Southwall Technologies Inc. Non-Qualified Stock Option Agreement
EXHIBIT
99.3
Southwall
Technologies Inc.
NON-QUALIFIED
STOCK OPTION AGREEMENT (this “Agreement”) by and
between Southwall Technologies Inc., a Delaware corporation (the “Company”), and the
employee of the Company or a Related Company (the “Participant”)
specified in Schedule
A appended to this Agreement (“Schedule A”).
WHEREAS,
the Company maintains the Southwall Technologies Inc. 2007 Long-Term Incentive
Plan (the “Plan”);
and
WHEREAS,
the Participant renders important services to the Company or a Related Company,
and the Company desires to grant a stock option to the Participant;
and
WHEREAS,
the Board of Directors of the Company (the “Board”) or the
Administrator (as defined in the Plan), acting pursuant to the Plan, has
authorized the grant of this Non-Qualified Stock Option to the Participant
subject to the terms and conditions of the Plan and the additional terms and
conditions of this Agreement;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Company and the Participant hereby agree as follows:
1. Grant of
Option. The Company hereby grants to the Participant, and the
Participant hereby accepts, a Non-Qualified Stock Option (the “Option”) to purchase
from the Company that number of shares of the Company’s Common Stock, $0.001 par
value per share (the “Shares”), specified
in Schedule
A. This Agreement and the Option hereby granted to the
Participant are subject to all of the terms and conditions of the Plan which are
incorporated herein by this reference; any term used herein shall have the
meaning assigned thereto in the Plan, unless such term is otherwise specifically
defined herein.
2. Option Price; Date of
Grant. This Option may be exercised at the option price per
Share specified in Schedule A, which the
Board or the Administrator has determined, in accordance with Section 8 of the
Plan. The Date of Grant of this Option is specified in Schedule
A.
3. Term of Option; Vesting and
Service Requirements. This Option shall expire on the date
specified in Schedule
A (the “Expiration
Date”). This Option shall be exercisable to the extent of the
number of Shares vested as of the date of exercise, in accordance with the
vesting schedule provided in Schedule
A. If exercised in part, the Option may be exercised only once
in each calendar quarter, except with the express written consent of the
Company. The vesting installments provided in Schedule A are
cumulative, and this Option will remain exercisable with respect to all vested
but unexercised installments until the Option expires on the Expiration Date,
unless the Option is sooner terminated as provided in Section 7 or Section 8 of this
Agreement.
4. Other Conditions and
Limitations. The Option shall not be assignable or
transferable by the Participant otherwise than by will or by the laws of descent
and distribution, and the Option shall be exercisable during the lifetime of the
Participant by the Participant only.
5. Exercise of
Option. Written notice of the exercise of the Option or any
portion thereof shall be given to the Company’s Stock Administration Department
accompanied by the option price in (a) cash or a check
payable to the Company, (b) other Shares which
(i) in the case
of Shares acquired upon exercise of an Option, have been owned by the
Participant for more than six months on the date of surrender, and (ii) have a fair
market value on the date of surrender equal to the aggregate Exercise Price (as
defined in the Plan) of the Shares as to which such Option shall be exercised,
(c)
consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan, or (d) any combination of
the foregoing methods of payment.
6. Stock Dividends; Stock
Splits; Stock Combinations; Recapitalizations. Appropriate
adjustment shall be made in the maximum number of Shares subject to this Option
and in the number, kind and option price of Shares covered by this Option to the
extent it remains outstanding, to give effect to any stock dividends, stock
splits, stock combinations, recapitalizations and other similar changes in the
capital structure of the Company after the Date of Grant of this Option, as
determined by the Board or the Administrator in accordance with Section 12 of
the Plan.
7.
