Exhibit 10.2


 


THE SHARES ISSUABLE PURSUANT TO THIS
AGREEMENT ARE SUBJECT TO THE PROVISIONS OF THE COMPANY’S 2005 EQUITY-BASED
COMPENSATION PLAN AND THIS AGREEMENT IS ENTERED INTO PURSUANT THERETO.  A COPY OF SUCH PLAN IS AVAILABLE UPON WRITTEN
REQUEST TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.


 


J. L. HALSEY CORPORATION

2005 EQUITY-BASED COMPENSATION PLAN


 


NONSTATUTORY STOCK
OPTION AGREEMENT


 










 


	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


Re:                               Grant of Stock Option


 


Dear                               :


 


The
board of directors (the “Board”) of J.L. Halsey Corporation (the “Company”) has
adopted the Company’s 2005 Equity-Based Compensation Plan (the “Plan”) for
certain employees of the Company and its Subsidiaries.  A copy of the Plan is being furnished to you
concurrently with the execution of this Nonstatutory Stock Option Agreement
(the “Option Agreement”) and shall be deemed a part of this Option Agreement as
if fully set forth herein.  Unless the
context otherwise requires, all terms defined in the Plan shall have the same
meaning when used herein.


 


1.                                       The Grant.  Subject to the conditions set forth below,
the Company hereby grants to you, effective as of                                
(“Grant Date”), as a matter of separate inducement and not in lieu of any
salary or other compensation for your services, the right and option to
purchase (the “Option”), in accordance with the terms and conditions set forth
herein and in the Plan, an aggregate of                    
shares of Stock of the Company (the “Option Shares”), at the Exercise Price (as
hereinafter defined).  As used herein, the term “Exercise Price” shall mean a price
equal to $                
per share, subject to the adjustments and limitations set forth herein and in
the Plan.  The Option granted hereunder
is intended to constitute an Option which is not designed pursuant to section 422
of the Internal Revenue Code of 1986, as amended; however, you should consult
with your tax advisor concerning the proper reporting of any federal or state
tax liability that may arise as a result of the grant or exercise of the
Option.


 





















 


2.                                       Exercise.


 


(a)                                  For purposes of this Option
Agreement, the Option Shares shall be deemed “Nonvested Shares” unless and
until they have become “Vested Shares.” 
The Option shall in all events terminate at the close of business on the
tenth (10) anniversary of the date of this Option Agreement.  Subject to other terms and conditions set
forth herein, the Option may be exercised in cumulative installments as follows:                                                                         .


 


Option
Shares shall constitute Vested Shares once they are exercisable.


 


(b)                                 Subject to the relevant
provisions and limitations contained herein and in the Plan, you may exercise
the Option to purchase all or a portion of the applicable number of Vested
Shares at any time prior to the termination of the Option pursuant to this
Option Agreement.  In no event shall you
be entitled to exercise the Option for any Nonvested Shares or for a fraction
of a Vested Share.


 


(c)                                  Any exercise by you of the
Option shall be in writing addressed to the Secretary of the Company at its
principal place of business (a copy of the form of exercise to be used will be
available upon written request to the Secretary), and shall be accompanied by a
certified or bank check payable to the order of the Company in the full amount
of the Exercise Price of the shares so purchased, or in such other manner as
described in the Plan and approved by the Committee.


 


The
terms and provisions of the employment agreement, if any, between you and the
Company or any Subsidiary (the “Employment Agreement”) that relate to or affect
the Option are incorporated herein by reference.  Notwithstanding the foregoing provisions of
this Section 2, in the event of any conflict or inconsistency between the
terms and conditions of this Section 2 and the terms and conditions of the
Employment Agreement, the terms and conditions of the Employment Agreement
shall be controlling.


