Exhibit 10.3
PARLEX CORPORATION
1989 EMPLOYEES' STOCK OPTION PLAN
For:
Granted on __________, _____
incorporated under the laws of the Commonwealth of
Massachusetts (hereinafter called the "Company")
THE OPTION IS EXERCISABLE ONLY WITHIN CERTAIN
PERIODS AND ONLY UPON THE TERMS AND SUBJECT
TO THE CONDITIONS SET FORTH HEREIN
THIS MEMORANDUM WITNESSETH THAT: This option is granted under the
Employees' Stock Option Plan (hereinafter called the "Plan") of the Company
and is subject to the provisions thereof which are made a part hereof by
this reference.
The Company hereby grants to the individual whose name is hereinabove
set forth and who is sometimes hereinafter called "the said individual" the
following option:
ARTICLE FIRST.
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Subject to the terms and conditions set forth herein, the said
individual is hereby given the right and option to purchase from the
Company at ____________ ($________) per share an aggregate of
_________________ (_______) shares of the Common Stock of the Company
during certain periods hereinafter stated and in the manner hereinafter set
forth.
Notwithstanding any provision of this memorandum or of the Plan, the
option to purchase hereunder is not exercisable after the expiration of ten
years from the date this option is granted. The last day of said ten-year
period is herein called the "specified termination date." The option to
purchase hereunder (unless sooner terminated) may be exercised, in whole or
in part, within an only within certain periods in the amounts stated as to
each period. The said periods are herein called "Exercise Periods" and
commence one year from the date of the grant.
All said periods shall end on the specified termination date. In the
event the said individual ceased to be employed by the Company before the
time when the Exercise Period as to certain shares commences, the option as
to such shares shall terminate and become void upon the date of such
cessation of employment and shall not thereafter be exercisable.
Notwithstanding any provision contained herein, the Board of
Directors of the Company (the "Board"), in its sole discretion, may after
an option is granted change the period during which the option or any
portion thereof may not be exercised.
ARTICLE SECOND.
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(a) This option is not transferable by the said individual
otherwise than by will or the laws of descent and distribution,
and is exercisable, during the said individual's lifetime, only
by him, and by him only while he is an employee of the Company;
provided, however, that if the said individual dies while he is
an employee of the Company, then with respect only as to any
shares as to which at the time of his decease this option by
its terms could then have been exercised, his estate shall have
the right to exercise this option for a period commencing with
his decease and ending with the date six months thereafter or
the specified termination date or a date of termination fixed
under Section (f) of ARTICLE SECOND of Section (c) of ARTICLE
FOURTH, whichever of said four dates shall first occur.
(b) The term "Estate" as used in this Section or elsewhere means
the executors or administrators of the estate of the said
individual after his decease or other persons succeeding, to
the extent permitted by the provisions of this option, to the
rights of the said individual after his decease by his will or
the laws of descent and distribution, as the case may be.
(c) Re-employment of a person by the Company shall not be deemed to
constitute such person an employee of the Company for purposes
of any rights held by such person upon the date his prior
employment ceased. Except as specifically permitted by express
provision in the case of the decease of the said individual,
this option may not under any provision hereof be exercised at
any time unless at all times during the period beginning with
the date of the granting of this option and ending on the date
of such time of exercise the said individual was an employee of
the Company.
(d) For purposes of this memorandum only, employment of a person by
a subsidiary of the Company shall be considered as if such
person were employed by the Company, and termination of
employment of a person by either the Company or a subsidiary
thereof shall not constitute cessation of
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employment by the Company if at substantially the same time
such person is or became employed by the Company or a
subsidiary of the Company. The term "subsidiary" as used in
this Section and all subsequent provisions of the Option
Agreement shall mean any present or future corporation which
would be a subsidiary corporation of the Company as that term
is defined in Section 4259(f) of the Internal Revenue Code of
1986, as amended (the "Code").
(e) The term "Holder", as used in this Section and all subsequent
provision of this option, shall mean the said individual and,
if the said individual shall have deceased, his Estate as
herein before defined. The Holder shall not, by virtue of this
option, be deemed to be a holder of any shares purchasable
hereunder or to be entitled to the rights or privileges of a
holder of such shares unless and until they shall have been in
fact issued to him after exercise of the option with respect to
such shares.
(f) This option is subject to all laws and regulations of any
governmental authority which may be applicable thereto and,
notwithstanding any of the provisions hereof, the Holder agrees
that the option granted hereby will not be exercised nor will
the Company be obligated to issue any shares of stock hereunder
if the exercise thereof or the issuance of such shares, as the
case may be, would constitute a violation by the Holder or the
Company of any such law or regulation or of any provision
thereof.
