Document:

exv10w2

 

Exhibit 10.2

PEERLESS MFG. CO.

STOCK OPTION AGREEMENT

     THIS AGREEMENT (this “Agreement”), effective as of ___, is
made and entered into by and between Peerless Mfg. Co., a Texas corporation (the “Corporation”),
and ___ (the “Participant”).

W I T N E S S E T H:

     WHEREAS, the Corporation has implemented the Peerless Mfg. Co. 2001 Stock Option and
Restricted Stock Plan (the “Plan”), which was adopted by the Corporation’s Board of Directors (the
“Board”) and approved by the Corporation’s shareholders, and which provides for the grant of stock
to certain selected officers, directors and key employees of the Corporation or its subsidiaries
with respect to shares of Common Stock, $1.00 par value, of the Corporation (the “Common Stock”);

     WHEREAS, the stock options provided for under the Plan are intended to comply with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as amended;

     WHEREAS, the committee appointed by the Board to administer the Plan (the “Committee”) has
selected the Participant to participate in the Plan and has awarded
the non-qualified stock option described in this Agreement (the “Option”) to the Participant;

     WHEREAS, the parties hereto desire to evidence in writing the terms and conditions of the
Option.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
herein contained, and as an inducement to the Participant to continue as an employee of the
Corporation or its subsidiaries and to promote the success of the business of the Corporation and
its subsidiaries, the parties hereby agree as follows:

     1. Grant of Option. Effective as of the date of this Agreement (the “Award Date”),
the Corporation hereby grants to the Participant, upon the terms and subject to the conditions,
limitations and restrictions set forth in the Plan and in this Agreement, the Option to acquire
___ shares of Common Stock, at an exercise price per
share of $       , which is
the Fair Market Value on the Award Date. The Participant hereby accepts the Option from the
Corporation.

     2. Vesting. As of the Award Date (as defined above), the Option is vested in full as
to all shares of Common Stock subject hereto.

     3. Exercise. In order to exercise the Option with respect to any vested portion, the
Participant

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shall provide written notice to the Corporation at its principal executive office. At the time of
exercise, the Participant shall pay to the Corporation the exercise price per share set forth in
Section 1 times the number of vested shares as to which the Option is being exercised. The
Participant shall make such payment in cash, check or at the Corporation’s option, by the delivery
of shares of Common Stock having a Fair Market Value on the date immediately preceding the exercise
date equal to the aggregate exercise price. If the Option is exercised in full, the Participant
shall surrender this Agreement to the Corporation for cancellation. If the Option is exercised in
part, the Participant shall surrender this Agreement to the Corporation so that the Corporation may
make appropriate notation hereon or cancel this Agreement and issue a new agreement representing
the unexercised portion of the Option.

     If the shares to be purchased are covered by an effective registration statement under the
Securities Act of 1933, as amended (the “Act”), the Option may be exercised by a broker-dealer
acting on behalf of the Participant if (a) the broker-dealer has received from the Participant or
the Corporation a fully- and duly-endorsed agreement evidencing such option, together with
instructions signed by the Participant requesting the Corporation to deliver the shares of Common
Stock subject to such option to the broker-dealer on behalf of the Participant and specifying the
account into which such shares should be deposited, (b) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise, and (c) the broker-dealer
and the Participant have otherwise complied with Section 220.3(e) (4) of Regulation T, 12 CFR Part
220, or any successor provision.

     4. Who May Exercise. The Option shall be exercisable during the lifetime of the
Participant only by the Participant. To the extent exercisable after the Participant’s death, the
Option shall be exercised only by the Participant’s representatives, executors, successors or
beneficiaries.

     5. Expiration of Option. The Option shall expire, and shall not be exercisable with
respect to any vested portion as to which the Option has not been exercised, on the first to occur
of: (a) the tenth anniversary of the Award Date; or (b) 90 days after any termination of the
Participant’s employment with the Corporation for any reason other than death or 360 days after any
such death. The Option shall expire, and shall not be exercisable, with respect to any unvested
portion, immediately upon the termination of the Participant’s employment with the Corporation for
any reason, including death.

     6. Tax Withholding. Any provision of this Agreement to the contrary notwithstanding,
the Corporation may take such steps as it deems necessary or desirable for the withholding of any
taxes that it is required by law or regulation of any governmental authority, federal, state or
local, domestic or foreign, to withhold in connection with any of the shares of Common Stock
subject hereto.

