FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT



 Exhibit 10.12 
  

			
	 	 	 Kadant Inc.

	 Notice of Grant of Stock Options
	 	 ID: 52-1762325

	 And Option Agreement
	 	 One Acton Place, Suite 202

	 	 	 Acton, MA 01720


  

			
	 [Name of Optionee]
	 	 Option Number:

	 [Address]
	 	 Plan:

	 	 	 ID:


  
 Effective [date], you have been
granted a(n) Non-Qualified Stock Option to buy [number] shares of Kadant Inc. (the Company) stock at [$price] per share. 
  
 The total option price of the shares granted is [$number]. 
  
 Shares in each period will become fully vested on the date shown. 
  

							
	 Shares

	  	 Vest Type

	  	 Full Vest

	  	 Expiration



  
  
 By your signature and the Company’s signature below, you and the Company agree that these options are granted under and governed by the terms and conditions of the
Company’s Stock Option Plan as amended and the Option Agreement, all of which are attached and made a part of this document. 
  

			
	  

	 	  


	 Kadant Inc.
	 	 Date

		
	  

	 	  


	 Optionee Name
	 	 Date


  

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 KADANT INC. 
  
 Nonqualified Stock Option Agreement 
  
 1. Grant of Option. This Nonqualified Stock Option Agreement (the “Option Agreement”) contains the terms
and conditions of a grant of a nonqualified stock option (the “Option”) to purchase the shares of the common stock of the Company (the “Option Shares”) made to you pursuant to the stock option plan identified on the cover page of
this Option Agreement (the “Plan”). The date on which your Option was granted by the Company’s Board of Directors is written on the cover page of this Option Agreement and is called the Grant Date. A copy of the Plan that governs your
Option is attached and made a part of this Option Agreement. This Option is intended to be a non-statutory stock option under the U.S. Internal Revenue Code of 1986, as amended. 
  
 2. Exercisability and Vesting of Option. Your Option only may be exercised once your Option Shares have vested. Your
Option Shares vest and become exercisable in three installments for the number of shares listed on the cover page of this Option Agreement under the heading “Shares” and on the vesting dates written on the cover page of this Option
Agreement under the heading “Full Vest”, provided that on each vesting date you have been continuously employed by the Company or an “Affiliated Employer” since the Grant Date. Your Option Shares will fully vest immediately in
the event of a Change in Control, an event that is defined in the Plan, if the Change in Control occurs before the date on which you cease to be an employee of the Company or an Affiliated Employer. The date on which you cease to be an employee of
the Company or an Affiliated Employer is called your “Employment Termination Date”. An “Affiliated Employer” means any corporation that more than 50% of its outstanding common stock is owned by the Company. On your Employment
Termination Date, all Option Shares that have not already vested are immediately forfeited to the Company and cancelled. 
  
 3. Termination of Option. The date on which your Option terminates or expires is called the “Option Termination Date.” Your Option will
terminate when the first of the following events occurs: 
  
 (a)
the Expiration Date of the Option, which is seven years from your Grant Date and identified on the cover page of this Option Agreement under the heading “Expiration”; or 
  
 (b) three months after your Employment Termination Date if the Employment Termination Date occurs for any reason other than
the reasons named in Sections 3(c), 3(d) or 3(e); or 
  
 (c) one
year after your Employment Termination Date if your Employment Termination Date occurs due to your death or disability. For purposes of this Option Agreement, “disability” means that you are receiving disability benefits under the
Company’s Long Term Disability Coverage, as then in effect, on the Employment Termination Date; or 
  
 (d) two years after your Employment Termination Date if the Employment Termination Date occurs due to your retirement. For purposes of this Option
Agreement, (i) if 

  

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you are an outside director of the Company, “retirement” means the date on which you cease to serve as a director of the Company, and (ii) if you
are an employee of the Company or an Affiliated Employer, “retirement” means the termination of your employment after age 55 and the completion of 10 years of continuous service (consisting of at least 20 hours per week) to the Company or
an Affiliated Employer; or 
  
 (e) the date the Company is
dissolved or liquidated. 
  
