EXHIBIT 10.50
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made as of the date set forth on the signature
page hereof by and between Universal Electronics Inc., a Delaware corporation
(the "Corporation") and the undersigned Optionee (the "Optionee"). As used in
this Agreement, the term "Corporation" shall include, where applicable, any and
all of its subsidiaries or related entities. Any capitalized term used in this
Agreement that is not defined herein shall have the meaning thereof set forth in
the Universal Electronics Inc. 2002 Stock Incentive Plan (the "Plan").
WHEREAS, the Compensation Committee of the Board of Directors of the Corporation
(the "Committee") and the Board of Directors of the Corporation (the "Board")
have approved the Plan;
WHEREAS, the Board has designated and empowered the Committee to administer the
Plan; and
WHEREAS, the Committee has determined that the Optionee, as an Eligible
Employee, should be granted a stock option ("Option") under the Plan to purchase
shares of the Corporation's common stock, par value $0.01 per share (the
"Stock"), upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, the parties, intending to be legally bound, hereto agree as
follows:
1. GRANT AND DESIGNATION OF OPTION. Upon the execution and delivery of this
Agreement and the related Stock Option Certificate of even date herewith
(the "Certificate"), the Corporation hereby grants to the Optionee the
Option to purchase the aggregate number of shares of Stock set forth on the
Certificate at the price per share ("Option Price") further set forth on
the Certificate.
2. TERM AND EXERCISE OF OPTION. Subject to earlier termination, acceleration
or cancellation of the Option as provided herein, the term of the Option
shall be for that period of time also set forth on the Certificate (the
"Option Period") and, subject to the provisions of this Agreement, the
Option shall be exercisable at such times and as to such number of shares
as determined on the schedule set forth on the Certificate.
3. METHOD OF EXERCISE. The Option may be exercised by written notice to the
Corporation (the "Exercise Notice") at its offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to the attention of the Secretary of the
Corporation. The Exercise Notice shall state (a) the election to exercise
the Option, (b) the total number of full shares in respect to which it is
being exercised, and (c) shall be signed by the person or persons
exercising the Option. The Exercise Notice shall be accompanied by the
Certificate and a certified or cashier's check for the full amount of the
purchase price of such shares plus an amount necessary to satisfy
Optionee's obligations pursuant to Section 11, or as may be permitted by
the Committee, by certificates for shares of Stock which have been owned by
the Optionee for more than six months prior to the date of exercise and
which have a fair market value of the date of exercise equal to the
purchase price, or by a combination of such methods of payment. Upon
receipt of the foregoing, the Corporation shall issue the shares of Stock
as to which the Option has been duly exercised and shall return the
Certificate, duly endorsed to reflect such exercise, to the Optionee. In a
cashless exercise, as permitted under Federal Reserve Board's Regulation T,
subject to applicable securities law restrictions, Optionee must notify the
Corporation as to the manner of the transaction.
4. OPTIONEE'S COVENANTS AND REPRESENTATIONS.
(a) Optionee represents and warrants that any and all shares acquired
through the exercise of rights under the Option granted pursuant to
this Agreement will be acquired for Optionee's own account and not
with a view to, or present intention of, distribution thereof in
violation of the Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder (the "1933 Act") and will not be
disposed of in contravention of the 1933 Act.
(b) Optionee acknowledges that Optionee is able to bear the economic risk
of the investment in any and all shares of Stock acquired through the
exercise of rights under the Option for an indefinite period of time
because the Stock has not been registered under the 1933 Act and,
therefore, cannot be sold unless subsequently registered under the
1933 Act or an exemption from such registration is available.
(c) Optionee has reviewed this Agreement and has had an opportunity to ask
questions and receive answers concerning the terms and conditions of
the offering of Stock and has had full access to such other
information concerning the Corporation as Optionee has requested.
(d) Optionee agrees that if Optionee should dispose of any Shares acquired
upon the exercise of an Incentive Stock Option, including a
disposition by sale, exchange, gift or transfer of legal title within
two (2) years after the date such Option was granted to the Optionee
or within one (1) year after the transfer of such Shares to the
Optionee upon the exercise of such Option, the Optionee shall notify
the Company within three (3) days after such disposition.
5. RESTRICTION ON EXERCISE. This Option may not be exercised if the issuance
of such shares upon such exercise or the method of payment of consideration
for such shares would constitute a violation of any applicable federal or
state securities or other law or regulation. As a condition to the exercise
of this Option, the Corporation may require Optionee to make any
representation and warranty to the Corporation as may be required by any
applicable law or regulation. All exercises of the Option must be for full
shares of Stock only.
