Document:

Exhibit 10.3

 

VALMONT 2002 STOCK PLAN

 

SECTION 1

 

NAME AND PURPOSE

 

1.1  NAME. The name of the plan shall be the Valmont 2002 Stock Plan (the “Plan”).

 

1.2. PURPOSE OF PLAN. The purpose of the Plan is to foster and promote the long-term financial success of the Company and increase stockholder value by (a) motivating superior performance by means of stock incentives, (b) encouraging and providing for the acquisition of an ownership interest in the Company by Employees and (c) enabling the Company to attract and retain the services of a management team responsible for the long-term financial success of the Company.

 

SECTION 2

 

DEFINITIONS

 

2.1  DEFINITIONS. Whenever used herein, the following terms shall have the respective meanings set forth below:

 

(a)                      “Act” means the Securities Exchange Act of 1934, as amended.

 

(b)                     “Award” means any Option, Stock Appreciation Right, Restricted Stock, Stock Bonus, or any combination thereof granted under the Plan, including Awards combining two or more types of Awards in a single grant.

 

(c)                      “Board” means the Board of Directors of the Company.

 

(d)                     “Code” means the Internal Revenue Code of 1986, as amended.

 

(e)                      “Committee” means the Compensation Committee of the Board, which shall consist of two or more members, each of whom shall be a “non-employee director” within the meaning of Rule 16b-3 as promulgated under the Act.

 

(f)                        “Company” means Valmont Industries, Inc., a Delaware corporation (and any successor thereto) and its Subsidiaries.

 

(g)                     “Director Award” means an award of Stock and an annual Award of a Nonstatutory Stock Option granted to each Eligible Director pursuant to Section 7.1 without any action by the Board or the Committee.

 

(h)                     “Eligible Director” means a person who is serving as a member of the Board and who is not an Employee.

 

(i)                         “Employee” means any employee of the Company or any of its Subsidiaries.

 

(j)                         “Fair Market Value” means, on any date, the average of the high and low sales prices of the Stock as reported on the National Association of

 

 

Securities Dealers Automated Quotation system (or on such other recognized market or quotation system on which the trading prices of the Stock are traded or quoted at the relevant time) on such date. In the event that there are no Stock transactions reported on such system (or such other system) on such date, Fair Market Value shall mean the average of the high and low sale prices on the immediately preceding date on which Stock transactions were so reported.

 

(k)                      “Option” means the right to purchase Stock at a stated price for a specified period of time. For purposes of the Plan, an Option may be either (i) an Incentive Stock Option within the meaning of Section 422 of the Code or (ii) a Nonstatutory Stock Option.

 

(l)                         “Participant” means any person designated by the Committee to participate in the Plan.

 

(m)                   “Plan” means the Valmont 2002 Stock Plan, as in effect from time to time.

 

(n)                     “Restricted Stock” shall mean a share of Stock granted to a Participant subject to such restrictions as the Committee may determine.

 

(o)                     “Stock” means the Common Stock of the Company, par value $1.00 per share.

 

(p)                     “Stock Appreciation Right” means the right, subject to such terms and conditions as the Committee may determine, to receive an amount in cash or Stock, as determined by the Committee, equal to the excess of (i) the Fair Market Value, as of the date such Stock Appreciation Right is exercised, of the number shares of Stock covered by the Stock Appreciation Right being exercised over (ii) the aggregate exercise price of such Stock Appreciation Right.

 

(q)                     “Stock Bonus” means the grant of Stock as compensation from the Company in lieu of cash salary or bonuses otherwise payable to the Participant, and stock issued for service awards and other similar employee recognition programs.

 

(r)                        “Subsidiary” means any corporation or partnership in which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock of such corporation or of the capital interest or profits interest of such partnership.

 

2.2  GENDER AND NUMBER. Except when otherwise indicated by the context, words in the masculine gender used in the Plan shall include the feminine gender, the singular shall include the plural, and the plural shall include the singular.

 

SECTION 3

 

ELIGIBILITY AND PARTICIPATION

 

Except as otherwise provided in Sections 5.1 and 7.1, the only persons eligible to participate in the Plan shall be those Employees selected by the Committee as Participants.

