Document:

exv10w13

 

Exhibit 10.13

KOMAG INCORPORATED

AMENDMENT TO STOCK OPTION AGREEMENTS

     This Amendment (the “Amendment”) is made this 15 day of February, 2006, by and between Thian
H. Tan (“Participant”) and Komag Incorporated (the “Company”).

     WHEREAS, the Company has previously granted Participant one or more options (each an “Option”
and collectively, the “Options”) to purchase shares of Company common stock (“Shares”) under the
Company’s amended and restated 2002 Qualified Stock Plan (the “Plan”) and such Options have been
memorialized in Participant’s Stock Option Agreements, including any Notices of Stock Option Grants
relating thereto (collectively, the “Agreements”);

     WHEREAS, the Participant currently serves as the Company’s Chief Executive Officer;

     WHEREAS, Participant has expressed that he would like to retire from his position as Chief
Executive Officer of the Company in the near future; and

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the
best interests of the Company and its stockholders to assure that the Company will have the
continued dedication and objectivity of Participant while finding his successor and thereafter to
help his successor transition into Participant’s current position with the Company.

     NOW, THEREFORE, the parties hereto agree that the Agreements are hereby amended as follows:

     1. Vesting upon Commencement of Employment by Participant’s Successor.
Notwithstanding anything to the contrary set forth in the Agreements, on the first business day
upon which Participant’s successor as Chief Executive Officer commences employment with the Company
(as determined by the Company in its sole discretion) and subject to Participant continuing to
serve as the Company’s Chief Executive Officer through such date, each Option then outstanding will
immediately vest and become exercisable as to 100% of the Shares subject to each such Option.
Thereafter, and notwithstanding anything to the contrary set forth in the Agreements, but subject
to the terms of the Plan, Participant will have ninety (90) days to exercise each outstanding
Option. To the extent Participant does not exercise an Option within such ninety (90) day period,
the Option will terminate and cease to remain outstanding and Participant will have no further
right to acquire Shares subject thereto.

     2. Stock Option Agreement. To the extent not expressly amended hereby, the Agreements
will remain in full force and effect.

     3. No Guarantee of Continued Service. Participant acknowledges and agrees that the
vesting of the Options pursuant to this Amendment or the Agreements is earned only by continuing as
Service Provider (as defined in the Plan). Participant further acknowledges and agrees that this
Amendment and the Agreements do not constitute an express or implied promise of continued
engagement as a Service Provider for the vesting period, for any period, or at all, and shall not

 

 

interfere in any way with Participant’s right or the right of the Company (or the Parent or
Subsidiary employing or retaining Participant) to terminate Participant as a Service Provider at
any time, with or without cause or with or without notice.

     4. Assignment. This Amendment will be binding upon and inure to the benefit of (a)
the heirs, executors and legal representatives of Participant upon Participant’s death and (b) any
successor of the Company. Any such successor of the Company will be deemed substituted for the
Company under the terms of this Amendment for all purposes. For this purpose, “successor” means
any person, firm, corporation or other business entity which at any time, whether by purchase,
merger or otherwise, directly or indirectly acquires all or substantially all of the assets or
business of the Company. None of the rights of Participant under this Amendment may be assigned or
transferred except by will or the laws of descent and distribution. Any other attempted
assignment, transfer, conveyance or other disposition of Participant’s rights under this Amendment
will be null and void.

     5. Entire Agreement. This Amendment, taken together with the Agreements (to the
extent not amended hereby), represent the entire agreement of the parties and will supersede any
and all previous contracts, arrangements or understandings between the parties with respect to the
Participant’s stock option benefits. This Amendment may be amended at any time only by mutual
written agreement of the parties hereto.

     6. Counterparts. This Amendment may be executed in counterparts, and each counterpart
will have the same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned. Execution and delivery of this Amendment by
exchange of facsimile copies bearing the facsimile signature of a party will constitute a valid and
binding execution and delivery of the Amendment by such party. Such facsimile copies will
constitute enforceable original documents.

     7. Headings. All captions and section headings used in this Amendment are for
convenient reference only and do not form a part of this Amendment.

     8. Governing Law. This Amendment will be governed by the laws of the State of
California (with the exception of its conflict of laws provisions).

     IN WITNESS WHEREOF, this Amendment has been entered into as of the date first set forth above.

	 	 	 
	KOMAG
INCORPORATED

	By:
	 	 
	 	 	 

	Its:
	 	 
	 	 	 

PARTICIPANT

 

Thian H. Tan

-2-

 

KOMAG INCORPORATED

AMENDMENT TO RESTRICTED STOCK PURCHASE AGREEMENTS

     This Amendment (the “Amendment”) is made this 15 day of February, 2006, by and between Thian
H. Tan (“Participant”) and Komag Incorporated (the “Company”).

     WHEREAS, the Company has previously granted Participant one or more awards of restricted stock
(each a “Restricted Stock Award” and collectively, the “Restricted Stock Awards”) under the
Company’s amended and restated 2002 Qualified Stock Plan (the “Plan”) through awards of Stock
Purchase Rights (as defined under the Plan) and such Restricted Stock Awards have been memorialized
in Participant’s Restricted Stock Purchase Agreements, including any Notices of Grant Stock
Purchase Rights relating thereto (collectively, the “Agreements”);

     WHEREAS, the Participant currently serves as the Company’s Chief Executive Officer;

     WHEREAS, Participant has expressed that he would like to retire from his position as Chief
Executive Officer of the Company in the near future; and

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the
best interests of the Company and its stockholders to assure that the Company will have the
continued dedication and objectivity of Participant while finding his successor and thereafter to
help his successor transition into Participant’s current position with the Company.

     NOW, THEREFORE, the parties hereto agree that the Agreements are hereby amended as follows:

     1. Vesting upon Commencement of Employment by Participant’s Successor.
Notwithstanding anything to the contrary set forth in the Agreements, on the first business day
upon which Participant’s successor as Chief Executive Officer commences employment with the Company
(as determined by the Company in its sole discretion) and subject to Participant continuing to
serve as the Company’s Chief Executive Officer through such date, each Restricted Stock Award will
immediately vest as to 40% of the then unvested shares subject to each Restricted Stock Award.
Thereafter, the remaining unvested shares subject to each Restricted Stock Award will not vest in
accordance with the vesting schedule set forth in any applicable Agreement, but will instead vest
in full on the later of (i) three (3) months after the first business day upon which Participant’s
successor as Chief Executive Officer commences employment with the Company or (ii) January 2, 2007,
subject to Participant continuing to be a Service Provider (as defined in the Plan) through such
date.

     2. Restricted Stock Purchase Agreements. To the extent not expressly amended hereby,
the Agreements will remain in full force and effect.

     3. No Guarantee of Continued Service. Participant acknowledges and agrees that the
vesting of the Restricted Stock Awards pursuant to this Amendment or the Agreements is earned only
by continuing as Service Provider (as defined in the Plan). Participant further acknowledges and
agrees that this Amendment and the Agreements do not constitute an express or implied promise

 

 

of continued engagement as a Service Provider for the vesting period, for any period, or at
all, and shall not interfere in any way with Participant’s right or the right of the Company (or
the Parent or Subsidiary employing or retaining Participant) to terminate Participant as a Service
Provider at any time, with or without cause or with or without notice.