Capital Changes and
Business Successions. Upon the occurrence of any of the
following events, the Participant’s rights with respect to this Option shall be
adjusted as hereinafter provided:
a. Sale of the
Company. If the Company is to be consolidated with or acquired
by another entity in a Sale of the Company (as defined in Section 2 of the
Plan), the Board or the Administrator or the board of directors of any entity
assuming the obligations of the Company hereunder, may, as to this Option,
(i) provide
that this Option be assumed or an equivalent option be substituted by the
successor entity or a parent or subsidiary thereof, (ii) subject to the
provisions of clauses (iv) and (v) below, after the effective date of the Sale
of the Company, permit the Participant immediately prior to such effective date,
upon exercise of this Option, to receive in lieu of Shares, shares of stock or
other securities or consideration as the holders of Common Stock received
pursuant to the Sale of the Company, (iii) waive any
discretionary limitations imposed with respect to the Option so that some or all
of this Option, from and after a date prior to the effective date of the Sale of
the Company, is exercisable in full, (iv) cause this Option
to be cancelled as of the effective date of the Sale of the Company, provided
that notice of cancellation is given to the Participant and such Participant has
the right to exercise this Option in full prior to or contemporaneously with the
effective date of the Sale of the Company, or (v) cause this Option
to be cancelled as of the effective date of the Sale of the Company, provided
that notice of such cancellation is given to the Participant and such
Participant has the right to exercise this Option, to the extent exercisable in
accordance with the terms hereof, prior to or contemporaneously with the
effective date of the Sale of the Company.
b. Dissolution or
Liquidation. Subject to the provisions of Section 12(b) of the
Plan, in the event of the proposed dissolution or liquidation of the Company,
this Option will terminate immediately prior to the consummation of such
proposed action or at such other time and subject to such other conditions as
shall be determined by the Board or the Administrator.
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c. Issuances of
Securities. Except as expressly provided herein, no issuance
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares subject to this
Option. No adjustments shall be made for dividends paid in cash or in
property other than securities of the Company.
8. Termination of
Option. In the event that the Participant terminates Service,
within the meaning specified in the Plan, with the Company, or a Related
Company, for any reason at any time prior to the exercise of this Option in
full, this Option shall terminate in accordance with the following
provisions:
a. if
the Participant’s Service shall have been terminated by the Company
involuntarily for Misconduct, within the meaning specified in the Plan, this
Option shall terminate and may no longer be exercised;
b. if
the Participant’s Service shall have terminated by resignation or other
voluntary action, the Participant may at any time within a period of thirty (30)
days after such termination of Service exercise this Option to the extent it was
exercisable on the date of termination of the Participant’s Service, provided
however that such thirty (30) day period shall be extended based on the
Participant’s years of service with the Company (as determined under the
Company’s standard policy for determining years of service) as follows: (i) to
three (3) months upon completion of five (5) years of service; (ii) to six (6)
months upon completion of ten (10) years of service; (iii) to nine (9) months
upon completion of fifteen (15) years of service; and (iv) to one (1) year upon
completion of twenty (20) years of service;
c. if
the Participant’s Service shall have been terminated involuntarily and not for
Misconduct, the Participant may at any time within a period of three (3) months
after such termination of Service exercise this Option to the extent it was
exercisable on the date of termination of the Participant’s Service; provided
however that such three (3) month period shall be extended based on the
Participant’s years of service with the Company (as determined under the
Company’s standard policy for determining years of service) as follows: (i) to six (6) months
upon completion of ten (10) years of service; (ii) to nine (9)
months upon completion of fifteen (15) years of service; and (iii) to one (1) year
upon completion of twenty (20) years of service
d. if
the Participant’s Service shall have been terminated because of Disability,
within the meaning specified in the Plan, the Participant may at any time within
a period of 12 months after such termination of Service exercise this Option to
the extent that the Option was exercisable on the date of termination of the
Participant’s Service; or
e. if
the Participant dies while a Service Provider, within the meaning specified in
the Plan, the Option, to the extent that the Participant was entitled to
exercise it on the date of death, may be exercised within a period of 12 months
after the Participant’s death by the person or persons to whom the Participant’s
rights under the Option shall pass by will or by the laws of descent and
distribution;
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provided, however, that this
Option may not be exercised to any extent by anyone after the Expiration
Date.
9. Tax Treatment of
Option. This Option is not intended to constitute an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), and the
Company makes no representations as to the tax treatment of the Participant upon
the receipt or exercise of this Option or the sale or other disposition of the
Shares issued pursuant to this Option. The Participant should obtain
advice from an appropriate independent professional adviser with respect to the
taxation implications of the grant, exercise, assignment, release, cancellation
or any other disposal of this Option (each, a “Trigger Event”) and
on any subsequent sale or disposition of the Shares. The Participant should
also take advice in respect of the taxation indemnity provisions under Section
10 below.
