EXHIBIT 10.52

 

STOCK OPTION AGREEMENT

 

CECO ENVIRONMENTAL CORP.

1997 STOCK OPTION PLAN

 

THIS AGREEMENT is dated and made effective as of January 5, 2005 (“Effective
Date”) by and between CECO ENVIRONMENTAL CORP. a Delaware corporation (the
“Company”), and THOMAS J. FLAHERTY (“Optionee”).

 

WITNESSETH:

 

WHEREAS, Optionee on the date hereof is a Director of the Company or one of its
Subsidiaries; and

 

WHEREAS, the Company desires to grant a non-qualified stock option to Optionee
to purchase shares of the Company’s Common Stock pursuant to the Company’s 1997
Stock Option Plan, as amended (the “Plan”); and

 

WHEREAS, the Board of Directors of the Company has authorized the grant of a
non-qualified stock option to Optionee and has determined that, on the Effective
Date, the Fair Market Value of Option Stock of the Company is $3.45 per share.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:

 

1. Grant of Option. The Company hereby grants to Optionee as of the Effective
Date the right and option (the “Option”) to purchase up to five thousand (5,000)
shares of Option Stock (“Shares”) at an exercise price of $3.45 per share on the
terms and conditions set forth herein and subject to the terms and conditions of
the Plan.

 

All capitalized terms not defined in this Agreement shall have the meaning set
forth in the Plan.

 

2. Duration and Exercisability.

 

a. Vesting and Exercise Period. The Options granted hereunder shall vest and
become exercisable January 5, 2006. Unvested options may not be exercised.

 

b. Expiration. The Option shall expire on the date sixty (60) days from the date
that Optionee no longer is a director of the Company or one of its Subsidiaries
for any reason, including without limitation due to death or disability
(“Expiration Date”) and vested options must be exercised, if at all, on or
before the Expiration Date.

 

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c. Lapse Upon Expiration. To the extent that this Option is not exercised prior
to the Expiration Date, all rights of Optionee under this Option shall thereupon
be forfeited.

 

3. Manner of Exercise.

 

a. General. The vested portions of this Option may be exercised only by Optionee
(or other proper party in the event of death or incapacity), subject to the
conditions of the Plan and this Agreement, and subject to such other
administrative rules as the Administrator deems advisable, by delivering written
notice of exercise to the Company at its principal office, in the form attached
hereto as Exhibit A. The notice shall state the number of Shares exercised and
shall be accompanied by payment in full of the Option price for all Shares
exercised pursuant to the notice. Any exercise of the Option shall be effective
upon receipt of such notice by the Company together with payment that complies
with the terms of the Plan and this Agreement. The Option may be exercised with
respect to any number or all of the shares as to which it can then be exercised
and, if partially exercised, may be so exercised as to the unexercised shares at
any time and from time to time prior to expiration of the Option as provided in
this Agreement.

 

b. Form of Payment. Subject to approval by the Administrator, payment of the
Option price by Optionee shall be in the form of cash, personal check, certified
check, or where permitted by law and provided that a public market for the
Company’s stock exists: (i) through a “same day sale” commitment from Optionee
and a broker-dealer that is a member of the National Association of Securities
Dealers (an “NASD Dealer”) whereby Optionee irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased to pay for the exercise
price and whereby the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the exercise price directly to the Company; (ii) through a
“margin” commitment from Optionee and a NASD Dealer whereby Optionee irrevocably
elects to exercise the Option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the NASD Dealer in the
amount of the exercise price, and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the exercise price directly to the
Company; or (iii) by tender of shares of Common Stock of the Company already
owned by Optionee for a period of at least six (6) months prior to payment
having a Fair Market Value on the date received by the Company equal to the
exercise price for the Shares exercised. Optionee shall be solely responsible
for any income or other tax consequences from any payment for Shares with
Optionee’s Common Stock of the Company.

 

c. Stock Transfer Records. Provided that the notice of exercise and payment are
in form and substance satisfactory to counsel for the Company, as soon as
practicable after the effective exercise of all or any part of the Option,
Optionee shall be recorded on the stock transfer books of the Company as the
owner of the Shares purchased, and the Company shall deliver to Optionee, or to
the NASD Dealer, as the case may be, one or more duly issued stock certificates
evidencing such ownership. All requisite original issue or transfer documentary
stamp taxes shall be paid by the Company. Optionee shall pay all other costs of
the Company incurred to issue such Shares to such NASD Dealer.

 

Shares purchased pursuant to exercise hereunder: (i) may be deposited with a
NASD Dealer designated by Optionee, in street name, if so provided in such
exercise notice accompanied by all applications and forms reasonably required by
the Administrator to effect such deposit, or (ii) may

 

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be issued to Optionee and such other person, as joint owners with the right of
survivorship, as is specifically described in such exercise notice. Optionee
shall be solely responsible for any income or other tax consequences of such a
designation of ownership hereunder (or the severance thereof).

 

4. Miscellaneous.

 

a. Rights to Employment and Rights as Shareholder. This Agreement shall not
confer on Optionee any right with respect to employment by the Company or any
Subsidiary. Optionee shall have no rights as a shareholder with respect to
Shares subject to this Option until such Shares are issued to Optionee upon the
exercise of this Option. No adjustment shall be made for dividends (ordinary or
extra-ordinary, whether in cash, securities or other property), distributions or
other rights for which the record date is prior to the date such shares are
issued, except as provided in Section 11 of the Plan.

 

b. Securities Law Compliance. The exercise of the Option and the issuance and
transfer of Shares shall be subject to compliance by the Company and Optionee
with all applicable requirements of federal and state securities laws and with
all applicable requirements of any securities exchange on which the Company’s
Common Stock may be listed at the time of such issuance or transfer.

