Exhibit 1(h)
TII INDUSTRIES, INC.
1995 STOCK OPTION PLAN
INCENTIVE STOCK OPTION CONTRACT
THIS INCENTIVE STOCK OPTION CONTRACT entered into as of
December 30, 1997 between TII INDUSTRIES, INC., a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxx (the "Optionee").
W I T N E S S E T H:
- - - - - - - - - -
1. The Company, in accordance with the allotment made by the
Compensation Committee of the Company's Board of Directors (the "Committee") and
subject to the terms and conditions of the 1995 Stock Option Plan of the Company
(the "Plan"), grants to the Optionee an option to purchase an aggregate of
60,000 shares of the Common Stock, $.01 par value per share, of the Company
("Common Stock") at an exercise price of $4.375 per share, being at least equal
to the fair market value of such shares of Common Stock on the date hereof. This
option is intended to constitute an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
although the Company makes no representation or warranty as to such
qualification.
2. The term of this option shall be ten years from the date
hereof, subject to earlier termination as provided in the Plan. However, this
option shall not be exercisable until December 30, 1998 at which time it shall
become exercisable as to 12,000 shares of Common Stock, and as to an additional
12,000 shares of Common Stock on each of the next four anniversaries of the date
hereof. The right to purchase shares of Common Stock under this option shall be
cumulative, so that if the full number of shares purchasable in a period shall
not be purchased, the balance may be purchased at any time or from time to time
thereafter, but not after the expiration of the option. Notwithstanding the
foregoing, in no event may a fraction of a share of Common Stock be purchased
under this option.
3. This option shall be exercised by giving written notice to
the Company at its then principal office, presently 0000 Xxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxx 00000, Attention: Vice President - Administration, stating that the
Optionee is exercising the option hereunder, specifying the number of shares
being purchased and accompanied by payment in full of the aggregate purchase
price therefor (a) in cash or by certified check, (b) with previously acquired
shares of Common Stock which have been held by the Optionee for at least six
months valued as provided in the Plan, or (c) a combination of the foregoing.
-1-
4. The Company and/or any Subsidiary may withhold cash and/or
shares of Common Stock to be issued to the Optionee in the amount which the
Company determines is necessary to satisfy its obligation to withhold taxes or
other amounts incurred by reason of the grant or exercise of this option or the
disposition of the underlying shares of Common Stock. Alternatively, the Company
may require the Optionee to pay the Company such amount in cash promptly upon
demand.
5. In the event of any disposition of the shares of Common
Stock acquired pursuant to the exercise of this option within two years from the
date hereof or one year from the date of transfer of such shares to him, the
Optionee shall notify the Company thereof in writing within 30 days after such
disposition. In addition, the Optionee shall provide the Company on demand with
such information as the Company shall reasonably request in connection with
determining the amount and character of the Optionee's income, the applicable
deduction and the obligation to withhold taxes or other amount incurred by
reason of such disqualifying disposition, including the amount thereof. The
Optionee shall pay the Company and/or the Subsidiary, as the case may be, in
cash on demand the amount, if any, which the Company determines is necessary to
satisfy such withholding obligation.
6. Notwithstanding the foregoing, this option shall not be
exercisable by the Optionee unless (a) a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
shares of Common Stock to be received upon the exercise of this option shall be
effective and current at the time of exercise or (b) there is an exemption from
registration under the Securities Act for the issuance of the shares of Common
Stock upon such exercise. The Optionee hereby represents and warrants to the
Company that, unless such a Registration Statement is effective and current at
the time of exercise of this option, the shares of Common Stock to be issued
upon the exercise of this option will be acquired by the Optionee for his own
account, for investment only and not with a view to the resale or distribution
thereof. In any event, the Optionee will notify the Company of any proposed
resale of the shares of Common Stock issued to him upon exercise of this option.
If (i) the Optionee is an "affiliate" of the Company within the meaning of the
Securities Act at the time of any such resale or (ii) at the time of exercise of
this option the shares issued were not subject to a current and effective
Registration Statement under the Securities Act covering their issuance, then
any subsequent resale or distribution of shares of Common Stock by the Optionee
will be made only pursuant to (x) a Registration Statement under the Securities
Act which, at the time of resale, is effective and current with respect to the
Optionee's sale of shares of Common Stock being sold, or (y) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption, the Optionee shall, prior to any offer of sale or sale
of such shares of Common Stock, provide the Company (unless waived by the
Company) with a favorable written opinion of counsel, in form and substance
satisfactory to the Company, as to the applicability of such exemption to the
proposed sale or distribution. Such representations and warranties shall also be
deemed to be made by the Optionee upon each exercise of this option. Nothing
herein shall be construed as requiring the Company to register the shares
subject to this option under the Securities Act.
7. Notwithstanding anything herein to the contrary, if at any
time the Committee shall determine, in its discretion, that the listing or
qualification of the shares of
-2-
Common Stock subject to this option on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition to, or in connection with, the granting
of an option or the issue of shares of Common Stock hereunder, this option may
not be exercised in whole or in part unless such listing, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Company.
8. The Company may affix appropriate legends upon the
certificates for shares of Common Stock issued upon exercise of this option and
may issue such "stop transfer" instructions to its transfer agent in respect of
such shares as it determines, in its discretion, to be necessary or appropriate
to (a) prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, (b) implement the provisions of the Plan or
this Contract or any other agreement between the Company and the Optionee with
respect to such shares of Common Stock, or (c) permit the Company to determine
the occurrence of a "disqualifying disposition," as described in Section 421(b)
of the Code, of the shares of Common Stock transferred upon the exercise of this
option.
9. Nothing in the Plan or herein shall confer upon the
Optionee any right to continue in the employ of the Company, any Parent or any
of its Subsidiaries, or interfere in any way with any right of the Company, any
Parent or its Subsidiaries to terminate such employment at any time for any
reason whatsoever without liability to the Company, any Parent or any of its
Subsidiaries.
10. The Company and the Optionee agree that they will both be
subject to and bound by all of the terms and conditions of the Plan, receipt of
a copy of which is acknowledged by the Optionee and is made a part hereof. Any
capitalized term not defined herein shall have the meaning ascribed to it in the
Plan. In the event of a conflict between the terms of this Contract and the
terms of the Plan, the terms of the Plan shall govern.
11. The Optionee represents and agrees that he will comply
with all applicable laws relating to the Plan and the grant and exercise of this
option and the disposition of the shares of Common Stock acquired upon exercise
of the option, including without limitation, federal and state securities and
"blue sky" laws.
12. This option is not transferable by the Optionee otherwise
than by will or the laws of descent and distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
13. This Contract shall be binding upon and inure to the
benefit of any successor or assign of the Company and to any heir, distributee,
executor, administrator or legal representative entitled to the Optionee's
rights hereunder.
14. This Contract shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to the conflicts of law rules thereof.
-3-
15. The invalidity or illegality of any provision herein shall
not affect the validity of any other provision.
16. The Optionee agrees that the Company may amend the Plan
and the options granted to the Optionee under the Plan, subject to the
limitations contained in the Plan.
IN WITNESS WHEREOF, the parties hereto have executed this
Contract as of the day and year first above written.
TII INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx, President
/s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx, Optionee
X.X. Xxx 000
Xxx Xxxx, Xxxxxx Xxxx 00000
------------------------------------
Address
-4-
