Document:

Exhibit 4.3

 

STOCK OPTION AGREEMENT

(Employment Inducement Grant)

 

This
NON-STATUTORY STOCK OPTION AGREEMENT, dated as of January 4, 2010 (this “Agreement”),
is between NETLIST, INC., a Delaware corporation (the “Company”), and Steve
McClure (the “Optionee”).

 

R E C I T A L S

 

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

 

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

 

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

 

A G R E E M E N T

 

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

 

1.             Grant  of  Option.  The Company hereby grants to the Optionee, as
an inducement to accept employment with the Company, an option (the “Option”)
to purchase from the Company all or any number of an aggregate of 100,000
shares (the “Option  Shares”), of the Company’s common stock,
$.001 par value per share, at a price of $ 5.00 per share, on the terms and
subject to the conditions of this Agreement. 
This grant is not
made pursuant to the Company’s 2006 Equity Incentive Plan (the “Plan”),
attached as Exhibit A. 
However, except as otherwise expressly provided herein, this grant is
subject to the rules, terms and conditions of the Plan as if it were a grant
made pursuant to and under the Plan, and all such rules, terms and conditions
are hereby incorporated herein by reference as if set forth herein in their
entirety.  Capitalized terms used but not
defined in this Agreement shall have the meanings given to them in the
Plan.  The Option is granted as of January
4, 2010 (the “Grant  Date”).

 

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

 

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

 

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

 

 

provisions
of Section 7.1(e) of the Plan), the Option shall become exercisable as
follows: (i) 25,000 shares on April 4, 2010; and (ii) 12
quarterly installments of 6,250 shares from July 4, 2010 through April 1,
2013, until vested in full (or otherwise terminated), such that, on April 1,
2013, the Option shall be vested as to all of the Shares and fully
exercisable.  These installments shall be
cumulative, such that Optionee may exercise the Option as to any or all of the
Shares covered by any installment at any time or times after such installment
vests and prior to termination of the Option. 
The foregoing notwithstanding, the Option shall cease vesting upon the
termination of Optionee’s status as an employee of the Company for any
reason.  Notwithstanding anything
expressed or implied to the contrary in the foregoing provisions of this Section 4,
the exercisability of the Option may, as provided in Section 7.1(d) of
the Plan, at any time be Accelerated in the discretion of the Committee.

 

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

 

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

 

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

 

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

 

	
  NETLIST, INC.

  	
   

  	
  OPTIONEE

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Michael
  S. Oswald

  	
   

  	
  Steve
  McClure

  	
   

  
	
   

  	
  Assistant
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Optionee’s
  Address:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

Exhibit A

 

Netlist, Inc.

2006 Equity Incentive PlanExhibit 10.2
 
RESTRICTED STOCK AWARD AGREEMENT
 
pursuant to the
XETA TECHNOLOGIES, INC.
2004 OMNIBUS STOCK INCENTIVE PLAN
 
SUMMARY OF RESTRICTED STOCK AWARD
 

	
  Employee
  Name (the “Employee”):

  	
   

  	
                                                                                                                         .

  
	
   

  	
   

  	
   

  
	
  Date
  of Grant (“Date of Grant”):

  	
   

  	
                                                                                                                         

  
	
   

  	
   

  	
   

  
	No. of Restricted Shares  Awarded:
	 
	                                                                                                                       .

 
The foregoing Restricted Stock award was granted by XETA Technologies, Inc. (the “Company”) on                                      pursuant to its 2004 Omnibus Stock Incentive Plan as amended (the “Plan”), and is subject to all of the terms and conditions set forth in this Restricted Stock Award Agreement (this “Agreement”) and the Plan, all of which are deemed incorporated herein in their entirety as one single and fully integrated agreement.
 
TERMS OF AWARD
 

Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Plan.

 

1.                                      Grant of Restricted Stock.  The  Company
hereby grants to Employee                                               
(                )
restricted shares of the Company’s common stock, having a par value of $.001
per share (the “Restricted Stock”), effective as
of the Date of Grant.  The Restricted
Stock is granted pursuant to the Plan and is subject to the terms and
provisions of this Agreement and the Plan as may be amended from time to time.

 

2.                                      Vesting of Restricted
Stock.  The Restricted Stock shall vest in three
equal annual installments as follows (so long as Employee continues to be
employed with the Company as of the vesting date,):

 

	
  Vesting
  Date

  	
   

  	
  No. of Shares Vested

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  00/00/0000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  00/000000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  00/00/0000

  	
   

  	
   

  	
   

  

 

Provided that all conditions of this Agreement and the Plan have been
satisfied, on each 

 

 

vesting date the restrictions of Section 3 shall lapse with
respect to the quantity of Restricted Stock then vesting.

 

3.                                      Restrictions.                         In addition to the restrictions provided for in the
Plan, the Restricted Stock shall be subject to the following restrictions.

 

(a)                                  The Restricted Stock granted hereunder
may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, whether voluntarily or involuntarily, by operation of law or
otherwise, until the Restricted Stock becomes vested in accordance with Section 2
above.  Immediately upon any attempt
to transfer the Restricted Stock prior to vesting of any rights hereunder, all
unvested Restricted Stock shall be forfeited by the Employee.