     4. Assignment. This Amendment will be binding upon and inure to the benefit of (a)
the heirs, executors and legal representatives of Participant upon Participant’s death and (b) any
successor of the Company. Any such successor of the Company will be deemed substituted for the
Company under the terms of this Amendment for all purposes. For this purpose, “successor” means
any person, firm, corporation or other business entity which at any time, whether by purchase,
merger or otherwise, directly or indirectly acquires all or substantially all of the assets or
business of the Company. None of the rights of Participant under this Amendment may be assigned or
transferred except by will or the laws of descent and distribution. Any other attempted
assignment, transfer, conveyance or other disposition of Participant’s rights under this Amendment
will be null and void.

     5. Entire Agreement. This Amendment, taken together with the Agreements (to the
extent not amended hereby), represent the entire agreement of the parties and will supersede any
and all previous contracts, arrangements or understandings between the parties with respect to the
Participant’s restricted stock benefits. This Amendment may be amended at any time only by mutual
written agreement of the parties hereto.

     6. Counterparts. This Amendment may be executed in counterparts, and each counterpart
will have the same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned. Execution and delivery of this Amendment by
exchange of facsimile copies bearing the facsimile signature of a party will constitute a valid and
binding execution and delivery of the Amendment by such party. Such facsimile copies will
constitute enforceable original documents.

     7. Headings. All captions and section headings used in this Amendment are for
convenient reference only and do not form a part of this Amendment.

     8. Governing Law. This Amendment will be governed by the laws of the State of
California (with the exception of its conflict of laws provisions).

     IN WITNESS WHEREOF, this Amendment has been entered into as of the date first set forth above.

	 	 	 
	KOMAG, INCORPORATED

	By:
	 	 
	 

	 	 
	Its:
	 	 
	 

	 	 

PARTICIPANT

 

Thian H. Tan

-2-

 

KOMAG INCORPORATED

AMENDED AND RESTATED 2002 QUALIFIED STOCK PLAN

NOTICE OF GRANT OF STOCK PURCHASE RIGHT

     Unless otherwise defined herein, the terms defined in the Plan shall have the same defined
meanings in this Notice of Grant of Stock Purchase Right (“Notice of Grant”).

Thian H. Tan

21925 Arrowhead Ln

Saratoga, CA 95070

     You have been granted the right to purchase Common Stock, subject to the Company’s Repurchase
Option and your ongoing status as a Service Provider (as described in the Plan and the attached
Restricted Stock Purchase Agreement), as follows:

	 	 	 
	Date of Grant

	 	February 15, 2006
	 
	 	 
	Price Per Share

	 	$0.01 
	 
	 	 
	Total Number of Shares Subject
to This Stock Purchase Right

	 	35,000 
	 
	 	 
	Expiration Date:

	 	March 17, 2006
	 
	 	 
	Vesting Schedule:

	 	Subject to any vesting acceleration provisions set forth in the Plan and
the attached Restricted Stock Purchase Agreement, one-third (1/3rd) of the
Shares shall vest on each of the first three (3) anniversaries of the Date of Grant,
subject to Purchaser continuing to be a Service Provider through such dates.

YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE EXPIRATION DATE OR IT WILL TERMINATE AND YOU
WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES. By your signature and the signature of the
Company’s representative below, you and the Company agree that this Stock Purchase Right is granted
under and governed by the terms and conditions of the Amended and Restated 2002 Qualified Stock
Plan and the Restricted Stock Purchase Agreement, attached hereto as Exhibit A-1, both of
which are made a part of this document. You further agree to execute the attached Restricted Stock
Purchase Agreement as a condition to purchasing any Shares under this Stock Purchase Right.

PURCHASER:

 

Signature

 

Print Name

KOMAG INCORPORATED

Jan Schwartz, Treasurer

 

 

EXHIBIT A-1

KOMAG INCORPORATED

AMENDED AND RESTATED 2002 QUALIFIED STOCK PLAN

RESTRICTED STOCK PURCHASE AGREEMENT

     Unless otherwise defined herein, the terms defined in the Plan shall have the same defined
meanings in this Restricted Stock Purchase Agreement.

     WHEREAS Purchaser named in the Notice of Grant (the “Purchaser”) is a Service Provider and
Purchaser’s continued participation is considered by the Company to be important for the Company’s
continued growth; and

     WHEREAS in order to give Purchaser an opportunity to acquire an equity interest in the Company
as an incentive for Purchaser to participate in the affairs of the Company, the Administrator has
granted to Purchaser a Stock Purchase Right subject to the terms and conditions of the Plan and the
Notice of Grant, which are incorporated herein by reference, and pursuant to this Restricted Stock
Purchase Agreement (the “Agreement”).

     NOW THEREFORE, the parties agree as follows:

     1. Sale of Stock. The Company hereby agrees to sell to Purchaser and Purchaser hereby
agrees to purchase shares of the Common Stock (the “Shares”), at the per Share purchase price and
as otherwise described in the Notice of Grant.

     2. Payment of Purchase Price. The purchase price for the Shares may be paid by
delivery to the Company at the time of execution of this Agreement of cash, a check, or some
combination thereof.

     3. Repurchase Option.

         (a) In the event Purchaser ceases to be a Service Provider for any or no reason (including
death or disability) before all of the Shares are released from the Company’s Repurchase Option
(see Section 4), the Company shall, upon the date of such termination (as reasonably fixed and
determined by the Company) have an irrevocable, exclusive option (the “Repurchase Option”) for a
period of sixty (60) days from such date to repurchase up to that number of shares which constitute
the Unreleased Shares (as defined in Section 4) at the original purchase price per share (the
“Repurchase Price”). The Repurchase Option shall be exercised by the Company by delivering written
notice to Purchaser or Purchaser’s executor (with a copy to the Escrow Holder) AND, at the
Company’s option, (i) by delivering to Purchaser or Purchaser’s executor a check in the amount of
the aggregate Repurchase Price, or (ii) by canceling an amount of Purchaser’s indebtedness to the
Company equal to the aggregate Repurchase Price, or (iii) by a combination of (i) and (ii) so that
the combined payment and cancellation of indebtedness equals the aggregate Repurchase Price. Upon
delivery of such notice and the payment of the aggregate Repurchase Price, the Company shall become
the legal and beneficial owner of the Shares being repurchased and all rights and interests therein
or relating thereto, and the Company shall have the right to retain and transfer to its own name
the number of Shares being repurchased by the Company.

 

 

         (b) Whenever the Company shall have the right to repurchase Shares hereunder, the Company may
designate and assign one or more employees, officers, directors or shareholders of the Company or
other persons or organizations to exercise all or a part of the Company’s purchase rights under
this Agreement and purchase all or a part of such Shares. If the Fair Market Value of the Shares
to be repurchased on the date of such designation or assignment (the “Repurchase FMV”) exceeds the
aggregate Repurchase Price of such Shares, then each such designee or assignee shall pay the
Company cash equal to the difference between the Repurchase FMV and the aggregate Repurchase Price
of such Shares.