     7. Dilution. The number of shares of Common Stock subject to the Option and the
exercise price therefor set forth in Section 1 shall be subject to adjustment for any Dilutive
Event. A “Dilutive Event” shall include any of the following events that results in dilution to
the shares of Common Stock acquired or acquirable upon exercise of the Option: any increase or
decrease in the shares of Common Stock or any other capital stock of the Corporation or any change
or exchange of any such securities

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for a different number or kind of securities, any of which results from one or more
stock splits, reverse stock splits, stock dividends, recapitalizations, reorganizations or other
corporate actions with a similar effect. A “Dilutive Event” shall not include, however, among
other things: (i) the issuance or exercise of options granted pursuant to the Plan or pursuant to any other stock-based compensation plan
adopted by the Corporation’s Board of Directors; or (ii) any issuance of capital stock by the
Corporation for Fair Market Value or any issuance or grant to any person or entity of any right to
subscribe for or to purchase any capital stock or securities convertible into any capital stock of
the Corporation for Fair Market Value.

     8. Transfer of Option. The Participant shall not, directly or indirectly, sell,
transfer, pledge, encumber or hypothecate (“Transfer”) any unvested portion of the Option or the
rights and privileges pertaining thereto. In addition, the Participant shall not, directly or
indirectly, Transfer any vested portion of the Option other than by will or the laws of descent and
distribution. Any permitted transferee to whom the Participant shall Transfer the Option shall
agree to be bound by this Agreement. Neither the Option nor the underlying shares of Common Stock
is liable for or subject to, in whole or in part, the debts, contracts, liabilities or torts of the
Participant, nor shall they be subject to garnishment, attachment, execution, levy or other legal
or equitable process.

     9. Certain Legal Restrictions. The Corporation shall not be obligated to sell or
issue any shares of Common Stock upon the exercise of the Option or otherwise unless the issuance
and delivery of such shares shall comply with all relevant provisions of law and other legal
requirements including, without limitation, any applicable federal or state securities laws and the
requirements of any stock exchange upon which shares of the Common Stock may then be listed. As a
condition to the exercise of the Option or the sale by the Corporation of any additional shares of
Common Stock to the Participant, the Corporation may require the Participant to make such
representations and warranties as may be necessary to assure the availability of an exemption from
the registration requirements of applicable federal or state securities laws. The Corporation
shall not be liable for refusing to sell or issue any shares if the Corporation cannot obtain
authority from the appropriate regulatory bodies deemed by the Corporation to be necessary to
lawfully sell or issue such shares. In addition, the Corporation shall have no obligation to the
Participant, express or implied, to list, register or otherwise qualify any of the Participant’s
shares of Common Stock. The shares of Common Stock issued upon the exercise of the Option may not
be transferred except in accordance with applicable federal or state
securities laws. At the Corporation’s option, the certificate evidencing shares of Common Stock
issued to the Participant may be legended as follows:

	 	   	THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE APPLICABLE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED OR PLEDGED EXCEPT IN COMPLIANCE
WITH THE REQUIREMENTS OF SUCH ACT AND THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.

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     Any Common Stock issued pursuant to the exercise of Options granted pursuant to this Agreement
to a person who would be deemed an officer or director of the Corporation under Rule
16b-3 shall not be transferred until at least six months have elapsed from the date of grant of
such Option to the date of disposition of the Common Stock underlying such Option.

     10. Plan Incorporated. The Participant accepts the Option subject to all the
provisions of the Plan, which are incorporated into this Agreement, including the provisions that
authorize the Committee to administer and interpret the Plan and which provide that the Committee’s
decisions, determinations and interpretations with respect to the Plan are final and conclusive
on all persons affected thereby. Except as otherwise set forth in this Agreement, terms defined in
the Plan have the same meanings herein.

     11. Miscellaneous.

     (a) The Option is intended to be a non-qualified stock option under applicable tax laws,
and it is not to be characterized or treated as an incentive stock option under such laws.

     (b) The granting of the Option shall impose no obligation upon the Participant to
exercise the Option or any part thereof. Nothing contained in this Agreement shall affect the
right of the Corporation to terminate the Participant at any time, with or without cause, or
shall be deemed to create any rights to employment on the part of the Participant.

     (c) The rights and obligations arising under this Agreement are not intended to and do
not affect the employment relationship that otherwise exists between the Corporation and the
Participant, whether such employment relationship is at will or defined by an employment
contract. Moreover, this Agreement is not intended to and does not amend any existing
employment contract between the Corporation and the Participant; to the extent there is a
conflict between this Agreement and such an employment contract, the employment contract
shall govern and take priority.

