Document:

exv10w23

 

Exhibit-10.23

U.S. Executives — Rollover Options

NON-QUALIFIED SHARE OPTION AGREEMENT

UNDER THE EQUITY INCENTIVE PLAN

FOR EXECUTIVE EMPLOYEES OF

AVAGO TECHNOLOGIES LIMITED AND SUBSIDIARIES

          This Non-Qualified Share Option Agreement (this “Agreement”), is entered into as of December
1, 2005 by and between Avago Technologies Limited, a company organized under the laws of Singapore,
hereinafter referred to as the “Company,” and «Name», an employee of the Company or a Subsidiary
(as defined below) or Affiliate (as defined below) of the Company, hereinafter referred to as
“Optionee.”

          WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase ordinary shares
of the Company (“Shares”);

          WHEREAS, the Company wishes to carry out the Plan (as defined below), the terms of which are
hereby incorporated by reference and made a part of this Agreement; and

          WHEREAS, the Committee (as defined below) appointed to administer the Plan has determined that
it would be to the advantage and best interest of the Company and its shareholders to grant the
Non-Qualified Share Option(s) provided for herein to the Optionee as an incentive for increased
efforts during his term of employment with the Company or its Subsidiaries or Affiliates, and has
advised the Company thereof and instructed the undersigned officers to issue said Options;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree
as follows:

ARTICLE I

DEFINITIONS

          Whenever the following terms are used in this Agreement, they shall have the meaning specified
in the Plan or below unless the context clearly indicates to the contrary.

     Section 1.1 — Affiliate

          “Affiliate” shall mean (a) with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person, and (b) with respect to the
Company, also any entity designated by the Board of Directors in which the Company or one of its
Affiliates has an interest, and (c) Kohlberg Kravis Roberts & Co., L.P.
(“KKR”), Silver Lake Partners LLC (“SLP”) and any Affiliate of any partner of KKR or SLP.

«Name» —
Rollover Stock Option Agreement

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For
purposes of this Agreement, “Person” means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture, governmental authority or
other entity of whatever nature, and “control” shall have the meaning given such term under Rule
405 of the Securities Act.

     Section 1.2 — Board of Directors

          “Board of Directors” shall mean the Board of Directors of the Company.

     Section 1.3 — Cause

          “Cause” shall mean (i) the Optionee’s willful refusal to perform in any material respect his
lawful duties or responsibilities for the Company or its Subsidiaries or willful disregard in any
material respect of any financial or other budgetary limitations established in good faith by the
Board of Directors or the board of directors of any Subsidiary; or (ii) the engaging by the
Optionee in conduct that causes material and demonstrable injury, monetarily or otherwise, to the
Company or any of its Subsidiaries, including, but not limited to, misappropriation or conversion
of assets of the Company or its Subsidiaries (other than non-material assets); or (iii) conviction
of or entry of a plea of nolo contendere to a non-vehicular felony. No act or failure to act by
the Optionee shall be deemed “willful” if done, or omitted to be done, by him in good faith and
with the reasonable belief that his action or omission was in the best interest of the Company or
its Subsidiaries or consistent with Company policies or the directive of the Board of Directors.

     Section 1.4 — Code

          “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.

     Section 1.5 — Committee

          “Committee” shall mean the Board of Directors or, if administration of the Plan is delegated
by the Board of Directors to it, the Compensation Committee of the Board of Directors or any other
committee of the Board of Directors designated by the Board of Directors to administer the Plan.

     Section 1.6 — Options

          “Options” shall mean the Non-Qualified Share Options to purchase Shares granted under this
Agreement.

     Section 1.7 — Partnerships

          “Partnerships” shall mean KKR and SLP.

«Name» —
Rollover Stock Option Agreement

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     Section 1.8 — Permanent Disability

          The Optionee shall be deemed to have a “Permanent Disability” if the Optionee is unable to
engage in the activities required by his employment by reason of any medically determined physical
or mental impairment which can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12 months, as reasonably determined by
the Board of Directors in good faith and in its discretion.

     Section 1.9 — Plan

          “Plan” shall mean the Equity Incentive Plan for Executive Employees of Avago Technologies
Limited and Subsidiaries, as the same may be amended from time to time.

     Section 1.10 — Pronouns

          The masculine pronoun shall include the feminine and neuter, and the singular the plural,
where the context so indicates.

     Section 1.11 — Secretary

          “Secretary” shall mean the Secretary of the Company.

