Form of Stock Option Agreement



 
EXHIBIT 4.2.2

NURLOGIC DESIGN, INC. 
 
STOCK OPTION
AGREEMENT 
 
TYPE OF OPTION (CHECK ONE):     ̈ INCENTIVE         ̈ NONQUALIFIED 
 
This Stock Option Agreement (the “Agreement”) is entered into immediately prior to the consummation of the Merger, as defined below, by and between NurLogic Design, Inc., a California corporation (the
“Company”), and              (the “Optionee”) pursuant to the Company’s 2000 Stock Incentive Plan (the “Plan”). 
 
For purposes hereof, the term “Merger” shall mean
the merger of the Company with and into Venice Acquisition Corp. (“Merger Sub”), a wholly-owned subsidiary of Artisan Components, Inc., a Delaware corporation (“Parent”), upon the consummation of which the Company will cease to
exist and the Merger Sub will remain a wholly owned subsidiary of Parent. 
 
1.    Grant of Option.    The Company hereby grants to Optionee an option (the “Option”) to purchase all or any portion of a total of
             (            ) shares (the “Shares”) of the Common Stock of the Company at a purchase price determined in
the manner described on Attachment A hereto (the “Exercise Price”), subject to the terms and conditions set forth herein and the provisions of the Plan. If the box marked “Incentive” above is checked, then this Option is intended
to qualify as an “incentive stock option” as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). If this Option fails in whole or in part to qualify as an incentive stock option, or if the box
marked “Nonqualified” is checked, then this Option shall to that extent constitute a nonqualified stock option. This Agreement is only effective upon the consummation of the Merger. 
 
2.    Vesting of
Option.    The right to exercise this Option shall vest in installments (“Vesting Installment”), and this Option shall be exercisable from time to time in whole or in part as to any vested installment, as follows:
25% of the Shares on or after the first anniversary of the consummation of the Merger, and an additional 1/12th of
the remainder of the Shares on the last day of each fiscal quarter commencing thereafter. 
 
No additional shares shall vest after the date of termination of Optionee’s “Continuous Service” (as defined in Section 3 below), but this Option shall continue to be exercisable in
accordance with Section 3 hereof with respect to that number of shares that have vested as of the date of termination of Optionee’s Continuous Service. 
 
3.    Term of Option.    Optionee’s right to exercise this Option shall terminate upon
the first to occur of the following: 
 
(a)    the expiration of ten (10) years from the date of this Agreement; 
 
(b)    the expiration of three (3) months from the date of termination of Optionee’s Continuous Service if such
termination occurs for any reason other than permanent disability, death or voluntary resignation; provided, however, that if Optionee dies during such three-month period the provisions of Section 3(e) below shall apply; 
 

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(c)    the expiration of one (1) month from the date of termination of Optionee’s Continuous Service if such termination occurs due to voluntary resignation; provided, however, that if Optionee dies during
such one-month period the provisions of Section 3(e) below shall apply; 
 
(d)    the expiration of one (1) year from the date of termination of Optionee’s Continuous Service if such termination is due to permanent disability of the Optionee (as defined in Section 22(e)(3)
of the Code); 
 
(e)    the
expiration of one (1) year from the date of termination of Optionee’s Continuous Service if such termination is due to Optionee’s death or if death occurs during either the three-month or one-month period following termination of
Optionee’s Continuous Service pursuant to Section 3(b) or 3(c) above, as the case may be; or 
 
(f)    upon the consummation of a “Change in Control” (as defined in Section 2.4 of the Plan), unless
otherwise provided pursuant to Section 10 below. 
 
As used herein, the term “Continuous Service” means (i) employment by either the Company or any parent or subsidiary corporation of the Company, or by a corporation or a parent or subsidiary of a corporation issuing or
assuming a stock option in a transaction to which Section 424(a) of the Code applies, which is uninterrupted except for vacations, illness (except for permanent disability, as defined in Section 22(e)(3) of the Code), or leaves of absence which are
approved in writing by the Company or any of such other employer corporations, if applicable, (ii) service as a member of the Board of Directors of the Company until Optionee resigns, is removed from office, or Optionee’s term of office expires
and he or she is not reelected, or (iii) so long as Optionee is engaged as a consultant or service provider to the Company or other corporation referred to in clause (i) above. 
 