 


3.                                       Termination
of Employment.  Except as provided
below in this Section 3 upon the termination of your employment with the
Company or any Subsidiary, any and all Options held by you that are not then
exercisable will become null and void upon the date of such termination and you
may, until the earlier of (x) ninety (90) days from the date of such
termination or (y) the expiration of the Option in accordance with its terms,
exercise the Option with respect to all or any part of the Vested Shares which
you were entitled to purchase immediately prior to such termination and,
thereafter, the Option shall, to the extent not previously exercised,
automatically terminate and become null and void, provided that:


 


(a)                                  in the case of termination of
your employment with the Company or any Subsidiary due to death, your estate
(or any Person who acquired the right to exercise such Option by bequest or
inheritance or otherwise by reason of your death) may, until the earlier of (x)
the date that is one (1) year after the date of death or (y) the expiration of
the Option in accordance with its terms, exercise the Option with respect to
all or any part of the Vested Shares to which the Option relates;


 


(b)                                 in the case of termination of your
employment with the Company or any Subsidiary due to your Disability, as
determined in the sole discretion of the Committee and as


 


2





















 


defined
in Section 15, you or your legal representative may, until the earlier of
(x) the one hundred and eightieth (180) day after the date your employment was
terminated or (y) the expiration of the Option in accordance with its terms,
exercise the Option with respect to all or any part of the Vested Shares to
which the Option relates;


 


(c)                                  in the case of termination of
your employment by the Company or any Subsidiary for any reason other than
Cause, as determined in the sole discretion of the Committee and as defined in Section 15,
within one (1) year of a Change in Control or in the case of your resignation
from the Company or any Subsidiary for Good Reason, as determined in the sole
discretion of the Committee and as defined in Section 15, within one (1)
year of a Change in Control, then any portion of the Option held by you as of
the date of separation that is not yet exercisable but would, pursuant to Section 2(a),
become exercisable over the twelve month period immediately following such
termination, shall become exercisable as of the date of separation, and any
portion of the Option held by you as of the date of separation that is
exercisable (either as a result of this sentence or otherwise) shall be
exercisable for a period of the lesser of (x) the remainder of the term of the
Option or (y) the date which is one (1) year after the termination of
employment; and


 


(d)                                 if you are on leave of absence
for any reason, the Company may, in its sole discretion, determine that you
will be considered to still be in the employ of or providing services for the
Company, provided that rights to the Option Shares will be limited to the
extent to which those rights were earned or vested when the leave or absence
began.


 


Notwithstanding
the foregoing provisions of this Section 3, in the event of any conflict
or inconsistency between the terms and conditions of this Section 3 and
the terms and conditions of the Employment Agreement, the terms and conditions
of the Employment Agreement shall be controlling.


 


4.                                       Transferability.  Any rights or interests herein will be
assignable or transferable by you only as provided in Section 10(a) of the
Plan and by will or the laws of descent and distribution.


 


5.                                       Withholding
Taxes.  The Committee may, in its
discretion, require you to pay to the Company (or the Company’s Subsidiary if
you are an employee of a Subsidiary of the Company), at the time of the
exercise of an Option or thereafter, the amount that the Committee deems
necessary to satisfy the Company’s or its Subsidiary’s current or future
obligation to withhold federal, state or local income or other taxes that you
incur by exercising an Option.  In
connection with the exercise of an Option requiring tax withholding, you may
(a) direct the Company to withhold from the shares of Stock to be issued to you
the number of shares necessary to satisfy the Company’s obligation to withhold
taxes, that determination to be based on the shares’ Fair Market Value as of
the date of exercise; (b) deliver to the Company sufficient shares of Stock
(based upon the Fair Market Value as of the date of such delivery) to satisfy
the Company’s tax withholding obligation, which tax withholding obligation is
based on the shares’ Fair Market Value as of the later of the date of exercise
or the date as of which the shares of Stock issued in connection with such
exercise become includable in your income; or (c) deliver sufficient cash to
the Company to satisfy its tax withholding obligations.  If you elect to use such a Stock withholding
feature you must make the election at the time and in the manner that the


 


3





















 


Committee prescribes.  The
Committee may, at its sole option, deny your request to satisfy withholding
obligations through Stock instead of cash. 
In the event the Committee subsequently determines that the aggregate
Fair Market Value (as determined above) of any shares of Stock withheld or
delivered as payment of any tax withholding obligation is insufficient to
discharge that tax withholding obligation, then you shall pay to the Company,
immediately upon the Committee’s request, the amount of that deficiency in the
form of payment requested by the Committee.


