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EXHIBIT 10.2
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE
1996 MICROWAVE COMPONENTS ENTERPRISES, INC. STOCK OPTION PLAN
This STOCK OPTION AGREEMENT (the "Agreement") is made as of this 10th day
of December, 1996 (the "Grant Date") by and between MICROWAVE COMPONENTS
ENTERPRISES, INC., a Michigan corporation ("the Company"), and XXXX X. XXXXXXX
(the "Optionee").
The Optionee is now employed by the Company or a subsidiary of the Company,
and the Company desires to provide additional incentive to the Optionee, to
encourage stock ownership by the Optionee, and to encourage the Optionee to
remain in the employ of the Company or a subsidiary and, as an inducement
thereto, the Company has determined to grant to the Optionee an incentive stock
option meeting the requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), pursuant to the Company's 1996 Stock Option Plan,
a copy of which is attached hereto (the "Plan"). Capitalized terms used and not
defined herein have the meanings ascribed to them in the Plan.
NOW, THEREFORE, it is agreed between the parties as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereof, the
Company hereby grants to the Optionee the right and option to purchase from the
Company up to, but not exceeding in the aggregate, 11,047 shares of the
Company's Common Stock, at a price of $64.90 per share. This option is intended
to meet the requirements under Section 422 of Code.
2. ACCRUAL OR RIGHT TO EXERCISE OPTION.
(a) The following sums were invested by certain of the
shareholders of the Company as equity investments in the Common Stock on the
dates reflected below in connection with the acquisition of the indicated
business operations:
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Under-
lying
Investment Amount Shares Date
---------- ------ ------ ----
Inmet Corporation $1,170,000 116,925 06/30/94
Weinschel Corporation $1,518,000 60,720 11/30/95
KDI/Triangle Corporation $ 509,642 8,638 07/23/96
-------
Subtotal 186,283
=======
(b) The option granted hereunder shall be exercisable immediately
and from time to time only if and to the extent that the underlying shares of
Common Stock related to each of the investments described in subsection (a)
above achieves a compound average annual return of 25% or higher, with such
return criteria to be averaged and dollar and time weighted (the "Return
Criteria"), as measured by either of the following:
(i) The actual realization of proceeds (monetary or
otherwise) by the holders of such shares through the sale, exchange or
other disposition of such shares (whether via a private sale, public
offering, merger, share exchange, etc.), provided that, if less than
all of such underlying shares of Common Stock are disposed of for
proceeds equal to or exceeding the Return Criteria, then such option
shall be exercisable only for that number of shares of Common Stock
equal to the product of (A) 11,047 shares, multiplied by (B) a
fraction, with the numerator equal to the number of underlying shares
of Common Stock disposed of for proceeds equal to or exceeding the
Return Criteria and with the denominator equal to 186,283 shares; or
(ii) The fair market value per share of the Common Stock as
determined in the public market after any initial public offering by
the Company, with such measurement to be determined regardless of
whether the holders described above actually realize any proceeds from
a sale, exchange or other disposition of such shares.
Attached hereto as EXHIBIT 1 is an example of the computation of the compound
average return on investment calculation, dollar and time weighted.
(c) Notwithstanding anything herein to the contrary, (i) this
option shall become exercisable in full upon the occurrence of a Change in
Control of the Company, as defined in and subject to the terms and conditions of
Section 14 of the Plan, regardless of whether the objectives described above in
subsection (b) have been satisfied, and (ii) this option shall not be
exercisable on or after December 10, 2001 (i.e., being five years after the
Grant Date).
3. TERMINATION OF EMPLOYMENT.
(a) If, prior to the date that this option shall first become
exercisable, the Optionee's employment with the Company, or any subsidiary of
the Company, shall be terminated, with or without cause, or by the act, death,
disability or retirement of the Optionee, the Optionee's right to exercise this
option shall terminate and all rights hereunder shall cease.
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(b) If, on or after the date that this option shall first become
exercisable, the Optionee's employment shall be terminated for any reason other
than death or disability, the Optionee shall have the right, within the earlier
of (i) the expiration of the option, or (ii) three months after such termination
of employment, to exercise this option to the extent that it shall have been
exercisable and unexercised on the date of such termination of employment,
subject to any other limitation on the exercise of such option in effect at the
date of exercise; provided, however, that the term of the option may be extended
further at the discretion of the Committee, but not beyond the expiration date
stated in the original grant.
