IEC ELECTRONICS CORP. OPTION AWARD AGREEMENT PURSUANT TO
Exhibit
10.13
PURSUANT
TO
2001
STOCK OPTION AND INCENTIVE PLAN
(Incentive
Stock Option)
OPTION
AWARD AGREEMENT, executed in duplicate as of the 12th day of August, 2003,
between IEC Electronics Corp., a Delaware corporation (the "Company"), and
W.
XXXXX XXXXXXX, an officer of the Company (the "Optionee").
RECITALS:
A. In
accordance with the provisions of the 2001 Stock Option and Incentive Plan
of
the Company (the "Plan") and pursuant to a resolution duly adopted by the Board
of Directors of the Company on August 12, 2003, the Company is authorized to
execute and deliver this Agreement on the terms and conditions herein set
forth.
B. All
capitalized terms in this Agreement shall have the meaning assigned to them
in
the Plan.
NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and
for other good and valuable consideration, the parties hereto agree as
follows:
1. Grant
of Option.
Subject
to all the terms and conditions of the Plan and this Agreement, the Company
hereby grants to the Optionee as of August 12, 2003 (the "Date of Grant") a
Stock Option (the "Option") to purchase up to 275,000 shares of common stock
of
the Company (such number being subject to adjustment as provided in Section
10),
$.01 par value, on the terms and conditions herein set forth. In accordance
with
Section 422 of the Internal Revenue Code of 1986, as amended, this Option shall
be an incentive stock option to the extent that the aggregate fair market value
of shares which Optionee may purchase hereunder for the first time in any
calendar year (and under all such plans of the Company) does not exceed
$100,000. The Option shall be exercisable from time to time during the option
term specified in Section 3 at the Option Exercise Price specified in Section
2.
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2. Option
Exercise Price.
The
option exercise price per share of common stock covered by this Option shall
be
$0.95.
3. Option
Term.
This
Option shall expire at 5:00 p.m. (Eastern Time) on March 31, 2009 (the
“Expiration Date”), unless sooner terminated in accordance with Section
7.
4. Vesting
and Exercise.
This
Option shall vest and be exercisable as follows:
(a) Vesting
and Exercise.
(i) 55,000
shares at such time as the closing price of the Corporation’s common stock as
reported on the Over-the-Counter Bulletin Board or such other public market
on
which the Corporation’s shares are then traded equals or exceeds $1.50 per share
for 30 consecutive days at any time between the Date of Grant and August 12,
2006;
(ii) 55,000
shares at such time as the closing price of the Corporation’s common stock as
reported on the Over-the-Counter Bulletin Board or such other public market
on
which the Corporation’s shares are then traded equals or exceeds $2.00 per share
for 30 consecutive days at any time between the Date of Grant and August 12,
2006;
(iii) 55,000
shares at such time as the closing price of the Corporation’s common stock as
reported on the Over-the-Counter Bulletin Board or such other public market
on
which the Corporation’s shares are then traded equals or exceeds $3.00 per share
for 30 consecutive days at any time between the Date of Grant and August 12,
2006;
(iv) 55,000
shares at such time as the closing price of the Corporation’s common stock as
reported on the Over-the-Counter Bulletin Board or such other public market
on
which the Corporation’s shares are then traded equals or exceeds $4.00 per share
for 30 consecutive days at any time between the Date of Grant and August 12,
2006; and
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(v) 55,000
shares at such time as the closing price of the Corporation’s common stock as
reported on the Over-the-Counter Bulletin Board or such other public market
on
which the Corporation’s shares are then traded equals or exceeds $5.00 per share
for 30 consecutive days at any time between the Date of Grant and August 12,
2006
(b) Notwithstanding
that the closing price of the Company’s common stock reaches the specified
performance targets set forth in (a) above, no installment of this Option shall
vest unless Optionee is employed as the Company’s Chief Executive Officer on the
date that the specified performance target has been met.
