EXHIBIT 10.10
INTERSIL HOLDING CORPORATION
OPTION AWARD AGREEMENT
AGREEMENT by and between Intersil Holding Corporation, a Delaware
corporation ("Intersil Holding" or "Company") and ____________ (the "Optionee"),
dated as of the 13th day of August, 1999.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. X. Xxxxx of Stock Option.
Intersil Holding hereby grants the Optionee an option (the "Option") to
purchase:
(a) Preferred Shares: _________ shares of 12% Series A Cumulative
Compounding Preferred Stock, par value $.01 per share, of Intersil
Holding (the "Preferred Shares"), with a liquidation value on date of
grant of $1000 per share. The number of shares of Preferred Stock for
which options are granted hereunder shall be adjusted annually as
provided in paragraph 1B; and
(b) The term "Shares" shall mean the Preferred Shares.
B. Preferred Stock Option Adjustment:
Provided that the Options granted hereby have not otherwise terminated, on
each anniversary date of the date of grant, the number of Preferred Shares
subject to this Option, and for which the Option remains unexercised, shall be
increased by a number of Preferred Shares, including fractional shares,
sufficient to increase the liquidation value of the Preferred Shares subject to
the Option over that value at the grant date in the case of the first
anniversary, or at the immediately preceding anniversary date in the case of any
other anniversary, by 12%. For purposes of this calculation, the number of
shares subject to Options at any date earlier than the calculation date will be
reduced by the number of shares for which Options have since been exercised.
2. Option Price. The initial exercise price of the options to acquire Preferred
Shares is $250 per share. Provided that the Optionee is still employed by
Intersil Holding on that date, and the Options granted hereby have not otherwise
terminated or been forfeited, on each anniversary date of the date of grant, the
price per Preferred Share subject to this Option shall be increased over that
price at the grant date in the case of the first anniversary, or at the
immediately preceding anniversary date in the case of any other anniversary, by
12%.
3. Term.
Unless earlier forfeited, the Option will expire in its entirety upon the
tenth anniversary of the date hereof.
4. Exercise of Option.
(a) Right to Exercise. This Option shall be exercisable during its term in
accordance with this Option Agreement beginning on the date of grant.
(b) Method of Exercise. This Option shall be exercisable by delivery of an
exercise notice in the form attached hereto as Exhibit A (the
"Exercise Notice") which shall state the election to exercise the
Option, the number of whole Shares with respect to which the Option is
being exercised, and such other representations and agreements as
may be required by the Company. The Exercise Notice shall be
accompanied by payment of the aggregate exercise price as to all
exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice
accompanied by the aggregate exercise price.
No Shares shall be issued pursuant to the exercise of an Option unless
such issuance and such exercise complies with applicable laws.
Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option
is exercised with respect to such Shares.
5. Any exercise of an Option shall also be considered to be an exercise of a pro
rata portion of any fractional shares produced by the adjustment calculation
under paragraph 1B, which fractional shares will be settled in cash. At the
Company's election, that settlement can be effected by the delivery of cash to
the Optionee or by a reduction in the Exercise Price equal to the otherwise
deliverable cash.
(a) Securities Matters. In the event the Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"),
at the time this Option is exercised, the Optionee shall, if required
by the Company, concurrently with the exercise of all or any portion
of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.
(b) Shareholders' Agreement. Optionee acknowledges that in addition to the
requirements and restrictions of this Agreement:
(1) Optionee is to be considered a Management Investor, as that term
is defined in the Securities Purchase and Holders Agreement by and
among Intersil Holding Corporation, Sterling Holding Company, LLC,
Manatee Investment Corporation., Intersil Prism, LLC, Xxxxxxx X.
Xxxxx and the Management Investors, dated August 13, 1999 (the
"Shareholders Agreement"), and
(2) That Optionee has received and agrees to be bound by the
Shareholders Agreement, which is incorporated herein by reference,
with respect to the Option and any shares of Intersil Holding
stock acquired upon exercise of this Option.
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Optionee is familiar with the terms and provisions of the Shareholders
Agreement, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee has reviewed the Shareholders Agreement and this
Option Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Option Agreement and fully understands all
provisions of the Option Agreement.
6. Method of Payment. Payment of the aggregate exercise price shall be by
cash or check, or a combination thereof, at the election of the Optionee.