     Section 1.12 — Securities Act

          “Securities Act” means the U.S. Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder.

     Section 1.13 — Shareholder’s Agreement

          “Shareholder’s Agreement” shall mean that certain Management Shareholder’s Agreement dated as
of even date herewith by and between the Company, the Optionee and other shareholders of the
Company.

     Section 1.14 — Subsidiary

          “Subsidiary” with respect to any entity shall mean any corporation in an unbroken chain of
corporations beginning with such entity if each of the corporations, or group of commonly
controlled corporations, other than the last corporation in the unbroken chain, then owns shares
possessing 50% or more of the total combined voting power of all classes of equity in one of the
other corporations in such chain.

«Name» —
Rollover Stock Option Agreement

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ARTICLE II

GRANT OF OPTIONS

     Section 2.1 — Grant of Options

          For good and valuable consideration, on and as of the date hereof the Company irrevocably
grants to the Optionee an Option to purchase any part or all of an aggregate of the number of
Shares set forth with respect to each such Option on the signature page hereof upon the terms and
conditions set forth in this Agreement.

     Section 2.2 — Exercise Price

          The per share exercise price of the Shares covered by the Option(s) shall be $[___].

     Section 2.3 — Consideration to the Company

          In consideration of the granting of these Option(s) by the Company, the Optionee agrees to
render faithful and efficient services to the Company or one of its Subsidiaries or Affiliates,
with such duties and responsibilities as the Company shall from time to time prescribe. Nothing in
this Agreement or in the Plan shall confer upon the Optionee any right to continue in the employ of
the Company or any of its Subsidiaries or Affiliates or shall interfere with or restrict in any way
the rights of the Company and its Subsidiaries and Affiliates, which are hereby expressly reserved,
to terminate the employment of the Optionee at any time for any reason whatsoever, with or without
Cause.

     Section 2.4 — Adjustments in Options

          Subject to Section 9 of the Plan, in the event that the outstanding Shares subject to an
Option are, from time to time, changed into or exchanged for cash or a different number or kind of
shares of the Company or other securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of shares, or
otherwise, the Committee shall make an appropriate and equitable adjustment in the number and kind
of shares or other consideration and the exercise price as to which such Option, or portions
thereof then unexercised, shall be exercisable in order to prevent dilution or enlargement of the
benefits intended to be made available with respect to any Option. Any such adjustment made by the
Committee shall be final and binding upon the Optionee, the Company and all other interested
persons.

«Name» —
Rollover Stock Option Agreement

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ARTICLE III

PERIOD OF EXERCISABILITY

     Section 3.1 — Commencement of Exercisability

          Subject to Section 3.2 of this Agreement, the Options shall be fully exercisable as of the
date hereof.

     Section 3.2 — Expiration of Options

          Except as otherwise provided in the Shareholder’s Agreement, the Options may not be exercised
to any extent by anyone after the first to occur of the following events:

     (a) The expiration date for the Option(s) indicated on Exhibit A;

     (b) The first anniversary of the date of the Optionee’s termination of employment by
reason of death or Permanent Disability;

     (c) The first business day which is ninety calendar days after the termination of
employment of the Optionee for any reason other than for Cause, death or Permanent
Disability;

     (d) The date the Option is terminated pursuant to the Shareholder’s Agreement;

     (e) The opening of business on the date of an Optionee’s termination of employment by
the Company for Cause; or

     (f) If the Committee so determines pursuant to Section 9 of the Plan, the effective
date of either the merger or consolidation of the Company into another Person, or the
exchange or acquisition by another Person of all or substantially all of the Company’s
assets or 80% or more of its then outstanding voting shares, or the recapitalization,
reclassification, liquidation or dissolution of the Company. At least ten (10) days prior
to the effective date of such merger, consolidation, exchange, acquisition,
recapitalization, reclassification, liquidation or dissolution, the Committee shall give the
Optionee notice of such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.2.

«Name» —
Rollover Stock Option Agreement

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ARTICLE IV

EXERCISE OF OPTION

     Section 4.1 — Person Eligible to Exercise

          During the lifetime of the Optionee, only he may exercise an Option or any portion thereof.
After the death of the Optionee, any exercisable portion of an Option may, prior to the time when
an Option becomes unexercisable under Section 3.2, be exercised by his personal representative or
by any person empowered to do so under the Optionee’s will or under the then applicable laws of
descent and distribution.

