Form of Stock Option Agreement



 Exhibit 10.18 
 SKULLCANDY, INC. 
 2011 INCENTIVE AWARD PLAN 

STOCK OPTION GRANT NOTICE AND 
 STOCK OPTION AGREEMENT 
 Skullcandy, Inc., a Delaware corporation (the
“Company”), pursuant to its 2011 Incentive Award Plan (the “Plan”), hereby grants to the individual listed below (the “Optionee”), an option to purchase the number of shares of
the common stock of the Company (“Common Stock”), set forth below (the “Option”). This Option is subject to all of the terms and conditions set forth herein and in the Stock Option Agreement attached
hereto as Exhibit A (the “Stock Option Agreement”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this
Grant Notice and the Stock Option Agreement. 
  

			
	Optionee:	 	 
		
	Grant Date:	 	 
		
	Vesting Commencement Date:	 	 
		
	Exercise Price per Share:	 	 $[ ] /Share

		
	Total Exercise Price:	 	 $

		
	 Total Number of Shares

Subject to the Option:
	 	 shares

		
	Expiration Date:	 	 

  

	 Type of Option: 
	 ̈  Incentive Stock Option       ̈  Non-Qualified
Stock Option 

  

	 Vesting Schedule: 
	[To be set forth in individual agreement] 

  

	 Termination: 
	The Option shall terminate on the Expiration Date set forth above or, if earlier, in accordance with the terms of the Stock Option Agreement. 


By his or her signature, the Optionee agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this
Grant Notice. The Optionee has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of
this Grant Notice, the Stock Option Agreement and the Plan. The Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or relating to the
Option. 
  

									
	SKULLCANDY, INC.	 		 	OPTIONEE
					
	By: 	 	 	 		 	By: 	 	 
					
	Print Name: 	 	 	 		 	Print Name: 	 	 
					
	Title: 	 	 	 		 		 	
					
	Address:	 	 	 		 	Address:	 	 
					
		 		 		 	Email:	 	 








 EXHIBIT A  

TO STOCK OPTION GRANT NOTICE 
 STOCK OPTION AGREEMENT 
 Pursuant to the Stock Option Grant Notice (the
“Grant Notice”) to which this Stock Option Agreement (this “Agreement”) is attached, Skullcandy, Inc., a Delaware corporation (the “Company”), has granted to the Optionee an
option (the “Option”) under the Company’s 2011 Incentive Award Plan (the “Plan”) to purchase the number of Shares indicated in the Grant Notice. 

ARTICLE I. 

GENERAL 

1.1      Incorporation of Terms of Plan.    The Option is subject to the terms
and conditions of the Plan which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control. 

ARTICLE II. 

GRANT OF OPTION 
 2.1      Grant of Option.    In consideration of the Optionee’s past and/or continued employment with or service to the Company or a
Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company irrevocably grants to the Optionee the Option to purchase any part or all
of the aggregate number of Shares set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement. Unless designated as a Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive Stock
Option to the maximum extent permitted by law. 
 2.2      Exercise
Price.    The exercise price of the Shares subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the price per share of the Shares subject
to the Option shall not be less than 100% of the Fair Market Value of a Share on the Grant Date. Notwithstanding the foregoing, if this Option is an Incentive Stock Option and the Optionee is a Greater Than 10% Stockholder as of the Grant Date, the
price per share of the Shares subject to the Option shall not be less than 110% of the Fair Market Value of a Share on the Grant Date. 
 2.3      Consideration to the Company.    In consideration of the grant of the Option by the Company, the Optionee agrees to render faithful and
efficient services to the Company or any Affiliate. Nothing in the Plan or this Agreement shall confer upon the Optionee any right to continue in the employ or service of the Company or any Affiliate or shall interfere with or restrict in any way
the rights of the Company and its Affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of the Optionee at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided
otherwise in a written agreement between the Company or an Affiliate and the Optionee. 

  
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 ARTICLE III. 
 PERIOD OF EXERCISABILITY 

3.1      Commencement of Exercisability. 

(a)      Subject to Sections 3.1(b), 3.2, 3.3, 5.10 and 5.13 hereof, the Option shall become vested and
exercisable in such amounts and at such times as are set forth in the Grant Notice. 
 (b)      No
portion of the Option which has not become vested and exercisable at the date of the Optionee’s Termination of Service shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a
written agreement between the Company and the Optionee. 
 3.2      Duration of
Exercisability.    The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in
the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 hereof. 

