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Exhibit
10.3(a)
SAIFUN SEMICONDUCTORS
LTD.
2003 SHARE OPTION
PLAN
SHARE OPTION
AGREEMENT
Unless otherwise defined
herein, the terms defined in the 2003 Share Option Plan, as amended
from time to time (the “ Plan ”) of Saifun
Semiconductors Ltd. shall have the same defined meanings in this
Share Option Agreement (the “ Option Agreement
”). Except where the context otherwise requires, the term
“Company” shall include Saifun Semiconductors Ltd. and
its Subsidiaries, if applicable.
| I. |
NOTICE OF SHARE OPTION GRANT |
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1.
Name:
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________________ (the “Optionee”
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Address:
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________________ |
| 2. |
The Optionee has been granted an Option to purchase Ordinary
Shares, par value NIS 0.01, of the Company, subject to the terms
and conditions of the Plan and this Option Agreement, as
follows: |
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| Date of
Grant |
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__________________________ |
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| Vesting
Commencement Date |
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__________________________ |
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| Exercise
Price per Share 1 : |
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$_________________________ |
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| Total Number
of Shares Granted |
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__________________________ |
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| Type of
Option 2 : |
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____ Option intended to qualify as an incentive stock
option ( “ISO” ) within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (
“Code” ) |
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____
Option not intended to qualify as an ISO (
“NQSO” ) |
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| Term/Expiration Date 3 : |
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__________________________ |
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1
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In case of (i) an ISO granted
to an employee of the Company or any Subsidiary who, at the time of
grant of such Option, is a Ten Percent Shareholder, the Exercise
Price shall be no less than one hundred ten percent (110%) of the
Fair Market Value per Share on the date of grant, and (ii) an ISO
granted to any other employee of the Company or any Subsidiary at
the time of the grant of such Option, the Exercise Price shall be
no less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant. In case of an Option granted to a
resident of California, the Exercise Price shall be (i) no less
than eighty five percent (85%) of the fair value (as defined in
Section 260.140.50 of the California Code of Regulations) of a
Share at the time the option is granted, and (ii) no less than 110%
of the fair value (as defined in Section 260.140.50 of the
California Code of Regulations) if the optionee is a Ten Percent
Shareholder.
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2
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NQSOs may be granted to
service providers (including employees, consultants, and
non-employee directors) of the Company and any Subsidiary, and ISOs
may be granted only to employees of the Company or any Subsidiary
on the date of grant of such ISOs.
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3
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No more than ten (10) years
from the Date of Grant, provided however, that in the case of an
ISO granted to a Ten Percent Shareholder, the Expiration Date shall
be no more than five (5) years from the Date of Grant.
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This Option shall be
exercisable in number of whole Shares, [in equal annual
installments over a period of five (5) years following the
Vesting Commencement Date (i.e. 20% of the Shares subject to the
Option shall vest upon the first, second, third, forth and fifth
anniversaries of the Vesting Commencement Date) ]
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, subject to the
Optionee’s continuous engagement with the Company during such
time. In no event shall the Option vest and become exercisable for
any additional Shares following Optionee’s cessation of
engagement with the Company.
| 4. |
Provisions for Termination : |
In no event may Optionee
exercise this Option after the Term/Expiration Date as provided
above.
In the event that
Optionee’s engagement with the Company should terminate, all
Options, which are vested and exercisable at the time of such
termination, shall be exercisable for (i) three
(3) months after the date of such termination (except in the
case of termination by reason of death or Disability); or
(ii) six (6) months after the date of such termination by
reason of Optionee’s death or Disability. Notwithstanding the
foregoing, in the event of Optionee’s death within three
(3) months after the date of termination, the Optionee’s
estate or heirs, as applicable, may exercise all Options, which are
vested and exercisable at the time of Optionee’s termination
of engagement, within six (6) months after the
Optionee’s death, but in no event after the Expiration Date
as provided above.
In the case of an ISO, if
such Disability is not a “disability” as such term is
defined in Section 22(e)(3) of the Code, such ISO shall be
treated for tax purposes as an NQSO commencing on the lapse of
three (3) months and one day following such
termination.
Notwithstanding the above, in
the event that Optionee’s engagement with the Company should
terminate for Cause, the entire unexercised Option (whether vested
or not) shall ipso facto terminate.
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4
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The vesting schedule for
Optionees who are residents of California (and are not officers,
directors, managers or consultants of the Company) must be at least
20% per year (Section 260.140.41(f) of the California Code of
Regulations) (i.e., 20% after first anniversary and 20% after
second anniversary).