     Section 4.2 — Partial Exercise

          The entire Option 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 3.2; provided, however, that any
partial exercise shall be for whole Shares only.

     Section 4.3 - Notice of Intent to Exercise

          Until such time as the Option and the Shares to be acquired pursuant to the exercise of the
Option are registered on a Form S-8 Registration Statement or any successor form thereto (or are
otherwise registered pursuant to the Securities Act), no less than ten (10) business days prior to
the date the Optionee, or other person then entitled to exercise, intends to exercise the Options
or any portion thereof, the Optionee, or such other person, shall provide the Company notice in
writing stating such intent.

     Section 4.4 — Manner of Exercise

          An Option may be exercised solely by delivering to the Secretary or his office all of the
following prior to the time when the Option becomes unexercisable under Section 3.2:

     (a) Notice in writing signed by the Optionee or the other person then entitled to
exercise the Option or portion thereof, stating that the Option or portion thereof is
thereby exercised, such notice complying with all applicable rules established by the
Committee;

     (b) Full payment (in cash, by check or by a combination thereof or by such other means
as may be approved by the Committee in its sole discretion) for the Shares with respect to
which such Option or portion thereof is exercised;

     (c) A bona fide written representation and agreement, in a form satisfactory to the
Committee, signed by the Optionee or other person then entitled to exercise such Option or
portion thereof, stating (i) that the Shares are being acquired for his own
account, for investment and without any present intention of distributing or reselling
said

«Name» —
Rollover Stock Option Agreement

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shares or any of them except as may be permitted under the Securities Act, and then
applicable rules and regulations thereunder, (ii) that, if applicable (as determined by the
Company), the Optionee has received, read and understood the Company’s Rule 701 Disclosure
Statement and (iii) that the Optionee or other person then entitled to exercise such Option
or portion thereof will indemnify the Company against and hold it free and harmless from any
loss, damage, expense or liability resulting to the Company if any sale or distribution of
the shares by such person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion, take whatever
additional actions it deems appropriate to ensure the observance and performance of such
representation and agreement and to effect compliance with the Securities Act, any other
U.S. federal or state securities laws or regulations and any other applicable laws or
regulations;

     (d) Full payment to the Company (in cash, by check or by a combination thereof) of all
amounts which, under federal, state or local law, it is required to withhold upon exercise
of the Option; and

     (e) In the event the Option or portion thereof shall be exercised pursuant to Section
4.1 by any person or persons other than the Optionee, appropriate proof of the right of such
person or persons to exercise the Option.

Notwithstanding the foregoing, in satisfaction of the payments required by Sections 4.4(b) and (d)
above, Optionee may execute a cashless exercise, net of such payments, pursuant to a formal program
adopted by the Company in connection with the Plan provided that such a cashless exercise would
not, as determined by the Committee in its sole discretion, (i) cause the Company or its
Subsidiaries to breach any debt agreement to which the Company or any of its Subsidiaries is a
party, (ii) result in a violation under Section 409A of the Code or the regulations promulgated
thereunder, (iii) be otherwise prohibited by the Code or the regulations promulgated thereunder or
(iv) result in negative accounting treatment under Generally Accepted Accounting Principles
(“GAAP”).

Without limiting the generality of this Section 4.4, the Committee may require an opinion of
counsel acceptable to it to the effect that any subsequent transfer of shares acquired on exercise
of an Option does not violate the Securities Act, and may issue stop-transfer orders covering such
Shares. Share certificates evidencing Shares issued on exercise of this Option shall bear an
appropriate legend referring to the provisions of subsection (c) above and the agreements herein.
The written representation and agreement referred to in subsection (c) above shall, however, not be
required if the Shares to be issued pursuant to such exercise have been registered under the
Securities Act, and such registration is then effective in respect of such Shares.

     Section 4.5 — Conditions to Issuance of Certificates

          The Shares deliverable upon the exercise of an Option, or any portion thereof, may be either
previously authorized but unissued Shares or, subject to applicable laws, 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 certificate or

«Name» —
Rollover Stock Option Agreement

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certificates for Shares purchased upon the exercise of an Option or portion thereof prior to
fulfillment of all of the following conditions:

     (a) The obtaining of approval or other clearance from any governmental agency which the
Committee shall, in its absolute discretion, determine to be necessary or advisable; and

     (b) The lapse of such reasonable period of time following the exercise of the Option as
the Committee may from time to time establish for reasons of administrative convenience;
provided, however, that no delay in the issuance of any certificate to be issued hereunder
shall operate to prejudice or impair the Optionee’s rights to participate in a corporate
transaction providing for the disposition of Shares or to exercise his rights under the
Shareholder’s Agreement.

