Option Agreement under the SMART Modular Technologies (WWH), Inc. Stock Incentive Plan (U.S.)
Exhibit 10.3
Date of Grant:
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Name of Optionee:
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Number of Shares Subject to the Option:
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Exercise Price:
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$ per share | |
Type of Option
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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;
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(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
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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
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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
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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:
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If to Optionee:
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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.
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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:
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Name:
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Title:
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Address: | |||||||
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