(g) Except in the manner and to the extent allowed for incentive
stock options by the Secretary of the Treasury or his delegate,
this option is not exercisable while there is outstanding any
incentive stock option within the meaning of Section 422(A) of
the Code which was granted before the granting of this option,
to said individual, to purchase stock in the Company or in a
corporation which at the time of the granting of such option is
a subsidiary or a parent corporation (as defined in Section
425(e) of the Code) of the Company, or in a predecessor
corporation of any such corporations. For purposes of this
Section (g), an option shall be treated as outstanding until it
has been exercised in full or has expired by the reason of
lapse of time.
ARTICLE THIRD.
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(a) This option may be exercised only by delivery of written notice
of exercise to the Company as hereinafter provided, and
delivery of such notice shall
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constitute exercise thereof. Such notice shall state the number
of shares with respect to which the option is being exercised,
shall be accompanied by cash or a certified check for the
option price or by such other consideration as the Board has
agreed to accept pursuant to the authority granted by Section
6(a) of the Plan; and, unless the Company shall at the time
expressly waive this requirement in connection with such
exercise of the option, shall contain a statement that the
option is being exercised only with a view to investment in,
and not with a view to the disposition of, the shares with
respect to which the option is then being exercised.
(b) As soon as reasonably feasible after the receipt of such notice
and payment, the Company will deliver or cause to be delivered
to the Holder at the office of the Company, certificates for
the number of shares with respect to which the option has been
exercised, registered in the name of the Holder.
Notwithstanding the foregoing, as a condition precedent to the
delivery of any shares hereunder, the Company shall have the
right to require the Holder to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax
requirements, if and to the extent required by law. The shares
may be registered in the name of a person other than a Holder
if the Holder is an Estate. Notwithstanding the foregoing, if
any law or regulation of the Securities and Exchange Commission
or other body having jurisdiction shall require the Company or
the Holder to take any action in connection with the shares
specified in such notice, then delivery of such shares to the
Holder shall be deferred for the period necessary to take such
action. The Company may also require as a condition precedent
to the delivery of any shares hereunder that the Holder give a
written representation to the Company which is satisfactory in
form and substance to its counsel and upon which the Company
may reasonably rely, that he will report to the Company any
disposition of such shares prior to the expiration of the
holding periods specified by Section 422A(a)(1) of the Code.
If, and to the extent that, the realization of income in such a
disposition imposes upon the Company, federal, state, local, or
other withholding tax requirements, the Company shall have the
right to require that the recipient remit to the Company an
amount sufficient to satisfy those requirements, and the
Company may require as a condition precedent to the
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delivery of any shares hereunder that the party exercising this
option give a satisfactory written representation promising to
make such a remittance.
(c) Delivery shall be made as of the date of delivery of notice of
exercise of the option with respect thereto, and the Holder
shall be entitled to receive all dividends and distributions
(payable in cash, stock, or otherwise) or the equivalent
thereof payable to stockholders of record subsequent to
delivery of notice of exercise of the option with respect to
such shares and prior to the date of issuance and delivery of
the shares pursuant thereto. Except as above provided with
respect to the payment of withholding taxes, the Company will
pay all federal original issue taxes on such issue and
delivery, and all other fees or expenses necessarily incurred
by the Company in connection therewith; provided, however, that
all federal and state transfer taxes payable in respect of
shares of Common Stock of the Company issued and delivered
under this option in a name other than the name of the person
to whom this option is granted shall, upon the delivery of such
shares, be paid by the recipient thereof.
ARTICLE FOURTH.
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If any of the following events shall occur prior to the specified
termination date or other termination of this option, the aggregate number
of shares covered by this option (or the balance of the shares covered
thereby, if theretofore the option has been exercised in part) and the
purchase price payable therefore, shall in each instance be changed or
adjusted as follows:
(a) If the Company shall, at any time while this option is
outstanding and prior to any termination thereof, declare and
pay in Common Stock any dividend upon shares of its Common
Stock outstanding, there shall in any such event be added to
the number of shares of Common Stock which might, immediately
prior to such dividend, be purchased pursuant to this option
the number of shares of Common Stock of the Company which the
Holder would have received or become entitled to receive by way
of such dividend if, at the date for the determination of
stockholders entitled to receive such dividend, the Holder had
been the holder of record of the number of shares of Common
Stock then covered by this option; and the then option price
per share shall be correspondingly adjusted so that the option
price per share, thereafter and
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prior to any other adjustment therein pursuant to the
provisions hereof, shall be the quotient resulting from
dividing the option price per share of Common Stock in effect
immediately prior to such stock dividend by the number of
shares which, by virtue of the foregoing provisions of this
paragraph, the Holder shall be entitled to purchase at the time
of purchase for each share he was entitled to purchase
immediately prior to such dividend. The additional shares,
which are purchasable by reason of the foregoing provisions of
this paragraph, may be purchased only within such period or
periods as may be purchased the shares on account of which, by
virtue of the foregoing provisions of this paragraph, such
additional shares may be purchased.
