UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 2, 2008
ZEBRA TECHNOLOGIES CORPORATION
(Exact Name of Registrant as Specified in Charter)
| Delaware | 000-19406 | 36-2675536 | ||
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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| 333 Corporate Woods Parkway, Vernon Hills, Illinois | 60061 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: 847-634-6700
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13c-4(c)) |
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Amendment to 2006 Zebra Technologies Corporation Incentive Compensation Plan
On December 2, 2008, the Compensation Committee (the “Committee”) of the Board of Directors of Zebra Technologies Corporation (the “Company”) approved amendments to Sections 13.1 and 19.3 of the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “2006 Plan”). The amendments, effective upon approval by the Committee, conform the 2006 Plan to changes in law required by Sections 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder.
The amendment to Section 13.1 provides that award agreements may permit the deferral of receipt of cash or shares pursuant to an award, provided that such award agreements shall include the rules and procedures for such payment deferrals. Prior to the amendment, the 2006 Plan had permitted the Committee to defer a participant’s receipt of such cash or shares and to establish rules and procedures for such payment deferrals, without a requirement that such deferral or rules and procedures be included in the award agreement.
The amendment to Section 19.3 permits the Company to delay a participant’s exercise of an option or stock appreciation right if the award is designed to be a stock right exempt from the requirements of Code Section 409A and if the Company reasonably determines that issuance or payment under the Award would not be deductible under Code Section 162(m).
The above description of the amendment to the 2006 plan is qualified in its entirety by reference to the complete text of such amendment, a copy of which is attached hereto as Exhibit 10.1.
Amendment to all outstanding Non-Qualified Stock Option Agreements under the 2006 Plan
On December 2, 2008, the Committee approved amendments to all outstanding Non-Qualified Stock Option Agreements under the 2006 Plan (the “2006 Option Agreements”). Prior to the amendment, the 2006 Option Agreements had provided that the Company could postpone the issuance and delivery of the shares of the Company’s Class A Common Stock issuable pursuant to an exercised option in cases in which the Company reasonably determined that (a) the deferral of such issuance and delivery would not be deductible under Code Section 162(m), or (b) such deferral is necessary to comply with the provisions of Code Section 409A. The amendment, effective upon approval by the Committee and as of the grant date under each 2006 Option Agreement, has deleted this provision. In lieu of that provision, the amendment permits the Company to delay a participant’s exercise of an option if the Company reasonably determines that the issuance of the shares of the Company’s Class A Common Stock would not be deductible under Code Section 162(m).
The above description of the amendment to the outstanding 2006 Option Agreements is qualified in its entirety by reference to the complete text of such amendment, a copy of which is attached hereto as Exhibit 10.2.
Amendments to outstanding Non-Qualified Stock Option Agreements under the 2002 Non-Employee Director Stock Option Plan (the “2002 Plan”)
On December 2, 2008, the Committee approved a form of amendment to all of the outstanding Non-Qualified Stock Option Agreements under the 2002 Plan (the “2002 Option Agreements”). The form of amendment, to be entered into by the Company and each participant with respect to the participant’s 2002 Option Agreements, amends the 2002 Option Agreements to provide that in the event of a change in control, the purchase price at which the Company may purchase outstanding options may not exceed an amount based on the consideration paid in the transaction constituting the change in control. The form of amendment also clarifies that the options granted under the 2002 Option Agreements are intended to qualify as stock rights that are exempt from Code Section 409A. The Company expects all participants holding options pursuant to the 2002 Option Agreements to enter into the amendments prior to December 31, 2008.
The above description of the form of amendment to the outstanding 2002 Option Agreements is qualified in its entirety by reference to the complete text of such form of amendment, a copy of which is attached hereto as Exhibit 10.3.
New forms of award agreements under the 2006 Plan
On December 2, 2008, the Committee also approved new forms of the following award agreements under the 2006 Plan: (a) Non-Qualified Stock Option Agreement, (b) Director Non-Qualified Stock Option Agreement (1-year vesting), (c) Director Non-Qualified Stock Option Agreement (4-year vesting), (d) Restricted Stock Agreement (time-vesting), and (e) Restricted Stock Agreement (performance-vesting). The new form award agreements are substantially similar to their respective predecessor award agreements, except that the new form award agreements have been amended to conform to the requirements of Code Section 409A. For example, the new form award agreements (i) except from permissible offset amounts between a participant and the Company any amounts owing from the Company to the participant that are subject to Code Section 409A, and (ii) with respect to the new form Non-Qualified Stock Option Agreements, include language consistent with the amendments to outstanding Non-Qualified Stock Option Agreements under the 2006 Plan as described above.
The above descriptions of the new form award agreements under the 2006 Plan are qualified in their entirety by reference to the complete texts of the forms of such new form award agreements, copies of which are attached hereto as Exhibit 10.4 (Non-Qualified Stock Option Agreement), Exhibit 10.5 (Director Non-Qualified Stock Option Agreement (1-year vesting)), Exhibit 10.6 (Director Non-Qualified Stock Option Agreement (4-year vesting)), Exhibit 10.7 (Restricted Stock Agreement (time-vesting)) and Exhibit 10.8 (Restricted Stock Agreement (performance-vesting)).
