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EXHIBIT 99.5
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated (the "Option
Agreement") by and between XeTel Corporation (the "Corporation") and
("Optionee") evidencing the stock option (the "Option") granted on to Optionee
under the terms of the Corporation's 1997 Stock Incentive Plan, and such
provisions shall be effective immediately. All capitalized terms in this
Addendum, to the extent not otherwise defined herein, shall have the meanings
assigned to them in the Option Agreement.
LIMITED STOCK APPRECIATION RIGHT
1. Optionee is hereby granted a limited stock appreciation
right exercisable upon the following terms and conditions:
(i) Optionee shall have the unconditional
right (exercisable at any time during the thirty (30)-day period
immediately following a Hostile Take-Over) to surrender the Option to
the Corporation, to the extent the Option is at the time exercisable
for vested shares of Common Stock. In return for the surrendered
Option, Optionee shall receive a cash distribution from the Corporation
in an amount equal to the excess of (A) the Take-Over Price of the
shares of Common Stock which are at the time vested under the
surrendered Option (or surrendered portion) over (B) the aggregate
Exercise Price payable for such shares.
(ii) To exercise this limited stock
appreciation right, Optionee must, during the applicable thirty
(30)-day exercise period, provide the Corporation with written notice
of the option surrender in which there is specified the number of
Option Shares as to which the Option is being surrendered. Such notice
must be accompanied by the return of Optionee's copy of the Option
Agreement, together with any written amendments to such Agreement. The
cash distribution shall be paid to Optionee within five (5) business
days following such delivery date. The exercise of the limited stock
appreciation right in accordance with the terms of this Addendum is
hereby approved by the Plan Administrator in advance of such exercise.
No further approval of the Plan Administrator shall be required at the
time of the actual option surrender and cash distribution. Upon receipt
of such cash distribution, the Option shall be cancelled with respect
to the Option Shares for which the Option has been surrendered, and
Optionee shall cease to have any further right to acquire those Option
Shares under the Option Agreement. The Option shall, however, remain
outstanding and exercisable for the balance of the Option Shares (if
any) in accordance with the terms of the
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Option Agreement, and the Corporation shall issue a new stock option
agreement (substantially in the same form of the surrendered Option
Agreement) for those remaining Option Shares.
(iii) In no event may this limited stock
appreciation right be exercised when there is not a positive spread
between the Fair Market Value of the Option Shares and the aggregate
Exercise Price payable for such shares. This limited stock appreciation
right shall in all events terminate upon the expiration or sooner
termination of the option term and may not be assigned or transferred
by Optionee.
2. For purposes of this Addendum, the following definitions
shall be in effect:
(i) A HOSTILE TAKE-OVER shall be deemed to
occur in the event any person or related group of persons (other than
the Corporation or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Corporation)
directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation's outstanding securities
pursuant to a tender or exchange offer made directly to the
Corporation's stockholders which the Board does not recommend such
stockholders to accept.
(ii) The TAKE-OVER PRICE per share shall be
deemed to be equal to the greater of (A) the Fair Market Value per
Option Share on the option surrender date or (B) the highest reported
price per share of Common Stock paid by the tender offeror in effecting
the Hostile Take-Over. However, if the surrendered Option is designated
as an Incentive Option in the Grant Notice, then the Take-Over Price
shall not exceed the clause (A) price per share.
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IN WITNESS WHEREOF, XeTel Corporation has caused this Addendum
to be executed by its duly-authorized officer, and Optionee has executed this
Addendum, all as of the Effective Date specified below.
XETEL CORPORATION
By:
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Title:
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OPTIONEE
EFFECTIVE DATE:________________, 199_
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