EXHIBIT 10.6
 
 
RELM Wireless Corporation
 
2007 Incentive Compensation plan
STOCK OPTION AGREEMENT
 
All capitalized terms used in this Stock Option Agreement, but not otherwise
defined herein, shall have the meanings ascribed to them in the 2007 Incentive
Compensation Plan.
 
I. NOTICE OF STOCK OPTION GRANT
Optionholder Name:
 
Address:
 

The Optionholder (as designated above) has been granted an Option to purchase
Shares of the Company, subject to the terms and conditions of the Plan and this
Option Agreement, as follows:

 
Date of Grant:
 
Type of Grant:
 
Vesting Commencement Date:
 
 
 
Exercise Price per Share:
 
Total Number of Shares Granted:
 
Total Exercise Price:
 
Type of Option
 
Expiration Date:  ___________, subject to earlier expiration as provided in
Section 3 of the Stock Option Agreement.
Vesting Schedule:  This Option shall be vested according to the following
vesting schedule:
 
Termination Period:  The term of this Option shall end as provided in Section 3
of the Stock Option Agreement.

II. STOCK OPTION AGREEMENT
 
1. Grant of Option.  The Company hereby grants to the Optionholder named in the
Notice of Stock Option Grant (the “Optionholder”), an option (the “Option”) to
purchase the number of Shares set forth in the Notice of Stock Option Grant, at
the exercise price per Share set forth in the Notice of Stock Option Grant (the
“Exercise Price”), and subject to the terms and conditions of the Plan, which is
incorporated herein by reference.  Subject to Section 10(e) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and this Stock
Option Agreement (the “Option Agreement”), the terms and conditions of the Plan
shall prevail.
 
2. Exercise of Option.
 
(a) Right to Exercise.  This Option shall be exercisable during its term in
accordance with the applicable provisions of the Plan and this Option Agreement.
 
(b) Method of Exercise.  This Option shall be exercisable by delivery of an
exercise notice in the form attached as Exhibit A (the “Exercise Notice”) which
shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company.
 
The Option shall be deemed exercised when the Company receives (i) written or
electronic notice of exercise (in accordance with this Option Agreement) from
the Optionholder (or other person entitled to exercise the Option), (ii) full
payment for the Shares with respect to which the Option is exercised, (iii)
payment of any required tax withholding; and (iv) any other documents required
by this Option Agreement or the Exercise Notice.  Full payment may consist of
any consideration and method of payment permitted by this Option
Agreement.  Shares issued upon exercise of an Option shall be issued in the name
of the Optionholder or, if requested by the Optionholder and permitted under
applicable law, in the name of the Optionholder and his or her spouse.  Until
the Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option.  The Company
shall issue (or cause to be issued) such Shares promptly after the Option is
exercised.  No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 10(c) of the Plan.
 
Exercise of this Option in any manner shall result in a decrease in the number
of Shares thereafter available for sale under the Option, by the number of
Shares as to which the Option is exercised.
 
(c) Legal Compliance. No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and such exercise complies with applicable laws and
the requirements of any governmental or regulatory agency or stock
exchange.  Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionholder on the date on which the Option is
exercised with respect to such Shares.
 
 
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(d) Vesting Acceleration.  Upon termination of Optionholder’s Continuous Service
by reason of death or Disability, this Option as of the date of the termination
of Continuous Service shall vest to the extent not fully vested and immediately
become exercisable.
 
3. Term.  Optionholder may not exercise the Option before the commencement of
its term or after its term expires.  During the term of the Option, Optionholder
may only exercise the Option to the extent vested.  The term of the Option
commences on the Date of Grant and expires upon the earliest of the following:
 
(a) With respect to the unvested portion of the Option, upon termination of
Optionholder’s Continuous Service;
 
(b) With respect to the vested portion of the Option, three (3) months after the
termination of Optionholder’s Continuous Service for any reason other than
Optionholder’s (i) death, (ii) Disability or (iii) voluntary resignation in
connection with a Change in Control;
 
(c) With respect to the vested portion of the Option, twelve (12) months after
the termination of Optionholder’s Continuous Service by reason of Optionholder’s
(i) death, (ii) Disability or (iii) voluntary resignation in connection with a
Change in Control;
 
(d) Upon the occurrence of a “Change in Control”, subject to Sections 9(a)(i)
and 9(a)(iv) of the Plan; or
 
(e) The day before the fifth (5th) anniversary of the Date of Grant.
 