     Section 4.6 — Rights as Shareholder

          The holder of an Option shall not be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any Shares purchasable upon the exercise of the Option or
any portion thereof unless and until certificates representing such Shares shall have been issued
by the Company to such holder.

ARTICLE V

MISCELLANEOUS

     Section 5.1 — Administration

          The Committee 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 or revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the Optionee, the Company and
all other interested persons. No member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to the Plan or the Options.
In its absolute discretion, the Board of Directors may at any time and from time to time exercise
any and all rights and duties of the Committee under the Plan and this Agreement.

«Name» —
Rollover Stock Option Agreement

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     Section 5.2 — Options Not Transferable

          Neither the Options nor any interest or right therein or part thereof shall be liable for the
debts, contracts or engagements of the Optionee or his successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge, 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),
and any attempted disposition thereof shall be null and void and of no effect; provided, however,
that this Section 5.2 shall not prevent transfers by will or by the applicable laws of descent and
distribution.

     Section 5.3 — Shares to Be Reserved

          The Company shall at all times during the term of the Options reserve and keep available such
number of Shares as will be sufficient to satisfy the requirements of this Agreement.

     Section 5.4 — Notices

          Any notice to be given under the terms of this Agreement to the Company shall be addressed to
the Company in care of its Secretary, and any notice to be given to the Optionee shall be addressed
to him at his most recent address as reflected in the Company’s records. By a notice given
pursuant to this Section 5.4, either party may hereafter designate a different address for notices
to be given to him or it. Any notice which is required to be given to the Optionee shall, if the
Optionee is then deceased, be given to the Optionee’s personal representative if such
representative has previously informed the Company of his status and address by written notice
under this Section 5.4. Any notice shall have been deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, and delivered by hand (whether by courier or
otherwise) or sent by registered or certified mail, return receipt requested (with postage
prepaid).

     Section 5.5 — Titles

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

     Section 5.6 — Applicability of Plan and Shareholder’s Agreement

          The Options and the Shares issued to the Optionee upon exercise of the Options shall be
subject to all of the terms and provisions of the Plan and the Shareholder’s Agreement, to the
extent applicable to the Options and such Shares. In the event of any conflict between this
Agreement and the Plan, the terms of the Plan shall control. In the event of any conflict between
this Agreement or the Plan and the Shareholder’s Agreement, the terms of the Shareholder’s
Agreement shall control.

«Name» —
Rollover Stock Option Agreement

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     Section 5.7 — Amendment

          This Agreement may be amended only by a writing executed by the parties hereto, which
specifically states that it is amending this Agreement.

     Section 5.8 — Jurisdiction

          Any suit, action or proceeding against the Optionee with respect to this Agreement, or any
judgment entered by any court in respect of any thereof, may be brought in any court of competent
jurisdiction in the State of California, and the Optionee hereby submits to the exclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding or judgment. The
Optionee hereby irrevocably waives any objections which he may now or hereafter have to the laying
of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought
in any court of competent jurisdiction in the State of California, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such court has been
brought in any inconvenient forum. No suit, action or proceeding against the Company with respect
to this Agreement may be brought in any court, domestic or foreign, or before any similar domestic
or foreign authority other than in a court of competent jurisdiction in the State of California,
and the Optionee hereby irrevocably waives any right which he may otherwise have had to bring such
an action in any other court, domestic or foreign, or before any similar domestic or foreign
authority. The Company hereby submits to the jurisdiction of such courts for the purpose of any
such suit, action or proceeding.

(Signature Page Follows)

«Name» —
Rollover Stock Option Agreement

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     IN WITNESS WHEREOF, this Non-Qualified Share Option Agreement has been executed and delivered
by the parties hereto as of the date first written above.