     4. Release of Shares From Repurchase Option.

         (a) One-third (1/3rd) of the Shares shall be released from the Company’s Repurchase
Option on each of the first three anniversaries of the Date of Grant (as set forth in the Notice of
Grant), subject to Purchaser continuing to be a Service Provider through such dates.
Notwithstanding the foregoing sentence, on the first business day upon which Purchaser’s successor
as Chief Executive Officer commences employment with the Company (as determined by the Company in
its sole discretion) and subject to Purchaser continuing to serve as the Company’s Chief Executive
Officer through such date, 40% of the then unvested Shares subject to this Award will immediately
vest. Thereafter, the remaining unvested Shares subject to this Award will not vest in accordance
with the vesting schedule set forth in this paragraph, but will instead vest on the later of (i)
three (3) months after the first business day upon which Participant’s successor as Chief Executive
Officer commences employment with the Company or (ii) January 2, 2007, subject to Purchaser
continuing to be a Service Provider through such date.

         (b) Any of the Shares that have not yet been released from the Repurchase Option are referred
to herein as “Unreleased Shares.”

         (c) The Shares that have been released from the Repurchase Option shall be delivered to
Purchaser at Purchaser’s request as provided in Section 6.

     5. Restriction on Transfer.

         Except for the escrow described in Section 6 or the transfer of the Shares to the Company or
its assignees contemplated by this Agreement, none of the Shares or any beneficial interest therein
shall be transferred, encumbered or otherwise disposed of in any way until such Shares are released
from the Company’s Repurchase Option in accordance with the provisions of this Agreement. Any
distribution or delivery to be made to Purchaser under this Agreement will, if Purchaser is then
deceased, be made to Purchaser’s designated beneficiary, or if no beneficiary survives Purchaser,
to the administrator or executor of Purchaser’s estate. Any such transferee must furnish the
Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory
to the Company to establish the validity of the transfer and compliance with any laws or
regulations pertaining to said transfer.

     6. Escrow of Shares.

         (a) To ensure the availability for delivery of the Unreleased Shares upon repurchase by the
Company pursuant to the Repurchase Option, the Company shall, upon execution of this Agreement,
deliver and deposit with an escrow holder designated by the Company (the “Escrow

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Holder”) the share certificates representing the Unreleased Shares. The Unreleased Shares
shall be held by the Escrow Holder until such time as the Company’s Repurchase Option expires. The
Shares and stock assignment attached hereto as Exhibit A-2 will be held by the Escrow
Holder until such time as the Company’s Repurchase Option expires or the date Purchaser’s status as
a Service Provider terminates.

         (b) The Escrow Holder shall not be liable for any act it may do or omit to do with respect to
holding the Unreleased Shares in escrow while acting in good faith and in the exercise of its
judgment.

         (c) If the Company or any assignee exercises the Repurchase Option hereunder, the Escrow
Holder, upon receipt of written notice of such exercise from the proposed transferee, shall take
all steps necessary to accomplish such transfer. Purchaser hereby appoints the Escrow Holder with
full power of substitution, as Purchaser’s true and lawful attorney-in-fact with irrevocable power
and authority in the name and on behalf of Purchaser to take any action and execute all documents
and instruments, including, without limitation, stock powers which may be necessary to transfer the
certificate or certificates evidencing such Unreleased Shares to the Company upon such termination.

         (d) When the Repurchase Option has been exercised or expires unexercised or a portion of the
Shares has been released from the Repurchase Option, upon request the Escrow Holder shall promptly
cause a new certificate to be issued for the released Shares and shall deliver the certificate to
the Company or Purchaser, as the case may be.

         (e) Subject to the terms hereof, Purchaser shall have all the rights of a shareholder with
respect to the Shares while they are held in escrow, including without limitation, the right to
vote the Shares and to receive any cash dividends declared thereon.

         (f) In the event of any merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, share combination, or other change in the corporate
structure of the Company affecting the Common Stock, the Shares will be increased, reduced or
otherwise changed, and by virtue of any such change Purchaser will in his capacity as owner of
Unreleased Shares that have been awarded to him be entitled to new or additional or different
shares of stock, cash or securities (other than rights or warrants to purchase securities); such
new or additional or different shares, cash or securities will thereupon be considered to be
Unreleased Shares and will be subject to all of the conditions and restrictions which were
applicable to the Unreleased Shares pursuant to this Agreement. If Purchaser receives rights or
warrants with respect to any Unreleased Shares, such rights or warrants may be held or exercised by
Purchaser, provided that until such exercise any such rights or warrants and after such exercise
any shares or other securities acquired by the exercise of such rights or warrants will be
considered to be Unreleased Shares and will be subject to all of the conditions and restrictions
which were applicable to the Unreleased Shares pursuant to this Agreement. The Administrator in
its absolute discretion at any time may accelerate the vesting of all or any portion of such new or
additional shares of stock, cash or securities, rights or warrants to purchase securities or shares
or other securities acquired by the exercise of such rights or warrants.

     7. Legends. The Company may instruct the transfer agent for its Common Stock to place
a legend on the certificates representing the Shares or otherwise note its records as to the
restrictions on transfer set forth in this Agreement.

-3-

 

     8. Withholding of Taxes. The Company will withhold otherwise deliverable Shares upon
release from the Company’s Repurchase Option having a Fair Market Value equal to the minimum amount
required to be withheld for the payment of income, employment and other taxes which the Company
determines must be withheld (the “Withholding Taxes”) with respect to such Shares pursuant to such
procedures as the Administrator may specify from time to time. The Company will not retain
fractional Shares to satisfy any portion of the Withholding Taxes. Accordingly, Purchaser will pay
to the Company an amount in cash sufficient to satisfy the remaining Withholding Taxes due and
payable as a result of the Company not retaining fractional Shares. Should the Company be unable
to procure such cash amounts from Purchaser, Purchaser agrees and acknowledges that Purchaser is
giving the Company permission to withhold from Purchaser’s paycheck(s) an amount equal to the
remaining Withholding Taxes due and payable as a result of the Company not retaining fractional
Shares.

     9. Tax Consequences. Purchaser has reviewed with Purchaser’s own tax advisors the
federal, state, local and foreign tax consequences of this investment and the transactions
contemplated by this Agreement. Purchaser is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. Purchaser understands that
Purchaser (and not the Company) shall be responsible for Purchaser’s own tax liability that may
arise as a result of the transactions contemplated by this Agreement. Purchaser understands that
Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income
the difference between the purchase price for the Shares and the Fair Market Value of the Shares as
of the date any restrictions on the Shares lapse. In this context, “restriction” includes the
right of the Company to buy back the Shares pursuant to the Repurchase Option. Purchaser
understands that Purchaser may elect to be taxed at the time the Shares are purchased rather than
when and as the Repurchase Option expires by filing an election under Section 83(b) of the Code
with the IRS within 30 days from the date of purchase. The form for making this election is
attached as Exhibit A-3 hereto.

         THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER’S SOLE RESPONSIBILITY AND NOT THE
COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE
COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER’S BEHALF.

