Exhibit 10.3
EMULEX CORPORATION
EMPLOYEE STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement is made and entered into by and
between Emulex Corporation, a Delaware corporation ("Company"), and the Employee
identified in the "Emulex Corporation Notice of Grant of Stock Option" ("Grant
Notice") which is attached hereto ("Optionee"), as of the "Grant Date" set forth
in the Grant Notice, with respect to the following facts:
A. The Company has adopted and the stockholders of the Company have
approved the Emulex Corporation Employee Stock Option Plan ("Plan") pursuant to
which the Company is authorized to grant stock options to employees of the
Company or its subsidiaries;
B. Optionee has received and reviewed a copy of the Plan; and
C. Optionee is an employee of the Company or a subsidiary.
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound, the parties agree as follows:
1. GRANT OF STOCK OPTION. Subject to the terms and conditions set forth
herein, the Company hereby grants to Optionee a nonqualified stock option
("Option") to purchase from the Company, at the "Option Price Per Share" set
forth in the Grant Notice, the "Total Number of Shares" of the Company's
authorized and unissued or reacquired shares of common stock set forth in the
Grant Notice.
2. NONQUALIFIED STOCK OPTION. The Stock Option granted to Optionee
pursuant to this Agreement is intended to be a "nonqualified stock option" and
is not subject to the qualification requirements and limitations applicable to
incentive stock options under Section 422 of the Internal Revenue Code of 1986,
as amended ("Code").
3. ADMINISTRATION. The Plan provides that the Plan Administrator shall be
the Board of Directors of the Company ("Board") or a committee ("Committee")
consisting of not less than two (2) individuals appointed by the Board. Subject
to the provisions of the Plan, the Plan Administrator shall have authority to
construe and interpret the Plan and this Agreement, to promulgate, amend, and
rescind rules and regulations relating to the administration of the Plan and
this Agreement, and to make all of the determinations necessary or advisable for
administration of the Plan and this Agreement. The interpretation and
construction by the Plan Administrator of any provision of this Agreement, shall
be final and binding upon all parties. No member of the Plan Administrator shall
be liable for any action or determination undertaken or made in good faith with
respect to the Plan or this Agreement.
4. TERM OF STOCK OPTION. Unless earlier exercised pursuant to Section 5
below, the Stock Option shall terminate on, and shall not be exercisable after,
the expiration of the earliest of (a) ten (10) years after the Grant Date set
forth in the Grant Notice or, if earlier, the Termination Date set forth in the
Grant Notice, (b) three (3) months after the date Optionee's employment with the
Company and its subsidiaries terminates, if such termination is for any reason
other than permanent disability, death or cause, or (c) the date the Optionee's
employment with the Company and its subsidiaries terminates if such termination
is for cause as determined by the Plan Administrator, in its sole discretion, or
(d) one (1) year after the date Optionee's employment with the Company and its
subsidiaries terminates, if such termination is a result of death or permanent
disability (as defined in the Plan), or death or permanent disability results
within not more than three months of the date on which the Optionee ceases to be
an employee.
5. EXERCISE.
5.1 EXERCISABILITY. Subject to the terms and conditions of this
Agreement, and unless otherwise defined in the Grant Notice, the Stock Option
shall become exercisable on a cumulative basis as to 25% of the Total Number of
Shares of Common Stock of the Company specified in the Grant Notice one year
after the Grant Date specified in the Grant Notice and an additional 6-1/4% of
such Total Number of Shares at any time after the end of each consecutive
calendar quarter thereafter, if Optionee is still employed by the Company or one
of its subsidiaries on such dates, until the Stock Option has become exercisable
with respect to the Total Number of Shares of Common Stock of the Company set
forth in the Grant Notice. The Stock Option may be exercised by Optionee with
respect to any shares of Common Stock of the Company covered by the Stock Option
at any time on or after the date on which the Stock Option becomes exercisable
with respect to such shares; provided that the other terms of this Agreement,
and any terms required by any broker used by the Optionee, are complied with.
Anything set forth in this Agreement to the contrary
notwithstanding, the Stock Option may not be exercised after the time Optionee
ceases to be an employee of the Company and its subsidiaries (irrespective of
the cause) except to the extent it would have been exercisable by Optionee at
such time.
5.2 NOTICE OF EXERCISE. Optionee shall exercise the Option by
delivering to the Company, either in person or by certified or registered mail,
written notice of election to exercise and payment in full of the purchase price
as provided in Subsection 5.3 of this Agreement. The written notice shall set
forth the whole number of shares with respect to which the Option is being
exercised.
5.3 PAYMENT OF PURCHASE PRICE. The purchase price for any shares of
common stock of the Company with respect to which Optionee exercises this Option
shall be paid in full at the time Optionee delivers to the Company the written
notice of election to exercise. The purchase price shall be paid in cash, by
check, or, at the discretion of the Plan Administrator, upon such terms and
conditions as the Plan Administrator shall approve, either by (a) a copy of
instructions to a broker directing such broker to sell the Common Stock for
which such Option is exercised, and to remit to the Company the aggregate
exercise price of such Options (a "cashless exercise"), or (b) by transferring
to the Company for redemption shares of common stock of the Company at their
Fair Market Value (determined as defined in the Plan) in the form and manner
specified by the Plan Administrator (a "stock-for-stock exercise"). In addition
to the purchase price, the optionee shall pay the amount of tax required to be
withheld (if any) by the Company or any parent or subsidiary corporation as a
result of the exercise of an Option. At the discretion of the Plan
Administrator, upon such terms as the Plan Administrator shall approve, the
Optionee may pay all or a portion of the tax withholding by (i) cash or check
payable to the Company, (ii) cashless exercise, (iii) stock-for-stock exercise,
or (iv) a combination of (i), (ii) and (iii). Notwithstanding the foregoing, the
Company, in its sole discretion, may extend and maintain, or arrange for the
extension and maintenance of, to the extent permitted by law, credit to Optionee
to finance payment of the purchase price on such terms as may be approved by the
Plan Administrator.