	 	 	 	 	 	 	 	 	 
	«NAME», OPTIONEE

	 	 
	 	 	 	COMPANY
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Signature

	 	 	 	Its	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

Optionee’s Address

	 	 	 	 	 	 	 	 

Aggregate number of Shares for which the Option granted hereunder is exercisable:
«Rollover_Options»

«Name» —
Rollover Stock Option Agreement

11exv10w24

 

Exhibit-10.24

U.S. Non-Employee Director — New Options

NON-QUALIFIED SHARE OPTION AGREEMENT

UNDER THE AMENDED AND RESTATED EQUITY INCENTIVE PLAN

FOR SENIOR MANAGEMENT EMPLOYEES OF

AVAGO TECHNOLOGIES LIMITED AND SUBSIDIARIES

          This
Non-Qualified Share Option Agreement (this “Agreement”), is
entered into as of «Grant Date» by and
between Avago Technologies Limited, a company organized under the laws of Singapore, hereinafter
referred to as the “Company,” and “Name”, a non-employee member of the Board of Directors of the Company,
hereinafter referred to as “Optionee.”

          WHEREAS, the Company wishes to afford the Optionee the opportunity to purchase ordinary shares
of the Company (“Shares”);

          WHEREAS, the Company wishes to carry out the Plan (as defined below), the terms of which are
hereby incorporated by reference and made a part of this Agreement; and

          WHEREAS, the Board of Directors of the Company has determined that it would be to the
advantage and best interest of the Company and its shareholders to grant the Non-Qualified Share
Option provided for herein to the Optionee as an incentive for increased efforts during his term of
service with the Company, and has advised the Company thereof and instructed the undersigned
officers to issue said Option;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree
as follows:

ARTICLE I

DEFINITIONS

          Unless otherwise defined in this Agreement, the terms defined in the Plan shall have the same
defined meanings in this Agreement unless the context clearly indicates to the contrary.

     Section 1.1 — Affiliate

          “Affiliate” shall mean (a) with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person, and (b) with respect to the
Company, also any entity designated by the Board of Directors in which the Company or one of its
Affiliates has an interest, and (c) Kohlberg Kravis Roberts & Co., L.P. (“KKR”), Silver Lake
Partners LLC (“SLP”) and any Affiliate of any partner of KKR or SLP.
For purposes of this Agreement, “Person” means an individual, partnership, corporation,

«Name» — Option Agreement

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business
trust, joint stock company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature, and “control” shall have the meaning given such term
under Rule 405 of the Securities Act.

     Section 1.2 — Committee

          “Committee” shall mean the Board of Directors or, if administration of the Plan is delegated
by the Board of Directors to it, the Compensation Committee of the Board of Directors or any other
committee of the Board of Directors designated by the Board of Directors to administer the Plan.

     Section 1.3 — Option

          “Option” shall mean the Non-Qualified Share Option to purchase Shares granted under this
Agreement.

     Section 1.4 — Permanent Disability

          The Optionee shall be deemed to have a “Permanent Disability” if the Optionee is unable to
engage in the activities required by his employment by reason of any medically determined physical
or mental impairment which can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12 months, as reasonably determined by
the Board of Directors in good faith and in its discretion.

     Section 1.5 — Plan

          “Plan” shall mean the Amended and Restated Equity Incentive Plan for Senior Management
Employees of Avago Technologies Limited and Subsidiaries, as the same may be amended from time to
time.

     Section 1.6 — Pronouns

          The masculine pronoun shall include the feminine and neuter, and the singular the plural,
where the context so indicates.

     Section 1.7 — Secretary

          “Secretary” shall mean the Secretary of the Company.

«Name» — Option Agreement

2

 

     Section 1.8 — Subsidiary

          “Subsidiary” with respect to any entity shall mean any corporation in an unbroken chain of
corporations beginning with such entity if each of the corporations, or group of commonly
controlled corporations, other than the last corporation in the unbroken chain, then owns shares
possessing 50% or more of the total combined voting power of all classes of equity in one of the
other corporations in such chain.

     Section 1.9 — Vesting Reference Date

          “Vesting Reference Date” shall mean the date set forth on the signature page hereof.

ARTICLE II

GRANT OF OPTION

     Section 2.1 — Grant of Option

          For good and valuable consideration, on and as of the date hereof the Company irrevocably
grants to the Optionee an Option to purchase any part or all of an aggregate of the number of
Shares set forth on the signature page hereof upon the terms and conditions set forth in this
Agreement.

     Section 2.2 — Exercise Price

          The per share exercise price of the Shares covered by the Option shall be the amount set forth
on the signature page hereof, which is equal to the Fair Market Value of the Shares on the date of
grant.

