Exhibit 10.3

[g210741kei001.gif]JAZZ TECHNOLOGIES, INC.
RESTRICTED STOCK BONUS AWARD GRANT NOTICE
(2006 EQUITY INCENTIVE PLAN)

Jazz Technologies, Inc. (the “Company”), pursuant to Section 7(a) of the
Company’s 2006 Equity Incentive Plan (the “Plan”), hereby awards to Participant
the right to acquire that number of shares of the Company’s Common Stock set
forth below (the “Award”).  This Award shall be evidenced by a Restricted Stock
Bonus Award Agreement (the “Award Agreement”).  This Award is subject to all of
the terms and conditions as set forth herein and in the applicable Award
Agreement and the Plan, each of which are attached hereto and incorporated
herein in their entirety.

Participant:

Date of Grant:

Vesting Commencement Date:

Number of Shares Subject to Award:

Payment for Common Stock:                                             
Participant’s past or future services           

Vesting Schedule:  Subject to the Participant’s Continuous Service through such
time, the shares subject to the Award shall vest in full on
                              (the “Vesting Date”).

Additional Terms/Acknowledgements:  Participant acknowledges receipt of, and
understands and agrees to, this Restricted Stock Bonus Award Grant Notice, the
Award Agreement, and the Plan.  Participant further acknowledges that as of the
Date of Grant, this Restricted Stock Bonus Award Grant Notice, the Award
Agreement and the Plan set forth the entire understanding between Participant
and the Company regarding the acquisition of the Common Stock pursuant to the
Award specified above and supersede all prior oral and written agreements on
that subject with the exception of (i) Awards previously granted and delivered
to Participant under the Plan, and (ii) the following agreements only:

OTHER
AGREEMENTS:                                                                      
[                                                  ]

Jazz Technologies, Inc.

Participant

 

 

By:

 

 

 

 

Signature

 

Signature

 

 

 

Title:

 

 

Date:

 

 

 

 

Date:

 

 

 

 

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JAZZ TECHNOLOGIES, INC.

2006 EQUITY INCENTIVE PLAN

RESTRICTED STOCK BONUS AWARD AGREEMENT

Pursuant to the Restricted Stock Bonus Award Grant Notice (“Grant Notice”) and
this Restricted Stock Bonus Award Agreement (“Agreement”), Jazz Technologies,
Inc. (the “Company”) has awarded you (“Participant”) the right to acquire shares
of Common Stock from the Company pursuant to Section 7(a) of the Company’s 2006
Equity Incentive Plan (the “Plan”) for the number of shares indicated in the
Grant Notice (collectively, the “Award”).  The Award is granted in exchange for
past or future services to be rendered by you to the Company or an Affiliate.
 In the event additional consideration is required by law so that the Common
Stock acquired under this Agreement is deemed fully paid and nonassessable, the
Board shall determine the amount and character of such additional consideration
to be paid.  Capitalized terms not explicitly defined in this Agreement or the
Grant Notice but defined in the Plan shall have the same definitions as in the
Plan.

The details of your Award, in addition to those set forth in the Grant Notice,
are as follows.

1.             ACQUISITION OF SHARES.  By signing the Grant Notice, you hereby
agree to acquire from the Company, and the Company hereby agrees to issue to
you, the aggregate number of shares of Common Stock specified in your Grant
Notice for the consideration set forth in Section 3 and subject to all of the
terms and conditions of the Award and the Plan.  You may not acquire less than
the aggregate number of shares specified in the Grant Notice.

2.             CLOSING.  Your acquisition of the shares shall be consummated as
follows:

(a)           You will acquire beneficial ownership of the shares by delivering
your Grant Notice, executed by you in the manner required by the Company, to the
Corporate Secretary of the Company, or to such other person as the Company may
designate, during regular business hours, on the date that you have executed the
Grant Notice (or at such other time and place as you and the Company may
mutually agree upon in writing not later than sixty (60) days following the Date
of Grant) (the “Closing Date”) along with any consideration, other than your
past or future services, required to be delivered by you by law on the Closing
Date and such additional documents as the Company may then require.

