Exhibit 10.1
 
LAKELAND INDUSTRIES, INC.
EMPLOYEE STOCK OPTION CERTIFICATE
AND AGREEMENT
 
Date of Grant:
August 12, 2019
 
 
Name of Optionee:
Allen Dillard
 
 
Number of Shares:
24,900
 
 
Exercise Price Per Share:
$11.17
 
 
Expiration Date:
August 11, 2029

 
Effective on the Date of Grant specified above, LAKELAND INDUSTRIES, INC. (the
“Company”) has granted to the above-named Optionee under the Company’s 2017
Equity Incentive Plan (the “Plan”), an option to purchase from the Company the
number of shares of common stock, par value $0.01 per share (the “Common
Stock”), of the Company set forth above (the “Option”). This Option is subject
to all the terms and conditions of the Plan which is incorporated in this Option
as though set forth in full, and to such rules, regulations and interpretations
as may be established or made by the Compensation Committee (the “Committee”) of
the Board of Directors acting within the scope of its authority and
responsibility under the Plan. The Optionee acknowledges receipt of a copy of
the Plan prior to execution of this Agreement. The applicable provisions of the
Plan shall govern in any situation where this Agreement is silent or where the
applicable provisions of this Agreement are contrary to or not reconcilable with
such Plan provisions.
 
The terms and conditions of this Option are as follows:
 
1.
Number and Price of Options. The number and price of the shares of Common Stock
(the “Shares”) subject to this Option shall be the number and price set forth
above, subject to any adjustments which may be made under Section 11 below.
 
2.
Vesting and Exercisability. This Option may not be exercised until it is vested.
This Option may be exercised to purchase the Shares in accordance with the
provisions of this Section 2.
 
(a)
Provided the Optionee is an employee of the Company on each vesting date, and
unless otherwise provided by this Option Agreement, this Option may be exercised
to purchase the Shares as follows:
 
(i)
Options to purchase all of the Shares shall vest as to 8,300 Shares on each of
August 12, 2020, August 12, 2021 and August 12, 2022.
 
(b)
This Option expires at 5:00 p.m. (eastern standard time) on the Expiration Date
as stated above whether or not it has been duly exercised, unless sooner
terminated as provided below (the “Expiration Time”). This Option may terminate,
as provided below, if the Optionee’s employment is terminated for any reason.
This Option shall terminate, and no Shares may be purchased after the Expiration
Time.
 
 
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3.
Acceptance of Option Agreement. The Optionee’s acceptance of this Option
Agreement will indicate the Optionee’s acceptance of and agreement to be bound
by its terms and the terms of the Plan. It imposes no obligation upon the
Optionee to purchase any of the shares subject to the Option. The Optionee’s
obligation to purchase Shares can arise only upon the Optionee’s exercise of the
Option in the manner set forth herein. This Option Agreement shall be subject in
all respects to the terms and conditions of the Plan and in the event of any
question or controversy relating to the terms of the Plan, the decision of the
Committee shall be final.
 
4.
Condition of Employment. Except as provided in Section 9, this Option may not be
exercised unless the Optionee is employed by the Company or an Affiliate (as
defined in the Plan) on the date of such exercise and shall have been an
employee continuously since the date of grant.
 
5.
Exercise Procedure. This Option is exercisable by a written notice signed by the
Optionee and delivered to the Company at its executive offices, signifying the
Optionee’s election to exercise the Option. An Option Exercise Form to be used
by the Optionee to provide written notice is attached to this Option. The notice
must state the number of shares of Common Stock for which the Option is being
exercised and must be accompanied by the full purchase price of the shares being
purchased. Payment shall be either (i) in cash, or by certified or bank
cashier’s check payable to the order of the Company, free from all collection
charges; (ii) subject to approval of such method of payment by the Committee, by
delivery of previously acquired Shares based on the Fair Market Value of the
Shares on the date the Option is exercised or through means of a “net
settlement,” whereby the Option exercise price will not be due in cash and where
the number of Shares issued upon such exercise will be equal to: (A) the product
of (i) the number of Shares as to which the Option is then being exercised, and
(ii) the excess, if any, of (a) the then current Fair Market Value per Share
over (b) the Option exercise price, divided by (B) the then current Fair Market
Value per Share; or (iii) by a combination of the methods of payment specified
in (i) and (ii) above.
 