4. Method of Payment.  Payment of the aggregate Exercise Price shall be, to the
extent permitted by applicable law, any combination of:
 
(a) cash or check;
 
(b) subject to the Company’s approval at the time of exercise, consideration
received by the Company under a formal cashless exercise program adopted by the
Company in connection with the Plan; or
 
(c) surrender to the Company of other Shares which, (i) in the case of Shares
acquired from the Company, either directly or indirectly, have been owned by the
Optionholder for such period of time on the date of surrender such that will
avoid an expense for financial accounting purposes, and (ii) have a Fair Market
Value on the date of surrender equal to the aggregate Exercise Price of Shares
being acquired pursuant to exercise of  this Option.  Shares from the portion of
this Option to be exercised may be used to pay the exercise price to the extent
that such use will not increase the compensation expense related to this Option
for financial accounting purposes.
 
5. Non-Transferability of Option. This Option is transferable by will or by the
laws of descent and distribution.  This Option also may be transferable to
Optionholder’s “family member” upon written consent of the Company if the
transfer is not for value and at the time of transfer, a Form S-8 registration
statement under the Securities Act of 1933, as amended (the “Securities Act”) is
available for the exercise of the Option and the subsequent resale of the
underlying Shares after such transfer.  In addition, Optionholder may, by
delivering written notice to the Company, in a form provided by or otherwise
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the
Option.  For purposes hereof, the term “family member” shall have the meaning
assigned to it in the general instructions of a Form S-8 registration statement
(or any successor form adopted under the Securities Act).
 
6. Tax Obligations.
 
(a) Tax Consequences.  Optionholder has reviewed with Optionholder’s own tax
advisors the federal, state, local and foreign tax consequences of this
Option.  Optionholder is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents.  Optionholder
understands that Optionholder (and not the Company) shall be responsible for any
tax liability that may arise as a result of the transactions contemplated by
this Option Agreement and the Plan.
 
(b) Withholding Taxes.  Optionholder may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Shares under
this Option by any of the following means (in addition to the Company’s right to
withhold from any compensation paid to the Optionholder by the Company) or by a
combination of such means:  (i) tendering a cash payment; (ii) authorizing the
Company to withhold Shares from the Shares otherwise issuable to Optionholder as
a result of the exercise or acquisition of stock under this Option; provided,
however, that no Shares are withheld with a value exceeding the minimum amount
of tax required to be withheld by law; or (iii) delivering to the Company owned
and unencumbered Shares.  Optionholder agrees to make appropriate arrangements
with the Company for the satisfaction of all federal, state, local and foreign
income and employment tax withholding requirements applicable to the Option
exercise.  Optionholder acknowledges and agrees that the Company may refuse to
honor the exercise and refuse to deliver Shares if such withholding amounts are
not delivered at the time of exercise.   The preceding to the contrary
notwithstanding, the Company, in its sole discretion, and in compliance with any
applicable laws and/or the requirements or any governmental or regulatory agency
or stock exchange, may withhold from the Shares otherwise deliverable to
Optionholder upon the exercise of this Option a number of whole Shares having a
Fair Market Value, as determined by the Company as of the date the Optionholder
recognizes income with respect to those Shares, not in excess of the amount of
minimum tax required to be withheld by law (or such other amount as may be
necessary to avoid adverse financial accounting treatment).  Any adverse
consequences to Optionholder arising in connection with such Shares withholding
procedure shall be the Optionholder’s sole responsibility.
 
