CIRRUS LOGIC, INC. 2006 STOCK INCENTIVE PLAN STOCK OPTION AGREEMENT
Exhibit 10.3
CIRRUS LOGIC, INC.
2006 STOCK INCENTIVE PLAN
2006 STOCK INCENTIVE PLAN
This Stock Option Agreement (this “Agreement”) is made and entered into as of the Date of
Grant set forth in the related Notice of Grant of Stock Option (“Notice of Grant”) by and between
Cirrus Logic, Inc., a Delaware corporation (the “Company”), and you as the Holder named in the
Notice of Grant (“Holder”):
WHEREAS, the Company, in order to induce you to enter into and/or continue in service to the
Company or its Affiliates in the capacity of Employee, Consultant, or Director, as applicable
(“Service”) and to materially contribute to the success of the Company, agrees to grant you an
option to acquire an interest in the Company through the purchase of shares of common stock of the
Company;
WHEREAS, the Company adopted the Cirrus Logic, Inc. 2006 Stock Incentive Plan, as it may be
amended from time to time (the “Plan”), under which the Company is authorized to grant stock
options to certain employees and service providers of the Company and its Affiliates;
WHEREAS, a copy of the Plan has been furnished to you and shall be deemed a part of this
Agreement as if fully set forth herein and terms capitalized but not defined herein shall have the
meaning set forth in the Plan; and
WHEREAS, you desire to accept the option created pursuant to this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other
valuable consideration hereinafter set forth, the parties agree as follows:
1. The Grant. Subject to the conditions set forth below, the Company hereby grants to
you, effective as of the Date of Grant set forth in the Notice of Grant, as a matter of separate
inducement and not in lieu of any salary or other compensation for your services to the Company,
the right and option to purchase (the “Option”), in accordance with the terms and conditions set
forth herein and in the Plan, an aggregate of the number of shares of Common Stock set forth in the
Notice of Grant (the “Option Shares”), at the Exercise Price set forth in the Notice of Grant (the
“Exercise Price”).
2. Exercise.
(a) Subject to the relevant provisions and limitations contained herein and in the Plan, you
may exercise the Option to purchase all or a portion of the applicable number of Vested Shares at
any time prior to the termination of the Option pursuant to this Agreement. Option Shares shall be
deemed “Nonvested Shares” unless and until they have become “Vested Shares” in accordance with the
vesting schedule set forth in the Notice of Grant, provided that you remain in the Service of the
Company or its Affiliates until the applicable dates set forth therein. In no event shall you be
entitled to exercise the Option for any Nonvested Shares or for a fraction of a Vested Share. For
administrative or other reasons, the Company may from time to time suspend the ability to exercise
options for limited periods of time, and the Committee may
provide for reasonable limitations on the number of requested exercises during any monthly or
weekly period.
(b) Any exercise of the Option by you shall be made by delivery to the Company’s stock plan
administrator of (i) a completed notice of exercise in such form as may be prescribed by the
Committee, which shall specify the number of Option Shares in respect of which the Option is being
exercised and such other information and/or representations as may be required by the Committee,
and (ii) payment of the aggregate Exercise Price for the Option Shares purchased pursuant to the
exercise.
(c) Payment of the Exercise Price may be made, at your election, with the approval of the
Company, (i) in cash, by certified or official bank check or by wire transfer of immediately
available funds, (ii) by delivery to the Company of a number of shares of Common Stock having a
Fair Market Value as of the date of exercise equal to the Exercise Price (provided that such Common
Stock used for this purpose must have been held by you for such minimum period of time as may be
established from time to time by the Committee), (iii) through a “cashless exercise” in accordance
with a Company established policy or program for the same, or (iv) any combination of the
foregoing.
(d) If you are on leave of absence for any reason, the Company may, in its sole discretion,
determine that you will be considered to still be in the Service of the Company, provided that,
except as otherwise determined by the Committee, rights to the Option will be limited to the extent
to which those rights were earned or vested when the leave of absence began.
