Exhibit
4.3


 


STOCK OPTION AGREEMENT

(Employment Inducement Grant)


 


This
NON-STATUTORY STOCK OPTION AGREEMENT, dated as of December 16, 2009 (this “Agreement”),
is between NETLIST, INC., a Delaware corporation (the “Company”), and John
Smolka (the “Optionee”).


 


R E C I T A L S


 


A.            Optionee has not previously been an
officer, director or employee of the Company, and this Option (as defined
below) is granted to Optionee to attract and retain Optionee to serve the
Company in the capacity of Director of Applications.


 


B.            This Agreement, and the grant of an
Option to the Optionee pursuant to the terms and conditions hereof, have been
approved by the Board of Directors of the Company (the “Board”).


 


C.            This Option is designated as a
non-qualified stock option, and does not
qualify as an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”).


 


A G R E E M E N T


 


In
consideration of the foregoing recitals and of the mutual covenants contained
herein, the parties, intending to be legally bound, agree as follows:


 


1.             Grant  of  Option.  The Company hereby grants to the Optionee, as
an inducement to accept employment with the Company, an option (the “Option”)
to purchase from the Company all or any number of an aggregate of 50,000 shares
(the “Option  Shares”), of the Company’s common stock, $.001 par
value per share, at a price of $6.03 per share, on the terms and subject to the
conditions of this Agreement.  This grant
is not made pursuant to the
Company’s 2006 Equity Incentive Plan (the “Plan”), attached as Exhibit A.  However, except as otherwise expressly
provided herein, this grant is subject to the rules, terms and conditions of
the Plan as if it were a grant made pursuant to and under the Plan, and all such
rules, terms and conditions are hereby incorporated herein by reference as if
set forth herein in their entirety. 
Capitalized terms used but not defined in this Agreement shall have the
meanings given to them in the Plan.  The
Option is granted as of December 16, 2009 (the “Grant  Date”).


 


2.             Character  of  Option.  The Option is not intended to be treated as an “incentive stock option”
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).


 


3.             Duration  of  Option.  Unless subject to earlier expiration or
termination pursuant to the terms of the Plan, the Option shall expire on the
ten year anniversary of the Grant Date.


 


4.             Exercisability  of  Option.  The Option may be exercised, at any time and
from time to time until its expiration or termination, for any or all of those
Option Shares in respect of which the Option shall have become exercisable, in
accordance with the provisions set forth below in this Section 4, on or at
any time prior to the date of any such exercise.  Subject to the provisions of the Plan
(including, without limitation, the provisions of Section 7.1(e) of
the Plan), the Option shall become exercisable in  sixteen 


 

















 


(16)
equal quarterly installments thereafter until vested in full (or otherwise terminated),
such that, on December 16, 2013, the Option shall be vested as to all of
the Shares and fully exercisable.  These
installments shall be cumulative, such that Optionee may exercise the Option as
to any or all of the Shares covered by any installment at any time or times
after such installment vests and prior to termination of the Option.  The foregoing notwithstanding, the Option
shall cease vesting upon the termination of Optionee’s status as an employee of
the Company for any reason.  Notwithstanding
anything expressed or implied to the contrary in the foregoing provisions of
this Section 4, the exercisability of the Option may, as provided in Section 7.1(d) of
the Plan, at any time be Accelerated in the discretion of the Committee.


 


5.             Transfer  of  Option.  Other than as expressly permitted by the
provisions of Section 6.4 of the Plan, the Option may not be transferred
except by will or the laws of descent and distribution and, during the lifetime
of the Optionee, may be exercised only by the Optionee.


 


6.             Incorporation  of  Plan
Terms.  The Option is granted
subject to all of the applicable terms and provisions of the Plan, which terms
and provisions are incorporated herein by reference pursuant to Section 1
of this Agreement, including, but not limited to, the limitations on the
Company’s obligation to deliver Option Shares upon exercise set forth in Section 9.2
(Violation of Law), Section 9.3 (Corporate Restrictions on Rights in
Stock), Section 9.4 (Investment Representations) and Section 9.7 (Tax
Withholding).


 


7.             Miscellaneous.  This Agreement shall be construed and
enforced in accordance with the internal, substantive laws of the State of
Delaware and shall be binding upon and inure to the benefit of any successor or
assign of the Company and any executor, administrator, trustee, guardian, or
other legal representative of the Optionee.


 


IN
WITNESS WHEREOF, the parties have executed this Stock Option Agreement as a
sealed instrument as of the date first above written.


 


 


	
  NETLIST, INC.

  	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Michael S. Oswald

  	
   

  	
  /s/
  John Smolka

  
	
   

  	
  Michael
  S. Oswald

  	
   

  	
  John
  Smolka

  
	
   

  	
  Assistant
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Optionee’s
  Address:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 

















 


Exhibit A


 


Netlist, Inc.


2006 Equity Incentive Plan