     10. General Provisions.

         (a) This Agreement shall be governed by the internal substantive laws, but not the choice of
law rules of California. This Agreement, subject to the terms and conditions of the Plan and the
Notice of Grant, represents the entire agreement between the parties with respect to the purchase
of the Shares by Purchaser. Subject to Section 16(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of this Agreement, the
terms and conditions of the Plan shall prevail. Unless otherwise defined herein, the terms defined
in the Plan shall have the same defined meanings in this Agreement.

         (b) Any notice, demand or request required or permitted to be given by either the Company or
Purchaser pursuant to the terms of this Agreement shall be in writing and shall be deemed given
when delivered personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of this Agreement or
such other address as a party may request by notifying the other in writing.

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         Any notice to the Escrow Holder shall be sent to the Company’s address with a copy to the
other party hereto.

         (c) The rights of the Company under this Agreement shall be transferable to any one or more
persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and
be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser
under this Agreement may only be assigned with the prior written consent of the Company.

         (d) Either party’s failure to enforce any provision of this Agreement shall not in any way be
construed as a waiver of any such provision, nor prevent that party from thereafter enforcing any
other provision of this Agreement. The rights granted both parties hereunder are cumulative and
shall not constitute a waiver of either party’s right to assert any other legal remedy available to
it.

         (e) Purchaser agrees upon request to execute any further documents or instruments necessary or
desirable to carry out the purposes or intent of this Agreement.

         (f) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION 4 HEREOF
IS EARNED ONLY BY CONTINUING SERVICE AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED OR PURCHASING SHARES HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH
PURCHASER’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE PURCHASER’S RELATIONSHIP AS A SERVICE
PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

By Purchaser’s signature below, Purchaser represents that he or she is familiar with the terms and
provisions of the Plan, and hereby accepts this Agreement subject to all of the terms and
provisions thereof. Purchaser has reviewed the Plan and this Agreement in their entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Purchaser agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any questions arising under
the Plan or this Agreement. Purchaser further agrees to notify the Company upon any change in the
residence indicated in the Notice of Grant.

PURCHASER:

 

Signature

 

Print Name

KOMAG INCORPORATED

Jan Schwartz, Treasurer

-5-

 

EXHIBIT A-2

ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED I, _____________________, hereby sell, assign and transfer unto Komag
Incorporated ___shares of the Common Stock of Komag Incorporated standing in my name of
the books of said corporation represented by Certificate No. ___herewith and do hereby
irrevocably constitute and appoint _____________________ to transfer the said stock on the
books of the within named corporation with full power of substitution in the premises.

     This Stock Assignment may be used only in accordance with the Restricted Stock Purchase
Agreement between Komag Incorporated and the undersigned dated __________________, ______(the
“Agreement”).

Dated: _________________, ____

Signature: _______________________________________

INSTRUCTIONS: Please do not fill in any blanks other than the signature line. The purpose of this
assignment is to enable the Company to exercise its Repurchase Option as set forth in the
Agreement, without requiring additional signatures on the part of Purchaser.

 

 

EXHIBIT A-3

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code
of 1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount
of any compensation taxable to taxpayer in connection with his or her receipt of the property
described below:

	1.	 	The name, address, taxpayer identification number and taxable year of the undersigned are
as follows:

	 	 	 	 	 
	NAME:

	 	TAXPAYER:
	 	SPOUSE:
	 
	 	 	 	 
	ADDRESS:
	 	 	 	 
	 
	 	 	 	 
	IDENTIFICATION NO.:

	 	TAXPAYER:
	 	SPOUSE:
	 
	 	 	 	 
	TAXABLE YEAR:
	 	 	 	 

	2.	 	The property with respect to which the election is made is described as follows:
	 
	 	 	____________ shares (the “Shares”) of the Common Stock of Komag Incorporated (the “Company”).
	 
	3.	 	The date on which the property was transferred is: ____________, ______.
	 
	4.	 	The property is subject to the following restrictions:
	 
	 	 	The Shares may be repurchased by the Company, or its assignee, upon certain events. This
right lapses with regard to a portion of the Shares based on the continued performance of
services by the taxpayer over time.
	 
	5.	 	The fair market value at the time of transfer, determined without regard to any restriction
other than a restriction which by its terms will never lapse, of such property is:
$____________.
	 
	6.	 	The amount (if any) paid for such property is: $____________.

The undersigned has submitted a copy of this statement to the person for whom the services
were performed in connection with the undersigned’s receipt of the above-described property. The
transferee of such property is the person performing the services in connection with the transfer
of said property.

The undersigned understands that the foregoing election may not be revoked except with the
consent of the Commissioner.

Dated: _________________, ____

The undersigned spouse of taxpayer joins in this election.

Dated: _________________, ____

_______________________________________

Taxpayer

_______________________________________

Spouse of Taxpayer

 

 

1710 Automation Parkway

San Jose, CA 95131-1873

Telephone (408) 576-2000

Facsimile (408) 944-9255

CONSULTING SERVICES AGREEMENT

     The following confirms the agreement (this “Agreement”) between
Thian Hoo Tan (“Consultant”, being an individual) and Komag, Incorporated (“Komag“ or the
“Company”) with respect to the provision by Consultant of consulting services to Komag, hereby
entered into as of February 15, 2006. In consideration of the mutual promises contained herein,
the parties hereto agree as follows:

     1. Resignation; Consulting Term.

         a. On the date of employment by Komag of a new Chief Executive Officer of Komag (“New CEO
Employment Date”), Mr. Tan agrees to resign his position as the Chief Executive Officer of the
Company and as a director of the Company, and agrees that he shall thereafter no longer serve as an
officer, employee or director of Komag or any of its subsidiaries. Consultant shall promptly
tender his written resignation to the Chairman of the Board of Directors of Komag effective as of
the New CEO Employment Date.

         b. The term of this Agreement will begin on the first day after the New CEO Employment Date
and will continue until the later of (i) three (3) months after the commencement of the consulting
term under this Agreement, or (ii) January 2, 2007, subject to any prior termination of this
Agreement as provided under Section 11 hereof (“Consulting Term”).

     2. Independent Contractor Status. It is the express intention of the parties to this
Agreement that Consultant perform the Services as an independent contractor to Komag, and Komag
shall classify Consultant as such for all purposes. Nothing in this Agreement shall in any way be
construed to constitute Consultant as an employee, agent, representative, joint venturer or partner
of Komag. Without limiting the generality of the foregoing, Consultant is not authorized to bind
Komag to any liability or obligation or to represent that Consultant has any such authority. Both
parties understand and agree that Consultant may perform services for others during the term of
this Agreement, subject to the provisions of Section 10 hereof.

     3. Warranties. Consultant warrants that he is in the business of providing to other
companies services similar to those provided to Komag under this Agreement; Consultant further
warrants that he either is providing, or has provided, such services to other companies.

 

 

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     4. Services. Consultant agrees to render consulting services (the “Services”) to
Komag for the term of this Agreement. The Services shall include, but are not limited to, those
duties set forth in Exhibit A hereto. The parties understand and agree that Consultant
will have the sole discretion to determine the method, means, and location of performing the
Services, and that Komag has no right to, and will not, control or determine the method, means, or
place of the performance of the Services.