 

 

SECTION 4

 

POWERS OF THE COMMITTEE

 

4.1 POWER TO GRANT. The Committee shall determine the Participants to whom Awards shall be granted, the type or types of Awards to be granted, and the terms and conditions of any and all such Awards. The Committee may establish different terms and conditions for different types of Awards, for different Participants receiving the same type of Awards, and for the same Participant for each Award such Participant may receive, whether or not granted at different times.

 

4.2 ADMINISTRATION. The Committee shall be responsible for the administration of the Plan. The Committee, by majority action thereof, is authorized to prescribe, amend, and rescind rules and regulations relating to the Plan, to provide for conditions deemed necessary or advisable to protect the interests of the Company, and to make all other determinations necessary or advisable for the administration and interpretation of the Plan in order to carry out its provisions and purposes. Determinations, interpretations, or other actions made or taken by the Committee pursuant to the provisions of the Plan shall be final, binding, and conclusive for all purposes and upon all persons.

 

SECTION 5

 

STOCK SUBJECT TO PLAN

 

5.1 NUMBER. Subject to the provisions of Section 5.3, the number of shares of Stock subject to Awards (including Director Awards) under the Plan may not exceed 1,700,000 shares of Stock. The shares to be delivered under the Plan may consist, in whole or in part, of treasury Stock or authorized but unissued Stock, not reserved for any other purpose. The maximum number of shares of Stock with respect to which Awards may be granted to any one Employee under the Plan is 40% of the aggregate number of shares of Stock available for Awards under Section 5.1. A maximum of 20% of the shares of Stock available for issuance under the Plan may be issued as Restricted Stock or Stock Bonuses. In addition, a maximum of 50,000 shares available for issuance under the Plan may be issued to non-employee consultants.

 

5.2 CANCELLED, TERMINATED OR FORFEITED AWARDS. Any shares of Stock subject to an Award which for any reason are cancelled, terminated or otherwise settled without the issuance of any Stock shall again be available for Awards under the Plan. In the event that an Award is exercised through the delivery of Stock or in the event that withholding tax liabilities arising from such Award are satisfied by the withholding of Stock by the Company, the number of shares available for Awards under the Plan shall be increased by the number of shares surrendered or withheld.

 

5.3 ADJUSTMENT IN CAPITALIZATION. In the event of any Stock dividend or Stock split, recapitalization (including, without limitation, the payment of an extraordinary dividend), merger, consolidation, combination, spin-off, distribution of assets to stockholders, exchange of shares, or other similar corporate transaction or event, (i) the aggregate number of shares of Stock available for Awards under Section 5.1 and (ii) the number of shares and exercise price with respect to Options and the number, prices and dollar value of other Awards, shall be appropriately adjusted by the Committee, whose determination shall be conclusive. If, pursuant to the preceding sentence, an adjustment is made to the number of shares of Stock

 

 

authorized for issuance under the Plan, a corresponding adjustment shall be made with respect to Director Awards granted pursuant to Section 7.1.

 

SECTION 6

 

STOCK OPTIONS

 

6.1 GRANT OF OPTIONS. Options may be granted to Participants at such time or times as shall be determined by the Committee. Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Nonstatutory Stock Options. The Committee shall have complete discretion in determining the number of Options, if any, to be granted to a Participant. Each Option shall be evidenced by an Option agreement that shall specify the type of Option granted, the exercise price, the duration of the Option, the number of shares of Stock to which the Option pertains, the exercisability (if any) of the Option in the event of death, retirement, disability or termination of employment, and such other terms and conditions not inconsistent with the Plan as the Committee shall determine. Options may also be granted in replacement of or upon assumption of options previously issued by companies acquired by the Company by merger or stock purchase, and any options so replaced or assumed may have the same terms including exercise price as the options so replaced or assumed.

 

6.2 OPTION PRICE. Nonstatutory Stock Options and Incentive Stock Options granted pursuant to the Plan shall have an exercise price which is not less than the Fair Market Value on the date the Option is granted.

 

6.3 EXERCISE OF OPTIONS. Options awarded to a Participant under the Plan shall be exercisable at such times and shall be subject to such restrictions and conditions as the Committee may impose, subject to the Committee’s right to accelerate the exercisability of such Option in its discretion. Notwithstanding the foregoing, no Option shall be exercisable for more than ten years after the date on which it is granted.