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For purposes of an ISO, an
employee shall cease to be an employee if any leave of absence
approved by the Company exceeds ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute
or contract; and if such reemployment is not so guaranteed, on the
91 st day
of such leave any ISO held by Optionee shall be treated, for tax
purposes, as a NQSO.
For purposes hereof,
termination of Optionee’s engagement shall be deemed
effective as detailed in Section 10.5 of the Plan.
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1.1 |
The Company hereby grants to the Optionee named in the Notice
of Share Option Grant (the “ Notice of Grant ”),
an option (the “ Option ”) to purchase the
number of Shares set forth in the Notice of Grant, at the exercise
price per Share set forth in the Notice of Grant (the “
Exercise Price ”), subject to the terms and conditions
set forth herein and in the Plan, which is incorporated herein by
reference. Subject to Section 15.2 of the Plan, in the event
of a conflict between the terms and conditions of the Plan and this
Option Agreement, the terms and conditions of the Plan shall
prevail, unless specifically stated otherwise herein. |
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1.2 |
In the case of an ISO, the Option shall not be considered an
ISO to the extent that the aggregate Fair Market Value of the
Shares which may be purchased on exercise of all ISOs held by
Optionee for the first time during any calendar year (under all
plans of the Company and any parent or Subsidiary of the Company)
exceeds US$100,000. For purposes of this Section 1.2, ISOs
shall be taken into account in the order in which they were
granted. The Fair Market Value of the Shares shall be determined as
of the time the Option with respect to such Shares is
granted. |
| 2. |
Non-Transferability of Option . This Option may not be
sold, pledged, assigned, hypothecated or transferred in any manner
other than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by Optionee.
The terms of the Plan and this Option Agreement shall be binding
upon the executors, administrators, heirs, successors and assigns
of the Optionee. |
| 3. |
Term of Option . This Option may be exercised only
within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the
terms of this Option Agreement. In the case of an ISO granted to an
Optionee, who is a Ten Percent Shareholder, at the time the Option
is granted, the term of the Option shall be no more than five
(5) years from the date such Option was granted. In the event
the Option shall not be exercised within its term, such Option, or
such part thereof, shall expire and all interests and rights of the
Optionee in and to the same shall terminate. |
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4.1 |
Right to Exercise . This Option shall be exercisable
during its term to the extent vested in accordance with the vesting
schedule set out in the Notice of Grant and with the applicable
provisions of the Plan and this Option Agreement. |
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4.2 |
Continuous Engagement Required. Except as otherwise
provided in the Notice of Grant, this Option may not be exercised
unless the Optionee, at the time he exercises this Option is, and
has been at all times since the date of grant set out in the Notice
of Grant engaged by the Company. Transfer between locations of the
Company or between the Company, its Subsidiaries or its successor
shall not be considered termination of engagement. In case of an
approved leave of absence, the vesting of the Option shall be
suspended during such leave of absence. |
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4.3 |
Method of Exercise . This Option shall be exercised by
delivery of a signed exercise notice substantially in the form
attached as Exhibit A (the “ Exercise
Notice ”), which shall state the election to exercise the
Option, the number of Shares with respect to which the Option is
being exercised, and shall be accompanied with such other
representations, agreements and documents as may be required by the
Company. The Exercise Notice shall be accompanied by payment of the
aggregate withholding taxes due with respect to the exercised
Shares (if applicable). This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice
and settlement of payment of the aggregate Exercise Price in such
form satisfactory to the Company. The Optionee may purchase less
than the number of Shares covered by the vested portion of the
Option, provided that no partial exercise of this Option may be for
a fraction of a Share. |
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4.4 |
Method of Payment ; Cashless Exercise . Payment
of the aggregate Exercise Price for the purchased Shares shall be
made by Optionee’s relinquishment of a portion of his Option
having a Fair Market Value equal to the aggregate Exercise Price,
so that the Company shall issue to the Optionee only the amount of
Shares of the Company having an aggregate Fair Market Value equal
to the difference between (x) the aggregate Fair Market Value
of the Shares so purchased; and (y) the aggregate Exercise
Price applicable for such exercised Options (the “
Cashless Exercise ”). For the purpose of the Cashless
Exercise hereof, the Committee shall determine the Fair Market
Value of the Shares in accordance with the provisions of the
Plan. |
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4.5 |
Rights as a Shareholder . |
(a) Until the issuance of the
Shares (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), the
Optionee shall not have any of the rights or privileges granted to
a shareholder of the Company with respect to any Shares purchasable
upon the exercise of any part of an Option. No adjustment will be
made for a dividend or other shareholders’ right for which
the record date is prior to the date the Shares are issued, except
as provided in Section 12 of the Plan.
(b) Except and to the
extent
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