EXHIBIT 10.10
AML COMMUNICATIONS, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of April 28, 1997, between AML Communications,
Inc. a Delaware corporation (the "Company") and Xxxx X. Xxxxxxx (the
"Optionee").
The Board of Directors has granted to the Optionee as a matter of separate
inducement in connection with his engagement with the Company, and not in lieu
of any salary or other compensation for his services, an option (the "Option")
to purchase shares of the Common Stock, par value $0.01 per share, of the
Company (the "Common Stock") on the terms and conditions set forth herein. This
Option is intended to qualify as an Incentive Stock Option under Section 422A of
the Internal Revenue Code (the "Code").
Capitalized terms used herein without definition shall have the same
meaning as in the Plan.
AGREEMENT
In consideration of the foregoing and of the mutual covenants set forth
herein and other good and valuable consideration, the parties hereto agree as
follows:
1. SHARES OPTIONED; OPTION PRICE. The Optionee may purchase all or any
part of an aggregate of 50,000 shares of Common Stock, at the price of $3.875
per share (which shall not be less than the greater of (A) 100% of the Fair
Market Value (as defined in the Plan) of the Common Stock on the date of the
grant of the Option or (B) the par value of the Common Stock; provided, however,
that each Option granted under the Plan to an Optionee who owns (after
application of the family and other attribution rules of Section 425(d) of the
Code), on the date of grant of the Option, more than 10% of the total combined
voting power of all classes of stock of the Company or of its parent or
subsidiary corporations (a "10% Optionee") shall have an exercise price that is
not less than the greater of (X) 110% of the Fair Market Value of the Common
Stock on the date of grant of the Option or (Y) the par value of the Common
Stock) on the terms and conditions set forth herein.
2. OPTION TERM, TIMES OF EXERCISE. The Option term shall end on April
28, 2002 which in no case shall be greater than ten years (five years if the
Option is a 10% Optionee) from the date of grant of this Option.
At the expiration of one year from the date of grant of the Option, the
Optionee shall be entitled to exercise 25% of the shares of Common Stock covered
by this Option and at the expiration of each year thereafter, the Optionee shall
be entitled to exercise an additional 25% of said shares such that the Optionee
shall be entitled to exercise 100% of upon expiration of four years from the
date of grant of this Option.
3. TERMINATION OF EMPLOYMENT; EFFECT ON OPTIONS.
(a) In the event that an Optionee who is employed by the Company or any of
its subsidiaries on a salaried basis (an "Employee") ceases to be an Employee
for any reason other than normal retirement, disability or death (i) all
outstanding Options which have been granted to such person under the Plan and
which have not yet become vested shall immediately terminate upon termination of
employment, and (ii) all outstanding Options which have been granted to such
person under the Plan and which have become vested shall terminate three months
thereafter (or such earlier period of time as such Options may expire in
accordance with their terms), provided, however, if such person's employment is
terminated "For Cause" (as defined below) all Options granted under the Plan to
such person, whether or not they have become vested at such time, shall
immediately terminate upon termination of employment.
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(b) In the event that an Optionee who is an Employee ceases to be an
Employee as a result of normal retirement or disability, all outstanding
Options, whether or not they have been vested at such time, shall be exercisable
for a period of one year from the date of such event by such person (or such
earlier period of time as such Options may expire in accordance with their
terms), and thereafter terminate.
(c) In the event that an Optionee who is an Employee ceases to be an
Employee as a result of death, all outstanding options, whether or not they have
become vested at such time, shall be exercisable by such person(s) to whom the
rights under such Options shall have passed by will or the applicable laws of
descent and distribution, for a period of six months from the date of death (or
such earlier period of time as such Options may expire in accordance with their
terms), and therefore terminate.