3.3      Expiration of Option.    The Option may not be exercised to any extent
by anyone after the first to occur of the following events: 
 (a)      The Expiration Date set
forth in the Grant Notice; 
 (b)      If this Option is designated as an Incentive Stock Option
and the Optionee is a Greater Than 10% Stockholder as of the Grant Date, the expiration of five (5) years from the Grant Date; 
 (c)      The date that is three (3) months from the date of the Optionee’s Termination of Service by the Company without Cause or by the Optionee for any reason
(other than due to death or disability); 
 (d)      The expiration of one (1) year from the
date of the Optionee’s Termination of Service by reason of the Optionee’s death or disability; or 

(e)      The start of business on the date of the Optionee’s Termination of Service by the Company for
Cause. 
 The Optionee acknowledges that an Incentive Stock Option exercised more than three (3) months after the
Optionee’s Termination of Employment, other than by reason of death or disability, will be taxed as a Non-Qualified Stock Option. 
 3.4      Special Tax Consequences.    The Optionee acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time
the Option is granted) of all Shares with respect to which Incentive Stock Options, including the Option, are exercisable for the first time by the Optionee in any calendar year exceeds $100,000, the Option and such other options shall be
Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of the Code. The Optionee further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option
and other “incentive stock options” into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder. 

  
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 ARTICLE IV. 
 EXERCISE OF OPTION 
 4.1      Person
Eligible to Exercise.    Except as provided in Section 5.2 hereof, during the lifetime of the Optionee, only the Optionee may exercise the Option or any portion thereof. After the death of the Optionee, any exercisable
portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by the deceased Optionee’s personal representative or by any person empowered to do so under the deceased
Optionee’s will or under the then-applicable laws of descent and distribution. 

4.2      Partial Exercise.    Any exercisable portion of the Option or the
entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof. However, the Option shall not be exercisable with
respect to fractional shares. 
 4.3      Manner of Exercise.    The
Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or any third party administrator or other person or entity designated by the Company) of all of the following prior to the time when the
Option or such portion thereof becomes unexercisable under Section 3.3 hereof: 
 (a)      A
written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Optionee or other person then entitled to exercise the
Option or such portion of the Option; 
 (b)      Full payment of the exercise price and
applicable withholding taxes to the stock administrator of the Company for the Shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 4.4 hereof; 

(c)      Any other written representations or documents as may be required in the Administrator’s sole
discretion to effect compliance with all applicable provisions of the Securities Act, the Exchange Act, any other federal, state or foreign securities laws or regulations, the rules of any securities exchange or automated quotation system on which
the Shares are listed, quoted or traded or any other applicable law; and 
 (d)      In the event
the Option or portion thereof shall be exercised pursuant to Section 4.1 hereof by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option. 

Notwithstanding any of the foregoing, the Company shall have the right to specify all conditions of the manner of exercise, which conditions may vary by
country and which may be subject to change from time to time. 
 4.4      Method of
Payment.    Payment of the exercise price shall be by any of the following, or a combination thereof, at the election of the Optionee: 
 (a)      Cash; 

(b)      Check; 

  
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 (c)      With the consent of the Administrator, delivery of a
written or electronic notice that the Optionee has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of
the sale to the Company in satisfaction of the aggregate exercise price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale; 

(d)      With the consent of the Administrator, surrender of other Shares which have been held by the
Optionee for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares with respect to
which the Option or portion thereof is being exercised; 
 (e)      With the consent of the
Administrator, surrendered Shares issuable upon the exercise of the Option having a Fair Market Value on the date of exercise equal to the aggregate exercise price of the Shares with respect to which the Option or portion thereof is being exercised;
or 
 (f)      With the consent of the Administrator, such other form of legal consideration as
may be acceptable to the Administrator. 
 4.5      Conditions to Issuance of Stock
Certificates.    The Shares deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued Shares, treasury Shares or issued Shares which have then been reacquired by the
Company. Such Shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares purchased upon the exercise of the Option or portion thereof prior to
fulfillment of the conditions set forth in Section 11.4 of the Plan. 
 4.6      Rights as
Stockholder.    The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Shares purchasable upon the exercise of any part of the Option unless and
until such Shares shall have been issued by the Company to such holder (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other
right for which the record date is prior to the date the Shares are issued, except as provided in Section 13.2 of the Plan. 

ARTICLE V. 