(b)           The shares under the Award shall be maintained by the Company’s
transfer agent in restricted book entry form.  From time to time the Company may
provide written instructions to its transfer agent to release such shares from
restricted book entry form.   You agree that certificates representing shares
under the Award cannot be issued for any of such shares that are Unvested
Shares.  The Company shall instruct the transfer agent to release Vested Shares
from restricted book entry form upon the vesting of such shares, and to transfer
such Vested Shares electronically to your broker, subject to your having made
adequate provisions for any sums required to satisfy the Withholding Taxes (as
defined in Section 15 below).  You will provide written notice to us identifying
your broker upon the Company’s request, and Vested Shares will not be
transferred pursuant to the immediately preceding sentence until you have

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provided such written notice.  For the avoidance of doubt, the release of the
Vested Shares shall occur, and the withholding obligations shall be satisfied,
not later than the last day of the “short-term deferral” period, as identified
pursuant to Treasury Regulation 1.409A-1(b)(4)(i).

3.             CONSIDERATION.  Unless otherwise required by law, the shares of
Common Stock to be acquired by you on the Closing Date shall be deemed paid, in
whole or in part in exchange for past and future services to be rendered to the
Company or an Affiliate in the amounts and to the extent required by law.

4.             VESTING.  The shares will vest as provided in the Vesting
Schedule set forth in your Grant Notice, provided that vesting shall cease upon
the termination of your Continuous Service.  “Vested Shares” shall mean shares
that have vested in accordance with the Vesting Schedule, and “Unvested Shares”
shall mean shares that have not vested in accordance with the Vesting Schedule.

5.             RIGHT OF REACQUISITION.  The Company shall simultaneously with
the termination of your Continuous Service reacquire (the “Reacquisition Right”)
for no consideration all of the Unvested Shares, unless the Company agrees to
waive its Reacquisition Right as to some or all of the Unvested Shares.  Any
such waiver shall be exercised by the Company by written notice to you or your
representative within ninety (90) days after the termination of your Continuous
Service, and the Company will in such case also instruct its transfer agent to
release to you the number of Unvested Shares not being reacquired by the
Company, subject to the satisfaction of the Withholding Taxes.  If the Company
does not waive its reacquisition right as to all of the Unvested Shares, then
effective as of the termination of your Continuous Service, the transfer agent
shall, upon the instruction of the Company, transfer to the Company the number
of Unvested Shares the Company is reacquiring.  The Reacquisition Right shall
expire when all of the shares have become Vested Shares.

6.             CAPITALIZATION CHANGES.  The number of shares of Common Stock
subject to your Award and referenced in your Grant Notice may be adjusted from
time to time for changes in capitalization pursuant to Section 10(a) of the
Plan.

7.             CERTAIN CORPORATE TRANSACTIONS.  In the event of a Corporate
Transaction as defined in the Plan, the Reacquisition Right may be assigned by
the Company to the successor of the Company (or such successor’s parent
corporation), if any, in connection with such transaction.  To the extent the
Reacquisition Right remains in effect following such transaction, it shall apply
to the new capital stock or other property received in exchange for the Common
Stock in consummation of the transaction, but only to the extent the Common
Stock was at the time covered by such right.

8.             SECURITIES LAW COMPLIANCE.  You may not be issued any Common
Stock under your Award unless the shares of Common Stock are either (i) then
registered under the Securities Act, or (ii) the Company has determined that
such issuance would be exempt from the registration requirements of the
Securities Act.  Your Award must also comply with other applicable laws and
regulations governing the Award, and you shall not receive such Common Stock if
the Company determines that such receipt would not be in material compliance
with such laws and regulations.

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9.             EXECUTION OF DOCUMENTS.  You hereby acknowledge and agree that
the manner selected by the Company by which you indicate your consent to your
Grant Notice is also deemed to be your execution of your Grant Notice and of
this Agreement.  You further agree that such manner of indicating consent may be
relied upon as your signature for establishing your execution of any documents
to be executed in the future in connection with your Award.

10.          RIGHTS AS STOCKHOLDER.  Subject to the provisions of this
Agreement, you shall have all rights and privileges of a stockholder of the
Company with respect to the Unvested Shares.  You shall be deemed to be the
holder of such shares for purposes of receiving any dividends that may be paid
with respect to such shares and for purposes of exercising any voting rights
relating to such shares, even if some or all of the shares are Unvested Shares;
provided, however, that any dividends or other distributions paid with respect
to the Unvested Shares shall be subject to all of the terms and conditions
applicable under this Award Agreement to the same extent as the Unvested Shares.