4.    Exercise of Option.    On or after the date hereof, and
until termination of the right to exercise this Option in accordance with Section 3 above, this Option may be exercised, but only as to the vested portion of the Option, in whole or in part by the Optionee (or, after his or her death, by the person
designated in Section 5 below) upon delivery of the following to the Company at its principal executive offices: 
 
(a)    a written notice of exercise which identifies this Agreement and states the number of Shares then being
purchased (but no fractional Shares may be purchased); 
 
(b)    a check or cash in the amount of the Exercise Price (or payment of the Exercise Price in such other form of lawful consideration as the Administrator may approve from time to time under the provisions of
Section 5.3 of the Plan); 
 
(c)    a check or cash in the amount reasonably requested by the Company to satisfy the Company’s withholding obligations under federal, state or other applicable tax laws with respect to the taxable income,
if any, recognized by the Optionee in connection with the exercise of this Option (unless the Company and Optionee shall have made other arrangements for deductions or withholding from Optionee’s wages, bonus or other compensation payable to
Optionee, or by the withholding of Shares issuable upon exercise of this Option or the delivery of Shares owned by the Optionee in accordance with Section 10.1 of the Plan, provided such arrangements satisfy the requirements of applicable tax laws);
and 
 

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(d) a letter,
if requested by the Company, in such form and substance as the Company may require, setting forth the investment intent of the Optionee, or person designated in Section 5 below, as the case may be. 
 
5.    Death of Optionee; No
Assignment.    The rights of the Optionee under this Agreement may not be assigned or transferred except by will or by the laws of descent and distribution, and may be exercised during the lifetime of the Optionee only by
such Optionee. Any attempt to sell, pledge, assign, hypothecate, transfer or dispose of this Option in contravention of this Agreement or the Plan shall be void and shall have no effect. If the Optionee’s Continuous Service terminates as a
result of his or her death, and provided Optionee’s rights hereunder shall have vested pursuant to Section 2 hereof, Optionee’s legal representative, his or her legatee, or the person who acquired the right to exercise this Option by
reason of the death of the Optionee (individually, a “Successor”) shall succeed to the Optionee’s rights and obligations under this Agreement. After the death of the Optionee, only a Successor may exercise this Option. 
 
6.    Representations and Warranties of
Optionee.  
 
(a)    Optionee represents and warrants that this Option is being acquired by Optionee for Optionee’s personal account, for investment purposes only, and not with a view to the distribution, resale or other
disposition thereof. 
 
(b)    Optionee acknowledges that the Company may issue Shares upon the exercise of the Option without registering such Shares under the Securities Act of 1933, as amended (the “Securities Act”), on the
basis of certain exemptions from such registration requirement. Accordingly, Optionee agrees that his or her exercise of the Option may be expressly conditioned upon his or her delivery to the Company of an investment certificate including such
representations and undertakings as the Company may reasonably require in order to assure the availability of such exemptions, including a representation that Optionee is acquiring the Shares for investment and not with a present intention of
selling or otherwise disposing thereof and an agreement by Optionee that the certificates evidencing the Shares may bear a legend indicating such non-registration under the Securities Act and the resulting restrictions on transfer. Optionee
acknowledges that, because Shares received upon exercise of an Option may be unregistered, Optionee may be required to hold the Shares indefinitely unless they are subsequently registered for resale under the Securities Act or an exemption from such
registration is available. 
 
(c)    Optionee acknowledges receipt of a copy of the Plan and understands that all rights and obligations connected with this Option are set forth in this Agreement and in the Plan. 
 
7.    Right of First Refusal.

 
(a)    The Shares acquired
pursuant to the exercise of this Option may be sold by the Optionee only in compliance with the provisions of this Section 7, and subject in all cases to compliance with the provisions of Section 6(b) hereof. Prior to any intended sale, Optionee
shall first give written notice (the “Offer Notice”) to the Company specifying (i) his or her bona fide intention to sell or otherwise transfer such Shares, (ii) the name and address of the proposed purchaser(s), (iii) the number of Shares
the Optionee proposes to sell (the “Offered Shares”), (iv) the price for which he or she proposes to sell the Offered Shares, and (v) all other material terms and conditions of the proposed sale. 
 

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(b)    Within 30 days after receipt of the Offer Notice, the Company or its nominee(s) may elect to purchase all or any portion of the Offered Shares at the price and on the terms and conditions set forth in the
Offer Notice by delivery of written notice (the “Acceptance Notice”) to the Optionee specifying the number of Offered Shares that the Company or its nominees elect to purchase. Within 15 days after delivery of the Acceptance Notice to the
Optionee, the Company and/or its nominee(s) shall deliver to the Optionee payment of the amount of the purchase price of the Offered Shares to be purchased pursuant to this Section 7, against delivery by the Optionee of a certificate or certificates
representing the Offered Shares to be purchased, duly endorsed for transfer to the Company or such nominee(s), as the case may be. Payment shall be made on the same terms as set forth in the Offer Notice or, at the election of the Company or its
nominees(s), by check or wire transfer of funds. If the Company and/or its nominee(s) do not elect to purchase all of the Offered Shares, the Optionee shall be entitled to sell the balance of the Offered Shares to the purchaser(s) named in the Offer
Notice at the price specified in the Offer Notice or at a higher price and on the terms and conditions set forth in the Offer Notice; provided, however, that such sale or other transfer must be consummated within 60 days from the date of the Offer
Notice and any proposed sale after such 60-day period may be made only by again complying with the procedures set forth in this Section 7. 
 
