NON-QUALIFIED STOCK OPTION AGREEMENT
AGREEMENT made the 29th day
of April, 2010, between Nu
Horizons Electronics Corp., a Delaware corporation, (hereinafter called
the "Company") and Xxxxxx Xxxx
(hereinafter called "Optionee").
In
consideration of the premises and the mutual covenants hereinafter set forth,
the parties hereto agree as follows:
1. Grant and
Exercise of Option. The Company hereby grants to
Optionee an option to purchase a total of 360,000 shares of the
authorized and unissued Common Stock of the Company, having a par value of
$.0066 per share, at the price of $3.69 per share (the
“Option”), upon and subject to the following terms and conditions:
(a) The
Option may be exercised before April 28, 2020 (the "Expiration Date") and,
within such period, only at the following times and in the following
amounts:
(i) After
the expiration of one (1) year from the date of this Agreement, the Option
may be exercised to the extent of up to TWENTY-FIVE (25%) PERCENT of the shares
of Common Stock granted in Paragraph 1 hereof;
(ii) After
the expiration of two (2) years from the date of this Agreement, the option
may be exercised for up to FIFTY (50%) PERCENT of the shares of Common Stock
granted in Paragraph 1 hereof;
(iii) After
the expiration of three (3) years from the date of this Agreement, the
Option may be exercised to the extent of up to SEVENTY-FIVE (75%) PERCENT of the
shares of Common Stock granted in Paragraph 1 hereof ; and
(iv) After
the expiration of four (4) years from the date of this Agreement, the
Option may be exercised to the extent of ONE HUNDRED (100%) PERCENT of the
shares of Common Stock granted in Paragraph 1 hereof.
(v) Notwithstanding
the vesting of the Option in accordance with subparagraphs (i)-(iv), above,
Optionee shall not have the right to exercise any such vested Options unless the
closing market price of the Common Stock on the Nasdaq Stock Market shall be no
less than $5.00 per share for at least 10 consecutive trading days prior to the
date of exercise.
(b) The
Option shall be exercisable during the Optionee's lifetime only by the Optionee
and shall not be exercisable by the Optionee unless, at all times since
May 3, 2010, and at the time of exercise, such Optionee is an employee of
or providing services to the Company, any parent corporation of the Company or
any Subsidiary or Affiliate, except:
(i) Upon
termination of all such employment or provision of services (other than by
death, Total Disability, or by Total Disability followed by death in the
circumstances provided below), the Optionee may exercise the Option at any time
within three months thereafter but only to the extent that the Option is
exercisable on the date of such termination pursuant to
Section 1(a);
(ii) Upon
termination of all such employment by Total Disability, the Optionee may
exercise the Option at any time within three years thereafter, but only to the
extent such Option is exercisable on the date of such termination pursuant to
Section 1(a); and
(iii) In
the event of the death of the Optionee (x) while an employee of or
providing services to the Company, any parent corporation of the Company or any
Subsidiary or Affiliate, or (y) within three months after termination of
all such employment or provision of services (other than for Total Disability),
or (z) within three years after termination on account of Total
Disability of all such employment or provision of services, the Optionee's
estate or any person who acquires the right to exercise such option by bequest
or inheritance or by reason of the death of the Optionee may exercise the Option
at any time within the period of two years from the date of death. In
the case of clauses (x) and (z) above, the Option shall be exercisable
in full for all the remaining shares of Common Stock covered hereby, but in the
case of clause (y) the Option shall be exercisable only to the extent it
was exercisable on the date of such termination of employment pursuant to
Section 1(a).
(c) In
the event of a Change in Control (a) all Options outstanding on the date of
such Change in Control shall become immediately and fully exercisable, and
(b) the Optionee will be permitted to surrender for cancellation within
sixty (60) days after such Change in Control any portion of the Option not
yet exercised which was granted more than six (6) months prior to the date
of such surrender and to receive a cash payment in an amount equal to the
excess, if any, of the Fair Market Value (on the date of surrender) of the
shares of Common Stock then purchasable under the Option over the aggregate
purchase price for such shares of Common Stock.
(d) Each
exercise of the Option shall be by delivery to the Company, at its then
principal office (attention of the Treasurer), of written notice stating the
number of shares of Common Stock to be purchased, accompanied by payment in full
of the option price of such shares of Common Stock. The option price
shall be payable in United States dollars (i) cash, or (ii) check, or
(iii) other shares of the Company’s Common Stock which have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, or (iv) consideration
received by the Company under any cashless exercise program implemented by the
Company in connection with the Plan.