11.          TRANSFER RESTRICTIONS.  In addition to any other limitation on
transfer created by applicable securities laws, you shall not sell, assign,
hypothecate, donate, encumber, or otherwise dispose of any interest in the
Common Stock while such shares of Common Stock are Unvested Shares or continue
to be held by the Company’s transfer agent in restricted book entry form;
provided, however, that an interest in such shares may be transferred pursuant
to a qualified domestic relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended.  After any Common
Stock has been released to you from restricted book entry form, you shall not
sell, assign, hypothecate, donate, encumber, or otherwise dispose of any
interest in the Common Stock except in compliance with the provisions herein,
applicable securities laws and the Company’s policies, including its policies on
trading on insider information.  Notwithstanding the foregoing, by delivering
written notice to the Company, in a form satisfactory to the Company, you may
designate a third party who, in the event of your death, shall thereafter be
entitled to receive any distribution of Common Stock pursuant to this Agreement.

12.          NON-TRANSFERABILITY OF THE AWARD.  Your Award (except for Vested
Shares issued pursuant thereto) is not transferable except by will or by the
laws of descent and distribution.

13.          RESTRICTIVE LEGENDS.  The Common Stock issued under your Award
shall be endorsed with appropriate legends, if any, as determined by the
Company.

14.          AWARD NOT A SERVICE CONTRACT.  Your Award is not an employment or
service contract, and nothing in your Award shall be deemed to create in any way
whatsoever any obligation on your part to continue in the service of the Company
or any Affiliate, or on the part of the Company or any Affiliate to continue
such service.  In addition, nothing in your Award shall obligate the Company or
any Affiliate, their respective stockholders, boards of directors, or employees
to continue any relationship that you might have as an Employee or Consultant of
the Company or any Affiliate.

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15.          WITHHOLDING OBLIGATIONS.  At the time your Award is granted, on the
Vesting Date, or at any other time as determined necessary or appropriate by the
Company under applicable law, you hereby authorize withholding from any amounts
payable to you, and otherwise agree to make adequate provision in cash for, any
sums required to satisfy any federal, state, local and foreign tax withholding
obligations of the Company or any Affiliate which arise in connection with your
Award (the “Withholding Taxes”).  The Company, at its sole discretion and
subject to any limitations under applicable law, shall satisfy such Withholding
Taxes by (a) permitting you to enter into a “same day sale” commitment with a
broker-dealer that is a member of the National Association of Securities Dealers
(an “NASD Dealer”) whereby you irrevocably elect to sell a portion of the shares
of Common Stock to be delivered under the Award to satisfy the Withholding Taxes
and whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the proceeds necessary to satisfy the Withholding Taxes directly to the
Company, (b) withholding shares of Common Stock that are otherwise to be
released by the transfer agent from restricted book entry form on the Vesting
Date in satisfaction of the Withholding Taxes; provided, however, that the
amount of the shares so withheld shall not exceed the amount necessary to
satisfy the Withholding Taxes using the minimum statutory withholding rates that
are applicable to this kind of income, (c) withholding for the Withholding Taxes
from wages and other cash compensation payable to you, or (d) causing you to
tender a cash payment to the Company.  The Company shall elect alternative (d)
if, and to the extent that, the Company determines in good faith at the time the
Withholding Taxes arise that withholding pursuant to alternatives (a) - (c)
would not be sufficient to cover the Withholding Taxes, would cause you or the
Company to violate applicable laws, including but not limited to the Exchange
Act or The Sarbanes-Oxley Act of 2002, and/or would not be in the best interests
of the Company or its stockholders.  The Company and you agree that if you have
entered into a valid and binding automatic trading plan designed to comply with
the requirements of Rule 10b5-1(c)(1)(i)(B) of the Exchange Act and whereby
shares of Common Stock subject to the Award would be sold under the plan to
satisfy the Withholding Taxes (pursuant to alternative (a) above) at the time
the Withholding Taxes are due, the Withholding Taxes shall be satisfied first,
and to the greatest extent possible, pursuant to such plan.

