EX-10.5 5 ex_154182.htm EXHIBIT 10.5

EXHIBIT 10.5

inTEST Corporation
_______________

Non-Qualified Stock Option Agreement
_______________

inTEST Corporation, a Delaware corporation (“inTEST” or the “Company”), hereby grants to ___________________ (the “Optionee”) an option to purchase a total of _____________________ (_____________) shares of the Common Stock (the “Option Shares”) of inTEST, at the price and on the terms and conditions set forth herein and in all respects subject to the terms, conditions and provisions of the inTEST Corporation Second Amended and Restated 2014 Stock Plan applicable to options granted pursuant to the Non-Qualified Plan (the “Plan”), which terms, conditions and provisions are hereby incorporated herein by reference. Unless the context herein otherwise requires, capitalized terms not defined herein shall have the meaning provided in the Plan.

1. | Term of Option
| This Option is granted as of __________________ (the “Date of Grant”) and it may not be exercised later than the close of business on ________________ (the “Expiration Date”); however, this Option is subject to earlier termination as set forth in this Option Agreement and in the Plan.
2. | Option Exercise Price
| The Option exercise price (“Option Price”) is __________________________________ ($____) per Option Share.
3. | Exercise of Option
| This Option is exercisable during its term only in accordance with the terms, conditions and provisions of the Plan and this Option Agreement as follows:
| (i) | Right to Exercise. This Option shall vest ___________________________. The Optionee must be in the service of inTEST or any of its Affiliates on the date of such vesting in order for the Option to vest; provided, however, if the Optionee is an employee, and upon such Optionee’s retirement from active employment with the Company or its Affiliates, the Optionee’s age plus years of service are equal to or greater than seventy-five (75) years, and the Optionee signs and agrees to be bound by the Company’s or an Affiliate’s post-employment non-competition, non-solicitation and non-disclosure agreement, the Option shall continue to vest according to this Paragraph 3(i). This Option may be exercised, in whole or in part, up to the amount vested through the date of exercise to the extent not earlier exercised and otherwise in accordance with the terms, conditions and provisions of the Plan and this Option Agreement.
| (ii) | Method of Exercise. When exercisable, this Option shall be exercised only upon receipt by inTEST, in form and substance acceptable to inTEST, of (A) written notice of such exercise and (B) payment in full of the Option Price for the Option Shares to be purchased. Each such notice shall (A) specify the number of Option Shares to be purchased, and (B) satisfy the securities law requirements set forth in the Plan.
| (iii) | Restrictions on Exercise. This Option may not be exercised if the issuance of the Option Shares upon such exercise would constitute a violation of any applicable federal or state securities laws or regulations or other laws or regulations. As a condition to the exercise of this Option, inTEST may require the Optionee to make any representations and warranties to inTEST as inTEST deems necessary or appropriate under any applicable law or regulation.

4. | Payment for Option Shares
| The Optionee shall pay for the shares (i) in cash; (ii) by bank check payable to the order of inTEST; or (iii) by such other mode of payment as inTEST may approve.
5. | Transfer of Option Shares
| Option Shares may not be sold, pledged, assigned, hypothecated, gifted, transferred or disposed of in any manner without compliance with all applicable federal and state securities laws and regulations, and an appropriate legend referring to any restrictions on transfer and any other restrictions imposed herein or under the Plan may be endorsed on the certificates representing Option Shares.
6. | Transfer of Option
| This Option may not be sold, pledged, assigned, hypothecated, gifted, transferred or disposed of in any manner, either voluntarily or involuntarily by operation of law, other than by will or by the laws of dissent or distribution, and may be exercised during the lifetime of the Optionee only by the Optionee. Subject to the foregoing, the terms of the Plan and the terms of this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.
7. | Termination of Options
| This Option shall expire as set forth above and may not be exercised later than the Expiration Date. Notwithstanding the foregoing, this Option may not be exercised after the first to occur of the following:
| (i) | the date set by the Board of Directors of inTEST (the “Board of Directors”) to be an accelerated expiration date after a finding by the Board of Directors that a change in the financial accounting treatment for options from that in effect on the date the Plan was adopted materially adversely affects inTEST or, in the determination of the Board of Directors, may materially adversely affect inTEST in the foreseeable future, provided the Board of Directors may take whatever action, including acceleration of any exercise provisions, it deems necessary should it make the determination referred to above;
| (ii) | expiration of one (1) year from the date the Optionee’s service with inTEST (or any of its Affiliates) terminates for any reason, other than for Cause, in which case this Option shall expire immediately; or
| (iii) | in the event of a Change of Control, the Expiration Date of any Option which has vested may be accelerated to a date not earlier than thirty (30) days after notice of such acceleration is given to the Optionee, and any Option which has not vested may be terminated.
8. | Acceleration of Option
| This Option shall immediately vest and be exercisable in the event (i) the Optionee dies, (ii) the Optionee incurs a Disability, or (iii) a Change of Control occurs and (A) the Unrelated Person involved in such Change of Control does not assume or substitute the Option; (B) the Optionee’s service with the Company is terminated by the Unrelated Person within two years following the Change of Control other than for Cause; or (C) the Optionee resigns for Good Reason. An employee who has retired from active employment according to Section 3(i) of this Option Agreement and whose Option is not assumed or substituted by an Unrelated Person following a Change of Control is considered to be terminated without Cause. For purposes of this Option Agreement, the term “Disability” shall mean a condition of total mental or physical incapacity for further performance of a person’s duty with the Company that the Committee determines, on the basis of competent medical evidence, is likely to be permanent and constitutes a “disability” within the meaning of section 22(e)(3) of the Internal Revenue Code.

