EXHIBIT 99.5
SEMIFAB, INC.
INCENTIVE STOCK OPTION AGREEMENT
This Agreement is made as of _________ (the "Grant Date"), between
SEMIFAB, INC. (the "Company") and _____________________
____________________________ ("Optionee").
WITNESSETH:
WHEREAS, the Company has adopted the SemiFab, Inc. 1993 Flexible Stock
Incentive Plan (the "Plan"), which Plan is incorporated in this Agreement by
reference and made a part of it; and
WHEREAS, the Company regards Optionee as a valuable employee of the
Company, and has determined that it would be to the advantage and in the
interests of the Company and its shareholders to grant the options provided for
in this Agreement to Optionee as an inducement to remain in the service of the
Company (as defined in the Plan) and as an incentive for increased efforts
during such service;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties to this Agreement hereby agree as follows:
1. Option Grant. The Company hereby grants to Optionee the right and
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option to purchase from the Company on the terms and conditions hereinafter set
forth, all or any part of an aggregate of _____________ shares of the Common
Stock of the Company (the "Stock"). This option is intended to satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") and qualify as an incentive stock option.
2. Option Price. The purchase price of the Stock subject to this
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option shall be $_________ per share, which price is not less than the per share
fair market value of such Stock as of the Grant Date as determined by the Board
of Directors of the Company or a Committee designated by it (the "Committee"),
or, if Optionee possesses more than ten percent of the combined voting power of
the Company or any of its Affiliates, not less than 110 percent of the per share
fair market value of the Stock as of the Grant Date as determined by the
Committee. The term "Option Price" as used in this agreement refers to the
purchase price of the Stock subject to this option.
3. Option Period. This option shall be exercisable only during the
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Option Period, and during such Option Period, the exercisability of
1.
the option shall be subject to the limitations of paragraph 4 and the vesting
provisions of paragraph 5. The Option Period shall commence on the Grant Date
and except as provided in paragraph 4, shall terminate (the "Termination Date")
ten years from the Grant Date; provided, however, that the Option Period for a
person possessing more than ten percent of the combined voting power of the
Company or an Affiliate shall terminate five years from the Grant Date.
4. Limits on Option Period. The Option Period may end before the
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Termination Date, as follows:
(a) If Optionee ceases to be a bona fide employee of the Company or
an Affiliate for any reason other than disability (within the meaning of
subparagraph (c)) or death during the Option Period, the Option Period shall
terminate three months after the date of such cessation of employment or on the
Termination Date, whichever shall first occur, and the option shall be
exercisable only to the extent exercisable under paragraph 5 on the date of
Optionee's cessation of employment.
(b) If Optionee dies while in the employ of the Company or any of
its Affiliates, the Option Period shall end one year after the date of death or
on the Termination Date, whichever shall first occur, and Optionee's executor or
administrator or the person or persons to whom Optionee's rights under this
option shall pass by will or by the applicable laws of descent and distribution
may exercise this option only to the extent exercisable under paragraph 5 on the
date of Optionee's death.
(c) If Optionee's employment is terminated by reason of disability
(within the meaning of Section 22(e)(3) of the Code), the Option Period shall
end one year after the date of Optionee's cessation of employment or on the
Termination Date, whichever shall first occur, and the option shall be
exercisable only to the extent exercisable under paragraph 5 on the date of
Optionee's cessation of employment.
(d) If Optionee is on a leave of absence from the Company or an
Affiliate because of his disability, or for the purpose of serving the
government of the country in which the principal place of employment of Optionee
is located, either in a military or civilian capacity, or for such other purpose
or reason as the Committee may approve, Optionee shall not be deemed during the
period of such absence, by virtue of such absence alone, to have terminated
employment with the Company or an Affiliate except as the Committee may
otherwise expressly provide.
2.
5. Vesting of Right to Exercise Options. Subject to other limitations
contained in this Agreement, the Optionee shall have the right to exercise the
option in accordance with the following schedule:
(a) As to 25% of the number of shares covered by the option, at
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any time after one year from the Grant Date;
(b) As to an additional 25% of the remaining number of shares
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covered by the option, at any time after the end of each year thereafter until
the option shall be fully exercisable.