(b) If the Company shall, at any time while this option is
outstanding, reclassify the shares of its Common Stock into a
greater or lesser number of shares of Common Stock, the number
of shares which may, after any such reclassification, be
purchased pursuant to this option shall be the number of shares
which the Holder would have received or become entitled to
receive upon such reclassification if the Holder had, prior to
such reclassification, been the holder of record of the number
of shares of Common Stock then covered by this option; and the
option price per share shall be correspondingly adjusted so
that, in the event of a reclassification into a greater number
of shares, the option price per share, thereafter and prior to
any other adjustment therein pursuant to the provisions hereof,
shall be the quotient resulting from dividing the option price
per share of Common Stock in effect immediately prior to such
reclassification by the number of shares of Common Stock into
which each share of such stock shall be reclassified, and, in
the event of a reclassification into a lesser number of shares,
the option price per share, thereafter and prior to any other
adjustment therein pursuant to the provisions hereof, shall be
the product resulting from multiplying the option price per
share of Common Stock in effect immediately prior to such
reclassification by the number of shares of Common Stock
required to constitute one share of the reclassified number of
shares. The number of shares which are purchasable by reason of
the foregoing provisions of this paragraph within any specified
fixed period or periods shall be increased or decreased in that
proportion which the number of shares purchasable after any
such reclassification bears
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to the number of shares purchasable immediately before any such
reclassification.
(c) If, at any time while this option is outstanding, there shall
be a reorganization or recapitalization of the Company or a
consolidation or merger of the Company into or with another
company or a sale of all or substantially all of the assets of
the Company, adequate provision shall be made so that, in lieu
of each share of Common Stock then covered by this option,
there shall thereafter be substituted hereunder during the
period hereof such other share or shares of stock, security or
securities, or assets as would have been issuable or payable in
respect of or in exchange for such share had the Holder on the
record date for the determination thereof been the record
holder of such share; provided, however, that in any such event
or in anticipation of any such event, the period or periods
within which this option may be exercised may be accelerated by
the Company by vote of the Board of Directors to a date not
less than thirty days after notice of such acceleration shall
have been mailed to the Holder.
(d) If the Company shall take any action (other than by way of the
declaration or payment of a dividend or dividends (exclusive of
stock dividends) thereon and other than such action as is
described or referred to in clauses (a), (b), or (c) of this
ARTICLE FOURTH hereof which, in the opinion of the Board of
Directors, would materially dilute the Common Stock or other
securities then covered by this option, the Board of Directors
shall appoint a firm of independent public accountants (which
may be the firm which regularly examines and reports upon the
financial statements of the Company) which shall give their
opinion as to the adjustment, if any, in the then option price
per share required to protect against such dilution, and the
option price per share shall thereupon become the price
expressed in such opinion.
(e) No fraction of or fractional shares shall be purchasable or
delivered upon purchase hereunder.
Upon any adjustment required as herein above provided of
the purchase price or the number of shares purchasable upon the
exercise of this option, the Company agrees forthwith to
deliver to the Holder a certificate, signed by its
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President or Treasurer, setting forth the number of shares, and
the price per share therefore, thereafter purchasable on the
exercise of this option.
The Company will, at all times during the term of this
option, reserve and keep available out of shares of its Common
Stock authorized and unissued such number of shares of its
Common Stock as shall be sufficient to satisfy the requirements
of this option.
This option shall be binding upon any company into which
the Company is merged or with which it is consolidated, and,
unless clearly inapplicable, references herein to the Company
shall be deemed to include any such company.
ARTICLE FIFTH.
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Any notice to be given to the Company hereunder shall be
deemed sufficient if delivered in writing at the office of the
Treasurer of the Company or at such other address as the
Company may hereafter designate and shall be effective when so
delivered.
Any notice to be given to the Holder hereunder shall be
deemed sufficient if delivered in person to the Holder or at
his address furnished to the Company or when deposited in the
mail addressed to the Holder at such address and shall be
effective when so delivered or when so deposited.
ARTICLE SIXTH.
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The decision of the Board of Directors of the Company
shall be final with respect to all questions arising under the
Plan, including all matters relating to the construction
thereof and of the options issued thereunder.
IN WITNESS WHEREOF, the Company has caused this option to
be signed by its duly authorized officer and its corporate seal
to be hereunto affixed this __ day of ___________, _____.
ATTEST: PARLEX CORPORATION
______________________ By:___________________________
Name: Name:
Title: Title:
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