EXECUTION COPY
NONQUALIFIED OPTION AGREEMENT
NONQUALIFIED OPTION AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of June 5,
1998, (the "Effective Date") among QUESTOR PARTNERS FUND, L.P., a limited
partnership organized and existing under the laws of the State of Delaware
("Questor"), QUESTOR SIDE-BY-SIDE PARTNERS, L.P., a limited partnership
organized and existing under the laws of the State of Delaware ("QSS"), and the
other party signatory hereto (the "Participant");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Stock Purchase Agreement dated as of May
6, 1998 (the "Stock Purchase Agreement"), Questor and QSS have agreed to acquire
an aggregate of (i) 1,419,962 shares of common stock, par value $0.001 per share
(the "Common Stock"), of IMPCO Technologies, Inc., a Delaware corporation (the
"Company") and (ii) 3,250 shares of preferred stock, par value $0.001 per share
(the "Preferred Stock") of the Company, which are currently convertible into an
aggregate of at least 613,207 shares of Common Stock; and
WHEREAS, the Participant is currently a stockholder of and
consultant to the Company and, upon the terms and subject to the conditions
hereinafter set forth, Questor and QSS desire to provide the Participant with an
incentive to continue to support the Company and to increase his interest in the
success of the Company through the granting to the Participant of nonqualified
stock options (the "Options") to purchase shares of Common Stock;
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
1. Grant of Options. Subject to the terms and conditions
contained herein and the completion of the transactions contemplated by the
Stock Purchase Agreement, each of Questor and QSS hereby grants to the
Participant, effective as of completion of the transactions contemplated by the
Stock Purchase Agreement, the number of Options specified on the signature page
hereof. Each such Option shall entitle the Participant to purchase from Questor
or QSS, as the case may be, upon payment of the relevant exercise price
specified on the signature page hereof (the "Option Price"), one share of Common
Stock.
2. Vesting and Exercisability of Options. Twenty-five percent of
the Options will vest on June 30, 1999 and thereafter on each of the next three
anniversaries of such date. The Options will become exercisable only after the
Preferred Stock purchased by Questor and QSS pursuant to the Stock Purchase
Agreement is converted (or is convertible at the option of Questor and QSS) into
the number of shares of Common Stock specified in the
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Stock Purchase Agreement and will become exercisable only upon the earlier of
(i) five years after the date of this Agreement and (ii) the sale by Questor and
QSS of 50% or more of the shares of Common Stock owned by them as of the
Effective Date (including the number of shares of Common Stock into which shares
of Preferred Stock owned by them as of the Effective Date could be converted) to
a person or entity unaffiliated with Questor (an "Exercise Event"). Questor and
QSS shall provide prompt notice (the "Exercise Event Notice") to the Participant
after the occurrence of an Exercise Event or the signing of an agreement with
respect to the occurrence of an Exercise Event. If an Exercise Event Notice is
given before June 30, 2002 and at a time when options would otherwise continue
to vest pursuant to Section 3, all of the Options will be fully vested as of the
date of the Exercise Event. Within one week after receipt of such notice, the
Participant shall notify Questor or QSS of its irrevocable election to exercise
or not to exercise his option. The closing of an option exercise in connection
with an Exercise Event shall occur on or prior to the later of the effective
date of an Exercise Event or 30 days after receipt of the Exercise Event Notice.
Any Options for which notice of irrevocable exercise is not given within one
week of actual receipt by the Participant of the Exercise Event Notice as
described above shall be automatically forfeited. To the extent exercised by a
Participant, Options granted to Participant by each of Questor and QSS must be
exercised concurrently on a pro rata basis.
3. Expiration of Options. The Options shall not be exercisable
following December 31, 2003 (the "Expiration Date"). Following termination of
▇▇. ▇'▇▇▇▇'▇ consulting relationship with the Company, the Options, to the
extent then vested (the "Vested Options"), may be exercised as provided
hereunder until the Expiration Date. Any Option which is not a Vested Option as
of the date of the termination of ▇▇. ▇'▇▇▇▇'▇ consulting relationship with the
Company shall terminate as of such date and be of no further force and effect;
provided, however, that if such consulting relationship is terminated as a
result of the death or disability of the Participant, the options will continue
to vest in accordance with their terms; and provided further that the
Participant's refusal to accept a consulting assignment due to a failure of the
parties to agree upon reasonable compensation will not constitute grounds for
the termination of the Participant's options or otherwise affect the vesting of
his options.