OTHER PROVISIONS 
 5.1      Administration.    The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be
final and binding upon the Optionee, the Company and all other interested persons. No member of the Administrator or the Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan,
this Agreement or the Option. 
 5.2      Transferability of
Option.    Except as otherwise set forth in the Plan: 
 (a)      The
Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until the Option has been exercised and
the shares underlying the Option have been issued, and all restrictions applicable to such shares have lapsed; 

  
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 (b)      The Option shall not be liable for the debts,
contracts or engagements of the Optionee or the Optionee’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until the Option has been exercised, and any attempted
disposition thereof prior to exercise shall be null and void and of no effect, except to the extent that such disposition is permitted by Section 5.2(a) hereof; and 
 (c)      During the lifetime of the Optionee, only the Optionee may exercise the Option (or any portion thereof), unless it has been disposed of pursuant to a DRO; after the
death of the Optionee, any exercisable portion of the Option may, prior to the time when such portion becomes unexercisable under the Plan or this Agreement, be exercised by the Optionee’s personal representative or by any person empowered to
do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 

(d)      Notwithstanding any other provision in this Agreement, the Optionee may, in the manner determined
by the Administrator, designate a beneficiary to exercise the rights of the Optionee and to receive any distribution with respect to the Option upon the Optionee’s death. A beneficiary, legal guardian, legal representative, or other person
claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and this Agreement, except to the extent the Plan and this Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by
the Administrator. If the Optionee is married or a domestic partner in a domestic partnership qualified under applicable law and resides in a community property state, a designation of a person other than the Optionee’s spouse or domestic
partner, as applicable, as his or her beneficiary with respect to more than 50% of the Optionee’s interest in the Option shall not be effective without the prior written consent of the Optionee’s spouse or domestic partner. If no
beneficiary has been designated or survives the Optionee, payment shall be made to the person entitled thereto pursuant to the Optionee’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be
changed or revoked by the Optionee at any time provided the change or revocation is filed with the Administrator prior to the Optionee’s death. 
 5.3      Tax Consultation.    Optionee understands that Optionee may suffer adverse tax consequences as a result of the grant, vesting and/or
exercise of the Option, and/or with the purchase or disposition of the Shares subject to the Option. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of
such shares and that Optionee is not relying on the Company for any tax advice. 

5.4      Adjustments.    The Optionee acknowledges that the Option is subject to
modification and termination in certain events as provided in this Agreement and Article 13 of the Plan. 

5.5      Notices.    Any notice to be given under the terms of this Agreement to
the Company shall be addressed to the Company in care of the Secretary of the Company at the address given beneath the signature of the Company’s authorized officer on the Grant Notice, and any notice to be given to the Optionee shall be
addressed to the Optionee at the address given beneath the Optionee’s signature on the Grant Notice. By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for notices to be given to that
party. Any notice which is required to be given to the Optionee shall, if the Optionee is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 hereof by written notice under this Section 5.5.
Any notice shall be deemed duly given when sent to the Optionee via email or when sent to either party by reputable overnight courier or by certified mail (return receipt requested) through the United States Postal Service. 

  
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 5.6      Optionee’s
Representations.    If the Shares purchasable pursuant to the exercise of this Option have not been registered under the Securities Act or any applicable state laws on an effective registration statement at the time this
Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, make such written representations as are deemed necessary or appropriate by the Company and/or its counsel.

 5.7      Titles.    Titles are provided herein for convenience only
and are not to serve as a basis for interpretation or construction of this Agreement. 

5.8      Governing Law.    The laws of the State of Delaware shall govern the
interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. 

5.9      Conformity to Securities Laws.    The Optionee acknowledges that the
Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state
securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 
 5.10      Amendments, Suspension and Termination.    To the extent permitted by the Plan, this Agreement may be wholly or partially amended or
otherwise modified, suspended or terminated at any time or from time to time by the Committee or the Board, provided, however, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of
this Agreement shall adversely affect the Option in any material way without the prior written consent of the Optionee. 

5.11      Successors and Assigns.    The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth in this Article 5, this Agreement shall be
binding upon the Optionee and his or her heirs, executors, administrators, successors and assigns. 

5.12      Notification of Disposition.    If this Option is designated as an
Incentive Stock Option, the Optionee shall give prompt notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or transfer is made (a) within two (2) years from the Grant
Date with respect to such Shares or (b) within one (1) year after the transfer of such Shares to the Optionee. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property,
assumption of indebtedness or other consideration, by the Optionee in such disposition or other transfer. 

5.13      Limitations Applicable to Section 16 Persons.    Notwithstanding
any other provision of the Plan or this Agreement, if the Optionee is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended
to the extent necessary to conform to such applicable exemptive rule. 

  
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 5.14      Not a Contract of Employment. Nothing in this
Agreement or in the Plan shall confer upon the Optionee any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries. 
 5.15      Entire Agreement. The Plan, the Grant Notice and this Agreement (including all Exhibits thereto) constitute the entire agreement of the parties and supersede
in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof. 
 5.16      Section 409A. Notwithstanding any other provision of the Plan, this Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice shall
be interpreted in accordance with the requirements of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the date hereof, “Section 409A”). The Administrator may, in its discretion, adopt such amendments to the Plan, this Agreement or the Grant Notice or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate to comply with the requirements of Section 409A. 

  
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