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Exhibit
10.3
N ON -Q
UALIFIED S TOCK O
PTION A GREEMENT
This NON-QUALIFIED
STOCK OPTION AGREEMENT (this “Option Agreement”), dated
as of September 4, 2007 (the “Grant Date”), is
between ZEBRA TECHNOLOGIES CORPORATION, a Delaware corporation (the
“Company”), and ANDERS GUSTAFSSON (the
“Participant”), relating to a non-qualified stock
option granted under the 2006 Zebra Technologies Corporation
Incentive Compensation Plan (the “Plan”). Capitalized
terms used in this Option Agreement without definition shall have
the meanings ascribed to such terms in the Plan.
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(a) |
Grant . Subject to the provisions of this Option
Agreement and pursuant to the provisions of the Plan, the Company
hereby grants to the Participant as of the Grant Date a
Non-Qualified Stock Option (the “Option”) to purchase
75,000 shares (the “Option Shares”) of the
Company’s Class A Common Stock, $.01 par value per share
(the “Stock”), at a price of $________ per share (the
“Option Price”).
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(b) |
Term
of the Option . Unless the Option terminates earlier
pursuant to other provisions of the Option Agreement, the Option
shall expire on the tenth anniversary of the Grant Date (the
“Expiration Date”).
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(c) |
Nontransferability . The Option shall be
non-transferable, except by will or the laws of descent and
distribution, or as otherwise permitted under the Plan.
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(a) |
General Vesting Rule . Prior to the Expiration
Date, the Option shall become and be exercisable as
follows:
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Grant Date
Anniversary
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Percentage of Option Exercisable |
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Prior to the first
anniversary
of the Grant Date
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0% |
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On or after the first
anniversary
of the Grant Date
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25% |
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On or after the second
anniversary
of the Grant Date, an
additional
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25% |
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On or after the third
anniversary
of the Grant Date, an
additional
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25% |
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On or after the fourth
anniversary
of the Grant Date, an
additional
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25% |
provided, however,
except as otherwise provided for under this Option Agreement or the
Employment Agreement between the Company and the Participant
effective as of September 4, 2007 (the “Employment
Agreement”), the Participant must remain employed by the
Company or any Subsidiary continuously through the applicable
vesting dates.
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(b) |
Death or Disability . In the event the
Participant’s employment with the Company and/or any
Subsidiary is terminated due to death or Disability, any unvested
Option Shares as of the date of the Participant’s termination
of employment shall immediately become fully vested and exercisable
and, along with unexercised vested Option Shares, shall remain
exercisable until the earlier of:
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(i) |
the
Expiration Date; or
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(ii) |
one
(1) year after the date of the Participant’s termination
of employment due to death or Disability.
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In the event of the
Participant’s death, the Participant’s beneficiary or
estate may exercise the vested Option Shares.
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(c) |
Retirement . In the event the Participant’s
employment with the Company and/or any Subsidiary is terminated due
to Retirement, any unexercised, vested Option Shares as of the date
of Participant’s termination of employment shall remain
exercisable until the earlier of:
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(i) |
the
Expiration Date; or
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(ii) |
one
(1) year after the date of the Participant’s termination
of employment due to Retirement.
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For purposes of
this Option Agreement, “Retirement” means the
Participant’s voluntary termination of employment with the
Company and/or any Subsidiary after attaining either:
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age 55
with ten (10) complete years of service or more with the
Company and/or any Subsidiary; or
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(d) |
Termination for Cause . In the event the
Participant’s employment with the Company and/or any
Subsidiary is terminated for Cause, all unvested Option Shares and
all unexercised, vested Option Shares shall expire immediately, be
forfeited and considered null and void. “Cause” shall
have the meaning assigned to it in the Participant’s
Employment Agreement.
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(e) |
Other Termination of Employment . In the event
the Participant’s employment with the Company and/or any
Subsidiary is terminated for any reason other than as provided in
Sections 2(b), (c) or (d) hereof, vesting of the
Participant’s Option Shares shall be governed by the
Employment Agreement and any unexercised, vested Option Shares as
of the date of Participant’s termination of employment shall
remain exercisable until the earlier of:
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(i) |
the
Expiration Date; or
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(ii) |
ninety
(90) days after the date of the Participant’s
involuntary (as to the Participant) termination of employment for
reasons other than death, Disability, Retirement, or Cause;
or
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(iii) |
thirty
(30) days after the Participant’s voluntary termination
of employment for reasons other than Retirement.
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(f) |
Change in Control Vesting . Subject to the
provisions of Section 15 of the Plan, if a Change in Control
occurs, 100% of the remaining unvested Option Shares shall be
immediately vested and exercisable upon the Change in Control and,
along with unexercised vested Option Shares, shall remain
exercisable through the Expiration Date.