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
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Exhibit
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Description of Exhibits |
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| 10.1 | Amendment to the 2006 Zebra Technologies Corporation Incentive Compensation Plan dated December 2, 2008. | |
| 10.2 | Amendment to all outstanding Non-Qualified Stock Option Agreements under the 2006 Zebra Technologies Corporation Incentive Compensation Plan dated December 2, 2008. | |
| 10.3 | Form of Amendment to outstanding Non-Qualified Stock Option Agreements under the 2002 Non-Employee Director Stock Option Plan. | |
| 10.4 | Form of Non-Qualified Stock Option Agreement. | |
| 10.5 | Form of Director Non-Qualified Stock Option Agreement (1-year vesting). | |
| 10.6 | Form of Director Non-Qualified Stock Option Agreement (4-year vesting). | |
| 10.7 | Form of Restricted Stock Agreement (time-vesting). | |
| 10.8 | Form of Restricted Stock Agreement (performance-vesting). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ZEBRA TECHNOLOGIES CORPORATION | ||||||
| Date: December 2, 2008 | By: | /s/ Anders Gustafsson | ||||
| Anders Gustafsson | ||||||
| Chief Executive Officer | ||||||
EXHIBIT INDEX
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Exhibit
|
Description of Exhibits |
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| 10.1 | Amendment to the 2006 Zebra Technologies Corporation Incentive Compensation Plan, dated December 2, 2008. | |
| 10.2 | Amendment to all outstanding Non-Qualified Stock Option Agreements under the 2006 Zebra Technologies Corporation Incentive Compensation Plan dated December 2, 2008. | |
| 10.3 | Form of Amendment to outstanding Non-Qualified Stock Option Agreements under the 2002 Non-Employee Director Stock Option Plan. | |
| 10.4 | Form of Non-Qualified Stock Option Agreement. | |
| 10.5 | Form of Director Non-Qualified Stock Option Agreement (1-year vesting). | |
| 10.6 | Form of Director Non-Qualified Stock Option Agreement (4-year vesting). | |
| 10.7 | Form of Restricted Stock Agreement (time-vesting). | |
| 10.8 | Form of Restricted Stock Agreement (performance-vesting). | |
Exhibit 10.1
AMENDMENT
TO THE
2006 ZEBRA TECHNOLOGIES CORPORATION INCENTIVE COMPENSATION PLAN
WHEREAS , Zebra Technologies Corporation (the “Company”) previously adopted the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”);
WHEREAS , pursuant to Section 13.2 of the Plan, the Company’s Compensation Committee may amend the Plan to the extent necessary to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”); and
WHEREAS , the Company desires to amend the Plan to ensure that stock options and stock appreciation rights issued under the Plan are stock rights exempt from the requirements of Section 409A;
NOW, THEREFORE , in consideration of the foregoing and in accordance with its powers under the Plan, the Company hereby amends the Plan effective as of May 9, 2006 in the following respects:
| 1. | By deleting the first paragraph of Section 13.1 in its entirety and replacing it with the following: |
“The Committee, in its sole discretion, may include in any Award Agreement provisions that permit the Participant to defer receipt of the payment of cash or delivery of Shares that would otherwise be due to such Participant upon the exercise, lapse or waiver of restrictions, or satisfaction of any requirements or goal with respect to such Award. The Award Agreement shall include the rules and procedures for any such payment deferrals as the Committee determines in its sole discretion, subject to the following:”
| 2. | By deleting the last sentence of Section 19.3 in its entirety and replacing it with the following: |
“With respect to any Option or SAR Award designed to be a stock right exempt from the requirements of Code Section 409A, the Company reserves the right to delay a Participant’s exercise of such Award if the Company reasonably determines that issuance or payment under the Award would not be deductible under Code Section 162(m). With respect to any other Award, payment of any amount that the Company reasonably determines would not be deductible under Code Section 162(m) shall be deferred until the earlier of the earliest date on which the Company reasonably determines that the deductibility of the payment will not be so limited, or the year following termination of employment.”
Executed on this 2 nd day of December, 2008.
| ZEBRA TECHNOLOGIES CORPORATION | ||
| By: | /s/ Joanne Townsend | |
| Joanne Townsend | ||
| Its: | Vice President, Human Resources | |
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Exhibit 10.2
Amendment to
N ON -Q UALIFIED S TOCK O PTION A GREEMENTS
This Amendment hereby amends all outstanding Non-Qualified Stock Option Agreements relating to non-qualified stock options granted to employees and non-employee directors (collectively, the “Option Agreements”) under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”) to ensure that the Option Agreements qualify as stock rights that are exempt from Section 409A of the Internal Revenue Code of 1986, as amended. The Option Agreements are hereby amended effective as of the Grant Date by deleting Section 3(c) in its entirety and replacing it with the following:
| “(c) | Compliance with Federal and State Law . The Company reserves the right to delay a Participant’s exercise of an Option if (1) the Company’s issuance of 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 as long as the Company reasonably determines to be necessary to satisfy the following: |
| (i) | its completing or amending any securities registration or qualification of the Option Shares or the Company or the Participant satisfying any exemption from registration under any federal or state law, rule, or regulation; |
| (ii) | its receiving proof the Company considers satisfactory that a person seeking to exercise the Option after the Participant’s death is entitled to do so; |
| (iii) | the Participant complying with any requests for representations under the Plan; and |
| (iv) | the Participant complying with any federal, state, or local tax withholding obligations.” |
Executed on this 2 nd day of December, 2008.
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ZEBRA TECHNOLOGIES CORPORATION |
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By: |
/s/ Joanne Townsend |
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| Joanne Townsend | ||
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Its: |
Vice President, Human Resources | |
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Exhibit 10.3
Amendment to
Zebra Technologies Corporation
2002 Non-Employee Director Stock Option Plan
N ON -Q UALIFIED S TOCK O PTION A GREEMENTS
This Amendment hereby amends the outstanding Non-Qualified Stock Option Agreement(s) relating to non-qualified stock options granted to the Participant under the 2002 Non-Employee Director Stock Option Plan, to ensure that those options qualify as stock rights that are exempt from Section 409A of the Internal Revenue Code of 1986, as amended, by adding the following paragraph at the end of the Agreement(s):
“Notwithstanding anything to the contrary contained herein or in the Plan, in no event shall the Change in Control Price for any Option Shares that became vested after December 31, 2004, or are covered by an Option that was granted after December 31, 2004, exceed the Deal Price, or if there is no Deal Price, the closing price on the day of the Change in Control. “Deal Price” shall mean the consideration paid for Company Common Stock in a tender or exchange offer or Corporate Transaction that constituted the Change in Control. The Company and the Participant intend that the Option will qualify as stock rights that are exempt from Section 409A of the Internal Revenue Code of 1986, and the Option shall be construed and administered accordingly.”
Executed on this day of December, 2008.
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ZEBRA TECHNOLOGIES CORPORATION |
Participant | |||
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<<Officer and Title>> |
<<Name>> | |||
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Exhibit 10.4
N ON -Q UALIFIED S TOCK O PTION A GREEMENT
This NON-QUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”), dated as of , 20 (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and <<Participant Name>> (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.
| 1. | Grant of Option . |
| (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 <<Number of Shares>> shares (the “Option Shares”) of the Company’s Class A Common Stock, $.01 par value per share (the “Stock”), at a price of <<Strike Price>>per share (the “Option Price”). |
| (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”). |
| (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. |
| 2. | Vesting of Option . |
| (a) | General Vesting Rule . Prior to the Expiration Date, the Option shall become and be exercisable as follows: |
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Grant Date Anniversary |
Percentage of Option
Exercisable |
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Prior to the first anniversary of the Grant Date |
0% | |
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On or after the first anniversary of the Grant Date |
25% | |
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On or after the second anniversary of the Grant Date, an additional |
25% | |
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On or after the third anniversary of the Grant Date, an additional |
25% | |
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On or after the fourth anniversary of the Grant Date, an additional |
25% |
provided, however, except as otherwise provided for under this Option Agreement, the Participant must remain employed by the Company or any Subsidiary continuously through the applicable vesting dates.
| (b) | Death or Disability . Notwithstanding the provisions of Section 2(a) hereof, in the event the Participant’s employment with the Company and/or any Subsidiary is terminated due to death or Disability, any unvested Option Shares as of the date of the Participant’s termination of employment shall immediately become fully vested and exercisable and, along with unexercised vested Option Shares, shall remain exercisable until the earlier of: |
| (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. |
In the event of the Participant’s death, the Participant’s beneficiary or estate may exercise the vested Option Shares.
