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EXHIBIT 10.33
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "AGREEMENT") is entered into as of
____________________, 2000 by and between Communications & Power Industries
Holding Corporation, a Delaware corporation (the "COMPANY"), and the person
identified on Annex A attached hereto (hereinafter referred to as the "OPTION
HOLDER"), with reference to the following facts:
WHEREAS, the Company has adopted, effective on or prior to the date
hereof, its 2000 Stock Option Plan (the "PLAN"), pursuant to which options
("OPTIONS") to purchase shares of the Company's common stock, $.01 par value per
share ("COMMON STOCK"), may be issued to key employees, consultants, advisors
and non-affiliate directors of the Company and its Subsidiaries (as defined in
the Plan), subject to the terms and restrictions included in the Plan; and
WHEREAS, Option Holder is a key employee, consultant, advisor or
non-affiliate director of the Company or one of its Subsidiaries and,
accordingly, as an incentive to the Option Holder, the Company desires to grant
Options to the Option Holder as set forth herein; and
WHEREAS, the Options granted under this Agreement shall constitute an
award or awards under the Plan; and
WHEREAS, the Options granted hereby are not intended to qualify as
"incentive stock options" under Section 422 of the Internal Revenue Code of
1986, as amended (the "CODE");
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. Certain Option Holder Representations and Agreements.
(a) Purchase for Investment.
(i) The Option Holder represents and warrants that: (A)
the Common Stock acquired by the Option Holder upon the exercise of Options
pursuant to this Agreement will be acquired for the Option Holder's own account
for investment, without any present intention of selling or further distributing
the same and the Option Holder does not have any reason to anticipate any change
in the Option Holder's circumstances or any other particular occasion or event
which would cause the Option Holder to desire to sell any of such Common Stock
and (B) the Option Holder is fully aware that, in agreeing to sell or issue such
Common Stock to the Option Holder, the Company will be relying upon the truth
and accuracy of these representations and warranties. The Option Holder agrees
that the Option Holder will not sell or otherwise dispose of any Common Stock
except in compliance with the Securities Act of 1933, as amended (the "ACT"),
the rules and regulations of the Securities and Exchange Commission thereunder,
the relevant state securities laws applicable to the Option Holder's action and
the terms of this Agreement.
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(ii) As a condition to the issuance of Common Stock
upon the exercise of the Options, the Option Holder agrees to enter into and be
bound by the provisions of the Stockholders Agreement attached as Annex B
hereto, unless the Option Holder is already a party to such Stockholders
Agreement and that any Common Stock acquired hereunder shall be subject to the
rights and obligations set forth in the Stockholders Agreement.
(iii) The Option Holder acknowledges that no trading
market for the Common Stock exists currently or is expected to exist at any time
in the foreseeable future and that, as a result, the Option Holder may be unable
to sell any of the Common Stock acquired hereunder for an indefinite period.
Further, the Company has no obligation to register any of the Common Stock,
except as expressly provided in the Stockholders Agreement.
(iv) The Option Holder acknowledges that no Options
shall be exercisable unless a registration statement with respect to the Options
is effective or the Company has determined that such registration is
unnecessary.
(b) Right to Discharge Reserved. The Option Holder acknowledges
and agrees that nothing herein, including the opportunity to make any equity
investment in the Company, shall be deemed to create any implication concerning
the adequacy of the Option Holder's services to the Company or any of its
Subsidiaries or shall be construed as an agreement by the Company or any of its
Subsidiaries, express or implied, to employ the Option Holder or contract for
the Option Holder's services, to restrict the right of the Company or any of its
Subsidiaries to discharge the Option Holder or cease contracting for the Option
Holder's services or to modify, extend or otherwise affect in any manner
whatsoever the terms of any employment agreement, consultant agreement,
independent contractor agreement or other such contract for services which may
exist between the Option Holder and the Company or any of its Subsidiaries.
2. Grant and Terms of Stock Option.
(a) Grant and Expiration Date. The Company hereby grants to the
Option Holder the right and option to purchase, subject to the terms and
conditions set forth in the Plan and this Agreement, all or any part of the
number of shares of Common Stock (subject to adjustment as provided in the Plan)
indicated on Annex A hereto at the purchase price of $_____ per share (the
"EXERCISE PRICE"), exercisable from time to time in accordance with the
provisions of this Agreement during a period expiring on the tenth (10th)
anniversary of this Agreement (the "EXPIRATION DATE") or earlier in accordance
with the terms of this Section 2. All shares of Common Stock issued upon the
exercise of such Options shall be subject to all of the terms and restrictions
contained in this Agreement and the Stockholders Agreement. The Options granted
hereby are not intended to qualify as "incentive stock options" under Section
422 of the Code.