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(a) |
Manner of Exercise . The vested Option Shares may
be exercised, in whole or in part, by delivering written notice to
the Company in accordance with Section 7(k) hereof and in such
form as the Company may require from time to time. Such notice of
exercise shall:
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(i) |
specify
the number of Option Shares to be purchased;
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(ii) |
specify
the aggregate Option Price for such Option Shares; and
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(iii) |
be
accompanied by payment in full of such aggregate Option
Price.
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(b) |
Payment Upon Exercise . The Option Price upon
exercise of any Option Shares shall be payable to the Company in
full either:
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(i) |
in cash or
its equivalent;
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(ii) |
by
tendering previously acquired Stock that has been held for at least
six months (or such longer period to avoid a charge to earnings for
financial reporting purposes) and having an aggregate Fair Market
Value at the time of exercise equal to the total Option Price,
or
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(iii) |
a
combination of Sections 3(b)(i) and (ii) hereof.
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In addition,
payment of the Option Price may be payable by one or more of the
following methods either upon written consent from the Committee or
if one or more of the following methods will not result in a charge
to earnings for financial reporting purposes:
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(iv) |
by
withholding Stock that otherwise would be acquired on exercise
having an aggregate Fair Market Value at the time of exercise equal
to the total Option Price;
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(v) |
by
tendering other Awards payable under the Plan;
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(vi) |
by
cashless exercise through delivery of irrevocable instructions to a
broker to promptly deliver to the Company the amount of proceeds
from a sale of shares having a Fair Market Value equal to the total
Option Price; or
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(vii) |
any
combination of Sections 3(b)(i)-(vi) upon written consent of
the Committee.
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(c) |
Compliance with Federal and State Law . The
Company reserves the right to delay a Participant’s exercise
of an Option if (1) the Company’s issuance of Stock upon
such exercise would violate any applicable federal or state
securities laws or any other applicable laws or regulations, or
(2) the Company reasonably determines that issuance of Stock
would not be deductible under Code Section 162(m). The
Participant may not sell or otherwise dispose of the Option Shares
in violation of any applicable law. The Company may postpone
issuing and delivering any Option Shares for so long as the Company
reasonably determines to be necessary to satisfy the
following:
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(i) |
its
completing or amending any securities registration or qualification
of the Option Shares or it or the Participant satisfying any
exemption from registration under any federal or state law, rule,
or regulation;
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(ii) |
its
receiving proof it considers satisfactory that a person seeking to
exercise the Option after the Participant’s death is entitled
to do so;
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(iii) |
the
Participant complying with any requests for representations under
the Plan; and
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(iv) |
the
Participant complying with any federal, state or local tax
withholding obligations.
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(d) |
No
Fractions of Stock . The Company shall not be required to
issue any fractional shares of Stock.
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Payment of Taxes . If the Company is obligated to
withhold an amount on account of any tax imposed as a result of the
exercise of an Option, the Participant shall be required to pay
such amount to the Company, as provided under Section 17 of
the Plan. The
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Participant acknowledges and agrees that the Participant is
responsible for the tax consequences associated with the grant of
the Option and its exercise.
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Changes in Company’s Capital Structure . To
prevent dilution or enlargement of rights, the Committee shall make
or authorize to be made an adjustment in the number and class of
Option Shares and/or the Option Price to prevent dilution or
enlargement of rights, as a result of the following:
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(i) |
any
adjustment, recapitalization, reorganization or other changes in
the Company’s capital structure or its business;
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(ii) |
any merger
or consolidation of the Company;
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(iii) |
any
issuance of bonds, debentures, preferred or prior preference stock
ahead of or affecting the Company’s Common Stock or the
rights thereof;
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(iv) |
the
dissolution or liquidation of the Company;
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(v) |
any sale
or transfer of all or any part of the Company’s assets or
business; or
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(vi) |
any other
corporate act or proceeding, whether of a similar character or
otherwise.
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| 6. |
Confidentiality, Non-Solicitation and Non-Compete
. Participant agrees to, understands and acknowledges the
following:
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(a) |
Confidential Information . Participant will be
furnished, use or otherwise have access to certain Confidential
Information of the Company. For purposes of this Option Agreement,
Confidential Information means any and all financial, technical,
commercial or other information concerning the business and affairs
of the Company that is confidential and proprietary to the Company,
including without limitation,
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(i) |
information relating to the Company’s past and existing
customers and vendors and development of prospective customers and
vendors, including specific customer product requirements, pricing
arrangements, payment terms, customer lists and other similar
information;
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(ii) |
inventions, designs, methods, discoveries, works of authorship,
creations, improvements or ideas developed or otherwise produced,
acquired or used by the Company;
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(iii) |
the
Company’s proprietary programs, processes or software,
consisting of but not limited to, computer programs in source or
object code and all related documentation and training materials,
including all upgrades, updates, improvements, derivatives and
modifications thereof and
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