| (c) | Retirement . In the event the Participant’s employment with the Company and/or any Subsidiary is terminated due to Retirement, any unexercised, vested Option Shares as of the date of Participant’s termination of employment shall remain exercisable until the earlier of: |
| (i) | the Expiration Date; or |
| (ii) | one (1) year after the date of the Participant’s termination of employment due to Retirement. |
For purposes of this Option Agreement, “Retirement” means the Participant’s voluntary termination of employment with the Company and/or any Subsidiary after attaining either:
| • |
age 55 with ten (10) complete years of service or more with the Company and/or any Subsidiary; or |
| • |
age 65. |
| (d) | 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. For purposes of this Option Agreement, “Cause” means, as determined by the Company, in its sole discretion, termination of the Participant’s employment with the Company or any Subsidiary because of: |
| (i) | the Participant’s material breach of this Option Agreement or of any other agreement to which the Participant and the Company are parties, as determined by the Committee in good faith; or |
| (ii) | material violation of Company policy, regardless of whether within or outside of his or her authority; or |
| (iii) | willful or intentional misconduct; gross negligence; or dishonest, fraudulent, or unethical behavior; or other conduct involving serious moral turpitude, by Participant in the performance of his or her duties; or |
| (iv) | dishonesty, theft or conviction of any crime or offense involving money or property of the Company or any Subsidiary; or |
| (v) | breach of any fiduciary duty owing to the Company or any Subsidiary; or |
| (vi) | unauthorized disclosure of Confidential Information or unauthorized dissemination of Company Materials; or |
| (vii) | conduct that is, or could reasonably be expected to be, materially harmful to the Company or any of its subsidiaries or affiliates, as determined by the Committee in good faith. |
| (e) | Other Termination of Employment . In the event the Participant’s employment with the Company and/or any Subsidiary is terminated for any reason other than as provided in Sections 2(b), (c) or (d) hereof, any unexercised, vested Option Shares as of the date of Participant’s termination of employment shall remain exercisable until the earlier of: |
| (i) | the Expiration Date; or |
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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, Retirement, or Cause; or |
| (iii) | thirty (30) days after the date of the Participant’s voluntary termination of employment for reasons other than Retirement. |
| (f) | Change in Control Vesting . Subject to the provisions of Section 15 of the Plan, if a Change in Control occurs, 100% of the remaining unvested Option Shares shall be immediately vested and exercisable upon the Change in Control and, along with unexercised vested Option Shares, shall remain exercisable through the Expiration Date. |
| 3. | Exercise of Option . |
| (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 of Section 7(k) hereof and in such form as the Company may require from time to time. Such notice of exercise shall: |
| (i) | specify the number of Option Shares to be purchased; |
| (ii) | specify the aggregate Option Price for such Option Shares; and |
| (iii) | be accompanied by payment in full of such aggregate Option Price. |
| (b) | Payment Upon Exercise . The Option Price upon exercise of any Option Shares shall be payable to the Company in full either: |
| (i) | in cash or its equivalent; |
| (ii) | by tendering previously acquired 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 |
| (iii) | a combination of Sections 3(b)(i) and (ii) hereof. |
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:
| (iv) | by withholding 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, |
| (v) | by tendering other Awards payable under the Plan, or |
| (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. |
| (vii) | Any combination of Sections 3(b)(i)-(vi) upon written consent of the Committee. |
| (c) | Compliance with Federal and State Law . The Company reserves the right to delay a Participant’s exercise of an Option if (1) the Company’s issuance of 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: |
| (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; |
| (iii) | the Participant complying with any requests for representations under the Plan; and |
| (iv) | the Participant complying with any federal, state, or local tax withholding obligations. |
| (d) | No Fractions of Stock . The Company shall not be required to issue any fractional shares of Stock. |
| 4. | Payment of Taxes . |
| (a) | General Rule . 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. |
| 5. | Changes in Company’s Capital Structure. |
| (a) | Adjustment in Authorized Stock . As may be determined to be appropriate and equitable by the Committee, in its complete and sole discretion, to prevent dilution or enlargement of rights, the Committee shall make or authorize to be made an adjustment in the number and class of Option Shares and/or the Option Price to prevent dilution or enlargement of rights, as a result of the following: |
| (i) | any adjustment, recapitalization, reorganization or other changes in the Company’s capital structure or its business; |
| (ii) | any merger or consolidation of the Company; |
| (iii) | any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Company’s Common Stock or the rights thereof; |
| (iv) | the dissolution or liquidation of the Company; |
| (v) | any sale or transfer of all or any part of the Company’s assets or business; or |
| (vi) | any other corporate act or proceeding, whether of a similar character or otherwise. |
| 6. | Confidentiality, Non-Solicitation and Non-Compete . Participant agrees to, understands and acknowledges the following: |
| (a) | Confidential Information . Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company. For purposes of this Option Agreement, Confidential Information means any and all financial, technical, commercial or other information concerning the business and affairs of the Company that is confidential and proprietary to the Company, including without limitation, |
| (i) | information relating to the Company’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payments terms, customer lists and other similar information; |
| (ii) | inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; |
| (iii) | the Company’s proprietary programs, processes or software, consisting of but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development; |
| (iv) | the subject matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and |
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| (v) | other confidential and proprietary information or documents relating to the Company’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential. |
The Company devotes significant financial, human and other resources to the development of its products, its customer base and the general goodwill associated with its business, and the Company diligently maintains the secrecy and confidentiality of its Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While employed by the Company and thereafter, Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or disclose to any individual or entity any Confidential Information, except as may be required by the Company in connection with Participant’s employment.
All Company Materials are and will be the sole property of the Company. Participant agrees that during and after his or her employment by the Company, Participant will not remove any Company Materials from the business premises of the Company or deliver any Company Materials to any person or entity outside the Company, except as Participant is required to do so in connection with performing the duties of his or her employment. Participant further agrees that, immediately upon the termination of his or her employment for any reason, or during Participant’s employment if so requested by the Company, Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only Participant’s copy of this Agreement. For purposes of this Option Agreement, Company Materials means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company, whether such documents have been prepared by Participant or by others.