6. EFFECT OF TERMINATION OF EMPLOYMENT. Except as set forth in Sections 7 and
8 below and subject to the limitations set forth in Section 9(b), in the
event that Optionee's employment with the Corporation ceases for any
reason, Optionee may (or Optionee's estate or representative, in the event
of Optionee's death during the applicable exercise period as set forth in
Section 8), during the earlier of (a) the ninety (90) day period following
such cessation of employment or (b) the remaining term of the Option
Period, exercise the Option to the extent such Option was exercisable on
the date such employment ceased and, on such date, that portion of the
Option which was not exercisable shall automatically terminate without
further action by the parties hereto and, in all events, to the extent not
exercised, the Option shall terminate in its entirety at the end of
business on the last day of the applicable exercise period as set forth in
this Section 6; provided, however, the Committee, in its sole discretion,
may approve the full vesting to Optionee (or Optionee's estate or
representative, in the event of Optionee's death) in the Option and, in
such event, to the extent not previously exercised, the Option shall be
exercisable in whole or in part with respect to all remaining shares of
Stock covered the Option and may be exercised by Optionee (or Optionee's
estate or representative, in the event of Optionee's death) at any time
prior to the expiration of the original Option Period.
7. EFFECT OF TERMINATION OF EMPLOYMENT WITHOUT CAUSE OR DUE TO CONSTRUCTIVE
TERMINATION.
(a) In the event that Optionee's employment with the Corporation is
terminated by the Corporation without "Cause" (as such term is defined
in Section 7(b) below) or in the event of "Constructive Termination"
(as such term is defined in Section 7(c) below), Optionee shall become
immediately fully vested in the Option without further action by the
parties hereto, and, to the extent not previously exercised, shall be
exercisable in whole or in part with respect to all remaining shares
of Stock covered by the Option and may be exercised by Optionee (or
Optionee's estate or representative, in the event of Optionee's death)
at any time prior to the expiration of the original Option Period,
subject to the limitations set forth in Section 9(b).
(b) For purposes of this Agreement, "Cause" shall mean (i) the willful and
continued failure by Optionee to substantially perform Optionee's
duties with the Corporation (other than a failure resulting from
Optionee's death or "Total Disability" (as such term is defined in
Section 7(e) below)) after a demand for substantial performance is
delivered to Optionee by the Corporation which specifically identifies
the manner in which it is believed that Optionee has not substantially
performed Optionee's duties; (ii) the willful engaging by Optionee in
gross misconduct materially and demonstrably injurious to the property
or business of the Corporation; or (iii) Optionee's commission of
fraud, misappropriation or a felony. For purposes of this definition
of "Cause", no act or failure to act on Optionee's part will be
considered "willful" unless done, or omitted to be done, by Optionee
not in good faith and without a reasonable belief that Optionee's
action or omission was in the interests of the Corporation or not
opposed to the best interests of the Corporation.
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(c) For purposes of this Agreement, "Constructive Termination" shall occur
on that date on which Optionee resigns from employment with the
Corporation, if such resignation occurs within eighteen (18) months
after the occurrence of (i) the failure of Optionee to be elected or
re-elected or appointed or reappointed to such office that Optionee
holds (other than as a result of a termination for "Cause") if
Optionee is an officer of the Corporation and the office which
Optionee holds is one to which Optionee is elected according to the
Corporation's By-laws; (ii) a change in Optionee's functions, duties,
or responsibilities such that Optionee's position with the Corporation
becomes substantially less in responsibility, importance, or scope; or
(iii) a "Change in Control" (as such term is defined in Section 7(d)
below).
(d) For purposes of this Agreement, a "Change in Control" shall be deemed
to occur when (i) any "person" or "group" (as such terms are used in
Sections 3(a), 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (the
"1934 Act")), other than (1) a trustee or other fiduciary holding
securities under any employee benefit plan of the Corporation or (2) a
corporation owned directly or indirectly by the stockholders of the
Corporation in substantially the same proportions as their ownership
of Stock in the Corporation immediately prior to any such occurrence,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the 1934 Act), directly or indirectly, of securities of the
Corporation representing 20% or more of the total voting power of the
then outstanding securities of the Corporation entitled to vote
generally in the election of directors (the "Voting Stock"); (ii)
individuals who are members of the Board on the date of this Agreement
and any individual who becomes a member of the Board hereafter whose
nomination for election as a director was approved by the affirmative
vote of a majority of such directors (including any non-director added
pursuant to this clause), cease to constitute a majority of the
members of the Board; (iii) there occurs a merger or consolidation of
the Corporation with any other corporation or entity, other than a
merger or consolidation which would result in the Voting Stock of the
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Stock or the voting securities
of such surviving entity outstanding immediately after such merger or
consolidation; (iv) there occurs a sale or transfer or disposition of
all or substantially all of the Corporation's assets to any other
corporation or entity, other than a corporation owned directly or
indirectly by the stockholders of the Corporation in substantially the
same proportions as their ownership of Stock in the Corporation
immediately prior to such sale, transfer or disposition; or (v) the
dissolution or liquidation of the Corporation.