 4. No Assignment of Rights.
Except for assignments or transfers by will or the applicable laws of descent and distribution, your rights and interests under this Option Agreement and the Plan may not be assigned or transferred in whole or in part either directly or by operation
of law or otherwise, including without limitation by way of execution, levy, garnishment, attachment, pledge or bankruptcy, and no such rights or interests shall be subject to any of your obligations or liabilities. Notwithstanding the foregoing, if
you are a director or officer of Kadant Inc. on the date of grant, or subsequently become a director or officer of Kadant Inc., the Company consents to the transfer of this Option by you to an immediate member of your family, a family trust or
family partnership, provided that you, the Company and the transferee execute a written assignment of this Option in the form specified by the Company and upon terms satisfactory to the Company prior to such assignment becoming effective.

  
 5. Exercise of Option; Delivery and Deposit of
Certificate(s). You (or in the case of your death, your legal representative) may exercise vested Option Shares in whole or in part by giving written notice to the Company on the form provided by the Company (the “Exercise Notice”) any
time before the Option Termination Date. Your Exercise Notice must be accompanied by full payment for the Option Shares being purchased before it will be considered complete. You may pay for the Option Shares by any of the following methods:

  

	 	•	 	in cash or by certified or bank cashier’s check payable to the order of the Company, in an amount equal to the number of Option Shares being purchased multiplied by the
Exercise Price (the “Exercise Consideration”), 

  

	 	•	 	in unrestricted shares of the Company’s common stock (the “Tendered Shares”) with a market value equal to the Exercise Consideration, 

  

	 	•	 	by delivery of an unconditional and irrevocable undertaking by a broker to deliver promptly to the Company sufficient funds to pay the Exercise Consideration, or


  

	 	•	 	any combination of cash, certified or bank cashier’s check or Tendered Shares having a total value equal to the Exercise Consideration. 

  
 Tendered Shares that were acquired directly from the Company may be surrendered as all or
part of the Exercise Consideration only if you acquired such Tendered Shares more than six months prior to the date of exercise. As soon as reasonably practicable after receipt of the Exercise Notice and the Exercise Consideration, the Company will
deliver or cause to be delivered to you a certificate or certificates representing the number of Option Shares you purchased, registered in your name. 
  
 6. Rights With Respect to Option Shares. Prior to the date the Option is exercised, you shall not be considered to be the holder of the common
stock represented by the Option 

  

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Shares for any purpose. Upon the issuance to you of a certificate or certificates representing Option Shares, you shall have ownership of those Option
Shares, including the right to vote and receive dividends, subject, however, to the other restrictions and limitations that may be imposed either pursuant to the Plan and this Option Agreement or which may now or at some date in the future be
imposed by the Certificate of Incorporation or the By-Laws of the Company. 
  