| (b) | Non-Solicitation and Non-Compete . For the period beginning on the date hereof and ending twelve (12) months following the termination of employment with the Company, Participant will not directly or indirectly: |
| (i) | employ, recruit or solicit for employment any person who is (or was within the six (6) months prior to Participant’s employment termination date) an employee of the Company; |
| (ii) | accept employment or engage in a competing business which may require contact, solicitation, interference or diverting of any of the Company’s customers, or that may result in the disclosure, divulging, or other use, of Confidential Information or Company Materials acquired during Participant’s employment with the Company; or |
| (iii) | solicit or encourage any customer, vendor or potential customer or vendor of the Company with whom Participant had contact while employed by the Company to terminate or otherwise alter his, her or its relationship with the Company. Participant understands that any person or entity that Participant contacted during the twelve (12) months prior to the date of Participant’s termination of employment for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company has a protectible proprietary interest. |
| (c) | Remedies for Violation . |
| (i) |
Injunctive Action . Participant acknowledges that if he or she violates the terms of this Section 6, the injury that would be suffered by the Company as a result of a breach of the provisions of this Option Agreement (including any provision of Section 6 (a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy. Consequently, the Company will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any |
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breach or threatened breach or otherwise to specifically enforce any provision of this Option Agreement, and the Company will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s rights under this Section 6(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company, if the Participant breaches any of the provisions of Sections 6(a) or (b) hereof, the Company will have the right to cease making any payments otherwise due to the Participant under this Option Agreement. |
| (ii) | Forfeiture of the Option and Repayment. In addition to the rights available to the Company under Section 6(c)(i) hereof, if Participant violates the terms of this Section 6 at any time, Participant, without any further action by the Company or Participant, shall forfeit, as of the first day of any such violation, all right, title and interest to this Option, any Option Shares then owned by Participant and any net proceeds received by Participant pursuant to any sales or transfer of any Option Shares prior to, on or after such date, and the Company shall have the right to issue a stop transfer order and other appropriate instructions to its transfer agent with respect to this Option and the Option Shares, and the Company further shall be entitled to reimbursement from Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company in enforcing the Company’s rights under this Section 6. By accepting this Option grant, Participant hereby consents to a deduction from any amounts the Company owes to Participant from time to time (including amounts owed to Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to Participant by the Company), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that Participant owes the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount Participant owes to the Company, calculated as set forth in this Section 6(c)(ii), Participant agrees to immediately pay the unpaid balance to the Company. |
| (d) | Enforceability of Restrictive Covenants . The scope and duration of the restrictive covenants contained in this Option Agreement are reasonable and necessary to protect a legitimate, protectible interest of the Company. However, if one or more provisions of this Option Agreement are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this Option Agreement and the balance of the Option Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms. |
| (e) | Written Acknowledgement by Participant . The Committee, in its sole discretion, may require the Participant, as a condition to the exercise of this Option, to acknowledge in writing that he or she has not engaged, and is not in the process of engaging, in any of the activities described in this Section 6. |
| 7. | Miscellaneous Provisions . |
| (a) | No Service or Employment Rights . No provision of this Option Agreement or of the Option granted hereunder shall give the Participant any right to continue in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary. |
| (b) | Stockholder Rights . Until the Option shall have been duly exercised to purchase such Option Shares and such shares have been officially recorded as issued on the Company’s official stockholder records, no person or entity shall be entitled to vote, receive dividends or be deemed for any purpose the holder of any Option Shares, and adjustments for dividends or otherwise shall be made only if the record date therefor is subsequent to the date such shares are recorded and after the date of exercise and without duplication of any adjustment. |
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| (c) | Plan Document Governs . The Option is granted pursuant to the Plan, and the Option and this Option Agreement are in all respects governed by the Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Option Agreement by reference or are expressly cited. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan. Any inconsistency between the Option Agreement and the Plan shall be resolved in favor of the Plan. Participant hereby acknowledges receipt of a copy of the Plan. |
| (d) | Investment Representation and Agreement . The Committee may require the Participant to furnish to the Company, prior to the issuance of any shares of Common Stock upon the exercise of all or any part of this Option, an agreement (in such form as the Committee may specify) in which the Participant represents that the shares of Common Stock acquired by him or her upon exercise are being acquired for investment and not with a view to the sale or distribution thereof. |
| (e) | Beneficiary Designation . The Participant may, from time to time, in accordance with procedures set forth by the Committee, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Option Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate or exercised by the Participant’s estate. |
| (f) | Administration . This Option Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Option Agreement, all of which shall be binding upon the Participant. |
| (g) | No Vested Right In Future Awards . Participant acknowledges and agrees (by executing this Option Agreement) that the granting of Options under this Option Agreement are made on a fully discretionary basis by the Company and that this Option Agreement does not lead to a vested right to further Option awards in the future. |
| (h) | Use Of Personal Data . By executing this Option Agreement, Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, salary, nationality, job title, position, and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan. |
| (i) | Severability . In the event that any provision of this Option Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Option Agreement, and this Option Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. |
| (j) |
Waiver; Cumulative Rights . The failure or delay of either party to require performance by the |
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other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time. |
| (k) | Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. |
| (l) | Counterparts . This Option Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument. |
| (m) | Successors and Assigns . This Option Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors. |
| (n) | Governing Law . This Option Agreement and the Option granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws. |
| (o) | Entire Agreement . This Option Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction. |
| (p) | Amendment . Any amendment to this Option Agreement shall be in writing and signed by the Company. |
| (q) | Headings . The headings contained in this Option Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Option Agreement. |
IN WITNESS WHEREOF , the Company has caused this Option Agreement to be duly executed by an officer thereunto duly authorized, and the Participant has hereunto set his or her hand, all as of the day and year first above written.
| ZEBRA TECHNOLOGIES CORPORATION | Participant | |||
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| <<Officer and Title>> | <<Name>> | |||
8
Exhibit 10.5
Form of Director 1-Year Vesting
N ON -Q UALIFIED S TOCK O PTION A GREEMENT
This NON-QUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”), dated as of <<Grant Date>> (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and <<Name>> (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.
| 1. | Grant of Option . |
| (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 <<Number>> shares (the “Option Shares”) of the Company’s Class A Common Stock, $.01 par value per share (the “Stock”), at a price of <<Strike Price>> 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 (10 th ) anniversary of the Grant Date (the “Expiration Date”). |
| (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. |
| 2. | Vesting of Option . |
| (a) | General Vesting Rule . Prior to the Expiration Date, 100% of the Option shall become and be exercisable on or after the first anniversary of the Grant Date provided, however, except as otherwise provided for under this Option Agreement, the Participant must remain a member of the Board of Directors of the Company (the “Board”) continuously through the applicable vesting date. |
| (b) | Death or Disability . Notwithstanding the provisions of Section 2(a) hereof, in the event the Participant’s service on the Board is terminated due to the Participant’s death or Disability, any unvested portion of the Option as of the date of such termination of service shall immediately become fully vested and exercisable and, along with any unexercised, vested portion of the Option, shall remain exercisable until the earlier of: |
| (i) | the Expiration Date; or |
| (ii) | one (1) year after the date of the Participant’s termination of service on the Board due to the Participant’s death or Disability. |
In the event of the Participant’s death, the Participant’s beneficiary or estate may exercise the vested portion of the Option.