(c) Any portion of the option that is not exercised shall
accumulate and may be exercised at any time during the Option Period prior to
the Termination Date. No partial exercise of this option may be for less than 5
percent of the total number of shares then available under this option. In no
event shall the Company be required to issue fractional shares.
(d) Notwithstanding the foregoing, the aggregate fair market value
(determined as of the time such option is granted) of the Stock with respect to
which incentive stock options are exercisable for the first time in any calendar
year (under the Plan and any other incentive stock option plans of the Company
or its Affiliates) shall not exceed $100,000.
6. Method of Exercise. Optionee may exercise the option with respect
to all or any part of the shares of Stock then subject to such exercise as
follows:
(a) By giving the Company written notice of such exercise,
specifying the number of such shares as to which this option is exercised. Such
notice shall be accompanied by an amount equal to the Option Price of such
shares, in the form of any one or combination of the following:
(i) cash; a certified check, bank draft, postal or express money order payable
to the order of the Company in lawful money of the United States; (ii) shares of
Stock valued at fair market value; (iii) notes, or (iv) in any combination of
the foregoing. The shares of Stock shall be valued in accordance with
procedures established by the Committee. Any note used to exercise this option
shall be a full recourse, interest-bearing obligation containing such terms as
the Committee shall determine. If a note is used, the Optionee agrees to
execute such further documents as the Committee may deem necessary or
appropriate in connection with issuing the note, perfecting a security interest
in the Stock purchased with the note, and any related terms or conditions that
the Committee may propose. Such further documents may include, not by way of
limitation, a
3.
security agreement, an escrow agreement, a voting trust agreement and an
assignment separate from certificate.
(b) Optionee (and Optionee's spouse, if any) shall be required, as
a condition precedent to acquiring Stock through exercise of the option, to
execute one or more agreements relating to obligations in connection with
ownership of the Stock or restrictions on transfer of the Stock no less
restrictive than the obligations and restrictions to which the other
shareholders of the Company are subject at the time of such exercise.
(c) If required by the Committee, Optionee shall give the Company
satisfactory assurance in writing, signed by Optionee or his legal
representative, as the case may be, that such shares are being purchased for
investment and not with a view to the distribution thereof, provided that such
assurance shall be deemed inapplicable to (1) any sale of such shares by such
Optionee made in accordance with the terms of a registration statement covering
such sale, which may hereafter be filed and become effective under the
Securities Act of 1933, as amended, and with respect to which no stop order
suspending the effectiveness thereof has been issued, and (2) any other sale of
such shares with respect to which in the opinion of counsel for the Company,
such assurance is not required to be given in order to comply with the
provisions of the Securities Act of 1933, as amended.
As soon as practicable after receipt of the notice required in
paragraph 6(a) and satisfaction of the conditions set forth in paragraphs 6(b)
and 6(c), the Company shall, without transfer or issue tax and without other
incidental expense to Optionee, deliver to Optionee at the office of the
Company, at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of the
Secretary, or such other place as may be mutually acceptable to the Company and
Optionee, a certificate or certificates of such shares of Stock; provided,
however, that the time of such delivery may be postponed by the Company for such
period as may be required for it with reasonable diligence to comply with
applicable registration requirements under the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, any applicable listing
requirements of any national securities exchange, and requirements under any
other law or regulation applicable to the issuance or transfer of such shares.
7. Corporate Transactions.
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(a) If there should be any change in a class of Stock subject to
this option, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock split, stock dividend (in excess of 2
4.
percent) or other change in the corporate structure of the Company, the company
may make appropriate adjustments in order to preserve, but not to increase, the
benefits to Optionee, including adjustments in the number of shares of such
Stock subject to this option and in the price per share. Any adjustment made
pursuant to this paragraph 7 as a consequence of a change in the corporate
structure of the Company shall not entitle Optionee to acquire a number of
shares of such Stock of the Company or shares of stock of any successor company
greater than the number of shares Optionee would receive if, prior to such
change, Optionee had actually held a number of shares of such Stock equal to the
number of shares subject to this option.
(b) For purposes of this paragraph 7, a "Corporate Transaction"
shall include any of the following stockholder-approved transactions to which
the Company is a party:
(i) a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal purpose of which is
to change the state of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company in liquidation or dissolution of
the Company; or
(iii) any reverse merger in which the Company is the
surviving entity but in which securities assessing more than fifty percent (50%)
of the total combined voting power of the Company's outstanding securities are
transferred to holder different from those who held such securities immediately
prior to such merger.
