EX-10.1 2 g10307exv10w1.htm EX-10.1 FORM OF INCENTIVE STOCK OPTION AGREEMENT
EX-10.1
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g10307exv10w1.htm
EX-10.1 FORM OF INCENTIVE STOCK OPTION AGREEMENT
8. Non-Competition and Non-Solicitation Agreement. In consideration of the grant of
this Option, the Participant agrees as follows:
If the Participant violates any of the provisions of (a) or (b) of this paragraph 8, the
Participant shall pay the Company any profits the Participant received upon exercise of the
Option, provided that the Option was exercised less than six months prior to termination of
the Participant’s employment.
15. No Right to Continued Employment. This Option does not confer upon the
Participant any right with respect to continued employment by the Company or any Affiliate, nor
shall it interfere in any way with the right of the Company or any Affiliate to terminate the
Participant’s employment at any time without assigning a reason therefor.
16. No Stockholder Rights. The Participant shall not have any rights as a stockholder
with respect to Shares subject to the Option until the date of exercise of the Option and the
issuance of the Shares that are being acquired.
17. Binding Effect. Subject to the limitations stated above and in the Plan, this
Agreement shall be binding upon and inure to the benefit of the legatees, distributees, transferees
and personal representatives of the Participant and the successors of the Company.
18. Conflicts. In the event of any conflict between the provisions of the Plan and
the provisions of this Agreement, the provisions of the Plan shall govern. All references herein
to the Plan shall mean the Plan as in effect on the date hereof.
19. Governing Law. This Agreement shall be governed by the laws of the State of
Delaware, except to the extent federal law applies.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by a duly authorized
officer, and the Participant has affixed his signature hereto.
2. Accelerated Vesting
Accelerated Vesting on Death
[ ] Notwithstanding the foregoing, the Option shall become exercisable with respect to
one-hundred percent (100%) of the Shares subject to the Option if the Participant dies while still
employed by the Company or any Affiliate.
Accelerated Vesting on Disability
[ ] Notwithstanding the foregoing, the Option shall become exercisable with respect to
one-hundred percent (100%) of the Shares subject to the Option if the Participant becomes Disabled
while still employed by the Company or any Affiliate.
Exhibit 10.1 ARRIS GROUP, INC. 2007 STOCK INCENTIVE PLAN Incentive Stock Option Agreement No. of Shares subject to Incentive Stock Option: ___ THIS INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”) dated as of the ___ day of , 20___, by and between Arris Group, Inc., a Delaware corporation (the “Company”), and (the “Participant”), is made pursuant and subject to the provisions of the Company’s 2007 Stock Incentive Plan (the “Plan”), a copy of which is attached hereto. All terms used herein that are defined in the Plan have the same meaning given them in the Plan. Paragraph 23 of this Agreement provides definitions of additional terms used herein. 1. Grant of Option. Pursuant to the Plan, the Company, on , 20___ (the “Date of Grant”), granted to the Participant, subject to the terms and conditions of the Plan and subject further to the terms and conditions set forth herein, the right and option to purchase from the Company all or any part of an aggregate of shares of the common stock of the Company, par value $0.01 per share (“Shares”) at the exercise price of $ per Share. Such price per Share is not less than the Fair Market Value of a Share on the Date of Grant (or, in the case of a Ten Percent Shareholder, not less than 110 percent of the Fair Market Value of a Share on the Date of Grant). This Option is intended to be treated as an incentive stock option under Code Section 422, but only to the extent the aggregate Fair Market Value (determined as of the Date of Grant) of the Shares for which this Option (and all other options of the Participant that are intended to be incentive stock options whether granted under the Plan or any other plan of the Company or any of its Affiliates) becomes exercisable for the first time in any calendar year does not exceed One Hundred Thousand Dollars ($100,000). If that limitation is exceeded, the Option may be exercised for the excess number of Shares as a nonqualified stock option. The Company shall not be liable to the Participant if the Internal Revenue Service or any court or other authority having jurisdiction over such matters determines for any reason whatsoever that this Option or any portion thereof does not qualify as an incentive stock option. This Option is exercisable as hereinafter provided. 2. Terms and Conditions. This Option is subject to the following terms and conditions:
| owns, (iv) by a cashless exercise through a broker, (v) by any other method the Committee authorizes or (vi) by any combination of the aforementioned methods of payment. If Shares are used to pay part or all of the Option price, the sum of the cash and cash equivalent and the Fair Market Value (determined as of the day preceding the date of exercise) of the Shares surrendered must not be less than the Option price of the Shares for which the Option is being exercised. |
| (a) | Notwithstanding any other provision of this Agreement, the Option shall not be exercisable and no shares of Common Stock shall be issued, except in compliance with all applicable federal and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company’s Shares may be listed. The Company shall have the right to rely on an |
| opinion of its counsel as to such compliance. Any stock certificate evidencing Shares issued pursuant to the Option may bear such legends and statements as the Committee may deem advisable to assure compliance with federal and state laws and regulations and to reflect any other restrictions applicable to such shares as the Committee otherwise deems appropriate. The Option shall not be exercisable and no shares of Common Stock shall be issued until the Company has obtained such consent or approval as the Committee may deem advisable from regulatory bodies having jurisdiction over such matters. |