| (c) | Retirement . In the event the Participant’s service on the Board is terminated due to Retirement, any unexercised, vested portion of the Option as of the date of the Participant’s termination of service on the Board shall remain exercisable until the earlier of: |
| (i) | the Expiration Date; or |
| (ii) | one (1) year after the date of the Participant’s termination of service on the Board due to Retirement. |
For purposes of this Option Agreement, “Retirement” means the Participant’s voluntary termination of service on the Board after attaining either:
| • |
age fifty-five (55) with ten (10) or more complete years of service with the Company and/or any Subsidiary; or |
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| • |
age sixty-five (65). |
| (d) | Other Termination of Service on the Board . In the event the Participant’s service on the Board is terminated for any reason other than as provided in Section 2(b) or (c) hereof, any portion of the Option that is unexercised and vested as of the date of such termination shall remain exercisable until the earlier of: |
| (i) | the Expiration Date; or |
| (ii) | ninety (90) days after the date of the Participant’s termination of service on the Board. |
| (e) | Change in Control Vesting . Subject to the provisions of Section 15 of the Plan, if a Change in Control occurs, 100% of the remaining unvested portion of the Option shall be immediately vested and exercisable upon such Change in Control and, along with any unexercised, vested portion of the Option, shall remain exercisable through the Expiration Date. |
| 3. | Exercise of Option . |
| (a) | Manner of Exercise . The vested portion of the Option may be exercised, in whole or in part, by delivering written notice to the Company in accordance with of Section 7(k) hereof and in such form as the Committee may require from time to time. Such notice of exercise shall: |
| (i) | specify the number of Option Shares to be purchased; |
| (ii) | specify the aggregate Option Price for such Option Shares; and |
| (iii) | be accompanied by payment in full of such aggregate Option Price. |
| (b) | Payment Upon Exercise . The Option Price upon exercise of any portion of the Option shall be payable to the Company in full either: |
| (i) | in cash or its equivalent; |
| (ii) | by tendering previously acquired Stock that has been held for at least six months (or such longer period necessary to avoid a charge to the Company’s earnings for financial reporting purposes) and having an aggregate Fair Market Value at the time of exercise equal to the aggregate Option Price, or |
| (iii) | a combination of Sections 3(b)(i) and (ii) hereof. |
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 the Company’s earnings for financial reporting purposes:
| (iv) | by withholding Stock that otherwise would be acquired on exercise having an aggregate Fair Market Value at the time of exercise equal to the aggregate Option Price, |
| (v) | by tendering other Awards payable under the Plan, or |
| (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. |
| (vii) | Any combination of Sections 3(b)(i)-(vi) upon written consent of the Committee. |
| (c) | Compliance with Federal and State Law . The Company reserves the right to delay a Participant’s exercise of the Option if (1) the Company’s issuance of 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 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: |
| (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; |
| (iii) | the Participant complying with any requests for representations under the Plan; and |
| (iv) | the Participant complying with any federal, state, or local tax withholding obligations. |
| (d) | No Fractions of Stock . The Company shall not be required to issue any fractional shares of Stock. |
| 4. | Payment of Taxes . |
| (a) | General Rule . 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. |
| 5. | Changes in Company’s Capital Structure . |
| (a) | Adjustment in Authorized Stock . As may be determined to be appropriate and equitable by the Committee, in its complete and sole discretion, to prevent dilution or enlargement of rights, the Committee shall make or authorize to be made an adjustment in the number and class of Option and/or the Option Price to prevent dilution or enlargement of rights, as a result of the following: |
| (i) | any adjustment, recapitalization, reorganization or other changes in the Company’s capital structure or its business; |
| (ii) | any merger or consolidation of the Company; |
| (iii) | any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Company’s Common Stock or the rights thereof; |
| (iv) | the dissolution or liquidation of the Company; |
| (v) | any sale or transfer of all or any part of the Company’s assets or business; or |
| (vi) | any other corporate act or proceeding, whether of a similar character or otherwise. |
| 6. | Confidentiality, Non-Solicitation and Non-Compete . The Participant agrees to, understands and acknowledges the following: |
| (a) | Confidential Information . The Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company. For purposes of this Option Agreement, “Confidential Information” means any and all financial, technical, commercial or other information concerning the business and affairs of the Company that is confidential and proprietary to the Company, including without limitation, |
| (i) | information relating to the Company’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payments terms, customer lists and other similar information; |
| (ii) | inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; |
| (iii) | the Company’s proprietary programs, processes or software, consisting of but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development; |
| (iv) | the subject matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and |
| (v) | other confidential and proprietary information or documents relating to the Company’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential. |
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The Company devotes significant financial, human and other resources to the development of its products, its customer base and the general goodwill associated with its business, and the Company diligently maintains the secrecy and confidentiality of its Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While serving on the Board and thereafter, the Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or disclose to any individual or entity any Confidential Information, except as may be required by the Company in connection with the Participant’s service on the Board.
All Company Materials are and will be the sole property of the Company. The Participant agrees that during and after his or her service on the Board, the Participant will not remove any Company Materials from the business premises of the Company or deliver any Company Materials to any person or entity outside the Company, except as the Participant is required to do so in connection with performing the duties as a member of the Board. The Participant further agrees that, immediately upon the termination of his or her service on the Board for any reason, or during the Participant’s tenure as a member of the Board if so requested by the Company, the Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this Option Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company, whether such documents have been prepared by the Participant or by others.
| (b) | Non-Solicitation and Non-Compete . For the period beginning on the date hereof and ending twelve (12) months following the Participant’s termination of service on the Board, the Participant will not directly or indirectly: |
| (i) | employ, recruit or solicit for employment any person who is (or was within the six (6) months prior to the date the Participant’s service on the Board terminated) an employee of the Company; |
| (ii) | accept employment, serve on the board of directors of, or engage in a competing business which may require contact, solicitation, interference or diverting of any of the Company’s customers, or that may result in the disclosure, divulging, or other use, of Confidential Information or Company Materials acquired during the Participant’s service on the Board; or |
| (iii) | solicit or encourage any customer, vendor or potential customer or vendor of the Company with whom the Participant had contact while serving on the Board to terminate or otherwise alter his, her or its relationship with the Company. The Participant understands that any person or entity that the Participant contacted during the twelve (12) months prior to the date of the Participant’s termination of service on the Board for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company has a protectible proprietary interest. |
| (c) | Remedies for Violation . |
| (i) | Injunctive Action . The Participant acknowledges that if he or she violates the terms of this Section 6, the injury that would be suffered by the Company as a result of a breach of the provisions of this Option Agreement (including any provision of Section 6 (a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy. Consequently, the Company will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Option Agreement, and the Company will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s rights under this Section 6(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company, if the Participant breaches any of the provisions of Sections 6(a) or (b) hereof, the Company will have the right to cease making any payments otherwise due to the Participant under this Option Agreement. |
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| (ii) | Forfeiture of the Option and Repayment . In addition to the rights available to the Company under Section 6(c)(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Participant, without any further action by the Company or the Participant, shall forfeit, as of the first day of any such violation, all right, title and interest to this Option, any Option Shares then owned by the Participant and any net proceeds received by the Participant pursuant to any sales or transfer of any Option Shares prior to, on or after such date, and the Company shall have the right to issue a stop transfer order and other appropriate instructions to its transfer agent with respect to this Option and the Option Shares, and the Company further shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company in enforcing the Company’s rights under this Section 6. By accepting this Option, the Participant hereby consents to a deduction from any amounts the Company owes to the Participant from time to time (unless such amounts is subject to Code Section 409A), to the extent of any amounts that the Participant owes the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount the Participant owes to the Company, calculated as set forth in this Section 6(c)(ii), the Participant agrees to immediately pay the unpaid balance to the Company. |
| (d) | Enforceability of Restrictive Covenants . The scope and duration of the restrictive covenants contained in this Option Agreement are reasonable and necessary to protect a legitimate, protectible interest of the Company. However, if one or more provisions of this Option Agreement are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this Option Agreement and the balance of the Option Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms. |
| (e) | Written Acknowledgement by the Participant . The Committee, in its sole discretion, may require the Participant, as a condition to the exercise of this Option, to acknowledge in writing that he or she has not engaged, and is not in the process of engaging, in any of the activities described in this Section 6. |