9. | Amendment of Option
| inTEST has the right to amend this Option, subject to the Optionee’s consent if such amendment is not favorable to the Optionee, except that the consent of the Optionee shall not be required for any amendment made pursuant to the Plan.
10. | Amendment of the Plan
| Subject to certain restrictions contained in the Plan, the Board of Directors of inTEST may amend the Plan from time to time in such manner as it may deem advisable.
1 1. | Continued Service
| The grant of this Option shall not be construed to imply or constitute evidence of any agreement, express or implied, on the part of inTEST to continue the service of the Optionee with inTEST or any of its Affiliates.
12. | Withholding of Taxes
| If required by inTEST, the Optionee shall, as a condition to the exercise of the Option and the issuance of Option Shares or the transfer of the Option Shares, remit to inTEST the amount of any federal, state or local taxes, including FICA taxes and other employment taxes, required to be withheld or paid under applicable law. To the extent that such taxes are not collected upon the exercise of the Option, inTEST may withhold a portion of the Option Shares or take whatever other action it deems necessary to collect all required taxes due upon the exercise of the Option or transfer of the Option Shares.
1 3. | Entire Agreement
| This Option Agreement, together with the Plan, represents the entire agreement between the parties.
1 4. | Governing Law
| This Option Agreement shall be construed in accordance with the laws of the State of Delaware.

[Signature Page Follows]

IN WITNESS WHEREOF, inTEST executes this Option Agreement as of the day and year set forth above.

| inTEST Corporation |
| By: |  |
| Hugh T. Regan, Jr. Secretary, Treasurer and Chief Financial Officer |

ACKNOWLEDGMENT

The Optionee acknowledges receipt of a copy of the Plan and a copy of the Prospectus covering the Option Shares to be issued pursuant to the Plan, copies of which are attached hereto, and Optionee represents that he or she has read and is familiar with the terms, conditions and provisions thereof and hereby accepts the Option granted ______________ subject to all the terms, conditions and provisions thereof. The Optionee hereby agrees to accept as binding, conclusive and final, all decisions or interpretations of the Board of Directors or the Committee upon any questions arising under the Plan.

Date: |  |  |
|  |  | Name:
|  |  | Address:

NOTICE OF EXERCISE OF STOCK OPTION

To: | inTEST Corporation 804 East Gate Drive, Suite 200 Mt. Laurel, NJ 08054 Attn: Chief Financial Officer

_____________, 20___

In accordance with Section 3 of the Non-Qualified Stock Option Agreement dated as of _____________________ (the “Option”), I hereby irrevocably elect to exercise the Option to purchase _____________ Option Shares of the Common Stock of inTEST Corporation (the “Corporation”) at the exercise price of _____________________________ ($____) per Option Share and deliver herewith a bank check payable to the order of the Corporation for the aggregate exercise price of $________________.

| Signature*: |  |
| Name*: Address: Phone: SS #: |  |

* The signature and name should correspond exactly with the name on the first page of the Option.