| (b) | Notwithstanding any other provision of this Agreement, the Committee may postpone the exercise of the Option for such time as the Committee in its sole discretion may deem necessary in order to permit the Company (i) to effect, amend or maintain any necessary registration of the Plan or the Shares issuable pursuant to the Option under the securities laws; (ii) to take any action in order to (A) list such Shares or other shares of stock of the Company on a stock exchange if the Shares are not then listed on such exchange or (B) comply with restrictions or regulations incident to the maintenance of a public market for its Shares, including any rules or regulations of any stock exchange on which the Shares are listed; (iii) to determine that such Shares in the Plan are exempt from such registration or that no action of the kind referred to in (ii)(B) above needs to be taken; (iv) to comply with any other applicable law, including without limitation, securities laws; (v) to comply with any legal or contractual requirements during any such time the Company or any Affiliate is prohibited from doing any of such acts under applicable law, including without limitation, during the course of an investigation of the Company or any Affiliate, or under any contract, loan agreement or covenant or other agreement to which the Company or any Affiliate is a party or (vi) to otherwise comply with any prohibition on such acts or payments during any applicable blackout period; and the Company shall not be obligated by virtue of any terms and conditions of the Agreement or any provision of the Plan to recognize the grant, exercise or vesting of the Option or to issue Shares in violation of the securities laws or the laws of any government having jurisdiction thereof or any of the provisions hereof. Any such postponement shall not extend the term of the Option and neither the Company nor its directors and officers nor the Committee shall have any obligation or liability to the Participant or to any other person with respect to Shares as to which the Option shall lapse because of such postponement. |
| (a) | During employment and for a period of four (4) months from the date of termination of the Participant’s employment with the Company and its Affiliates for any reason whatsoever, the Participant will not, directly or indirectly, compete with the Company or any Affiliate by providing to any entity that is in a Competing Business services substantially similar to the services provided by the Participant at the time of termination. | ||
| (b) | During employment and for a period of two (2) years after the termination of the Participant’s employment with the Company and its Affiliates for any reason whatsoever, the Participant will not, on his own behalf or on behalf of any other person, partnership, association, corporation or other entity, solicit or in any manner attempt to influence or induce any employee of the Company or its Affiliates (known by the Participant to be such) to leave the employment of the Company or its Affiliates, nor shall the Participant use or disclose to any person, partnership, association, corporation or other entity any information obtained while an employee of the Company or any Affiliate concerning the name and addresses of the Company’s or any Affiliate’s employees. |
9. Agreement to Terms of the Plan and Agreement. The Participant has received a copy of the Plan, has read and understands the terms of the Plan and this Agreement, and agrees to be bound by their terms and conditions. 10. Minimum Exercise. This Option may not be exercised for less than Shares unless it is exercised for the full number of Shares that remain subject to the Option. 11. Fractional Shares. Fractional Shares shall not be issuable hereunder, and when any provision hereof may entitle the Participant to a fractional Share, such fractional Share shall be disregarded. 12. Change in Capital Structure. The terms of this Option shall be adjusted in accordance with the terms and conditions of the Plan as the Committee determines is equitably required in the event the Company effects one or more stock dividends, subdivisions or consolidations of Shares, reorganizations, recapitalizations, spin-offs or other similar changes in capitalization. 13. Notification Upon Sale. The Participant shall give written notice of any sale or other disposition of any Shares acquired under this Option to the Company’s Secretary at the Company’s address specified in paragraph 14 below, if the Participant sells or otherwise disposes of any Shares acquired under this Option before the expiration of the later of the two-year period beginning on the Date of Grant or the one-year period beginning on the date that the Participant exercised this Option with respect to such Shares. 14. Notice. Any notice or other communication given pursuant to this Agreement, or in any way with respect to this Option, shall be in writing and shall be personally delivered or mailed by United States registered or certified mail, postage prepaid, return receipt requested, to the following addresses:
| If to the Company: | Arris Group, Inc. | |||
| 0000 Xxxxxxxxx Xxxxx | ||||
| Xxxxxxx, Xxxxxxx 00000 | ||||
| Attn: Xxxxx Xxxxxxxx, Executive Vice President | ||||
| If to the Participant: | ||||