| 7. | Miscellaneous Provisions . |
| (a) | No Service or Employment Rights . No provision of this Option Agreement or of the Option granted hereunder shall give the Participant any right to continue to serve on the Board or in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary. |
| (b) | Stockholder Rights . Until the Option shall have been duly exercised to purchase Option Shares and such shares have been officially recorded as issued on the Company’s official stockholder records, no person or entity shall be entitled to vote, receive dividends or be deemed for any purpose the holder of such Option Shares, and adjustments for dividends or otherwise shall be made only if the record date therefore is subsequent to the date such shares are recorded and after the date of exercise and without duplication of any adjustment. |
| (c) | Plan Document Governs . The Option is granted pursuant to the Plan, and the Option and this Option Agreement are in all respects governed by the Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Option Agreement by reference or are expressly cited. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan. Any inconsistency between the Option Agreement and the Plan shall be resolved in favor of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan. |
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| (d) | Investment Representation and Agreement . The Committee may require the Participant to furnish to the Company, prior to the issuance of any Option Shares upon the exercise of all or any part of this Option, an agreement (in such form as the Committee may specify) in which the Participant represents that the Option Shares acquired by him or her upon exercise are being acquired for investment and not with a view to the sale or distribution thereof. |
| (e) | Beneficiary Designation . The Participant may, from time to time, in accordance with procedures set forth by the Committee, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Option Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate or exercised by the Participant’s estate. |
| (f) | Administration . This Option Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Option Agreement, all of which shall be binding upon the Participant. |
| (g) | No Vested Right In Future Awards . The Participant acknowledges and agrees (by executing this Option Agreement) that the granting of Options under this Option Agreement are made on a fully discretionary basis by the Company and that this Option Agreement does not lead to a vested right to further Awards in the future. |
| (h) | Use Of Personal Data . By executing this Option Agreement, the Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, compensation, nationality, job title, position, and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan. |
| (i) | Severability . In the event that any provision of this Option Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Option Agreement, and this Option Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. |
| (j) | Waiver; Cumulative Rights . The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time. |
| (k) | Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address (including any electronic mail address) as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. The Participant hereby consents to electronic delivery of any notices that may be made hereunder. |
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| (l) | Counterparts . This Option Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument. |
| (m) | Successors and Assigns . This Option Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors. |
| (n) | Governing Law . This Option Agreement and the Option granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws. |
| (o) | Entire Agreement . This Option Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction. |
| (p) | Amendment . Any amendment to this Option Agreement shall be in writing and signed by the Company. |
| (q) | Headings . The headings contained in this Option Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Option Agreement. |
IN WITNESS WHEREOF , the Company has caused this Option Agreement to be duly executed by an officer thereunto duly authorized, and the Participant has hereunto set his or her hand, all as of the day and year first above written.
| ZEBRA TECHNOLOGIES CORPORATION | Participant | |||
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| <<Officer and Title>> | <<Name>> | |||
7
Exhibit 10.6
Form of Director 4-Year Vesting
N ON -Q UALIFIED S TOCK O PTION A GREEMENT
This NON-QUALIFIED STOCK OPTION AGREEMENT (this “Option Agreement”), dated as of <<Grant Date>> (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and <<Name>> (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.
| 1. | Grant of Option . |
| (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 <<Number>> shares (the “Option Shares”) of the Company’s Class A Common Stock, $.01 par value per share (the “Stock”), at a price of <<Strike Price>> 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 (10 th ) anniversary of the Grant Date (the “Expiration Date”). |
| (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. |
| 2. | Vesting of Option . |
| (a) | General Vesting Rule . Prior to the Expiration Date, the Option shall become and be exercisable as follows: |
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Grant Date Anniversary Exercisable |
Percentage of Option
that Becomes |
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Prior to the first anniversary of the Grant Date |
0% | |
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On or after the first anniversary of the Grant Date |
25% | |
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On or after the second anniversary of the Grant Date, an additional |
25% | |
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On or after the third anniversary of the Grant Date, an additional |
25% | |
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On or after the fourth anniversary of the Grant Date, an additional |
25% |
provided, however, except as otherwise provided for under this Option Agreement, the Participant must remain a member of the Board of Directors of the Company (the “Board”) continuously through the applicable vesting dates.
| (b) | Death or Disability . Notwithstanding the provisions of Section 2(a) hereof, in the event the Participant’s service on the Board is terminated due to the Participant’s death or Disability, any unvested portion of the Option as of the date of such termination of service shall immediately become fully vested and exercisable and, along with any unexercised, vested portion of the Option, shall remain exercisable until the earlier of: |
| (i) | the Expiration Date; or |
| (ii) | one (1) year after the date of the Participant’s termination of service on the Board due to the Participant’s 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 portion of the Option.
| (c) | Retirement . In the event the Participant’s service on the Board is terminated due to Retirement, any unexercised, vested portion of the Option as of the date of the Participant’s termination of service on the Board shall remain exercisable until the earlier of: |
| (i) | the Expiration Date; or |
| (ii) | one (1) year after the date of the Participant’s termination of service on the Board due to Retirement. |
For purposes of this Option Agreement, “Retirement” means the Participant’s voluntary termination of service on the Board after attaining either:
| • |
age fifty-five (55) with ten (10) or more complete years of service with the Company and/or any Subsidiary; or |
| • |
age sixty-five (65). |
| (d) | Other Termination of Service on the Board . In the event the Participant’s service on the Board is terminated for any reason other than as provided in Section 2(b) or (c) hereof, any portion of the Option that is unexercised and vested as of the date of such termination shall remain exercisable until the earlier of: |
| (i) | the Expiration Date; or |
| (ii) | ninety (90) days after the date of the Participant’s termination of service on the Board. |
| (e) | Change in Control Vesting . Subject to the provisions of Section 15 of the Plan, if a Change in Control occurs, 100% of the remaining unvested portion of the Option shall be immediately vested and exercisable upon such Change in Control and, along with any unexercised, vested portion of the Option, shall remain exercisable through the Expiration Date. |
| 3. | Exercise of Option . |
| (a) | Manner of Exercise . The vested portion of the Option may be exercised, in whole or in part, by delivering written notice to the Company in accordance with of Section 7(k) hereof and in such form as the Committee may require from time to time. Such notice of exercise shall: |
| (i) | specify the number of Option Shares to be purchased; |
| (ii) | specify the aggregate Option Price for such Option Shares; and |
| (iii) | be accompanied by payment in full of such aggregate Option Price. |
| (b) | Payment Upon Exercise . The Option Price upon exercise of any portion of the Option shall be payable to the Company in full either: |
| (i) | in cash or its equivalent; |
| (ii) | by tendering previously acquired Stock that has been held for at least six months (or such longer period necessary to avoid a charge to the Company’s earnings for financial reporting purposes) and having an aggregate Fair Market Value at the time of exercise equal to the aggregate Option Price, or |
| (iii) | a combination of Sections 3(b)(i) and (ii) hereof. |
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 the Company’s earnings for financial reporting purposes:
| (iv) | by withholding Stock that otherwise would be acquired on exercise having an aggregate Fair Market Value at the time of exercise equal to the aggregate Option Price, |
| (v) | by tendering other Awards payable under the Plan, or |
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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. |
| (vii) | Any combination of Sections 3(b)(i)-(vi) upon written consent of the Committee. |
| (c) | Compliance with Federal and State Law . The Company reserves the right to delay a Participant’s exercise of the Option if (1) the Company’s issuance of Stock upon such exercise would violate any applicable federal or state securities laws or any other applicable laws or regulations, or (2) 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 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: |
| (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; |
| (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; |
| (iii) | the Participant complying with any requests for representations under the Plan; and |
| (iv) | the Participant complying with any federal, state, or local tax withholding obligations. |
| (d) | No Fractions of Stock . The Company shall not be required to issue any fractional shares of Stock. |
| 4. | Payment of Taxes . |
| (a) | General Rule . 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. |
| 5. | Changes in Company’s Capital Structure . |
| (a) | Adjustment in Authorized Stock . As may be determined to be appropriate and equitable by the Committee, in its complete and sole discretion, to prevent dilution or enlargement of rights, the Committee shall make or authorize to be made an adjustment in the number and class of Option and/or the Option Price to prevent dilution or enlargement of rights, as a result of the following: |
| (i) | any adjustment, recapitalization, reorganization or other changes in the Company’s capital structure or its business; |
| (ii) | any merger or consolidation of the Company; |