7. Entire Agreement; Governing Law.  The Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionholder with respect to the subject matter
hereof, and may not be modified adversely to the Optionholder’s interest except
by means of a writing signed by the Company and Optionholder.  This Option
Agreement shall be construed and enforced under the laws of the State of
Florida, without regard to choice of law provisions thereof.
 
8. No Guarantee of Continued Service.  Optionholder acknowledges and agrees that
nothing in this Option Agreement or the Plan confer upon Optionholder any right
to continue to serve the Company as a Non-Employee Director or to serve the
Company or any Related Entity in any other capacity.
 
[Signature Page Follows]

 
 
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Optionholder acknowledges receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof.  Optionholder
has reviewed the Plan and this Option in their entirety. Optionholder hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan or
this Option.  Optionholder further agrees to notify the Company upon any change
in the residence address indicated below.
 

Optionholder   RELM Wireless Corporation             Signature   By            
Print Name   Title                   Residence Address    

 
                                                                      

[Signature Page of Option Agreement]
 
 

 
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EXHIBIT A
 
RELM Wireless Corporation
2007 INCENTIVE COMPENSATION PLAN
 
EXERCISE NOTICE
 
RELM Wireless Corporation
7100 Technology Drive
West Melbourne, Florida 32904
 

Attention:  Chief Financial Officer

 
1. Exercise of Option.  Effective as of today, _____________, _____, the
undersigned (“Optionholder”) hereby elects to exercise Optionholder’s option to
purchase _________ shares of the Common Stock (the “Shares”) of RELM Wireless
Corporation (the “Company”) under and pursuant to the 2007 Incentive
Compensation Plan (the “Plan”) and the Stock Option Agreement dated
____________, ____ (the “Option Agreement”).
 
2. Delivery of Payment and Required Documents.  Optionholder herewith delivers
to the Company the full purchase price of the Shares, as set forth in the Notice
of Stock Option Grant in Part I of the Option Agreement, and any and all
withholding taxes due in connection with the exercise of the Option.  In
addition, Optionholder herewith delivers any other documents required by the
Company.
 
3. Representations of Optionholder.  Optionholder acknowledges that Optionholder
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
 
4. Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a stockholder shall exist with respect to the Shares, notwithstanding the
exercise of the Option.  The Shares shall be issued to the Optionholder as soon
as practicable after the Option is exercised in accordance with the Option
Agreement.  No adjustment shall be made for a dividend or other right for which
the record date is prior to the date of issuance except as provided in
Section 10(c) of the Plan.
 
5. Tax Consultation.  Optionholder understands that Optionholder may suffer
adverse tax consequences as a result of Optionholder’s purchase or disposition
of the Shares.  Optionholder represents that Optionholder has consulted with any
tax consultants Optionholder deems advisable in connection with the purchase or
disposition of the Shares and that Optionholder is not relying on the Company
for any tax advice.
 
6. Successors and Assigns.  The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this Exercise Notice shall
inure to the benefit of the successors and assigns of the Company.  Subject to
the restrictions on transfer set forth in the Option Agreement, this Exercise
Notice shall be binding upon Optionholder and his or her heirs, executors,
administrators, successors and assigns.
 
7. Interpretation.  Any dispute regarding the interpretation of this Exercise
Notice shall be submitted by Optionholder or by the Company forthwith to the
Committee which shall review such dispute at its next regular meeting.  The
resolution of such a dispute by the Committee shall be final and binding on all
parties.
 
8. Governing Law.  This Exercise Notice shall be construed and enforced under
the laws of the State of Florida, without regard to choice of law provisions
thereof.
 
9. Entire Agreement.  The Plan and Option Agreement are incorporated herein by
reference.  All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in the Option Agreement.  This Exercise
Notice, the Plan and the Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionholder
with respect to the subject matter hereof, and may not be modified adversely to
the Optionholder’s interest except by means of a writing signed by the Company
and Optionholder.
 

Optionholder   RELM Wireless Corporation             Signature   By            
Print Name   Title                   Residence Address    

 
 
 
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