IEC ELECTRONICS CORP. FORM OF OPTION AWARD AGREEMENT PURSUANT TO
FORM
OF OPTION AWARD AGREEMENT
PURSUANT
TO
2001
STOCK OPTION AND INCENTIVE PLAN
(Incentive
Stock Option)
OPTION AWARD AGREEMENT, executed in
duplicate as of the ______ day of ______________, _______, between IEC
Electronics Corp., a Delaware corporation (the "Company"), and _______________,
an employee 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
Compensation Committee of the Board of Directors of the Company on
_______________, 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
________________ (the "Date of Grant") an Incentive Stock Option (the "Option")
to purchase up to ____________ 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. 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
$_________.
3. Option
Term. This Option shall have a term of seven (7) years
measured from the Date of Grant and shall accordingly expire at 5:00 p.m.
(Eastern Time) on ________________ (the “Expiration Date”), unless sooner
terminated in accordance with Section 7.
4. Exercise. This
Option may be exercised as follows:
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.
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
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(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.
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.
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(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 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’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.
(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.
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(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 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.
(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.
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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, the
Committee, in its sole discretion, may make such substitution or adjustment in
the number and purchase price of shares subject to this Option as it may
determine, make this Option fully vested and exercisable, or amend or terminate
this Option upon such terms and conditions as it shall provide (which, in the
case of the termination of the vested portion of this Option, shall require
payment or other consideration which the Committee deems equitable in the
circumstances).
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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.
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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W.
Xxxxx Xxxxxxx
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Its:
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Chief
Executive Officer and
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Chairman
of the Board
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ACCEPTANCE
I,
________________________________, 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
10.5
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 and, in
particular, that I have not engaged in any Detrimental Activity as defined in
Section 8(a) of the Agreement. I understand, acknowledge and agree
that in the event I fail to comply with the provisions of (i) – (vi) of Section
8(a) of the Agreement during the period specified in Section 8(c) of the
Agreement, the exercise of this Option may be rescinded by the Company and I may
become obligated to pay the Company the amount of any gain realized or payment
received as a result of the rescinded exercise, all as set forth in Section 8(c)
of the Agreement.
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Very
truly yours,
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Optionee's
Signature
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