EXHIBIT 10.8

 

DUCOMMUN INCORPORATED

 

STOCK OPTION AGREEMENT

 

This stock option agreement (“Option”) is made as of [Date] (the “Effective
Date”), between DUCOMMUN INCORPORATED, a Delaware corporation (the
“Corporation”), and [Name] (“Option Holder”).

 

R E C I T A L S

 

This Option is being granted pursuant to the 1994 Stock Incentive Plan (the
“Plan”). This Option is intended to qualify as an incentive stock option
(“Incentive Stock Option”) as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”). This Option expires on [Date2] (the
“Expiration Date”).

 

A G R E E M E N T S

 

1. Grant. The Corporation hereby grants to the Option Holder the right and
option to purchase, on the terms and conditions hereinafter set forth, all or
any part of an aggregate of [            ] shares of the Common Stock at the
purchase price of $[            ] per share, being 100% of the fair market value
of the Common Stock on the date the option is granted, exercisable from time to
time in accordance with the provisions of this Agreement until the close of
business on the Expiration Date.

 

2. Definitions. Unless the context clearly indicates otherwise, and subject to
the terms and conditions of the Plan as the same may be amended from time to
time, the following terms, when used in this stock option agreement, shall have
the meanings set forth in this Section 2.

 

“Common Stock” shall mean the Common Stock, $.01 par value, of the Corporation
or such other class of shares or other securities as may be applicable pursuant
to the provisions of Section 7 of this stock option agreement.

 

“Subsidiary” shall have the meaning ascribed to that term under Section 424(f)
of the Code, and which is designated by the Committee for participation in the
Plan by the key employees thereof.

 

“Committee” shall mean the Compensation Committee of the Board of Directors of
the Corporation, or if there is no such committee acting, the Board of Directors
of the Corporation.

 

3. Conditions to Exercise. The Option Holder may not purchase any shares by

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exercise of this option unless the Option Holder shall have remained in the
employ of the Corporation and/or a Subsidiary until at least             . On
and after             , the Option Holder may purchase, by exercise of this
option, an aggregate of not more than one-fourth of the total number of shares
subject to this option. On and after             , the Option Holder may
purchase, by exercise of this option, an additional one-fourth of such total
number of shares. On and after             , the Option Holder may purchase, by
exercise of this option, an additional one-fourth of such total number of
shares. On and after             , until this option expires, the Option Holder
may purchase, by exercise of this option, all or any part of the shares subject
to this option. Provided, however, that until this option expires, the Option
Holder may purchase, by exercise of this option, all or any part of the shares
subject to this option at any time after a “Change in Control” of the
Corporation has occurred. For purposes of this stock option agreement, a “Change
in Control” of the Corporation shall mean a change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”); provided that, without limitation, such a change in
control shall be deemed conclusively to have occurred if (i) a tender offer
shall be made and consummated for the ownership of 25% or more of the
outstanding voting securities of the Corporation, (ii) the shareholders of the
Corporation approve that the Corporation be merged or consolidated with another
corporation and as a result of such merger or consolidation less than 75% of the
outstanding voting securities of the surviving or resulting corporation shall be
owned in the aggregate by the former shareholders of the Corporation, other than
affiliates (within the meaning of the Exchange Act) of any party to such merger
or consolidation, as the same shall have existed immediately prior to such
merger or consolidation, (iii) the shareholders of the Corporation approve that
the Corporation sell, lease, exchange or transfer substantially all of its
assets to another corporation, entity or person which is not a wholly-owned
subsidiary, (iv) a person, as defined in Sections 13(d) and 14(d) (as in effect
on the date hereof) of the Exchange Act, shall acquire 25% (or in the case of
The Clark Estates, Inc., 30%) or more of the outstanding voting securities of
the Corporation (whether directly, indirectly, beneficially or of record), (v)
the shareholders of the Corporation approve a plan or proposal for the
liquidation or dissolution of the Corporation, or (vi) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by the Corporation’s
shareholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period. For purposes hereof, ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions of
Rule 13d-3 (as in effect on the date hereof) under the Exchange Act. A sale or
other change in control of any Subsidiary of the Corporation by which the Option
Holder is employed shall not be deemed a Change in Control of the Corporation
for purposes of this Agreement.