(e) The Option shall in all events terminate at the close of business on the Expiration Date
set forth in the Notice of Grant (the “Expiration Date”).
3. Effect of Termination of Service on Exercisability. Except as provided in Sections
6 and 7, this Option may be exercised only while you remain in the Service of the Company or any
Affiliate and will terminate and cease to be exercisable upon termination of your Service, except
as follows:
(a) Termination on Account of Disability. If your Service with the Company or any
Affiliate terminates by reason of disability (within the meaning of section 22(e)(3) of the Code),
this Option may be exercised by you (or your estate or the person who acquires this Option by will
or the laws of descent and distribution or otherwise by reason of your death) at any time during
the period ending on the earlier to occur of (i) the date that is twelve (12) months following such
termination, or (ii) the Expiration Date, but only to the extent this Option was exercisable for
Vested Shares as of the date your Service so terminates. You will not be considered to have
terminated your Service by reason of disability unless you furnish proof of such impairment
sufficient to satisfy the Committee in its discretion.
(b) Termination on Account of Death. If your Service with the Company or any
Affiliate terminates by reason of your death, your estate, or the person who acquires this Option
by will or the laws of descent and distribution or otherwise by reason of your death, may exercise
this Option at any time during the period ending on the earlier to occur of (i) the date
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that is twelve (12) months following your death, or (ii) the Expiration Date, but only to the
extent this Option was exercisable for Vested Shares as of the date of your death.
(c) Termination not for Cause. If your Service with the Company or any Affiliate
terminates for any reason other than as described in Sections 3(a) or (b), unless such Service is
terminated for Cause (as defined below), this Option may be exercised by you at any time during the
period ending on the earlier to occur of (i) the date that is three (3) months following your
termination, or (ii) the Expiration Date, or by your estate (or the person who acquires this Option
by will or the laws of descent and distribution or otherwise by reason of your death) during a
period of twelve (12) months following your death if you die during such three-month period, but in
each such case only to the extent this Option was exercisable for Vested Shares as of the date of
your termination. “Cause” means “cause” as defined in your employment agreement, if any, with the
Company or an Affiliate, or in the absence of such an agreement or such a definition, “Cause” will
mean a determination by the Committee that you (A) have engaged in personal dishonesty, willful
violation of any law, rule, or regulation (other than minor traffic violations or similar
offenses), or breach of fiduciary duty involving personal profit, (B) have been convicted of, or
plead nolo contendere to, any felony or a crime involving moral turpitude,(C) have engaged in
negligence or willful misconduct in the performance of your duties, including but not limited to
willfully refusing without proper legal reason to perform your duties and responsibilities, (D)
have materially breached any corporate policy or code of conduct established by the Company or any
Affiliate as such policies or codes may be adopted from time to time, (E) have violated the terms
of any confidentiality, nondisclosure, intellectual property, nonsolicitation, noncompetition,
proprietary information or inventions agreement, or any other agreement between you and the Company
or any Affiliate related to your Service with the Company or any Affiliate, or (F) have engaged in
conduct that is likely to have a deleterious affect on the Company or any Affiliate or their
legitimate business interests, including but not limited to their goodwill and public image. Your
Service with the Company shall be deemed to have been terminated for Cause effective as of your
date of termination if facts and circumstances are discovered after your Service has terminated
that would have justified a termination for Cause as of your date of termination.
4. Non-Transferability. The Option, and any rights or interests therein, may not be
transferred in any manner except by will or the laws of descent and distribution or to the extent
approved by the Committee in accordance with the terms of the Plan.
