EXHIBIT 10.2.1
LSI LOGIC STORAGE SYSTEMS, INC.
2004 EQUITY INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
LSI Logic Storage Systems, Inc. (the "Company") hereby grants you (the
"Employee"), a nonqualified stock option under the Company's 2004 Equity
Incentive Plan (the "Plan"), to purchase shares of common stock of the Company
("Shares") effective as of the date (the "Grant Date") indicated on the Notice
of Grant of Stock Options (the "Notice of Grant") to which this agreement is
attached and which are collectively referred to as the "Agreement". In general,
the latest date this option will expire is the expiration date indicated on the
Notice of Grant (the "Expiration Date"). However, as provided in this Agreement,
this option may expire earlier than the Expiration Date. Subject to the
provisions of the Notice of Grant, this Agreement and of the Plan, the principal
features of this option are as follows:
IMPORTANT:
Your signature to the Notice of Grant indicates your agreement and
understanding that this grant is subject to all of the terms and conditions
contained in the Notice of Grant, this Agreement and the Plan. For example,
important additional information on vesting and forfeiture of the Shares covered
by this grant is contained in the Notice of Grant. PLEASE BE SURE TO READ ALL OF
THE NOTICE OF XXXXX, WHICH CONTAINS CERTAIN SPECIFIC TERMS AND CONDITIONS OF
THIS OPTION.
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION
1. Grant of Option. The Company hereby grants to the Employee under the
Plan, as a separate incentive in connection with his or her employment and not
in lieu of any salary or other compensation for his or her services, a
nonqualified stock option to purchase, on the terms and conditions set forth in
this Agreement and the Plan, all or any part of an aggregate of the number of
Shares listed in the Notice of Grant.
2. Exercise Price. The purchase price per Share for this option (the
"Exercise Price") shall be the option price listed in the Notice of Grant.
3. Vesting Schedule. Except as otherwise provided in Paragraph 14 of this
Agreement, the right to exercise this option will vest as to twenty-five percent
(25%) of the Shares subject to the option on the first anniversary date of the
Vesting Commencement Date, and as to an additional 25% on each subsequent
anniversary date of the Vesting Commencement Date thereafter, until the right to
exercise this option shall have vested with respect to one hundred percent
(100%) of such Shares. Shares scheduled to vest on any such date actually will
vest only if the Employee has not incurred a Termination of Service prior to
such date.
4. Termination of Option. In the event of the Employee's Termination of
Service for any reason other than Disability or death, the Employee may, within
three (3) months after the date of such Termination of Service, or prior to the
Expiration Date, whichever shall first occur, exercise any then vested but
unexercised portion of this option. In the event of the Employee's Termination
of Service due to Disability, the Employee may, within one (1) year after the
date of Termination of Service due to Disability, or prior to the Expiration
Date, whichever shall first occur, exercise any then vested but unexercised
portion of this option. In addition, this option may terminate in accordance
with Paragraph 13.
5. Death of Employee. In the event that the Employee dies while in the
employ of the Company and/or an Affiliate or during the three (3) month or one
(1) year periods referred to in Paragraph 4 above, the Employee's designated
beneficiary, or if no beneficiary survives the Employee, the administrator or
executor of the Employee's estate (the "Transferee"), may, within one (1) year
after the date of death, exercise any unexercised portion of the option that was
vested prior to the Employee's Termination of Service. Any such Transferee must
furnish the Company (a) written notice of his or her status as a Transferee, (b)
evidence satisfactory to the Company to establish the validity of the transfer
of this option and compliance with any
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laws or regulations pertaining to such transfer, and (c) written acceptance of
the terms and conditions of this option as set forth in this Agreement.
6. Persons Eligible to Exercise Option. Except as provided in Paragraph 5
above or as otherwise determined by the Committee in its discretion, this option
shall be exercisable during the Employee's lifetime only by the Employee.
7. Option is Not Transferable. Except as otherwise expressly provided
herein, this option and the rights and privileges conferred hereby may not be
transferred, pledged, assigned or otherwise hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to sale under execution,
attachment or similar process. Upon any attempt to transfer, pledge, assign,
hypothecate or otherwise dispose of this option, or of any right or privilege
conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this option and the rights and privileges conferred hereby
immediately shall become null and void.
