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EXHIBIT 10.6
XXXXXXXX INCORPORATED
STOCK OPTION AGREEMENT
This stock option agreement ("Agreement") is made as of [date] (the "Effective
Date"), between XXXXXXXX INCORPORATED, a Delaware corporation (the
"Corporation"), and [name] ("Option Holder").
R E C I T A L S
This Option is being granted pursuant to the 1994 Stock Incentive Plan (the
"Plan"). This Option DOES NOT represent an incentive stock option as defined in
Section 422A of the Internal Revenue Code. This Option expires on [date] (the
"Expiration Date").
A G R E E M E N T S
1. Grant. The Corporation hereby grants to the Option Holder the right
and option to purchase, on the terms and conditions hereinafter set forth, all
or any part of an aggregate of 1,500 shares of the Common Stock at the purchase
price of $[ ] per share, being 100% of the fair market value of the Common Stock
on the date the option is granted, exercisable from time to time in accordance
with the provisions of this Agreement until the close of business on the
Expiration Date.
2. Definitions. Unless the context clearly indicates otherwise, and
subject to the terms and conditions of the Plan as the same may be amended from
time to time, the following terms, when used in this stock option agreement,
shall have the meanings set forth in this Section 2.
"Common Stock" shall mean the Common Stock, $.01 par value, of the
Corporation or such other class of shares or other securities as may be
applicable pursuant to the provisions of Section 7 of this stock option
agreement.
3. Conditions to Exercise. The Option Holder may not purchase any shares
by exercise of this option unless the Option Holder shall have served as a
director of the Corporation until at least [date]. On and after [date], until
this option expires, the Option Holder may purchase, by exercise of this option,
all or any part of the shares subject to this option. Provided, however, that
until this option expires, the Option Holder may purchase, by exercise of this
option, all or any part of the shares subject to this option at any time after a
"Change in Control" of the Corporation has occurred. For purposes of this stock
option agreement, a "Change in Control" of the Corporation shall mean a change
in control of a nature that would be required to be reported in response to Item
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6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"); provided that, without limitation,
such a change in control shall be deemed conclusively to have occurred if (i) a
tender offer shall be made and consummated for the ownership of 25% or more of
the outstanding voting securities of the Corporation, (ii) the shareholders of
the Corporation approve that the Corporation be merged or consolidated with
another corporation and as a result of such merger or consolidation less than
75% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former shareholders of the
Corporation, other than affiliates (within the meaning of the Exchange Act) of
any party to such merger or consolidation, as the same shall have existed
immediately prior to such merger or consolidation, (iii) the shareholders of the
Corporation approve that the Corporation sell, lease, exchange or transfer
substantially all of its assets to another corporation, entity or person which
is not a wholly-owned subsidiary, (iv) a person, as defined in Sections 13(d)
and 14(d) (as in effect on the date hereof) of the Exchange Act, shall acquire
25% (or in the case of The Xxxxx Estates, Inc., 30%) or more of the outstanding
voting securities of the Corporation (whether directly, indirectly, beneficially
or of record), (v) the shareholders of the Corporation approve a plan or
proposal for the liquidation or dissolution of the Corporation, or (vi) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
the Corporation's shareholders, of each new director was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of the period. For purposes hereof, ownership of voting securities
shall take into account and shall include ownership as determined by applying
the provisions of Rule 13d-3 (as in effect on the date hereof) under the
Exchange Act
4. Exercise by the Option Holder. This Option may be exercised solely by
the Option Holder, except as provided in Section 5 below in the event of the
Option Holder's death.
5. Termination. This Option shall terminate if and when the Option
Holder shall cease to be a director of the Corporation, except as follows:
(a) Death. If the Option Holder dies while a director of the
Corporation, or while this Option was exercisable by him in accordance
with paragraph (b) below, this Option may be exercised (for not more
than the number of shares as to which the Option Holder might have
exercised this Option at the time of such death) by the personal
representative of the decedent, or by such person or persons as shall
have acquired the Option Holder's rights under this option by will or by
the laws of descent and distribution, at any time (i) prior to the
Expiration Date, in the event the Expiration Date is not more than one
year from the date of death, or (ii) within such one year, in the event
that the Expiration Date is more than one year from such date of death.
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(b) Retirement or Other Termination. If the Option Holder retires
or if he ceases to be a director of the Corporation for any reason other
than by death, this option may be exercised (for not more than the
number of shares as to which the Option Holder might have exercised this
option on the date of his retirement or the date on which he ceased to
be a director) at any time (i) prior to the Expiration Date, in the
event the Expiration Date is not more than three months from the date of
such retirement or termination, or (ii) within such three-month period,
in the event that the Expiration Date is more than three months from the
date of such retirement or termination.