 

6.4 PAYMENT. The Committee shall establish procedures governing the exercise of Options, which shall require that written notice of exercise be given and that the Option price be paid in full in cash or cash equivalents, including by personal check, at the time of exercise or pursuant to any arrangement that the Committee shall approve. The Committee may, in its discretion, permit a Participant to make payment (i) by tendering, either by actual delivery of shares or by attestation, shares of Stock already owned by the Participant valued at its Fair Market Value on the date of exercise (if such Stock has been owned by the Participant for at least six months) or (ii) by electing to have the Company retain Stock which would otherwise be issued on exercise of the Option, valued at its Fair Market Value on the date of exercise.  As soon as practicable after receipt of a written exercise notice and full payment of the exercise price, the Company shall deliver to the Participant a certificate or certificates representing the acquired shares of Stock. The Committee may permit a Participant to elect to pay the exercise price upon the exercise of an Option by irrevocably authorizing a third party to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any required tax withholding resulting from such exercise.

 

6.5 INCENTIVE STOCK OPTIONS. Notwithstanding anything in the Plan to the contrary, no term of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be so exercised, so as to disqualify the Plan under Section 422 of the Code, or, without the consent of any Participant

 

 

affected thereby, to cause any Incentive Stock Option previously granted to fail to qualify for the Federal income tax treatment afforded under Section 421 of the Code.

 

6.6 REPLACEMENT OPTIONS. The Committee may grant a replacement option (a “Replacement Option”) to any Employee who exercises all or part of an option granted under this Plan using Qualifying Stock (as herein defined) as payment for the purchase price. A Replacement Option shall grant to the Employee the right to purchase, at the Fair Market Value as of the date of said exercise and grant, the number of shares of stock equal to the sum of the number of whole shares (i) used by the Employee in payment of the purchase price for the option which was exercised and (ii) used by the Employee in connection with applicable withholding taxes on such transaction. A Replacement Option may not be exercised for six months following the date of grant, and shall expire on the same date as the option which it replaces. Qualifying Stock is stock which has been owned by the Employee for at least six months prior to the date of exercise and has not been used in a stock-for-stock swap transaction within the preceding six months.

 

SECTION 7

 

DIRECTOR AWARDS

 

7.1 AMOUNT OF AWARD. Each Eligible Director shall receive a non-discretionary Award of 2,000 shares of stock each year; such Award shall be made annually on the date of and following completion of the Company’s annual stockholders’ meeting (commencing with the 2002 annual stockholders’ meeting).  Each Eligible Director shall be issued a common stock certificate for such number of shares. Termination of the director’s services for any reason other than (i) death, (ii) retirement from the Board at mandatory retirement age, or (iii) resignation or failure to stand for re-election, in any such case with the prior approval of the Board, will result in forfeiture of the Stock. If the Stock is forfeited, the director shall return the number of forfeited shares of Stock, or equivalent value, to the Company. The number of shares of Stock awarded to an Eligible Director annually shall be appropriately adjusted in the event of any stock changes as described in Section 5.3. In addition, each Eligible Director shall receive a non-discretionary Award of a Nonqualified Stock Option for 4,000 shares of Stock exercisable at the Fair Market Value of the Company’s common stock on the date of grant; such Award shall be made annually on the date of and following completion of the Company’s annual stockholders’ meeting (commencing with the 2002 annual stockholders’ meeting).

 

The number of nonqualified options awarded to a director shall be appropriately adjusted in the event of any stock changes as described in Section 5.3.

 

7.2 NO OTHER AWARDS. An Eligible Director shall not receive any other Award under the Plan.

 

SECTION 8

 

STOCK APPRECIATION RIGHTS

 

8.1 SAR’S IN TANDEM WITH OPTIONS. Stock Appreciation Rights may be granted to Participants in tandem with any Option granted under the Plan, either at or after the time of the grant of such Option, subject to such terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine. Each Stock Appreciation Right shall

 

 

only be exercisable to the extent that the corresponding Option is exercisable, and shall terminate upon termination or exercise of the corresponding Option.

 

Upon the exercise of any Stock Appreciation Right, the corresponding Option shall terminate.

 

8.2 OTHER STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may also be granted to Participants separately from any Option, subject to such terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine.

 

SECTION 9

 

RESTRICTED STOCK

 

9.1 GRANT OF RESTRICTED STOCK. The Committee may grant Restricted Stock to Participants at such times and in such amounts, and subject to such other terms and conditions not inconsistent with the Plan as it shall determine.