| (iii) | any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Company’s Common Stock or the rights thereof; |
| (iv) | the dissolution or liquidation of the Company; |
| (v) | any sale or transfer of all or any part of the Company’s assets or business; or |
| (vi) | any other corporate act or proceeding, whether of a similar character or otherwise. |
| 6. | Confidentiality, Non-Solicitation and Non-Compete . The Participant agrees to, understands and acknowledges the following: |
| (a) | Confidential Information . The Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company. For purposes of this Option Agreement, “Confidential Information” means any and all financial, technical, commercial or other information concerning the business and affairs of the Company that is confidential and proprietary to the Company, including without limitation, |
| (i) | information relating to the Company’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payments terms, customer lists and other similar information; |
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| (ii) | inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; |
| (iii) | the Company’s proprietary programs, processes or software, consisting of but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development; |
| (iv) | the subject matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and |
| (v) | other confidential and proprietary information or documents relating to the Company’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential. |
The Company devotes significant financial, human and other resources to the development of its products, its customer base and the general goodwill associated with its business, and the Company diligently maintains the secrecy and confidentiality of its Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While serving on the Board and thereafter, the Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or disclose to any individual or entity any Confidential Information, except as may be required by the Company in connection with the Participant’s service on the Board.
All Company Materials are and will be the sole property of the Company. The Participant agrees that during and after his or her service on the Board, the Participant will not remove any Company Materials from the business premises of the Company or deliver any Company Materials to any person or entity outside the Company, except as the Participant is required to do so in connection with performing the duties as a member of the Board. The Participant further agrees that, immediately upon the termination of his or her service on the Board for any reason, or during the Participant’s tenure as a member of the Board if so requested by the Company, the Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only the Participant’s copy of this Agreement. For purposes of this Option Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company, whether such documents have been prepared by the Participant or by others.
| (b) | Non-Solicitation and Non-Compete . For the period beginning on the date hereof and ending twelve (12) months following the Participant’s termination of service on the Board, the Participant will not directly or indirectly: |
| (i) | employ, recruit or solicit for employment any person who is (or was within the six (6) months prior to the date the Participant’s service on the Board terminated) an employee of the Company; |
| (ii) | accept employment, serve on the board of directors of, or engage in a competing business which may require contact, solicitation, interference or diverting of any of the Company’s customers, or that may result in the disclosure, divulging, or other use, of Confidential Information or Company Materials acquired during the Participant’s service on the Board; or |
| (iii) |
solicit or encourage any customer, vendor or potential customer or vendor of the Company with whom the Participant had contact while serving on the Board to terminate or otherwise alter his, her or its relationship with the Company. The Participant understands that any person or entity that the Participant contacted during the twelve (12) months prior to the |
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date of the Participant’s termination of service on the Board for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company has a protectible proprietary interest. |
| (c) | Remedies for Violation . |
| (i) | Injunctive Action . The Participant acknowledges that if he or she violates the terms of this Section 6, the injury that would be suffered by the Company as a result of a breach of the provisions of this Option Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy. Consequently, the Company will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Option Agreement, and the Company will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s rights under this Section 6(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company, if the Participant breaches any of the provisions of Sections 6 (a) or (b) hereof, the Company will have the right to cease making any payments otherwise due to the Participant under this Option Agreement. |
| (ii) | Forfeiture of the Option and Repayment . In addition to the rights available to the Company under Section 6(c)(i) hereof, if the Participant violates the terms of this Section 6 at any time, the Participant, without any further action by the Company or the Participant, shall forfeit, as of the first day of any such violation, all right, title and interest to this Option, any Option Shares then owned by the Participant and any net proceeds received by the Participant pursuant to any sales or transfer of any Option Shares prior to, on or after such date, and the Company shall have the right to issue a stop transfer order and other appropriate instructions to its transfer agent with respect to this Option and the Option Shares, and the Company further shall be entitled to reimbursement from the Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company in enforcing the Company’s rights under this Section 6. By accepting this Option, the Participant hereby consents to a deduction from any amounts the Company owes to the Participant from time to time (unless such amount is subject to Code Section 409A), to the extent of any amounts that the Participant owes the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount the Participant owes to the Company, calculated as set forth in this Section 6(c)(ii), the Participant agrees to immediately pay the unpaid balance to the Company. |
| (d) | Enforceability of Restrictive Covenants . The scope and duration of the restrictive covenants contained in this Option Agreement are reasonable and necessary to protect a legitimate, protectible interest of the Company. However, if one or more provisions of this Option Agreement are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this Option Agreement and the balance of the Option Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms. |
| (e) | Written Acknowledgement by the Participant . The Committee, in its sole discretion, may require the Participant, as a condition to the exercise of this Option, to acknowledge in writing that he or she has not engaged, and is not in the process of engaging, in any of the activities described in this Section 6. |
| 7. | Miscellaneous Provisions . |
| (a) | No Service or Employment Rights . No provision of this Option Agreement or of the Option granted hereunder shall give the Participant any right to continue to serve on the Board or in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary. |
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| (b) | Stockholder Rights . Until the Option shall have been duly exercised to purchase Option Shares and such shares have been officially recorded as issued on the Company’s official stockholder records, no person or entity shall be entitled to vote, receive dividends or be deemed for any purpose the holder of such Option Shares, and adjustments for dividends or otherwise shall be made only if the record date therefore is subsequent to the date such shares are recorded and after the date of exercise and without duplication of any adjustment. |
| (c) | Plan Document Governs . The Option is granted pursuant to the Plan, and the Option and this Option Agreement are in all respects governed by the Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Option Agreement by reference or are expressly cited. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan. Any inconsistency between the Option Agreement and the Plan shall be resolved in favor of the Plan. The Participant hereby acknowledges receipt of a copy of the Plan. |
| (d) | Investment Representation and Agreement . The Committee may require the Participant to furnish to the Company, prior to the issuance of any Option Shares upon the exercise of all or any part of this Option, an agreement (in such form as the Committee may specify) in which the Participant represents that the Option Shares acquired by him or her upon exercise are being acquired for investment and not with a view to the sale or distribution thereof. |
| (e) | Beneficiary Designation . The Participant may, from time to time, in accordance with procedures set forth by the Committee, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Option Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate or exercised by the Participant’s estate. |
| (f) | Administration . This Option Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Option Agreement, all of which shall be binding upon the Participant. |
| (g) | No Vested Right In Future Awards . The Participant acknowledges and agrees (by executing this Option Agreement) that the granting of Options under this Option Agreement are made on a fully discretionary basis by the Company and that this Option Agreement does not lead to a vested right to further Awards in the future. |
| (h) | Use Of Personal Data . By executing this Option Agreement, the Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, compensation, nationality, job title, position, and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan. |
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| (i) | Severability . In the event that any provision of this Option Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Option Agreement, and this Option Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. |
| (j) | Waiver; Cumulative Rights . The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time. |
| (k) | Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address (including any electronic mail address) as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. The Participant hereby consents to electronic delivery of any notices that may be made hereunder. |
| (l) | Counterparts . This Option Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument. |
| (m) | Successors and Assigns . This Option Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors. |
| (n) | Governing Law . This Option Agreement and the Option granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws. |
| (o) | Entire Agreement . This Option Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction. |
| (p) | Amendment . Any amendment to this Option Agreement shall be in writing and signed by the Company. |
| (q) | Headings . The headings contained in this Option Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Option Agreement. |
IN WITNESS WHEREOF , the Company has caused this Option Agreement to be duly executed by an officer thereunto duly authorized, and the Participant has hereunto set his or her hand, all as of the day and year first above written.
