Exhibit
10.3


 


SRS LABS,
INC.


 


Non-employee
Director


Nonqualified Stock
Option Agreement


(Re-Election)


 


WHEREAS,                                                  (hereinafter
called the “Optionee”) is a Non-employee Director (as defined in the
SRS Labs, Inc. Amended and Restated 1996 Non-employee Directors Stock
Option Plan, as amended (the “Plan”)) of SRS Labs, Inc. (hereinafter
called the “Company”); and


 


WHEREAS, the Plan
provides for the automatic grant of an option to purchase 15,000 shares of common stock, par value
$.001 per share (the “Common Shares”) of the Company to be made to each Non-employee
Director of the Company on the date of each Annual Meeting of Stockholders of
the Company at which such Non-employee Director is elected a Nonemployee Director,
subject to the terms and conditions of the Plan; and


 


WHEREAS, the
Optionee was elected as a Non-employee Director at the Annual Meeting of
Shareholders of the Company held on                                                  
(the “Date of Grant”); and


 


WHEREAS, the
execution of a Non-employee Director Nonqualified Stock Option Agreement
substantially in the form hereof (this or the “Agreement”) has been authorized
by a resolution of the Committee (as defined in the Plan); and


 


WHEREAS, the
option granted hereby is intended as a nonqualified stock option and shall not
be treated as an “incentive stock option” within the meaning of that term under
Section 422 of the Internal Revenue Code of 1986, as amended.


 


NOW, THEREFORE,
the Company hereby grants to the Optionee a nonqualified stock option (the “Option”)
pursuant to the Plan to purchase 15,000 Common Shares of the Company at a price
of $              
per share (the “Option Price”). 
The Company agrees to cause certificates for any shares purchased hereunder
to be delivered to the Optionee upon payment of the Option Price in full, all
subject, however, to the terms and conditions of the Plan and the terms and
conditions hereinafter set forth. 
Capitalized terms used herein without definition shall have the meanings
assigned to them in the Plan.


 


1.                                       This
Option (until terminated as hereinafter provided) shall be exercisable to the
extent of one-third of the Common Shares covered by the Option as of the first
anniversary of the Date of Grant and to the extent of an additional one-third
thereof after each of the next two successive full years thereafter during
which the Optionee shall have been in the continuous service of the Company as
a Director.  To the extent exercisable,
this Option may be exercised in whole or in part from time to time.


 


2.                                       This
Option shall be exercised by giving written notice to the Company of the
exercise thereof, accompanied by full payment of the Option Price.  The Option Price shall be payable (a) in cash (including check, bank draft,
or money order or wire or other transfer of funds, or advice of credit to the
Company), (b) by actual or
constructive transfer to the Company of Common Shares, or (c) by a combination of such methods of
payment described in Sections 2(a) or 2(b). 
The requirement of payment in cash shall be deemed satisfied if the
Optionee shall have made arrangements satisfactory to the Company with a bank
or broker who is a member of the National Association of Securities Dealers,
Inc. to sell on the exercise date a sufficient number of shares being purchased
so that the net proceeds of the sale transaction will at least equal the Option
Price plus payment of any applicable withholding taxes and pursuant to which
the bank or broker undertakes to deliver the full Option Price plus payment of
any applicable withholding taxes to the Company on a date satisfactory to the
Company, but not later than the date on which the sale transaction will settle
in the ordinary course of business.


 


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3.                                       This
Option shall terminate on the earliest of the following dates:


 


(A)                              the
later of:  (i) one year after the Optionee ceases to be a Director of the
Company or (ii) one year after the
death of the Optionee whether the Optionee dies while a Director of the Company
or within the one-year period set forth in Section 3(A)(i) hereof; or


 


(B)                                ten
years from the Date of Grant.


 


4.                                       This
Option is not transferable by the Optionee other than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order, or (iii) by gift to a family member (as defined in the
rules and regulations relating to the use of a registration statement on
Form S-8 under the Securities Act of 1933, as amended, or any successor
form).  During the lifetime of the
Optionee, this Option may be exercised only by the Optionee or such Optionee’s
legal representative or permitted successor.


 


5.                                       This
Option shall not be exercisable if such exercise would involve a violation of
any applicable federal or state securities law, and the Company hereby agrees
to make reasonable efforts to comply with such securities laws.


 


6.                                       The
Board of Directors of the Company (the “Board”) shall make or provide for such
adjustments in the Option Price and the number or kind of Common Shares or
other securities covered by this Option as the Board in its sole discretion,
exercised in good faith, shall determine is equitably required to prevent
dilution or enlargement of the rights of the Optionee that otherwise would
result from (i) any stock dividend,
stock split, combination of shares, issuance of rights or warrants to purchase
stock, spin-off, recapitalization or other changes in the capital structure of
the Company, or (ii) any merger,
consolidation, reorganization or partial or complete liquidation, or (iii) any other corporate transaction or
event having an effect similar to any of the foregoing.  Furthermore, in the event any such
transaction or event described or referred to in the immediately preceding sentence
shall occur, the Board may provide in substitution of any or all of the
Optionee’s rights under this Agreement such alternative consideration
(including securities of any surviving entity) as the Board may in good faith
determine to be equitable under the circumstances and may require in connection
therewith the surrender of this Option to the extent replaced.  In any case, such substitution of securities
shall not require the consent of the undersigned or any other person.


 


7.                                       If
the Optionee becomes an employee of the Company or a subsidiary after the Date
of Grant while remaining a member of the Board, any Option rights held under
the Plan by the Optionee at the time of commencement of such employment shall
not be affected thereby.


 


This Agreement is
executed by the Company as of the                 
day of                            ,
         .


 


	
   

  	
  SRS LABS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


The
undersigned Optionee hereby acknowledges receipt of an executed original of
this Agreement and accepts the Option granted hereunder, subject to the terms
and conditions of the Plan and the terms and conditions hereinabove set forth.


 


	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date: 

  	
   

  	
   

  
					



 


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