 

Each grant of Restricted Stock shall be subject to such restrictions, which may relate to continued employment with the Company, performance of the Company, or other restrictions, as the Committee may determine. Each grant of Restricted Stock shall be evidenced by a written agreement setting forth the terms of such Award.

 

9.2 REMOVAL OF RESTRICTIONS. The Committee may accelerate or waive such restrictions in whole or in part at any time in its discretion.

 

SECTION 10

 

STOCK BONUSES

 

10.1 GRANT OF STOCK BONUSES. The Committee may grant a Stock Bonus to a Participant at such times and in such amounts, and subject to such other terms and conditions not inconsistent with the Plan, as it shall determine.

 

SECTION 11

 

AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN

 

11.1 GENERAL. The Board may from time to time amend, modify or terminate any or all of the provisions of the Plan, subject to the provisions of this Section 11.1. The Board may not change the Plan in a manner which would prevent outstanding Incentive Stock Options granted under the Plan from being Incentive Stock Options without the written consent of the optionees concerned. Furthermore, the Board may not make any amendment which would (i) materially modify the requirements for participation in the Plan, (ii) increase the number of shares of Stock subject to Awards under the Plan or to any one Employee pursuant to Section 5.1, or (iii) change the minimum exercise price for stock options as provided in Section 6.2, in each case without the approval of a majority of the outstanding shares of Stock entitled to vote thereon. No amendment or modification shall affect the rights of any Employee with respect to a previously granted Award, nor shall any amendment or modification affect the rights of any Eligible Director pursuant to a previously granted Director Award.

 

11.2 TERMINATION OF PLAN. No further Options shall be granted under the Plan subsequent to December 31, 2012, or such earlier date as may be determined by the Board.

 

 

SECTION 12

 

MISCELLANEOUS PROVISIONS

 

12.1 NONTRANSFERABILITY OF AWARDS. Except as otherwise provided by the Committee, Awards under the Plan are not transferable, except by will or by the laws of descent and distribution.

 

12.2 BENEFICIARY DESIGNATION. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries (who may be named contingent or successively) to whom any benefit under the Plan is to be paid or by whom any right under the Plan is to be exercised in case of his death. Each designation will revoke all prior designations by the same Participant shall be in a form prescribed by the Committee, and will be effective only when filed in writing with the Company. In the absence of any such designation, Awards outstanding at death may be exercised by the Participant’s surviving spouse, if any, or otherwise by his estate.

 

12.3 NO GUARANTEE OF EMPLOYMENT OR PARTICIPATION. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company or any Subsidiary. No Employee shall have a right to be selected as a Participant, or, having been so selected, to receive any future Awards.

 

12.4 TAX WITHHOLDING. The Company shall have the power to withhold, or require a Participant or Eligible Director to remit to the Company, an amount sufficient to satisfy federal, state, and local withholding tax requirements on any Award under the Plan, and the Company may defer issuance of Stock until such requirements are satisfied. The Committee may, in its discretion, permit a Participant to elect, subject to such conditions as the Committee shall impose, (i) to have shares of Stock otherwise issuable under the Plan withheld by the Company or (ii) to deliver to the Company previously acquired shares of Stock, in each case having a Fair Market Value sufficient to satisfy all or part of the Participant’s estimated total federal, state and local tax obligation associated with the transaction.

 

12.5 CHANGE OF CONTROL. On the date of a Change of Control, all outstanding options and stock appreciation rights shall become immediately exercisable and all restrictions with respect to Restricted Stock shall lapse.

 

“Change of Control” shall mean:

 

(i)                         The acquisition (other than from the Company) by any person, entity or “group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the Act (excluding any acquisition or holding by (i) the Company or its subsidiaries, (ii) any employee benefit plan of the Company or its subsidiaries which acquires beneficial ownership of voting securities of the Company and (iii) Robert B. Daugherty, his successors and assigns and any tax-exempt entity established by him) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 50% or more of either the then outstanding shares of common stock or the combined voting power of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; or

 

 

(ii)                      Individuals who, as of the date hereof, constitute the Board (as of the date hereof the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for the election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board; or

 

(iii)                   Consummation of a reorganization, merger or consolidation, approved by the stockholders of the Company, in which the Company is not the surviving entity and with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company’s then outstanding voting securities, or a liquidation or dissolution of the Company or of the sale of all or substantially all of the assets of the Company.

