Exhibit 10.35
EAGLE TEST SYSTEMS,
INC.
2003 STOCK OPTION AND GRANT
PLAN
SECTION 1. GENERAL PURPOSE OF
THE PLAN; DEFINITIONS
The name of the plan is the Eagle
Test Systems, Inc. 2003 Stock Option and Grant Plan (the
“Plan”). The purpose of the Plan is to encourage and
enable the officers, employees, directors, consultants and other
key persons of Eagle Test Systems, Inc., an Illinois corporation
(the “Company”) and its Subsidiaries, upon whose
judgment, initiative and efforts the Company largely depends for
the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company’s welfare will
assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company’s
behalf and strengthening their desire to remain with the
Company.
The following terms shall be defined
as set forth below:
“Act”
means the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
“Award” or
“Awards,” except where referring to a particular category
of grant under the Plan, shall include Incentive Stock Options,
Non-Qualified Stock Options, Restricted Stock Awards, Unrestricted
Stock Awards, or any combination of the foregoing.
“Board”
means the Board of Directors of the
Company or its successor entity.
“Cause”
means a vote of the Board resolving
that the grantee should be dismissed as a result of (i) the
commission of any act by a grantee constituting financial
dishonesty against the Company (which act would be chargeable as a
crime under applicable law); (ii) a grantee’s engaging
in any other act of dishonesty, fraud, intentional
misrepresentation, moral turpitude, illegality or harassment which,
as determined in good faith by the Board, would:
(A) materially adversely affect the business or the reputation
of the Company with its current or prospective customers,
suppliers, lenders and/or other third parties with whom it does or
might do business; or (B) expose the Company to a risk of
civil or criminal legal damages, liabilities or penalties;
(iii) the repeated failure by a grantee to follow the
directives of the Company’s chief executive officer or Board
or (iv) any material misconduct, violation of the
Company’s policies, or willful and deliberate non-performance
of duty by the grantee in connection with the business affairs of
the Company.
“Code”
means the Internal Revenue Code of
1986, as amended, and any successor Code, and related rules,
regulations and interpretations.
“Committee” has the meaning specified in
Section 2.
“Effective
Date” means the
date on which the Plan is approved by shareholders as set forth at
the end of this Plan.
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
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“Fair Market
Value” of the Stock
on any given date means the fair market value of the Stock
determined in good faith by the Committee; provided, however, that
(i) if the Stock trades on a national securities exchange, the
Fair Market Value on any given date is the closing sale price on
such date; (ii) if the Stock does not trade on any national
securities exchange but is admitted to trading on the National
Association of Securities Dealers, Inc. Automated Quotation System
(“NASDAQ”), the Fair Market Value on any given date is
the closing sale price as reported by NASDAQ on such date; or if no
such closing sale price information is available, the average of
the highest bid and lowest asked prices for the Stock reported on
such date. For any date that is not a trading day, the Fair Market
Value of the Stock for such date will be determined by using the
closing sale price or the average of the highest bid and lowest
asked prices, as appropriate, for the immediately preceding trading
day. The Committee can substitute a particular time of day or other
measure of closing sale price if appropriate because of changes in
exchange or market procedures. Notwithstanding the foregoing, if
the date for which Fair Market Value is determined is the first day
when trading prices for the Stock are reported on NASDAQ or trading
on a national securities exchange, the Fair Market Value shall be
the “Price to the Public” (or equivalent) set forth on
the cover page for the final prospectus relating to the
Company’s Initial Public Offering.
“Good
Reason” means the
occurrence of any of the following events: (i) a substantial
adverse change in the nature or scope of the grantee’s
responsibilities, authorities, powers, functions or duties;
(ii) a reduction in the grantee’s annual base salary
except for across-the-board salary reductions similarly affecting
all or substantially all management employees; or (iii) the
relocation of the offices at which the grantee is principally
employed to a location more than 50 miles from such
offices.
“Incentive Stock
Option” means any
Stock Option designated and qualified as an “incentive stock
option” as defined in Section 422 of the
Code.