     5. Employment of Assistants. Should Consultant, in his sole discretion, deem it
necessary to employ assistants to aid him in the performance of the Services, the parties agree
that Komag will not direct, supervise or control in any way such assistants to Consultant in their
performance of Services. The parties further agree that any such assistants shall be employed
solely by Consultant, and that he alone shall be responsible for providing workers’ compensation
insurance for his employees, for paying the salaries and wages of his employees, and for ensuring
that all required tax withholdings are made.

     Consultant further represents and warrants that he maintains workers’ compensation insurance
coverage for his employees, if any, and acknowledges that he alone has responsibility for such
coverage.

     6. Obligations of Consultant.

         a. Consultant will supply (or reimburse Komag for) all tools, equipment and materials
necessary to accomplish the Services under this Agreement and shall incur all expenses associated
with performance, except as expressly provided in Exhibit A hereto. Consultant will have
access to use of existing Komag equipment, systems and leased lines.

         b. Consultant acknowledges and agrees that Consultant is obligated to report as income all
compensation received by Consultant pursuant to this Agreement. Consultant agrees and acknowledges
the obligation to pay all self-employment and other taxes on such income. Consultant is solely
responsible for all taxes, withholdings and other similar statutory obligations; and Consultant
agrees to defend, indemnify and hold harmless Komag and its directors, officers and employees
harmless from and against any and all claims made by any entity on account of an alleged failure by
Consultant to satisfy any such tax or withholding obligations attributable to Consultant’s
provision of services pursuant to this agreement.

         c. Consultant will indemnify and hold harmless Komag and its directors, officers and employees
from, and will defend Komag and its directors, officers and employees against, any and all losses,
taxes, liabilities, costs, expenses, damages, claims, demands or suits, and related costs and
expenses to persons or property that arise, directly or indirectly, from or in connection with any
acts or omissions of Consultant, or from the breach of any term or condition of this Agreement
attributable to Consultant or his/her agents.

     7. Reporting to Komag’s Facilities. Consultant is not required to report to work at
the offices of Komag during any particular work hours. Rather, Consultant is free to report or not
report to Komag’s offices as he sees fit. When Consultant does visit Komag’s offices, he will be
required to sign in or wear the standard issued Identification badge.

     8. Compensation.

         a. Consultant shall be paid upon completion of each project(s) which he has been hired to
perform or at the discretion of Komag on a retained basis. Consultant shall submit to

 

 

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Komag invoices for all services rendered and, assuming timely and satisfactory completion of the
project(s), Komag agrees to adhere to the payment schedule attached hereto in Exhibit A.
Except as otherwise explicitly set forth in this Section 8, the foregoing fees are Consultant’s
sole compensation for rendering Services to Komag. The parties agree that Komag is not responsible
for reimbursing any costs or expenses incurred by Consultant in performing the Services.
Authorized travel expenses (pre-authorized by Komag in writing) associated with business travel
within the scope of this Agreement will be reimbursed by Komag.

         b. If, on or immediately prior to the New CEO Employment Date, Consultant executes and does
not revoke a Release Agreement in substantially the form attached hereto as Exhibit B,
then, within ten (10) business days after the expiration of any such revocation period, Komag will
pay Consultant a year-to-date pro-rated bonus under Komag’s Target Incentive Plan calculated based
on Komag achieving 100% of Komag’s 2006 Operating Income Target, provided that the year-to-date
operating income through the most recently concluded quarter prior thereto meets or exceeds 100% of
the Operating Income Target as defined in Komag’s Target Incentive Plan, on a pro-rated basis
through such period. The Compensation Committee of the Komag Board of Directors will determine any
applicable personal bonus modifier for Consultant, which will determine the ultimate bonus amount.
If Consultant’s resignation as an officer and director of Komag occurs following the end of a
fiscal quarter of Komag but prior to the Komag Audit Committee’s review of the financial results
for that quarter, then any such bonus hereunder shall only be paid following the Komag Audit
Committee’s review of the financial results for that quarter, subject to the terms and conditions
set forth herein.

         c. Upon the conclusion of Komag’s 2006 fiscal year, Komag will pay Consultant an additional
bonus payment under Komag’s Target Incentive Plan, on or before February 28, 2007, provided that
(i) Consultant has performed the Services hereunder to the reasonable satisfaction of the Board of
Directors of the Company, (ii) Consultant executes and does not revoke an additional Release
Agreement in substantially the form attached hereto as Exhibit B on or immediately prior to
such bonus payment date, and (iii) Komag’s performance qualifies for the payment of bonuses under
the terms of such plan. The bonus amount will equal the bonus that Consultant would have been
eligible to earn under Komag’s Target Incentive Plan had Consultant remained employed as the Chief
Executive Officer of Komag through December 31, 2006. The Compensation Committee of the Komag
Board of Directors will determine any applicable personal bonus modifier for Consultant, which will
determine the ultimate bonus amount.

     9. Confidential Information. Consultant understands that Komag possesses Proprietary
Information as defined below which is important to its business and that this Agreement creates a
relationship of confidence and trust between Consultant and Komag with regard to Proprietary
Information.

         a. For purposes of this Agreement, “Proprietary Information” is information that was or will
be developed, created, or discovered by or on behalf of Komag, or is developed, created or
discovered by Consultant while performing Services, or which became or will become known by, or was
or is conveyed to Komag which has commercial value in Komag’s business. “Proprietary Information”
includes, but is not limited to, trade secrets, computer programs, ideas, techniques, inventions
(whether patentable or not), business and product development plans, customers and other
information concerning Komag’s actual or anticipated business, research or development, personnel
information, Inventions (as defined in subsection e below), or which is received in confidence by
or for Komag from any other person.

         b. At all times, both during the term of this Agreement and after its

 

 

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termination, Consultant will keep in confidence and trust, and will not use or disclose, any Proprietary Information
without the prior written consent of an officer of Komag, except as may be necessary in the
ordinary course of performing the Services under this Agreement.

         c. Consultant understands that Komag possesses or will possess “Company Documents” which are
important to its business. For purposes of this Agreement, “Company Documents” are documents or
other media that contain or embody Proprietary Information or any other information concerning the
business, operations or plans of Komag, whether such documents have been prepared by Consultant or
by others. Company Documents include, but are not limited to, blueprints, drawings, photographs,
charts, graphs, notebooks, customer lists, computer disks, personnel files, tapes or printouts,
sound recordings and other printed, typewritten or handwritten documents. All Company Documents
are and shall remain the sole property of Komag. Consultant agrees not to remove any Company
Documents from the business premises of Komag or deliver any Company Documents to any person or
entity outside Komag, except as required to do in connection with performance of the Services under
this Agreement. Consultant further agrees that, immediately upon Komag’s request and in any event
upon completion of the Services, Consultant shall deliver to Komag all of Komag’s property,
including but not limited to all Company Documents, apparatus, equipment and other physical
property or any reproduction of such property (including all electronically stored information and
passwords to access such property), excepting only Consultant’s copy of this Agreement.

         d. During the term of this Agreement and for one (1) year thereafter (the “Restricted
Period”), Consultant will not, directly or indirectly, encourage or solicit any employee or
contractor of Komag or its affiliates to leave Komag or its affiliates for any reason. During the
Restricted Period, Consultant will not, whether for Consultant’s own account or for the account of
any other person, firm, corporation or other business organization, intentionally interfere with
any person who is or during the period of Consultant’s engagement by Komag was a partner, supplier,
customer or client of Komag or its affiliates.

