TECHNOLOGY RESEARCH CORPORATION AMENDED AND RESTATED 2000 LONG TERM INCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT
TECHNOLOGY
RESEARCH CORPORATION
AMENDED
AND RESTATED 2000 LONG TERM INCENTIVE PLAN
This OPTION AGREEMENT is made this
____ day
of ______, ____ between TECHNOLOGY RESEARCH CORPORATION, a Florida corporation,
hereinafter referred to as the "Corporation" and ___________,
a Director of the Corporation, hereinafter referred to as "Director."
WHEREAS, the holders of a majority of
the shares of the Corporation’s voting common stock (the "Common Stock") represented in
person or by proxy have adopted the terms and conditions of the Amended and
Restated 2000 Long Term Incentive Plan (the "Plan"), at its Annual Meeting
of shareholders conducted on August 27, 2008, the terms of which are hereby
incorporated by reference;
WHEREAS, the Corporation desires to
carry out the purposes of the Plan to afford the Director an opportunity to
purchase shares of its Common Stock providing an additional incentive for such
Directors and to further align such Directors’ interests with those of the
Company’s shareholders and thereby promote the long-term financial interests of
the Company, including the growth in value of the Company’s equity and
enhancement of long-term shareholder return; and
WHEREAS, Director has acknowledged and
represented that he has reviewed the terms of this Agreement, has received a
copy of the Plan, has been advised of his right to consult with a tax advisor,
financial consultant or legal counsel to obtain legal or financial advice
regarding this Agreement and that unless otherwise provided in this Agreement,
this Agreement shall be subject to the provisions of the Plan.
NOW, THEREFORE, in consideration of the
mutual covenants hereinafter set forth and for other good and valuable
consideration, the parties hereto agree as follows:
1. Grant of
Option. The
Corporation hereby irrevocably grants to the Director a Non-Qualified Stock Option, hereinafter called the
"Option", to purchase
all or any part of an aggregate of ________ shares (such number being subject to
adjustment as provided in Section 11 hereof) of the Corporation’s Common Stock
(the "Shares") on the
terms and conditions herein set forth. The Option granted under this
Agreement is not intended to qualify as an incentive stock option, as that term
is defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended.
2. Purchase
Price. The
purchase price of the Shares covered by the Option shall be $_____ per
share.
3. Term of
Option. The
term of the Option shall be for a period of ten (10) years commencing on the
date of grant of the Option; provided that the Option may be earlier terminated
as set forth herein.
4. Vesting
and Exercise of Option. Subject
to the terms and conditions of this Agreement and the Plan and provided that
Director continues to provide services tothe Corporation from the grant date,
the Option shall become vested and may be exercised in whole or in part from
time to time during its specified term in accordance with the following
schedule:
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_______share
on _______________;
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_______shares
on ______________; and
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_______shares
on ______________
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Exercisability
of the Option Shares under this Section 4 is cumulative, and after the Option
becomes exercisable under this Agreement with respect to any portion of the
Option Shares, it shall continue to be exercisable with respect to that portion
of the Option Shares until the Option expires.
The Director shall be entitled to
exercise any portion of the Option in accordance with the provisions of Section
4 hereof, either in whole or in part, by delivering written notice of such
exercise to the office of the Secretary of the Corporation or to such other
location as may be designated by the Board (as that term is defined in the
Plan), specifying therein the number of Shares with respect to which the Option
is being exercised, which notice shall be accompanied by payment in full of the
purchase price of the Shares being acquired.
Notwithstanding anything
in this Section to the contrary, the Option Shares shall become fully vested
upon the occurrence of a "change
in control,"
if the change in control occurs prior to the Option Shares becoming fully
vested, and the Director’s date of termination of directorship as a Director of
the Corporation. For purposes of this Section, the term "change in
control" means: (a) the acquisition of beneficial ownership, as that term
is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended,
by any entity, person, or group, of more than 35% of the outstanding capital
stock of the Corporation entitled to vote for the election of directors (“Voting Power”); (b) the
effective date of (i) a merger or consolidation of the Corporation with one or
more other corporations as the result of which the holders of the outstanding
Voting Power of the Corporation immediately prior to such merger or
consolidation (excluding those who are affiliates of any such other corporation)
hold less than 50% of the Voting Power of the survivor of such merger or
consolidation or it parent, or (ii) a transfer of substantially all of the
assets of the Corporation other than to an entity of which the Corporation owns
at least 50% of the Voting Power; or (c) the election to the Board, without the
recommendation or approval of the incumbent board of the directors, the lesser
of four directors or directors constituting a majority of the number of
directors of the Corporation then in office.