 

12.6  AGREEMENTS WITH COMPANY. An Award under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Committee may, in its sole discretion, prescribe.  The terms and conditions of any Award to any Participant shall be reflected in such form of written document as is determined by the Committee or its designee.

 

12.7 COMPANY INTENT. The Company intends that the Plan comply in all respects with Rule 16b-3 under the Act, and any ambiguities or inconsistencies in the construction of the Plan shall be interpreted to give effect to such intention.

 

12.8 REQUIREMENTS OF LAW. The granting of Awards and the issuance of shares of Stock shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or securities exchanges as may be required.

 

12.9 EFFECTIVE DATE. The Plan shall be effective upon its adoption by the Board subject to approval by the Company’s stockholders at the 2002 annual stockholders’ meeting.

 

12.10 GOVERNING LAW. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.Exhibit 10.6

 

VALMONT INDUSTRIES, INC.

STOCK OPTION AGREEMENT

 

STOCK OPTION AGREEMENT made this DATE, between Valmont Industries, Inc., a Delaware corporation (“Company”), and NAME, an employee of the Company (“Employee”).

 

The Company desires, by affording the Employee an opportunity to purchase its common shares as hereinafter provided, to carry out the purpose of the Valmont 2008 Stock Plan (the “Plan”).  This option is expressly designated not to be an Incentive Stock Option as defined in I.R.C. §422A.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for good and valuable consideration, the parties hereto agree as follows:

 

1.             Grant of Option.  The Company hereby irrevocably grants to the Employee, pursuant to and subject to the terms of the Plan, the right and option, hereinafter called the “Option,” to purchase all or any part of an aggregate of ## shares of common stock (the “Common Shares”) of the Company (such number being subject to adjustment as provided in Paragraph 8 hereof) on the terms and conditions herein set forth.  The holder of the Option shall not have any of the rights of a stockholder with respect to the shares covered by the Option until one or more certificates for such shares shall be delivered to such holder upon the due exercise of the Option.

 

Employee acknowledges receipt of a copy of the Plan, and agrees that this award of the Option shall be subject to all of the terms and conditions set forth in the Plan, including future amendments thereto, if any, which Plan is incorporated herein by reference as part of this Agreement.

 

2.             Purchase Price.  The purchase price of the Common Shares covered by the Option shall be $XX.XX per share.  The purchase price of the shares as to which the Option shall be exercised shall be paid in full in cash at the time of exercise or, at the discretion of the Compensation Committee of the Board of Directors of the Company (the “Committee”), the purchase price may be paid in common stock of the Employer already owned by the Employee valued at its Fair Market Value (as defined in the Plan) on the date of exercise.  The purchase price of the Common Shares may also be paid by a “net exercise” arrangement pursuant to which the Company will reduce the number of Common Shares issued upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided that the Company shall accept cash or other payment to the extent of any remaining balance of the aggregate exercise price.

 

3.             Term of Option.  The term of the Option shall be for a period of seven years from the date hereof, subject to earlier termination as provided in Paragraphs 6, 7 and 12 hereof.

 

4.             Non-Transferability.  Except as otherwise permitted by the Committee, the Option shall not be transferable otherwise than by will or the laws of descent and distribution, and the Option may be exercised, during the lifetime of the Employee, only by such Employee.

 

 

More particularly (but without limiting the generality of the foregoing), the Option may not be assigned, transferred (except as provided above),  pledged or hypothecated in any way, shall not be assignable by operation of law, and shall not be subject to execution, attachment or similar process.  Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions hereof or the levy of any execution, attachment or similar process upon the Option shall be null and void and without effect.

 

5.             Exercisability.  Subject to Paragraph 6, this Option shall be exercisable in staggered one-third (1/3) increments, all with a period of exercisability commencing on the date of first exercisability and ending on Date.  The following exercise table is applicable:

 

	
 
    	
 
    	
 
    	
 
    	
Last Date Options
    
	
Shares Granted
    	
 
    	
Exercisable on or After
    	
 
    	
May be Exercised
    
	
1/3 of total grant
    	
 
    	
 
    	
 
    	
 
    
	
1/3 of total grant
    	
 
    	
 
    	
 
    	
 
    
	
1/3 of total grant
    	
 
    	
 
    	
 
    	
 
    

 

The Option may be exercised, at any time or from time to time, as to any part or all the shares exercisable; provided, however, that the Option may not be exercised as to less than one hundred (100) shares at any one time (or the remaining shares then purchasable under the Option, if less than one hundred (100) shares).  The Option may not be exercised unless at the date of exercise a Registration Statement under the Securities Act of 1933, as amended, relating to the shares covered by the Option shall be in effect or the Company shall have determined that an exemption from such registration is available.  Subject to Paragraph 6, the Option may not be exercised at any time unless the Employee shall have been in the continuous employ of the Company or a subsidiary from the time hereof to the date of the exercise of the Option.

