Document:

ex10-3.htm

Exhibit 10.3

 

India Globalization Capital, Inc.

Nonqualified Stock Option Agreement

 

This Stock Option Agreement (the “Agreement”) is entered into and made effective as of __________, by and between India Globalization Capital, Inc., a Maryland corporation (the “Company”), and _________ (the “Optionee”).

 

WITNESSETH:

 

WHEREAS, the Committee desires to encourage Optionee to provide additional services to the Company and as incentive thereto, enable the Optionee to increase his proprietary interest in the Company by granting an option to purchase common stock of the Company, par value of $.0001 per share (the “Shares”), as authorized under the India Globalization, Inc. Omnibus Incentive Plan, as amended from time to time (the “Plan”).

 

NOW THEREFORE, in consideration of the promises and the mutual covenants contained herein, the Company and the Optionee hereby agree as follows:

 

1. Grant of Option.  Subject to the terms and conditions of the Agreement and the Plan, the Company hereby grants to the Optionee the right to purchase all or part of _______ Shares of the Company (the “Option”) at a per share purchase price (“Exercise Price”) of $____ (which is the Fair Market Value (as defined in Section 2(r) of the Plan)), effective as of _______  (the “Grant Date”).  The Option shall be an Nonqualified Stock Option (as defined in Section 2(t) of the Plan).

 

2. Exercise of Option.   The Option shall become vested and exercisable, to a maximum cumulative extent, pursuant to the following schedule:

 

	
Vesting Date

	
Percentage Vested

	  	
%

In no event shall the Option be exercised for fractional Shares.

 

3. Option Term.  Subject to earlier termination as provided below in this paragraph 3, the term of the Option shall be for a ____ year period, beginning on the Grant Date and ending on __________ (the “Expiration Date”).

 

(a) Death or Disability.  In the event that the Optionee’s employment with the Company or its Affiliates terminates by reason of death or Disability (as defined in Section 2(o) of the Plan), any unvested Shares under the Option shall be forfeited immediately upon termination.  All remaining unexercised, vested Shares subject to the Option shall remain exercisable until the 12-month anniversary of the Optionee’s employment termination date.  In the case of the Optionee’s death, the Optionee’s beneficiary or estate may exercise the Option.

 

  

  

  

 

(b) Termination by the Company without Cause; Voluntary Termination by Optionee.  In the event that the Company terminates the Optionee’s employment without Cause  (as defined in Section 2(f) of the Plan) or the Optionee voluntarily terminates employment for any reason, any unvested Shares under the Option shall be forfeited immediately upon termination.

 

(c) Termination for Cause.  In the event Company terminates the Optionee’s employment for Cause (as defined in Section 2(f) of the Plan), all unvested Shares under the Option and all unexercised, vested Shares under the Option shall be forfeited immediately.

 

Notwithstanding the foregoing provisions of this paragraph 3, in no event may the Option be exercised later than the Expiration Date.

 

4. Method of Exercise; Payment of Exercise Price.  The Option shall be exercisable by delivering to the Company a written Notice of Exercise containing the information described in Exhibit A hereto, in the form attached as Exhibit A, or in any other form acceptable to the Committee.  Such Notice of Exercise shall be signed by the Optionee and delivered to the Company at the address specified in paragraph 12.  This Option shall be deemed to be exercised upon the Company’s receipt of the Notice of Exercise accompanied by full payment of the Exercise Price.  Payment of the Exercise Price shall be by any of the following, or a combination of the following:

 

(a) cash;

 

(b) cash equivalent approved by the Committee;

 

(c) tendering previously acquired Shares (or delivering a certification of ownership of such Shares) having an aggregate Fair Market Value (as defined in Section 2(r) of the Plan) at the time of exercise equal to the total Exercise Price,

 

(d) through a cashless (broker-assisted) exercise; or

 

(e) a combination of (a), (b), (c) and/or (d).

 

5. Non-Transferability of Option.  This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by him or her.  The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.

 

  

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6. Tax Withholding.  The Company shall have the right to require, before the issuance or delivery of any Shares hereunder, payment by the Optionee of any federal, state or local taxes required by law to be withheld upon the exercise of all or any part of the Option.  Payment of such withholding requirements may be made:

 

(a) in cash;

 

(b) by tendering previously acquired Shares (or delivering a certification of ownership of such Shares) having an aggregate Fair Market Value (as defined in Section 2(r) of the Plan) equal to the amount required to be withheld;

 

(c) by the Company withholding Shares subject to the exercised Option that have a Fair Market Value (as defined in Section 2(r) of the Plan) at the time of exercise equal to the amount required to be withheld; or

 

(d) any combination of (a), (b) and/or (c) above.