5. Compliance with Securities Law. Notwithstanding any provision of this Agreement to
the contrary, the grant of the Option and the issuance of Common Stock will be subject to
compliance with all applicable requirements of federal, state, and foreign securities laws and with
the requirements of any stock exchange or market system upon which the Common Stock may then be
listed. The Option may not be exercised if the issuance of shares of Common Stock upon exercise
would constitute a violation of any applicable federal, state, or foreign securities laws or other
law or regulations or the requirements of any stock exchange or market system upon which the Common
Stock may then be listed. In addition, the Option may not be exercised unless (1) a registration
statement under the Securities Act of 1933, as amended (the “Act”), is at the time of exercise of
the Option in effect with respect to the shares issuable upon exercise of the Option or (2) in the
opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the registration requirements
of the Act. YOU ARE CAUTIONED THAT THE
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OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, YOU
MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any
shares subject to the Option will relieve the Company of any liability in respect of the failure to
issue or sell such shares as to which such requisite authority has not been obtained. As a
condition to the exercise of the Option, the Company may require you to satisfy any qualifications
that may be necessary or appropriate to evidence compliance with any applicable law or regulation
and to make any representation or warranty with respect to such compliance as may be requested by
the Company.
6. Extension if Exercise Prevented by Law. Notwithstanding Section 3, if the exercise
of the Option within the applicable time periods set forth in Section 3 is prevented by the
provisions of Section 5, the Option will remain exercisable until 30 days after the date you are
notified by the Company that the Option is exercisable, but in any event no later than the
Expiration Date. The Company makes no representation as to the tax consequences of any such
delayed exercise. You should consult with your own tax advisor as to the tax consequences of any
such delayed exercise.
7. Extension if You are Subject to Section 16(b). Notwithstanding Section 3, if a
sale within the applicable time periods set forth in Section 3 of shares acquired upon the exercise
of the Option would subject you to suit under Section 16(b) of the Securities Exchange Act of 1934,
as amended, the Option will remain exercisable until the earliest to occur of (1) the 10th day
following the date on which a sale of such shares by you would no longer be subject to such suit,
(2) the 190th day after your termination of Service with the Company and any Affiliate, or (3) the
Expiration Date. The Company makes no representation as to the tax consequences of any such
delayed exercise. You should consult with your own tax advisor as to the tax consequences of any
such delayed exercise.
8. Withholding Taxes. The Committee may, in its discretion, require you to pay to the
Company at the time of the exercise of an Option or thereafter, the amount that the Committee deems
necessary to satisfy the Company’s current or future obligation to withhold federal, state or local
income or other taxes that you incur by exercising an Option. In connection with such an event
requiring tax withholding, you may (a) direct the Company to withhold from the shares of Common
Stock to be issued to you the number of shares necessary to satisfy the Company’s obligation to
withhold taxes, that determination to be based on the shares’ Fair Market Value as of the date of
exercise; (b) deliver to the Company sufficient shares of Common Stock (based upon the Fair Market
Value as of the date of such delivery) to satisfy the Company’s tax withholding obligation; or (c)
deliver sufficient cash to the Company to satisfy its tax withholding obligations. If you elect to
use a Common Stock withholding feature you must make the election at the time and in the manner
that the Committee prescribes. The Committee may, at its sole option, deny your request to satisfy
withholding obligations through shares of Common Stock instead of cash. In the event the Committee
subsequently determines that the aggregate Fair Market Value (as determined above) of any shares of
Common Stock withheld or delivered as payment of any tax withholding obligation is insufficient to
discharge that tax withholding obligation, then you shall pay to the Company, immediately upon the
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Committee’s request, the amount of that deficiency in the form of payment requested by the
Committee.
9. Status of Common Stock. With respect to the status of the Common Stock, at the
time of execution of this Agreement you understand and agree to all of the following:
(a) You agree that the shares of Common Stock that you may acquire by exercising this Option
will not be sold or otherwise disposed of in any manner that would constitute a violation of any
applicable securities laws, whether federal or state. You also agree that the certificates
representing the shares of Common Stock purchased under this Option may bear such legend or legends
as the Committee deems appropriate to assure compliance with applicable securities laws.