(c) If, on or after the date that this option shall first become
exercisable, the Optionee shall die (either while employed by the Company or
within three months after termination) or become disabled, the Optionee or the
executor or administrator of the estate of the Optionee (as the case may be) or
the person or persons to whom the option shall have been transferred by will or
the laws of descent and distribution, shall have the right, within the earlier
of (i) the expiration of the option, or (ii) one year from the date of the
Optionee's death or termination of employment due to disability to exercise this
option to the extent that it was exercisable and unexercised on the date of the
Optionee's death or termination of employment due to disability, subject to any
other limitation on exercise in effect at the date of exercise; provided,
however, that the term of the option may be extended further at the discretion
of the Committee, but not beyond the expiration date stated in the original
grant.
(d) The transfer of the Optionee from one corporation to another
among the Company and any of its subsidiaries, or a leave of absence with the
written consent of the Company, shall not be a termination of employment for
purposes of this option.
As used in this Agreement, the term" employment" means employment with the
Company or any parent or subsidiary of the Company, the term "disability" means
any "disability" as defined in Section 22(e) of the Code), and the term
"subsidiary" of the Company means any "subsidiary corporation" as defined in
Section 424(f) of the Code.
4. EXERCISE OF OPTION.
(a) The Optionee, from time to time during the period when the
option hereby granted may by its terms be exercised, may exercise the option in
whole or in part as at the time permitted, by delivery to the Company of:
(i) A written notice signed by the Optionee (A) stating the
number of shares that the Optionee has elected to purchase at that time from the
Company, and (B) upon the request of the Company, a signed statement from the
Optionee representing that he is acquiring the shares being purchased for
investment and not for resale; and
(ii) cash, personal check, certified or bank cashier's check
for an amount equal to the purchase price of the shares then to be purchased.
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(b) After receipt of the foregoing, and subject to Section 5
below, the Company shall issue the shares in the name of the Optionee and
deliver the certificates therefor to the Optionee.
5. COMPLIANCE WITH SECURITIES LAWS. Notwithstanding anything to the
contrary herein, the Company's obligation to sell and deliver stock under this
option is subject to such compliance with federal and state laws, rules and
regulations applying to the authorization, issuance or sale of securities as the
Company deems necessary or advisable. The Company shall not be required to sell
and deliver stock pursuant hereto unless and until it receives satisfactory
assurance that the issuance or transfer of such shares will not violate any of
the provisions of any federal or state law, rule or regulation governing the
sale of securities, or that there has been compliance with the provisions of
such laws, rules and regulations.
6. NON-ASSIGNABILITY. The option hereby granted shall not be
transferable by the Optionee other than by will or the laws of descent and
distribution, and the option may be exercised during the Optionee's lifetime
only by the Optionee. Any transferee of the option shall take the same subject
to the terms and conditions of this Agreement. No such transfer of the option
shall be effective to bind the Company unless the Company shall have been
furnished with written notice thereof and a copy of the will and/or such other
evidence as the Company may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and
conditions of this Agreement. No assignment or transfer of this option, or of
the rights represented thereby, whether voluntary or involuntary, by operation
of law or otherwise, except a transfer by the Optionee by will or by the laws of
descent and distribution, shall vest in the purported assignee or transferee any
interest or right herein whatsoever.
7. DISPUTES. As a condition to the granting of the option granted
hereby, the Optionee and the Optionee's successors and assigns agree that any
dispute or disagreement which shall arise under or as a result of this Agreement
shall be determined by the Board of Directors ("Board") in its sole discretion
and judgment and that any such determination and any interpretation by the Board
of the terms of this Agreement shall be final and shall be binding and
conclusive for all purposes.
8. ADJUSTMENTS -- STOCK DIVIDEND, RECLASSIFICATION, ETC. The number
of shares subject to the option granted to the Optionee under this Agreement
(both as to the number of shares of Common Stock and the option price) shall be
appropriately adjusted in accordance with Section 13 of the Plan for any
increase or decrease in the number of outstanding shares of Common Stock
resulting from payment of a stock dividend on Common Stock, a subdivision or
combination of shares of Common Stock, a stock split or a reclassification of
Common Stock, and in the event of a merger, consolidation or share exchange in
which the Company shall be the surviving corporation.
9. RIGHTS AS PRIOR TO ISSUANCE OF SHARES. The Optionee shall have no
rights as a shareholder of the Company with respect to any of the shares covered
by this option until the
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issuance of a stock certificate or certificates upon the exercise of the option
in full or in part, and then only with respect to the shares represented by such
certificate or certificates. Without limiting the generality of the foregoing,
no adjustment shall be made for dividends or other rights with respect to such
shares for which the record date is prior to the date such certificate is
issued.