(b) Vesting. The following percentage of the Options shall vest
in accordance with the following schedule upon the passage of the indicated
anniversaries of the date of this Agreement (the "ANNIVERSARIES"):
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Percentage Vested Anniversary
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25% First
50% Second
75% Third
100% Fourth
Any Options which are not vested in accordance with this paragraph (b)
are sometimes referred to in this Agreement as "Unvested Options." Any Options
which are vested in accordance with this paragraph (b) are sometimes referred to
in this Agreement as "Vested Options."
(c) Exercisability. Unvested Options may not be exercised until
vested in accordance with Section 2(b) above or otherwise accelerated as
provided herein, and Vested Options may be exercised at any time prior to the
Expiration Date.
(d) Corporate Transaction. Upon the happening of a merger,
reorganization, consolidation, a sale of all or substantially all of the
outstanding shares of the Company's capital stock or sale of substantially all
of the assets of the Company, the Committee, may, in its discretion, do one or
more of the following: (i) shorten the period during which the Options are
exercisable (provided they remain exercisable for at least 30 days after the
date notice of such shortening is given to Option Holder); (ii) accelerate the
vesting schedule of the Options; (iii) arrange to have the surviving or
successor entity assume the Options or grant replacement options with
appropriate adjustments in the exercise prices and adjustments in the number
and kind of securities issuable upon exercise or adjustments so that the
Options or their replacements represent the right to purchase the shares of
stock, securities or other property (including cash) as may be issuable or
payable as a result of such transaction with respect to or in exchange for the
number of shares of Common Stock purchasable and receivable upon exercise of
the Options had such exercise occurred in full prior to such transaction; or
(iv) cancel these Options upon payment to the Option Holder in cash, with
respect to each Option to the extent then exercisable (including any Options as
to which the exercise has been accelerated as contemplated in clause (ii)
above), of any amount that is the equivalent of the excess of the fair market
value of the Common Stock (at the effective time of the merger, reorganization,
sale or other event) over the exercise price of the Option. All determinations
(including without limitation with respect to fair market value) pursuant to
this Section 2(d) shall be made by the Committee and shall be final, binding
and conclusive on all parties.
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(e) Means of Exercise. Each exercise of the Options shall be by
means of a written notice of exercise delivered to the Company on a regular
business day, specifying the number of shares to be purchased and accompanied by
payment to the Company of the full purchase price of the shares to be purchased.
Payment of the purchase price of the shares shall be made solely in cash or by
bank cashiers check or (as funds clear) personal check payable to the order of
the Company, unless the Committee determines in its discretion that payment may
be made in whole or in part by the delivery to the Company of the Option
Holder's promissory note (which such promissory note shall have such terms,
conditions and security as the Committee may determine) or in some other manner.
Furthermore, the Committee may provide, in its sole discretion, that payment for
such shares of Common Stock following exercise of Options may be made in whole
or in part with shares of the Company's Common Stock held by the Option Holder.
If payment is made in whole or in part in shares of the Company's Common Stock,
then the Option Holder shall deliver to the Company certificates registered in
the name of such Option Holder, free of all liens, claims and encumbrances of
any kind and having an aggregate Fair Market Value on the date of delivery that
is at least equal to the Exercise Price of the shares with respect to which such
Option is to be exercised by the payment in shares of Common Stock. The Options
may not be exercised for a fraction of a share of Common Stock.
Exercisable Options may be exercised during the lifetime of the
Option Holder only by the Option Holder, and after the Option Holder's death by
his transferees by will or the laws of descent or distribution, and not
otherwise, in accordance with the terms and conditions of this Agreement and the
Plan.
Notwithstanding anything to the contrary contained in this
Section 2, no share of Common Stock shall be issued and delivered upon exercise
of any Option unless and until there shall have been full compliance with all
applicable requirements of the Act (whether by registration or satisfaction of
exemption conditions), all applicable listing requirements of any national
securities exchange or other market on which shares of the same class are then
listed or
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traded and any other requirements of law or of any regulatory body having
jurisdiction over such issuance and delivery, including without limitation under
any applicable state securities or "blue sky" law. Without limiting the
generality of the preceding sentence, prior to any exercise of Options and as a
condition precedent to such exercise and the issuance of any shares of Common
Stock upon such exercise, the Company may require the Option Holder to confirm
to the Company, in such form as the Company may specify, the representations and
agreements of the Option Holder set forth in Section 1 above or to make similar
or additional representations, warranties and agreements with respect to the
shares of Common Stock issuable upon such exercise.
(f) Right of Redemption.
