EXHIBIT 99.4
FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE
LITTELFUSE, INC. EQUITY INCENTIVE COMPENSATION PLAN
THIS NON-QUALIFIED STOCK OPTION AGREEMENT is entered into as of _______,
20____, between ______________________ (the "Optionee") and LITTELFUSE, INC., a
Delaware corporation (the "Corporation"), with reference to the following facts:
A. Pursuant to the Littelfuse, Inc. Equity Incentive Compensation Plan (the
"Plan"), the Corporation is authorized to grant options for shares of its Common
Stock, $.01 par value (the "Common Stock"), to officers and employees of the
Corporation or any Subsidiary as a reward for past performance or as an
incentive to future performance.
B. The Corporation desires to grant an option to the Optionee.
NOW, THEREFORE, IN CONSIDERATION of the foregoing facts, the Corporation
hereby grants the following options:
1. Grant of Option. The Corporation hereby grants to the Optionee an
irrevocable option to purchase up to __________ shares of Common Stock of
the Corporation at the price of $_________ per share. The number and kind
of shares subject to this option and the purchase price per share are
subject to adjustment as provided in the Plan. This option shall expire on
the day before the seventh (7th) anniversary of the date hereof unless
earlier terminated in accordance with the provisions hereof.
2. Exercise of Option. Subject to the terms of the Plan and this
Agreement, this option may be exercised as follows: with respect to
twenty-five percent (25%) of the Common Stock covered hereby during the six
(6) year period commencing one (1) year following the date of grant; with
respect to an additional twenty-five percent (25%) of the Common Stock
covered hereby during the five (5) year period commencing two (2) years
following the date of grant; with respect to an additional twenty-five
percent (25%) of the Common Stock covered hereby during the four (4) year
period commencing three (3) years following the date of grant; and with
respect to the remaining twenty-five percent (25%) of the Common Stock
covered hereby during the three (3) year period commencing four (4) years
following the date of grant. This option shall be exercised by delivery of
written notice to the Corporation stating the number of shares with respect
to which the option is being exercised, together with full payment of the
purchase price therefor. Payment may be made in cash or in such other form
or combination of forms permitted by the Plan as shall be acceptable to the
Committee.
3. Reserved Shares. The Corporation has duly reserved for issuance a
number of authorized but unissued shares adequate to fulfill its
obligations under this Agreement. During the term of this Agreement the
Corporation shall take such action as may be necessary to maintain at all
times an adequate number of shares reserved for issuance or treasury shares
to fulfill its obligations hereunder.
4. Termination of Employment. In the event that the Optionee ceases to
be an employee of the Corporation and its subsidiaries for any reason other
than as set forth in Section 11.4 of the Plan, this option may, subject to
the provisions of the Plan and Section 11 of this Agreement, be exercised
(but only to the extent that the Optionee was entitled to do so at the time
of the termination of the Optionee's employment) at any time within three
(3) months after such termination, but in no case later than the date on
which this option was originally scheduled to expire. Any portion of this
option which was not exercisable by the Optionee at the time of any such
termination of employment shall be cancelled and forfeited and the Optionee
shall not have any further rights whatsoever with respect thereto.
Notwithstanding the foregoing:
(a) If the Optionee's employment is terminated by reason of the
Optionee's Disability, or following a Change in Control (as both
such terms are defined in the Plan), the option shall vest in
full, and may be exercised at any time during the period
described above, as provided in Section 11.2(a) of the Plan.
(b) If the Optionee's employment is terminated by reason of the
Optionee's death, the option shall vest in full, and may be
exercised at any time during the period described above, except
that twelve (12) months shall be substituted for three (3) months
from the date of termination, as provided in Section 11.2(a) of
the Plan.
(c) If the Optionee's employment is terminated by reason of the
Eligible Retirement, as defined in the Plan, the option shall not
vest in full at the time of termination, but shall continue to
vest on the same dates, and be exercisable during the same
periods, as if the Optionee were still employed, as provided in
Section 11.2(b) of the Plan.
5. Assignment or Transfer. This option may not be assigned or
transferred except by will or by the laws of descent and distribution or
pursuant to Section 12.1 of the Plan.
6. Plan and Committee. The construction of the terms of this Agreement
shall be controlled by the Plan, a copy of which is attached hereto as
Exhibit A and hereby made a part hereof as though set forth herein
verbatim, and the rights of the Optionee are subject to modification and
termination in certain events as provided in the Plan. All words and
phrases not otherwise defined herein shall have the meanings provided in
the Plan. The Committee's interpretations of and determinations under any
of the provisions of the Plan or this Agreement shall be conclusive.
7. Compliance with Law. This option shall not be exercised and no
shares shall be issued in respect hereof, unless in compliance with
applicable federal and state tax and securities laws.
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7.1. Certificate Legends. The certificates for shares purchased
pursuant to this option shall bear any legends deemed necessary by the
Committee.
7.2. Representations of the Optionee. As a condition to the
exercise of this option, the Optionee will deliver to the Corporation
such signed representations as may be necessary, in the opinion of
counsel satisfactory to the Corporation, for compliance with
applicable federal and state securities laws.
7.3. Resale. The Optionee's ability to transfer shares purchased
pursuant to this option or securities acquired in lieu thereof or in
exchange therefor may be restricted under federal or state securities
laws. The Optionee shall not resell or offer for resale such shares or
securities unless they have been registered or qualified for resale
under all applicable federal and state securities laws or an exemption
from such registration or qualification is available in the opinion of
counsel satisfactory to the Corporation.
