Document:

exv10w2

 

Exhibit 10.2

SMART Modular Technologies (WWH), Inc.

Stock Incentive Plan

     Section 1. Purpose. The purposes of the SMART Modular Technologies (WWH), Inc. Stock
Incentive Plan (the “Plan”) are to promote the interests of SMART Modular Technologies (WWH), Inc.,
an exempted company organised under the laws of the Cayman Islands (together with its successors
and assigns, the “Company”) and its shareholders by (i) attracting and retaining exceptional
executive personnel, employees, directors, and consultants of the Company and its Affiliates (as
defined below); (ii) motivating employees, consultants and directors by means of performance
related incentives to achieve longer range performance goals; and (iii) enabling employees,
consultants and directors to participate in the long term growth and financial success of the
Company.

     Section 2.  Definitions. As used in the Plan, the following terms shall have the meanings
set forth below:

     (a) “Affiliate” means with respect to any Person, (i) any other Person directly or indirectly
controlling, controlled by or under common control with such Person and any entity that is,
directly or indirectly, controlled by the Company and (ii) any other entity in which such Person
has a significant equity interest or which has a significant equity interest in such Person, in
either case as determined by the Committee. For purposes of this definition, the terms “control”
(including with correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”) when used with respect to any Person, means the possession, directly or indirectly
of the power to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the
foregoing, for purposes of any Incentive Stock Option, “Affiliate” shall mean any parent
corporation or subsidiary corporation of the Company as those terms are defined in Sections 424(e)
and (f), respectively, of the Code.

     (b) “Award” means any Option or other stock-based award granted hereunder.

     (c) “Award Agreement” means any written agreement, contract, or other instrument or document
evidencing any Award, which may, but need not, be executed or acknowledged by a Participant.

     (d) “Board” means the Board of Directors of the Company.

     (e) “Cause” means, unless otherwise defined in any Employment Agreement or Award Agreement:

          (i) a Participant’s willful and continued failure substantially to perform his or her duties
(other than as a result of total or partial incapacity due to physical or mental illness);

          (ii) a Participant’s gross negligence or willful malfeasance in the performance of his or her
duties;

 

 

          (iii) a Participant’s commission of an act constituting fraud, embezzlement, or any other act
constituting a felony or other similar offense under the laws of the United States, the Cayman
Islands or any other jurisdiction in which the Company conducts business;

          (iv) a Participant being repeatedly under the influence of alcohol or illegal drugs while
performing his or her duties; or

          (v) any other act or omission which is materially injurious to the financial condition or
business reputation of the Company or any of its Affiliates as determined in the reasonable
discretion of the Company, including a Participant’s breach of the provisions of any
non-solicitation, non-competition, trade secret or confidentiality covenant in favor of the Company
or its Affiliates binding upon such Participant.

     (f) “Change of Control” means the occurrence of one of the following events:

          (i) the consummation of a merger or consolidation of the Company with or into any other entity
pursuant to which the shareholders of the Company, or applicable, immediately prior to such merger
or consolidation hold less than 50% of the voting power of the surviving entity;

          (ii) the sale or other disposition of all or substantially all of the Company’s assets; or

          (iii) any acquisition by any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act and other than the direct and indirect shareholders of the Company
immediately before such transaction) of the beneficial ownership of 50% or more of the voting power
of the Company’s equity securities in a single transaction or series of related transactions, other
than in an underwritten public offering of the securities of the Company;

provided, however, that a transaction shall not constitute a Change of Control if its sole purpose
is to change the state of the Company’s incorporation or to create a holding company that will be
owned in substantially the same proportions by the persons who held the Company’s securities
immediately before such transaction.

     (g) “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

     (h) “Committee” means a committee of one or more members of the Board designated by the Board
to administer the Plan. Until otherwise determined by the Board, the full Board shall be the
Committee under the Plan.

     (i) “Consultant” means any person, including an advisor, engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services.

     (j) “Director” means a member of the Board.

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     (k) “Disability” shall mean “permanent and total disability” as defined in Section 22(e)(3) of
the Code.

     (l) “Employee” means an employee of the Company or any of its Affiliates.

     (m) “Employment Agreement” means an employment agreement entered into between a Participant
and the Company or any of its Affiliates.

     (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (o) “Exercise Price” means the purchase price of the Option as set forth in the Award
Agreement.

     (p) “Fair Market Value” means, with respect to a Share as of any date of determination, the
reported closing price of a Share on such exchange or market as is the principal trading market for
the Shares for the trading day immediately preceding such date of determination. If the Shares are
not traded on an exchange or principal trading market on such date, the fair market value of a
Share shall be determined by the Committee in good faith taking into account such factors as the
Committee shall in its sole discretion deem relevant or appropriate.

     (q) “Incentive Stock Option” means a right to purchase Shares from the Company that is granted
under Section 6 of the Plan and that is intended to meet the requirements of Section 422 of the
Code or any successor provision thereto.

     (r) “Initial Public Offering” shall mean the closing of the first underwritten public offering
of Shares after which the Shares are publicly traded.

     (s) “Initial Transferability Date” shall mean the earlier to occur of (i) the Initial Public
Offering or (ii) the Reporting Date.

     (t) “Listing Date” means the first date on which any security of the Company is listed or
approved for listing upon notice of issuance on a national securities exchange or on the National
Market System of the Nasdaq Stock Market (or any successor to that entity), if the exchange or
Nasdaq Stock Market (or its successor) has been certified by rule or order of the commissioner.