8. Exercise of Option. This option may be exercised by the person then
entitled to do so as to any Shares which may then be purchased (a) by giving
notice of exercise by way of such form, time, place and/or manner as the Company
may designate, (b) providing full payment of the Exercise Price (and the amount
of any income tax the Company determines is required to be withheld by reason of
the exercise of this option or as is otherwise required under Paragraph 10
below), and (c) giving satisfactory assurances in the form or manner requested
by the Company that the shares to be purchased upon the exercise of this option
are being purchased for investment and not with a view to the distribution
thereof. Notwithstanding any contrary provision of this Agreement, if the
expiration date of this option falls on a Saturday, Sunday or California
holiday, the Employee may exercise any then vested but unexercised portion of
this option at any time prior to the close of business on the first business day
following that Saturday, Sunday or California holiday. In addition, if the
option is to be exercised through a stock broker-assisted transaction, the
option must be exercised while the applicable stock market is open for trading
and before the option otherwise expires.
9. Conditions to Exercise. Except as provided in Paragraph 8 above or as
otherwise required as a matter of law, and as so specified by the Company at any
time, the Exercise Price for this option may be paid in one (1) (or a
combination of two (2) or more) of the following forms:
(a) Personal check, a cashier's check or a money order.
(b) Irrevocable directions to a securities broker approved by the
Company to sell all or part of the option shares and to deliver to the
Company from the sale proceeds an amount sufficient to pay the Exercise
Price and any required withholding taxes. (The balance of the sale
proceeds, if any, will be delivered to Employee.)
(c) Irrevocable directions to a securities broker or lender approved
by the Company to pledge option shares as security for a loan and to
deliver to the Company from the loan proceeds an amount sufficient to pay
the Exercise Price and any required withholding taxes.
10. Tax Withholding and Payment Obligations. The Company will assess its
requirements regarding tax, social insurance and any other payroll tax
withholding and reporting in connection with this option, including the grant,
vesting or exercise of this option or sale of shares acquired pursuant to the
exercise of this option ("tax-related items"). These requirements may change
from time to time as laws or interpretations change. Regardless of the Company's
actions in this regard, the Employee hereby acknowledges and agrees that the
ultimate liability for any and all tax-related items is and remains his or her
responsibility and liability and that the Company (1) makes no representations
or undertaking regarding treatment of any tax-related items in connection with
any aspect of this option grant, including the grant, vesting or exercise of
this option and the subsequent sale of shares acquired pursuant to the exercise
of this option; and (2) does not commit to structure the terms of the grant or
any aspect of this option to reduce or eliminate the Employee's liability
regarding tax-related items. In the event the Company determines that it and/or
an Affiliate must withhold or collect any tax-related items as a result of the
Employee's participation in the Plan, the Employee agrees as a condition of the
grant of this option to make arrangements satisfactory to the Company to enable
it to satisfy all withholding and/or collection requirements. The Employee
authorizes the Company and/or an Affiliate to withhold all applicable
withholding taxes from the Employee's wages. Furthermore, the Employee agrees to
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pay the Company and/or an Affiliate any amount of taxes the Company and/or an
Affiliate may be required to withhold or collect as a result of the Employee's
participation in the Plan that cannot be satisfied by deduction from the
Employee's wages or other cash compensation paid to the Employee by the Company
and/or an Affiliate. The Employee acknowledges that he or she may not exercise
this option unless the tax withholding and/or collection obligations of the
Company and/or any Affiliate are satisfied.
11. Suspension of Exercisability. If at any time the Company shall
determine, in its discretion, that the listing, registration or qualification of
the Shares upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory authority, is necessary
or desirable as a condition of the purchase of Shares hereunder, this option may
not be exercised, in whole or in part, unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company. The Company shall
make reasonable efforts to meet the requirements of any such state or federal
law or securities exchange and to obtain any such consent or approval of any
such governmental authority.