     Section 2.3 — Consideration to the Company

          In consideration of the granting of this Option by the Company, the Optionee agrees to render
faithful and efficient services to the Company, with such duties and responsibilities as the
Company shall from time to time prescribe. Nothing in this Agreement or in the Plan shall confer
upon the Optionee any right to continue in the service of the Company or any of its Subsidiaries or
Affiliates or shall interfere with or restrict in any way the rights of the Company and its
Subsidiaries and Affiliates, which are hereby expressly reserved, to terminate the service of the
Optionee at any time for any reason whatsoever, with or without Cause.

     Section 2.4 — Adjustments in Option

          Subject to Section 14 of the Plan, in the event that the outstanding Shares subject to an
Option are, from time to time, changed into or exchanged for cash or a different number or kind of
shares of the Company or other securities of the Company by reason of a merger,
consolidation, recapitalization, reclassification, stock split, stock dividend, combination of

«Name» — Option Agreement

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shares, or otherwise, the Committee shall make an appropriate and equitable adjustment in the
number and kind of shares or other consideration and the exercise price as to which such Option, or
portions thereof then unexercised, shall be exercisable in order to prevent dilution or enlargement
of the benefits intended to be made available with respect to any Option. Any such adjustment made
by the Committee shall be final and binding upon the Optionee, the Company and all other interested
persons.

ARTICLE III

PERIOD OF EXERCISABILITY

     Section 3.1 — Commencement of Exercisability

          (a) The Option shall become exercisable with respect to 20% of the Shares subject to such
Option on each anniversary of the Vesting Reference Date, so that 100% of the Shares subject to the
Option shall be exercisable on the fifth anniversary of the Vesting Reference Date.

          (b) Notwithstanding the foregoing, no Option or portion thereof shall become exercisable as to
any additional Shares following the Optionee’s cessation of service with the Company or a
Subsidiary as a Non-Employee Director, an Employee or a Consultant for any reason and any Option
which is non-exercisable as of the Optionee’s cessation of service with the Company or a Subsidiary
as a Non-Employee Director, Employee or Consultant shall be immediately cancelled.

     Section 3.2 — Expiration of Option

     Except as otherwise provided in the Plan, the Option may not be exercised to any extent by
anyone after the first to occur of the following events:

     (a) The fifth anniversary of the date hereof;

     (b) The first anniversary of the date of the Optionee’s cessation of service with the
Company or a Subsidiary as a Non-Employee Director, Employee or Consultant by reason of
death or Permanent Disability;

     (c) The first business day which is ninety calendar days after the cessation of service
with the Company or a Subsidiary as a Non-Employee Director, Employee or Consultant for any
reason other than for Cause, death or Permanent Disability;

     (d) The opening of business on the date of termination by the Company for Cause of the
Optionee’s service with the Company as a Non-Employee Director, Employee or Consultant; or

«Name» — Option Agreement

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     (e) If the Committee so determines pursuant to Section 15 of the Plan, the effective
date of either the merger or consolidation of the Company into another Person, or the
exchange or acquisition by another Person of all or substantially all of the Company’s
assets or 80% or more of its then outstanding voting shares, or the recapitalization,
reclassification, liquidation or dissolution of the Company. At least ten (10) days prior
to the effective date of such merger, consolidation, exchange, acquisition,
recapitalization, reclassification, liquidation or dissolution, the Committee shall give the
Optionee notice of such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.2.

ARTICLE IV

EXERCISE OF OPTION

     Section 4.1 — Person Eligible to Exercise

          During the lifetime of the Optionee, only he may exercise an Option or any portion thereof.
After the death of the Optionee, any exercisable portion of an Option may, prior to the time when
an Option becomes unexercisable under Section 3.2, be exercised by his personal representative or
by any person empowered to do so under the Optionee’s will or under the then applicable laws of
descent and distribution.

     Section 4.2 — Partial Exercise

          Any exercisable portion of an 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 3.2; provided, however, that any partial exercise shall be for
whole Shares only.

     Section 4.3 - Notice of Intent to Exercise

          Until such time as the Option and the Shares to be acquired pursuant to the exercise of the
Option are registered on a Form S-8 Registration Statement or any successor form thereto (or are
otherwise registered pursuant to the Securities Act), no less than ten (10) business days prior to
the date the Optionee, or other person then entitled to exercise, intends to exercise the Options
or any portion thereof, the Optionee, or such other person, shall provide the Company notice in
writing stating such intent.