(e) For purposes of this Agreement, "Total Disability" shall mean an event
of illness or other incapacity of Optionee resulting in Optionee's
failure or inability to discharge Optionee's duties as an employee of
the Corporation for ninety (90) or more days during any period of 120
consecutive days.
8. EFFECT OF TERMINATION OF EMPLOYMENT DUE TO DEATH OR TOTAL DISABILITY. In
the event that Optionee's employment with the Corporation ceases or is
terminated due to Optionee's death or Total Disability, Optionee (or
Optionee's estate or representative, in the event of Optionee's death) may,
subject to the limitations set forth in Section 9(b), during the earlier of
(a) the one (1) year period following such cessation or termination of
employment or (b) the remaining term of the Option Period, exercise the
Option to the extent such Option was exercisable on the date such
employment ceased or was terminated and, on such date, that portion of the
Option which was not exercisable shall automatically terminate without
further action by the parties hereto and, in all events, to the extent not
exercised, the Option shall terminate in its entirety at the end of
business on the last day of the applicable exercise period as set forth in
this Section 8; provided, however, the Committee, in its sole discretion,
may approve the full vesting to Optionee (or Optionee's estate or
representative, in the event of Optionee's death) in the Option and, in
such event, to the extent not previously exercised, the Option shall be
exercisable in whole or in part with respect to all remaining shares of
Stock covered the Option and may be exercised by Optionee (or Optionee's
estate or representative, in the event of Optionee's death) at any time
prior to the expiration of the original Option Period.
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9. LIMITATIONS ON EXERCISE OF INCENTIVE STOCK OPTION.
(a) Notwithstanding the foregoing, any Incentive Stock Option granted
pursuant to this Agreement will be exercisable only to the extent that
the aggregate fair market value of the Stock with respect to which the
option first becomes exercisable during any calendar year would not
exceed $100,000 (the "$100,000 Exercise Limitation"). In determining
whether the $100,000 Exercise Limitation would be exceeded, all
Incentive Stock Options granted to the Optionee that first become
exercisable in that year will be included in the calculation, whether
granted under the Plan or under any other option plan of the
Corporation. If the $100,000 Exercise Limitation would be exceeded
with respect to any Incentive Stock Option grant, the maximum whole
number of underlying shares with an aggregate fair market value not in
excess of $100,000 shall be treated as issued pursuant to an Incentive
Stock Option and the remaining shares shall be treated as issued
pursuant to a Non-qualified Stock Option. Finally, if the Option
ceases to qualify as an Incentive Stock Option, as a result of the
failure of the Optionee to exercise the Option within the three (3)
month period specified in Section 9(b) below, the $100,000 Exercise
Limitation shall not apply.
(b) In the case of an Incentive Stock Option, the Option must be exercised
in full within three (3) months after cessation of employment, or such
Option will no longer qualify as an Incentive Stock Option and shall
thereafter be, and receive the tax treatment applicable to, a
Non-qualified Stock Option.
10. RIGHT OF A STOCKHOLDER. Optionee shall not have any rights as a stockholder
with respect to any shares of Stock underlying a Stock Option, unless and
until all the conditions set forth in Section 5(a) (iii) have been
satisfied.
11. WITHHOLDING OF TAXES. Whenever the Corporation is required to issue shares
of Stock upon exercise hereunder, the Corporation shall have the right to
require the recipient to remit in cash to the Corporation an amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery of any certificate or certificates for
such shares of Stock.
12. ADJUSTMENTS. In the event of any change in the outstanding shares of Stock
of the Corporation by reason of a stock dividend or distribution,
recapitalization, spin-off, merger, consolidation, split-up, combination,
exchange of shares or the like, the Committee shall adjust the number of
shares of Stock which may be issued under the Plan and shall provide for an
equitable adjustment of the exercise price of and the number of shares of
Stock issuable pursuant to each outstanding Option under the Plan.
13. COMPLIANCE WITH CERTAIN LAWS AND REGULATIONS. If the Committee shall
determine, in its sole discretion, that the listing, registration or
qualification of the shares subject to the Option upon any securities
exchange or under any law or regulation, or that the consent or approval of
any governmental regulatory body is necessary or desirable in connection
with the granting of the Option or the acquisition of shares thereunder,
the Optionee shall supply the Committee or the Corporation, as the case may
be, with such certificates, representations and information as the
Committee or the Corporation, as the case may be, may request and shall
otherwise cooperate with the Corporation in obtaining any such listing,
registration, qualification, consent or approval.