“Initial Public
Offering” means the
consummation of the first fully underwritten, firm commitment
public offering pursuant to an effective registration statement
under the Act covering the offer and sale by the Company of its
equity securities, as a result of or following which the shares of
Stock shall be publicly held.
“Non-Qualified Stock
Option” means any
Stock Option that is not an Incentive Stock Option.
“Option” or
“Stock Option” means any option to purchase shares of Stock
granted pursuant to Section 5.
“Restricted Stock
Award” means Awards
granted pursuant to Section 6.
“Stock”
means the Common Stock, no par
value, of the Company, subject to adjustments pursuant to
Section 3.
“Subsidiary” means any corporation or other entity (other
than the Company) in any unbroken chain of corporations or other
entities beginning with the Company if each of the corporations or
entities (other than the last corporation or entity in the unbroken
chain) owns stock or other interests possessing 50 percent or more
of the economic interest or 50 percent or more of the total
combined voting power of all classes of stock or other interests in
one of the other corporations or entities in the chain.
“Unrestricted Stock
Award” means any
Award granted pursuant to Section 7.
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SECTION 2. ADMINISTRATION OF PLAN;
COMMITTEE AUTHORITY TO SELECT GRANTEES AND DETERMINE
AWARDS
(a) Administration of Plan.
The Plan shall be administered by the Board, or at the discretion
of the Board, by a committee of the Board, comprised, except as
contemplated by Section 2(c), of not less than two Directors.
All references herein to the Committee shall be deemed to refer to
the group then responsible for administration of the Plan at the
relevant time (i.e., either the Board of Directors or a committee
or committees of the Board, as applicable).
(b) Powers of Committee. The
Committee shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and
authority:
(i) to select the individuals to
whom Awards may from time to time be granted;
(ii) to determine the time or times
of grant, and the extent, if any, of Incentive Stock Options,
Non-Qualified Stock Options, Restricted Stock Awards, Unrestricted
Stock Awards, or any combination of the foregoing, granted to any
one or more grantees;
(iii) to determine the number of
shares of Stock to be covered by any Award;
(iv) to determine and modify from
time to time the terms and conditions, including restrictions, not
inconsistent with the terms of the Plan, of any Award, which terms
and conditions may differ among individual Awards and grantees, and
to approve the form of written instruments evidencing the
Awards;
(v) to accelerate at any time the
exercisability or vesting of all or any portion of any
Award;
(vi) to impose any limitations on
Awards granted under the Plan, including limitations on transfers,
repurchase provisions and the like and to exercise repurchase
rights or obligations;
(vii) subject to the provisions of
Section 5(a)(ii), to extend at any time the period in which
Stock Options may be exercised;
(viii) to determine at any time
whether, to what extent, and under what circumstances distribution
or the receipt of Stock and other amounts payable with respect to
an Award shall be deferred either automatically or at the election
of the grantee and whether and to what extent the Company shall pay
or credit amounts constituting interest (at rates determined by the
Committee) or dividends or deemed dividends on such deferrals;
and
(ix) at any time to adopt, alter and
repeal such rules, guidelines and practices for administration of
the Plan and for its own acts and proceedings as it shall deem
advisable; to interpret the terms and provisions of the Plan and
any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the
Plan; to decide all disputes arising in connection with the Plan;
and to otherwise supervise the administration of the
Plan.
All decisions and interpretations of
the Committee shall be binding on all persons, including the
Company and Plan grantees.
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(c) Delegation of Authority to
Grant Awards. The Committee, in its discretion, may delegate to
the Chief Executive Officer of the Company all or part of the
Committee’s authority and duties with respect to the granting
of Awards at Fair Market Value, and in the event of such
delegation, such Chief Executive Officer shall be deemed a
one-person Committee of the Board. Any such delegation by the
Committee shall include a limitation as to the amount of Awards
that may be granted during the period of the delegation and shall
contain guidelines as to the determination of the exercise price of
any Option, the conversion ratio or price of other Awards and the
vesting criteria. The Committee may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any
prior actions of the Committee’s delegate or delegates that
were consistent with the terms of the Plan.