5. Payment
of Exercise Price. Payment may be
made (i) wholly or partly in cash (including check, bank draft, money order or
wire transfer of immediately available funds); (ii) by delivery of outstanding
shares of Common Stock with a fair market on the date of exercise equal to the
aggregate exercise price payable with respect to the exercise of the Option;
(iii) by shares of Common Stock that would otherwise be issued upon exercise of
the Option; (iv) by means of a cashless exercise procedure which permits
the Participant to simultaneously exercise an option and sell the Shares thereby
acquired and enable the broker to use the proceeds from such sale as payment for
the exercise price of such option; or (v) by any combination of the foregoing
permissible forms of payment. The Director agrees to furnish the
Company with any requested documentation required to effect payment of the
exercise price. No Shares shall be issued until full payment
therefore has been made in the manner set forth above or in any combination of
the methods set forth above, in each case to the extent approved by the
Board.
6. Termination
of Directorship. In the event that
termination of directorship occurs for any reason (other than by reason of
death, permanent and total disability or retirement), the Option shall expire on
the date of termination of directorship; provided that the Director shall be
entitled to exercise any vested Options at any time within three (3) months
after such termination, but in no event more than ten (10) years after the date
of grant of the Option.
7. Death of
Director. If the
directorship of the Director terminates due to death, the Option shall expire on
the first anniversary of such termination of directorship or the date the Option
expires in accordance with its terms, whichever occurs first. The
vested Options may be exercised by the devisee or legatee of the Director or by
the personal representative or executor of his estate with respect to the same
number of shares of Common Stock in the same manner, and to the same extent as
if the Director had continued his directorship during such period and the Option
shall be canceled with respect to all remaining shares of Common Stock otherwise
subject to the Option.
8. Permanent
and Total Disability of Director. A permanent and
totally disabled Director may exercise any Option within twelve (12) months
after terminating his service as a director of the Corporation, or the date that
the Option expires in accordance with its terms, whichever occurs
first. Any non-vested
Option will continue to vest as scheduled
for a period not to exceed one year after terminating his services as a
director. For
purposes of the Plan and this Option, an individual is deemed to be permanently
and totally disabled if he is unable to engage in any substantial, gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12)
months.
9. Retirement
of Director. In the event that termination of directorship
occurs by reason of retirement and the Director is of retirement age (i.e., age
65 or greater), the Director shall be entitled to exercise any vested Options at
any time until the three year anniversary of such date of termination or the
date the Option expires in accordance with its terms, whichever occurs
first.
10. Transferability
of Option. Unless otherwise
approved by the Board of Directors, the Option may be exercised only by the
Director during his lifetime and may not be transferred other than by will or
the applicable laws of descent or distribution. The Option shall not
otherwise be transferred, assigned, pledged or hypothecated for any purpose
whatsoever and is not subject, in whole or in part, to execution, attachment, or
similar process. Any attempt at assignment, transfer, pledge or
hypothecation or other disposition of the Option, other than in accordance with
the terms set forth herein, shall be void and of no
effect. Notwithstanding anything in this Section to the contrary, the
Director, with the approval of the Board, may transfer the Option for no
consideration to or for the benefit of the Director’s immediate family
(including, without limitation, to a trust for the benefit of the Director’s
immediate family or to a partnership or limited liability company for one or
more members of the Director’s immediate family), subject to such limits as the
Board may establish, and the transferee shall remain subject to all the terms
and conditions applicable to the Option prior to such transfer. The
foregoing right to transfer the Option shall apply to the right to consent to
amendments to this Agreement and, in the discretion of the Board, shall also
apply to the right to transfer ancillary rights associated with the
Option. The term “immediate family” shall mean the Director’s spouse,
parent, children, stepchildren, adoptive relationships, sisters, brothers and
grandchildren (and, for this purpose, shall also include the
Director).
11. Adjustment
of Number of Shares. In the event that
a dividend shall be declared upon the Common Stock of the Corporation payable in
shares of Common Stock of the Corporation or a stock split, the number of shares
of Common Stock then subject to any such option and the number of shares
reserved for issuance pursuant to the Plan but not yet covered by an Option
shall be adjusted by adding to each share the number of shares which shall be
distributed thereon if such shares had been outstanding on the date fixed for
determining the stockholders entitled to receive such stock dividend or
split. For example, if an Option were granted for 1,000 shares at a
$10.00 per share option price (a total price of $10,000), and subsequently there
was a two for one stock split, then the holder of such option shall be entitled
to purchase 2,000 shares of Common Stock at the price of $5.00 per share or an
aggregate purchase price of $10,000. In the event that the
outstanding shares of the Common Stock of the Corporation shall be changed into
or exchanged for a different class of shares of stock of the Corporation or of
another Corporation, whether through reorganization, recapitalization, merger or
acquisition, then there shall be substituted for each share of Common Stock
subject to any such option and for each share of Common Stock reserved for
issuance pursuant to the Plan, but not yet covered by an Option, the number and
kind of shares of stock or other securities into which each outstanding share of
Common Stock shall be so changed or for which such share shall be
exchanged. No adjustment or substitution provided for in this
paragraph shall require the Corporation to sell a fractional share.
