EXHIBIT 10.9
THE STOCK OPTIONS DESCRIBED HEREIN AND THE SECURITIES ISSUABLE
UPON THE EXERCISE HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER
ANY STATE SECURITIES OR BLUE SKY LAWS. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
Date:____________________ Option ____________
This Stock Option Transfer Agreement (the "Agreement") is made and entered
into on this ________________ by and between BRAD JACOBY, individual
("Grantor"), and _______________, individual ("Recipient"), and takes
effect only after closing (as that term is defined therein) of the Purchase
Agreement by and between INTEGRATED PERFORMANCE SYSTEMS, INC. ("IPFS") and
BEST CIRCUIT BOARDS, INC. d/b/a Lone Star Circuits ("LSC") executed on
October 22, 2004.
WITNESSETH
WHEREAS, Recipient is recognized as a key employee to LSC, and will in the
future be a key employee of the surviving entity of the merger between IPFS
and LSC (the "Merged Entity");
NOW, THEREFORE, in consideration of the premises, covenants, and agreements
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged and confessed, Grantor and
Recipient agree as follows:
1. Granting of Stock Options
-------------------------
Grantor, an individual residing in Dallas County, Texas, hereby transfers
and conveys to Recipient an option to acquire ________________ shares of
stock in the Merged Entity from Grantor. The stock issued to Recipient
pursuant to the exercise of options granted in this Agreement (the
"underlying stock") shall be stock owned by Grantor and not newly issued
treasury stock of the Merged Entity.
2. Exercise Price
--------------
Exercise of the granted options shall be a cashless exercise.
3. Exercise Period
---------------
The options described herein are exercisable at any time subsequent to the
execution of this agreement.
4. Right of First Refusal on Sale of Stock
---------------------------------------
Grantor hereby retains a right of first refusal on any sale of stock by
Recipient subsequent to Recipient's exercise of stock options granted under
this Agreement. Grantor shall have the right to purchase all or a portion
of the stock offered for sale by Recipient at the same bid price offered to
a third party.
5. Shares Carry Restrictions
-------------------------
The shares of Common Stock of the Company purchased upon exercise of
this Option ("Restricted Stock") or purchasable upon exercise of this Option
("Underlying Stock") shall not be transferable except upon the conditions
stated below, which are intended to insure compliance with federal and state
securities laws. The certificates representing these shares of stock,
unless the same are registered prior to exercise of this Option, shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state. The securities have been acquired
for investment and may not be sold, offered for sale or
transferred in the absence of an effective registration under the
Securities Act of 1933, as amended, and any applicable state
securities laws or an opinion of counsel satisfactory in form and
substance to counsel for the Company that the transaction shall
not result in a violation of state or federal securities laws."
BY EXECUTION OF THIS AGREEMENT, TRANSFEREE HEREBY
ACKNOWLEDGES THAT HE IS TAKING SUBJECT TO SUCH RESTRICTIONS AND WILL FOREVER
HOLD GRANTOR HARMLESS FOR ANY ABILITY OR LACK THEREOF TO TRANSFER OR SELL
SUCH SECURITIES.
6. No Guarantee of Future Value
----------------------------
While Grantor, as Chief Executive Officer of the Merged Entity, will
diligently pursue all means of obtaining adequate return on the stock of
the merged entity, Grantor makes no guarantee as to the future value of such
transferred shares. Recipient should consult its own investment advisor as
to the advisability of the continued holding of the transferred shares once
restrictions on the sale or transfer have been removed.
7. Method of Exercise.
-------------------
While this Option remains outstanding and exercisable, the Recipient may
exercise, in whole or in part, the purchase rights evidenced hereby. Such
exercise shall be effected by: (i) the surrender of the Option, together
with a duly executed copy of the form of exercise attached hereto, to the
Secretary of the Company at its principal offices; and (ii) a statement
identifying the number of shares for which the options are being exercised.
8. Certificate for Shares
----------------------
Upon the exercise of the rights evidenced by this Option, one or more
certificates for the number of Shares so redeemed shall be issued as soon as
practicable thereafter, and in any event within 30 days of the delivery of
the subscription notice.
