EXHIBIT 10.27
CPI INTERNATIONAL, INC.
STOCK OPTION AGREEMENT
(DIRECTORS)
THIS STOCK OPTION AGREEMENT (the "AGREEMENT") is made and entered into as
of the date of grant set forth on Exhibit A hereto by and between CPI
International, Inc., a Delaware corporation (the "COMPANY"), and the individual
(the "OPTIONEE") set forth on Exhibit A.
A. Optionee is becoming a member of the Board of Directors of the Company
("BOARD").
B. The Board has determined that it is appropriate, desirable and in the
best interests of the Company to grant options to Optionee.
C. Accordingly, pursuant to the CPI International, Inc. 2006 Equity and
Performance Incentive Plan (the "PLAN"), the Company is hereby issuing this
option (the "OPTION") to purchase the number of shares of the Common Stock of
the Company (the "SHARES" or the "OPTION SHARES") set forth on Exhibit A hereto,
at the exercise price determined as provided herein, and in all respects subject
to the terms, definitions and provisions of the Plan, which is incorporated
herein by reference.
D. Unless otherwise defined herein, capitalized terms used in this
Agreement shall have the meanings set forth in the Plan.
NOW, THEREFORE, in consideration of the mutual agreements contained herein,
the Optionee and the Company hereby agree as follows:
1. Grant and Terms of Stock Option.
1.1 Grant of Option. The Company has granted to the Optionee the right and
option to purchase, subject to the terms and conditions set forth in the Plan
and this Agreement, all or any part of the number of Shares set forth on Exhibit
A at a purchase price per Share equal to the exercise price per Share set forth
on Exhibit A. This Option is not intended to be an Incentive Stock Option and is
instead intended to be a Nonqualified Stock Option.
1.2 Vesting and Exercisability. Subject to the provisions of the Plan and
the other provisions of this Agreement, this Option shall vest and become
exercisable in accordance with the schedule set forth on Exhibit A.
Notwithstanding the foregoing, in the event of termination of Optionee's status
as a director for any reason, this Option shall immediately cease vesting;
provided, however, if such termination occurs as a result of either death or
Disability, the vesting of this Option shall be partially accelerated as set
forth on Exhibit A hereto.
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1.3 Term of Option. The "TERM" of this Option shall begin on the date of
grant set forth on Exhibit A and end on the expiration of the Term specified on
Exhibit A. No portion of this Option may be exercised after the expiration of
the Term.
1.3.1 In the event of termination of Optionee's status as a director
as a result of death or Disability, this Option shall terminate and be
cancelled on the earlier of (i) the expiration of the Term, or (ii) 12
months after termination of Optionee's status as a director.
1.3.2 In the event of termination of Optionee's status as a director
for any reason other than cause, death or Disability, the portion of this
Option that is not vested and exercisable as of the date of termination
shall be immediately cancelled and terminated. In addition, the portion of
this Option that is vested and exercisable as of the date of termination of
Optionee's status as a director shall terminate and be cancelled on the
earlier of (i) the expiration of the Term, or (ii) the Exercise Termination
Date. The "Exercise Termination Date" shall mean the later of (x) 90 days
after termination of Optionee's status as a director or (y) if Optionee
reasonably determines that Optionee is prohibited or restricted from
selling Shares in the public markets for any portion of the 90 day period
in clause (x) (whether as a result of the possession of information that
might be considered material nonpublic information, the absence of a
registration statement available to Optionee, or other legal or contractual
restrictions on sale), 90 days after all such restrictions cease to exist.
1.3.3 If Optionee's status as a director is terminated for cause, this
entire Option shall be cancelled and terminated as of the date of such
termination and shall no longer be exercisable as to any Shares, whether or
not previously vested.
2. Method of Exercise.
2.1 Delivery of Notice of Exercise. This Option shall be exercisable by
written notice in the form attached hereto as Exhibit B which shall state the
election to exercise this Option, the number of Shares in respect of which this
Option is being exercised, and such other representations and agreements with
respect to such Shares as may be required by the Company pursuant to the
provisions of this Agreement and the Plan. Such written notice shall be signed
by Optionee (or by Optionee's beneficiary or other person entitled to exercise
this Option in the event of Optionee's death under the Plan) and shall be
delivered in person or by overnight delivery service or certified mail to the
Secretary of the Company. At the same time, the Optionee shall pay the exercise
price to the Company. This Option shall not be deemed exercised until the
Company receives such written notice and the exercise price and any other
applicable terms and conditions of this Agreement are satisfied. This Option may
not be exercised for a fraction of a Share.
2.2 Restrictions on Exercise. No Shares will be issued pursuant to the
exercise of this Option unless and until there shall have been full compliance
with all applicable requirements of the Securities Act of 1933, as amended
(whether by registration or satisfaction of exemption conditions), all
Applicable Laws, and all applicable listing requirements of any national
securities exchange or other market system on which the Common Stock is then
listed. As a condition to the exercise of this Option, the Company
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may require Optionee to make any representation and warranty to the Company as
may be necessary or appropriate, in the judgment of the Committee, to comply
with any Applicable Law.