(b) You agree that (1) the Company may refuse to register the transfer of the shares of Common
Stock purchased under this Option on the stock transfer records of the Company if such proposed
transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any
applicable securities law and (2) the Company may give related instructions to its transfer agent,
if any, to stop registration of the transfer of the shares of Common Stock purchased under this
Option.
10. Notice of Sales Upon Disqualifying Disposition of ISO. If the Option is
designated as an Incentive Stock Option in the Notice of Grant, you must comply with the provisions
of this Section. You must promptly notify the Company in writing if you dispose of any of the
shares acquired pursuant to the Option within one year after the date you exercise all or part of
the Option or within two years after the Date of Grant. Until such time as you dispose of such
shares in a manner consistent with the provisions of this Agreement, unless otherwise expressly
authorized by the Company, you must hold all shares acquired pursuant to the Option in your name
(and not in the name of any nominee) for the one-year period immediately after the exercise of the
Option and the two-year period immediately after the Date of Grant. At any time during the
one-year or two-year periods set forth above, the Company may place a legend on any certificate
representing shares acquired pursuant to the Option requesting the transfer agent for the Company’s
stock to notify the Company of any such transfers. Your obligation to notify the Company of any
such transfer will continue notwithstanding that a legend has been placed on the certificate
pursuant to the preceding sentence.
11. Right to Terminate Services. Nothing contained in this Agreement shall confer
upon you the right to continue in the employ of or performing services for the Company or any
Affiliate, or interfere in any way with the rights of the Company or any Affiliate to terminate
your employment or service relationship at any time.
12. Furnish Information. You agree to furnish to the Company all information
requested by the Company to enable it to comply with any reporting or other requirement imposed
upon the Company by or under any applicable statute or regulation. You further agree to notify the
Company upon any change in the residence address indicated on the Notice of Grant.
13. Dispute Resolution. The provisions of this Section shall be the exclusive means
of resolving disputes arising out of or relating to the Notice of Grant, the Plan, the Option and
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this Agreement. The Company, you, and your assignees pursuant to Sections 3 and 4 (the
“parties”) shall attempt in good faith to resolve any disputes arising out of or relating to the
Notice of Grant, the Plan, the Option and this Agreement by negotiation between individuals who
have authority to settle the controversy. Negotiations shall be commenced by either party by
notice of a written statement of the party’s position and the name and title of the individual who
will represent the party. Within thirty (30) days of the written notification, the parties shall
meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem
necessary, to resolve the dispute.
Any controversy, dispute or claim that has not been settled by negotiation within thirty (30)
days of the written notification as set forth above shall be finally settled by arbitration under
the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) by three
arbitrators. In such event, the claimant will deliver a written notice to the respondent(s) and
the AAA initiating arbitration and naming an arbitrator. Within twenty (20) days after receipt of
such arbitration notice, the respondent(s) shall name an arbitrator. Within twenty (20) days from
the naming of the two arbitrators, the two arbitrators shall name a third arbitrator. If there are
multiple claimants and/or multiple respondents, all claimants and/or all respondents shall attempt
to agree upon naming their respective arbitrator. If the claimants or respondents, as the case may
be, fail to name their respective arbitrator, or if the two arbitrators fail to name a third
arbitrator, or if within twenty (20) days after any arbitrator shall resign or otherwise cease to
serve as such a replacement arbitrator is not named by the party that originally named such
arbitrator, such arbitrator as to which agreement cannot be reached or as to which a timely
appointment is not made shall be named by the AAA. The place of arbitration shall be Austin,
Texas. The award of the arbitrators may be entered in any court of competent jurisdiction. The
costs of the arbitration shall be shared by the disputing parties equally. Notwithstanding
anything to the contrary herein, the arbitrators shall not award nor shall the Company have any
liability for any consequential, punitive, special, incidental, indirect or similar damages.
14. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the United States mail
by certified mail (if the parties are in the United States) or upon deposit for delivery by an
internationally recognized express mail courier service (for international delivery of notice),
with postage and fees prepaid, addressed to the other party at its address as such party may
designate in writing from time to time to the other party.
15. No Liability for Good Faith Determinations. The Company and the members of the
Committee and the Board shall not be liable for any act, omission or determination taken or made in
good faith with respect to this Agreement or the Option granted hereunder.
16. Execution of Receipts and Releases. Any payment of cash or any issuance or
transfer of shares of Common Stock or other property to you, or to your legal representative, heir,
legatee or distributee, in accordance with the provisions hereof, shall, to the extent thereof, be
in full satisfaction of all claims of such persons hereunder. The Company may require you or your
legal representative, heir, legatee or distributee, as a condition precedent to such payment or
issuance, to execute a release and receipt therefore in such form as it shall determine.
17. No Guarantee of Interests. The Board and the Company do not guarantee the Common
Stock of the Company from loss or depreciation.
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18. Company Records. Records of the Company regarding your Service and other matters
shall be conclusive for all purposes hereunder, unless determined by the Company to be incorrect.
19. Successors. This Agreement shall be binding upon you, your legal representatives,
heirs, legatees and distributees, and upon the Company, its successors and assigns.
20. Severability. If any provision of this Agreement is held to be illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but
such provision shall be fully severable and this Agreement shall be construed and enforced as if
the illegal or invalid provision had never been included herein.
21. Headings. The titles and headings of paragraphs are included for convenience of
reference only and are not to be considered in construction of the provisions hereof.
22. Governing Law. All questions arising with respect to the provisions of this
Agreement shall be determined by application of the laws of the State of Delaware, without giving
any effect to any conflict of law provisions thereof, except to the extent Delaware law is
preempted by federal law. The obligation of the Company to sell and deliver Common Stock hereunder
is subject to applicable laws and to the approval of any governmental authority required in
connection with the authorization, issuance, sale, or delivery of such Common Stock.
23. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to the Option granted under the Plan or future options that may be granted
under the Plan by electronic means or to request your consent to participate in the Plan by
electronic means. You hereby consent 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.
24. Word Usage. Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Agreement dictates, the plural shall be read as the
singular and the singular as the plural.
25. Miscellaneous.
(a) This Agreement is subject to all the terms, conditions, limitations and restrictions
contained in the Plan. In the event of any conflict or inconsistency between the terms hereof and
the terms of the Plan, the terms of the Plan shall be controlling.
(b) The Option may be amended by the Board or by the Committee at any time (i) if the Board or
the Committee determines, in its sole discretion, that amendment is necessary or advisable in light
of any addition to or change in any federal or state, tax or securities law or other law or
regulation, which change occurs after the Date of Grant and by its terms applies to the Option; or
(ii) other than in the circumstances described in clause (i) or provided in the Plan, with your
consent.
(c) If this Option is designated as an Incentive Stock Option in the Notice of Grant, then in
the event the Option Shares (and all other options granted to you by the Company
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or any parent of the Company or subsidiary that are designated as incentive stock options
within the meaning of section 422 of the Code) that first become exercisable in any calendar year
have an aggregate fair market value (determined for each Option Share as of the Date of Grant) that
exceeds $100,000, the Option Shares in excess of $100,000 shall be treated as subject to a
Nonstatutory Stock Option.
By your signature below, or by your electronic acceptance of this Agreement, you agree to all
the terms and conditions of the Option, the Plan, and this Agreement. You acknowledge that you
have had the opportunity to review the Plan and this Agreement in their entirety and to obtain the
advice of counsel prior to executing this Agreement. You agree to accept as binding, conclusive
and final all decisions or interpretations of the Committee upon any questions relating to the
Option, the Plan, or this Agreement.
| AGREED AND ACCEPTED: | ||
| Signature of Holder | ||
| Printed Name of Holder | ||
Date: |
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