If the Option Holder exercises his vested Options upon or
following the termination of the Option Holder's employment or service with the
Company or its Subsidiaries for any reason, the Company shall have the right,
but not the obligation, to pay to the Option Holder an amount equal to the
excess of the Fair Market Value (as defined in the Stockholders Agreement) of a
share of Common Stock over the Exercise Price, if any, for each share of Common
Stock which the Option Holder desires to purchase pursuant to the exercisable
portion of his or her Vested Option in lieu of delivering Common Stock upon
exercise of the Options.
(g) Automatic Expiration; Accelerated Expiration.
(i) Termination of Employment or Business Relationship:
Unvested Options. If at any time the Option Holder ceases to be an employee,
consultant or director with the Company or any of its Subsidiaries for any
reason or for no reason, all Unvested Options held by the Option Holder shall
expire automatically on the date the Option Holder's employment, consulting or
director status with the Company or its Subsidiaries ceases and no Unvested
Options held by the Option Holder may be exercised to any extent by the Option
Holder or by anyone claiming by or through the Option Holder on or after such
date.
(ii) Termination of Employment or Business
Relationship: Vested Options. Subject to the other provision of this Agreement,
if at any time the Option Holder ceases to be an employee, consultant or
director with the Company or any of its Subsidiaries for any reason other than
Just Cause Dismissal or for no reason, Vested Options held by the Option Holder
may thereafter be exercised at any time prior to the date which is (I) in the
event of the death of the Option Holder, one (1) year after the date of
termination of employment, consulting or director status, or (II) in all other
cases, three (3) months after the date of termination of the employment,
consulting or director relationship. Such date which is one (1) year or three
(3) months, as applicable, after the date of termination of employment or
consulting, advisory or other such services is referred to in this subparagraph
(ii) as the "ACCELERATED EXPIRATION DATE". If the Option Holder's termination of
employment, consulting or director status is a result of the death of the Option
Holder, the Option Holder's Vested Options may be exercised by the person or
persons to whom the Option Holder's rights under such Vested Options shall pass
by reason of the death of the Option Holder, whether by will or the laws of
descent and distribution. However, in no event may any Vested Options be
exercised to any extent by anyone after the earliest to occur of the Expiration
Date or the Accelerated Expiration Date.
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(iii) Just Cause Dismissal. Notwithstanding anything to
the contrary in this Agreement, if the Company or any of its Subsidiaries
determines that the Option Holder's employment or consulting, advisory or other
such relationship is to be terminated on the basis of a "Just Cause Dismissal"
(as defined below), any right of the Option Holder to exercise any Options
granted under this Agreement (whether or not such Options are Vested Options or
are then exercisable) shall automatically expire on the date that the Option
Holder receives notice of such Dismissal. In no event may any Options (whether
or not such Options are Vested Options or are then exercisable) held by the
Option Holder be exercised to any extent by the Option Holder or by any person
claiming by or through the Option Holder on or after such date. To the extent
the Option Holder is party to an employment, consulting, advisor or other such
agreement with the Company, a "JUST CAUSE DISMISSAL" shall have the meaning
assigned to the definition of "Cause" in such employment, consulting, advisory
or other such agreement. In all other cases, a "JUST CAUSE DISMISSAL" shall mean
the termination of the Option Holder's employment or consulting, advisory or
other such relationship with the Company or any of its Subsidiaries as a result
of any of the following:
(A) the Option Holder commits any act of fraud, intentional
misrepresentation or serious misconduct in connection with the business
of the Company or its subsidiaries, including but not limited to
falsifying any documents or agreements (regardless of form); or
(B) the Option Holder violates any rule or policy of the Company
or its subsidiaries (A) for which violation an employee may be
terminated pursuant to the written policies of the Company or its
subsidiaries adopted prior to such violation, or (B) which violation
results in material damage to the Company or its subsidiaries, or (C)
which, after written notice to do so, the Option Holder fails to correct
within a reasonable time; or
(C) the Option Holder willfully breaches or, after written
notice, continues to habitually neglect any material aspect of the
Option Holder's duties (1) as described in the Option Holder's
employment, consulting, advisory or other such contract, if any, or (2)
in the ordinary course of the Option Holder's employment or consulting,
advisory or other such relationship, or (3) assigned to the Option
Holder by the Company or its subsidiaries, which assignment was
reasonable in light of the Option Holder's position with the Company or
its subsidiaries (all of the foregoing duties, "DUTIES"); or
(D) the Option Holder fails, after written notice, adequately to
perform any of the Option Holder's Duties and such failure is reasonably
likely to have an adverse impact upon the Company or its subsidiaries or
the operations of any of them; or
(E) the Option Holder materially fails to comply with a
reasonable direction from the Board of Directors of the Company or its
subsidiaries with respect to a material matter; or
(F) while employed by the Company or its subsidiaries, and
without the written approval of the Company's Board of Directors, the
Option Holder performs
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services for any other corporation or person which competes with the
Company or its subsidiaries; or
(G) the Option Holder is convicted by a court of competent
jurisdiction of a felony (other than a traffic or moving violation) or
any crime involving dishonesty; or
(H) any other action or condition that may result in termination
of an employee for cause pursuant to any generally applied standard
adopted in good faith by the Board of Directors of the Company or its
subsidiaries from time to time but prior to such action or condition.