10. NOTICE OF DISPOSITION OF STOCK. The Optionee hereby agrees to
notify the Company of any disposition of stock acquired pursuant to the exercise
of this option prior to two years after the Grant Date or prior to one year
after exercise of the option.
11. PROVISIONS OF PLAN CONTROLLING. The provisions of this Agreement
are subject to the terms and provisions of the Plan. In the event of any
conflict between the provisions of this Agreement, the option, and/or the
provisions of the Plan, the provisions of the Plan shall control.
12. MISCELLANEOUS.
(a) Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if physically delivered, telephonically transmitted by telecopier or other
similar means, or five (5) days after having been deposited in the United States
Mail, as certified mail with return receipt requested and with postage prepaid,
addressed to the recipient as follows:
(i) If to the Company, to:
Xxxx X. Xxxxxx, Esq. (Secretary and Chairman of the
Compensation Committee)
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
(000-000-0000; fax (push "*"))
and to:
Xxxxxxx X. Xxxxxxx, Treasurer
c/o Inmet Corporation
000 Xxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
(000-000-0000; fax 000-000-0000)
with a courtesy copy to:
Xxxxxx Xxxxxxx PLLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
(000-000-0000; fax 000-000-0000)
Attention: J. Xxxxxxx Xxxxxxx
(ii) If to the Optionee, to:
Xxxx X. Xxxxxxx
000 Xxxxxxxx
Xxxxxx Xxxxxx Xxxx, Xxxxxxxx 00000
(313-331-5915)
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Either party by notice to the other may designate a different address to which
notices shall addressed. Any notice given by the Company to the Optionee at the
Optionee's last designated address shall be effective to bind any other person
who shall acquire rights hereunder.
(b) Entire Agreement; Amendment. This Agreement, along with the
Plan, constitutes the entire agreement and understanding of the parties hereto
with respect to the subject matter hereof. No representation, inducement,
agreement, promise or understanding altering, modifying, amending, taking from
or adding to the terms and conditions hereof shall have any force and effect
unless the same is in writing and validly executed by the parties hereto.
(c) Parties in Interest; "Optionee" to Include Certain
Transferees. This Agreement shall be binding upon and inure to the benefit of,
and be enforceable by, the parties hereto and their respective permitted
successors and assigns, heirs and personal representatives. Whenever the word
"Optionee" is used in any provision of this Agreement under circumstances where
the provision should logically apply to any other person or persons to whom the
option, in accordance with the provisions of Section 6 hereof, may be
transferred, the word "Optionee" shall be deemed to include such person or
persons.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be treated as an original but all of which,
collectively, shall constitute a single instrument.
(e) Severability. In the event that any one or more of the
provisions of this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.
(f) Captions. The captions and headings of the sections and the
subsections have been inserted as a matter of convenience and reference only and
shall not control or affect the meaning or construction of this Agreement.
(G) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
MICROWAVE COMPONENTS ENTERPRISES, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx, Secretary and
Chairman of the Compensation
Committee
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, Treasurer
OPTIONEE:
/s/ Xxxx X. Xxxxxxx
--------------------------------
XXXX X. XXXXXXX
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NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION
GRANTED UNDER THE
1996 MICROWAVE COMPONENTS ENTERPRISES, INC. STOCK OPTION PLAN
, 199
------------------ -
Chairman of the Compensation Committee
of the Board of Directors
Microwave Components Enterprises, Inc.
c/o Inmet Corporation
000 Xxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
An incentive stock option was granted to me on December 10, 1996 (the
"Grant Date") to purchase 11,047 shares of Microwave Components Enterprises,
Inc. Common Stock, at a price of $64.90 per share, under the 1996 Stock Option
Plan.
I hereby elect to exercise my incentive stock option with respect to
shares. Enclosed herewith is/are the following (check one or more, if
applicable) in a sufficient amount to satisfy the applicable purchase price:
cash
---
my personal check
---
a certified check
---
a bank cashier's check
---
I agree to notify the Company if, prior to two years from the Grant Date
and one year from the exercise date, I dispose of any shares acquired pursuant
to my exercise of this incentive stock option.
I represent that the shares of stock that I am purchasing upon this
exercise of my option are being purchased for investment purposes and not with a
view to resale. This representation shall not be binding upon me if the shares
of Common Stock that I am purchasing are subject to an effective Registration
Statement under the Securities Act of 1933.
/s/
---------------------------------------------
XXXX X. XXXXXXX, Optionee