9. Reservation of Shares
---------------------
Jacoby covenants that he will at all times, keep available such number of
authorized shares of his Common Stock, free from all preemptive rights with
respect thereto, which will be sufficient to permit the exercise of this
Option for the full number of Shares specified herein, upon exercise of this
Option. Jacoby further covenants that such Shares, when issued pursuant to
the exercise of this Option, will be duly and validly issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to
the issuance thereof.
In furtherance of this Section 9, Jacoby shall, immediately upon receipt of
common stock in IPFS pursuant to the closing of the transaction referenced
in the preamble to this Agreement, deposit into escrow an amount of stock
sufficient to satisfy the amount of the grant as described herein. A
separate escrow agreement shall be executed and incorporated as if described
fully herein.
10. Adjustment of Exercise Price and Number of Shares
-------------------------------------------------
The number of and kind of securities purchasable upon exercise of this
Option shall be subject to adjustment from time to time as follows:
(a) Subdivisions and Combinations. If the Company shall at any
time prior to the expiration of this Option subdivide its Common Stock by
split-up or otherwise, or combine its Common Stock, the number of Shares
issuable on the exercise of this Option shall forthwith be proportionately
increased in the case of a subdivision, or proportionately decreased in the
case of a combination. Any adjustment under this Section 7(a) shall become
effective at the close of business on the date the subdivision or
combination becomes effective.
(b) Notice of Adjustment. When any adjustment is required to be
made in the number or kind of shares purchasable upon exercise of the
Option, the Company shall promptly notify Recipient of such event and of the
number of shares of Common Stock or other securities or property thereafter
purchasable upon exercise of the Option.
11. No Stockholder Rights
---------------------
Prior to the exercise of this Option, Recipient shall not be entitled to
any rights of a shareholder with respect to the Shares, including (without
limitation) the right to vote such Shares, receive dividends or other
distributions thereon, exercise preemptive rights or be notified of
shareholder meetings, and such Recipient shall not be entitled to any notice
or other communication concerning the business or affairs of the Company.
12. Mutilated or Missing Options
----------------------------
In case any Option shall be mutilated, lost, stolen or destroyed,
Jacoby shall issue and deliver in exchange and substitution for and upon
cancellation of the mutilated Option, or in lieu of and substitution for
the Option lost, stolen or destroyed, a new Option of like tenor and
representing an equivalent right or interest, but only upon receipt of
evidence reasonably satisfactory to Jacoby of such loss, theft or
destruction of such Option and indemnity or bond, if requested, also
reasonably satisfactory to Jacoby. An applicant for such substitute Option
shall also comply with such other reasonable regulations and pay such other
reasonable charges as Jacoby may prescribe.
13. Payment of Taxes
----------------
Jacoby will pay all taxes (other than any income taxes or other similar
taxes), if any, attributable to the initial issuance of the Option and the
issuance of the Shares upon the exercise of the Option, provided, however,
that Jacoby shall not be required to pay any tax or taxes which may be
payable in respect of the issuance or delivery of any Option, or the
transfer thereof, and no such issuance, delivery or transfer shall be made
unless and until the person requesting such issuance or transfer has paid to
Jacoby the amount of any such tax, or has established, to the satisfaction
of Jacoby, that no such tax is payable or such tax has been paid.
The options granted herein will constitute compensation under S61 of the
Internal Revenue Code. Under that provision, Recipient would have
compensation in the amount of the fair market value of the underlying
stock received pursuant to the exercise of the options granted under this
Agreement as of the date of exercise. Recipient hereby acknowledges the
opportunity to consult with its own tax advisor as to the proper tax
treatment of both the granting and exercise of the options. Recipient
further acknowledges that he will be responsible for all taxes imposed on
the granting or exercise of options, as well as on any subsequent sale or
transfer of the underlying stock.
14. Option Register
---------------
The Options shall be numbered and shall be registered on the books of the
Company (the "Option Register") as they are issued. The Company shall be
entitled to treat the registered holder of any Option on the Option Register
as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to or interest in such Option on the
part of any other person, and shall not be liable for any registration or
transfer of Options which are registered or to be registered in the name
of a fiduciary or the nominee of a fiduciary unless made with the actual
knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration of transfer, or with knowledge of such facts
that its participation therein amounts to bad faith.