     (d) Neither the Participant nor any person claiming under or through the Participant
shall be or shall have any of the rights or privileges of a stockholder of the Corporation in
respect of any of the shares issuable upon the exercise of the Option herein unless and until
certificates representing such shares shall have been issued and delivered to the Participant
or such Participant’s agent.

     (e) Any notice to be given to the Corporation under the terms of this Agreement or any
delivery of the Option to the Corporation shall be addressed to the Corporation at its
principal executive offices, and any notice to be given to the Participant shall be addressed
to the Participant at the address set forth beneath his or her signature hereto, or at such
other address for a party as such party may hereafter designate in writing to the other. Any
such notice shall be deemed to have been duly given if mailed, postage prepaid, addressed as
aforesaid.

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     (f) Subject to the limitations in this Agreement on the transferability by the
Participant of
the Option and any shares of Common Stock, this Agreement shall be binding upon and inure to the
benefit of the representatives, executors, successors or beneficiaries of the parties hereto.

     (g) The interpretation, performance and enforcement of this Agreement shall be governed by the
laws of the State of Texas and the United States, as applicable, without reference to the conflict
of laws provisions thereof.

     (h) If any provision of this Agreement is declared or found to be illegal, unenforceable or
void, in whole or in part, then the parties shall be relieved of all obligations arising under such
provision, but only to the extent that it is illegal, unenforceable or void, it being the intent
and agreement of the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while preserving its intent or,
if that is not possible, by substituting therefor another provision that is legal enforceable and
achieves the same objectives.

     (i) All section titles and captions in this Agreement are for convenience only, shall not be
deemed part of this Agreement, and in no way shall define, limit, extend or describe the scope or
intent of any provisions of this Agreement.

     (j) The parties shall execute all documents, provide all information, and take or refrain
from taking all actions as may be necessary or appropriate to achieve the purposes of this
Agreement.

     (k) This Agreement constitutes the entire agreement among the parties hereto pertaining to
the subject matter hereof and supersedes all prior agreements and understandings pertaining hereto.

     (l) No failure by any party to insist upon the strict performance of any covenant, duty,
agreement or condition of this Agreement or to exercise any right or remedy consequent upon a
breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

     (m) This Agreement may be executed in counterparts, all of which together shall constitute
one agreement binding on all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart.

     (n) At any time and from time to time the Committee may execute an instrument providing for
modification, extension, or renewal of any outstanding option, provided that no such modification,
extension or renewal shall (i) impair the Option in any respect without the consent of the holder
of the Option or (ii) conflict with the provisions of Rule 16b-3. Except as provided in the
preceding sentence, no supplement, modification or amendment of this

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Agreement or waiver of any provision of this Agreement shall be binding unless executed in
writing by all parties to this Agreement. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision of this Agreement (regardless
of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise
expressly provided.

     (o) In addition to all other rights or remedies available at law or in equity, the
Corporation shall be entitled to injunctive and other equitable relief to prevent or enjoin any
violation of the provisions of this Agreement.

     (p) The Participant’s spouse joins this Agreement for the purpose of agreeing to
and accepting the terms of this Agreement and to bind any community property interest he or she has or
may have in the Option, any vested portion or any unvested portion of the Option, any shares of
Common Stock acquired upon exercise of the Option and any other shares of Common Stock held by the
Participant.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	 	CORPORATION:
	 
	 	 	 	 
	 	 	Peerless Mfg. Co.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	

	 	Name:	 	 
	

	 	 	 	

	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	

	 
	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	

	

	 	Address:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	PARTICIPANT’S SPOUSE:
	 
	 	 	 	 
	 	 	

	 
	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	

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PEERLESS MFG. CO.

STOCK OPTION AGREEMENT

Exhibit 10.3

     THIS AGREEMENT (this “Agreement”), effective as of                     , is
made and entered into by and between Peerless Mfg. Co., a Texas corporation (the “Corporation”),
and                      (the “Participant”).