(c) Notwithstanding
that the closing price of the Company’s common stock does not reach the
specified performance targets set forth in (a) above, this Option shall become
fully vested and exercisable after September 30, 2008 and may be exercised,
in
whole or in part, from October 1, 2008 until March 31, 2009.
5. Non-Transferability
of Option.
This
Option shall be exercisable during Optionee’s lifetime only by Optionee and may
not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by Optionee’s will or by the laws of descent and
distribution. Any attempted assignment, transfer, pledge, hypothecation, or
other disposition of the Option contrary to the provisions hereof, and the
levy
of any execution, attachment, or similar process upon the Option, shall be
null
and void and without effect.
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6. Manner
of Exercising Option.
(a) In
order
to exercise this Option with respect to all or any part of the shares of Stock
for which this Option is at the time exercisable, Optionee (or any other person
or persons exercising the Option) must take the following actions:
(i) Execute
and deliver to the Company a Notice of Exercise (“Notice”) (in the form attached
to this Agreement) for the shares of Stock for which the Option is exercised,
which Notice may require the Optionee to certify in a manner acceptable to
the
Company that Optionee is in compliance with the terms and conditions of the
Plan
and this Agreement; and
(ii) Pay
the
aggregate Option Exercise Price for the purchased shares in one or more of
the
following forms:
(A) by
cash,
wire transfer or check made payable to the Company;
(B) in
shares
of Stock held by Optionee (or any other person or persons exercising the Option)
for at least six (6) months and valued at Fair Market Value on the date of
exercise; or
(C) through
a
special sale and remittance procedure pursuant to which Optionee shall
concurrently provide irrevocable instructions (I) to the approved brokerage
firms to effect the immediate sale of the purchased shares and remit to the
Company, out of the sale proceeds available on the settlement date, sufficient
funds to cover the aggregate Option Exercise Price payable for the purchased
shares plus all applicable federal, state and local income and employment taxes
required to be withheld by the Company by reason of such exercise and (II)
to
the Company to deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sales transaction.
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Except
to
the extent the sale and remittance procedure is utilized in connection with
the
Option exercise, payment of the Option Exercise Price must accompany the Notice
delivered to the Company in connection with the Option exercise.
In
the
event this Option is exercised by any person or persons other than the Optionee,
the Notice shall be accompanied by appropriate proof of the right of such person
or persons to exercise the Option.
(iii) Make
appropriate arrangements with the Company for the satisfaction of all federal,
state and local income and employment tax withholding requirements applicable
to
the Option exercise.
(b) As
soon
as practical after the date of exercise, the Company shall issue to or on behalf
of Optionee (or any other person or persons exercising this Option) a
certificate for the purchased shares of Stock, with the appropriate legends,
if
any, affixed thereto.
(c) In
no
event may this Option be exercised for any fractional shares.
7. Termination
of Employment.
If
the
Optionee has a Termination of Employment (as defined in the Plan), the following
provisions shall apply:
(a) Death.
If the
Optionee’s Termination of Employment is on account of death, then this Option
shall become fully vested and may be exercised, in whole or in part, by the
Optionee’s Designated Beneficiary (as defined in the Plan) at any time on or
before the earlier to occur of (x) the Expiration Date of the Option and (y)
the
first anniversary of the date of such Termination of Employment.
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(b) Disability.
If the
Optionee’s Termination of Employment is on account of Disability, unvested
Options shall be forfeited, and Options, to the extent they are vested on the
date of Termination of Employment, may be exercised, in whole or in part, by
the
Optionee at any time on or before the earlier to occur of (x) the Expiration
Date of the Option and (y) the first anniversary of the date of such Termination
of Employment.
(c) Cause.
If the
Optionee’s Termination of Employment is on account of cause, all outstanding
Options, vested and unvested, shall terminate and be forfeited on the date
of
such Termination of Employment.
(d) Other
Reasons.
If the
Optionee’s Termination of Employment is for any reason other than those
enumerated in Sections (a) through (c), unvested Options shall be forfeited,
and
Options, to the extent they are vested on the date of Termination of Employment,
may be exercised, in whole or in part, by the Optionee at any time on or before
the earlier to occur of (x) the Expiration Date of the Option and (y) three
(3)
months after the date of such Termination of Employment.