         e. Consultant will promptly disclose in writing to Komag all “Inventions” (which term includes
improvements, inventions, designs, formulas, works of authorship, trade secrets, technology, mask
works, circuits, layouts, algorithms, computer programs, ideas, processes, techniques, know-how and
data, whether or not patentable) made or conceived or reduced to practice or developed by
Consultant, either alone or jointly with others, during the term of this Agreement in connection
with the Services or which relate to any Proprietary Information.

         f. All Proprietary Information and all title, patents, patent rights, copyrights,
mask work rights, trade secret rights, and other intellectual property and rights anywhere in the
world (collectively “Rights”) in connection therewith shall be the sole property of Komag.
Consultant hereby assigns to Komag any Rights Consultant may have or acquire in such Proprietary
Information. Any works which are copyrightable subject matter are agreed by the parties to be
works made for hire.

         g. Consultant agrees that all Inventions which Consultant makes, conceives, reduces to
practice or develops (in whole or in part, either alone or jointly with others) during the term of
this Agreement in connection with the Services or which relate to any Proprietary Information shall
be the sole property of Komag. Consultant agrees to assign (or cause to be assigned) and hereby
assigns fully to Komag all Inventions and Rights to any such Inventions.

         h. Consultant agrees to perform, during and after the term of this Agreement, all acts deemed
necessary or desirable by Komag to permit and assist it, at Consultant’s

 

 

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reasonable rate, in
evidencing, perfecting, obtaining, maintaining, defending and enforcing Rights and/or Consultant’s
assignment with respect to such Inventions in any and all countries. Such acts may include,
but are not limited to, execution of documents and assistance or cooperation in legal proceedings.
Consultant hereby irrevocably designates and appoints Komag and its duly authorized officers and
agents, as Consultant’s agents and attorneys-in-fact to act for and in behalf and instead of
Consultant, to execute and file any documents and to do all other lawfully permitted acts to
further the above purposes with the same legal force and effect as if executed by Consultant.

         i. Consultant represents that performance of all the terms of this Agreement will not breach
any agreement to keep in confidence Proprietary Information acquired by Consultant in confidence or
in trust prior to the execution of this Agreement. Consultant has not entered into, and Consultant
agrees not to enter into, any agreement either written or oral that conflicts or might conflict
with Consultant’s performances of the Services under this Agreement.

         j. If any Rights or Inventions assigned hereunder are based on, or incorporate, or are
improvements or derivatives of, or cannot be reasonably made, used, reproduced and distributed
without using or violating technology or Rights owned or licensed by Consultant and not assigned
hereunder, Consultant hereby grants Komag a perpetual, worldwide royalty-free, non-exclusive
sublicensable right and license to exploit and exercise all such technology and Rights in support
of Komag’s exercise or exploitation of any assigned Rights or Inventions (including any
modifications, improvements and derivatives thereof).

     10. Non-Compete. Consultant agrees to take all reasonable precautions to prevent any
unauthorized disclosure of Komag’s Proprietary Information, including but not limited to, by,
during the term of this Agreement, refraining from accepting and commencing work for an employer or
other entity which would interfere with his obligations to Komag, which would create a conflict of
interest, and/or which involves providing services directly or indirectly for a disk maker or the
disk making division of a company. Without Komag’s prior written approval, Consultant will not
directly or indirectly disclose to anyone the existence of this Agreement or the fact that
Consultant has this arrangement with Komag, except as otherwise required by law or if this
Agreement is publicly disclosed by Komag.

     11. Survival. Upon termination of this Agreement, all rights and duties of Komag and
Consultant toward each other shall cease, except Section 2 (Independent Contractor Status), Section
6 (Obligations of Consultant), Section 9 (Confidential Information), Section 10 (Non-Compete),
Section 13 (Enforceability of Agreement), and Section 15 (Arbitration).

     12. Enforceability of Agreement. Consultant agrees that any dispute in the meaning,
effect, or validity of this Agreement shall be resolved in accordance with the laws of the State of
California without regard to the conflict of laws provisions thereof. Consultant further agrees
that if one or more provisions of this Agreement are held to be unenforceable under applicable
California law, such provision(s) shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.

     13. Assignment. This Agreement shall not be assignable by either Consultant or Komag
without the express written consent of the other party.

     14. Arbitration. Any controversy between the parties hereto involving the
construction or application of any terms, covenants, or conditions of this Agreement or any claim
arising out of or relating to this Agreement will be submitted to and be settled by final and
binding arbitration in

 

 

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San Jose, California, in accordance with the rules of the American
Arbitration Association then in effect, and judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof.

     15. Entire Understanding. This Agreement contains the entire understanding of the
parties regarding its subject matter and can only be modified by a subsequent written agreement
executed by Consultant and the President of Komag.

     16. Notices. All notices required or given herewith shall be addressed to Komag or
Consultant at the designated addresses shown below by registered mail, special delivery, or by
certified courier service:

	 	a.	 	To Komag:
	 
	 	 	 	Komag, Incorporated

ATTN: Human Resources

1710 Automation Parkway

San Jose, CA 95131
	 
	 	b.	 	To Consultant:
	 
	 	 	 	Thian Hoo Tan

21925 Arrowhead Lane

Saratoga, CA 95070

     17. Attorneys’ Fees. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys’ fees, costs, and necessary disbursements, in addition to any other relief to which the
party may be entitled.

     18. Severability. If any provision of this Agreement is found to be illegal or
unenforceable, the other provisions shall remain effective and enforceable to the greatest extent
possible.

(Remainder of page intentionally left blank.)

 

 

TH Tan Consulting Agreement

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     IN WITNESS WHEREOF, the parties hereto have executed this Consulting Agreement as of the date
first set forth above.

	 	 	 	 	 
	 	CONSULTANT

 	 
	Dated:     _______________, 2006. 	By:  	 	 
	 	Name:  	Thian Hoo Tan 
	 	 	 	 
	 
	 	KOMAG, INCORPORATED

 	 
	Dated: _______________, 2006. 	By:  	 
	 
	 	Name:  	 

	 	Title:  	 

	 

 

 

EXHIBIT A

DUTIES OF INDEPENDENT CONTRACTOR

AND PAYMENT SCHEDULE FOR COMPLETION OF SAME

Please print clearly:

	 	 	 	 	 	 	 
	Consultant Name:

	 	Tan
	 	Thian
	 	Hoo
	 	 	 
	 

	 	(Last)
	 	(First)
	 	(MI)
	 
	 	 	 	 	 	 
	Address:

	 	21925 Arrowhead Lane

Saratoga, CA 95070	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	Mgr/Supv:

	 	 

	 	Dept. Name/Number:

	 	 	 
	Date:
	 	 
	 

	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	SS#:
	 	 
	 

	 	 
	 
	 	 
	 

	 	G&A Executive Mgmt. / 19506
	 

	 	 	 
	 	 	Anticipated
	 	 	Completion
	Scope of Work	 	Dates

	Consultant will provide consulting and advisory services relating to matters and to projects or work in process that had been within the
Consultant’s areas of responsibility while he served as Chief Executive Officer of the Company, including such appropriate tasks as the
Company’s Board of Directors (“the Board”) may request as necessary and appropriate to assist the individual who becomes the Company’s
Chief Executive Officer (“CEO) transition into that position. The services which the Consultant will provide hereunder may include,
without limitation, introducing the CEO to the Company’s major clients and business people with whom the Consultant had business
relationships relating to the Company’s business while Consultant served as CEO.

	 	later of 3 months from
effective date or
January 2, 2007

	 	 	 	 	 	 	 
	Retainer:

	 	$10,000.00 per full calendar month for
	 	Anticipated Contract Length:
	 	Up to 3 months
	 

	 	four (4) days of services per month*.
	 	 	 	 