W I T N E S S E T H:

     WHEREAS, the Corporation has implemented the Peerless Mfg. Co. 2001 Stock Option and
Restricted Stock Plan (the “Plan”), which was adopted by the Corporation’s Board of Directors (the
“Board”) and approved by the Corporation’s shareholders, and which provides for the grant of stock
to certain selected officers, directors and key employees of the Corporation or its subsidiaries
with respect to shares of Common Stock, $1.00 par value, of the Corporation (the “Common Stock”);

     WHEREAS, the stock options provided for under the Plan are intended to comply with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as amended;

     WHEREAS, the committee appointed by the Board to administer the Plan (the “Committee”) has
selected the Participant to participate in the Plan and has awarded the non-qualified stock option
described in this Agreement (the “Option”) to the Participant;

     WHEREAS, the parties hereto desire to evidence in writing the terms and conditions of the
Option.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
herein contained, and as an inducement to the Participant to continue as an employee of the
Corporation or its subsidiaries and to promote the success of the business of the Corporation and
its subsidiaries, the parties hereby agree as follows:

     1. Grant of Option. Effective as of the date of this Agreement (the “Award Date”),
the Corporation hereby grants to the Participant, upon the terms and subject to the conditions,
limitations and restrictions set forth in the Plan and in this Agreement, the Option to acquire
            
shares of Common Stock, at an exercise price per share of $       , which is
the Fair Market Value on the Award Date. The Participant hereby accepts the Option from the
Corporation.

     2. Vesting. The shares of Common Stock subject to the Option shall vest ratably in
four equal annual increments commencing on the first anniversary of the Award Date.
Notwithstanding the preceding sentence, the Option shall immediately vest in full as to all shares
of Common Stock subject hereto upon any “Sale of the Corporation.” A “Sale of the Corporation”
shall occur if the Corporation shall engage in a merger, consolidation, recapitalization,
reorganization or sale, lease or transfer of all

- 1 -

 

or substantially all of the Corporation’s assets and the Corporation or its stockholders or
affiliates
immediately before such transaction shall beneficially own, immediately after or as a result of
such transaction, equity securities of the surviving or acquiring corporation or such corporation’s
parent corporation possessing less than fifty-one percent (51%) of the voting power of the
surviving or acquiring corporation or such corporation’s parent corporation, provided that a Sale
of the Corporation shall not be deemed to occur upon any public offering or series of such
offerings of securities of the Corporation or its affiliates that results in any such change in
beneficial ownership.

     3. Exercise. In order to exercise the Option with respect to any vested portion, the
Participant
shall provide written notice to the Corporation at its principal executive office. At the time of
exercise, the Participant shall pay to the Corporation the exercise price per share set forth in
Section
1 times the number of vested shares as to which the Option is being exercised. The Participant
shall
make such payment in cash, check or at the Corporation’s option, by the delivery of shares of
Common Stock having a Fair Market Value on the date immediately preceding the exercise date equal
to the aggregate exercise price. If the Option is exercised in full, the Participant shall
surrender this Agreement to the Corporation for cancellation. If the Option is exercised in part,
the Participant shall surrender this Agreement to the Corporation so that the Corporation may make
appropriate notation hereon or cancel this Agreement and issue a new agreement representing the
unexercised portion of the Option.

     If the shares to be purchased are covered by an effective registration statement under the
Securities Act of 1933, as amended (the “Act”), the Option may be exercised by a broker-dealer
acting on behalf of the Participant if (a) the broker-dealer has received from the Participant or
the Corporation a fully- and duly-endorsed agreement evidencing such option, together with
instructions signed by the Participant requesting the Corporation to deliver the shares of Common
Stock subject to such option to the broker-dealer on behalf of the Participant and specifying the
account into which such shares should be deposited, (b) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise, and (c) the broker-dealer
and the Participant have otherwise complied with Section 220.3(e) (4) of Regulation T, 12 CFR Part
220, or any successor provision.

     4. Who May Exercise. The Option shall be exercisable during the lifetime of the
Participant only by the Participant. To the extent exercisable after the Participant’s death, the
Option shall be exercised only by the Participant’s representatives, executors, successors or
beneficiaries.

     5. Expiration of Option. The Option shall expire, and shall not be exercisable with
respect to any vested portion as to which the Option has not been exercised, on the first to occur
of: (a) the tenth anniversary of the Award Date; or (b) 90 days after any termination of the
Participant’s employment with the Corporation for any reason other than death or 360 days after any
such death. The Option shall expire, and shall not be exercisable, with respect to any unvested
portion, immediately upon the termination of the Participant’s employment with the Corporation for
any reason, including death.

