Exhibit 4.6
SHARE OPTION AGREEMENT
This Share Option Agreement (this
“Agreement”), is entered into as of February 3,
2006 by and between Avago Technologies Limited, a company organized
under the laws of Singapore, hereinafter referred to as the
“Company,” and Capstone Equity Investors LLC, a
consultant of the Company, hereinafter referred to as
“Optionee.”
WHEREAS, the Company wishes to
afford the Optionee the opportunity to purchase ordinary shares of
the Company (“Shares”); and
WHEREAS, the Board of Directors has
determined that it would be to the advantage and best interest of
the Company and its shareholders to grant the Options provided for
herein to the Optionee as an incentive for increased efforts during
its term of consultancy with the Company or its Subsidiaries or
Affiliates, and has instructed the undersigned officers to issue
said Options;
NOW, THEREFORE, in consideration of
the mutual covenants herein contained and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties
hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are
used in this Agreement, they shall have the meaning specified below
unless the context clearly indicates to the contrary.
Section 1.1
— Affiliate
“Affiliate” shall mean
(a) with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control
with, such Person, and (b) with respect to the Company, also
any entity designated by the Board of Directors in which the
Company or one of its Affiliates has an interest, and
(c) Kohlberg Kravis Roberts & Co., L.P.
(“KKR”), Silver Lake Management Company, L.L.C.
(“SLP”) and any Affiliate of any partner or member, as
the case may be, of KKR or SLP. For purposes of this Agreement,
“Person” means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity
of whatever nature, and “control” shall have the
meaning given such term under Rule 405 of the Securities
Act.
Section 1.2
— Board of
Directors
“Board of Directors”
shall mean the Board of Directors of the Company.
Section 1.3
— Business
Day
“Business Day” shall
mean any day that is not a Saturday, a Sunday or other day on which
banks are required or authorized by law to be closed in
Singapore.
Section 1.4
— Cause
“Cause” means material
failure or deficiency by Optionee in the performance of
its services in accordance with the request of the Company, as
determined in the Company’s good faith discretion; provided
that such request for services shall not be materially different in
scope than services performed by Optionee on or prior to the date
hereof without Optionee’s consent.
Section 1.5
— Committee
“Committee” shall mean
the Board of Directors or the Compensation Committee of the Board
of Directors or any other committee of the Board of Directors
designated by the Board of Directors to administer the
Option.
Section 1.6
— Determination
Date
“Determination Date”
means the October 31 immediately following the Vesting
Reference Date and each of the next three anniversaries
thereof.
Section 1.7
— Good
Reason
“Good Reason” means
(a) material failure by the Company to provide Optionee with
access to the information or employees necessary to perform its
duties, or (b) a material increase in the scope of services
that the Company requires Optionee to perform, unless consented to
by Optionee.
Section 1.8
— Options
“Options” shall mean the
options, including the Time Option and the Performance Option, to
purchase Shares granted under this Agreement.
Section 1.9
— Performance
Option
“Performance Option”
shall mean an Option with respect to which the commencement of
exercisability is governed by Section 3.1(b)
hereof.
Section 1.10
— Pronouns
The masculine pronoun shall include
the feminine and neuter, and the singular the plural, where the
context so indicates.
2
Section 1.11
— Secretary
“Secretary” shall mean
the Secretary of the Company.
Section 1.12
— Securities
Act
“Securities Act” means
the U.S. Securities Act of 1933, as amended and the rules and
regulations promulgated thereunder.
Section 1.13
— Shareholder
Agreement
“Shareholder Agreement”
shall mean that certain Shareholder Agreement dated as of even date
herewith by and between the Company and the Optionee.
Section 1.14
— Shareholder
Agreements
“Shareholder Agreements”
shall mean the Shareholder Agreement and that certain Amended and
Restated Shareholder Agreement, dated as of February 3, 2006,
among the Company, Optionee, Bali Investments S.à r.l., Silver
Lake Partners II, Cayman, L.P., Silver Lake Technology Investors II
Cayman, L.P., Integral Capital Partners VII, L.P., KKR Millennium
Fund (Overseas), Limited Partnership, KKR European Fund, Limited
Partnership, KKR European Fund II, Limited Partnership, KKR
Partners (International), Limited Partnership, Avago Investment
Partners, Limited Partnership, Seletar Investments Pte. Ltd.,
Geyser Investment Pte Ltd and certain other persons.
Section 1.15
— Subsidiary
“Subsidiary” with
respect to any entity shall mean any corporation in an unbroken
chain of corporations beginning with such entity if each of the
corporations, or group of commonly controlled corporations, other
than the last corporation in the unbroken chain, then owns shares
possessing 50% or more of the total combined voting power of all
classes of equity in one of the other corporations in such
chain.
Section 1.16
— Time
Option
“Time Option” shall mean
an Option with respect to which the commencement of exercisability
is governed by Section 3.1(a) hereof.
Section 1.17
— Vesting Reference
Date
“Vesting Reference Date”
shall mean December 1, 2005.
3
ARTICLE II
GRANT OF OPTIONS
Section 2.1
— Grant of
Options
For good and valuable consideration,
on and as of the date hereof the Company irrevocably grants to the
Optionee a Time Option to purchase any part or all of an aggregate
of 400,000 Shares and a Performance Option to purchase any part or
all of an aggregate of 400,000 Shares upon the terms and conditions
set forth in this Agreement.
Section 2.2
— Exercise
Price
The per share exercise price of the
Shares covered by the Options shall be U.S.$5.00.
Section 2.3
— Discretion of the Board
of Directors
The grant of any options is left to
the discretion of the Board of Directors. The Company has no
obligation to award share options in the future even if options
have been awarded in one or more of the preceding years. Nothing in
this Agreement should be read as an obligation or a guarantee by
the Company with respect to the future value of the
Options.
Section 2.4
— Adjustments in
Options
In the event that the outstanding
Shares subject to an Option are, from time to time, changed into or
exchanged for cash or a different number or kind of shares of the
Company or other securities of the Company by reason of a merger,
consolidation, recapitalization, reclassification, stock split,
stock dividend, combination of shares, or otherwise, the Committee
shall make an appropriate and equitable adjustment in the number
and kind of shares or other consideration and the exercise price as
to which such Option, or portions thereof then unexercised, shall
be exercisable in order to prevent dilution or enlargement of the
benefits intended to be made available with respect to any Option.
Any such adjustment made by the Committee shall be final and
binding upon the Optionee, the Company and all other interested
persons.
In the event of a
“spin-off” or other substantial distribution of assets
of the Company which has a material diminutive effect upon the Fair
Market Value of the Shares, the Committee shall in its discretion
make an appropriate and equitable adjustment to the exercise or
purchase price to reflect such diminution.
4
ARTICLE III
PERIOD OF
EXERCISABILITY
Section 3.1
— Commencement of
Exercisability
(a) The Time Option shall become
exercisable with respect to 25% of the Shares subject to such Time
Option on each anniversary of the Vesting Reference
Date.
(b) On each anniversary of the
Vesting Reference Date, the Performance Option shall become
exercisable for an incremental percentage of the Shares subject to
such Option equal to the product of 25% and the Achievement Ratio
for the year ending on the immediately preceding Determination
Date, provided that on each Determination Date in no event shall
the total percentage of Shares subject to the Performance Option
that are exercisable be greater than the product of (i) 25%
and (ii) the number of Determination Dates (including such
Determination Date) as have fallen from and after the Vesting
Reference Date. For the avoidance of doubt, in the event that the
Achievement Ratio is greater than 1.0 for any year, the Performance
Option shall become exercisable for an incremental percentage of
t
