Document:

exv10w5xby

Exhibit 10.5(b)

NON QUALIFIED STOCK OPTION AGREEMENT

(Grant by Compensation Committee of the Board of Directors)

EFFECTIVE DATE:

					
	 	 	 	 	 
	BETWEEN:
	 	TRM Corporation, an Oregon corporation
	 	the “Company”
	 	 	 	 	 
	AND:
	 	 	 	the “Optionee”

     To attract and retain able, experienced, and trained people and to provide additional
incentive to key employees and directors, the Board of Directors of the Company (the “Board”)
adopted and the shareholders of the Company approved the TRM Corporation Omnibus Stock Incentive
Plan (the “Plan”). Pursuant to the Plan, the Board has granted to the Optionee a non qualified
option to purchase shares of the Company’s Common Stock, no par value (the “Stock”), in the amount
indicated below.

     NOW, THEREFORE, in consideration of the promises and the mutual covenants contained in this
Agreement, the parties agree as follows:

     1. Grant. The Company grants to the Optionee upon the terms and conditions set forth
below the right and option (the “Option”), subject to the vesting schedule set forth in
paragraph 3, to purchase any part of an aggregate of                      shares of the Company’s authorized but
unissued Stock at a purchase price of $                     per share, this price being the fair market value of
the shares as determined pursuant to the Plan on the date of the grant of this Option. The Option
is given upon the following terms and conditions:

          (a) Subject to reduction in the Option term as provided in subparagraphs (b), (d) and (f)
below, the Option granted shall continue in effect until                      years from the date hereof. Subject
to the vesting schedule set forth in paragraph 3, the Option may be exercised at any time and from
time to time over the term of the Option.

          (b) Except as provided in subparagraph (d) hereof, the Option shall not be exercised unless at
the time of such exercise the Optionee is serving as a director of the Company or a parent or
subsidiary corporation of the Company and shall have so served continuously since the date the
Option was granted. Absence on leave or on account of illness under rules established by the
Compensation Committee of the Board of Directors (the “Committee”) shall not be deemed an
interruption of such continuous service for purposes of the Option.

          (c) The Option shall not be assignable or transferable by the Optionee except by will or by
the laws of descent and distribution of the state or country of the Optionee’s domicile at the time
of death. The option shall be exercisable during the Optionee’s lifetime only by the Optionee.

          (d) In the event the Optionee ceases to serve as a director of the Company or a parent or
subsidiary corporation of the Company for any reason other than because of death or physical
disability preventing the Optionee from performing the Optionee’s regular duties as a director, the
Option may be exercised by the Optionee at any time prior to the expiration date of the Option or
the expiration of three months after the Optionee ceases to serve as a director, whichever is the
shorter period, but only to the extent that the Optionee was entitled to exercise the Option on the
date of termination. If the Optionee ceases to serve as a director because of physical disability
preventing the Optionee from performing regular duties, the Option may be exercised by the Optionee
at any time prior to the expiration date of the Option or the expiration of twelve months after the
date the Optionee ceases to serve as a director, whichever is the shorter period, but only to the
extent the Optionee was entitled to exercise the Option on the date of termination. If the
Optionee dies while serving as a director, the option may be exercised at any time prior to the
expiration date of the Option or the expiration of twelve months after the date of Optionee’s
death, whichever is the shorter period, but only to the extent the Optionee was entitled to
exercise the Option on the date of death, and only by the persons to whom such Optionee’s rights
under the Option pass by the Optionee’s will or by the laws of descent and distribution of the
state or country of the Optionee’s domicile at the time of death. To the extent that the Option is
not exercised within the limited period provided above, all further rights to purchase shares
pursuant to the Option shall end at the expiration of such period.

 

 

          (e) Shares may be purchased pursuant to the Option only upon receipt by the Company of written
notice from the Optionee of the Optionee’s desire to purchase, specifying the number of shares the
Optionee desires to purchase and the date on which the Optionee desires to complete the purchase
which shall not be more than 30 days after receipt of notice. If required to comply with any
applicable federal or state securities laws, the notice also shall contain a representation that it
is the Optionee’s intention to acquire the shares for investment and not for resale. On or before
the date specified for completion of the purchase of the shares, the Optionee shall pay the Company
the full purchase price of the shares in cash. No shares shall be issued until full payment has
been made, and the Optionee shall have none of the rights of a shareholder until shares are issued.
Upon notification of the amount due and prior to or concurrently with delivery of the certificate
representing the shares, the Optionee shall pay to the Company any amounts necessary to satisfy
applicable federal, state, and local withholding tax requirements.