	 

	 	Additional days to be billed at $2,500.00 per day.**	 	 
	 

	 	*A month would be completed on the same day of any subsequent
month on which the Consultant commences providing services as
a consultant.
	 

	 	**A day of service would require at least 8 hours of services
to the Company during such day.

			
	Expense Reimbursement:	 	The Consultant shall be reimbursed for the usual and customary expenses associated with conducting company
related business.
 

			
	Billing Terms:	 	Net 15
 

Approvals:

	 	 	 
	 
	 	 
	 
	Manager/Supervisor

BOD, non-executive Chairman

	 	Date
	 
	 	 
	 
	 	 
	 
	Human Resources

	 	Date

	 	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	 
	 

	 	Date
	 
	 	 
	 
	 	 
	 
	 	 
	 
	CEO

	 	Date

 

 

EXHIBIT B

 

 

Exhibit B

RELEASE AGREEMENT

     This Release Agreement (“Agreement”) is made by and between Thian Hoo Tan (“Tan”) and Komag,
Incorporated, a Delaware corporation (“Komag” or the “Company”) (jointly referred to as the
“Parties”) as of [___]. Any term used but not defined herein shall have the meaning ascribed
to such term in the Consulting Services Agreement dated as of February [ ], 2006, as amended,
between the parties (the “Consulting Agreement”).

     1. Confidential Information. Tan shall continue to maintain the confidentiality of
all confidential and proprietary information of the Company and shall continue to comply with the
terms and conditions of that certain Confidentiality Agreement dated ___between Tan and
the Company.

     2. Payment of Salary and Benefits. Tan acknowledges and represents that, except as
explicitly set forth in Section 8 of the Consulting Agreement, the Company has paid all salary,
wages, bonuses, accrued vacation, commissions and any and all other benefits due to Tan. Tan
ceased accruing employee benefits, including, but not limited to, vacation time and paid time off,
as of the New CEO Employment Date.

     3. Release of Claims. Tan agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Tan by the Company and its officers,
managers, supervisors, agents and employees. Tan, on his own behalf, and on behalf of his
respective heirs, family members, executors, agents, and assigns, hereby fully and forever releases
the Company and its officers, directors, employees, agents, investors, shareholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations, and
assigns (the “Releasees”), from, and agrees not to sue concerning, any claim, duty, obligation or
cause of action relating to any matters of any kind, whether presently known or unknown, suspected
or unsuspected, that Tan may possess arising from any omissions, acts or facts that have occurred
up until and including the Effective Date of this Agreement including, without limitation:

         (i) any and all claims relating to or arising from Tan’s employment relationship with the
Company and the termination of that relationship;

         (ii) any and all claims relating to, or arising from, Tan’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;

         (iii) any and all claims under the law of any jurisdiction including, but not limited to,
wrongful discharge of employment, constructive discharge from employment, termination in violation
of public policy, discrimination, harassment, retaliation, fraud, fraudulent inducement, breach of
contract, both express and implied, breach of a covenant of good faith and fair dealing, both
express and implied; promissory estoppel, negligent or intentional infliction of emotional
distress, negligent or intentional misrepresentation, negligent or intentional interference with
contract or prospective economic advantage, unfair business practices, defamation, libel, slander,
negligence, personal injury, assault, battery, invasion of privacy, false imprisonment, conversion,
workers’ compensation and disability benefits;

         (iv) any and all claims for violation of any federal, state or municipal statute, including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair

 

 

Labor Standards Act, the Family and Medical Leave Act, the California Family Rights Act, the
Employee Retirement Income Security Act of 1974, the Older Workers Benefit Protection Act, The Worker
Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, and the
California Labor Code;

         (v) any and all claims for violation of the federal, or any state, constitution;

         (vi) any and all claims arising out of any other laws and regulations relating to employment
or employment discrimination;

         (vii) any claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by Tan as a result of this
Agreement; and

         (viii) any and all claims for attorneys’ fees and costs.

     The Company and Tan agree that the release set forth in this section shall be and remain in
effect in all respects as a complete general release as to the matters released. This release does
not extend to any obligations incurred under this Agreement.

     4. Acknowledgement of Waiver of Claims Under ADEA. Tan acknowledges that he is
waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967
(“ADEA”) and that this waiver and release is knowing and voluntary. Tan and the Company agree that
this waiver and release does not apply to any rights or claims that may arise under ADEA after the
Effective Date of this Agreement. Tan acknowledges that the consideration given for this waiver
and release Agreement is in addition to anything of value to which Tan was already entitled. Tan
further acknowledges that he has been advised by this writing that:

         (i) he should consult with an attorney prior to executing this Agreement;

         (ii) he has up to twenty-one (21) days within which to consider this Agreement;

         (iii) he has seven (7) days following his execution of this Agreement to revoke the Agreement;

         (iv) this Agreement shall not be effective until the revocation period has expired; and

         (v) nothing in this Agreement prevents or precludes Tan from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor does it impose any
condition precedent, penalties or costs for doing so, unless specifically authorized by federal
law.

     5. Civil Code Section 1542. Tan represents that he is not aware of any claim by him
other than the claims that are released by this Agreement. Tan acknowledges that he has been
advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542,
which provides as follows:

	 	 	A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE

 

 

	 	 	TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

Tan, being aware of said code section, agrees to expressly waive any rights he may have thereunder,
as well as under any other statute or common law principles of similar effect.

     6. No Pending or Future Lawsuits. Tan represents that he has no lawsuits, claims, or
actions pending in his name, or on behalf of any other person or entity, against the Company or any
other person or entity referred to herein. Tan also represents that he does not intend to bring
any claims on his own behalf or on behalf of any other person or entity against the Company or any
other person or entity referred to herein.

     7. Confidentiality. The Parties acknowledge that Tan’s agreement to keep the terms
and conditions of this Agreement confidential was a material factor on which all parties relied in
entering into this Agreement. Tan hereto agrees to use his best efforts to maintain in confidence
the existence of this Agreement, the contents and terms of this Agreement, and the consideration
for this Agreement (hereinafter collectively referred to as “Severance Information”). Tan agrees
to take every reasonable precaution to prevent disclosure of any Severance Information to third
parties, and agrees that there will be no publicity, directly or indirectly, concerning any
Severance Information. Tan agrees to take every precaution to disclose Severance Information only
to those attorneys, accountants, governmental entities, and family members who have a reasonable
need to know of such Severance Information.