12. Lock-Up Period. The Employee shall not offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any Shares (or other
securities) of the Company or enter into any swap, hedging or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of any Shares (or other securities) of the Company held by the
Employee (other than those included in the registration) for a period specified
by the representative of the underwriters of the Shares (or other securities) of
the Company not to exceed one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act
of 1933, as amended (the "Securities Act"). The Employee shall execute and
deliver such other agreements as may be reasonably requested by the Company or
the underwriter which are consistent with the foregoing or which are necessary
to give further effect thereto. In addition, if requested by the Company or the
representative of the underwriters of the Shares (or other securities) of the
Company, the Employee shall provide, within ten (10) days of such request, such
information as may be required by the Company or such representative in
connection with the completion of any public offering of the Company's
securities pursuant to a registration statement filed under the Securities Act.
The obligations described in this Section shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of said one hundred eighty (180) day period.
Any transferee of this option also shall be bound by this Paragraph 12. The
certificate evidencing the Shares will be imprinted with any legend the Company,
in its discretion, deems appropriate to indicate the restrictions set forth in
this Paragraph 12.
13. No Initial Public Offering. If at any time the Committee shall
determine, in its discretion, that an initial listing or registration of any
Shares upon any securities exchange or under federal law is not likely to occur,
the Committee may, in its discretion, determine that this option shall be
converted to an option to purchase shares of common stock of LSI Logic
Corporation by such means as the Committee deems appropriate. Unless the
Committee determines otherwise, the outstanding option will be converted to an
option to purchase shares of common stock of LSI Logic Corporation as follows:
(a) The option to purchase shares of common stock of LSI Logic
Corporation shall be exercisable for the number of Shares subject to the
then outstanding portion of this option multiplied by the "Conversion
Ratio" (as defined below), with the resulting number of shares rounded down
to the nearest whole share; and
(b) The per share exercise price of the option to purchase shares of
common stock of LSI Logic Corporation shall be equal to the quotient of the
per Share exercise price of this option divided by the Conversion Ratio,
rounded up to the nearest whole cent.
For purposes of this Agreement, "Conversion Ratio" means the Fair Market
Value of a Share immediately prior to the date the option is being converted
divided by the fair market value of a share of LSI Logic Corporation common
stock at the time of the conversion.
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14. Change in Control. In the event of a Change in Control, this option
shall be subject to the definitive agreement governing such Change in Control.
Such agreement, without the Employee's consent and notwithstanding any provision
to the contrary in this Agreement or the Plan, may provide for: (a) the
assumption of this option by the surviving corporation or its parent; (b) the
substitution by the surviving corporation or its parent of options with
substantially the same terms as this option; (c) the substitution by the
surviving corporation or its parent of other awards having a value at least
equal to the value as this option; (d) the conversion of this option into an
option to purchase the consideration received by the stockholders of the Company
in the Change in Control; (e) the termination of this option after the Company
shall have provided the Employee with the ability to exercise this option, to
the extent then exercisable, for a period of fifteen (15) days or less before
the consummation of the Change in Control; or (f) the cancellation of this
option after payment to the Employee of an amount in cash or cash equivalents
equal to (A) the fair market value of the Shares subject to this option at the
time of the Change in Control minus (B) the Exercise Price of the Shares subject
to this option at the time of the Change in Control. The Committee may, in its
sole discretion, accelerate the exercisability and vesting of this option in
connection with any of the foregoing alternatives. For purposes of this
Agreement, "Change in Control" means the occurrence of any of the following
events: (a) any "person" (as such term is used in Sections 13(d) and 14(d) of
the 1934 Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the
1934 Act), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the total voting power represented by the
Company's then outstanding voting securities; (b) the consummation of the sale
or disposition by the Company of all or substantially all of the Company's
assets; (c) a change in the composition of the Board occurring within a two-year
period, as a result of which fewer than a majority of the directors are
Incumbent Directors; (d) the approval by the shareholders of the Company, or if
shareholder approval is not required, by the Board, of a plan of complete
liquidation of the Company; or (e) the consummation of a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or its parent) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity or
its parent outstanding immediately after such merger or consolidation.
Notwithstanding any provision to the contrary herein, a Change in Control shall
not include the registration of any class of the Company's securities pursuant
to Section 12(g) of the Securities Exchange Act of 1934, as amended, nor any
event or series of events through which LSI Logic Corporation ceases to own a
majority of the total voting power represented by the voting securities of the
Company through a sale of Company securities to the public. "Incumbent
Directors" means directors who either (A) are Directors as of the effective date
of the Plan, or (B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the Directors at the time of
such election or nomination (but will not include an individual whose election
or nomination is in connection with an actual or threatened proxy contest
relating to the election of directors to the Company).