 

7. Adjustments.  Subject to any required action by the Board and/or stockholders, the number of Shares subject to the Plan, the number of Shares covered by each outstanding Option and the per share purchase price thereof shall be proportionately adjusted for any increase or decrease in the number of issued Shares as provided under Section 4.4 of the Plan.  Adjustments under this paragraph 7 shall be made by the Committee, in its discretion, whose determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive.

 

8. Compliance with Securities Laws.

 

(a) The Company does not have an obligation to sell or issue Shares that are not registered under the Securities Act of 1933, as amended, unless such Shares can be issued by virtue of an exemption under the Securities Act of 1933, as determined by legal counsel to the Company.  The Company may issue Shares to the Optionee if the Optionee represents that such Shares are being acquired as an investment and not with a view to, or for sale in connection with, the distribution of any such Shares.  Certificates for Shares issued under the circumstances of the foregoing shall bear an appropriate legend reciting such representation.

 

(b) In no event shall the Company be required to sell, issue or deliver Shares pursuant to this Agreement if, in the opinion of the Committee, the issuance thereof would constitute a violation by either the Optionee or the Company of any provision of any law or regulation of any governmental authority or any securities exchange.  As a condition of any sale or issuance of Shares pursuant to the Option, the Company may place legends on the Shares, issue stop-transfer orders and require such agreements or undertakings from the Optionee as the Company may deem necessary or advisable to assure compliance with any such law or regulation.

 

9. Plan.  The Option is subject to all the terms and conditions set forth in the Plan, which is hereby incorporated by reference.  Capitalized terms used, but not defined in this Agreement, shall have the meanings set forth in the Plan.  In the event of an express conflict between any term, provision or condition of this Agreement and those of the Plan, the terms, provisions or conditions of this Agreement shall control if the conflict arises with respect to a matter for which the Committee has discretion under the terms of the Plan.  All other conflicting terms, conditions or provisions shall be governed and administered in accordance with the terms, conditions or provisions of the Plan.  A copy of the Plan is attached hereto as Exhibit B, and the Optionee acknowledges his receipt and understanding of the terms of the Plan.

 

  

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10. Lock-Up Agreement.  The Optionee agrees, if requested by the Company and an underwriter of Shares (or other securities) of the Company, not to sell or otherwise transfer or dispose of any Shares (or other securities) of the Company held by the Optionee during the 180 day period following the effective date of a registration statement filed under the Securities Act of 1933, without the prior consent of the Company or such underwriter, as the case may be.

 

11. Right to Setoff.  The Company may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company may owe to the Optionee from time to time, including amounts payable in connection with the Option or other compensation owed to the Optionee, such amounts as may be owed by the Optionee to the Company.  The Optionee shall remain liable for any part of the Optionee’s payment obligation not satisfied through such deduction and setoff.

 

12. Notices.  All notices shall be written and shall be sufficiently made if personally delivered or if sent by nationally-recognized overnight courier, by facsimile, or by registered or certified mail, return receipt requested and postage prepaid, which notice shall be effective upon receipt.  Each such notice shall be addressed as follows:

 

If to the Company, to:

 

India Globalization Capital, Inc.

4336 Montgomery Ave.

Bethesda, Maryland 20814

Attention:  John Selvaraj

 

Telephone:  301-983-0998

 

Facsimile:  240-465-0273

 

If to the Optionee, at the Optionee’s last known address on the books and records of the Company.  Any such notice may be sent to such other address as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith.

 

13. Employment Matters.  The award of this Option does not form part of the Optionee’s entitlement to remuneration or benefits in terms of the Optionee’s employment with his employer.  The Optionee’s terms and conditions of employment are not affected or changed in any way by this Option or by the terms of the Plan or this Agreement.  No provision of this Agreement or of the Option granted hereunder shall give the Optionee any right to continue in the service or employ of the Company or any Affiliate, create any inference as to the length of employment or service of the Optionee, affect the right of the Company or any Affiliate to terminate the employment or service of the Optionee, with or without Cause (as defined in Section 2(f) of the Plan), or give the Optionee any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Affiliate.  The Optionee acknowledges and agrees (by executing this Agreement) that the granting of the Option under this Agreement is made on a fully discretionary basis by the Company and that this Agreement does not lead to a vested right to further Option awards in the future.  Further, the Option set forth in this Agreement constitutes a non-recurrent benefit and the terms of this Agreement are only applicable to the Option distributed pursuant to this Agreement.

 

  

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14. Undertaking by Optionee.  The Optionee hereby agrees to take whatever additional actions and execute whatever additional documents the Committee may, in its discretion, deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Optionee pursuant to the express provisions of this Agreement and the Plan.