     (u) “Non-Qualified Stock Option” means a right to purchase Shares from the Company that is
granted under Section 6 of the Plan and that is not intended to be an Incentive Stock Option.

     (v) “Option” means an Incentive Stock Option or a Non-Qualified Stock Option.

     (w) “Participant” means a Person granted an Award under the Plan (and to the extent
applicable, any heirs or legal representatives thereof).

     (x) “Permitted Transferees” shall mean, with respect to each Participant, (i) those persons
who acquire Shares pursuant to such Participant’s will or the laws of descent and

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distribution or as a result of other donative transfers to “family members” as defined in, and
under the circumstances permitted under, Rule 701 and (ii) the Company.

     (y) “Person” means any individual, corporation, limited liability company, partnership,
association, joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

     (z) “Reporting Date” means the date on which the Company becomes a reporting company under the
Exchange Act with respect to any class of its equity securities.

     (aa) “Rule 701” means Rule 701 as promulgated under the Securities Act.

     (bb) “SEC” means the Securities and Exchange Commission or any successor thereto.

     (cc) “Securities Act” means the Securities Act of 1933, as amended.

     (dd) “Shares” means the ordinary shares, of US$0.001 par value, in the authorised capital of
the Company or such other securities as may be designated by the Committee from time to time.

     (ee) “Substitute Awards” means Awards granted in assumption of, or in substitution for,
outstanding awards previously granted by a company acquired by the Company or with which the
Company combines.

     Section 3.
Administration.

     (a) Authority of Committee. The Plan shall be administered by the Committee. Subject to the
terms of the Plan, applicable law and contractual restrictions affecting the Company, and in
addition to other express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority to:

          (i) designate Participants;

          (ii) determine the type or types of Awards to be granted to a Participant and the exercise
price or purchase price, if applicable;

          (iii) determine the number of Shares to be covered by, or with respect to which payments,
rights, or other matters are to be calculated in connection with, Awards;

          (iv) determine the terms and conditions (including the vesting schedule, if any) of any Award
and Award Agreement;

          (v) determine whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards or other property, or canceled,
forfeited, or suspended and the method or methods by which Awards may be settled, exercised,
canceled, forfeited or suspended;

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          (vi) determine whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property, and other amounts payable with respect to an Award shall
be deferred either automatically or at the election of the holder thereof or of the Committee;

          (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan;

          (viii) establish, amend, suspend, or waive such rules and regulations and appoint such agents
as it shall deem appropriate for the proper administration of the Plan; and

          (ix) make any other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan.

     (b) Committee Discretion Binding. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and
shall be final, conclusive and binding upon all Persons, including the Company, any of its
Affiliates, any Participant, any holder or beneficiary of any Award, any shareholder and any
Employee.

     Section 4. Shares Available For Awards.

     (a) Shares Available. Subject to adjustment as provided in this Section, the number of Shares
with respect to which Awards may be granted under the Plan shall be
7,329,948. Such Shares may
consist, in whole or in part, of authorised and unissued shares. If, after the effective date of
the Plan, any Shares covered by an Award granted under the Plan (including any Substitute Award) or
to which such an Award relates are forfeited, or if such an Award is settled for cash or otherwise
terminates or is canceled without the delivery of Shares, then the Shares covered by such Award, or
to which such Award relates, shall again become Shares with respect to which Awards may be granted.
In addition, Shares tendered in satisfaction or partial satisfaction of the exercise price of any
Award or any tax withholding obligations will again become Shares with respect to which Awards may
be granted.

     (b) Adjustments. In the event that the number of issued Shares is increased or decreased as a
result of a stock dividend, stock split, reverse stock split, combination or reclassification of
Shares, or any other increase or decrease in the number of issued Shares effected without receipt
of consideration by the Company (provided that conversion of any convertible securities of the
Company shall not be deemed to have been “effected without receipt of consideration”), then the
Committee shall, in such manner as it may deem equitable but otherwise in its discretion, adjust
any or all of (i) the number of Shares of the Company (or number and kind of other securities or
property) with respect to which Awards may thereafter be granted, (ii) the number of Shares or
other securities of the Company (or number and kind of other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any Award.

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     (c) Substitute Awards. Any Shares underlying Substitute Awards shall not be counted against
the Shares authorised for issuance under the Plan and shall, subject to existing corporate
authorities, increase the number of Shares available for issuance hereunder, unless determined
otherwise by the Committee.

     Section 5. Eligibility.

     (a) General. Any Employee, Consultant or Director shall be eligible to be selected by the
Committee to receive an Award under the Plan.

     (b) Incentive Stock Options. Only Employees who are U.S. taxpayers shall be eligible for the
grant of Incentive Stock Options.

     Section 6. Stock Options.

     (a) Grants. The Committee is authorised to grant Options to Participants with the terms and
conditions set forth in this Section and with such additional terms and conditions, in either case
not inconsistent with the provisions of the Plan, as the Committee shall determine.

     (b) Type of Option. The Committee shall have the authority to grant Incentive Stock Options
to U.S. taxpayers or to grant Non-Qualified Stock Options to any Participant, or both. In the case
of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply
with the provisions of Section 422 of the Code, as from time to time amended, or any successor
provision thereto, and any regulations implementing such statute.

     (c) Exercise Price. The Committee in its sole discretion shall establish the Exercise Price at
the time each Option is granted. Notwithstanding the foregoing, the Exercise Price of any Option
granted prior to the Listing Date shall not be less than 85% of the Fair Market Value at the time
the Option is granted (or 110% of the Fair Market Value in the case of any person who owns
securities possessing more than 10% of the total combined voting power of all classes of securities
of the Company or its Affiliates).