(e) Death
After Termination of Employment.
If (i)
the Optionee’s Termination of Employment is for any reason other than death and
(ii) the Optionee dies after such Termination of Employment but before the
date
the Options must be exercised as set forth in the preceding subsections,
unvested Options shall be forfeited, and any Options, to the extent they are
vested on the date of the Optionee’s death, may be exercised, in whole or in
part, by the Optionee’s Designated Beneficiary at any time on or before the
earlier to occur of (x) the Expiration Date of the Option and (y) the first
anniversary of the date of death.
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8. Detrimental
Activities.
(a) The
Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict
this Option at any time if Optionee is not in compliance with all applicable
provisions of this Agreement and the Plan, or if Optionee engages in any
“Detrimental Activity”. For purposes of this Agreement, “Detrimental Activity”
includes: (i) the rendering of services for any organization or engaging
directly or indirectly in any business which is or becomes competitive with
the
Company, or which organization of business, or the rendering of services to
such
organization or business, is or becomes otherwise prejudicial to in conflict
with the interests of the Company; (ii) the disclosure to anyone outside the
Company, or the use in other than the Company’s business, without prior written
authorization from the Company, of any confidential information or material
relating to the business of the Company, acquired by the Optionee either during
or after employment with the Company; (iii) activity that results in termination
of Optionee’s employment for cause; (iv) a violation of any rules, policies,
procedures or guidelines of the Company, including, but not limited to, the
Company’s Code of Conduct; (v) any attempt, directly or indirectly, to induce
any employee of the Company to be employed or perform services elsewhere or
any
attempt, directly or indirectly, to solicit the trade or business of any current
or prospective customer, supplier or partner of the Company or (vi) any other
conduct or act determined by the Board of Directors to be injurious, detrimental
or prejudicial to any interest of the Company.
(b) Upon
exercise of this Option, Optionee, if requested by the Company, shall certify
in
a manner acceptable to the Company that Optionee is in compliance with the
terms
and conditions of the Plan.
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(c) In
the
event Optionee fails to comply with the provisions of (i)-(vi) of Section 8(a)
prior to, or during the six months after, any exercise of this Option, such
exercise may be rescinded within two years thereafter. In the event of any
such
rescission, Optionee shall pay to the Company the amount of any gain realized
or
payment received as a result of the rescinded exercise, in such manner and
on
such terms and conditions as may be required, and the Company shall be entitled
to set-off against the amount of any such gain any amount owned to Optionee
by
the Company.
9. General
Restriction.
This
Option shall be subject to the requirement that if at any time the Board of
Directors in its discretion shall determine that the listing, registration
or
qualification of the shares subject to such Option on any securities exchange
or
under any state or federal law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such Option or the issuance or purchase of shares
thereunder, such Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors.
10. Option
Adjustments; Change in Control.
In the
event of a stock dividend, stock split or other change in corporate structure
or
capitalization affecting the common stock or any other transaction (including,
without limitation, an extraordinary cash dividend) which, in the determination
of the Compensation Committee (the "Committee") of the Board of Directors,
affects the common stock such that an adjustment is required in order to
preserve the benefits or potential benefits intended to be made available under
the Plan, then the Committee, in its sole discretion, shall equitably adjust
any
or all of (i) the number and kind of shares of stock subject to this Option,
and
(ii) the exercise price with respect to the foregoing, provided that the number
of shares subject to this Option shall always be a whole number. In the event
of
a Change in Control (as defined in the Plan) or a dissolution or liquidation
of
the Company, this Option shall become fully vested and exercisable.
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11. Amendment
to this Option Award Agreement.