     Section 4.4 — Manner of Exercise

          An Option, or any exercisable portion thereof, may be exercised solely by delivering to the
Secretary or his office all of the following prior to the time when the Option or such portion
becomes unexercisable under Section 3.2:

     (a) Notice in writing signed by the Optionee or the other person then entitled to
exercise the Option or portion thereof, stating that the Option or portion thereof is

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thereby exercised, such notice complying with all applicable rules established by the
Committee;

     (b) Full payment (in cash, by check or by a combination thereof or by such other means
as may be approved by the Committee in its sole discretion) for the Shares with respect to
which such Option or portion thereof is exercised;

     (c) A bona fide written representation and agreement, in a form satisfactory to the
Committee, signed by the Optionee or other person then entitled to exercise such Option or
portion thereof, stating (i) that the Shares are being acquired for his own account, for
investment and without any present intention of distributing or reselling said shares or any
of them except as may be permitted under the Securities Act, and then applicable rules and
regulations thereunder, (ii) that, if applicable (as determined by the Company), the
Optionee has received, read and understood the Company’s Rule 701 Disclosure Statement and
(iii) that the Optionee or other person then entitled to exercise such Option or portion
thereof will indemnify the Company against and hold it free and harmless from any loss,
damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion, take whatever
additional actions it deems appropriate to ensure the observance and performance of such
representation and agreement and to effect compliance with the Securities Act, any other
U.S. federal or state securities laws or regulations and any other applicable laws or
regulations;

     (d) Full payment to the Company (in cash, by check or by a combination thereof) of all
amounts which, under federal, state or local law, it is required to withhold upon exercise
of the Option; and

     (e) In the event the Option or portion thereof shall be exercised pursuant to Section
4.1 by any person or persons other than the Optionee, appropriate proof of the right of such
person or persons to exercise the Option.

Notwithstanding the foregoing, upon Optionee’s termination of service to the Company by the Company
without Cause, by the Optionee for Good Reason or by reason of death or Permanent Disability, in
satisfaction of the payments required by Sections 4.4(b) and (d) above, Optionee may execute a
cashless exercise, net of such payments, pursuant to a formal program adopted by the Company in
connection with the Plan provided that such a cashless exercise would not, as determined by the
Committee in its sole discretion, (i) cause the Company or its Subsidiaries to breach any debt
agreement to which the Company or any of its Subsidiaries is a party, (ii) result in a violation
under Section 409A of the Code or the regulations promulgated thereunder, (iii) be otherwise
prohibited by the Code or the regulations promulgated thereunder or (iv) result in negative
accounting treatment under Generally Accepted Accounting Principles (“GAAP”).

Without limiting the generality of this Section 4.4, the Committee may require an opinion of
counsel acceptable to it to the effect that any subsequent transfer of shares acquired on exercise
of an Option does not violate the Securities Act, and may issue stop-transfer orders covering

«Name» — Option Agreement

6

 

such
Shares. Share certificates evidencing Shares issued on exercise of this Option shall bear an
appropriate legend referring to the provisions of subsection (c) above and the agreements herein.
The written representation and agreement referred to in subsection (c) above shall, however, not be
required if the Shares to be issued pursuant to such exercise have been registered under the
Securities Act, and such registration is then effective in respect of such Shares.

     Section 4.5 — Conditions to Issuance of Certificates

          The Shares deliverable upon the exercise of an Option, or any portion thereof, may be either
previously authorized but unissued Shares or, subject to applicable laws, 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 certificate or certificates for Shares
purchased upon the exercise of an Option or portion thereof prior to fulfillment of all of the
following conditions:

     (a) The obtaining of approval or other clearance from any governmental agency which the
Committee shall, in its absolute discretion, determine to be necessary or advisable; and

     (b) The lapse of such reasonable period of time following the exercise of the Option as
the Committee may from time to time establish for reasons of administrative convenience;
provided, however, that no delay in the issuance of any certificate to be issued hereunder
shall operate to prejudice or impair the Optionee’s rights to participate in a corporate
transaction providing for the disposition of Shares or to exercise his rights hereunder.

     Section 4.6 — Rights as Shareholder

          The holder of an Option shall not be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any Shares purchasable upon the exercise of the Option or
any portion thereof unless and until certificates representing such Shares shall have been issued
by the Company to such holder.