     (d) Exercise. Each Option shall be exercisable at such times and subject to such terms and
conditions as the Committee may, in its sole discretion, specify in the applicable Award Agreement
or thereafter. The Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of U.S. federal or state securities
laws, or those of any other jurisdiction, as it may deem necessary or advisable. Notwithstanding
the foregoing, any Option granted prior to the Listing Date to any Employee who is not an officer,
director or consultant shall become exercisable at the rate of at least 20% per year over five
years from the date the Option is granted, subject to continued employment.

     (e) Payment. No Shares shall be delivered pursuant to any exercise of an Option until payment
in full of the exercise price is received by the Company, together with any documentation required
by the Company and any applicable taxes. Such payment may be made:

          (i) in cash;

          (ii) if approved by the Committee, in Shares (the value of such Shares shall be their Fair
Market Value on the date of exercise) owned by the Participant for the period required to avoid a
charge to the Company’s earnings (which is generally six months);

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          (iii) if approved by the Committee, by a combination of the foregoing;

          (iv) if approved by the Committee, in accordance with a cashless exercise program; or

          (v) in such other manner as permitted by the Committee at the time of grant or thereafter.

     Section 7. Other Stock-based Awards. The Committee is hereby authorised to grant to
Participants such other Awards (including, without limitation, grants of restricted stock,
restricted stock units, rights to purchase stock, warrants, and rights to dividends and dividend
equivalents) that are denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares (including, without limitation, securities convertible
into Shares) as are deemed by the Committee to be consistent with the purposes of the Plan. Subject
to the terms of the Plan, the Committee shall determine the terms and conditions of such Awards.
Shares or other securities delivered pursuant to a purchase right granted under this Section shall
be purchased for such consideration, which may be paid by such method or methods and in such form
or forms, including, without limitation, cash, Shares, other securities, other Awards, or other
property, or any combination thereof, as the Committee shall determine.

     Section 8. Effect Of Termination Of Employment Or Service.

     (a) Termination of Employment or Service. Except as the Committee may otherwise provide at
the time the Award is granted or thereafter, or as required to comply with applicable law, if the
Participant’s employment or service with the Company and its Affiliates is terminated by
Participant or by the Company for any reason (other than death or Disability or by the Company for
Cause), then vesting shall immediately cease and, to the extent vested as of the date of
termination, an Award may be retained and, if applicable, exercised until the earlier of (i) the
date three months (or such longer or shorter period, if any, specified in the applicable Award
Agreement or Employment Agreement) after such termination of employment or service or (ii) the date
such Award would have expired had it not been for the termination of employment or service, after
which time, in either case, the Award shall expire.

     (b) Death or Disability. Except as the Committee may otherwise provide at the time the Award
is granted or thereafter, or as required to comply with applicable law, if the Participant’s
employment or service with the Company and its Affiliates is terminated by reason of death or
Disability, then vesting shall immediately cease and, to the extent vested as of the date of
termination, the Award may be retained and, if applicable, exercised by the Participant or his
successor (if employment or service is terminated by death) until the earlier of (i) the date one
year after such termination of employment or service or (ii) the date such Award would have expired
had it not been for the termination of such employment or service, after which time, in either
case, the Award shall expire.

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     (c) Cause. Except as the Committee may otherwise provide at the time the Award is granted or
thereafter, or as required to comply with applicable law, if the Participant’s employment or
service with the Company and its Affiliates is terminated by the Company or an
Affiliate for Cause, all Awards shall be forfeited and shall expire immediately on the date of
termination.

     (d) Repurchase Rights Prior to an Initial Public Offering. Unless otherwise determined in an
Employment Agreement or Award Agreement, the Company shall have the following rights to repurchase
a Participant’s Shares (the “Repurchase Right”) upon termination of Participant’s employment or
service:

          (i) If the Participant’s employment or service with the Company and its Affiliates shall be
terminated by the Company or any of its Affiliates for Cause, all Shares previously acquired
hereunder and held by Participant for the period determined by the Company in its discretion that
will not result in adverse accounting consequences to the Company (which is generally six months)
shall be subject to a right of repurchase by the Company from the Participant or his or her
Permitted Transferee at a price per Share equal to the lesser of (A) the Exercise Price or (B) Fair
Market Value as of the date of the notice given pursuant to clause (iii) below.

          (ii) If the Participant’s employment or service with the Company and its Affiliates shall be
terminated (A) by Participant for any reason, (B) by the Company or any of its Affiliates for any
reason other than Cause, or (C) as a result of death or Disability, all Shares previously acquired
hereunder and held by Participant for the period determined by the Company in its discretion that
will not result in adverse accounting consequences to the Company (which is generally six months)
shall be subject to a right of repurchase by the Company from the Participant or his or her
Permitted Transferee at a price per Share equal to Fair Market Value as of the date of the notice
given pursuant to clause (iii) below.

          (iii) If the Company elects to exercise its Repurchase Right under this Section, the Company
shall deliver written notice to the Participant or his or her Permitted Transferee, as applicable,
setting forth the number of Shares proposed to be purchased and the then Fair Market Value. Upon
the consummation of any such purchase, Participant shall deliver certificates, as applicable, or
other documents satisfactory to the Company in its sole discretion evidencing such Shares duly
endorsed, or accompanied by written instruments of transfer, free and clear of any encumbrances
against delivery of payment for such Shares.