- 2 -

 

     6. Tax Withholding. Any provision of this Agreement to the contrary
notwithstanding, the Corporation may take such steps as it deems necessary or desirable for the
withholding of any taxes
that it is required by law or regulation of any governmental authority, federal, state or local,
domestic
or foreign, to withhold in connection with any of the shares of Common Stock subject hereto.

     7. Dilution. The number of shares of Common Stock subject to the Option and the
exercise price therefor set forth in Section 1 shall be subject to adjustment for any Dilutive
Event. A “Dilutive Event” shall include any of the following events that results in dilution to
the shares of Common Stock acquired or acquirable upon exercise of the Option: any increase or
decrease in the shares of Common Stock or any other capital stock of the Corporation or any change
or exchange of any such securities
for a different number or kind of securities, any of which results from one or more stock splits,
reverse stock splits, stock dividends, recapitalizations, reorganizations or other corporate
actions with a similar effect. A “Dilutive Event” shall not include, however, among other things:
(i) the issuance or exercise of options granted pursuant to the Plan or pursuant to any other stock-based compensation plan
adopted by the Corporation’s Board of Directors; or (ii) any issuance of capital stock by the
Corporation for Fair Market Value or any issuance or grant to any person or entity of any right to
subscribe for or to purchase any capital stock or securities convertible into any capital stock of
the Corporation for Fair Market Value.

     8. Transfer of Option. The Participant shall not, directly or indirectly, sell,
transfer, pledge, encumber or hypothecate (“Transfer”) any unvested portion of the Option or the
rights and privileges pertaining thereto. In addition, the Participant shall not, directly or
indirectly, Transfer any vested portion of the Option other than by will or the laws of descent and
distribution. Any permitted transferee to whom the Participant shall Transfer the Option shall
agree to be bound by this Agreement. Neither the Option nor the underlying shares of Common Stock
is liable for or subject to, in whole or in part, the debts, contracts, liabilities or torts of the
Participant, nor shall they be subject to garnishment, attachment, execution, levy or other legal
or equitable process.

     9. Certain Legal Restrictions. The Corporation shall not be obligated to sell or
issue any shares of Common Stock upon the exercise of the Option or otherwise unless the issuance
and delivery of such shares shall comply with all relevant provisions of law and other legal
requirements including, without limitation, any applicable federal or state securities laws and the
requirements of any stock exchange upon which shares of the Common Stock may then be listed. As a
condition to the exercise of the Option or the sale by the Corporation of any additional shares of
Common Stock to the Participant, the Corporation may require the Participant to make such
representations and warranties as may be necessary to assure the availability of an exemption from
the registration requirements of applicable federal or state securities laws. The Corporation
shall not be liable for refusing to sell or issue any shares if the Corporation cannot obtain
authority from the appropriate regulatory bodies deemed by the Corporation to be necessary to
lawfully sell or issue such shares. In addition, the Corporation shall have no obligation to the
Participant, express or implied, to list, register or otherwise qualify any of the Participant’s
shares of Common Stock. The shares of Common Stock issued upon the exercise of the Option may not
be transferred except in accordance with applicable federal or state

- 3 -

 

securities laws. At the Corporation’s option, the certificate evidencing shares of Common
Stock issued to the Participant may be legended as follows:

	   	THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE APPLICABLE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED OR PLEDGED EXCEPT IN COMPLIANCE
WITH THE REQUIREMENTS OF SUCH ACT AND THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.

     Any Common Stock issued pursuant to the exercise of Options granted pursuant to this Agreement
to a person who would be deemed an officer or director of the Corporation under Rule
16b-3 shall not be transferred until at least six months have elapsed from the date of grant of
such Option to the date of disposition of the Common Stock underlying such Option.

     10. Plan Incorporated. The Participant accepts the Option subject to all the
provisions of the Plan, which are incorporated into this Agreement, including the provisions that
authorize the Committee to administer and interpret the Plan and which provide that the Committee’s
decisions, determinations and interpretations with respect to the Plan are final and conclusive
on all persons affected thereby. Except as otherwise set forth in this Agreement, terms defined in
the Plan have the same meanings herein.

     11. Miscellaneous.

     (a) The Option is intended to be a non-qualified stock option under applicable tax laws,
and it is not to be characterized or treated as an incentive stock option under such laws.

     (b) The granting of the Option shall impose no obligation upon the Participant to
exercise the Option or any part thereof. Nothing contained in this Agreement shall affect the
right of the Corporation to terminate the Participant at any time, with or without cause, or
shall be deemed to create any rights to employment on the part of the Participant.