 

(b)                                 If Employee’s employment with the Company
is terminated by the Company without Cause, by Employee voluntarily, by reason
of Employee’s death or retirement, or for any other reason other than “Cause”
as that term is defined in the Plan, all unvested Restricted Stock will
automatically be forfeited, together with any dividends paid on such unvested
Restricted Stock, and all rights therein will revert and be transferred to and
reacquired by the Company, unless the Committee, in its sole and absolute
discretion, notifies the Employee otherwise within thirty (30) days following
such termination.

 

(c)                                  If Employee’s employment with the Company
is terminated by the Company for Cause, all unvested Restricted Stock will,
automatically and immediately, be forfeited by Employee and transferred to the
Company, together with any dividends that may have been paid on such shares.

 

4.                                      Rights
as a Shareholder.  Subject to
the restrictions contained in this Agreement, Employee shall have all of the
rights of a shareholder of the Company, including the right to vote the Restricted
Stock and the right to receive cash dividends thereon; provided that the
Committee in its discretion may require that any dividends paid with respect to
unvested Restricted Stock be held in escrow until all restrictions on such
Restricted Stock have lapsed.

 

5.                                      Un-certificated
Shares.    The Restricted Stock will be represented in book-entry
form by the Company’s transfer agent pursuant to the direct registration system
and will be evidenced by a direct registration statement.  In accordance with the Company’s bylaws,
Employee has the option to request that the Company issue a physical stock
certificate to Employee representing the Restricted Stock, after the Restricted
Stock vests.  Any certificates
representing and evidencing the Restricted Stock issued prior to vesting shall
be endorsed with the following restrictive legend:

 

The
transferability of this certificate and the shares of stock represented hereby
are subject to the restrictions, terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the 2004 Omnibus
Stock Incentive Plan of Xeta Technologies, Inc. and an Award Agreement
entered into between the registered owner of such shares 

 

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and Xeta Technologies, Inc.
A copy of such Plan and Award Agreement is on file in the office of the
Secretary of Xeta Technologies, Inc., 1814 West Tacoma Street, Broken
Arrow, Oklahoma 74012.

 

6.                                      Tax
Withholding Obligations.  In order to satisfy any withholding or
similar tax requirements relating to the Restricted Stock, the Company has the
right to deduct or withhold from any payroll or other payment to Employee, or
require Employee to remit to the Company, an appropriate payment or other
provision, which may include the withholding of Restricted Stock.

 

7.                                      Change
in Control.  Upon the occurrence of a Change in Control of
the Company, all unvested Restricted Stock shall immediately expire and be
cancelled.

 

8.                                      No
Right to Continued Employment. 
Neither the grant of Restricted Stock nor this Agreement confers upon
Employee any right to continued employment with the Company.

 

9.                                      Nature of Award and
Registration of Stock.

 

(a)                                  The award of the Restricted Stock is
voluntary and does not create any right on the part of Employee to receive
future grants of any Incentive Awards under the Plan.  All decisions with respect to future grants
of Incentive Awards, if any, will be at the sole discretion of the Company.

 

(b)                                 The Company has an effective registration
statement on file with the Securities and Exchange Commission with respect to
the shares of common stock subject to this Award.  The Company intends to maintain this
registration statement but has no obligation to do so.  If the registration ceases to be effective,
Employee will not be able to transfer or sell the vested Restricted Stock
unless exemptions from registration under applicable securities laws are
available. The Employee agrees that any resale by him or her of the Restricted
Stock will comply in all respects with the requirements of all applicable
securities laws, rules and regulations (including, without limitation, the
provisions of the Securities Act of 1933, as amended).

 

(c)                                  The Employee
shall execute and deliver to the Company such written representations or other
documentation, if any, as may be requested by the Company in order for it to
comply with applicable requirements of federal and state securities laws, as
well as any other applicable laws, rules or regulations.

 

10.                               Miscellaneous.  This Agreement and the Award evidenced hereby
are made and granted pursuant to the Plan and are in all respects limited by
and subject to the terms of the Plan. 
All decisions of the Committee with respect to any question or issue
arising under the Plan or this Agreement shall be conclusive and binding on all
persons having an interest in the Restricted Stock award.  In the event of any conflict between the
terms of the Plan and the terms of this Agreement, the terms of the Plan shall
govern.  This Agreement shall be governed
by the laws of the State of Oklahoma, without resort to that state’s
conflict-of-laws rules.

 

3

 

EXECUTED in Broken Arrow, Oklahoma, on and as of
the Effective Date.

 

 

	
  XETA TECHNOLOGIES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Greg D. Forrest

  	
   

  
	
  Chief Executive Officer

  	
   

  

 

 

ACKNOWLEDGEMENT
OF EMPLOYEE:

 

The Employee
hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions hereof.  The
Employee acknowledges receipt of the prospectus for the Plan dated                                    .

 

	
  “Employee”

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature

  	
   

  

 

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