2010 DIRECTORS’
EQUITY COMPENSATION PLAN
OPTION AWARD
AGREEMENT
THIS
AGREEMENT (the “Agreement”), is made
effective as of the [DAY] day of [MONTH], [YEAR], (hereinafter called
the “Date of
Grant”), between The Quigley Corporation, a Delaware corporation
(hereinafter called the “Company”), and [NAME] (hereinafter called the
“Participant”):
RECITALS:
WHEREAS,
the Company has adopted The Quigley Corporation 2010 Directors’ Equity
Compensation Plan (the “Plan”), which Plan is
incorporated herein by reference and made a part of this
Agreement. Capitalized terms not otherwise defined herein shall have
the same meanings as in the Plan; and
WHEREAS,
the Committee has determined that it would be in the best interests of the
Company and its shareholders to grant the option provided for herein to the
Participant pursuant to the Plan and the terms set forth herein.
NOW
THEREFORE, in consideration of the mutual covenants hereinafter set forth, the
parties agree as follows:
1.
Grant of the
Option. The Company hereby grants to the Participant the right
and option (the “Option”) to purchase,
on the terms and conditions hereinafter set forth, all or any part of an
aggregate of [# OF SHARES]
Shares, subject to adjustment as set forth in the Plan. The
purchase price of the Shares subject to the Option shall be $[PRICE] per Share (the “Option
Price”). The Option is intended to be a non-qualified stock
option, and is not intended to be treated as an option that complies with
Section 422 of the Internal Revenue Code of 1986, as amended.
2.
Vesting.
(a) All
Options granted pursuant to the Plan shall vest and become exercisable in
accordance with the following schedule:
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First
Anniversary of the Date of Grant
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Second
Anniversary of the Date of Grant
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Third
Anniversary of the Date of Grant
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Fourth
Anniversary of the Date of Grant
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3.
Exercise of
Option.
(a) Period of
Exercise. Subject to the provisions of the Plan and this
Agreement, the Participant may exercise all or any part of the Vested Portion of
the Option at any time prior to the earliest to occur
of:
(i) the
seventh anniversary of the Date of Grant;
(ii) one
year following the date of the Participant’s separation from service due to
death or Disability;
(iii) three
months following the date of the Participant’s separation from service with the
Company without Cause ; and
(iv) the
date of the Participant’s separation from service with the Company for Cause or
by the Participant for any reason or by the Participant for death or
Disability.
For
purposes of this agreement, “Cause” shall mean (i)
the willful failure or refusal by such Participant to perform his or her duties
to the Company or its Affiliates (other than any such failure resulting from
such Participant’s incapacity due to physical or mental illness), which has not
ceased within ten days after a written demand for substantial performance is
delivered to such Participant by the Company, which demand identifies the manner
in which the Company believes that such Participant has not performed such
duties; (ii) the willful engaging by such Participant in misconduct which is
materially injurious to the Company or its Affiliates, monetarily or otherwise
(including breach of any confidentiality or non-competition covenants to which
such Participant is bound); (iii) the conviction of such Participant of, or the
entering of a plea of nolo contendere by such Participant with respect to, a
felony or to any crime which is materially injurious to the Company or its
Affiliates; or (iv) substantial or repeated acts of dishonesty by such
Participant in the performance of his/her duties to the Company or its
Affiliates. The determination of the existence of Cause shall be made by the
remainder of the Board in good faith.
(b) Method of
Exercise.
(i) Subject
to Section 3(a), the Vested Portion of the Option may be exercised by delivering
to the Company at its principal office written notice of intent to so exercise;
provided that,
the Option may be exercised with respect to whole Shares only. Such
notice shall specify the number of Shares for which the Option is being
exercised and shall be accompanied by payment in full of the Option
Price. The payment of the Option Price may be made at the election of
the Participant (i) in cash or its equivalent (e.g., by check), (ii) to the
extent permitted by the Committee, in Shares having a Fair Market Value equal to
the aggregate Option Price for the Shares being purchased and satisfying such
other requirements as may be imposed by the Committee; provided, that such
Shares have been held by the Participant for no less than six months (or such
other period as established from time to time by the Committee in order to avoid
adverse accounting treatment applying generally accepted accounting principles),
(iii) partly in cash and, to the extent permitted by the Committee, partly in
such Shares, (iv) if there is a public market for the Shares at such time,
through the delivery of irrevocable instructions to a broker to sell Shares
obtained upon the exercise of the Option and to deliver promptly to the Company
an amount out of the proceeds of such Sale equal to the aggregate option price
for the Shares being purchased, or (v) through a “net settlement” as described
in Section 6(c) of the Plan. No Participant shall have any rights to
dividends or other rights of a stockholder with respect to Shares subject to an
Option until the Participant has given written notice of exercise of the Option,
paid in full for such Shares and, if applicable, has satisfied any other
conditions imposed by the Committee pursuant to the Plan.