10. The Participant’s Taxation
Indemnity.
a. To
the extent permitted by law, the Participant hereby agrees to indemnify and keep
indemnified the Company as trustee for and on behalf of any affiliate entity, in
respect of any liability or obligation of the Company and/or any affiliate
entity to account for income tax or any other taxation provisions under the laws
of the Participant’s country or citizenship and/or residence to the extent
arising from a Trigger Event or arising out of the acquisition, retention and
disposal of the Shares.
b. The
Company shall not be obliged to allot and issue any of the Shares or any
interest in the Shares unless and until the Participant has paid to the Company
such sum as is, in the opinion of the Company, sufficient to indemnify the
Company in full against any liability the Company has for any amount of, or
representing, income tax or any other tax arising from a Trigger Event (the
“Option Tax
Liability”), or the Participant has made such other arrangement as in the
opinion of the Company will ensure that the full amount of any Option Tax
Liability will be recovered from the Participant within such period as the
Company may then determine.
11. No Rights as a Stockholder;
No Obligation to Continue Service. The Participant shall have
no rights as a stockholder with respect to the Shares subject to the Option
until the exercise of the Option and the issuance of a stock certificate for the
Shares with respect to which the Option shall have been
exercised. Nothing herein contained shall impose any obligation on
the Company or any of its subsidiaries or the Participant with respect to the
Participant’s continued Service with the Company or any of its
subsidiaries. Nothing herein contained shall impose any obligation
upon the Participant to exercise the Option.
12. Relationship to
Plan. The Option contained in this Agreement has been granted
pursuant to the Plan, and is in all respects subject to the terms, conditions
and definitions of the Plan, as amended from time to time. The
Participant hereby accepts this Option subject to all the terms and provisions
of the Plan and agrees that all decisions under and interpretations of the Plan
by the Board shall be final, binding and conclusive upon the Participant and the
Participant’s permitted heirs, executors, administrators, successors and
assigns.
13. Miscellaneous. In
case any one or more of the provisions or part of any provision contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of this Agreement, but this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision or part of a provision had never been contained
herein. This Agreement shall be binding upon and inure to the benefit
of the parties hereto, and to their respective heirs, executors, administrators,
successors and assigns. This Agreement shall be governed by and
construed and administered in accordance with the laws of the State of
Delaware.
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14. Data
Protection.
a. To
facilitate the administration of the Plan and this Agreement, it will be
necessary for the Company (or its payroll administrators) to collect, hold and
process certain personal information about the Participant and to transfer this
data to certain third parties such as brokers with whom the Participant may
elect to deposit any share capital under the Plan. The Participant
consents to the Company (or its payroll administrators) collecting, holding and
processing the Participant’s personal data and transferring this data to the
Company or any other third parties insofar as is reasonably necessary to
implement, administer and manage the Plan.
b. The
Participant understands that the Participant may, at any time, view the
Participant’s personal data, require any necessary corrections to it or withdraw
the consents herein in writing by contacting the Company, but acknowledges that
without the use of such data it may not be practicable for the Company to
administer the Participant’s involvement in the Plan in a timely fashion or at
all and this may be detrimental to the Participant.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the
Date of Grant specified in Schedule
A.
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SOUTHWALL
TECHNOLOGIES INC.
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By:
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Name:
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Title:
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Participant:
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Print
Name:
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IRS Circular 230
Disclosure: To ensure compliance with requirements imposed by
the IRS, we inform you that any tax advice contained in this communication
(including any attachments) (i) was not intended
or written to be used, and cannot be used, for the purpose of avoiding any tax
penalty and (ii) was not written
to promote, market or recommend the transaction or matter addressed in the
communication. Each taxpayer should seek advice based on the
taxpayer’s particular circumstances from an independent tax
advisor.
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Southwall
Technologies Inc.
SCHEDULE
A
This
Schedule A sets
forth certain information and provisions referred to in the Non-Qualified Stock
Option Agreement to which this Schedule A is
appended.
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1.
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The
Participant is [NAME], whose address is [ADDRESS], and whose social
security number is [SS].
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2.
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The
number of option Shares is [NUMBER OF
SHARES].
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3.
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The
option price per Share for such option Shares is
$[___].
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4.
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The
Date of Grant of the Option is
[_____________].
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5.
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The
Expiration Date of the Option is
[_____________].
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6.
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The
Shares shall “vest” and become exercisable as follows: 25% shall vest on
each anniversary of the Date of Grant set forth above such that the Option
shall be fully vested on the fourth anniversary of the Date of Grant,
provided that the Participant remains a Service Provider of the Company or
a Related Company.
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