          (f) Except as provided in the final sentence of this subparagraph (f), if the outstanding
shares of Stock are increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation, by reason of any
reorganization, merger, consolidation, reclassification, stock split-up, combination of shares, or
dividend payable in shares, the Board or the Committee shall make appropriate adjustment in the
number and kind of shares as to which the Option, or portion thereof then unexercised, shall be
exercisable, in order that the Optionee’s proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in the Option shall be made without change in the total
price applicable to the unexercised portion of the Option and with a corresponding adjustment in
the option price per share. Any such adjustment made by the Board or the Committee shall be
conclusive. In the event of the dissolution or liquidation of the Company or a merger or other
reorganization in which the Company is not the surviving corporation, in lieu of adjusting the
Option as described above, the Committee may, in its sole discretion, provide a 30-day period
immediately prior to such event during which the Optionee shall have the right to exercise the
Option in whole or in part without any limitation on exercisability and upon the expiration of such
30-day period all unexercised options shall immediately terminate; provided, however, that, if the
event occurs less than six months after the date the Option is granted, the exercise of the Option
shall not be accelerated, if such acceleration would cause the grant or the exercise of the Option
to be deemed a purchase subject to Section 16(b) of the Securities Exchange Act of 1934 and the
regulations promulgated thereunder.

     2. Conditions. The obligations of the Company under this Agreement shall be subject
to the approval of such state or federal authorities or agencies as may have jurisdiction in the
matter. The Company will use its best efforts to take such steps as may be required by state or
federal law or applicable regulations, including rules and regulations of the Securities and
Exchange Commission and any stock exchange on which the Company’s shares may then be listed, in
connection with the issuance or sale of any shares acquired pursuant to this Agreement or the
listing of such shares on any such exchange. The Company shall not be obligated to issue or
deliver shares under this Agreement if, upon advice of its legal counsel, such issuance or delivery
would violate state or federal securities laws.

     3. Vesting Schedule. The Option shall initially not be exercisable. Except as
provided in the final sentence of paragraph 1(f), the Option shall vest and become fully
exercisable as to the number of shares specified below on each date specified below until the
option is exercisable in full. Under no circumstances may the Option be exercised until six months
after the date of grant.

	 	 	 
	 
	 	Shares Vesting
	Vesting Date
	 	on Such Date
	 
	 	 
	 	 	 
	 	 	 

     4. Legends. Certificates representing the shares subject to this Agreement shall bear
such legends as the Company shall deem appropriate to reflect any restrictions on transfer imposed
by federal or applicable state securities laws.

     5. Employment. Nothing in the Plan or in this Agreement shall confer upon the
Optionee any right to be continued as a director of the Company or interfere in any way with the
right of the Company to remove the Optionee as a director at any time for any cause.

     6. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of any successor of the Company, but except as provided above, the Option granted shall not
be assigned or otherwise disposed of by the Optionee.

 

 

     7. The Plan. The Option is subject to the terms and conditions of the Plan. In the
event of a conflict between the Plan and this Agreement, the terms of the Plan shall control.

	 	 	 	 	 	 	 	 	 
	TRM Corporation	 	 	 	Optionee	 	 
	 
	 	 	 	 	 	 	 	 
	By
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 
	 

	 	President & Chief Executive Officerexv10w5xcy

Exhibit 10.5(c)

AWARD AGREEMENT

(Grant by Compensation Committee of the Board of Directors)

EFFECTIVE DATE:

					
	 	 	 	 	 
	BETWEEN:
	 	TRM Corporation, an Oregon corporation
	 	the “Company”
	 	 	 	 	 
	AND:
	 	 	 	the “Grantee”

     To attract and retain able, experienced, and trained people and to provide additional
incentive to directors and key employees, the Board of Directors of the Company (the “Board”)
adopted and the shareholders of the Company approved the Company’s Omnibus Stock Incentive Plan
(the “Plan”). This Award Agreement (the “Award Agreement”) documents the grant of Common Stock
subject to the terms and conditions set forth herein and in the Plan. Capitalized terms used
herein shall, unless otherwise required by the context, have the meaning ascribed to such terms in
the Plan.

     By action of the Committee, and subject to the terms of the Plan, the Grantee is hereby
granted shares of the Company’s Common Stock, no par value, as indicated below (the “Stock”),
subject to the Plan and to the restrictions and risks of forfeiture as set forth in this Award
Agreement.

     NOW, THEREFORE, in consideration of the promises and the mutual covenants contained in this
Agreement, the parties agree as follows:

     1. Definitions. As used herein, the following terms shall have the meanings set forth
below:

          (a) “Date of Grant” means the Effective Date as indicated above.

          (b) “Forfeiture Date” means any date prior to the end of the Restriction Period on which
Grantee’s service with the Company (or an affiliate of the Company) terminates for any reason
unless such termination is treated hereunder as accelerating the end of the Restriction Period.