(ii) Notwithstanding
any other provision of the Plan or this Agreement to the contrary, the Option
may not be exercised prior to the completion of any registration or
qualification of the Option or the Shares under applicable state and federal
securities or other laws, or under any ruling or regulation of any governmental
body or national securities exchange that the Committee shall in its sole
discretion determine to be necessary or advisable.
(iii) Upon
the Company’s determination that the Option has been validly exercised as to any
of the Shares, the Company shall issue certificates in the Participant’s name
for such Shares. However, the Company shall not be liable to the
Participant for damages relating to any delays in issuing the certificates to
him, any loss of the certificates, or any mistakes or errors in the issuance of
the certificates or in the certificates themselves.
(iv) In
the event of the Participant’s death, the Vested Portion of the Option shall
remain exercisable by the Participant’s executor or administrator, or the person
or persons to whom the Participant’s rights under this Agreement shall pass by
will or by the laws of descent and distribution as the case may be, to the
extent set forth in Section 3(a). Any heir or legatee of the
Participant shall take rights herein granted subject to the terms and conditions
hereof.
4.
Change of
Control. Upon a Change of Control (as defined by the Plan),
the terms of the Plan shall apply. Notwithstanding the foregoing, the
Options granted hereby shall become immediately exercisable in full upon the
occurrence of a Change of Control.
5.
Option
Recovery. If the Committee determines that the Participant (a)
engaged in conduct that constituted Cause as defined in Section 3(a) of this
Agreement at any prior to the Participant’s termination of services, (b) engaged
in conduct during the 6 month period after the Participant’s termination of
services that would have constituted Cause if the Participant had not ceased to
provide services, or (c) violates the terms of any non-compete agreement,
non-solicitation agreement, confidentiality agreement, or any other restriction
on the Participant’s post-termination activities established under any agreement
with the Company or other Company policy or arrangement during the 6 months
after the Participant’s ceases to provide services to the Company, then (i) any
Option held by the Participant shall immediately terminate, and the Participant
shall automatically forfeit all Shares underlying any exercised portion of an
Option for which the Company has not yet delivered the Share certificates, upon
refund by the Company of the Exercise Price paid by the Participant for such
Shares and (ii) the Participant shall return any Shares received upon exercise
of this Option or repay to the Company any proceeds received from the sale of
other disposition of the Shares transferred pursuant to this Option less the
Exercise Price. Upon any exercise of an Option, the Company may
withhold delivery of share certificates pending resolution of an inquiry that
could lead to a finding resulting in a forfeiture under this
Section.
6.
Legend on
Certificates. The certificates representing the Shares
purchased by exercise of the Option shall be subject to the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which such Shares are listed, and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
7.
Transferability. The
Option may not be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Participant otherwise than by will or by the
laws of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance. No such permitted
transfer of the Option to heirs or legatees of the Participant shall be
effective to bind the Company unless the Committee shall have been furnished
with written notice thereof and a copy of such evidence as the Committee may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions
hereof. During the Participant’s lifetime, the Option is exercisable
only by the Participant.
8.
Securities
Laws. Upon the acquisition of any Shares pursuant to the
exercise of the Option, the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
9.
Notices. Any
notice necessary under this Agreement shall be addressed to the Company in care
of its Secretary at the principal executive office of the Company and to the
Participant at the address appearing in the personnel records of the Company for
the Participant or to either party at such other address as either party hereto
may hereafter designate in writing to the other. Any such notice
shall be deemed effective upon receipt thereof by the addressee.
10.
Choice of
Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Delaware without regard to conflicts of
laws.
11.
Option Subject to
Plan. By entering into this Agreement the Participant agrees
and acknowledges that the Participant has received and read a copy of the
Plan. The Option is subject to the Plan. The terms and
provisions of the Plan, as they may be amended from time to time, are hereby
incorporated herein by reference. In the event of a conflict between
any term or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and
prevail.
12. Signature in
Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
[Signatures on next
page.]
IN
WITNESS WHEREOF, the parties have caused this Agreement to be effective as of
the day and year first above written.
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The
Quigley Corporation
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Name:
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Title:
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Participant
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Name:
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Title:
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