For these purposes, “Fair Market Value” means, as of any date, the value of a
Share determined as follows: (i) if the Shares are listed on any established
stock exchange or a national market system, including, without limitation, the
Nasdaq Global Market, the Fair Market Value of a Share will be the closing sales
price for such stock as quoted on that system or exchange (or the system or
exchange with the greatest volume of trading in Shares) at the close of regular
hours trading on the day of determination; (ii) if the Shares are regularly
quoted by recognized securities dealers but selling prices are not reported, the
Fair Market Value of a Share will be the mean between the high bid and low asked
prices for Shares at the close of regular hours trading on the day of
determination; or (iii) if Shares are not traded as set forth above, the Fair
Market Value will be determined in good faith by the Committee taking into
consideration such factors as the Committee considers appropriate, such
determination by the Committee to be final, conclusive and binding.
 
If notice of the exercise of this Option is given by a person or persons other
than the Optionee, the Company may require, as a condition to the exercise of
this Option, the submission to the Company of appropriate proof of the right of
such person or person to exercise this Option.
 
6.
Issuance of Shares. A certificate for the Shares purchased will be issued as
soon as practicable. The Company, however, shall not be required to issue or
deliver a certificate for any Shares until it has complied with all requirements
of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, any stock exchange on which the Common Stock may then be listed and
all applicable state laws in connection with the issuance or sale of such Shares
or the listing of such Shares.
 
 
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7.
No Rights Until Exercise. Until the issuance of a certificate for the Shares,
the Optionee or such other person who may be entitled to exercise this Option,
shall have none of the rights of a stockholder with respect to shares issuable
upon exercise of this Option.
 
8.
Transferability. This Option shall not be pledged, encumbered, or hypothecated
to, or in favor of, or subject to any lien, obligation, or liability of the
Optionee to, any party, other than the Company, any Subsidiary or Affiliate, or
assigned or transferred by the Optionee otherwise than by will or the laws of
descent and distribution, and this Option shall be exercisable during the
lifetime of the Optionee only by the Optionee or his or her guardian or legal
representative. Notwithstanding the foregoing, the Committee may, in its
discretion, provide that this Option be transferable, without consideration, to
immediate family members (i.e., children, grandchildren or spouse), to trusts
for the benefit of such immediate family members and to partnerships in which
such family members are the only partners. The Committee may attach to such
transferability feature such terms and conditions as it deems advisable. In
addition, an Optionee may, in the manner established by the Committee, designate
a beneficiary (which may be a person or a trust) to exercise the rights of the
Optionee, and to receive any distribution, with respect to the Option upon the
death of the Optionee. A beneficiary, guardian, legal representative or other
person claiming any rights under the Plan from or through the Optionee shall be
subject to all terms and conditions of the Plan and this Option applicable to
the Optionee, except as otherwise determined by the Committee, and to any
additional restrictions deemed necessary or appropriate by the Committee.
 

9.
Termination of Employment. Any portion of an Option that is not exercisable upon
termination of service will expire immediately and automatically upon such
termination and any portion of an Option that is exercisable upon termination of
service will expire on the date it ceases to be exercisable in accordance with
this Section 9.
 
(i)
Termination by Reason of Death. If a Optionee’s service with the Company or any
Affiliate terminates by reason of death, any Option held by such Optionee may
thereafter be exercised, to the extent it was exercisable at the time of his or
her death or on such accelerated basis as the Committee may determine at or
after grant, by the legal representative of the estate or by the legatee of the
Optionee, for a period expiring (i) at such time as may be specified by the
Committee at or after grant, or (ii) if not specified by the Committee, then 12
months from the date of death, or (iii) if sooner than the applicable period
specified under (i) or (ii) above, upon the Expiration Time.
 
(ii)
Termination by Reason of Disability. If a Optionee’s service with the Company or
any Affiliate terminates by reason of Disability, any Option held by such
Optionee may thereafter be exercised by the Optionee or his personal
representative, to the extent it was exercisable at the time of termination, or
on such accelerated basis as the Committee may determine at or after grant, for
a period expiring (i) at such time as may be specified by the Committee at or
after grant, or (ii) if not specified by the Committee, then 12 months from the
date of termination of service, or (iii) if sooner than the applicable period
specified under (i) or (ii) above, upon the Expiration Time.
 