 

4. Exercise by the Option Holder. This Option may be exercised solely by the
Option Holder, except as provided in Section 5 below in the event of the Option
Holder’s death.

 

5. Termination. This Option shall terminate if and when the Option Holder shall
cease to be an employee of the Corporation or a Subsidiary, except as follows:

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(a) Death or Permanent Disability. If the Option Holder dies or becomes
permanently disabled (within the meaning of Section 22(e)(3) of the Code) while
employed by the Corporation or a Subsidiary, or while this Option was
exercisable by him in accordance with paragraph (b) below after his retirement
or the termination of his employment other than for cause, this Option may be
exercised (for not more than the number of shares as to which the Option Holder
might have exercised this Option at the time of such death or permanent
disability) at any time (i) prior to the Expiration Date, in the event the
Expiration Date is not more than one year from the date of death, or (ii) within
such one year, in the event that the Expiration Date is more than one year from
such date of death;

 

(b) Retirement or Other Termination. If the Option Holder retires or if his
employment with the Corporation or a Subsidiary is terminated for any reason
other than by death or permanent disability, this Option may be exercised (for
not more than the number of shares as to which the Option Holder might have
exercised this Option on the date of his retirement or the date on which his
employment was terminated) at any time (i) prior to the Expiration Date in the
event the Expiration Date is not more than three months from the date of such
retirement or termination, or (ii) within such three-month period, in the event
that the Expiration Date is more than three months from the date of such
retirement or termination of employment; provided, however, that if the Option
Holder is dismissed for cause, of which the Committee shall be the sole judge,
this Option shall terminate forthwith.

 

The Committee may determine that, for the purpose of the Plan, the Option Holder
while on a leave of absence will be considered as still in the employ of the
Corporation or a Subsidiary, provided that if any such leave of absence exceeds
90 days and the Option Holder’s right to reemployment is not guaranteed either
by statute or express written contract, such Option Holder shall cease to be an
employee of the Corporation or a Subsidiary on the 91st day of such leave, and
provided that this Option shall be exercisable during a leave of absence only as
to the number of shares as to which it was exercisable at the commencement of
such leave of absence.

 

6. Method of Exercise. A person electing to exercise this Option shall deliver
to the Secretary of the Corporation prior to the Expiration Date a written
notice of such election and of the number of shares such person has elected to
purchase and shall at the time of exercise tender the full purchase price of the
shares such person has elected to purchase. The purchase price for the shares
may, at the election of the Option Holder, be paid with previously issued shares
of Common Stock of the Company, provided that if such Common Stock was acquired
by the Option Holder by exercise of a stock option, then such Common Stock must
have been owned by the Option Holder for at least six months.

 

7. Adjustments

 

(a) If the outstanding shares of Common Stock of the Corporation are increased,
decreased, or converted into or exchanged for a different number or kind of
shares or securities of the Corporation through recapitalization (other than the
conversion of convertible securities according to their terms),
reclassification, stock dividend, stock split or reverse stock split, an

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appropriate and proportionate adjustment shall be made, or if the Corporation
shall spin-off or otherwise distribute assets with respect to the out-standing
shares of Common Stock of the Corporation, an appropriate and proportionate
adjustment may be made in the discretion of the Committee, in (i) the number and
kind of shares subject to this Option, and (ii) the exercise price for each
share under this Option, without any change in the aggregate purchase price or
value applicable to the unexercised portion hereof.

 

(b) In the event of the dissolution or liquidation of the Corporation, or upon
any merger, consolidation or reorganization of the Corporation with any other
corporations or entities as a result of which the Corporation is not the
surviving corporation, or upon the sale of all or substantially all of the
assets of the Corporation or the acquisition of more than 80% of the stock of
the Corporation by another corporation or entity, there shall be substituted for
each of the shares of Common Stock then subject to the Plan the number and kind
of shares of stock, securities or other assets which would have been issuable or
payable in respect of or in exchange for such Common Stock then subject to the
Plan, as if the Option Holder had been the owner of such shares as of the
transaction date. Any securities so substituted shall be subject to similar
successive adjustments.