     8. Entire Agreement. This Agreement represents the entire agreement and understanding
between the Company and Tan concerning the subject matter of this Agreement and Tan’s relationship
with the Company, and supersedes and replaces any and all prior agreements and understandings
between the Parties concerning the subject matter of this Agreement and Tan’s relationship with the
Company, with the exception of the Consulting Agreement, the Confidentiality Agreement and the
outstanding stock option and restricted stock award agreements granted by the Company to Tan.

     9. No Waiver. The failure of the Company to insist upon the performance of any of the
terms and conditions in this Agreement, or the failure to prosecute any breach of any of the terms
and conditions of this Agreement, shall not be construed thereafter as a waiver of any such terms
or conditions. This entire Agreement shall remain in full force and effect as if no such
forbearance or failure of performance had occurred.

     10. No Oral Modification. This Agreement may only be amended in a writing signed by
Tan and an authorized representative of the Company.

     11. Governing Law. This Agreement shall be construed, interpreted, governed, and
enforced in accordance with the laws of the State of California, without regard to choice-of-law
provisions. Tan hereby consents to personal and exclusive jurisdiction and venue in the State of
California.

     12. Effective Date. This Agreement is effective after it has been signed by both
parties and after eight (8) days have passed since Executive has signed the Agreement, provided
Executive does not revoke his consent in writing.

     13. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.

 

 

     14. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties hereto, with the full
intent of releasing all claims. The Parties acknowledge that:

         (i) They have read this Agreement;

         (ii) They have been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such
counsel;

         (iii) They understand the terms and consequences of this Agreement and of the releases it
contains; and

         They are fully aware of the legal and binding effect of this Agreement.

(Remainder of page intentionally left blank.)

 

 

     IN WITNESS WHEREOF, the Parties have executed this Release Agreement on the respective dates
set forth below.

	 	 	 	 	 	 	 
	 	 	 	THIAN HOO TAN

 	 
	Dated: 	 	 	By:  	 	 
	 	 	 	Name:  	Thian Hoo Tan 
	 	 	 	 	 	 
	 	 	 
	 	 	 	KOMAG, INCORPORATED

 	 
	Dated: 	 	 	By:  	 	 
	 	 	 	Name:  	 	 
	 	 	 	Title:exv10w16

 

Exhibit 10.16

AMENDMENT TO

THE SANTARUS, INC. 1998 STOCK OPTION PLAN

     THIS AMENDMENT TO THE SANTARUS, INC. 1998 STOCK OPTION PLAN (this “Amendment”), dated as of
February 9, 2006, is made and adopted by SANTARUS, INC., a Delaware corporation (the “Company”).
Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in
the Plan (as defined below).

RECITALS

     WHEREAS, the Company maintains the Santarus, Inc. 1998 Stock Option Plan (the “Plan”);

     WHEREAS, the Company desires to amend the Plan as set forth below;

     WHEREAS, pursuant to Section 13 of the Plan, the Plan may be amended by the Board of Directors
of the Company; and

     WHEREAS, the Board of Directors of the Company has approved this Amendment pursuant to
resolutions adopted effective February 9, 2006.

     NOW, THEREFORE, in consideration of the foregoing, the Company hereby amends the Plan as
follows:

     1. A new Section 8.2(g) is hereby added to the Plan as follows:

          “(g) Notwithstanding anything in this Plan or in any Option Agreement to the contrary, in the
event of a Change in Control, (i) one hundred percent (100%) of any outstanding repurchase rights
applicable to any unvested, exercised option shares (determined as of the date ten (10) days prior
to the date of the Change in Control) held by each member of the Board who is not an Employee and
who continues to serve on the Board as of the date ten (10) days prior to the date of the Change of
Control shall terminate automatically, and the shares of Stock subject to those terminated rights
shall automatically become vested shares immediately prior to the consummation of the Change in
Control and (ii) one hundred percent (100%) of any unexercisable or unvested portion of any
outstanding, unexercised Options (determined as of the date ten (10) days prior to the date of the
Change in Control) held by each member of the Board who is not an Employee and who continues to
serve on the Board as of the date ten (10) days prior to the date of the Change of Control shall
become automatically immediately exercisable and vested as of the date ten (10) days prior to the
date of the Change in Control.”

     2. This Amendment shall be and is hereby incorporated in and forms a part of the Plan. All
other terms and provisions of the Plan shall remain unchanged except as specifically modified
herein. The Plan, as amended by this Amendment, is hereby ratified and confirmed.

     I hereby certify that the foregoing Amendment was duly adopted by the Board of Directors of
Santarus, Inc. on February 9, 2006.

	 	 	 	 	 
	 

	 	By:
	 	/s/ Debra P. Crawford
	 

	 	 	 	 
	 

	 	Name:
	 	Debra P. Crawford
	 

	 	Title:
	 	SVP, Chief Financial Officer, Treasurer
	 

	 	 	 	and Secretary

 

 

PLAN HISTORY

	 	 	 
	October 30, 1998

	 	Board adopts Plan, with an initial reserve of 1,000,000 shares.
	 
	 	 
	November 5, 1998

	 	Shareholders approve Plan, with an initial reserve of 1,000,000 shares.
	 
	 	 
	June 16, 2000

	 	Board approves increase in share reserve from 1,000,000 to 1,600,000.
	 
	 	 
	August 27, 2000

	 	Shareholders approve increase in share reserve from 1,000,000 to 1,600,000.
	 
	 	 
	February 21, 2001

	 	Board approves increase in share reserve from 1,600,000 to 3,750,000.
	 
	 	 
	February 21, 2001

	 	Shareholders approve increase in share reserve from 1,600,000 to 3,750,000.
	 
	 	 
	October 10, 2001

	 	Board approves increase in share reserve form 3,750,000 to 4,600,000.
	 
	 	 
	January 14, 2002

	 	Board approves modification to allow the Board flexibility in the determination of the terms of promissory
notes delivered as payment for the exercise of options.
	 
	 	 
	January 14, 2002

	 	Shareholders approve increase in share reserve from 3,750,000 to 4,600,000.
	 
	 	 
	March 19, 2002

	 	Board approves modifications to the default provisions relating to the effect of a Change in Control on
outstanding options and exercised shares and expressly granting the Board increased flexibility in
determining such terms at the time of option grant.
	 
	 	 
	March 5, 2003

	 	Board approves increase in share reserve from 4,600,000 to 14,600,000, effective immediately subsequent to
the closing of the first sale of the Company’s Series D Preferred Stock (which sale was completed on April
30, 2003).
	March 6, 2003

	 	Shareholders approve increase in share reserve from 4,600,000 to 14,600,000, effective immediately subsequent
to the closing of the first sale of the Company’s Series D Preferred Stock (which sale was completed on April
30, 2003).
	 
	 	 
	December 3, 2003

	 	Board approves amendment and restatement of the Plan to permit (a) the transfer of Nonstatutory Stock Options
and (b) the designation of beneficiaries for both Incentive Stock Options and Nonstatutory Stock Options.
	 
	 	 
	February 9, 2006

	 	Board approves amendment to the Plan relating to acceleration of options held by non-employee Board members
in the event of a Change in Control.

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