 

15. Binding Effect.  This Agreement shall be binding upon, and inure to the benefit of, the successors and assigns of the Company and upon persons who acquire the right to exercise the Option granted hereunder by will or through the laws of descent and distribution.

 

16. Singular, Plural, Gender.  Whenever used herein, except where the context clearly indicates to the contrary, nouns in the singular shall include the plural, and the masculine pronoun shall include the feminine gender.

 

17. Headings.  Headings of the paragraphs contained in this Agreement are inserted for convenience and reference and shall not be used in interpreting or construing the terms and provisions of the Agreement.

 

18. Rights as Stockholder.  The Optionee or other person or entity exercising the Option shall have no rights as a stockholder with respect to any Shares covered by the Option until any such Shares have been fully paid and issued as provided herein.

 

19. Entire Agreement; Modification.  This Agreement and the Plan constitute the entire agreement between the parties with respect to the terms and supersede all prior or written or oral negotiations, commitments, representations and agreements with respect thereto.  The terms and conditions set forth in this Agreement may only be modified or amended in a writing, signed by both parties.  The Option granted hereunder may not be cancelled without the Optionee’s written consent.

 

20. Severability.  In the event any one or more of the provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect in any jurisdiction, such provision or provisions shall be automatically deemed amended, but only to the extent necessary to render such provision or provisions valid, legal and enforceable in such jurisdiction, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

 

21. Governing Law.  The laws of the state of Maryland, without giving effect to principles of conflicts of law, will apply to the Plan, to the Option and the Agreement.

 

22. Code Section 409A.  Notwithstanding any other provision of this Agreement or the Plan to the contrary, by issuing this Option at Fair Market Value on the Grant Date, the Company intends that the Option will not be subject to Code Section 409A.

 

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(signature page follows)

 

  

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IN WITNESS WHEREOF, the Company and the Participant have executed this Agreement as of the day and year first written above.

 

	
 

 

 

 

                                                                                     

Participant:  _______________

	
 

INDIA GLOBALIZATION CAPITAL, INC.

 

 

                                                                               

By:  Ram Mukunda

Its:  CEO

 

Options granted ____________.

Form 4: __________

Vesting ______________

Life: Five years ___________

Exercise Price: _________

Stock price: _________

Number ______________

 

  

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EXHIBIT A

 

INDIA GLOBALIZATION CAPITAL, INC. OMNIBUS INCENTIVE PLAN

 

Employee’s Notice of Exercise of Incentive Stock Option

 

	To:   	India Globalization Capital, Inc.
	 	 
	Attn:   	Stock Option Administrator (John Selvaraj)
	 	 
	Subject: 	Notice of Intention to Exercise Stock Option

                    

This is official notice that the undersigned (“Optionee”) intends to exercise the Optionee’s option to purchase _________ Shares of India Globalization Capital, Inc., under and pursuant to the Company’s Omnibus Incentive Plan and the Option Agreement dated                           :

 

	
Date of Exercise:

	  
	
Number of Shares:

	  
	
Exercise Price:

	  
	
Method of Payment of Exercise Price:

	  
	
Social Security Number:

	  

 

The Shares should be issued as follows:

 

	
Name:

	  
	
Address:

	  
	
Signed:

	  
	
Date:

	  

 

  

  

  

 

EXHIBIT B

 

A copy of the India Globalization Capital, Inc. Omnibus Incentive Plan follows.

 

 

 

 

	
13033743v.1Fiscal 2011 Annual Performance Bonus Program for Carter and Lundgren

 Exhibit 10.1 
 Fiscal 2011 Annual Performance Bonus Program 
 for John D. Carter and
Tamara L. Lundgren 
 The Amended and Restated Employment Agreements between the Company and each of John D. Carter and
Tamara L. Lundgren provide for annual cash bonuses under bonus programs to be developed by the Compensation Committee (the “Committee”), with bonuses payable based on Company financial performance and achievement of management objectives
as determined by the Committee at the beginning of each fiscal year. The annual bonus program for Mr. Carter and Ms. Lundgren for fiscal 2011 has two components. The first component consists of awards with cash payouts based on achievement
of Company financial performance targets. The second component is based on the achievement of management objectives established by the Committee. The two components of the annual performance bonus program shall operate independently, and the
Committee shall make determinations with respect to the second component without regard to the outcomes under the first component. 
 Company
Financial Performance Targets 
 Calculation of Cash Payout. For fiscal 2011, the Company financial
performance targets shall be the Company’s earnings per share (“EPS”) and the combined return on capital employed (“ROCE”) of the Company’s Metals Recycling Business (“MRB”) and the Company’s Auto Parts
Business (“APB”), and each performance target shall be weighted equally. Cash payouts to the participants under this component of the bonus program shall be determined based on the level of achievement of each performance target. The
Committee has established performance targets for EPS and ROCE and corresponding payouts as a percentage of a participant’s target amount. Payouts begin at positive levels of EPS and ROCE. 