12. Stock
Certificates. Upon exercise of
the Option and payment of the exercise price, the Corporation shall deliver a
certificate or certificates representing such Shares as soon as practicable
after the notice shall be received; or (b) fix a date (not less than five (5)
nor more than ten (10) business days from the date such notice shall be received
by the Corporation) for the payment of the full purchase price of such Shares
with the Secretary of the Corporation, against delivery of a certificate or
certificates representing such shares. The certificate or
certificates for the Shares as to which the Option shall have been so exercised
shall be registered in the name of the person or persons so exercising the
Option (or, if the Option shall be exercised by the Director and if the Director
shall so request in the notice exercising the Option, shall be registered in the
name of the Director and another person jointly, with right of survivorship) and
shall be delivered upon the written order of the person or persons exercising
the Option. In the event the Option shall be exercised by any person
or persons other than the Director, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the
Option. All shares that shall be purchased upon the exercise of the
Option as provided herein shall be fully paid and non-assessable.
13. No
Additional Rights. Neither the
Director nor any other person entitled to exercise the Option under the terms
hereof shall be, or have any of the rights or privileges of, a shareholder of
the Corporation with respect to any of the Shares of Common Stock issuable upon
exercise of the Option, unless and until the purchase price for such Shares
shall have been paid in full.
14. Cancellation
or Modification of Agreement. In the event that
the Option shall be exercised in whole, this Agreement shall be surrendered to
the Corporation for cancellation. In the event the Option shall be
exercised in part, or a change in the number or designation of the Common Stock
shall be made, this Agreement shall be delivered to the Corporation for the
purpose of making appropriate notation thereon or otherwise revising in such
manner as the Corporation shall determine the partial exercise or change in the
number of Shares or designation of the Shares of Common Stock.
15. Notices. Every direction,
revocation or notice authorized or required by the Plan shall be deemed
delivered to the Corporation (i) on the date it is personally delivered to the
Secretary of the Corporation at its principal executive offices or (ii) three
business days after it is sent by registered or certified mail, postage prepaid,
addressed to the Secretary at such offices, and shall be deemed delivered to an
optionee (i) on the date it is personally delivered to him or (ii) three
business days after it is sent by registered or certified mail, postage prepaid,
addressed to him at the last address shown for him on the records of the
Corporation.
16. Investment
Purpose. The Option is
granted on the express condition that the purchase of Shares upon an exercise
hereof shall be made for investment purposes only and not with a view to their
resale or further distribution unless such Shares, at the time of their issuance
and delivery, are registered under the Securities Act of 1933, as amended, or,
alternatively, at some time following such issuance their resale is determined
by counsel for the Corporation to be exempt from the registration requirements
of the Act and of any other applicable law, regulation or ruling.
17. Tax
Withholding. Director
shall be required to deposit with the Company an amount of cash equal to the
amount determined by the Company to be required with respect to any withholding
taxes, FICA contributions, or the like under any federal, state or local
statute, ordinance, rule or regulation in connection with the exercise
of the Option. If the Board, in its sole
discretion, permits Shares of the Corporation’s Common Stock to be used to
satisfy any such tax withholding, such Shares shall be valued based on the fair
market value of such Shares as of the date the tax withholding is required to be
made, as determined by the Board.
18. General. The Corporation
shall at all times during the term of the Option reserve and keep available such
number of shares of Common Stock as will be sufficient to satisfy the
requirements of this Option Agreement, shall pay all original issue and transfer
taxes with respect to the issue and transfer of shares pursuant hereto and all
other fees and expenses necessarily incurred by the Corporation in connection
therewith, and will from time to time use its best efforts to comply with all
laws and regulations which, in the opinion of counsel for the
Corporation, shall be applicable thereto. The Option shall
be exercised in accordance with such administrative regulations as the Board
shall from time to time adopt.
19. Acceptance
by Director. The exercise of
the Option is conditioned upon the acceptance of Director of the terms hereof as
evidenced by his execution of this Option Agreement.
20. Electronic
Delivery. The
Corporation may, in its sole discretion, decide to deliver any documents
related to participation in the Plan, options granted under the Plan or future
options that may be granted under the Plan by electronic means or to request
your consent to participate in the Plan by electronic means. You hereby consent
to receive such documents by electronic delivery and, if requested, to agree to
participate in the Plan through an on-line or electronic system established and
maintained by the Corporation or another third party designated by the
Corporation. If the Plan Committee decides to permit or use
electronic signatures in documenting the Agreement or notices to be sent under
this Agreement, you acknowledge that any electronic signature will have legal
validity.
IN WITNESS WHEREOF, the Corporation has
caused this Option Agreement to be duly executed by its officers thereunto duly
authorized, and the Director has hereunto set his hand and seal, all on the day
and year first above written.
TECHNOLOGY RESEARCH
CORPORATION
By:
Name: Xxxx
Xxxxxx
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Its: President
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Chief
Executive Officer
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DIRECTOR
Amended
and Restated 2000 Long Term
Incentive
Plan Non-Qualified Stock Option Agreement