 


6.                                       Adjustments.  The terms of an Option shall be subject to
adjustment from time to time, in accordance with the following provisions:


 


(a)                                  If at any time, or from time to
time, the Company shall subdivide as a whole (by reclassification, by a Stock
split, by the issuance of a distribution on Stock payable in Stock or
otherwise) the number of shares of Stock then outstanding into a greater number
of shares of Stock, then (i) the number of shares of Stock (or other kind of
securities) that may be acquired under the Option shall be increased
proportionately and (ii) the price (including Exercise Price) for each share of
Stock (or other kind of shares or securities) subject to the then outstanding
Option shall be reduced proportionately, without changing the aggregate
purchase price or value of the outstanding Option.


 


(b)                                 If at any time, or from time to
time, the Company shall consolidate as a whole (by reclassification, reverse
Stock split or otherwise) the number of shares of Stock then outstanding into a
lesser number of shares of Stock, (i) the number of shares of Stock (or other
kind of shares or securities) that may be acquired under the Option shall be
decreased proportionately; and (ii) the price (including Exercise Price) for
each share of Stock (or other kind of shares or securities) subject to the
Option shall be increased proportionately, without changing the aggregate
purchase price or value of the outstanding Option.


 


(c)                                  Whenever the number of shares of
Stock subject to the Option and the price for each share of Stock subject to
the Option are required to be adjusted as provided in this Section 6, the
Committee shall promptly prepare a notice setting forth, in reasonable detail,
the event requiring adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the change in price and the number of
shares of Stock, other securities, cash, or property purchasable subject to the
Option after giving effect to the adjustments. 
The Committee shall promptly give you such a notice.


 


(d)                                 Adjustments under this Section 6
shall be made by the Committee, and its determination as to what adjustments
shall be made and the extent thereof shall be final, binding, and
conclusive.  No fractional interest shall
be issued under the Plan on account of any such adjustments.


 


7.                                       Notice.  All notices required or permitted under this
Option Agreement must be in writing and personally delivered or sent by mail
and shall be deemed to be delivered on the date on which it is actually received
by the person to whom it is properly addressed. A notice shall be effective
when actually received by the Company in writing and in conformance with this
Option Agreement and the Plan.  Until
changed in accordance herewith, the Legal Department and the optionee specify
their respective addresses as set forth below:


 


4





















 


	
  Legal Department:

  	
   

  	
  J. L. Halsey Corporation

  
	
   

  	
   

  	
  103 Foulk Road, Suite 205-Q

  
	
   

  	
   

  	
  Wilmington, Delaware 19803

  
	
   

  	
   

  	
  Attention: David Burt

  
	
   

  	
   

  	
   

  
	
  Optionee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


8.                                       Information
Confidential.  As partial
consideration for the granting of this Option, you agree that you will keep
confidential all information and knowledge that you have relating to the manner
and amount of your participation in the Plan; provided, however, that such
information may be disclosed as required by law and may be given in confidence
to your spouse, tax and financial advisors, or a financial institution to the
extent that such information is necessary to obtain a loan.


 


9.                                       Furnish
Information.  You agree to furnish to
the Company all information requested by the Company to enable it to comply
with any reporting or other requirement imposed upon the Company by or under
any applicable statute or regulation.


 


10.                                 Company Records.  Records of the Company or its Subsidiaries
regarding your period of employment, termination of employment and the reason
therefor, leaves of absence, re-employment, and other matters shall be
conclusive for all purposes hereunder.


 


11.                                 Successors.  This Agreement shall be binding upon you,
your legal representatives, heirs, legatees and distributees, and upon the
Company, its successors and assigns.


 


12.                                 Headings.  The titles and headings of paragraphs are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.


 


13.                                 Governing Law.  All questions arising with respect to the
provisions of this Agreement shall be determined by application of the laws of
the State of Delaware except to the extent Delaware law is preempted by federal
law.  The obligation of the Company to
sell and deliver Stock hereunder is subject to applicable laws and to the
approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Stock.