Participants’ Target Amounts. The total target amount for Mr. Carter for the Company financial
performance component shall be 50% of his annual base salary as in effect on August 31, 2011, with one-half of this target amount subject to each of the two financial performance targets and the maximum total bonus under these two targets not
to exceed three times his target amount under this component. The total target amount for Ms. Lundgren for the Company financial performance component shall be 50% of her annual base salary as in effect on August 31, 2011, with one-half of
this target amount subject to each of the two financial performance targets and the maximum total bonus under these two targets not to exceed seven times her target amount under this component. 

EPS. The EPS goal for fiscal 2011 shall be based on the Adjusted EPS for that year. Adjusted EPS for fiscal 2011
shall mean the Company’s diluted earnings per share for that fiscal year before extraordinary items and the cumulative effects of changes in accounting principles, if any, as set forth in the audited consolidated financial statements of the
Company and its subsidiaries for that fiscal year, adjusted to eliminate the impact of such other items as the Committee shall have specified at the time of establishment of the performance targets. 

 ROCE. The ROCE for fiscal 2011 shall be equal to the sum of the
Adjusted Operating Income of MRB and the Adjusted Operating Income of APB for fiscal 2011 divided by the sum of the Average Capital Employed of MRB and the Average Capital Employed of APB for fiscal 2011. Adjusted Operating Income for each business
for fiscal 2011 shall mean the business’s segment operating income for fiscal 2011 as set forth in the audited consolidated financial statements of the Company and its subsidiaries for fiscal 2011, adjusted to eliminate the impact of such items
as the Committee shall have specified at the time of establishment of the performance targets and then reduced by the Company’s effective tax rate for fiscal 2011 as determined from the audited consolidated statement of operations of the
Company and its subsidiaries for fiscal 2011. Average Capital Employed for each business for fiscal 2011 shall mean the average of five (5) numbers consisting of the business’s Capital Employed as of the last day of the fiscal year and as
of the last day of the four preceding fiscal quarters. Capital Employed for each business as of any date shall mean (i) the business’s total assets (adjusted to eliminate the impact of such items as the Committee shall have specified at
the time of establishment of the performance targets), minus (ii) the business’s total liabilities other than debt for borrowed money and capital lease obligations, plus (iii) its intercompany payable balances, minus (iv) its
intercompany receivable balances, in each case as set forth in the consolidated financial statements of the Company and its subsidiaries as of the applicable date or otherwise determined from the Company’s accounting records on a consistent
basis. 
 Change in Accounting Principle. If the Company implements a change in accounting principle
during fiscal 2011 either as a result of issuance of new accounting standards or otherwise, and the effect of the accounting change was not reflected in the Company’s business plan at the time of approval of this award, then EPS and ROCE shall
be adjusted to eliminate the impact of the change in accounting principle. 
 Management Objectives 

The second component of the annual bonus program is based on the achievement of the management objectives determined by the Committee. The
Committee shall establish the management objectives and specify the weight to be assigned to each objective. Following the end of the fiscal year, the Committee shall evaluate the performance of each participant against the management objectives,
determine the extent to which each objective has been met and determine the amount of the bonus to be paid. The target bonus amount for Mr. Carter for this component of the bonus program shall be 50% of his annual base salary as in effect on
August 31, 2011, and the maximum bonus under this component may not exceed three times this target amount. The target bonus amount for Ms. Lundgren for this component of the bonus program shall be 50% of her annual base salary as in effect
on August 31, 2011, and the maximum bonus under this component may not exceed three times this target amount. The actual amount of the bonuses under this component shall be determined by the Committee. 

General Provisions 
 Certification. Following the end of fiscal 2011 and prior to the payment of any bonus, the Committee shall certify in writing the level of attainment of each performance target for the year and the
calculation of the bonus amounts for each participant. Payouts shall be made in cash to the participants as soon as practicable after October 31, 2011 following certification by the Committee. 

 Conditions to Payment. Subject to the terms of each
participant’s employment agreement and change in control agreement, a participant must be employed by the Company on August 31, 2011 to receive the annual bonus. 

IRS Section 162(m). The annual bonus program is implemented pursuant to the Executive Annual Bonus Plan,
which was amended and re-approved by shareholders in 2010, and is intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code. Each of the performance targets used in the program for fiscal 2011 is
among performance goals approved by shareholders in the Executive Annual Bonus Plan.

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