 
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(iii)
Cause. If a Optionee’s service with the Company or any Affiliate is terminated
for Cause (as defined in the Plan): (i) any Option, or portion thereof, not
already exercised will be immediately and automatically forfeited as of the date
of such termination, and (ii) any Shares for which the Company has not yet
delivered share certificates will be immediately and automatically forfeited and
the Company will refund to the Optionee the Option exercise price paid for such
Shares, if any.
 

(iv)
Other Termination. If a Optionee’s service with the Company or any Affiliate
terminates for any reason other than death, Disability or Cause, any Option held
by such Optionee may thereafter be exercised by the Optionee, to the extent it
was exercisable at the time of such termination, or on such accelerated basis as
the Committee may determine at or after grant, for a period expiring (i) at such
time as may be specified by the Committee at or after grant, or (ii) if not
specified by the Committee, then 90 days from the date of termination of
service, or (iii) if sooner than the applicable period specified under (i) or
(ii) above, upon the Expiration Time.
 

10.
Not an Employment Agreement. This Option does not confer on the Optionee any
right to continue in the employ of the Company or interfere in any way with the
right of the Company to determine the terms of the Optionee’s employment.
 
11.
Corporate Transactions and Change of Control.  In the event of any corporate
event or transaction such as a merger, consolidation, reorganization,
recapitalization, stock split, reverse stock split, split up, spin-off,
combination of shares, exchange of shares, stock dividend, dividend in kind, or
other like change in capital structure (other than ordinary cash dividends) to
stockholders of the Company, or other similar corporate event or transaction
affecting the Shares, the Committee, to prevent dilution or enlargement of the
Optionee’s rights under the Plan and this Option, shall, in such manner as it
may deem equitable, substitute or adjust, in its sole discretion, the number and
kind of shares that may be issued under the Plan and this Option, the number and
kind of shares subject to this Option, the exercise price, grant price or
purchase price applicable to this Option, and/or any other affected terms and
conditions of the Plan or this Option. In the event of a Change of Control (as
defined in the Plan), the treatment of this Option will be subject in all
respects to the terms and conditions of the Plan, including provisions which set
forth the ability of the Committee to determine the rights of the Optionee with
respect to this Option.
 
12.
Securities Law Compliance. This Option shall be subject to the requirement that
if at any time the Committee shall determine that the registration, listing or
qualification of the Shares covered hereby upon any securities exchange or under
any federal or state law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the granting of this Option or the purchase of the Shares, this Option may
not be exercised unless and until such registration, listing, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee. The Committee may require that the person
exercising this Option shall make such representations and agreements and
furnish such information as it deems appropriate to assure compliance with the
foregoing or any other applicable legal requirements.
 
13.
Tax Matters. To the maximum extent permissible under the Code, this Option is
intended to qualify for “incentive stock option” treatment under the provisions
of Section 422 of the Code. It is understood and acknowledged by Optionee,
however, that all of the options represented by this Option may not qualify as
Incentive Stock Options. The Optionee is therefore urged to consult with his or
her individual tax advisor prior to exercising this Option since the exercise of
this Option may result in adverse tax consequences including the payment of
additional federal and/or state income taxes.
 
 
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14.
Withholding Tax. No later than the date as of which an amount first becomes
includible in the gross income of the Optionee for federal income tax purposes
with respect to this Option, the Optionee will pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any federal,
state or local taxes of any kind required by law to be withheld with respect to
such amount. The Committee may, in its sole discretion, permit the Optionee to
satisfy the minimum required withholding obligations (or such higher amount that
would not have an adverse accounting effect) with Shares, including Shares that
are part of the Option that gives rise to the withholding requirement. The
obligations of the Company under the Plan will be conditioned on such payment or
arrangements and the Company will have the right to deduct any such taxes from
any payment of any kind otherwise due to the Optionee.
 

15.
Notices. Any notice to be given to the Company hereunder must be given in
writing and addressed, if to the Company, to its principal executive office to
the attention of its Chief Executive Officer (or such other Person as the
Company may designate in writing from time to time), and, if to the Optionee, to
the address contained in the Company’s personnel files, or at such other address
as the Optionee may hereafter designate in writing to the Company. Any such
notice will be deemed duly given: if delivered personally or via recognized
overnight delivery service, on the date and at the time so delivered; if sent
via telecopier or email, on the date and at the time telecopied or emailed with
confirmation of delivery; or, if mailed, five (5) days after the date of mailing
by registered or certified mail.
 