 


14.                                 Word Usage.  Words used in the masculine shall apply to
the feminine where applicable, and wherever the context of this Agreement
dictates, the plural shall be read as the singular and the singular as the
plural.


 


15.                                 Miscellaneous.


 


(a)                                  This Option Agreement is subject
to all the terms, conditions, limitations and restrictions contained in the
Plan.  In the event of any conflict or
inconsistency between the terms hereof and the terms of the Plan, the terms of
the Plan shall be controlling.


 


5





















 


(b)                                 This Option Agreement is not a
contract of employment and the terms of your employment shall not be affected
by, or construed to be affected by, this Option Agreement, except to the extent
specifically provided herein.  Nothing
herein shall impose, or be construed as imposing, any obligation (i) on the
part of the Company or any Subsidiary to continue your employment, or (ii) on
your part to remain in the employ of the Company or any Subsidiary.


 


(c)                                  This Option Agreement may be
amended as provided in Section 10(c) of the Plan.


 


(d)                                 Definitions.


 


(i)                                     Cause shall have the meaning given
such term in your Employment Agreement (if any) with the Company or a
Subsidiary of the Company; provided,
however, that if you do not have an Employment Agreement or
such agreement does not define Cause, Cause shall mean, as determined by the
Board or Committee in its sole discretion exercised in good faith, (A) your
breach of any nondisclosure, noncompetition, or other agreement to which you
and the Company are parties; (B) your commission of a felony or of a
misdemeanor involving moral turpitude; (C) the participation by you in any
fraud; (D) your dishonesty that is detrimental to the best interest of the
Company; (E) the willful and continued failure by you to substantially perform
your duties to the Company (other than any such failure resulting from your
incapacity due to physical or mental illness) after written demand for
substantial performance is delivered by the Company specifically identifying
the manner in which the Company believes you have not substantially performed
your duties; or (F) the willful engagement by you in misconduct which is
materially injurious to the Company, monetarily or otherwise.


 


(ii)                                  Disability shall have the meaning given
such term in your Employment Agreement (if any) with the Company or a
Subsidiary of the Company; provided, however, that if you do not have an Employment
Agreement or it does not define Disability, Disability shall mean, as
determined by the Board or Committee in its sole discretion exercised in good
faith, a physical or mental impairment of sufficient severity that either you
are unable to continue performing the duties you performed before such
impairment or your condition entitles you to disability benefits under any
insurance or employee benefit plan of the Company or its subsidiaries and that
impairment or condition is cited by the Company as the reason for termination
of your employment.


 


(iii)                               Good
Reason
shall have the meaning given such term in your Employment Agreement (if any)
with the Company or a Subsidiary of the Company; provided, however, that if you do
not have an Employment Agreement or the Employment Agreement does not define
Good Reason, Good Reason shall mean, as determined by the Board or Committee in
its sole discretion exercised in good faith, the occurrence of one or more of
the following events: (A) breach by the Company of any provision of you
Employment Agreement where such breach continues for a period of ten (10) days
after written notice thereof by you; (B) the Company gives notice to you
pursuant to the provisions of your Employment Agreement that the Company does
not


 


6





















 


wish to extend the Employment
Agreement and you resign before the expiration of the Employment Agreement; (C)
relocation of your regular work address by more than fifty miles without your
consent; or (D) any material adverse change in your job responsibilities,
duties, functions, status, offices, title, prerequisites or support staff.  By way of example only and without limiting
the applicability of the preceding clause, a material adverse change in your
job responsibilities, functions and status would result from a demotion which
significantly reduces your discretion and independent judgment within the
Company or significantly reduces the number of employees subject to your
authority.


 


[Remainder of page intentionally left blank]


 


7





















 


Please
indicate your acceptance of all the terms and conditions of the Option and the
Plan by signing and returning a copy of this Option Agreement.


 


	
   

  	
   

  	
  J. L. Halsey Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


 


	
  ACCEPTED:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Signature of Optionee

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Name of Optionee (Please Print)

  
	
   

  
	
  Date:

  	
   

  	
  ,

  	
   

  	
   

  
					



 


8