 

c. Mergers, Recapitalization, Stock Splits, Etc. The provisions of Section 11 of
the Plan, as amended effective the Effective Date, shall govern all Options in
the event of any reorganization, merger, consolidation, recapitalization,
reclassification, change in par value, stock split-up, combination of shares or
dividend payable in capital stock, or other such transaction described under
Section 11 of the Plan, and the Company reserves all discretion provided
therein.

 

d. Nontransferability. The Option may not be transferred in any manner other
than by will or by the laws of descent and distribution and may be exercised
during the lifetime of Optionee only by Optionee. The terms of the Option shall
be binding upon the executors, administrators, successors and assigns of
Optionee.

 

e. 1997 Stock Option Plan. The Option evidenced by this Agreement is granted
pursuant to the Plan, as amended the Effective Date, a copy of which Plan has
been made available to Optionee and is hereby incorporated into this Agreement.
This Agreement shall be subject to and in all respects limited and conditioned
as provided in the Plan. The Plan governs this Option and, in the event of any
questions as to the construction of this Agreement or in the event of a conflict
between the Plan and this Agreement, the Plan shall govern, except as the Plan
otherwise provides.

 

f. Withholding. Optionee acknowledges that, upon exercise of all or any portion
of this Option, the Company shall have the right to require Optionee to pay to
the Company an amount equal to the amount the Company is required to withhold as
a result of such exercise federal and state income tax purposes.

 

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g. Scope of Agreement. This Agreement shall bind and inure to the benefit of the
Company and its successors and assigns and Optionee and any successor or
successors of Optionee permitted under Section 4(d) of this Agreement.

 

h. Interpretation. The Administrator shall have the sole discretion to interpret
and administer the Plan. Any determination made by the Administrator with
respect to any Option shall be final and binding on the Company and on all
persons having an interest in the Option granted under this Agreement and the
Plan.

 

i. Entire Option. The Plan, as amended, is incorporated herein by reference.
This Agreement and the Plan constitute the entire agreement and understanding of
the parties hereto with respect to the subject matter hereof and supersede all
prior understandings and agreements with respect to such subject matter.

 

j. Successors and Assigns. The Company may assign any of its rights under the
Option. The Option shall be binding upon and inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer
set forth herein, the Option shall be binding upon Optionee and Optionee’s
heirs, executors, administrators, legal representatives, successors and assigns.

 

k. Market Standoff Agreement. Optionee, if requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other securities)
of the Company held by Optionee during the period requested by the managing
underwriter following the effective date of a registration statement of the
Company filed under the Securities Act, provided that all officers and directors
of the Company are required to enter into similar agreements. Such agreement
shall be in writing in a form satisfactory to the Company and such underwriter.
The Company may impose stop-transfer instructions with respect to the shares (or
other securities) subject to the foregoing restriction until the end of such
period.

 

l. Governing Law. The Option shall be governed by and construed in accordance
with the internal laws of the State of Delaware, without regard to that body of
law pertaining to choice of law or conflict of law.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.

 

CECO ENVIRONMENTAL CORP.   OPTIONEE By:  

/s/ Phillip DeZwirek

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/s/ Thomas J. Flaherty

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Its:   CEO   Thomas J. Flaherty

 

The Grant set forth in this Agreement has been approved by Administrators of
CECO Environmental Corp. 1997 Stock Option Plan

 

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EXHIBIT A

 

CECO ENVIRONMENTAL CORP.

1997 STOCK OPTION PLAN (the “Plan”)

STOCK OPTION EXERCISE AGREEMENT

 

I hereby elect to purchase the number of shares of Common Stock of CECO
ENVIRONMENTAL CORP. (the “Company”) as set forth below:

 

Optionee                                                                       
Number of Shares Purchased:                                         
             Social Security Number:                                           
   Purchase Price per Share:                                         
                    Address:                                         
                              Aggregate Purchase Price:
                                                         
____________________________________    Date of Option Agreement:
                                                          Type of Option: [    ]
Incentive Stock Option    Exact Name of Title to Shares:
                                                   
                            [    ] Nonqualified Stock Option   
_____________________________________________

 

1. Delivery of Purchase Price. Optionee hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Option Agreement (the
“Option Agreement”) as follows (check as applicable and complete):

 

[    ] in cash (by check) in the amount of $            , receipt of which is
acknowledged by the Company;

 

If the Committee allowed payment by other means in the Stock Option Agreement,
add one or more of the following, as applicable:

 

[    ] by delivery of              fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Optionee for at least six (6) months
prior to the date hereof (and which have been paid for within the meaning of SEC
Rule 144), or obtained by Optionee in the open public market, and owned free and
clear of all liens, claims, encumbrances or security interests, valued at the
current Fair Market Value of $             per share;

 

[    ] through a “same-day-sale” commitment, delivered herewith, from Optionee
and the NASD Dealer named therein, in the amount of $            ; or

 

[    ] through a “margin” commitment, delivered herewith from Optionee and the
NASD Dealer named therein, in the amount of $            .

 

2. Tax Consequences. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE TAX
CONSEQUENCES AS A RESULT OF OPTIONEE’S PURCHASE OR DISPOSITION OF THE SHARES.
OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX CONSULTANT(S)
OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE
SHARES AND THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE.

 

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3. Entire Agreement. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Agreement, the Plan and the Option Agreement constitute
the entire agreement and understanding of the parties and supersede in their
entirety all prior understandings and agreements of the Company and Optionee
with respect to the subject matter hereof, and are governed by Delaware law
except for that body of law pertaining to choice of law or conflict of law.

 

Date:                       

 

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    Signature of Optionee

 

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