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EXHIBIT 10.5.1
THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") is made and entered
into as of the date of grant set forth below (the "Date of Grant"), by and
between Condor Systems, Inc., a California corporation (the "Company"), and the
optionee named below ("Optionee").
Optionee: Xxxxxx X. Xxxxxxx
Address: c/o Global Technology Partners, LLC
0000 Xxx Xxxxxx, X.X., Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000
Total Options Granted: 187,555
Exercise Price Per Share: $1.00
Total Options Vested 78,148
on Date of Grant:
Total Options Vesting
over three years: 187,555
Vesting Commencement Date: May 1, 1999
Date of Grant: August 4, 2000
Expiration Date for Exercise May 1, 2009
of All Options:
Type of Stock Option: [X] Nonstatutory Stock Option
Definitions: As used in this Agreement, the following definitions shall
apply:
1. Grant of Option. The Company hereby grants to Optionee an option
(the "Option") to purchase the total number of shares of Class A common stock of
the Company ("Common Stock") set forth above opposite Total Options Granted (the
"Shares") at the Exercise Price Per Share set forth above (the "Exercise
Price"), subject to all of the terms and conditions of this Agreement.
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2. Exercise of Option. This Option shall be exercisable for only
vested Shares during its term as follows:
(a) Vesting
(i) Time vesting. The number of Shares that is 15/36th of
the total number of Shares listed opposite of "Total Options Grant" are vested
and exercisable on the date hereof, and 1/36th of the unvested Shares shall vest
and be exercisable on the last day of each month hereafter. Notwithstanding the
foregoing, all unvested Shares shall automatically become fully vested and shall
be immediately exercisable on and as of the date that any share of Class C
common stock of the Company is sold by any DLJMB Entity (as defined in the
Investors' Agreement, dated as of April 15, 1999, among the Company and the
several shareholders thereof).
(ii) This Option may not be exercised for a fraction of a
Share.
(iii) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in Section 7 below.
(b) Method of Exercise. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the number
of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company. Such written
notice shall be signed by Optionee and shall be delivered in person or by
certified mail to the Secretary or Chief Financial Officer of the Company. The
written notice shall be accompanied by payment of the exercise price.
(c) Adjustments, Merger, etc. The number and class of the Shares
and/or the exercise price specified above are subject to appropriate adjustment
in the event of changes in the capital stock of the Company by reason of stock
dividends, split-ups or combinations of shares, reclassifications, mergers,
consolidations, reorganizations or liquidations. Subject to any required action
of the shareholders of the Company, if the Company shall be the surviving
corporation in any merger or consolidation, this Option (to the extent that it
is still outstanding) shall pertain to and apply to the securities to which a
holder of the same number of shares of Common Stock that are then subject to
this Option would have been entitled.
No Shares will be issued pursuant to the exercise of an Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
3. Optionee's Representations. By receipt of this Option, by its
execution, and by its exercise in whole or in part, Optionee represents to the
Company that Optionee understands that:
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(a) both this Option and any Shares purchased upon its exercise
are securities, the issuance by the Company of which requires compliance with
federal and state securities laws;
(b) these securities are made available to Optionee only on the
condition that Optionee makes the representations contained in this Section 3 to
the Company;
(c) Optionee has made a reasonable investigation of the affairs
of the Company sufficient to be well informed as to the rights and the value of
these securities;
(d) Optionee understands that the securities have not been
registered under the Securities Act of 1933, as amended (the "Act") in reliance
upon one or more specific exemptions contained in the Act, which may depend upon
(a) Optionee's bona fide investment intention in acquiring these securities; (b)
Optionee's intention to hold these securities in compliance with federal and
state securities laws; (c) Optionee having no present intention of selling or
transferring any part thereof (recognizing that the Option is not transferable)
in violation of applicable federal and state securities laws; and (d) there
being certain restrictions on transfer of the Shares subject to the Option;
(e) Optionee understands that the Shares subject to this Option,
in addition to other restrictions on transfer, must be held indefinitely unless
subsequently registered under the Act, or unless an exemption from registration
is available; that Rule 144, the usual exemption from registration, is only
available after the satisfaction of certain holding periods and in the presence
of a public market for the Shares; that there is no certainty that a public
market for the Shares will exist, and that otherwise it will be necessary that
the Shares be sold pursuant to another exemption from registration which may be
difficult to satisfy;
(f) Optionee understands that the certificate representing the
Shares will bear a legend prohibiting their transfer in the absence of their
registration or the opinion of counsel for the Company that registration is not
required, and a legend prohibiting their transfer in compliance with applicable
state securities laws unless otherwise exempted; and
(g) Optionee understands that the Shares will be subject to
right of first refusal of the Company and upon exercise of the Option, Optionee
will be required to sign the Company's stockholder agreement.