20. Tax Consequences and Section 409A. The Participant acknowledges that there may be tax consequences upon the acquisition and disposition of Shares acquired upon exercise of this Option, and that the Participant should consult a tax advisor prior to such acquisition or disposition. The Option is intended to be exempt from the requirements of Section 409A of the Code. Notwithstanding the preceding, the Company and its Affiliates shall not be liable to the Participant or any other person if the Internal Revenue Service or any court or other authority having jurisdiction over such matter determines for any reason that this Agreement is subject to taxes, penalties or interest as a result of failing to comply with Section 409A of the Code. 21. Withholding Obligations. The Participant shall be responsible for satisfying all applicable income and employment tax withholding obligations with respect to the exercise of the Option (i) in cash, (ii) by certified or bank cashier’s check, (iii) by surrendering Shares to the Company that the Participant already owns (but only for the minimum required withholding), (iv) by a cashless exercise through a broker, (v) by any other method the Committee authorizes or (vi) by any combination of the aforementioned methods of payment. 22. Amendment or Termination. This Agreement may be amended or terminated at any time by the mutual agreement and written consent of the Participant and the Company, but only to the extent permitted under the Plan. 23. Definitions. For purposes of this Agreement, the following words shall have the meanings set forth below:
| (a) | “Affiliate” means, as it relates to any limitations or requirements with respect to incentive stock options, any “subsidiary” or “parent” corporation (as such terms are defined in Code Section 424) of the Company. Affiliate otherwise means any entity that is part of a controlled group of corporations or is under common control with the Company within the meaning of Code Sections 1563(a), 414(b) or 414(c), except that, in making any such determination, 50 percent shall be substituted for 80 percent under such Code Sections and the related regulations. | ||
| (b) | “Cause” shall have the same meaning as under any employment agreement between the Company or any Affiliate and the Participant or, if no such employment agreement exists or if such employment agreement does not contain any such definition, Cause means any material breach of the terms of the Participant’s employment contract (if any) or Agreement, or any conduct intentionally or materially harmful to the Company, as determined in the sole discretion of the Committee, including but not limited to the unauthorized use of proprietary information. | ||
| (c) | “Code” means the Internal Revenue Code of 1986, as amended. | ||
| (d) | “Competing Business” means any business that engages, in whole or in part, in the equipment and supply for broadband communications systems in the United States. | ||
| (e) | “Disabled” means fully and permanently disabled within the meaning of the Company’s group long-term disability plan then in effect. The Committee, in its sole discretion, shall determine whether the Participant is Disabled for purposes of this Agreement. | ||
| (f) | “Fair Market Value” means, on any given date, the fair market value of a Share as the Committee in its discretion shall determine; provided, however, that the Committee shall determine Fair Market Value without regard to any restriction other than a restriction which, by its terms, will never lapse and, if the Shares are traded on any national stock exchange or quotation system, the Fair Market Value of a Share shall be the closing price of a Share as reported on such stock exchange or quotation system on such date, or if the Shares are not traded on such stock exchange or quotation system on such date, then on the next preceding day that the Shares were traded on such stock exchange or quotation system, all as reported by such source as the Committee shall select. The Fair Market Value that the Committee determines shall be final, binding and conclusive on the Company, any Affiliate and the Participant. |
| (g) | “Ten Percent Shareholder” means any individual who (considering the stock attribution rules described in Code Section 424(d)) owns stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or any Affiliate. |
| COMPANY: | ||||
| ARRIS GROUP, INC. | ||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| PARTICIPANT: | ||||
| Participant |
EXHIBIT A Vesting Provisions Except as provided in paragraphs 3, 4, 5 or 6 of the Agreement, this Option shall become exercisable as set forth below. For purposes of the Agreement, including the vesting provisions in this Exhibit A, the Participant will be deemed to have terminated employment as of his or her last day of active work for the Company and its Affiliates; provided, however, that the Participant shall be deemed to be actively at work during any period the Participant is on approved paid medical leave or during the protected reemployment period applicable to military leave. 1. General Vesting Service-Based Vesting [ ] The Option shall become exercisable with respect to [thirty-three] percent ([33]%) of the Shares subject to the Option on the [first and second] annual anniversaries of the Date of Grant and then with respect to the remaining [thirty-four] percent ([34]%) of the Shares subject to the Option on the [third] annual anniversary of the Date of Grant, provided the Participant is still employed by the Company or any Affiliate at each such time. Performance-Based Vesting [ ] The Option shall become exercisable with respect to the percentage of Shares set forth below with respect to each applicable vesting date, provided that, at each such time, (a) the Participant is still employed by the Company or any Affiliate and (b) the performance measures set forth below have been met. Notwithstanding the foregoing, if the applicable performance measures are not met at a specified vesting date, but the cumulative performance measures are met at a subsequent vesting date, then the Option shall become exercisable with respect to that percentage of Shares specified for the applicable vesting date plus the percentage of Shares for prior vesting dates that did not become exercisable solely because of a failure to meet the performance measures for the prior vesting dates.
| Percentage of Shares for | ||||||
| which Option may be | Cumulative | |||||
| Vesting Date | Performance Target | Exercised | Performance Target | |||
Accelerated Vesting on Retirement [ ] Notwithstanding the foregoing, the Option shall become exercisable with respect to one-hundred percent (100%) of the Shares subject to the Option if the Participant voluntarily terminates employment with the Company and its Affiliates after reaching age ___.