8. Notice. Every notice or other communication relating to this
Agreement shall be in writing and shall be mailed or delivered to the party
for whom it is intended at such address as may from time to time be
designated by such party in a notice mailed or delivered to the other party
as herein provided; provided, however, that unless and until some other
address be so designated, all notices or communications by the Optionee to
the Corporation shall be mailed or delivered to the Corporation to the
attention of its Secretary at 800 East Northwest Highway, Des Plaines,
Illinois 60016, and all notices or communications by the Corporation to the
Optionee may be given to the Optionee personally or may be mailed to the
Optionee at the most recent address which the Optionee has provided in
writing to the Corporation.
9. Tax Treatment. This option is a non-qualified option and shall not
be treated as an incentive stock option pursuant to Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). The option is
intended as a stock right that does not provide for deferral of
compensation and is not subject to Section 409A of the Code, and shall not
be interpreted to permit any deferral of compensation that would cause it
to be subject to Section 409A. The Optionee acknowledges that the tax
treatment of this option, shares subject to this option or any events or
transactions with respect thereto may be dependent upon various factors or
events which are not determined by the Plan or this Agreement. The
Corporation makes no representations with respect to and hereby disclaims
all responsibility as to such tax treatment.
10. Withholding Taxes. The Corporation shall have the right to require
the Optionee to remit to the Corporation an amount sufficient to satisfy
any federal, state or local withholding tax requirement prior to the
delivery of any shares of Common Stock acquired by the exercise of the
option granted hereunder. In each case of the exercise of the option, the
Corporation will notify the Optionee of the amount of the withholding tax
which must be paid under federal and, where applicable, state and local
law. Upon receipt of such notice, the Optionee shall promptly remit to the
Corporation the amount specified in such notice. No amounts of income
received by the Optionee pursuant to this
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Agreement shall be considered compensation for purposes of any pension or
retirement plan, insurance plan or any other employee benefit plan of the
Corporation or any of its Subsidiaries.
11. Non-competition Forfeiture Provisions. The Optionee acknowledges
that a primary objective of the Corporation in deciding to grant the option
to the Optionee under this Agreement is to provide the Optionee with an
incentive to acquire shares of Common Stock and remain an employee of the
Corporation and that this objective will not have been accomplished if the
Optionee exercises the option, in whole or in part, and shortly thereafter
terminates his or her employment with the Corporation and becomes an
employee of a competitor of the Corporation or its affiliates. Therefore,
notwithstanding anything else to the contrary contained in the Plan or this
Agreement, in the event that the Optionee shall accept employment with, or
become employed by, a Competitor (as such term is hereinafter defined) as
an officer, employee, consultant, agent, representative or otherwise, or in
the event that any of the Forfeiture Events described in Section 11.4 of
the Plan occur during the Optionee's employment or within twelve (12)
months thereafter, the Optionee agrees that: (i) all unexercised options to
acquire Common Stock then held by the Optionee which have been granted by
the Corporation to the Optionee pursuant to this Agreement shall be deemed
to be cancelled and forfeited and the Optionee shall not have any further
rights whatsoever with respect thereto; and (ii) the Optionee shall
immediately pay to the Corporation an amount equal to the product of (x)
the aggregate number of shares of Common Stock respecting which the
Optionee exercised options to acquire shares of Common Stock granted
pursuant to this Agreement at any time during the 180 days preceding the
earlier of the date the Optionee accepted or commenced employment with a
Competitor and (y) the aggregate differences between the exercise prices of
any such options and the respective fair market values (as such term is
defined in Section 2.14 of the Plan) of the Common Stock on the respective
dates of exercise of such options (the "Forfeited Options Gain"). As used
herein, the term "Competitor" shall mean any person or entity, or any
affiliate thereof, which manufactures, distributes or sells circuit
protection products in competition with the Corporation or any of its
Subsidiaries. In the event that the Optionee shall fail to immediately pay
to the Corporation the Forfeited Options Gain, the Optionee shall be liable
to the Corporation for all costs, expenses and attorneys' fees incurred by
the Corporation in connection with collecting the Forfeited Options Gain
from the Optionee, plus interest at a per annum rate equal to the lower of
12% or the highest rate permitted by applicable law. The Optionee agrees
that the Corporation and its Subsidiaries compete worldwide in the sale of
circuit protection products and that the forfeiture provisions of this
Section 11, and Section 11.3 of the Plan, are reasonable as they relate to
the objectives of the Corporation in deciding to grant the option to the
Optionee under this Agreement. In the event that any court shall finally
hold that any provision of this Agreement constitutes an unreasonable or
unenforceable restriction against the Optionee, the Optionee agrees that
the provisions hereof shall not be rendered void but shall apply to such
extent as such court may judicially determine or indicate constitutes a
reasonable and enforceable restriction under the circumstances involved.
The Corporation and the Optionee each request that any such court which
holds that any of the provisions of this Agreement constitutes an
unreasonable or unenforceable restriction against the Optionee
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make a determination of what would constitute a reasonable and enforceable
restriction under the circumstances involved and to reform this Agreement
accordingly.
12. No Right to Continued Employment. Nothing in the Plan or in this
Agreement shall confer upon the Optionee any right to continue in the
employ or service of the Corporation or any of its subsidiaries or
interfere in any way with the right of the Corporation or its subsidiaries
to terminate such employment or service at any time.
13. Governing Law. Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, U.S.A., excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the statutory or common
law of another jurisdiction.
IN WITNESS WHEREOF, the Corporation and the Optionee have executed this
Non-Qualified Stock Option Agreement effective as of the date first set forth
above.
LITTELFUSE, INC. OPTIONEE:
By
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Its
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