          (iv) The Repurchase Right shall lapse and be of no further force and effect upon the earlier
to occur of (A) an Initial Public Offering and (B) 12 months after termination of Participant’s
employment or service, or earlier as required by applicable law or regulation.

          (v) Any exercise of a Repurchase Right shall be made in accordance with the Company’s
articles of association from time to time.

     Section 9.  Amendment And Termination.

     (a) Amendment or Termination of the Plan. The Board may amend, alter, suspend, discontinue, or
terminate the Plan or any portion thereof at any time; provided that (i) no such amendment,
alteration, suspension, discontinuation or termination shall be made without shareholder approval
if such approval is necessary to comply with any tax or regulatory requirement with which the Board
deems it necessary or desirable to qualify or comply and

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(ii) any amendment, alteration, suspension, discontinuance, or termination that would
adversely affect the rights of a Participant with respect to any outstanding Award shall not to
that extent be effective with respect to such Award without the consent of the affected
Participant, holder or beneficiary, except as otherwise provided in Section 10 below or elsewhere
in the Plan. Notwithstanding anything to the contrary herein, the Committee may amend the Plan in
such manner as may be necessary so as to have the Plan conform with local rules and regulations in
any jurisdiction outside the United States.

     (b) Amendment or Termination of Awards. Subject to the terms of the Plan and applicable law,
the Committee may waive any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Award theretofore granted, prospectively or retroactively;
provided that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would adversely affect the rights of a Participant shall not to that extent be
effective without the consent of the affected Participant, holder or beneficiary, except as
otherwise provided in Section 10 below or elsewhere in the Plan or the applicable Award Agreement.

     Section 10. Corporate Transactions.

     (a) Change of Control. Any provision of this Plan or any Award Agreement to the contrary
notwithstanding, in the event of a Change of Control, the Committee, in its sole discretion, (i)
may cause any outstanding Award to be (A) continued by the Company, (B) assumed, or substituted
with a substantially equivalent award, by the successor company (or its parent or any of its
subsidiaries), or (C) canceled in consideration of a cash payment or alternative Award, if
applicable, made to the holder of such canceled Award equal in value to the Fair Market Value of
such canceled Award less any exercise price (provided that the Committee may determine that only
holders of vested Awards shall receive any such cash payment or alternative Award); or (ii) may
take any other action or actions with respect to the outstanding Awards that it deems appropriate.
Any Award (or any portion thereof) not continued or assumed by the Company or the successor company
(or its parent or any of its subsidiaries), as applicable, pursuant to the foregoing shall
terminate on such Change of Control and the holder thereof shall be entitled to no consideration
for such Award.

     (b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company,
then all outstanding Awards shall terminate immediately prior to such event.

     Section 11.  General Provisions.

     (a) Dividend Equivalents. In the sole and complete discretion of the Committee, an Award may
provide the Participant with dividends or dividend equivalents, payable in cash, Shares, other
securities or other property on a current or deferred basis.

     (b) Nontransferability of Awards. Except to the extent otherwise provided in an Award
Agreement or as determined by the Committee (except with respect to Incentive Stock Options), no
Award shall be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered
by a Participant, except by will or the laws of descent and distribution.

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     (c) Transfer Restrictions on Shares. Shares issued hereunder may not be sold, given,
transferred, assigned, or otherwise hypothecated by the holder thereof prior to the Initial
Transferability Date, except to such holder’s Permitted Transferees. Any attempted transfer in
violation of this subsection will be void ab initio. Shares held by Permitted Transferees who
receive such Shares in accordance with this subsection shall be subject to the restrictions herein
as if such Permitted Transferee were the original holder of the Shares transferred to the Permitted
Transferee.

     (d) No Rights to Awards. No Employee, Participant or other Person shall have any claim to be
granted any Award, and there is no obligation for uniformity of treatment of Employees,
Participants, or holders or beneficiaries of Awards. The terms and conditions of Awards need not be
the same with respect to each recipient.

     (e) Lock-up Period. Unless otherwise determined by the Committee, Shares shall not be issued
under this Plan unless the Participant agrees that he or she will not sell, transfer, make any
short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any Shares (or other securities of the
Company) held by the Participant prior to the date 180 days following the effective date of a
registration statement with respect to any underwritten public offering by the Company of its
securities as requested by the managing underwriters for such offering, including the Initial
Public Offering.

     (f) Information Obligations. Prior to the Listing Date, to the extent required by applicable
law, the Company shall deliver financial statements to Participants at least annually. This
subsection shall not apply to key employees whose duties in connection with the Company assure them
access to equivalent information.

     (g) Share Certificates. Certificates issued in respect of Shares shall, unless the Committee
otherwise determines, be registered in the name of the Participant or its permitted transferees and
shall be deposited by such Participant or permitted transferee, together with a stock power
endorsed in blank, with the Company. When the Participant ceases to be bound by any transfer
restrictions set forth herein or in the applicable Award Agreement, the Company shall deliver such
certificates to the Participant upon request. Such stock certificate shall carry such appropriate
legends, and such written instructions shall be given to the Company transfer agent, as may be
deemed necessary or advisable by counsel to the Company in order to comply with the requirements of
the Securities Act of 1933, any state securities laws or any other applicable laws. All
certificates for Shares or other securities of the Company or any of its Affiliates delivered under
the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the Plan or the rules,
regulations and other requirements of the Securities and Exchange Commission or any stock exchange
upon which such Shares or other securities are then listed and any applicable laws or rules or
regulations, and the Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

     (h) Withholding. A Participant may be required to pay to the Company or any of its Affiliates,
and the Company or any Affiliate shall have the right and is hereby authorised (i) to withhold from
any Award, from any payment due or transfer made under any Award or under

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the Plan or from any compensation or other amount owing to a Participant, the amount (in cash,
Shares, other securities, other Awards or other property) of any applicable taxes, social
contributions or other amounts required by applicable law in respect of the grant, exercise, lapse
or vesting of an Award or any payment or transfer under an Award or under the Plan and (ii) to take
such other action as may be necessary in the opinion of the Company to satisfy all obligations for
the payment of such amounts.