          (c) “Restriction Period” with respect to any Stock subject to this Award Agreement, means the
period from the Date of Grant up to the Vesting Date applicable to such Stock.

          (d) “Vesting Date” means, with respect to any of the Stock subject to this Award Agreement,
the date specified as the applicable vesting date herein, or such earlier date as such Stock may
become vested under the terms of the Plan.

     2. Grant. The Company grants to the Grantee upon the terms and conditions set forth
in this Award Agreement                      shares of the Company’s Common Stock. This Award is given upon the
following terms and conditions:

          (a) Subject to the terms and conditions set forth herein and in the Plan, Grantee shall not be
permitted to sell, transfer, pledge or assign any Restricted Stock during such shares’ Restricted
Period.

          (b) The Stock subject to this Award Agreement shall vest                                         .

     (c) Subject to the terms and conditions set forth herein and in the Plan, the restrictions on
the Stock subject to this Award Agreement imposed hereunder or pursuant to the Plan shall lapse on
each Vesting Date with respect to the portion of such Stock to which such Vesting Date is
applicable. The Stock subject to this Award Agreement shall, however, be fully vested upon a
Change in Control to the extent provided in the Plan (such event being treated as a Vesting Date
for these purposes). Notwithstanding the foregoing, the vesting of the Stock subject to this Award
on the occurrence of a Vesting Date shall only occur if the Grantee is, and has continuously been,
in service to the Company or of an affiliate of the Company from the Date of Grant through such
Vesting Date.

 

 

          (d) In the event the Grantee ceases to serve as a director or an employee of the Company or of
an affiliate of the Company prior to the occurrence of a Vesting Date, the Stock to which such
Vesting Date was applicable shall be forfeited by the Grantee and the Stock so forfeited shall be
reacquired by the Company without consideration, except in the event of death, disability, or
retirement under certain programs or a change in control.

          (e) Except for the restrictions specified herein and in the Plan, the Grantee shall have all
of the rights of a shareholder with respect to the Stock subject to this Award, including the right
to vote such Stock to the same extent that such shares could be voted if they were not subject to
the restrictions set forth in this Award Agreement.

          (f) Any dividends payable with respect to the Stock subject to this Award shall be distributed
to the Grantee at the same time and in the same manner as dividends are distributed to any other
holder of the Company’s Common Stock. Any dividends that are in the nature of extraordinary
dividends or that are in the form of a distribution of securities, shall be held in escrow and
shall be subject to the same restrictions and the same provisions for vesting and forfeiture as are
applicable under the terms of this Award Agreement and the Plan to the Stock with respect to which
such dividends were issued.

     3. Legends. Certificates representing the Stock subject to this Award Agreement shall
bear such legends as the Company shall deem appropriate to reflect any restrictions on transfer
imposed under the Award Agreement, pursuant to the terms of the Plan, or by reason of applicable
federal or state securities laws.

     4. Delivery of Shares. Upon a Vesting Date, the Company shall notify Grantee (or
Grantee’s personal representative, heir or legatee in the event of Grantee’s death) that the
restrictions on an installment of Stock have lapsed, and shall, without payment from Grantee for
such Restricted Stock, upon such Grantee’s request deliver a certificate for such Restricted Stock
without any legend or restrictions, except for such restrictions as may be imposed by the
Committee, in its sole judgment, by reason of applicable federal or state securities laws; provided
that no certificates for shares will be delivered to Grantee (or to his or her personal
representative, heir or legatee) until appropriate arrangements have been made with the Company for
the withholding of any taxes which may be due with respect to such Stock. The Company may
condition delivery of certificates for shares of Stock upon the prior receipt from Grantee of any
undertakings which it may determine are required to assure that the certificates are being issued
in compliance with federal and state securities laws. Notwithstanding the foregoing, the Committee
may require the Grantee to deliver to the Company a stock power endorsed in blank relating to the
shares of Common Stock subject to the Award in order to facilitate the reacquisition of the Stock
by the Company in the event of a forfeiture, or may hold the certificates representing the Stock
subject to this Award Agreement until the Restriction Period expires.

     5. Status of Stock. The Stock subject to this Award is intended to constitute
property subject to a substantial risk of forfeiture during the Restriction Period, and subject to
federal income tax in accordance with Section 83 of the Internal Revenue Code (“Section 83”).
Section 83 generally provides that Grantee will recognize compensation income with respect to the
Stock only to the extent it becomes vested on the applicable Vesting Date or Dates in an amount
equal to the then fair market value of the Stock. Alternatively, Grantee may elect, pursuant to
Section 83(b) of the Internal Revenue Code, to recognize compensation income for all or any part of
the Stock subject to this Award as of the date the Award is granted to the Grantee in an amount
equal to the fair market value of the Stock subject to the election. Such election must be made
within 30 days of the date the Award is granted, and the Grantee is required to notify the Company
immediately if such an election is made. Grantee should consult his or her tax advisors to
determine whether a Section 83(b) election is appropriate. Attached is a further Explanation and
Illustration of the Section 83(b) election and sample election form.

