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Exhibit
10.4
Form of Director 1-Year
Vesting
N ON -Q
UALIFIED S TOCK O
PTION A GREEMENT
This NON-QUALIFIED STOCK
OPTION AGREEMENT (this “Option Agreement”), dated
as of <<Grant Date>> (the “Grant Date”), is
between ZEBRA TECHNOLOGIES CORPORATION , a Delaware
corporation (the “Company”), and <<Name>>
(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
<<Number>> shares (the “Option Shares”) of
the Company’s Class A Common Stock, $.01 par value per
share (the “Stock”), at a price of <<Strike
Price>> per share (the “Option
Price”). |
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(b)
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Term of the Option
. Unless the Option terminates earlier pursuant to other
provisions of the Option Agreement, the Option shall expire on the
tenth (10 th ) 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, 100% of the Option shall become and be exercisable on or
after the first anniversary of the Grant Date provided, however,
except as otherwise provided for under this Option Agreement, the
Participant must remain a member of the Board of Directors of the
Company (the “Board”) continuously through the
applicable vesting date. |
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(b) |
Death or Disability . Notwithstanding the
provisions of Section 2(a) hereof, in the event the
Participant’s service on the Board is terminated due to the
Participant’s death or Disability, any unvested portion of
the Option as of the date of such termination of service shall
immediately become fully vested and exercisable and, along with any
unexercised, vested portion of the Option, 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 service on the Board due to the Participant’s
death or Disability. |
In the event of the
Participant’s death, the Participant’s beneficiary or
estate may exercise the vested portion of the Option.
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(c) |
Retirement . In the event the Participant’s
service on the Board is terminated due to Retirement, any
unexercised, vested portion of the Option as of the date of the
Participant’s termination of service on the Board 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 service on the Board due to Retirement. |
For purposes of this Option
Agreement, “Retirement” means the Participant’s
voluntary termination of service on the Board after attaining
either:
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• |
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age
fifty-five (55) with ten (10) or more complete years of
service with the Company and/or any Subsidiary; or
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(d) |
Other
Termination of Service on the Board . In the event the
Participant’s service on the Board is
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terminated for any reason
other than as provided in Section 2(b) or (c) hereof, any
portion of the Option that is unexercised and vested as of the date
of such termination 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
termination of service on the Board. |
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(e) |
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 portion of the Option shall
be immediately vested and exercisable upon such Change in Control
and, along with any unexercised, vested portion of the Option,
shall remain exercisable through the Expiration Date. |
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(a) |
Manner of Exercise . The vested portion of the
Option may be exercised, in whole or in part, by delivering written
notice to the Company in accordance with of Section 7(k)
hereof and in such form as the Committee 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 portion of the Option 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 necessary to avoid a
charge to the Company’s earnings for financial reporting
purposes) and having an aggregate Fair Market Value at the time of
exercise equal to the aggregate Option Price, or |
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(iii) |
a combination of Sections 3(b)(i) and
(ii) hereof. |
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 the
Company’s 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 aggregate Option Price, |
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(v) |
by tendering other Awards payable under the Plan,
or |
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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 purchase price. |
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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 the Option if 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. The Participant
may not sell or otherwise dispose of 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; |
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(iv) |
the Participant complying with any federal, state, or local tax
withholding obligations; |
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(v) |
its deferring payment of any amount that it reasonably
determines would not be deductible under Code Section 162(m)
until the earlier of: |
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• |
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the earliest
date on which the Company reasonably determines that the
deductibility of the payment will not be limited; or
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the year
following the Participant’s termination of service on the
Board; and
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(vi) |
its compliance with the provisions of Code Section 409A to
the extent applicable, including any final regulations issued
pursuant thereto, including the Committee’s right to amend
any provision of this Option Agreement, to the extent necessary to
help ensure that amounts due hereunder are not subject to adverse
tax consequences under Code Section 409A, which right is
hereby consented to by the Participant (notwithstanding
Section 16 of the Plan). |
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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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(a) |
General Rule . 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 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
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(a) |
Adjustment in Authorized Stock . As may be
determined to be appropriate and equitable by the Committee, in its
complete and sole discretion, 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 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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Confidentiality, Non-Solicitation and Non-Compete
. The Participant agrees to, understands and acknowledges the
following: |
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(a) |
Confidential Information . The 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, payments 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,
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computer programs in
source or object code and all related documentation and training
materials, including all upgrades, updates, improvements,
derivatives and modifications thereof and including programs and
documentation in incomplete stag
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