     (c) The rights and obligations arising under this Agreement are not intended to and do
not affect the employment relationship that otherwise exists between the Corporation and the
Participant, whether such employment relationship is at will or defined by an employment
contract. Moreover, this Agreement is not intended to and does not amend any existing
employment contract between the Corporation and the Participant; to the extent there is a
conflict between this Agreement and such an employment contract, the employment contract
shall govern and take priority.

     (d) Neither the Participant nor any person claiming under or through the Participant
shall

- 4 -

 

be or shall have any of the rights or privileges of a stockholder of the Corporation in
respect of any of the shares issuable upon the exercise of the Option herein unless and until
certificates representing such shares shall have been issued and delivered to the Participant or
such Participant’s agent.

     (e) Any notice to be given to the Corporation under the terms of this Agreement or any
delivery of the Option to the Corporation shall be addressed to the Corporation at its principal
executive offices, and any notice to be given to the Participant shall be addressed to the
Participant at the address set forth beneath his or her signature hereto, or at such other address
for a party as such party may hereafter designate in writing to the other. Any such notice shall
be deemed to have been duly given if mailed, postage prepaid, addressed as aforesaid.

     (f) Subject to the limitations in this Agreement on the transferability by the Participant of
the Option and any shares of Common Stock, this Agreement shall be binding upon and inure to the
benefit of the representatives, executors, successors or beneficiaries of the parties hereto.

     (g) The interpretation, performance and enforcement of this Agreement shall be governed by the
laws of the State of Texas and the United States, as applicable, without reference to the conflict
of laws provisions thereof.

     (h) If any provision of this Agreement is declared or found to be illegal, unenforceable or

void, in whole or in part, then the parties shall be relieved of all obligations arising under such
provision, but only to the extent that it is illegal, unenforceable or void, it being the intent
and agreement of the parties that this Agreement shall be deemed amended by modifying such
provision to the extent necessary to make it legal and enforceable while preserving its intent or,
if that is not possible, by substituting therefor another provision that is legal enforceable and
achieves the same objectives.

     (i) All section titles and captions in this Agreement are for convenience only, shall not be
deemed part of this Agreement, and in no way shall define, limit, extend or describe the scope or
intent of any provisions of this Agreement.

     (j) The parties shall execute all documents, provide all information, and take or refrain
from taking all actions as may be necessary or appropriate to achieve the purposes of this
Agreement.

     (k) This Agreement constitutes the entire agreement among the parties hereto pertaining to
the subject matter hereof and supersedes all prior agreements and understandings pertaining hereto.

     (l) No failure by any party to insist upon the strict performance of any covenant, duty,
agreement or condition of this Agreement or to exercise any right or remedy consequent upon a
breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

- 5 -

 

     (m) This Agreement may be executed in counterparts, all of which together shall
constitute one agreement binding on all the parties hereto, notwithstanding that all such parties
are not signatories to the original or the same counterpart.

     (n) At any time and from time to time the Committee may execute an instrument providing for
modification, extension, or renewal of any outstanding option, provided that no such
modification, extension or renewal shall (i) impair the Option in any respect without the
consent of the holder of the Option or (ii) conflict with the provisions of Rule 16b-3. Except as
provided in the preceding sentence, no supplement, modification or amendment of this
Agreement or waiver of any provision of this Agreement shall be binding unless executed in writing
by all parties to this Agreement. No waiver of any of the provisions of this Agreement

shall be deemed or shall constitute a waiver of any other provision of this Agreement (regardless
of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise
expressly provided.

     (o) In addition to all other rights or remedies available at law or in equity, the
Corporation shall be entitled to injunctive and other equitable relief to prevent or enjoin any
violation of the provisions of this Agreement.

     (p) The Participant’s spouse joins this Agreement for the purpose of agreeing to
and accepting the terms of this Agreement and to bind any community property interest he or she has or
may have in the Option, any vested portion or any unvested portion of the Option, any shares of
Common Stock acquired upon exercise of the Option and any other shares of Common Stock held by the
Participant.

- 6 -

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	 	CORPORATION:
	 
	 	 	 	 
	 	 	Peerless Mfg. Co.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Name:
	 	
	 
	 	 	 	

	

	 	Title:
	 	
	 
	 	 	 	

	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	

	 
	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	

	

	 	Address:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	PARTICIPANT’S SPOUSE
	 	 	

	 
	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	

- 7 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]