The
Committee may modify or amend this Option if it determines, in its sole
discretion, that amendment is necessary or advisable in the light of any
addition to or change in the Internal Revenue Code or in the regulations issued
thereunder, or any federal or state securities laws or other law or regulation,
which change occurs after the date of grant of this Option and by its terms
applies to this Option. No amendment of this Option, however, may, without
the
consent of the Optionee, make any changes which would adversely affect the
rights of such Optionee.
12. Notices.
Notices
hereunder shall be in writing and if to the Company shall be delivered
personally to the Secretary of the Company or mailed to its principal office,
000 Xxxxxx Xxxxxx, X.X. Xxx 000, Xxxxxx, Xxx Xxxx 00000, addressed to the
attention of the Secretary and, if to the Optionee, shall be delivered
personally or mailed to the Optionee at Optionee’s address as the same appears
on the records of the Company.
13. Stockholder
Rights.
This
Option does not confer upon the holder thereof any rights as a stockholder
of
the Company until such person shall have exercised the Option, paid the Option
Exercise Price and become a holder of record of the purchased shares of
Stock
14. Interpretations
of this Agreement.
All
decisions and interpretations made by the Committee with regard to any question
arising hereunder or under the Plan shall be binding and conclusive on all
persons having an interest in this Option. The Option granted hereunder, and
the
common stock which may be issued upon exercise thereof, are subject to the
provisions of the Plan. In the event there is any inconsistency between the
provisions of this Agreement and those of the Plan, the provisions of the Plan
shall govern.
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15. Successors
and Assigns.
This
Agreement shall bind and inure to the benefit of the parties hereto and the
successors and assigns of the Company and, to the extent provided in Section
7,
to the personal representatives, legatees and heirs of the
Optionee.
16. Disqualifying
Disposition.
In the
event that Optionee shall sell or transfer any shares of common stock acquired
upon the exercise of this Option prior to the later of (a) two (2) years from
the Date of Grant or (b) one (1) year from the date of exercise of the Option,
Optionee agrees to so advise the Company immediately and to promptly pay to
the
Company the amount of any federal, state or local taxes that may be
required.
IN
WITNESS WHEREOF, the Company has caused this Option Award Agreement to be
executed on the day and year first above written.
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By:
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Xxxxx
X. Xxxxxxxx
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Chairman,
Compensation Committee
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ACCEPTANCE
I,
W.
XXXXX XXXXXXX,
hereby
certify that I have read and fully understand the foregoing Option Award
Agreement. I acknowledge that I have been apprised that it is the intent of
the
Company that Optionees obtain and retain an equity interest in the Company.
I
hereby execute this Option Award Agreement to indicate my acceptance of this
Option and my intent to comply with the terms thereof.
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Optionee
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Street
Address
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City
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State
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Zip Code
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EXHIBIT A
_________________, 20__
000
Xxxxxx Xxxxxx
X.
X. Xxx
000
Xxxxxx,
XX 00000
Attention:
Secretary
Dear
Sir:
This
is
to notify you that I hereby elect to exercise my option rights
to_____________shares
of
common stock of IEC Electronics Corp. (the "Company") granted under the Option
Award Agreement (the "Agreement"), dated__________________________,
20__,
issued to me pursuant to the 2001 Stock Option and Incentive Plan (the "Plan").
The option exercise price pursuant to such Agreement, as adjusted, is
$____________ per share or $__________ in the aggregate.
In
payment of the full option exercise price, I enclose (please complete as
appropriate):
| (a) |
my
check payable to IEC Electronics Corp. in the amount of
$__________.
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(b)
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__________
shares of common stock of the Company owned by me for at least six
months,
free of any liens or encumbrances and having a fair market value
of
$_________.
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(c)
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an
authorization letter which gives irrevocable instructions to the
Company
to deliver the stock certificates representing the shares for which
the
option is being exercised directly to ______________ (name and address
of
broker) together with a copy of the instructions to _______________
(name
of broker) to sell such shares and promptly deliver to the Company
the
portion of the proceeds equal to the total purchase price and withholding
taxes due, if any.
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I
hereby
certify that I am in compliance with the terms and conditions of the Plan and
the Agreement.
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Optionee's
Signature
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