     (i) Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement which
shall be delivered to the Participant and shall specify the terms and conditions of the Award and
any rules applicable thereto.

     (j) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent
the Company or any Affiliate from adopting or continuing in effect other compensation arrangements.

     (k) No Right to Employment. The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ or service of the Company or any Affiliate and
shall not lessen or effect the right of the Company or its Affiliates to terminate the employment
or service of a Participant.

     (l) Rights as a Shareholder. Subject to the provisions of the applicable Award, no Participant
or holder or beneficiary of any Award shall have any rights as a shareholder with respect to any
Shares to be issued under the Plan until he or she has become the holder of such Shares.

     (m) Governing Law. The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan and any Award Agreement shall be determined in accordance with the
laws of the Cayman Islands, without, to the fullest extent permissible thereby, application of the
conflict of law principles thereof.

     (n) Severability. If any provision of the Plan or any Award is or becomes or is deemed to be
invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person
or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

     (o) Other Laws. The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines that the issuance or
transfer of such Shares or such other consideration might violate any applicable law or regulation
or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment
tendered to the Company by a Participant in connection therewith shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of the foregoing, no
Award granted hereunder is, nor shall be construed as, an offer to sell securities of the Company,
and no such offer shall be outstanding, unless and until the Committee in its sole

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discretion has determined that any such offer, if made, would be in compliance with all
applicable requirements of the laws of the Cayman Islands, the U.S. federal securities laws and any
other laws to which such offer, if made, would be subject.

     (p) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to
create a trust or separate fund of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to
receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any Affiliate.

     (q) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award, and the Committee shall determine whether cash or other securities or other
property shall be paid or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated, or otherwise eliminated.

     (r) Headings. Headings are given to the Sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.

     (s) Proprietary Information and Inventions Agreement. A Participant shall, as a condition
precedent to the exercise or settlement of an Award, have executed and be in compliance with the
Company’s (or its Affiliate’s) standard form of confidentiality and non-disclosure agreement.

     (t) Modification of Award Terms for non-U.S. Participants. The Committee shall have the
discretion and authority to grant Awards with such modified terms as the Committee deems necessary
or appropriate in order to comply with the laws of the country in which the Participant resides or
is employed, and the Committee may establish a subplan under this Plan for such purposes.

     (u) Company Governing Instruments. All Shares issued and/or vested pursuant to an Award or
Substitute Award, or transferred thereafter, shall be held subject to the Memorandum and Articles
of Association of the Company.

     Section 12. Term Of The Plan.

     (a) Effective Date. The Plan shall be effective as of the date of its adoption by the Board.

     (b) Expiration Date. No Award shall be granted under the Plan more than ten years after the
date of adoption of the Plan by the Board. Unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award granted hereunder may, and the authority of the Board or the
Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive
any conditions or rights under any such Award shall, continue after the authority for grant of new
Awards hereunder has been exhausted.

12exv10w3

 

Exhibit 10.3

Option
Agreement

under the

SMART Modular Technologies (WWH), Inc.

Stock Incentive Plan

(U.S.)

	 	 	 
	Date of Grant:

	 	                    
	 
	 	 
	Name of Optionee:

	 	                    
	 
	 	 
	Number of Shares Subject to the Option:

	 	                    
	 
	 	 
	Exercise Price:

	 	$                     per share
	 
	 	 
	Type of Option

	 	Non-Qualified Stock Option

     SMART
Modular Technologies (WWH), Inc. (the “Company”), hereby grants as of the
date of grant set forth above (the “Grant Date”) to the above-named optionee (“Optionee”) an
option (the “Option”) to purchase from the Company, for the price per share set forth above,
the number of shares of common stock of the Company (“Shares”) set forth above pursuant to the
SMART Modular Technologies (WWH), Inc. Stock Incentive Plan (the “Plan”).

     Capitalized terms not otherwise defined herein shall have the same meanings as in the
Plan. The terms and conditions of the Option granted hereby, to the extent not controlled by
the terms and conditions contained in the Plan, are as follows:

     1. Exercise Price. The price at which each Share subject to this Option may be
purchased shall be the price set forth above.

     2. Number of Shares, Exercise, The number of Shares for which the Option may be
exercised are set forth above. To the extent the Option has become vested or exercisable in
accordance with Section 3 hereof, the Option may be exercised at any time through the date of
expiration of the Option, as set forth in Section 5 hereof.

     3. Vesting. The Option shall vest and become exercisable over four years on the
following schedule:

          (a) The Option shall become vested and exercisable as to 25% of the Shares
constituting the Option on the first anniversary of the Grant Date, subject to Optionee’s
continued employment with the Company or one of its subsidiaries on such date.

          (b) Thereafter, the Option shall become vested and exercisable at a rate of
1/48 of the Shares constituting the Option per month, subject to Optionee’s continued
employment with the Company or one of its subsidiaries on each such date.

 

 

          (c) Vesting shall cease immediately upon termination of Optionee’s
employment with the Company and its subsidiaries for any reason (including death or
Disability).