 

6.             Termination of Employment.

 

(a)           In the event that the Employee voluntarily terminates employment prior to retirement on or after age 62, or in the event the Company terminates the Employee’s employment for Cause, the Option may be exercised by the Employee (to the extent that the Employee shall have been entitled to do so at the termination of employment) at or prior to the time of such termination.

 

(b)           In the event the employment of the Employee shall be terminated by the Company without Cause, the Employee shall have ninety days following such termination to exercise all options exercisable on the date of termination.

 

(c)           In the event the employment of the Employee terminates due to death or Disability, the Option shall become immediately exercisable, provided that the Option must be exercised by Employee (or Employee’s personal representative or successor) within a period ending on the earlier of (i) three years following the death or Disability or (ii) the remaining term of the Option as set forth in Paragraph 3.

 

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(d)           In the event that the employment of the Employee voluntarily terminates due to retirement of the Employee on or after attaining age 62, this Option shall continue to vest for a period ending on the earlier of (i) three years from the date of retirement, or (ii) the remaining term of the Option as set forth in Paragraph 3.  All Options which become exercisable must be exercised within three years following the date of retirement.

 

(e)           In the event of a Change-of-Control of the Company (as defined in the Plan), this Option shall become immediately exercisable and such options may be exercised within the remaining term of the Option as set forth in Paragraph 3.

 

(f)            So long as the Employee shall continue to be an employee of the Company, or an affiliate, or a subsidiary the Option shall not be affected by any change of duties or position.  Nothing in this Option Agreement shall confer upon the Employee any right to continue in the employ of the Company or interfere in any way with the right of the Company to terminate his/her employment at any time.  The transfer of employment between any combination of the Company and any affiliate or subsidiary shall not be deemed a termination of employment.

 

(g)           For purposes of this Agreement, “Cause” shall include the Employee’s (i) indictment, conviction, or plea of guilty or nolo contendere to a misdemeanor involving moral turpitude or a felony, (ii) breach of duties to the Company which cause material financial loss to the Company, which is not cured within five days following receipt by Employee of written notice from the Chief Executive Officer, or (iii) failure of Employee to act at all times in the best interests of the Company or to carry out the duties of his position in all material respects as assigned by the Chief Executive Officer or his designee, if any such failure is not cured within five days following receipt by Employee of written notice from the Chief Executive Officer or his designee.  For purposes of this Agreement, “Disability” shall mean that the Employee, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, is receiving income replacement benefits for a period of not less than three months under the Company’s long-term disability plan.

 

7.             Non-Compete.  The Employee agrees that for a period of twelve months after employment has been terminated for any reason other than by the Company without cause, the Employee will not, solicit for sale or sell products or services, which compete with any of the Company’s products or services to those persons, companies, firms or corporations who were or are customers of the Company and with whom the Employee had personal contact during and as a result of employment with the Company.  The Employee agrees not to solicit or sell to such customers on behalf of the Employee or on behalf of any other person, firm, company or corporation.  Moreover, during said twelve month period, the Employee shall neither induce nor encourage any employee employed by the Company to leave the Company’s employment.  The Employee also agrees that during said twelve month period, he/she will not interfere with the Company’s contractual or business relationships with its suppliers or vendors.

 

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The Employee acknowledges that a violation of the Employee’s covenants above, may result in irreparable and continuing harm to the Company.  If the Employee violates any of these covenants, the Company will be entitled to seek from any court of competent jurisdiction (in addition to other remedies) injunctive relief, to restrain any further violations by Employee and by any persons acting for or on Employee’s behalf.  In the event the Company is required to seek enforcement of any of the provisions of this agreement, the Company will be entitled to recover from the Employee reasonable attorney’s fees plus costs and expenses.

