Exhibit 10.5
PARLEX CORPORATION
2001 EMPLOYEES' STOCK OPTION PLAN
incorporated under the laws of the Commonwealth of Massachusetts
(hereinafter called the "Company")
STOCK OPTION NO. ___________ GRANTED: __________
FOR _____ SHARES OF COMMON STOCK
AT _________ PER SHARE
TO: __________________
THIS 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 2001
Employees' Stock Option Plan (hereinafter called the "Plan") of the Company
and is subject to the provisions of the Plan which are made a part hereof by
this reference. The parties acknowledge and agree that except for the
provisions contained in this Memorandum, the Plan constitutes the full and
complete understanding and agreement of the parties. In the event of a
conflict between the provisions of this Memorandum and the Plan, the Plan
shall govern. The Company hereby grants to the individual whose name is
hereinabove set forth and who is sometimes hereinafter called "the Optionee"
the following option:
ARTICLE FIRST.
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(a) Subject to the terms and conditions set forth herein, the
Optionee is hereby given the right and option to purchase from the
Company at ______________________ dollars ($ ) 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 five
years from the date this option is granted. The last day of said five-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 and only within certain periods in the amounts stated as to
each period. The said periods are herein called "Exercise Periods" and are
as follows:
as to _____ shares, the period beginning with the _____ day of
____________, 20 ;
as to _____ shares, the period beginning with the _____ day of
____________, 20 ;
as to _____ shares, the period beginning with the _____ day of
____________, 20 ;
as to _____ shares, the period beginning with the _____ day of
____________, 20 ; and
as to _____ shares, the period beginning with the _____ day of
____________, 20 .
(b) All said periods shall end on the specified termination
date. In the event the Optionee ceases to be employed by the Company
for any reason other than death, any then unexercised options granted
to such Optionee shall immediately terminate and become void upon the
date of termination of employment and shall not thereafter be
exercisable. The Company shall have the sole discretion to set the
date of termination for purposes of the Plan, without regard to any
notice period or other obligation under the labor laws of the
jurisdiction where the Optionee is employed.
(c) In the event that an Optionee ceases to be an employee of
the Company by reason of his death, any option granted to such
Optionee, to the extent exercisable on the date of his death, may be
exercised by his executor or administrator or the person or persons to
whom the option is transferred by will or the applicable laws of
descent and distribution at any time or times within one hundred
eighty (180) days after the date of the Participant's death. The
options shall expire at the end of such one hundred eighty (180) day
period.
ARTICLE SECOND.
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(a) This option is not transferable by the said Optionee
otherwise than by will or the laws of descent and distribution, and is
exercisable, during the Optionee's lifetime, only by him, and by him
only while he is an employee of the Company.
(b) The term "Estate" as used in this Section or elsewhere
means the executors or administrators of the estate of the Optionee
after his decease or other persons succeeding, to the extent permitted
by the provisions of this option, to the rights of the Optionee after
his decease by his will or the laws of descent and distribution, as
the case may be.
(c) The term "Holder", as used in this Section and all
subsequent provisions of this option, shall mean the Optionee and, if
the Optionee shall have deceased, his Estate as hereinbefore 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
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such shares unless and until they shall have been in fact issued to
him after exercise of the option with respect to such shares.
(d) 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.
(e) Re-employment of the Optionee by the Company shall not be
deemed to constitute the Optionee 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 Optionee, 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
Optionee was an employee of the Company.
(f) For purposes of this memorandum only, employment of an
Optionee by a subsidiary of the Company shall be considered as if such
Optionee were employed by 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 in which the Company
owns, directly or indirectly, stock possessing 50 percent or more of
the total combined voting power of all classes of stock.
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 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 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.
Payment may also be in whole or in part in shares of the Common Stock
of the Company already owned by the Optionee exercising the option,
valued at the Market Price determined in accordance with the
provisions of Section (b) of Article Third herein provided, however,
that there shall be no such exercise at any one time as to fewer than
one hundred (100) shares or all of the remaining shares then
purchasable by the person or persons exercising the option, if fewer
than one hundred (100) shares.
(b) For purposes of this Plan, the Market Price shall be the
closing sale price of a share of Common Stock as listed on the Nasdaq
National
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Market on the date of grant (or the last closing sale price in the
event there were no such trades on the date of grant).
(c) 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.
(d) 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
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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 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 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;
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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. Notwithstanding the
foregoing, a dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving corporation or
in which a majority of its outstanding shares are so converted or
exchanged shall cause every option hereunder to terminate; provided
that if any such dissolution, liquidation, merger or consolidation is
contemplated, the Company shall either arrange for any corporation
succeeding to the business and assets of the Company to issue to the
participants replacement options (which, in the case of Incentive
Stock Options, satisfy, in the determination of the Committee, the
requirements of Section 424 of the Code) on such corporation's stock
which will to the extent possible preserve the value of the
outstanding options or shall make the outstanding options fully
exercisable at least 20 days before the effective date of any such
dissolution, liquidation, merger or consolidation. The existence of
the Plan shall not prevent any such change or other transaction and no
participant hereunder shall have any right except as herein expressly
set forth.
(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 hereinabove 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 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,
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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 President 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 Plan shall be administered by the Committee appointed by the Board
of Directors to administer the Plan or the Board of Directors as a whole if
no appointment is made (the "Committee"). The decision of the Committee or
the Board of Directors shall be final and binding on all persons concerned
and with respect to all questions arising under the Plan, including the
terms of the Plan and of the options granted under the Plan.
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 _______________, 20__ .
ATTEST: PARLEX CORPORATION
_____________________________ By:___________________________
Name: Name:
Title: Title:
I hereby acknowledge receipt of this Option Agreement covering my
stock option under the Parlex Corporation 2001 Employees' Stock Option Plan,
and the enclosed Plan, and in connection with the grant of the Option
hereunder to me, hereby agree that the contents of this Option Agreement and
the terms and conditions of the Plan are acceptable to me and that I shall
be bound thereby.
__________________________ ____________
Optionee Date
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