     4. Nature of Grant. In accepting the grant, the Optionee acknowledges that:

          (a) the Plan is established voluntarily by the Company, it is discretionary in
nature and it may be modified, amended, suspended or terminated by the Company at any time,
unless otherwise provided in the Plan and this Option Agreement;

          (b) the grant of this Option is voluntary and occasional and does not create
any contractual or other right to receive future grants of options, or benefits in lieu of
options, even if options have been granted repeatedly in the past;

          (c) all decisions with respect to future option grants, if any, will be at the sole
discretion of the Company;

          (d) the Optionee’s participation in the Plan shall not create a right to further
employment with the Company or its Affiliates and shall not interfere with the ability of the
Company or its Affiliates to terminate the Optionee’s employment relationship at any time with
or without cause;

          (e) the Optionee is voluntarily participating in the Plan;

          (f) this Option is an extraordinary item that does not constitute compensation
of any kind for services of any kind rendered to the Company or its Affiliates, and which is
outside the scope of the Optionee’s employment contract, if any;

          (g) this Option and Option benefit is not part of normal or expected
compensation or salary for any purposes, including, but not limited to, calculating any severance,
resignation, termination, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments;

          (h) in the event that the Optionee ceases to be an employee, director or
consultant, this Option grant will not be interpreted to form an employment contract or
relationship with the Company or its Affiliates, and furthermore, this Option grant will not
be interpreted to form an employment contract with the Company or its Affiliates;

          (i) the future value of the underlying Shares is unknown and cannot be
predicted with certainty;

          (j) if the underlying Shares do not increase in value, the Options will have
no value;

          (k) if the Optionee exercises his or her Option and obtains Shares, the value of
those Shares acquired upon exercise may increase or decrease in value, even below the Exercise
Price;

2

 

          (1) in consideration of this grant of Options, no claim or entitlement to
compensation or damages shall arise from termination of the Options or diminution in value of
the Options or Shares purchased through exercise of the Options resulting from termination
of the Optionee’s employment by the Company or its Affiliates (for any reason whatsoever and
whether or not in breach of local labor laws) and the Optionee irrevocably releases the
Company and its Affiliates from any such claim that may arise; if, notwithstanding the foregoing, any
such claim is found by a court of competent jurisdiction to have arisen, then, by signing this
Option Agreement, the Optionee shall be deemed irrevocably to have
waived his or her entitlement to pursue such claim; and

          (m) in the event of involuntary termination of employment (whether or not in
breach of local labor laws), the Optionee’s right to exercise the Options after termination
of employment, if any, will be measured by the date of termination of the Optionee’s active
employment (e.g., active employment would not include a period of “garden leave” or similar
period pursuant to local law), and will not be extended by any notice period mandated under
local law; the Administrator shall have the exclusive discretion to determine when the
Optionee is no longer actively employed for purposes of the Optionee’s Option grant.

     5. Term of Option. The term of the Option commences on the Grant Date and
expires upon the earliest of the following:

          (a) three months after termination of Optionee’s employment with the
Company and its Affiliates by Participant or by the Company or any of its Affiliates (other
than as a result of death or Disability or termination by the Company for Cause);

          (b) one year after Optionee’s employment with the Company and its Affiliates
is terminated by reason of Optionee’s death or Disability;

          (c) immediately upon termination of Optionee’s employment with the
Company and its Affiliates by the Company or any of its Affiliates for Cause;

          (d) the day before the tenth (10th) anniversary of the Grant Date;

          (e) in the event of a Change of Control, to the extent not continued or
assumed in accordance with Section 10(a) of the Plan; or

          (f) in accordance with Section 10(b) of the Plan.

     6. Exercise.

          (a) Manner of Exercise. During the term of the Option set forth in Section 5
above, Optionee (or his representative, devisee or heir, as applicable) may exercise any
portion of this Option which has become exercisable in accordance with the terms hereof as to all or
any of the Shares then available for purchase by delivering to the Company written notice in the
form specified by the Company. Payment shall be (i) in cash, by certified or bank cashier check
payable to the order of the Company, free from all collection charges, (ii) in the discretion
of the Committee, in Shares (and provided such shares shall have been held by Optionee for such
period of time as the Committee shall determine necessary so as not to result in adverse

3

 

accounting consequences for the Company) having a Fair Market Value on the date of exercise
equal to the full amount of the Exercise Price therefor, or (iii) such other form as may be
permitted by the Committee. Only one stock certificate will be issued unless Optionee
otherwise requests in writing. Shares purchased upon exercise of the Option will be issued in the name
of Optionee or Optionee’s permitted transferee. Optionee shall not be entitled to any rights as a
stockholder of the Company in respect of any Shares covered by this Option until such shares
of Stock shall have been paid for in full and issued to Optionee.