(c)    The Optionee may transfer all or any portion of the Shares to a trust established for the sole benefit of the
Optionee and/or his or her spouse or children without such transfer being subject to the right of first refusal set forth in this Section 7, provided that the Shares so transferred shall remain subject to the terms and conditions of this Agreement
and no further transfer of such Shares may be made without complying with the provisions of this Section 7. 
 
(d)    Any Successor of Optionee pursuant to Section 5 hereof, and any transferee of the Shares pursuant to this
Section 7, shall hold the Shares subject to the terms and conditions of this Agreement and no further transfer of the Shares may be made without complying with the provisions of this Section 7. 
 
(e)    The rights provided the Company
and its nominee(s) under this Section 7 shall terminate upon the closing of the initial public offering of shares of the Company’s Common Stock pursuant to a registration statement filed with and declared effective by the Securities and
Exchange Commission under the Securities Act. 
 
8.    Restrictive Legends. 
 
(a)    Optionee hereby acknowledges that federal securities laws and the securities laws of the state in which he or she resides may require the placement of certain restrictive legends upon the Shares
issued upon exercise of this Option, and Optionee hereby consents to the placing of any such legends upon certificates evidencing the Shares as the Company, or its counsel, may deem necessary or advisable. 
 
(b)    In addition, all stock
certificates evidencing the Shares shall be imprinted with a legend substantially as follows: 
 
“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL IN FAVOR OF THE CORPORATION AND/OR ITS NOMINEE(S), AS SET FORTH IN
A STOCK OPTION AGREEMENT DATED 

 

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AS OF THE CONSUMMATION OF THE MERGER (AS THAT TERM IS DEFINED IN SUCH STOCK OPTION AGREEMENT). TRANSFER OF THESE SHARES MAY BE MADE ONLY IN
COMPLIANCE WITH THE PROVISIONS OF SAID AGREEMENT, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF SAID CORPORATION. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.”



 
9.    Adjustments Upon Changes in Capital Structure.    In the event that the outstanding shares of Common Stock of the Company are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the Company by reason of a recapitalization, stock split, reverse stock split, combination of shares, reclassification, stock dividend or other change in the capital structure
of the Company, then appropriate adjustment shall be made by the Administrator to the number of Shares subject to the unexercised portion of this Option and to the Exercise Price per share, in order to preserve, as nearly as practical, but not to
increase, the benefits of the Optionee under this Option, in accordance with the provisions of Section 4.2 of the Plan. 
 
10.    Change in Control.    In the event of a Change in Control (as defined in Section 2.4
of the Plan) of the Company: 
 
(a)    The right to exercise this Option shall accelerate automatically and vest in full (notwithstanding the provisions of Section 2 above) effective as of immediately prior to the consummation of the Change in
Control unless this Option is to be assumed by the acquiring or successor entity (or parent thereof) or a new option or New Incentives are to be issued in exchange therefor, as provided in subsection (b) below. If vesting of this Option will
accelerate pursuant to the preceding sentence, the Administrator in its discretion may provide, in connection with the Change in Control transaction, for the purchase or exchange of this Option for an amount of cash or other property having a value
equal to the difference (or “spread”) between: (x) the value of the cash or other property that the Optionee would have received pursuant to the Change in Control transaction in exchange for the shares issuable upon exercise of this Option
had this Option been exercised immediately prior to the Change in Control, and (y) the Exercise Price of this Option. 
 
(b)    The vesting of this Option shall not accelerate if and to the extent that: (i) this Option (including
the unvested portion thereof) is to be assumed by the acquiring or successor entity (or parent thereof) or a new option of comparable value is to be issued in exchange therefor pursuant to the terms of the Change in Control transaction, or (ii) this
Option (including the unvested portion thereof) is to be replaced by the acquiring or successor entity (or parent thereof) with other incentives under a new incentive program (“New Incentives”) containing such terms and provisions as the
Administrator in its discretion may consider equitable. If this Option is assumed, or if a new option of comparable value is issued in exchange therefor, then this Option or the new option shall be appropriately adjusted, concurrently with the
Change in Control, to apply to the number and class of securities or other property that the Optionee would have received pursuant to the Change in Control transaction in exchange for the shares issuable upon exercise of this Option had this Option
been exercised immediately prior to the Change in Control, and appropriate adjustment also shall be made to the Exercise Price such that the aggregate Exercise Price of this Option or the new option shall remain the same as nearly as practicable.