(c) In the event of any Corporate Transaction, this option-shall
terminate immediately prior to the specified effective date of the Corporate
Transaction unless assumed by the -successor corporation or its parent company,
pursuant to options providing substantially equal value and having substantially
equivalent provisions as the options granted pursuant to this Agreement.
8. Limitations on Transfer. This option shall, during Optionee's
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lifetime, be exercisable only by Optionee, and neither this option nor any right
hereunder shall be transferable by Optionee by operation of law or otherwise
other than by will or the laws of descent and distribution. In the event of any
attempt by Optionee to alienate, assign, pledge, hypothecate, or otherwise
dispose of this option or of any right hereunder, except as provided for in this
Agreement, or in the event of the levy of any attachment, execution,
5.
or similar process upon the rights or interest hereby conferred, the Company at
its election may terminate this option by notice to Optionee and this option
shall thereupon become null and void.
9. No Shareholder Rights. Neither Optionee nor any person entitled to
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exercise Optionee's rights in the event of his death shall have any of the
rights of a shareholder with respect to the shares of Stock subject to this
option except to the extent the certificates for such shares shall have been
issued upon the exercise of this option.
10. NO EFFECT ON TERMS OF EMPLOYMENT. SUBJECT TO THE TERMS OF ANY
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WRITTEN EMPLOYMENT CONTRACT TO THE CONTRARY, THE COMPANY (OR ITS AFFILIATE WHICH
EMPLOYS OPTIONEE) SHALL HAVE THE RIGHT TO TERMINATE OR CHANGE THE TERMS OF
EMPLOYMENT OF OPTIONEE AT ANY TIME AND FOR ANY REASON WHATSOEVER, WITH OR
WITHOUT CAUSE.
11. Notice. Any notice required to be given under the terms of this
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Agreement shall be addressed to the Company in care of its Secretary at the
Office of the Company at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and any
notice to be given to Optionee shall be addressed to him at the address given by
him beneath his signature to this Agreement, or such other address as either
party to this Agreement may hereafter designate in writing to the other. Any
such notice shall be deemed to have been duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, registered or certified and
deposited (postage or registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United States.
12. Committee Decisions Conclusive. All decisions of the Committee upon
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any question arising under the Plan or under this Agreement shall be conclusive.
13. Successors. This Agreement shall be binding upon and inure to the
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benefit of any successor or successors of the Company. Where the context
permits, "Optionee" as used in this Agreement shall include Optionee's executor,
administrator or other legal representative, or the person or persons to whom
Optionee's rights pass by will or the applicable laws of descent and
distribution.
14. Early Dispositions. Optionee agrees, as partial consideration for
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the designation of this option as an incentive stock option under Section 422 of
the Code, to notify the Company in writing within thirty
6.
(30) days of any disposition of any shares acquired by exercise of this option
if such disposition occurs within two (2) years from the Grant Date or within
one (1) year from the date Optionee purchased such shares by exercise of this
option. If the Company is required to withhold an amount for the purpose of
income and employment taxes as a result of an early disposition, Optionee
acknowledges that it will be required to satisfy the amount of such withholding
in a manner that the company prescribes.
15. California Law. The interpretation, performance and enforcement of
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this Agreement shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, the Company and Optionee have executed this
agreement as of the day and year first above written.
SEMIFAB, INC.
By ____________________________
Its____________________________
_______________________________
Optionee
By ____________________________
Its ____________________________
Address:________________________
________________________________
________________________________
7.
ATTACHMENT A
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CONSENT OF SPOUSE
I, __________________, spouse of ________________ have read and
approved the foregoing Agreement. In consideration of granting of the right of
my spouse to purchase shares of SemiFab, Inc. as set forth in the Agreement, I
hereby appoint my spouse as my attorney-in-fact with respect to the exercise of
any rights of the Agreement insofar as I may have any rights under such
community property laws of the State of California or similar laws relating to
marital property in effect in the state of our residence as of the date of the
signing of the foregoing Agreement.
Dated:____________________________ By:____________________________
8.