          (b) Optionee’s Responsibility for Tax Withholding. Regardless of any action
the Company or Affiliate takes with respect to any or all income tax, social insurance,
payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), the Optionee
acknowledges that the ultimate liability for all Tax-Related Items legally due by the Optionee
is and remains the Optionee’s responsibility and that the Company and/or Affiliate (i) make no
representations or undertakings regarding the treatment of any Tax-Related Items in connection
with any aspect of this Option grant, including the grant, vesting or exercise of this Option,
the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends,
and (ii) do not commit to structure the terms of the grant or any aspect of the Option to
reduce or eliminate the Optionee’s liability for Tax-Related Items. Prior to exercise of this Option,
the Optionee shall pay or make adequate arrangements satisfactory to the Company and/or Affiliate
to satisfy all withholding and payment on account obligations of the Company and/or Affiliate.
In this regard, the Optionee authorizes the Company and/or the Affiliate to withhold all
applicable Tax-Related Items legally payable by the Optionee from the Optionee’s wages or
other cash compensation paid to the Optionee by the Company and/or the Affiliate or from
proceeds of the sale of the Shares. Alternatively, or in addition, if permissible under local
law, the Company may (1) sell or arrange for the sale of Shares that the Optionee acquires to meet
the withholding obligation for Tax-Related Items, and/or (2) withhold in Shares, provided that the
Company only withholds the amount of Shares necessary to satisfy the minimum withholding
amount. Finally, the Optionee shall pay to the Company or Affiliate any amount of Tax-Related
Items that the Company or Affiliate may be required to withhold as a result of the Optionee’s
participation in the Plan or the Optionee’s purchase of Shares that cannot be satisfied by the
means previously described. The Company may refuse to honor the exercise and refuse to
deliver the Shares if the Optionee fails to comply with his or her obligations in connection
with the Tax-Related Items as described in this section.

          (c) Lock-up Period. By exercising the Option, Optionee agrees that the
Company (or a representative of the underwriter(s)) may, in connection with any underwritten
registration of the offering of any securities of the Company under the Securities Act
(including the Company’s Initial Public Offering), require that Optionee not sell, dispose of, transfer,
make any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any Shares or other securities of the
Company held by Optionee, for a period of time specified by the underwriter(s) (not to exceed
one hundred eighty (180) days) following the effective date of the registration statement of
the Company filed under the Securities Act. Optionee further agrees to execute and deliver such
other agreements as may be reasonably requested by the Company and/or the underwriter(s) that
are consistent with the foregoing or that are necessary to give further effect thereto. In
order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect
to Optionee’s Shares until the end of such period. The underwriters of the Company’s stock are

4

 

intended third party beneficiaries of this Subsection and shall have the right, power and authority
to enforce the provisions hereof as though they were a party hereto.

          (d) Restrictions on Transfer of Shares. By exercising the Option, Optionee
understands and agrees that any Shares acquired hereunder may not be sold, given, transferred,
assigned, or otherwise hypothecated by the holder thereof prior to the Initial Transferability
Date, except to such holder’s Permitted Transferees. Any attempted transfer in violation of
this subsection will be void ab initio. Shares held by Permitted Transferees who receive such
Shares in accordance with this subsection shall be subject to the restrictions herein as if such
Permitted Transferee were the original holder of the Shares transferred to the Permitted Transferee.

     7. Repurchase Rights Prior to an Initial Public Offering. The Company shall have
the following rights to repurchase Optionee’s Shares acquired pursuant to the exercise of the
Option (the “Repurchase Right”) upon termination of Optionee’s employment:

          (a) Termination for Cause. If Optionee’s employment with the Company and
its Affiliates is terminated by the Company or any of its Affiliates for Cause, all Shares
previously acquired hereunder and held for the period determined by the Company in its
discretion that will not result in adverse accounting consequences to the Company (which is
generally six months) shall be subject to a right of repurchase by the Company from Optionee
or his or her Permitted Transferee at a price per Share equal to the lesser of (A) the Exercise
Price or (B) Fair Market Value as of the date of the notice given pursuant to clause (c) below.

          (b) Termination without Cause. If Optionee’s employment with the Company
and its Affiliates is terminated (i) by the Company or any of its Affiliates for any reason
other than Cause, (ii) by Optionee for any reason, or (iii) as a result of death or Disability, all
Shares previously acquired and held for the period determined by the Company in its discretion that
will not result in adverse accounting consequences to the Company (which is generally six months)
shall be subject to a right of repurchase by the Company from Optionee or his or her Permitted
Transferee at a price per Share equal to Fair Market Value as of the date of the notice given
pursuant to clause (c) below.

          (c) Exercise of Repurchase Right. If the Company elects to exercise its
Repurchase Right under this Section 6, the Company shall deliver written notice to Optionee or
his or her Permitted Transferee, as applicable, setting forth the number of Shares proposed to
be purchased and the then Fair Market Value. Upon the consummation of any such purchase,
Optionee shall deliver certificates, as applicable, or other documents satisfactory to the
Company in its sole discretion evidencing such Shares duly endorsed, or accompanied by written
instruments of transfer, free and clear of any encumbrances against delivery of payment for
such Shares. If the Board determines that the Company is unable to repurchase all or some portion
of the Shares for cash without breaching the terms of any debt instruments or other agreement to
which the Company or any of its subsidiaries is a party, or the Board determines in good faith
that such repurchase would otherwise have a material adverse effect on the financial condition
of the Company, the Company will pay in cash the maximum amount permitted under such debt
instruments, or that would not result in such a material adverse effect, and deliver to
Optionee a promissory note for the balance, payable as soon as (and in the maximum amounts that) the

5

 

terms of such debt instruments or other agreements will permit or that will not have such a
material adverse effect and bearing interest at a rate no less than the applicable federal
rate.

          (d) Lapse of Repurchase Right. The Repurchase Right shall lapse and be of
no further force and effect upon the earlier to occur of (i) an Initial Public Offering and
(ii) 12 months after termination of Optionee’s employment.

          (e) Governing Instruments, Any exercise of a Repurchase Right shall be
made in accordance with the Company’s articles of association from time to time.