16.
Governing Law. This Option is governed by and construed in accordance with the
laws of the State of Delaware, without regard to the application of the
principles of conflicts of laws.
 
17.
Certain Definitions. Capitalized terms used herein, to the extent not defined in
this Option shall have the meanings ascribed to such term in the Plan.
 
18.
General Provisions. This Option constitutes the entire agreement of the parties
and supersede all prior undertakings and agreements with respect to the subject
matter hereof. Except where otherwise indicated by the context, any masculine
term used herein also shall include the feminine, the plural shall include the
singular, and the singular shall include the plural. In the event any provision
of this Option shall be held illegal or invalid for any reason, the illegality
or invalidity shall not affect the remaining parts of this Option and this
Option shall be construed and enforced as if the illegal or invalid provision
had not been included. No fractional shares of Common Stock shall be issued or
delivered pursuant to this Option. The Committee shall determine whether cash or
other property shall be issued or paid in lieu of fractional shares of Common
Stock or whether such fractional shares or any rights thereto shall be forfeited
or otherwise eliminated.
 

[Signature Page Follows]
 
 
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LAKELAND INDUSTRIES, INC.
 

By: /s/ Christopher J. Ryan
Name: Christopher J. Ryan
Title: Chief Executive Officer
 
 
 
 
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ACKNOWLEDGMENT
 
The Optionee acknowledges receipt of a copy of Lakeland Industries, Inc.’s 2017
Equity Incentive Plan (the “Plan”) and represents that he or she has read and is
familiar with the terms and provisions thereof and hereby accepts this Option
subject to all of the terms and provisions of this Option and the Plan. The
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Committee upon any questions arising under the Plan.
 
 
 
 
 
Date: August 28, 2019
  
Allen E. Dillard
 
 
  
Signature of Optionee
 
 
  
 
 
 
  
Allen Dillard
 
 
  
Name of Optionee
 
 
  
 
 
 
  
147 Mayo Road
 
 
  
Address
 
 
  
 
 
 
  
New Hope, AL 35760
 
 
  
City, State, Zip Code
 

 
 
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OPTION EXERCISE FORM
 
TO:
LAKELAND INDUSTRIES, INC.
[Current principal office address]
Attn: Chief Executive Officer
 
Ladies/Gentlemen:
 
I irrevocably elect to exercise my right to purchase _________ shares of Common
Stock covered by this Option Agreement and make full payment of the Exercise
Price of such shares as follows (PLEASE CHOOSE FORM OF PAYMENT).
 
☐           
Cash Purchase. I hereby elect to pay the Exercise Price in cash, and enclose a
CERTIFIED OR BANK CHECK (or has wired payment) in the amount of $_____________.
 
☐           
Cashless Exercise. Subject to the approval of the Committee, I have enclosed, or
subject to legal requirements you may withhold, _______ shares of Common Stock
of Lakeland Industries, Inc. in accordance with the Option Agreement. I
represent that I have owned the shares being delivered for at least six months
prior to the date of exercise.
 
☐           
Combination of Cash and Cashless. Subject to approval of the Committee, I elect
to pay the exercise price in cash and stock, and encloses a CERTIFIED OR BANK
CHECK (or has wired payment) in the amount of $____________ and have enclosed,
or subject to legal requirements you may withhold, _________ shares of Common
Stock of Lakeland Industries, Inc. in accordance with the Option Agreement. I
represent that I have owned the shares being delivered for at least six months
prior to the date of exercise.
 
I understand and agree that I will pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any federal, state or
local taxes of any kind required by law to be withheld with respect to such
amount. The Committee may, in its sole discretion, permit me to satisfy the
minimum required withholding obligations (or such higher amount that would not
have an adverse accounting effect) with Shares, including Shares that are part
of the Option that gives rise to the withholding requirement. The obligations of
the Company under the Plan will be conditioned on such payment or arrangements
and the Company will have the right to deduct any such taxes from any payment of
any kind otherwise due to me. Further, I agree to promptly notify Lakeland
Industries, Inc. of the sale of any of the shares I received upon exercise of
this option during the one-year period commencing on the date I receive the
certificate for the shares.
 
Kindly deliver to me a certificate representing the shares as follows:
 
INSTRUCTIONS FOR DELIVERY
 
Name:
 
Address:
 

Date:
 
Signature: _______________________________
 
 
 
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