 7. Dilution and Other Adjustments. In the event a stock dividend, stock split or combination of shares, or other distribution with respect to holders of common stock other than normal cash dividends, occurs
while the Option is outstanding (after the Grant Date and before the date the Option is exercised), the committee appointed by the Company’s Board of Directors to administer the Plan (the “Committee”) may in its discretion adjust the
number of shares for which the Option may be exercised and the Exercise Price for the Option to reflect such event. In the event any recapitalization, merger or consolidation involving the Company, any transaction in which the Company becomes a
subsidiary of another entity, any sale or other disposition of all or a substantial portion of the assets of the Company or any similar transaction, as determined by the Committee, (any of the foregoing, a “covered transaction”) occurs
while the Option is outstanding, the Committee in its discretion may (i) accelerate the exercisability of the Option, (ii) adjust the terms of the Option (whether or not in a manner that complies with the requirements of Section 424(a) of the
Internal Revenue Code of 1986, as amended (the “Code”)), (iii) if there is a survivor or acquiror entity, provide for the assumption of the Option by such survivor or acquiror or an affiliate thereof or for the grant of one or more
replacement options by such survivor or acquiror or an affiliate thereof, in each case on such terms (which may, but need not, comply with the requirements of Section 424(a) of the Code) as the Committee may determine, (iv) terminate the Option
(provided, that if the Committee terminates the Option, it shall, in connection therewith, either (A) accelerate the exercisability of the Option prior to such termination, or (B) provide for a payment to the holder of the Option of cash or other
property or a combination of cash or other property in an amount reasonably determined by the Committee to approximate the value of the Option assuming an exercise immediately prior to the transaction, or (C) if there is a survivor or acquiror
entity, provide for the grant of one or more replacement options pursuant to clause (iii) above), or (v) provide for none of, or any combination of, the foregoing. No fraction of a share or fractional shares shall be purchasable or deliverable under
this Option Agreement. 
  
 8. Reservation of Shares. The
Company will at all times during the term of this Option Agreement reserve and keep available enough shares of its common stock to satisfy the requirements of this Option Agreement and shall pay all fees and expenses necessarily incurred by the
Company in connection with this Option Agreement and the issuance of Option Shares. 
  
 9. Taxes. The Company, in its sole discretion, will determine whether the Company, any of its subsidiaries, or any other person has incurred or will incur any liability to withhold any federal, state or local
income or other taxes by reason of the grant or exercise of the Option, the issuance of Option Shares to you or the lapse of any restrictions applicable to the Option Shares. You agree to pay promptly, upon demand by the Company or any of its
subsidiaries, to the Company or such subsidiary, any amount requested by it for the purpose of satisfying such tax liability. If you fail to pay promptly the amount requested, the Company will refuse to issue you the Option Shares and will, without
further consent by you, have the right to deduct such taxes 

  

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from any payment of any kind otherwise due to you, and may hold back from the Option Shares to be delivered to you on exercise that number of shares
calculated to satisfy all federal, state, local or other applicable taxes required to be withheld in connection with such exercise. 
  
 The Company may permit you to satisfy the minimum statutory withholding tax requirement (the “Obligation”) arising from exercise of the Option
by making an election (an “Election”) to have the Company withhold from the number of shares to be issued upon exercise of the Option, or to otherwise tender to the Company, that number of shares of common stock having a value equal to the
amount of the Obligation. The value of the shares to be withheld or tendered shall be based upon the closing price of the common stock on the date that the amount of the Obligation is determined (the “Tax Date”), as reported by the stock
exchange on which the Company’s shares are then traded. Each Election must be made at the time the Option is exercised or the Tax Date, whichever is later. The Committee may disapprove of any Election or may suspend or terminate the right to
make Elections. An Election is irrevocable. 
  
 10.
Determination of Rights. Any dispute or disagreement concerning the Plan or this Option Agreement shall be determined by the committee appointed by the Company’s Board of Directors to administer the Plan (the “Committee”), in
its sole discretion, and any decision made by the Committee in good faith shall be conclusive on you and all other parties. The interpretation, construction and determination of any question by the Committee of any provision of this Option Agreement
or the Plan, or any rule or regulation adopted pursuant to the Plan, shall be final and conclusive on all parties. 
  
 11. Limitation of Employment Rights. The Option confers upon you no right to continue in the employ of the Company or an Affiliated Employer or
interferes in any way with the right of the Company or an Affiliated Employer to terminate your employment at any time. 
  
 12. Communications. Any communication or notice required or permitted to be given under this Option Agreement will be in writing, and mailed by
registered or certified mail, by express courier or delivered in hand, to the Company addressed to its Stock Option Administrator, Kadant Inc., One Acton Place, Suite 202, Acton, MA 01720, and to you at the address you most recently have given to
the Company. 
  
  

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