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Exhibit
10.5
LTI 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
168,750 shares (the “Option Shares”) of the
Company’s Class A Common Stock, $.01 par value per share
(the “ Common 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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(i)
twenty-five percent (25%) of the Option (rounded to the
nearest whole Option Share) shall vest if at any time during the
period from the Grant Date and ending on the fifth (5 th ) anniversary of the Grant Date
(the “Vesting Period”) the average of the Total
Shareholder Return (as hereinafter defined) measured over any
forty-five (45) consecutive trading-days is at least sixty
percent (60%); and
(ii) the
final seventy-five percent (75%) of the Option (rounded to the
nearest whole Option Share) shall vest if at any time during the
Vesting Period the average of the Total Shareholder Return measured
over any forty-five (45) consecutive trading-days is at least
one hundred percent (100%).
If the average of the Total
Shareholder Return measured over any forty-five consecutive
trading-day period is between sixty percent (60%) and one
hundred percent (100%), then the Participant shall vest in the
Option Shares in the aggregate (which Vested Percentage shall
include the 25% reflected in subparagraph (i), above), as
follows:
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Total Shareholder
Return
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Vested Percentage |
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65% but
less than 70%
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28.8%
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70% but
less than 75%
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33.4%
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75% but
less than 80%
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39.3%
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80% but
less than 85%
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46.8%
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85% but
less than 90%
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56.2%
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90% but
less than 95%
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68.4%
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95% but
less than 100%
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83.8%
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Except as otherwise provided
for under this Option Agreement or under the Employment Agreement
between the Company and the Participant effective as of
September 4, 2007 (the “Employment Agreement”),
the Participant must remain employed continuously through each
applicable vesting date. Any portion of the Option which is
unvested at the expiration of the Vesting Period as a result of the
failure to attain the required Total Shareholders Return shall be
forfeited.
“Total Shareholder
Return” shall equal (i) the fair market value of a share
of the Company’s Common Stock as reported on The NASDAQ Stock
Market as of the close of business on any particular date minus the
Grant Date Stock Price plus aggregate dividends paid on a share of
the Company’s Common Stock since the effective date of the
Participant’s employment agreement with the Company, divided
by (ii) the Grant Date Stock Price.
The “Grant Date Stock
Price” means the fair market value of a share of the
Company’s Common Stock as reported on The NASDAQ Stock Market
as of the closing of such market on the Grant Date.
To prevent dilution or
enlargement of the Total Shareholder Return, the Committee shall
make or authorize to be made an adjustment to the foregoing formula
for Total Shareholder Return to prevent dilution or enlargement of
the Total Shareholder Return, as a result of the following:
(1) any adjustment, recapitalization, reorganization or other
changes in the Company’s capital structure or its business;
(2) any merger or consolidation of the Company (other than a
Change in Control); (3) any issuance of bonds, debentures,
preferred or prior preference stock ahead of or affecting the
Company’s common stock or the rights thereof; (4) the
dissolution or liquidation of the Company; (5) any sale or
transfer of all or any part of the Company’s assets or
business; or (6) any other corporate act or proceeding,
whether of a similar character or otherwise.
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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
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 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) |
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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(d) |
Other Termination of Employment . Except as
provided in Section 2(e), in the event the Participant’s
employment with the Company and/or any Subsidiary is terminated for
any reason other than as provided in Section 2(b) or
(c) hereof, 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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(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 or Cause; or
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(iii) |
thirty
(30) days after the date of the Participant’s voluntary
termination of employment.
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(e) |
Change in Control Termination of Employment .
Subject to the provisions of Section 15 of the Plan, in the
event a Change in Control occurs during the Vesting Period and the
Participant’s employment is terminated by the Company and/or
any Subsidiary without Cause or is terminated by the Participant
for Good Reason during the period beginning 120 days before and
ending one (1) year after such Change in Control, any Option
Shares which are unvested as of the date of the Change in Control
shall be accelerated upon such a termination of employment and
shall vest as follows:
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Date of Change in
Control
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Percentage of Unvested That Vest
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Prior to the First
Anniversary of
the Effective Date
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100% |
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On or after the First
Anniversary of
the Effective Date, but prior
to
the Second Anniversary of
the
Effective Date
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80% |
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On or after the Second
Anniversary of
the Effective Date, but prior
to
the Third Anniversary of
the
Effective Date
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60% |
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On or after the Third
Anniversary of
the Effective Date, but prior
to
the Fourth Anniversary of
the
Effective Date
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40% |
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On or after the Fourth
Anniversary of
the Effective Date, but prior
to
the Fifth Anniversary of
the
Effective Date
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20% |
“Good
Reason” shall have the meaning assigned to it in the
Employment Agreement.
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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 Common 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 Common 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
purchase 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 (i) the Company’s issuance of Common
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 Common Stock . The Company shall not be
required to issue any fractional shares of Common Stock.
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| 4. |
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 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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| 5. |
Confidentiality, Non-Solicitation and Non-Compete
. Participant agrees to, understands and acknowledges
the
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