6. Method of Exercise. A person electing to exercise this option shall
deliver to the Secretary of the Corporation prior to the Expiration Date a
written notice of such election and of the number of shares such person has
elected to purchase and shall at the time of exercise tender the full purchase
price of the shares such person has elected to purchase.
7. Adjustments
(a) If the outstanding shares of Common Stock of the Corporation
are increased, decreased, or converted into or exchanged for a different number
or kind of shares or securities of the Corporation through recapitalization
(other than the conversion of convertible securities according to their terms),
reclassification, stock dividend, stock split or reverse stock split, an
appropriate and proportionate adjustment shall be made, or if the Corporation
shall spin-off, spin-out or otherwise distribute assets with respect to the
outstanding shares of Common Stock of the Corporation, an appropriate and
proportionate adjustment may be made in the discretion of the Board of
Directors, in (i) the maximum number and kind of shares as to which options may
be granted under the Plan, (ii) the number and kind of shares subject to
outstanding options, and (iii) the exercise price for each share under
outstanding options, without any change in the aggregate purchase price or value
applicable to the unexercised portion of the outstanding options.
(b) In the event of the dissolution or liquidation of the
Corporation, or upon any merger, consolidation or reorganization of the
Corporation with any other corporations or entities as a result of which the
Corporation is not the surviving corporation, or upon the sale of all or
substantially all of the assets of the Corporation or the acquisition of more
than 80% of the stock of the Corporation by another corporation or entity, there
shall be substituted for each of the shares of Common Stock then subject to the
Plan the number and kind of shares of stock, securities or other assets which
would have been issuable or payable in respect of or in exchange for such Common
Stock then subject to the Plan, as if the Option Holder had been the owner of
such shares as of the transaction date. Any securities so substituted shall be
subject to similar successive adjustments.
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8. Legal Requirements. No shares issuable upon the exercise of this
option shall be issued or delivered unless and until, in the opinion of counsel
for the Corporation, all applicable requirements of federal and state law and of
the Securities and Exchange Commission pertaining to the issuance and sale of
such shares and any applicable listing requirements of any national securities
exchange on which shares of the same class are then listed, shall have been
fully complied with. In connection with any such issuance or transfer, the
person acquiring the shares shall, if requested by the Corporation, give
assurances satisfactory to counsel to the Corporation in respect of such matters
as the Corporation may deem desirable to assure compliance with all applicable
legal requirements.
9. No Rights as a Shareholder. Neither the Option Holder nor any
beneficiary or other person claiming under or through the Option Holder shall
have any right, title or interest in or to any shares of Common Stock allocated
or reserved for the purpose of the Plan or subject to this Agreement except as
to such shares of Common Stock, if any, as shall have been issued or transferred
to such person.
10. Withholding. The Corporation may make such provisions as it may deem
appropriate for the withholding of any taxes which the Corporation determines it
is required to withhold in connection with this Agreement and the transactions
contemplated hereby, and the Corporation may require the Option Holder or other
person exercising this option to pay to the Corporation in cash any amount or
amounts which may be required to be paid as withheld taxes in connection with
any exercise of this option or any other transaction contemplated hereby as a
condition to the exercise of this option and issuance of shares of the Common
Stock.
11. No Assignments. Neither this Agreement, nor this option, nor any
other rights and privileges granted hereby shall be transferred, assigned,
pledged or hypothecated in any way, whether by operation of law of descent and
distribution. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of this Agreement, this option or any other right or privilege
granted hereby contrary to the provisions hereof, this Agreement, this option
and all of such rights and privileges shall immediately become null and void.
12. The Plan. The option hereby granted is subject to, and the
Corporation and Option Holder agree to be bound by, all of the terms and
conditions of the Plan as the same may be amended from time to time in
accordance with the terms thereof, but no such amendment may adversely affect
the Option Holder's rights under this Agreement. Option Holder acknowledges
receipt of a complete copy of the Plan.
13. Consideration. The consideration for the rights and benefits
conferred on Option Holder by this Option are the services rendered by the
Option Holder after and not before the grant of this Option.
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14. Applicable Law. This option has been granted as of the effective
date set forth above at Los Angeles, California, and the interpretation,
performance and enforcement of this Agreement shall be governed by the laws of
the State of California.
DUCOMMUN INCORPORATED
By:
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President and CEO
By:
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Secretary
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Option Holder
By his or her signature, the spouse of the Option Holder hereby agrees to be
bound by all the terms and conditions of this written stock option agreement.
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Spouse of Option Holder
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