2.3 Method of Payment. Payment of the exercise price shall be made in full
at the time of exercise (a) in cash or by certified check or bank check or wire
transfer of immediately available funds, (b) by delivery of a properly executed
exercise notice together with any other documentation as the Committee and the
Participant's broker, if applicable, require to effect an exercise of the Option
and delivery to the Company of the sale or other proceeds (as permitted by
Applicable Law) required to pay the exercise price, or (c) with the consent of
the Committee in its discretion, by tendering previously acquired Shares (either
actually or by attestation, valued at their then Fair Market Value) that have
been owned for a period of at least six months (or such other period to avoid
accounting charges against the Company's earnings). In addition, the Committee
may impose such other conditions in connection with the delivery of shares of
Common Stock in satisfaction of the exercise price as it deems appropriate in
its sole discretion.
2.4 Tax Withholding Obligations. In addition to the foregoing requirements,
any exercise of this Option shall be conditioned upon the Optionee satisfying
any applicable tax withholding obligations imposed on the Company in connection
with the exercise of this Option.
3. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution or to a
beneficiary designated pursuant to the Plan, and may be exercised during the
lifetime of Optionee only by Optionee. Subject to all of the other terms and
conditions of this Agreement, following the death of Optionee, this Option may,
to the extent it is vested and exercisable by Optionee in accordance with its
terms on the date of death, be exercised by Optionee's beneficiary or other
person entitled to exercise this Option in the event of Optionee's death under
the Plan. This Option may be assigned, in connection with the Optionee's estate
plan, in whole or in part, during the Optionee's lifetime to one or more Family
Members of the Optionee. Rights under the assigned portion may be exercised by
the person or persons who acquire a proprietary interest in such Option pursuant
to the assignment. The terms applicable to the assigned portion shall be the
same as those in effect for the Option immediately before such assignment and
shall be set forth in such documents issued to the assignee as the Committee
deems appropriate.
4. Restrictions; Restrictive Legends. Ownership and transfer of Shares issued
pursuant to the exercise of this Option will be subject to the provisions of,
including ownership and transfer restrictions (including, without limitation,
restrictions imposed by Applicable Laws and restrictions set forth or referenced
in legends imprinted on certificates representing such Shares).
5. General.
5.1 Governing Law. This Agreement shall be governed by and construed under
the laws of the state of Delaware applicable to agreements made and to be
performed
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entirely in Delaware, without regard to the conflicts of law provisions of
Delaware or any other jurisdiction.
5.2 Notices. Any notice required or permitted under this Agreement shall be
given in writing by overnight courier or by postage prepaid, United States
registered or certified mail, return receipt requested, to the address set forth
below or to such other address for a party as that party may designate by 10
days advance written notice to the other parties. Notice shall be effective upon
the earlier of receipt or 3 days after the date on which such notice is
deposited in the mails or with the overnight courier.
If to the Company: CPI International, Inc.
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Attention: Chief Financial Officer
If to Optionee, at the address set forth on Exhibit A.
5.3 Community Property. Without prejudice to the actual rights of the
spouses as between each other, for all purposes of this Agreement, the Optionee
shall be treated as agent and attorney-in-fact for that interest held or claimed
by his or her spouse with respect to this Option and the parties hereto shall
act in all matters as if the Optionee was the sole owner of this Option. This
appointment is coupled with an interest and is irrevocable.
5.4 Modifications. This Agreement may be amended, altered or modified only
by a writing signed by each of the parties hereto.
5.5 Application to Other Stock. In the event any capital stock of the
Company or any other corporation shall be distributed on, with respect to, or in
exchange for shares of Common Stock as a stock dividend, stock split,
reclassification or recapitalization in connection with any merger or
reorganization or otherwise, all restrictions, rights and obligations set forth
in this Agreement shall apply with respect to such other capital stock to the
same extent as they are, or would have been applicable, to the Option Shares on
or with respect to which such other capital stock was distributed.
5.6 Additional Documents. Each party agrees to execute any and all further
documents and writings, and to perform such other actions, which may be or
become reasonably necessary or expedient to be made effective and carry out this
Agreement.
5.7 No Third-Party Benefits. Except as otherwise expressly provided in this
Agreement, none of the provisions of this Agreement shall be for the benefit of,
or enforceable by, any third-party beneficiary.
5.8 Successors and Assigns. Except as provided herein to the contrary, this
Agreement shall be binding upon and inure to the benefit of the parties, their
respective successors and permitted assigns.