     6. Withholding of Taxes. Upon the lapse of restrictions, the Grantee understands that
the Grantee will be subject to compensation income taxes, and all applicable federal, state and
local withholding taxes. The Grantee agrees to pay to the Company, or to make arrangements
satisfactory to the Company, regarding the payment of any and all taxes of any kind required by law
to be paid by the Company with respect to all shares, after any restrictions lapse. The Company
shall, to the extent permitted by law, have the right to deduct from any payment of any kind
otherwise due to the Grantee any Federal, state or local taxes of any kind required by law to be
withheld when any restrictions lapse.

     7. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of any successor of the Company, but except as provided above, the Award granted shall not
be assigned or otherwise disposed of by the Grantee.

 

 

     8. The Plan. This Award is subject to the terms and conditions of the Plan. In the
event of a conflict between the Plan and this Agreement, the terms of the Plan shall control.

	 	 	 	 	 	 	 	 	 
	TRM Corporation	 	 	 	Grantee	 	 
	 
	 	 	 	 	 	 	 	 
	By
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 
	 

	 	President & Chief Executive Officer	 	 	 	 	 	 

 

 

EXPLANATION AND ILLUSTRATION OF THE

SECTION 83(b) ELECTION

	1.	 	Background. Section 83(b) of the U.S. Internal Revenue Code (the “Code”) allows
employees who receive Restricted Stock Awards (“RSAs”) to immediately elect to be taxed on the
fair market value of the Restricted Stock on the date of transfer (“Award Date”). The
advantage of this election is that an employee will immediately recognize compensation income
equal to the fair market value of TRM stock on the Award Date). The disadvantage of this
alternative is that if the value of the TRM stock drops in value, an employee will have
over-reported compensation income and only a capital loss may exist in the future.
Furthermore, Shares may be forfeited if the employee does not remain employed until vested.
TRM cannot provide tax advice to any employees with regard to whether or not they should make
a Section 83(b) election. However, an illustration of the Section 83(b) rules is as follows:

	 	a.	 	One share of TRM is valued at $10 on the date of transfer.
	 
	 	b.	 	If the employee receives a grant of 100 non-vested RSAs on November 3, 2008,
and makes a Section 83(b) election, the employee will be taxed on $1,000 as ordinary
compensation income.
	 
	 	c.	 	Assume that the value of the 100 shares increases, to $20 by November 3,
2010, when vesting occurs and all shares vest. In this event, without a Section 83(b)
election, the employee will recognize $2,000 of compensation income in 2010. If a
Section 83(b) election had been made, no additional compensation income would exist,
and the employee could have converted the $1,000 of appreciation into capital gain
income when the stock is sold.
	 
	 	d.	 	To make a Section 83(b) election, the election must be made within 30 of the
date of transfer (i.e., on or before December 3, 2008 in the above example),
by filing a statement with the IRS and notifying TRM of the election. The fair market
value of the TRM shares will then be included in the employee’s income in 2008, and
subject to all withholding taxes.

	 	 	For your consideration, we have attached a Sample Section 83(b) Election Form. Once again,
we remind you that any elections are your personal responsibility and recommend that you
consult with your personal tax advisor.

 

 

ELECTION PURSUANT TO SECTION 83(b) OF

THE INTERNAL REVENUE CODE OF 1986, AS AMENDED 

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, with respect to the property described below and supplies the following
information in accordance with Treas. Reg. Section 1.83-2 promulgated thereunder:

	1.	 	The name, address and taxpayer identification number of the undersigned are:
	 
	 	 	Name:                                                             
	 
	 	 	Address:                                                             
	 
	 	 	Social Security No.:                                         

	2.	 	The property with respect to which the election is being made consists of ___ shares of
TRM Corporation, no par, common stock.
	 
	3.	 	The property was transferred to the undersigned on                     . The taxable year for which
this election is made is calendar year 20___.
	 
	4.	 	The nature of the restrictions to which the property is subject is as follows:
	 
	 	 	           Restrictions imposed upon transfer under a Restricted Stock Award Plan.
	 
	5.	 	At the time of transfer of the property with respect to which this election is being made,
the fair market value of such property (determined without regard to any restrictions other
than restrictions which by their terms will never lapse) is $______ per share.
	 
	6.	 	The amount paid for the property for which this election is being made is $0 per share.
	 
	7.	 	The undersigned has furnished a copy of this statement to TRM Corporation.

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name of Employee:

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