     Section 4.7 Covenant Regarding 83(b) Election

          The Optionee hereby covenants and agrees that, unless otherwise determined by the Company,
Optionee will make an election pursuant to Treasury Regulation 1.83-2 with respect to the Shares to
be acquired upon each exercise of the Optionee’s Options by filing with the Internal Revenue
Service such election substantially in the form attached hereto as Exhibit A; and the Optionee
further covenants and agrees that he will furnish the Company with copies of the forms of election
the Optionee files within 30 days after each exercise of the Optionee’s Options and with evidence
that each such election has been filed in a timely manner.

«Name» — Option Agreement

7

 

ARTICLE V

MISCELLANEOUS

     Section 5.1 — Administration

          The Committee 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 or revoke any such rules. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the Optionee, the Company and
all other interested persons. No member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to the Plan or the Option.
In its absolute discretion, the Board of Directors may at any time and from time to time exercise
any and all rights and duties of the Committee under the Plan and this Agreement.

     Section 5.2 — Option Not Transferable

          Neither the Option nor any interest or right therein or part thereof shall be liable for the
debts, contracts or engagements of the Optionee or his successors in interest or shall be subject
to disposition by transfer, alienation, anticipation, pledge, 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),
and any attempted disposition thereof shall be null and void and of no effect; provided, however,
that this Section 5.2 shall not prevent transfers by will or by the applicable laws of descent and
distribution or any transfer to the Company contemplated in the Plan.

     Section 5.3 — Shares to Be Reserved

          The Company shall at all times during the term of the Option reserve and keep available such
number of Shares as will be sufficient to satisfy the requirements of this Agreement.

     Section 5.4 — Notices

          Any notice to be given under the terms of this Agreement to the Company shall be addressed to
the Company in care of its Secretary, and any notice to be given to the Optionee shall be addressed
to him at his most recent address as reflected in the Company’s records. By a notice given
pursuant to this Section 5.4, either party may hereafter designate a different address for notices
to be given to him or it. Any notice which is required to be given to the Optionee shall, if the
Optionee is then deceased, be given to the Optionee’s personal representative if such
representative has previously informed the Company of his status and address by written notice
under this Section 5.4. Any notice shall have been deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, and delivered by hand (whether by
courier or otherwise) or sent by registered or certified mail, return receipt requested (with
postage prepaid).

«Name» — Option Agreement

8

 

     Section 5.5 — Titles

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

     Section 5.6 — Applicability of Plan

          The Option and the Shares issued to the Optionee upon exercise of the Option shall be subject
to all of the terms and provisions of the Plan, to the extent applicable to the Option and such
Shares. In the event of any conflict between this Agreement and the Plan, the terms of the Plan
shall control.

     Section 5.7 — Amendment

          This Agreement may be amended only by a writing executed by the parties hereto, which
specifically states that it is amending this Agreement.

     Section 5.8 — Jurisdiction

          Any suit, action or proceeding against the Optionee with respect to this Agreement, or any
judgment entered by any court in respect of any thereof, may be brought in any court of competent
jurisdiction in the State of California, and the Optionee hereby submits to the exclusive
jurisdiction of such courts for the purpose of any such suit, action, proceeding or judgment. The
Optionee hereby irrevocably waives any objections which he may now or hereafter have to the laying
of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought
in any court of competent jurisdiction in the State of California, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such court has been
brought in any inconvenient forum. No suit, action or proceeding against the Company with respect
to this Agreement may be brought in any court, domestic or foreign, or before any similar domestic
or foreign authority other than in a court of competent jurisdiction in the State of California,
and the Optionee hereby irrevocably waives any right which he may otherwise have had to bring such
an action in any other court, domestic or foreign, or before any similar domestic or foreign
authority. The Company hereby submits to the jurisdiction of such courts for the purpose of any
such suit, action or proceeding.

(Signature Page Follows)

«Name» — Option Agreement

9

 

IN WITNESS WHEREOF, this Non-Qualified Share Option Agreement has been executed and delivered by
the parties hereto as of the date first written above.

	 	 	 	 	 	 	 
	«NAME», OPTIONEE

	 	COMPANY	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By  
	 	 
	 

Signature

	 	Its  
	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Optionee’s Address

	 	 	 	 	 	 

Aggregate number of Shares for which the Option granted hereunder is exercisable: «Options»

Per share exercise price: «Exercise_Price»

Grant Date for purposes of the provisions set forth in the Plan: «Grant_Date»

Vesting Reference Date: «Vesting_Reference_Date»

«Name» — Option Agreement

10

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