5.9 No Assignment. Except as otherwise provided in this Agreement, the
Optionee may not assign any of his, her or its rights under this Agreement
without the prior written consent of the Company, which consent may be withheld
in its sole discretion. The
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Company shall be permitted to assign its rights or obligations under this
Agreement, but no such assignment shall release the Company of any obligations
pursuant to this Agreement.
5.10 Severability. The validity, legality or enforceability of the
remainder of this Agreement shall not be affected even if one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect.
5.11 Equitable Relief. The Optionee acknowledges that, in the event of a
threatened or actual breach of any of the provisions of this Agreement, damages
alone will be an inadequate remedy, and such breach will cause the Company
great, immediate and irreparable injury and damage. Accordingly, the Optionee
agrees that the Company shall be entitled to injunctive and other equitable
relief, and that such relief shall be in addition to, and not in lieu of, any
remedies it may have at law or under this Agreement.
5.12 Headings. The section headings in this Agreement are inserted only as
a matter of convenience, and in no way define, limit, extend or interpret the
scope of this Agreement or of any particular section.
5.13 Number and Gender. Throughout this Agreement, as the context may
require, (a) the masculine gender includes the feminine and the neuter gender
includes the masculine and the feminine; (b) the singular tense and number
includes the plural, and the plural tense and number includes the singular; (c)
the past tense includes the present, and the present tense includes the past;
(d) references to parties, sections, paragraphs and exhibits mean the parties,
sections, paragraphs and exhibits of and to this Agreement; and (e) periods of
days, weeks or months mean calendar days, weeks or months.
5.14 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.15 Complete Agreement. This Agreement and the Plan constitute the
parties' entire agreement with respect to the subject matter hereof and
supersede all agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof.
CPI INTERNATIONAL, INC.
By:
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Its:
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OPTIONEE
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Name:
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EXHIBIT A
DETAILS OF STOCK OPTION GRANT
Optionee Name: ____________________________________________
Date of Grant: ____________________________________________
Number of Shares of Common Stock: ____________________________________________
Exercise Price Per Share: ____________________________________________
Term of Option: 10 Years after date of grant
VESTING SCHEDULE: Subject to the restrictions and limitations of the Option
Agreement and the Plan, this Option shall vest and become exercisable as
follows:
1/3 of the Shares subject to this Option will vest on the day before the first
annual stockholders meeting occurring after the Date of Grant.
1/3 of the Shares subject to this Option will vest on the day before the second
annual stockholders meeting occurring after the Date of Grant.
1/3 of the Shares subject to this Option will vest on the day before the third
annual stockholders meeting occurring after the Date of Grant.
If Optionee's status as a director terminates as result of death or Disability
and the date of termination does not occur on a vesting date, then for purposes
of determining the extent to which this Option has vested, Optionee's status as
a director shall be deemed to have terminated on the next occurring vesting
date. For example, if Optionee's status as a director terminates as result of
death or Disability one month before the second annual meeting after the date of
grant, 66 2/3% of the Shares subject to this Option shall be deemed to be vested
and exercisable as of the date of termination (and no further vesting shall
occur).
Optionee Address: ________________________________
EXHIBIT B
NOTICE OF EXERCISE OF STOCK OPTION
CPI International, Inc.
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Attn: Chief Financial Officer
Ladies and Gentlemen:
The undersigned hereby elects to exercise the option indicated below:
Option Grant Date: ____________________
Number of Shares Being Exercised: ____________
Exercise Price Per Share: _________________
Total Exercise Price: $_____________
Method of Payment: ______________
Enclosed herewith is payment in full of the total exercise price.
My exact name, current address and social security number for purposes of
the stock certificates to be issued and the shareholder list of the Company are:
Name: __________________________________
Address: _______________________________
_______________________________
Social Security Number: ________________
I UNDERSTAND THAT THERE MAY BE ADVERSE TAX CONSEQUENCES TO ME AS A RESULT
OF THE EXERCISE OF THE OPTION AND/OR ANY SALE OF THE SHARES, AND I HAVE
CONSULTED WITH MY OWN TAX ADVISOR REGARDING THOSE CONSEQUENCES AND I AM NOT
RELYING ON THE COMPANY FOR ANY TAX ADVICE.
I ALSO AGREE THAT I WILL NOT SELL OR DISPOSE OF MY SHARES IN VIOLATION OF
APPLICABLE SECURITIES LAWS, COMPANY POLICY (INCLUDING APPLICABLE "BLACK-OUT"
PERIODS) OR ANY AGREEMENT BY WHICH I AM BOUND.
Sincerely,
Dated:
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(Optionee's Signature)
SPOUSAL CONSENT
By his or her signature below, the spouse of the Optionee agrees to be
bound by all of the terms and conditions of the foregoing Option Agreement
(including those relating to the appointment of the Optionee as agent for any
interest that Spouse may have in the Option Shares).
OPTIONEE'S SPOUSE
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Signature
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