(e) In
the event of each exercise of the Option, the Company shall deliver to the
Optionee, personally or at his designated address, as soon as practicable, a
certificate made out to the Optionee for the number of shares being
purchased.
(f) The
Option is not intended to be an Incentive Stock Option under Section 422 of
the Internal Revenue Code of 1986, as amended.
(g) If
at any time, the Company or any Subsidiary or Affiliate is required, under
applicable laws and regulations, to withhold, or to make any deduction for any
taxes, or take any other action in connection with any Option exercise, the
Optionee shall be required to pay to the Company or such Subsidiary or
Affiliate, the amount of any taxes required to be withheld, or, in lieu thereof,
at the option of the Company, the Company or such Subsidiary or Affiliate may
accept Common Stock valued at its Fair Market Value on the date of payment, to
cover the amount required to be withheld.
2. Adjustments
to the Number of Option Shares.
If, at
any time, the Company shall take any action, whether by stock dividend, stock
split, combination of shares or otherwise, which results in a proportionate
increase or decrease in the number of shares of Common Stock theretofore issued
and outstanding, the number of shares subject to this Option shall, to the
extent deemed appropriate by the Committee, be increased or decreased in the
same proportion, provided, however, that the Company shall not be obligated to
issue fractional shares.
In the
event of any change in the outstanding shares of Common Stock by reason of any
recapitalization, merger, consolidation, reorganization, combination or exchange
of shares or other corporate change, the number of shares of Common Stock shall
be adjusted in such manner and to such extent, if any, as Committee deems to be
appropriate.
3. Non-Transferability
of Option. The Option granted under this Agreement shall not
be transferable otherwise than by will or the laws of descent and distribution
as may be permitted by the Company’s Board of Directors or its Compensation
Committee.
4. Purchase
for Investment. To the extent that, at the time of exercise of
the Option, the underlying shares have not been registered for sale
under the Securities Act or 1933, as amended, the Optionee represents, on behalf
of himself and any transferees, that any shares of Common Stock purchased
pursuant to this Agreement will be acquired in good faith for investment and not
for resale or distribution, and Optionee on behalf of himself and said person or
persons, agrees that each notice of the exercise of the Option shall contain or
be accompanied by a representation in writing signed by him or said person or
persons, as the case may be, in form satisfactory to the Company, that the
shares of Common Stock to be purchased pursuant to such notice are being so
acquired and will not be sold except in compliance with applicable securities
laws.
5. Capitalized
Terms. The capitalized terms used herein shall have the
following meanings:
"Affiliate"
means any person or entity controlled by or under common control with the
Company, by virtue of the ownership of voting securities, by contract or
otherwise.
"Board"
means the Board of Directors of the Company.
"Change
in Control" means a change of control of the Company, or in any person directly
or indirectly controlling the Company, which shall mean:
(a) a
change in control as such term is presently defined in Regulation 240.12b-2)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act");
or
(b) if
any "person" (as such term is used in Section 13(d) and 14(d) of the
Exchange Act) other than the Company or any "person" who on the date of this
Agreement is a director or officer of the Company, becomes the "beneficial
owner" (as defined in Rule 13(d)-3 under the Exchange Act) directly or
indirectly, of securities of the Company representing twenty percent (20%) or
more of the voting power of the Company's then outstanding securities;
or
(c) if
during any period of two (2) 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.
"Committee"
means the Compensation Committee of the Board.
"Fair
Market Value" means the closing market price of the Common Stock on
the Nasdaq Stock Market on the any date on which the Common Stock is to be
valued hereunder. If no sale shall have been reported on
the Nasdaq Stock Market consolidated reporting system on such date, Fair Market
Value shall be determined by the Committee.
"Subsidiary"
means any corporation in which the Company possesses directly or indirectly 50%
or more of the combined voting power of all classes of stock of such
corporation.
"Total
Disability" means accidental bodily injury or sickness which wholly and
continuously disabled an optionee. The Committee, whose decisions
shall be final, shall make a determination of Total Disability.
In Witness Whereof, the
parties hereto have duly executed this Agreement as of the day and year first
above written.
|
By:
|
/s/ Xxxx Xxxxxxxxxxx
|
||
|
By:
|
/s/ Xxxxxx Xxxx
|
||
|
Xxxxxx
Xxxx, Optionee
|
|||