Any determination as to whether Cause for termination exists made
by the Board of Directors of the Company shall be binding upon the Option
Holder, absent a showing that such determination was not made in good faith.
(h) No Transfer of Option. The Options shall not be transferred,
assigned, pledged or hypothecated in any way whether by operation of law or
otherwise, except by will or the laws of descent and distribution. Upon any
attempt so to transfer, assign, pledge. hypothecate, or otherwise dispose of
Options contrary to the provisions hereof, such Options shall immediately become
null and void and of no further force or effect.
(i) Option Holder Not Stockholder. Neither the Option Holder nor
any other person legally entitled to exercise Options shall be entitled to any
of the rights or privileges of a stockholder of the Company in respect of any
shares issuable upon any exercise of Options unless and until such Options are
exercised and the Option Holder becomes a party to the Stockholders Agreement.
(j) Liquidation or Dissolution. In the event of the dissolution
or liquidation of the Company, any Options that have not been exercised shall
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Company's Board of Directors or the Committee.
3. Notices. All notices or other communications under this Agreement
shall be given in writing and shall be deemed duly given and received on the
third full business day following the day of the mailing thereof by registered
or certified mail or when delivered personally or sent by facsimile transmission
as follows:
(a) if to the Company, at its principal executive offices at the
time of the giving of such notice, or at such other place as the Company shall
have designated by notice as herein provided to the Option Holder, Attention:
President and Chief Executive Officer; and
(b) if to the Option Holder at the address of the Option Holder
as it appears in Annex A or at such other place as the Option Holder shall have
designated by notice as herein provided to the Company.
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4. Miscellaneous.
(a) Withholding of Taxes. Whenever the Company proposes or is
required to deliver or transfer Common Stock in connection with the exercise of
the Options, the Company shall have the right to (i) require the recipient to
remit to the Company an amount sufficient to satisfy any federal, state and/or
local withholding tax requirements prior to the delivery or transfer of any
certificates for such Common Stock or (ii) take whatever action it deems
necessary to protect its interest with respect to tax liabilities.
(b) Integration. Except as provided in the following sentence,
this Agreement, the Stockholder Agreement and the Plan constitute the entire
agreement of the parties with respect to the subject matter hereof. This
Agreement may not be modified or amended except by a written agreement signed by
the Company and the Option Holder. This Agreement, the Plan and the Stockholders
Agreement supersede all prior agreements and understandings between the parties
with respect to its subject matter. The issuance of Options and the issuance and
sale of Common Stock to the Option Holder pursuant to the exercise of Options
hereunder is subject to, and the Company and the Option Holder agree to be bound
by, all of the terms and conditions of the Stockholders Agreement and the Plan,
including, without limitation, the provisions of Section 2 of the Plan
concerning, among other things, administration and interpretation of the Plan
and awards thereunder.
(c) Waiver. No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar nature.
(d) Successors and Assigns. Except as otherwise expressly
provided herein, this Agreement shall be binding upon and inure to the benefit
of the Company and its successors and assigns and the Option Holder and his
heirs and personal representatives.
(e) Severability. If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any manner affect or render invalid or
unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable provision
were not contained herein.
(f) Headings and Usage. The paragraph headings contained herein
are for the purposes of convenience only and are not intended to define or limit
the contents of said sections and paragraphs. Words in the singular shall be
read and construed as though in the plural and words in the plural shall be read
and construed as though in the singular in all cases where they would so apply.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.
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(h) Governing Law. This Agreement shall be deemed to be a
contract under the laws of the State of Delaware and for all purposes shall be
construed and enforced in accordance with the internal laws of said state
without regard to the principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
first date written above.
COMMUNICATIONS & POWER HOLDING
CORPORATION, INC.
By:
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Name:
Its:
OPTION HOLDER:
By:
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Name:
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Annex A
I. Name and Address II. Number of Shares
of Option Holder Subject to Options
(Total Shares Allocated) (Total Shares Allocated)
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Annex B
STOCKHOLDERS AGREEMENT
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