14. TRANSFERABILITY OF OPTION. The Option is not transferable by the Optionee
otherwise than by will or by the laws of descent and distribution and is
exercisable, during the Optionee's lifetime, only by the Optionee, or in
the case of Optionee's legal incompetency, only by Optionee's guardian or
legal representative.
15. ADDITIONAL RESTRICTIONS ON TRANSFER. The certificates representing the
Stock purchased upon the exercise of the Option will bear the following
legend until such shares of Stock have been registered under an effective
registration statement under the 1933 Act:
The securities represented by this certificate were originally issued on
_____________________, _____, have not been registered under the Securities
Act of 1933, as amended, or under the securities
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laws of any state or other jurisdiction (together, the "Securities Laws")
and may not be offered for sale, sold or otherwise transferred or
encumbered in the absence of compliance with such Securities Laws and until
the issuer hereof shall have received from counsel acceptable to issuer a
written opinion reasonably satisfactory to issuer that the proposed
transaction will not violate any applicable Securities Laws.
16. NOTICES. Any notice or demand provided for in this Agreement must be in
writing and must be either personally delivered, delivered by overnight
courier, or mailed by first class mail, to the Optionee at Optionee's most
recent address on file in the records of the Corporation, and to the
Corporation at the address set forth or established pursuant to Section 3
or to such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party. Any notice or demand under this Agreement will be deemed to have
been given when received.
17. SEVERABILITY. This Agreement and each provision hereof shall be valid and
enforced to the fullest extent permitted by law. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision. Without limiting the
generality of the foregoing, if the scope of any provision contained in
this Agreement is too broad to permit enforcement to its fullest extent,
such provision shall be enforced to the maximum extent permitted by law,
and the parties hereby agree that such scope may be judicially modified
accordingly.
18. COMPLETE AGREEMENT. This Agreement and those documents expressly referred
to herein embody the complete agreement and understanding among the parties
and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
19. COUNTERPARTS. This Agreement may be executed in separate counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute one and the same agreement.
20. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Optionee, the Corporation and their
respective permitted successors and assigns (including personal
representatives, heirs and legatees), and is intended to bind all
successors and assigns of the respective parties, except that Optionee may
not assign any of Optionee's rights or obligations under this Agreement
except to the extent and in the manner expressly permitted hereby.
21. REMEDIES. Each of the parties to this Agreement will be entitled to enforce
its rights under this Agreement specifically, to recover damages by reason
of any breach of any provision of this Agreement and to exercise all other
rights existing in its favor. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may, in its sole
discretion, apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement, without the
necessity of posting bond or any other security.
22. WAIVER OR MODIFICATION. Any waiver or modification of any of the provisions
of this Agreement shall not be valid unless made in writing and signed by
the parties hereto. A waiver by either party of any breach of this
Agreement shall not operate as a waiver of any subsequent breach.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
____ day of ______________, _____.
OPTIONEE UNIVERSAL ELECTRONICS INC.
________________________________ By: _______________________________
Signature Chairman and Chief Executive
Officer
________________________________
Print Name
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Certificate Number: ____
UNIVERSAL ELECTRONICS INC.
2002 STOCK INCENTIVE PLAN
STOCK OPTION CERTIFICATE
THIS CERTIFIES THAT ____________has been awarded an OPTION to purchase
__________ (_____) shares of common stock, par value $0.01 per share (the
"Stock"), of UNIVERSAL ELECTRONICS INC. This Certificate is issued in accordance
with and is subject to the terms and conditions of the related Stock Option
Agreement of even date herewith (the "Agreement"). The number of shares of Stock
subject to an Incentive Stock Option, the number of shares of Stock subject to a
Non-qualified Stock Option, and the respective Option prices are as set forth
below:
(a) ____________________ (_____) shares of Stock shall be subject to an
Incentive Stock Option at an Option price of $_____ per share; and
(b) ____________________ (_____) shares of Stock shall be subject to a
Non-qualified Stock Option at an Option price of $_____ per share.
THIS OPTION is not transferable except in accordance with the terms and
conditions of the Agreement.
THIS OPTION shall expire ten (10) years from the date of this Certificate.
THIS OPTION shall be exercisable as to all or a portion of the number of shares
set forth above as follows:
Incentive Stock Option Non-qualified Stock Option
On and After the Following Maximum Percentage Taking Into Maximum Percentage Taking
Dates, But Prior to Expiration Account Prior Exercises Into Account Prior Exercises
------------------------------ ------------------------------ ----------------------------
25% 25%
50% 50%
75% 75%
100% 100%
IN WITNESS WHEREOF, UNIVERSAL ELECTRONICS INC. has caused this Stock Option
Certificate to be signed by its duly authorized officer the ____ day of ______,
____.
UNIVERSAL ELECTRONICS INC.
By: _____________________________________
Its: Chairman and Chief Executive Officer
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