15. Transfer of Options
-------------------
The Options shall be transferable on the Option Register only upon delivery
thereof duly endorsed by the Recipient or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment
or authority to transfer. In all cases of transfer by an attorney, the
original power of attorney, duly approved, or an official copy thereof, duly
certified shall be deposited with the Company. In case of transfer by
executors, administrators, guardians or other legal representatives, duly
authenticated evidence of their authority shall be produced, and may be
required to be deposited with the Company in its discretion. Upon any
registration of transfer, the Company shall deliver a new Option or Options
to the Person entitled thereto. Notwithstanding the foregoing, the Company
shall have no obligation to cause Options to be transferred on its books to
any Person, unless the Recipient of such Options shall furnish to the
Company evidence of compliance with the Securities Act of 1933, as amended,
and applicable state blue sky laws.
16. Successors and Assigns
----------------------
The terms and provisions of this Option shall inure to the benefit of, and
be binding upon, Jacoby and the holders hereof and their respective
successors and assigns.
17. Agreement is with Individual, not Corporation
---------------------------------------------
Recipient hereby acknowledges that this Agreement is only with the
individual Grantor Brad Jacoby. In no way does this Agreement create any
rights on behalf of Recipient with respect to IPFS, LSC, or the Merged
Entity.
18. Transfer Void to the Extent Grantor Retains Less than 51% of the Merged
-----------------------------------------------------------------------
Entity
------
The merger transaction between IPFS and LSC, which will take place
immediately prior to execution of this Agreement, involves the transfer of
control to the Merged Entity to Grantor Brad Jacoby. Under no circumstances
will any transfer pursuant to this Agreement or pursuant to similar
agreements made with other key employees contemporaneously with the
execution of this Agreement, leave Grantor with less than 51% control of
all shares issued and outstanding of the Merged Entity. To the extent this
Agreement creates such a transfer, such transfer shall be void ab initio.
In the event of such a transfer under this section, the number of shares
transferred shall be adjusted proportionally with those shares transferred
under similar agreements made contemporaneously with other key employees.
19. Disputes to be Arbitrated
-------------------------
Any unresolved disputes arising out of this Agreement shall be submitted to
the nearest office of the American Arbitration Association for resolution.
20. Governing Law; Venue
--------------------
This Agreement shall be made and entered into in Dallas, Dallas County,
Texas, and shall be governed by and construed and enforced in accordance
with the Laws of the State of Texas without giving effect to any conflict
of law, rule, or principle of that state. Venue for any actions in
construction or enforcement of this Agreement shall be Dallas County, Texas.
21. Severability
------------
The provisions of this Agreement are intended to be severable. If any
such provision is held invalid or unenforceable in whole or in part in any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any other jurisdiction
or the remaining provisions hereof in any jurisdiction.
22. Prior Understandings
--------------------
This Agreement supersedes all prior understandings and agreements, whether
written or oral, between the parties hereto relating to the transactions
provided for herein. Specifically, but not by way of limitation, this
Agreement incorporates and supersedes the oral option agreement made between
Grantor and Recipient on or about April, 1996.
23. Amendments; Waiver
------------------
This Agreement may be amended only in writing by the mutual consent of both
Grantor and Recipient. No waiver of any provision of this Agreement shall
arise from any action or inaction of any party, except an instrument in
writing expressly waiving the provision executed by the party entitled to
the benefit of the provision.
24. Entire Agreement
----------------
This Agreement, together with any documents and exhibits given or delivered
pursuant to this Agreement, constitutes the entire agreement between the
parties to this Agreement on the subject matter of this Agreement. No party
shall be bound by any communications between them on the subject matter of
this Agreement unless the communication is (a) in writing, (b) bears a date
contemporaneous with or subsequent to the date of this Agreement, and (c) is
agreed to by all parties to this Agreement. On execution of this Agreement,
all prior agreements or understandings between the parties on the subject
matter of this Agreement shall be null and void.
25. Counterpart Execution
---------------------
This Agreement may be executed in multiple counterparts, each of which shall
be deemed an original, and each of which alone, and all of which together,
shall constitute one and the same instrument. When each party has executed
and delivered a counterpart of this Agreement, the Agreement shall be fully
binding on and enforceable by the parties. In making proof of the Agreement
it shall not be necessary to produce or account for any counterpart other
than the counterpart signed by a party against whom this Agreement is to be
enforced.
Signed this ______________.
________________________________ ______________________________
Brad Jacoby Brent Nolan