6. ISSUANCE OF AND RESTRICTION ON SHARES. Promptly after the Company's receipt
of the written notice of election provided for in Subsection 5.2 above and
Optionee's payment in full of the purchase price, the Company shall deliver, or
cause to be delivered to Optionee, certificates for the whole number of shares
with respect to which the Stock Option is being exercised by Optionee. Shares
shall be registered in the name of Optionee. If any law or regulation of the
Securities and Exchange Commission or of any other federal or state governmental
body having jurisdiction shall require the Company or Optionee to take any
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action prior to issuance to Optionee of the shares of Common Stock of the
Company specified in the written notice of election to exercise, or if any
listing agreement between the Company and any national securities exchange
requires such shares to be listed prior to issuance, the date for the delivery
of such shares shall be adjourned until the completion of such action and/or
such listing.
7. FRACTIONAL SHARES. In no event shall the Company be required to issue
fractional shares upon the exercise of any portion of the Stock Option.
8. RIGHTS AS A STOCKHOLDER. Optionee shall have no rights as a stockholder of
the Company with respect to any shares covered by the Stock Option until the
date of the issuance of a share certificate for such shares. No adjustment shall
be made for any dividends (ordinary or extraordinary, whether cash, securities,
or other property) or distributions or other rights for which the record date is
prior to the date such share certificate is issued, except as provided in
Section 9 below.
9. CAPITAL STRUCTURE ADJUSTMENTS. Except as otherwise provided herein,
appropriate and proportionate adjustments shall be made in the number and class
of shares subject to the Stock Option and the purchase price of such shares in
the event of a stock dividend (but only on Common Stock), stock split, reverse
stock split, recapitalization, reorganization, merger, consolidation,
separation, or like change in the capital structure of the Company. In the event
of a liquidation of the Company, or a merger, reorganization, or consolidation
of the Company with any other corporation in which the Company is not the
surviving corporation or the Company becomes a wholly owned subsidiary of
another corporation, any unexercised portion of this Stock Option shall be
deemed cancelled unless the surviving corporation in any such merger,
reorganization, or consolidation elects to assume this Stock Option or to use
substitute options in place thereof; provided, however, that, notwithstanding
the foregoing, if such Stock Options would otherwise be cancelled in accordance
with the foregoing, the Optionee shall have the right, exercisable during a
ten-day period ending on the fifth day prior to such liquidation, merger, or
consolidation, to exercise this Stock Option without regard to any restrictions
on exercisability. To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made by the Plan
Administrator, the determination of which shall be final, binding, and
conclusive.
10. NO TRANSFER OF STOCK OPTION. Optionee may not transfer all or any part of
the Stock Option except by will or the laws of descent and distribution, and the
Stock Option shall not be exercisable during the lifetime of Optionee by any
person other than Optionee.
11. INVESTMENT REPRESENTATION. Optionee hereby represents and warrants to the
Company that he is acquiring the Stock Option and the Common Stock thereto for
his own account and not with a view to or for sale in connection with any
distribution thereof. Optionee hereby further represents and warrants to, and
agrees with, the Company that, if he exercises the Stock Option in whole or in
part at a time when there is not in effect under the Securities Act of 1933, as
amended, a registration statement covering the shares issuable upon exercise of
the Stock Option and available for delivery a prospectus meeting the
requirements of Section 10(a)(3) of said Act, that Optionee may be required, as
a condition of issuance of the shares of Common Stock of the Company covered by
the Stock Option, to represent to the Company that the shares issued pursuant to
the exercise of the Stock Option are being acquired for investment and without a
view to distribution thereof; and that in such case the Company may place a
legend on the certificate(s) evidencing the shares of the Common Stock of the
Company issued upon exercise of the Stock Option reflecting the fact that the
shares were acquired for investment and cannot be sold or transferred unless
registered under said Act or unless counsel for the Company is satisfied that
the circumstances of the proposed transfer do not require such registration. In
addition, the Company may place a legend on the certificates evidencing the
shares reflecting the fact that they are subject to restrictions on transfer
under the terms of Section 6 hereof.
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12. GENERAL PROVISIONS.
12.1 ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties with respect to the subject matter hereof, and
supersedes any and all prior written or oral agreements between the parties with
respect to the subject matter hereof. There are no representations, agreements,
arrangements, or understandings, either written or oral, between or among the
parties with respect to the subject matter hereof which are not set forth in
this Agreement.
12.2 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.
12.3 NOTICES. Any notice given pursuant to this Agreement may be
served personally on the party to be notified or may be mailed, with postage
thereon fully prepaid, by certified or registered mail, with return receipt
requested, addressed as set forth by the party's signature of this Agreement or
at such other address as such party may designate in writing from time to time.
Any notice given as provided in the preceding sentence shall be deemed delivered
when given, if personally served, or ten (10) business days after mailing, if
mailed.
12.4 FURTHER ACTS. Each party to this Agreement agrees to perform
such further acts and to execute and deliver such other and additional documents
as may be reasonably necessary to carry out the provisions of this Agreement.
12.5 SEVERABILITY. If any term, provision, covenant, or condition of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, or unenforceable for any reason, such invalidity, illegality, or
unenforceability shall not affect any of the other terms, provisions, covenants,
or conditions of this Agreement, each of which shall be binding and enforceable.
12.6 MODIFICATION AND AMENDMENT. This Agreement may not be modified,
extended, renewed or substituted without an amendment or other agreement in
writing signed by the parties to this Agreement.
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