For the purposes of this Section 3, a termination of employment of an
Employee "For Cause" shall mean a termination for any of the following reasons:
(i) fraud, misappropriation or embezzlement by the Employee involving
the Company, or any affiliate of the Company;
(ii) the conviction in any jurisdiction of the Employee for any crime
involving or relating to moral turpitude;
(iii) a determination by the Board of Employee has been guilty of
dishonesty, gross negligence or willful malfeasance in the course of his
employment with the Company; or
(iv) the Employee's repeated violation of any specific written
directions of the Board or the Chief Executive Officer of the Company which
pertain to a material term or condition of the performance by the Employee of
his duties to the Company.
4. EXERCISE: PAYMENT FOR AND DELIVERY OF STOCK AND PAYMENT OF INCOME
TAXES. This Option may be exercised only by the Optionee or his transferees by
will or the laws of descent and distribution. This Option may be exercised by
giving written notice of exercise to the Company specifying the number of shares
of Common Stock to be purchased and the total purchase price.
Payment of the exercise price of any Option shall be made in full in cash
concurrently with the exercise of such Option; provided, however, in the
discretion of the Committee, payment of such exercise price may instead be made,
in whole or in part:
(i) with shares of Common stock delivered to the Company concurrently
with such exercise (such shares to be valued on the basis of the aggregate Fair
Market Value of such shares on the date of such exercise), provided that the
Company is not then prohibited from purchasing or acquiring its Common Stock;
and/or
(ii) by reducing the number of shares of Common Stock to be delivered
to the Optionee upon exercise of such Option (such reduction to be valued on the
basis of the aggregate Fair Market Value on the date of such exercise of the
additional shares that would otherwise have been delivered to such Optionee upon
exercise of such Option), provided that the Company is not then prohibited from
purchasing or acquiring its Common Stock.
If the Company becomes obligated to withhold an amount on account of any
federal or state income tax imposed as a result of an exercise of an Option
granted under the Plan (such amount shall be referred to herein as the
"Withholding Liability" and the first date upon which the Company is so
obligated shall be referred to herein as the "Withholding Date"), the Optionee
shall pay the Withholding Liability to the Company in full in cash on the
Withholding Date; provided, however, that, in the discretion of the Committee,
payment of the Withholding Liability to the Company may instead by made, in
whole or in part:
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(a) with shares of Common Stock delivered to the Company by such Optionee
on the Withholding Date (such shares to be valued on the basis of the aggregate
Fair Market Value of such shares on the Withholding Date), provided that the
Company is not then prohibited from purchasing or acquiring its Common Stock;
and/or
(b) by reducing the number of shares of Common Stock to be delivered to
such Optionee upon exercise of such Option (such reduction to be valued on the
basis of the aggregate Fair Market Value on the date of such exercise of the
additional shares that would otherwise have been delivered to such Optionee upon
exercise of such Option), provided that the Company is not then prohibited from
purchasing or acquiring its Common Stock.
5. RIGHTS IN SHARES BEFORE ISSUANCE AND DELIVERY. Neither the Optionee
nor his transferees by will or the laws of descent and distribution shall be, or
have any rights or privileges of, a stockholder of the Company with respect to
any shares of Common Stock issuable upon exercise of this Option, unless and
until certificates representing such shares shall have been issued and
delivered.
6. ADJUSTMENTS IN STOCK. Subject to the provisions of the Plan, if the
outstanding securities of the class then subject to the Plan are increased,
decreased or exchanged for or converted into a different number or kind of
securities as a result of a reorganization, merger or consolidation,
recapitalization, reclassification, stock dividend or other distribution, stock
split, reverse stock split or the like, then, the Committee shall make
appropriate and proportionate adjustments in the following:
(a) the number and type of shares or other securities that may thereafter
be acquired upon the exercise in full of Options thereafter granted under the
Plan; and
(b) the number and types of shares or other securities that may be
acquired upon the exercise in full of Options theretofore granted under the
Plan;
provided however, that any such adjustments in Options theretofore granted
under the Plan shall be made without changing the aggregate exercise price of
the unexercised portion of such Options.