15. No Rights of Stockholder. Neither the Employee (nor any transferee)
shall be or have any of the rights or privileges of a stockholder of the Company
in respect of any of the Shares issuable pursuant to the exercise of this
option, unless and until certificates representing such Shares shall have been
issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to the Employee (or transferee).
16. No Effect on Employment. The Employee's employment with the Company
and its Affiliates is on an at-will basis only, subject to the provisions of
applicable law. Accordingly, subject to any separate, written, express
employment contract with the Employee, nothing in this Agreement or the Plan
shall confer upon the Employee any right to continue to be employed by the
Company or any Affiliate or shall interfere with or restrict in any way the
rights of the Company or the Affiliate, which are hereby expressly reserved, to
terminate the employment of the Employee at any time for any reason whatsoever,
with or without good cause. Such reservation of rights can be modified only in
an express written contract executed by a duly authorized officer of the Company
or the Affiliate employing the Employee. For purposes of this Agreement, the
transfer of employment of the Employee between the Company and any one of its
Affiliates (or between Affiliates) shall not be deemed a Termination of Service.
In addition, a leave of absence or an interruption in
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service (including an interruption during military service) authorized or
acknowledged by the Company, or the Affiliate employing the Employee, as the
case may be, shall not be deemed a Termination of Service for the purposes of
this Agreement.
17. Address for Notices. Any notice to be given to the Company under the
terms of this Agreement shall be addressed to the Company, in care of its
General Counsel, at LSI Logic Storage Systems, Inc. 0000 Xxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxx 00000, or at such other address as the Company may hereafter
designate in writing.
18. Other Benefits. Except as provided below, nothing contained in this
Agreement shall affect the Employee's right to participate in and receive
benefits under and in accordance with the then current provisions of any
pension, insurance or other employee welfare plan or program of the Company or
any Affiliate. Notwithstanding any contrary provision of this Agreement, in the
event that the Employee receives a hardship withdrawal from his or her pre-tax
account under the Company's 401(k) Plan (the "401(k) Plan"), this option may not
be exercised during the six (6) month period following the receipt of such
withdrawal, unless the Company determines that such exercise (or a particular
manner of exercise) would not adversely affect the continued tax qualification
of the 401(k) Plan.
19. Maximum Term of Option. Notwithstanding any other provision of this
Agreement, this option is not exercisable after the Expiration Date.
20. Binding Agreement. Subject to the limitation on the transferability
of this option contained herein, this Agreement shall be binding upon and inure
to the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
21. Plan Governs. This Agreement is subject to all of the terms and
provisions of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Capitalized terms and phrases used and not
defined in this Agreement shall have the meaning set forth in the Plan. This
option is not an incentive stock option as defined in Section 422 of the
Internal Revenue Code. The Company may, in its discretion; issue newly issued
shares or treasury shares pursuant to this option.
22. Committee Authority. The Committee shall have all discretion, power,
and authority to interpret the Plan and this Agreement and to adopt such rules
for the administration, interpretation and application of the Plan as are
consistent therewith. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Employee, the Company and all other interested persons, and shall be
given the maximum deference permitted by law. No member of the Committee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.
23. Captions. The captions provided herein are for convenience only and
are not to serve as a basis for the interpretation or construction of this
Agreement.
24. Agreement Severable. In the event that any provision in this Agreement
shall be held invalid or unenforceable, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to have any
effect on, the remaining provisions of this Agreement.
25. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Employee expressly
warrants that he or she is not executing this Agreement in reliance on any
promises, representations, or inducements other than those contained herein.
Except as otherwise provided herein, modifications to this Agreement or the Plan
can be made only in an express written contract executed by a duly authorized
officer of the Company.
26. Amendment, Suspension, Termination. By accepting this option, the
Employee expressly warrants that he or she has received an option to purchase
stock under the Plan, and has received, read and understood a description of the
Plan. The Employee understands that the Plan is discretionary in nature and may
be modified, suspended or terminated by the Company at any time.
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