 

Notwithstanding any other provisions of this Agreement, including, but not limited to, Paragraphs 5 and 6 hereof, if the Employee violates any of the provisions of this Paragraph 7, the Employee shall forfeit any stock options that are not exercisable as of the date of such violation; such forfeiture shall not affect any other remedy available to the Company hereunder.

 

The Employee recognizes that the limitations in this Agreement are reasonable and necessary to protect the legitimate business interests of the Company.  In the event that any of the foregoing non-competition covenants are held to be unenforceable by any court of competent jurisdiction, the Employee agrees and understands that such covenants may be modified to impose limitations on the Employee’s activities no greater than that allowable under applicable law.

 

8.             Adjustment in Capitalization.  If any adjustment in the Company’s capitalization as described in the Plan occurs, appropriate adjustments shall be made (as provided in the Plan) to the number of shares and price per share of stock subject to this Option.

 

9.             Method of Exercising Option.  Subject to the terms and conditions of the Option Agreement, the Option may be exercised by written notice to the Company, care of its Chief Financial Officer, One Valmont Plaza, Omaha, Nebraska 68154.  Such notice shall state the election to execute 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 either: (a) 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; or (b) fix a date (not less than five (5) nor more than ten (10) business days from the date such notice shall be received by the Chief Financial Officer) for the payment of the full purchase price of such shares at the Company’s Transfer Agent Offices, against delivery of a certificate or certificates representing such shares.  Payment of such purchase price shall, in either case, be made by check payable to the order of the Company or, if applicable pursuant to Paragraph 2 hereof, the transfer of or withholding of the appropriate shares of stock.  The certificate or certificates for the shares as to which the Option shall have been so exercised shall be registered in the name of the person or persons so exercising the Option (or, if the Option shall be exercised by the Employee and if the Employee shall so request in the notice exercising the Option, shall be registered in the name of the Employee and another person jointly, with right of survivorship or in the name of the Employee’s spouse) and shall be delivered as provided above to or upon the written order of the person or persons exercising the Option.  All shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and non-assessable.

 

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As a condition of the issuance of shares hereunder, the Employee agrees to remit to the Company at the time of any exercise of this Option any taxes required to be withheld by the Company under federal, state or local law as a result of exercise.  The Employee may remit such amount in cash, or by an appropriate reduction of the number of shares to be delivered to the Employee upon exercise, or by the Employee delivering sufficient shares of common stock of the Employer valued at its fair market value (if such common stock has been owned by the Employee for at least six months).

 

10.           Retention of Shares.  Upon exercise of all or part of this Option, if the Employee, at the time of exercise, has not met the stock ownership guidelines of the Company applicable to Employee, the net shares obtained through the exercise of the Option shall be retained, and not otherwise disposed of, for a period of one year from the date of exercise.

 

11.           General.  The Company shall at all times during the term of the Option reserve and keep available such number of Common Shares as will be sufficient to satisfy the requirements of this Option Agreement, shall pay all original issue and transfer taxes with respect to the issue and transfer of shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith, and will use its best efforts to comply with all laws and regulations which shall be applicable thereto.

 

12.           Reimbursement.    In the event that (i) the Company is required to restate and submit to the Securities and Exchange Commission a restatement of its audited financial statements for a fiscal year after fiscal 2006 due to material noncompliance with any financial reporting requirement and (ii) Employee engaged in fraud or intentional misconduct that caused or contributed to the need for the restatement, as determined by the Board of Directors, the Company, in an appropriate case as determined by the Board of Directors, shall be entitled to cancel the Option, in whole or part, whether or not vested, and require Employee to repay to the Company any gain realized or return any shares received upon the exercise or payment of the Option (with such gain, payment or shares valued as of the date of exercise or payment), and return of all dividends paid thereon. The rights of reimbursement of the Company shall be in addition to any other right of reimbursement provided by law.

 

13.           Administration.  The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan.  Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding.

 

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14.           Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Employee.

 

15.           Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nebraska.

 

IN WITNESS WHEREOF, the corporation and the Employee have signed this Option Agreement effective as of the day and year first above written.

 

 

	
 
    	
 
    	
 
    	
VALMONT INDUSTRIES, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
Employee
    	
 
    	
 
    	
Mogens C. Bay
    
	
 
    	
 
    	
 
    	
Chairman and Chief Executive Officer
    

 

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