 

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(c)    If the provisions of subsection (b) above apply, then this Option, the new option or the New Incentives shall not accelerate but shall continue to vest in accordance with the provisions of Section 2 hereof
and shall continue in effect for the remainder of the term of this Option in accordance with the provisions of subsections (a) through (e) of Section 3 hereof. 
 
11.    No Employment Contract Created.    Neither the granting of this Option nor the
exercise hereof shall be construed as granting to the Optionee any right with respect to continuance of employment by the Company or any of its subsidiaries. The right of the Company or any of its subsidiaries to terminate at will the
Optionee’s employment at any time (whether by dismissal, discharge or otherwise), with or without cause, is specifically reserved. 
 
12.    Rights as Shareholder.    The Optionee (or transferee of this Option by will or by
the laws of descent and distribution) shall have no rights as a shareholder with respect to any Shares covered by this Option until such person has duly exercised this Option, paid the Exercise Price and become a holder of record of the Shares
purchased. 
 
13.    “Market Stand-Off” Agreement.    Optionee agrees that, if requested by the Company or the managing underwriter of any proposed public offering of the Company’s
securities, Optionee will not sell or otherwise transfer or dispose of any Shares held by Optionee without the prior written consent of the Company or such underwriter, as the case may be, during such period of time, not to exceed 180 days following
the effective date of the registration statement filed by the Company with respect to such offering, as the Company or the underwriter may specify. 
 
14.    Interpretation.    This Option is granted pursuant to the terms of the Plan, and
shall in all respects be interpreted in accordance therewith. The Administrator shall interpret and construe this Option and the Plan, and any action, decision, interpretation or determination made in good faith by the Administrator shall be final
and binding on the Company and the Optionee. As used in this Agreement, the term “Administrator” shall refer to the committee of the Board of Directors of the Company appointed to administer the Plan, and if no such committee has been
appointed, the term Administrator shall mean the Board of Directors. 
 
15.    Notices.    Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed given when delivered personally
or three (3) days after being deposited in the United States mail, as certified or registered mail, with postage prepaid, and addressed, if to the Company, at its principal place of business, Attention: the Chief Financial Officer, and if to the
Optionee, at his or her most recent address as shown in the employment or stock records of the Company. 
 
16.    Governing Law.    The validity, construction, interpretation, and effect of this
Option shall be governed by and determined in accordance with the laws of the State of California. 
 
17.    Severability.    Should any provision or portion of this Agreement be held to be
unenforceable or invalid for any reason, the remaining provisions and portions of this Agreement shall be unaffected by such holding. 
 
18.    Counterparts.    This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall be deemed one instrument. 
 

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19.    California Corporate Securities Law.    The sale of the shares that are the subject of this Agreement has not been qualified with the Commissioner of Corporations of the State of
California and the issuance of such shares or the payment or receipt of any part of the consideration therefor prior to such qualification is unlawful, unless the sale of such shares is exempt from such qualification by Section 25100, 25102 or 25105
of the California Corporate Securities Law of 1968, as amended. The rights of all parties to this Agreement are expressly conditioned upon such qualification being obtained, unless the sale is so exempt. 
 
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written. 
 

	 NurLogic Design, Inc.
	 	 	 	 “Optionee”

	
	 By:
	 	  

	 	 	 	 By:
	 	  


	 Its:
	 	  

	 	 	 	 	 	 (Signature)

	
	 	 	 	 	 	 	 	 	
 (Type or print name)


 
 

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ATTACHMENT
A 
 
DETERMINATION OF EXERCISE PRICE

 
The Exercise Price will be the closing sales price of the Common
Stock of Artisan Components, Inc. on the date of the consummation of the merger transaction contemplated under the Agreement and Plan of Reorganization, dated October 18, 2002, among the Company, Artisan Components, Inc. (“Artisan”),
Venice Acquisition Corp., a wholly owned subsidiary of Artisan, and William R. Peavey, as Securityholder Agent, as amended. 
 
In connection with the merger, the Option will be converted into the right to receive an option to purchase that number of shares of Artisan’s common
stock (calculated to the fourth decimal) calculated by dividing (x) the quotient obtained by dividing (A) the sum of the aggregate consideration, plus the sum of the exercise prices for all options of the Company outstanding, minus the aggregate
consideration to be paid to the holders of the Company’s Series A Preferred Stock, by (B) the sum of the number of shares of the Company’s common stock outstanding, plus the number of options outstanding as of October 18, 2002, by (y) the
Average Closing Price (the “Options Exchange Ratio”), rounded down to the nearest whole share. 
 
For purposes hereof, the “Average Closing Price” shall mean the weighted average sales prices of Artisan’s common stock for the 10 trading days ending on and including the second day
prior to the closing of the merger.