7. Restrictions on Exercise. This Option may not be exercised if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable law.
8. Non-Transferability of Option. This Option may not be transferred in any
manner except to the extent specifically permitted pursuant to the Shareholders
Agreement.
9. Term of Option. This Option will expire in its entirety on the tenth
anniversary of the date of this Agreement.
10. Notices. All notices or other communications given hereunder or in
connection herewith shall be sent pursuant to the Shareholders Agreement.
11. Option Not Compensation. Neither the Option, the value of Shares issued upon
exercise, any excess of market value over the Option price at times of exercise,
nor any other rights, profits, values or interests resulting from the grant or
exercise of the Option, shall be considered as "compensation" of the Optionee
for purposes of computing the Optionee's benefit rights under any present or
future pension benefit or welfare benefit plan or incentive compensation plan of
the Company under which he or she may become eligible for benefits on the basis
of such compensation.
12. No Guarantee of Continued Employment. If Optionee is an employee, Optionee
acknowledges and agrees that this agreement, the transactions contemplated
hereunder and the vesting schedule set forth herein do not constitute an express
or implied promise of continued employment or other relationship as a service
provider to the Company, and shall not interfere in any way with Optionee's
right or the company's right to terminate Optionee's employment or relationship
as a service provider at any time, with or without cause (subject in the case of
a service provider to any applicable service agreement).
13. Entire Agreement. This Option Agreement and the Shareholders Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof.
14. Consent to Exclusive Jurisdiction. The Company and the Optionee agree that
any legal action or proceeding with respect to this Agreement or any agreement,
certificate or other instrument entered into in contemplation of the
transactions contemplated by this Agreement, or any matters arising out of or in
connection with this Agreement or such other agreement, certificate or
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instrument, and any action for the enforcement of any judgment in respect
thereof, shall be brought exclusively in the Chancery Court of New Castle
County, Delaware or the courts of the United States of America for the District
of Delaware. By execution and delivery of this Agreement, the Company and the
Optionee irrevocably consents to service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, or by recognized
express carrier or delivery service, to the applicable party at his or its
address referred to herein. Each of the Company and the Optionee hereby
irrevocably waives any objection which he or it may now or hereafter have to the
paying of venue of any of the aforementioned actions or proceedings arising out
of or in connection with this Agreement, or any related agreement, certificate
or instrument referred to above, brought in the courts referred to above and
hereby further irrevocably waive and agree, to the fullest extent permitted by
applicable law, not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in any inconvenient forum.
Nothing herein shall affect the right of any party to service process in any
other manner permitted by law.
15. Waiver of Jury Trial. Each of the parties to this Agreement waives, to the
fullest extent permitted by law, any right to trial by jury of any claim,
demand, action or cause of action (i) arising under this Agreement or (ii) in
any way connected with or related or incidental to the dealings of the parties
hereto in respect of this Agreement or any of the transactions related hereto,
in each case whether now existing or hereafter arising , and whether in
contract, tort, equity or otherwise. Each of the parties to this Agreement
agrees and consents that any such claim, demand, action or cause of action shall
be decided by court trial without a jury and that the parties to this Agreement
may file an original counterpart of a copy of this Agreement with any court as
written evidence of the consent of the parties hereto to the waiver of the right
to trial by jury.
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SCHEDULE 1
INTERSIL HOLDING CORPORATION
OPTION AWARD AGREEMENT
OPTIONEE PREFERRED SHARES
-------- ----------------
Xxxxxx Xxxxxxxxx 100
Xxxxxx Xxxxxxxx 66.67
W. Xxxxxxx Xxxxxx 100
Xxx Xxxx 66.67
Xxxxx Xxxx 100
Xxxxxxx Xxxxxxxx 333.33
EXHIBIT A
EXERCISE NOTICE
Intersil Holding Corporation
Attention:
1. Exercise of Option. Effective as of today, __________________, ____ the
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
_____ shares of 12% Series A Cumulative Compounding Preferred Stock, par value
$.01 per share (the "Shares"), of Intersil Holding Corporation (the "Company"),
under and pursuant to the Intersil Holding Corporation Option Award Agreement
dated August 13, 1999 (the "Option Agreement").
2. Delivery of Payment. Optionee herewith delivers to the Company the full
purchase price of the Shares, as set forth in the Option Agreement.
3. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Shareholders Agreement, as that term is
defined by the Option Agreement and the Option Agreement and agrees to abide by
and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance of the Shares (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a Shareholder shall exist with respect to the Option Shares,
notwithstanding the exercise of the Option. The Shares shall be issued to the
Optionee as soon as practicable after the Option is exercised. The Optionee
specifically acknowledges that the Option and any Shares acquired upon exercise
of the Option are subject to the Company's rights and those of the other parties
to the Shareholders Agreement.
5. Tax Consultation. Optionee understands that Optionee may suffer adverse
tax consequences as a result of Optionee's purchase or disposition of the
Shares. Optionee represents that Optionee has consulted with all tax consultants
Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company or the Committee for any
tax advice.
6. Restrictive Legends and Stop-Transfer Orders.
(a) Legends. Optionee understands and agrees that the Company shall cause
the legend set forth below or a legend substantially equivalent
thereto to be placed upon any certificate(s) evidencing ownership of
the Shares together with any other legends that may be required by the
Company or by state or federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
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OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE
OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, A RIGHT OF FIRST REFUSAL AND OTHER RIGHTS
HELD BY THE PARTIES TO A SECURITIES PURCHASE AND HOLDERS AGREEMENT BY
AND AMONG INTERSIL HOLDING CORPORATION, STERLING HOLDING COMPANY, LLC,
XXXXXX FAR EAST LTD., INTERSIL PRISM, LLC, XXXXXXX X. XXXXX AND THE
MANAGEMENT INVESTORS NAMED THEREIN, DATED AUGUST 13, 1999 (THE
"SHAREHOLDERS AGREEMENT") AS INCORPORATED BY REFERENCE INTO THE
EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL OPTIONEE OF THESE
SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE
BINDING ON TRANSFEREES OF THESE SHARES.
(b) Stop-Transfer Orders. Optionee agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent,
if any, and that, if the Company transfers its own securities, it may
make appropriate notations to the same effect in its own records.
(c) Refusal to Transfer. The Company shall not be required (i) to transfer
on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Exercise Notice or (ii)
to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares
shall have been so transferred.
7. Entire Agreement. The Shareholders Agreement and Option Agreement are
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same meaning in this Exercise Notice. The
Shareholders Agreement and the Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. In the event of a conflict between the terms and conditions of this
Exercise Notice and the Shareholders Agreement and/or the Option Agreement, the
terms and conditions of the Shareholders Agreement or Option Agreement, as
applicable shall prevail.
Submitted by: Accepted by:
OPTIONEE: INTERSIL HOLDING CORPORATION
____________________________ By:___________________________
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
Optionee _______________.
Security _______________ Shares of Preferred Stock of Intersil Holding,
liquidation value $1,000 per share
Amount ________________________________________________
Date ________________________________________________
In connection with the purchase of the above-listed Securities, the
undersigned Optionee represents to the Company the following:
1. Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
2. Optionee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Optionee's
investment intent as expressed herein. In this connection, Optionee understands
that, in the view of the Securities and Exchange Commission, the statutory basis
for such exemption may be unavailable if Optionee's representation was
predicated solely upon a present intention to hold these Securities for the
minimum capital gains period specified under tax statutes, for a deferred sale,
for or until an increase or decrease in the market price of the Securities, or
for a period of one year or any other fixed period in the future. Optionee
further understands that the Securities must be held indefinitely unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available. Optionee further acknowledges and understands that
the Company is under no obligation to register the Securities. Optionee
understands that the certificate evidencing the Securities will be imprinted
with a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel
satisfactory to the Company and with any other legend required under applicable
state securities laws.
3. Holder is familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time of the grant of the Option to the Optionee, the exercise will be exempt
from registration under the Securities Act. In the event the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any
market stand-off agreement may require) the Securities exempt under Rule 701 may
be resold, subject to the satisfaction of certain of the conditions specified by
Rule 144, including: (a) the resale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (b) the availability of certain public information
about the Company, (c) the amount of Securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), and (d) the
timely filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the time
of grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale
to occur not less than one year after the later of the date the Securities were
sold by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than two years, the satisfaction of the conditions set forth in
sections (a), (b), (c) and (d) of the paragraph immediately above.
4. Optionee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Optionee understands that no assurances can be given that any
such other registration exemption will be available in such event.
Signature of Optionee:
Date: _____________________________ _________________________________
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