4. Restrictions on Transfer of Options. None of the Options may
be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of,
except by testamentary devise or the laws of descent and distribution; provided,
however, that the Participant may transfer vested options for tax planning
purposes to members of his immediate family or to a trust for the benefit of him
and his immediate family. The Options shall be exercisable only by the
Participant or permitted transferees during the Participant's lifetime. Options
that are vested at the time of the Participant's death (or that vest subsequent
to the Participant's death in accordance with Section 3) may be exercised in
accordance with their terms by the Participant's estate.
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5. Manner of Exercise. Except as otherwise provided in this
Agreement, the Participant may exercise any or all of the Options that have
vested hereunder, by giving a properly executed written notice to Questor and
QSS. The Participant shall pay the Option Price in full at the time the written
notice of exercise is given to Questor and QSS (or, in the case of an option
exercise in connection with an Exercise Event, within the time periods provided
in Section 2). Such payment shall be in cash, bank certified or cashier's check
or personal check (unless at the time of exercise Questor and QSS in a
particular case determines not to accept a personal check) for the Common Stock
being purchased.
6. Shareholder Rights. The Participant shall have no rights as a
shareholder with respect to any shares of Common Stock issuable upon exercise of
the Options until a certificate or certificates evidencing such shares shall
have been issued to the Participant, and no adjustment shall be made for
dividends or distributions or other rights in respect of any share for which the
record date is prior to the date upon which the Participant shall become the
holder of record thereof.
7. Securities Law Restrictions on Exercise. The Options shall not
be exercisable unless either the Common Stock subject to the Options has been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and qualified under applicable state "blue sky" laws in connection with the
offer and sale thereof, or Questor and QSS determines that such registration and
qualification is not required as a result of the availability of an exemption
from registration under such laws. Subject to the Participant providing Questor
and QSS with an investment representation reasonably satisfactory to Questor and
QSS, Questor and QSS shall use their reasonable best efforts to satisfy any
requirements for an available exemption from registration and qualification.
8. Issuance of Certificates. As soon as practicable following the
exercise of any Options, Questor and QSS shall use their reasonable best efforts
to cause the Company to issue a stock certificate in the Participant's name to
the Participant evidencing the appropriate number of shares of Common Stock
issued in connection with such exercise. In the event the issuance of Common
Stock upon the exercise of such Options is not registered under the Securities
Act, then the stock certificates issued pursuant to this Section 8 shall bear an
appropriate legend regarding Securities Act restrictions on resale.
9. Representations. The Participant represents that this
Agreement has been duly executed and delivered by the Participant and
constitutes a legal, valid and binding agreement of the Participant, enforceable
against the Participant in accordance with its terms.
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10. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by certified
or registered mail, return receipt requested, postage prepaid, addressed, if to
the Participant, to his or her attention at the mailing address set forth at the
foot of this Agreement (or to such other address as the Participant shall have
specified to the Company in writing) and, if to Questor or QSS, to ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, with copies to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. All
such notices shall be conclusively deemed to be received and shall be effective,
if sent by hand delivery, upon receipt, or if sent by registered or certified
mail, on the fifth day after the day on which such notice is mailed.
11. No Waiver. The waiver by any party of compliance with any
provision of this Agreement by the other parties shall not operate or be
construed as a waiver of any other provision of this Agreement, or of any
subsequent breach by such party of a provision of this Agreement.
12. Miscellaneous. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement. The headings
of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of this
Agreement. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
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IN WITNESS WHEREOF, Questor and QSS have caused this Agreement to
be executed by two of its duly authorized officers and the Participant has
executed this Agreement, all as of the Effective Date.
QUESTOR PARTNERS FUND, L.P.
By: Questor General Partner, L.P.
its general partner
By: Questor Principals, Inc.
its general partner
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇
Principal
QUESTOR SIDE-BY-SIDE PARTNERS, L.P.
By: Questor Principals, Inc.
its general partner
By:
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▇▇▇▇▇▇ ▇▇▇▇▇▇
Principal
▇▇▇▇▇ ▇. ▇'▇▇▇▇, ▇▇.
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First San Francisco Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
OPTIONS
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Number Granted by Questor: [113,816]
Number Granted by QSS: [8,173]
Option Price: U.S.$13.75
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