16.          TAX CONSEQUENCES.  You agree to review with your own tax advisors
the federal, state, local and foreign tax consequences of this investment and
the transactions contemplated by this Agreement.  You shall rely solely on such
advisors and not on any statements or representations of the Company or any of
its agents.  You understand that you (and not the Company) shall be responsible
for your own tax liability that may arise as a result of this investment or the
transactions contemplated by this Agreement.  You understand that Section 83 of
the Code taxes as ordinary income to you the fair market value of the shares of
Common Stock as of the date any restrictions on the shares lapse (that is, as of
the date on which part or all of the shares vest).  In this context,
“restriction” includes the right of the Company to reacquire the shares pursuant
to its Reacquisition Right.  You understand that you may elect to be taxed on
the fair market value of the shares at the time the shares are acquired rather
than when and as the Company’s Reacquisition Right expires by filing an election
under Section 83(b) of the Code with the Internal Revenue Service within thirty
(30) days after the Date of Grant of your Award.  YOU ACKNOWLEDGE THAT IT IS
YOUR SOLE RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTION UNDER
CODE SECTION 83(b), EVEN IF

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YOU REQUEST THE COMPANY OR ITS REPRESENTATIVES TO MAKE THE FILING ON YOUR
BEHALF.  YOU FURTHER ACKNOWLEDGE THAT YOU ARE AWARE THAT SHOULD YOU FILE AN
ELECTION UNDER SECTION 83(B) OF THE CODE AND THEN SUBSEQUENTLY FORFEIT THE
SHARES, YOU WILL NOT BE ABLE TO REPORT AS A LOSS THE VALUE OF ANY SHARES
FORFEITED AND WILL NOT GET A REFUND OF ANY OF THE TAX PAID.

17.    NOTICES.  Any notice or request required or permitted hereunder shall be
given in writing to each of the other parties hereto and shall be deemed
effectively given on the earlier of (i) the date of personal delivery, including
delivery by express courier, or (ii) the date that is five (5) days after
deposit in the United States Post Office (whether or not actually received by
the addressee), by registered or certified mail with postage and fees prepaid,
addressed at the following addresses, or at such other address(es) as a party
may designate by ten (10) days’ advance written notice to each of the other
parties hereto:

Company:

 

Jazz Technologies, Inc.

 

 

 

Attn: Stock Administrator

 

 

 

4321 Jamboree Road

 

 

 

Newport Beach, CA 92660

 

 

 

 

 

Participant:

 

Your address as on file with the Company at the time notice is given

 

18.          HEADINGS.  The headings of the Sections in this Agreement are
inserted for convenience only and shall not be deemed to constitute a part of
this Agreement or to affect the meaning of this Agreement.

19.          MISCELLANEOUS.

(a)           The rights and obligations of the Company under your Award shall
be transferable by the Company to any one or more persons or entities, and all
covenants and agreements hereunder shall inure to the benefit of, and be
enforceable by, the Company’s successors and assigns.

(b)           You agree upon request to execute any further documents or
instruments necessary or desirable in the sole determination of the Company to
carry out the purposes or intent of your Award.

(c)           You acknowledge and agree that you have reviewed your Award in its
entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting your Award and fully understand all provisions of your
Award.

(d)           This Agreement shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.

(e)           All obligations of the Company under the Plan and this Agreement
shall be binding on any successor to the Company, whether the existence of such
successor is the

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RESULT OF A DIRECT OR INDIRECT PURCHASE, MERGER, CONSOLIDATION, OR OTHERWISE, OF
ALL OR SUBSTANTIALLY ALL OF THE BUSINESS AND/OR ASSETS OF THE COMPANY.

20.          GOVERNING PLAN DOCUMENT.  Your Award is subject to all the
provisions of the Plan, the provisions of which are hereby made a part of your
Award, and is further subject to all interpretations, amendments, rules and
regulations which may from time to time be promulgated and adopted pursuant to
the Plan.  In the event of any conflict between the provisions of your Award and
those of the Plan, the provisions of the Plan shall control.

21.          EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.  The value of the Award
subject to this Agreement shall not be included as compensation, earnings,
salaries, or other similar terms used when calculating benefits under any
employee benefit plan (other than the Plan) sponsored by the Company or any
Affiliate except as such plan otherwise expressly provides. The Company
expressly reserves its rights to amend, modify, or terminate any or all of the
employee benefit plans of the Company or any Affiliate.

22.          CHOICE OF LAW.  The interpretation, performance and enforcement of
this Agreement shall be governed by the law of the state of California without
regard to that state’s conflicts of laws rules.

23.          SEVERABILITY.  If all or any part of this Agreement or the Plan is
declared by any court or governmental authority to be unlawful or invalid, such
unlawfulness or invalidity shall not invalidate any portion of this Agreement or
the Plan not declared to be unlawful or invalid. Any Section of this Agreement
(or part of such a Section) so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while remaining
lawful and valid.

* * * * *

This Agreement shall be deemed to be signed by the Company and the Participant
upon the signing by the Participant of the Grant Notice to which it is attached.

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