     8. Certificates. Certificates issued in respect of Shares acquired upon exercise of the
Option shall, unless the Committee otherwise determines, be registered in the name of Optionee
or Optionee’s permitted transferee. When Optionee ceases to be bound by any transfer
restrictions herein or in the Plan, the Company shall deliver such certificates to Optionee or
Optionee’s permitted transferee upon request. Such stock certificate shall carry such
appropriate legends, and such written instructions shall be given to the Company transfer agent, as may be
deemed necessary or advisable by counsel to the Company in order to comply with the
requirements of the Securities Act of 1933, any state securities laws or any other applicable
laws.

     9. Nontransferability of Option. This Option is personal to Optionee and may be
exercised only by Optionee or his or her representative in the event of Optionee’s Disability
or death. Any Option shall not be transferable other than by will or the laws of descent and
distribution. Following transfer, any such Option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer. The events of termination of
employment or death of Optionee set forth in the Plan shall continue to be applied with respect to
Optionee, following which the transferred Options shall be exercisable by the transferee only
to the extent and for the periods specified in the Plan.

     10.
 Employment Rights. This Option does not confer on Optionee any right to
continue in the employ of the Company or any Affiliate or interfere in any way with the right
of the Company or any Affiliate to determine the terms of Optionee’s employment.

     11.
 Proprietary Information and Inventions Agreement. Optionee shall, as a
condition precedent to the exercise or settlement of an Award, have executed and be in
compliance with the Company’s (or its Affiliate’s) standard form of confidentiality and non-
disclosure agreement.

     12.
 Terms of Plan, Interpretations. This Option and the terms and conditions herein
set forth are subject in all respects to the terms and conditions of the Plan, which shall be
controlling. All interpretations or determinations of the Committee and/or the Board shall be
binding and conclusive upon Optionee and his legal representatives on any question arising
hereunder. Optionee acknowledges that he has received and reviewed a copy of the Plan.

     13. Notices. All notices hereunder to the party shall be delivered or mailed to the
following addresses:

	 	 	 
	If to the Company:

	 	SMART Modular Technologies (WWH), Inc.
	 

	 	4211 Starboard Drive

6

 

	 	 	 
	 

	 	Fremont, CA 94538
	 

	 	Attn: President
 
	If to Optionee:

	 	To the person and at the address specified on the signature page or
the last address on the Company’s records for such person.

     Such addresses for the service of notices may be changed at any time provided notice of
such change is furnished in advance to the other party.

     14. Data Privacy. The Optionee hereby explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of the Optionee’s personal data as
described in this document by and among, as applicable, the Company and its Affiliates for the
exclusive purpose of implementing, administering and managing the Optionee’s participation in
the Plan.
 The Optionee understands that the Company and its Affiliates hold certain personal
information about the Optionee, including, but not limited to, the Optionee’s name, home
address and telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any Shares or directorships held in the Company,
details of all Options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested
or outstanding in the Optionee’s favor, for the purpose of implementing, administering and
managing the Plan (“Data”). The Optionee understands that Data may be transferred to any third
parties assisting in the implementation, administration and management of the Plan, that these
recipients may be located in the Optionee’s country or elsewhere, and that the recipient’s
country may have different data privacy laws and protections than the Optionee’s country. The Optionee
understands that he or she may request a list with the names and addresses of any potential
recipients of the Data by contacting his or her local human resources representative. The
Optionee authorizes the recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and managing the
Optionee’s participation in the Plan, including any requisite transfer of such Data as may be
required to a broker or other third party with whom he or she may elect to deposit any Shares
of stock acquired upon exercise of this Option. The Optionee understands that Data will be held
only as long as is necessary to implement, administer and manage the Optionee’s participation
in the Plan. The Optionee understands that he or she may, at any time, view Data, request
additional information about the storage and processing of Data, require any necessary
amendments to Data or refuse or withdraw the consents herein, in any case without cost, by
contacting in writing his or her local human resources representative. The Optionee
understands, however, that refusing or withdrawing his or her consent may affect his or her ability to
participate in the Plan. For more information on the consequences of the Optionee’s refusal to
consent or withdrawal of consent, the Optionee understands that he or she may contact his or
her local human resources representative.

     15. Entire Agreement. This Agreement contains the entire understanding of the
parties hereto in respect of the subject matter contained herein. This Agreement and the Plan
supersedes all prior agreements and understandings between the parties hereto with respect to
the subject matter hereof.

7

 

     16. Language. If the Optionee has received this or any other document related to the
Plan translated into a language other than English and if the translated version is different
than the English version, the English version will control.

     17. Electronic Delivery, The Company may, in its sole discretion, decide to deliver
any documents related to the Option granted under and participation in the Plan or future
Options that may be granted under the Plan by electronic means or to request the Optionee’s consent to
participate in the Plan by electronic means. The Optionee hereby consents to receive such
documents by electronic delivery and, if requested, to agree to participate in the Plan
through an on-line or electronic system established and maintained by the Company or another third party
designated by the Company.

     18. Governing Law. This Option Agreement shall be governed by and construed in
accordance with the laws of the Cayman Islands, without, to the fullest extent permissible
thereby, application of the conflict of law principles thereof.

     19. Counterparts. This Option Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

     IN WITNESS WHEREOF, the undersigned have caused this Option Agreement to be
duly executed as of the date first above written.

	 	 	 	 	 	 	 	 	 
	SMART MODULAR TECHNOLOGIES	 	 	 	 	 	 
	     (WWH),
INC.	 	 	 	OPTIONEE:
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Address:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 
	 

	 	 
	 	 	 	 	 	 

8

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