(d) Indemnification. Neither
the Board nor the Committee, nor any member of either or any
delegatee thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in
connection with the Plan, and the members of the Board and the
Committee (and any delegate thereof) shall be entitled in all cases
to indemnification and reimbursement by the Company in respect of
any claim, loss, damage or expense (including, without limitation,
reasonable attorneys’ fees) arising or resulting therefrom to
the fullest extent permitted by law and/or under any
directors’ and officers’ liability insurance coverage
which may be in effect from time to time.
SECTION 3. STOCK ISSUABLE
UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable. The
maximum number of shares of Stock reserved and available for
issuance under the Plan shall be 273,516 shares of Common Stock,
subject to adjustment as provided in Section 3(b). For
purposes of this limitation, the shares of Stock underlying any
Awards that are forfeited, canceled, reacquired by the Company,
satisfied without the issuance of Stock or otherwise terminated
(other than by exercise) shall be added back to the shares of Stock
available for issuance under the Plan. Subject to such overall
limitation, shares of Stock may be issued up to such maximum number
pursuant to any type or types of Award; provided, however, that
from and after the date the Company becomes subject to the
deduction limit imposed by Section 162(m) of the Code, Stock
Options with respect to no more than the number of shares of Stock
allowed thereunder may be granted to any one individual grantee
during any one calendar year period. The shares available for
issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company and held in its
treasury.
(b) Changes in Stock .
Subject to Section 3(c) hereof, if, as a result of any
reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split or other similar change in the
Company’s capital stock, the outstanding shares of Stock are
increased or decreased or are exchanged for a different number or
kind of shares or other securities of the Company, or additional
shares or new or different shares or other securities of the
Company or other non-cash assets are distributed with respect to
such shares of Stock or other securities, or, if, as a result of
any merger, consolidation or sale of all or substantially all of
the assets of the Company, the outstanding shares of Stock are
converted into or exchanged for a different number or kind of
securities of the Company or any successor entity (or a parent or
subsidiary thereof), the Committee shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares
reserved for issuance under the Plan, (ii) the number of Stock
Options that can be granted to any one individual grantee,
(iii) the number and kind of shares or other securities
subject to any then outstanding Awards under the Plan,
(iv) the repurchase price per share subject to each
outstanding Restricted Stock Award, and (v) the exercise price
and/or exchange price for each share subject to any then
outstanding Stock Options under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by
the number of Stock Options) as to
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which such Stock Options remain exercisable. The
adjustment by the Committee shall be final, binding and conclusive.
No fractional shares of Stock shall be issued under the Plan
resulting from any such adjustment, but the Committee in its
discretion may make a cash payment in lieu of fractional
shares.
The Committee may also adjust the
number of shares subject to outstanding Awards and the exercise
price and the terms of outstanding Awards to take into
consideration material changes in accounting practices or
principles, extraordinary dividends, acquisitions or dispositions
of stock or property or any other event if it is determined by the
Committee that such adjustment is appropriate to avoid distortion
in the operation of the Plan, provided that no such adjustment
shall be made in the case of an Incentive Stock Option, without the
consent of the grantee, if it would constitute a modification,
extension or renewal of the Option within the meaning of
Section 424(h) of the Code.
(c) Mergers and Other Sale
Events. In the case of and subject to the consummation of
(i) the dissolution or liquidation of the Company,
(ii) the sale of all or substantially all of the assets of the
Company on a consolidated basis to an unrelated person or entity,
(iii) a merger, reorganization or consolidation in which the
outstanding shares of Stock are converted into or exchanged for
securities of the successor entity and the holders of the
Company’s outstanding voting power immediately prior to such
transaction do not own a majority of the outstanding voting power
of the successor entity immediately upon completion of such
transaction, (iv) the sale o