 

(c) Notwithstanding anything to the contrary herein, no adjustment shall be made
under subsections (a) or (b) of this Section 7 without the prior written consent
of the Option Holder to the extent such adjustment would result in this Option
being treated as other than an Incentive Stock Option.

 

8. No Right to Continued Employment. Nothing in the Plan, in this Option or in
any other instrument executed pursuant thereto shall confer upon the Option
Holder any right to continue in the employ of the Corporation or any Subsidiary
of the Corporation or shall interfere in any way with the right of the
Corporation or any such Subsidiary to at any time terminate the employment of
the Option Holder with or without cause.

 

9. Legal Requirements. No shares issuable upon the exercise of this Option shall
be issued or delivered unless and until, in the opinion of counsel for the
Corporation, all applicable requirements of federal and state law and of the
Securities and Exchange Commission pertaining to the issuance and sale of such
shares and any applicable listing requirements of any national securities
exchange on which shares of the same class are then listed, shall have been
fully complied with. In connection with any such issuance or transfer, the
person acquiring the shares shall, if requested by the Corporation, give
assurances satisfactory to counsel to the Corporation in respect of such matters
as the Corporation or any Subsidiary of the Corporation may deem desirable to
assure compliance with all applicable legal requirements.

 

10. No Rights as a Shareholder. Neither the Option Holder nor any beneficiary or
other person claiming under or through the Option Holder shall have any right,
title or interest in or to any shares of Common Stock allocated or reserved for
the purpose of the Plan or subject to this Agreement except as to such shares of
Common Stock, if any, as shall have been issued or transferred to such person.

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11. Withholding. The Corporation or any Subsidiary of the Corporation may make
such provisions as it may deem appropriate for the withholding of any taxes
which the Corporation or such Subsidiary determines it is required to withhold
in connection with this Option and the transactions contemplated hereby, and the
Corporation or any such Subsidiary may require the Option Holder or other person
exercising this Option to pay to the Corporation or such Subsidiary in cash any
amount or amounts which may be required to be paid as withheld taxes in
connection with any exercise of this Option or any other transaction
contemplated hereby as a condition to the exercise of this Option and issuance
of shares of the Common Stock, provided, however, that any amount withheld for
taxes in connection with any exercise of this Option may, at the election of the
Option Holder, be paid with previously issued shares of Common Stock or the
deduction of shares of Common Stock to be issued in connection with the exercise
of this Option.

 

12. No Assignments. Neither this Option nor any other rights and privileges
granted hereby shall be transferred, assigned, pledged or hypothecated in any
way, other than by will or by operation of laws of descent and distribution.
Upon any attempt to so transfer, assign, pledge, hypothecate or otherwise
dispose of this Option or any other right or privilege granted hereby contrary
to the provisions hereof, this Option and all of such rights and privileges
shall immediately become null and void.

 

13. Other Programs. Nothing contained in this Option shall affect the right of
the Option Holder to participate in and receive benefits under and in accordance
with the then current provisions of any pension, insurance, profit-sharing or
other employee benefit plan or program of the Corporation or of any Subsidiary
of the Corporation.

 

14. The Plan. The Option hereby granted is subject to, and the Corporation and
Option Holder agree to be bound by all of the terms and conditions of the Plan
as the same may be amended from time to time in accordance with the terms
thereof, but no such amendment may adversely affect the Option Holder’s rights
under this Option. Option Holder acknowledges receipt of a complete copy of the
Plan.

 

15. Consideration. The consideration for the rights and benefits conferred on
Option Holder by this Option are the services rendered by the Option Holder
after and not before the grant of this Option.

 

16. Applicable Law. This Option has been granted as of the effective date set
forth above at Los Angeles, California, and the interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California.

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DUCOMMUN INCORPORATED By:  

 

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    Chief Executive Officer By:  

 

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Secretary

 

 

 

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Option Holder

 

By his or her signature, the spouse of the Option Holder hereby agrees to be
bound by all the terms and conditions of this written stock option agreement.

 

 

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Spouse of Option Holder