares received by him or her or to assist him or
her in complying with any exemption from such registration if he or she should
at a later date wish to dispose of the Shares. Employee acknowledges that if not
then registered under the Acts, the Shares shall bear a legend restricting the
transferability thereof, such legend to be substantially in the following form:
“The shares represented by this certificate have not been registered or
qualified under federal or state securities laws. The shares may not be offered
for sale, sold, pledged or otherwise disposed of unless so registered or
qualified, unless an exemption exists or unless such disposition is not subject
to the federal or state securities laws, and the Company may require that the
availability or any exemption or the inapplicability of such securities laws be
established by an opinion of counsel, which opinion of counsel shall be
reasonably satisfactory to the Company.”
     12. Employee Representations. Employee hereby represents and warrants that
Employee has reviewed with his/her own tax advisors the federal, state, and
local tax

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consequences of the transactions contemplated by this Agreement. Employee is
relying solely on such advisors and not on any statements or representation of
the Company or any of its agents. Employee understands that he or she will be
solely responsible for any tax liability that may result to him or her as a
result of the transactions contemplated by this Agreement. The Option, if
exercised, will be exercised for investment and not with a view to the sale or
distribution of the Shares to be received upon exercise thereof. Employee agrees
to hold stock acquired by exercise of this Option for a period of one year or to
notify the Company in writing of the date of disposition and the sale price of
the shares.
     13. General.
     (a) The Option is granted pursuant to the Plan and is governed by the terms
thereof. In the event of any conflict between the terms of this Option Agreement
and the terms of the Plan, the terms of the Plan shall control. The Company
shall at all times during the term of the Option reserve and keep available such
number of Shares as will be sufficient to satisfy the requirements of this
Option Agreement.
     (b) Nothing herein expressed or implied is intended or shall be construed
as conferring upon or giving to any person, firm, or corporation other than the
parties hereto, any rights or benefits under or by reason of this Agreement.
     (c) Each party hereto agrees to execute such further documents as may be
necessary or desirable to effect the purposes of this Agreement.
     (d) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same agreement.
     (e) This Agreement, in its interpretation and effect, shall be governed by
the laws of the State of South Dakota applicable to contracts executed and to be
performed therein.
[Signature page follows]

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[Signature page to Incentive Stock Option Agreement]
     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.

              NUMBER OF SHARES:   RAVEN INDUSTRIES, INC.
 
           
XXXX
  By        
 
           
 
      Its President & CEO    
 
            PURCHASE PRICE:   EMPLOYEE:
 
           
$XX.xx / per share
           
 
           
 
           

             
 
  DATE:        
 
           

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