7. NONTRANSFERABILITY OF OPTION. This Option is not transferable
otherwise than by will or the laws of descent and distribution. This Option
shall not be otherwise transferred, assigned, pledged, hypothecated or otherwise
disposed of in any way, whether by operation of law or otherwise, and shall not
be subject to execution, attachment or similar process. Upon any attempt to
transfer this Option otherwise than by will or the laws of descent and
distribution or to assign, pledge, hypothecate or otherwise dispose of this
Option, or upon the levy of an execution, attachment or similar process upon
this Option, this Option shall immediately terminate and become null and void.
8. LEGALITY. No securities issuable upon exercise of this Option shall be
issued and delivered unless and until, in the opinion of the Company, such
securities may be issued and delivered without causing the Company to be in
violation of or incur any liability under any federal, state or other securities
law, any requirement of any securities-exchange listing agreement to which the
Company may be a party, or any other requirement of law or of any regulatory
body having jurisdiction over the Company.
9. TERMINATING TRANSACTIONS. Upon (i) the dissolution or liquidation of
the Company, (ii) a reorganization, merger or consolidation of the Company
(individually or collectively, a "Merger") with one or more corporations as a
result of which the Company goes out of existence or becomes a subsidiary of
another corporation, or (iii) the acquisition of all or substantially all of the
assets or more than eighty percent (80%) of the then outstanding stock of the
Company by another entity, Options granted under the Plan shall terminate unless
provisions be made in writing in connection with such transaction for the
assumption of such Options or the substitution for such Options of a new option
covering the stock of a successor corporation, or a parent or subsidiary thereof
or of the company, with appropriate adjustments as to the number and kind of
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shares and prices, in which event such Options shall continue in the manner and
under the terms so provided. Each of such transactions referred to in (i), (ii)
and (iii) above shall be referred to as a "Terminating Transaction."
Notwithstanding the foregoing, each holder of outstanding Options granted under
the Plan, whether or not such Options have become vested at such time, shall
have the right to exercise such Options to the full extent not theretofore
exercised at such time immediately prior to the consummation of the Terminating
Transactions as the Committee shall designate, or in lieu thereof, in the case
of a Merger and in the discretion of the Committee, be entitled to receive upon
the consummation of the Merger, for each outstanding Option held by such person
and in exchange for the surrender and cancellation thereof, a cash payment from
the Company or its successor equal to the consideration paid per share of Common
Stock in the merger (or the Fair Market Value thereof) minus the exercise price
of such Option multiplied by the number of shares of Common Stock subject to
such Option.
10. NOTICES. Any notice to be given to the Company shall be addressed to
the Company in care of its Secretary at its principal office, and any notice to
be given to the Optionee shall be addressed to him at the address given beneath
his signature hereto, or as such other address as the Optionee may hereafter
designate in writing to the Company. Any such notice shall have been deemed
duly given when deposited in a post office or branch post office regularly
maintained by the United States Government.
11. LAWS APPLICABLE TO CONSTRUCTION. This Agreement has been executed and
delivered the day and year first above written at Camarillo, California, and
this Agreement shall be construed and enforced in accordance with the laws of
the State of California.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by an authorized officer, attested by its Secretary or one of its
Assistant Secretaries, and the Optionee has hereunto set his hand on the day and
year first above written.
AML COMMUNICATIONS, INC. OPTIONEE
By: /s/ Xxxxx Xxxxx /s/ Xxxx X. Xxxxxxx
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Xxxxx Xxxxx Xxxx X. Xxxxxxx
President & CEO
ATTEST: Social Security No.:
/s/ Xxxxx X. XxXxxx ###-##-####
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Xxxxx X. XxXxxx
Secretary Address:
0000 Xxxxxxxxx Xx.
Xxxxxxxx Xxxxxxx, XX 00000
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