4. Method of Payment. Payment of the purchase price shall be made by
cash, check or, in the sole discretion of the Board of Directors of the Company
at the time of exercise, promissory notes or other Shares of Common Stock having
a fair market value on the date of surrender equal to the aggregate purchase
price of the Shares being purchased.
5. Restrictions on Exercise. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such Shares would constitute a violation of any applicable
federal or state securities or other law or regulation. As a condition to the
exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.
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6. Non-Transferability of Option. This Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee only by the Optionee; provided, however that
such Option may be transferred to any accredited investor as defined under the
rules promulgated under the Act, so long as (i) such transfer is in compliance
with all federal and state securities laws, (ii) such transferee agrees to be
bound by all terms and provisions hereof and agrees to execute all customary
documents necessary to confirm compliance thereof, (iii) only vested Shares may
be transferred, and (iv) there is not more than two transferees of the Option in
total. The terms of this Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of Optionee.
7. Term of Option. This Option may not be exercised more than 10
years from the Vesting Commencement Date, and may be exercised during such term
only in accordance with the terms of this Option.
8. Early Disposition of Stock; Taxation Upon Exercise of Option. The
Optionee understands that, upon exercise of this Option, Optionee will recognize
income for tax purposes in an amount equal to the excess of the then fair market
value of the Shares over the exercise price. Upon a resale of such shares by the
Optionee, any difference between the sale price and the fair market value of the
Shares on the date of exercise of the Option will be treated as capital gain or
loss. Optionee understands that the Company may be required to withhold tax from
Optionee's current compensation in certain circumstances. To the extent that
Optionee's current compensation is insufficient to satisfy the withholding tax
liability, the Company may require the Optionee to make a cash payment to cover
such liability as a condition to exercise of this Option.
9. Tax Consequences. The Optionee understands that any of the
foregoing references to taxation are based on federal income tax laws and
regulations now in effect, and may not be applicable to the Optionee under
certain circumstances. The Optionee may also have adverse tax consequences under
state or local law. THE OPTIONEE HAS REVIEWED WITH THE OPTIONEE'S OWN TAX
ADVISORS THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. THE OPTIONEE IS RELYING SOLELY ON
SUCH ADVISORS AND NOT ON ANY STATEMENTS OR REPRESENTATIONS OF THE COMPANY OR ANY
OF ITS AGENTS. THE OPTIONEE UNDERSTANDS THAT THE OPTIONEE (AND NOT THE COMPANY)
SHALL BE RESPONSIBLE FOR THE OPTIONEE'S OWN TAX LIABILITY THAT MAY ARISE AS A
RESULT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
10. Severability; Construction. In the event that any provision in
this Option shall be invalid or unenforceable, such provision shall be severable
from, and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Option. This Option shall be
construed as to its fair meaning and not for or against either party.
11. Damages. The parties agree that any violation of this Agreement
(other than a default in the payment of money) cannot be compensated for by
damages, and any aggrieved
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party shall have the right, and is hereby granted the privilege, of obtaining
specific performance of this Agreement in any court of competent jurisdiction in
the event of any breach hereunder.
12. Governing Law. This Agreement shall be deemed to be made under
and governed by and construed in accordance with the laws of the State of
California. Jurisdiction for any disputes hereunder shall be solely in San Jose,
California.
13. Delay. No delay or failure on the part of the Company or the
Optionee in the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise by either of them of any
right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy.
14. Investors' Agreement. The Optionee, by execution of this
Agreement, agrees to execute and be bound by the Investors' Agreement, dated as
of April 15, 1999, among the Company and the several shareholders from time to
time parties thereto.
15. Market Standoff. Unless the Board of Directors otherwise
consents, Optionee agrees hereby not to sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period following the
effective date of a registration statement of the Company filed under the Act;
provided, however, that such restriction shall apply only to the first
registration statement of the Company to become effective under the Act which
includes securities to be sold on behalf of the Company to the public in an
underwritten public offering under the Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such 180-day period.
16. Complete Agreement. This Agreement constitutes the entire
agreement between the parties with respect to its subject matter, and supersedes
all other prior or contemporaneous agreements and understandings both oral or
written. This Agreement may only be amended in a writing signed by the Company
and the Optionee.
17. Privileges of Stock Ownership. Participant shall not have any of
the rights of a shareholder with respect to any Shares until Optionee exercises
the Option and pays the Exercise Price.
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18. Notices. Any notice required to be given or delivered to the
Company under the terms of this Agreement shall be in writing and addressed to
the Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated above or to such other address as
such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon: personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by rapifax or telecopier.
DATE OF GRANT: August 4, 2000
CONDOR SYSTEMS, INC.
By:
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Name:
Title:
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Optionee hereby accepts this Agreement subject to all of the terms
and provisions hereof. Optionee has reviewed this Agreement in its entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Option and fully understands all provisions of this Agreement. Optionee hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board of Directors of the Company upon any questions
arising under this Agreement.
Dated:
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(Signature)
Name (Print):
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