| ZEBRA TECHNOLOGIES CORPORATION | Participant | |||
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| <<Officer and Title>> | <<Name>> | |||
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Exhibit 10.7
R ESTRICTED S TOCK A GREEMENT
This RESTRICTED STOCK AGREEMENT (this “Stock Agreement”), dated as of , 20 (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and << PARTICIPANT NAME >> (the “Participant”), relating to restricted stock granted under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this Stock Agreement without definition shall have the meanings ascribed to such terms in the Plan.
| 1. | Grant of Restricted Stock . |
| (a) | Grant . Subject to the provisions of this Stock Agreement and pursuant to the provisions of the Plan, the Company hereby grants to the Participant as of the Grant Date <<Number>> shares of the Company’s Class A Common Stock, $.01 par value per share (the “Restricted Stock”). |
| (b) | Nontransferability . Except as otherwise permitted under the Plan or this Stock Agreement, the Restricted Stock granted hereunder shall be non-transferable by the Participant during the Period of Restriction set forth under Section 2 of this Stock Agreement. |
| 2. | Vesting of Restricted Stock . |
| (a) | Period of Restriction . The Restricted Stock shall be forfeitable and non-transferable during the Period of Restriction. The Period of Restriction with respect to the Restricted Stock shall begin on the Grant Date and shall end on the third anniversary of the Grant Date provided that the Participant must remain employed by the Company or any Subsidiary continuously through the Period of Restriction. |
| (b) | Vesting Exceptions . Notwithstanding the provisions of Section 2(a) hereof, a Participant’s unvested Restricted Stock shall be subject to the following additional vesting rules in the following circumstances: |
| (i) | Death, Disability or Good Reason . In the event the Participant’s employment with the Company and/or any Subsidiary is terminated due to death or Disability, or by reason of the Participant’s resignation for Good Reason, any unvested Restricted Stock as of the date of the Participant’s termination of employment shall immediately become fully vested and the remainder of the Period of Restriction relating to such Restricted Stock shall immediately lapse. For purposes of this Stock Agreement, “Good Reason” means termination of the Participant’s employment with the Company or any Subsidiary because of resignation by the Participant for any of the following reasons: |
| (A) | demotion of the Participant by the Company to a lesser position (including a material diminution in the status of the Participant’s responsibilities, authorities, powers or duties taken as a whole) or assignment of Participant to any duties materially inconsistent with the status and responsibilities of that position; |
| (B) | material breach of any provision of the Participant’s employment agreement, if any, by the Company and the Company’s failure to cure such breach within fifteen (15) business days after receipt of written notice from the Participant specifying in reasonable detail the nature of the breach; or |
| (C) |
decrease in base salary at the rate in effect on the date of grant (unless such decrease is applied on a proportionally equal basis to all executive officers of the Company) (an “Applicable Decrease”), but only if the Participant terminates his or her employment with the Company as a result of an Applicable Decrease within ten (10) business days after the effective date of the Applicable Decrease. For clarification purposes, if the Participant fails to terminate his or her |
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employment with the Company within ten (10) business days after the effective date of an Applicable Decrease, such termination shall not constitute termination of employment by Participant for Good Reason under this provision. |
| (ii) | Termination by the Company or any Subsidiary other than for Cause . In the event the Participant’s employment with the Company and/or any Subsidiary is terminated by the Company and/or any Subsidiary other than for Cause, any unvested Restricted Stock as of the date of the Participant’s termination of employment shall immediately become fully vested and the remainder of the Period of Restriction relating to such Restricted Stock shall immediately lapse. For purposes of this Stock Agreement, “Cause” means, as determined by the Company, in its sole discretion, termination of the Participant’s employment with the Company or any Subsidiary because of the Participant’s: |
| (A) | material breach of this Stock Agreement or of any other agreement to which the Participant and the Company are parties, as determined by the Committee in good faith; or |
| (B) | material violation of Company policy, regardless of whether within or outside of his or her authority; or |
| (C) | willful or intentional misconduct; gross negligence; or dishonest, fraudulent, or unethical behavior; or other conduct involving serious moral turpitude, in the performance of his or her duties; or |
| (D) | dishonesty, theft or conviction of any crime or offense involving money or property of the Company or any Subsidiary; or |
| (E) | breach of any fiduciary duty owing to the Company or any Subsidiary; or |
| (F) | unauthorized disclosure of Confidential Information or unauthorized dissemination of Company Materials; or |
| (G) | conduct that is, or could reasonably be expected to be, materially harmful to the Company or any of its subsidiaries or affiliates, as determined by the Committee in good faith. |
| (iii) | Other Termination of Employmen t . 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)(i) or (ii) hereof, any unvested Restricted Stock as of the date of the Participant’s termination of employment shall immediately be forfeited to the Company. |
| (iv) | Change in Control Vesting . Subject to the provisions of Section 15 of the Plan, if a Change in Control occurs, any unvested Restricted Stock shall be immediately vested and the remainder of the Period of Restriction related to such Restricted Stock shall immediately lapse. |
| 3. | Rights While Holding Restricted Stock . |
| (a) | Legend. Each certificate issued for shares of Restricted Stock under this Stock Agreement shall be registered in the Participant’s name and deposited by the Participant, together with a stock power endorsed in blank, with the Company and shall bear the following (or a similar) legend: |
“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in a Stock Agreement entered into between the registered owner and Zebra Technologies Corporation.”
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When shares of Restricted Stock become vested, the Company shall redeliver to the Participant (or the Participant’s legal representatives, beneficiaries or heirs) the number of shares which have then vested. The Participant agrees that any sale of shares of Restricted Stock received upon vesting shall be made in compliance with the registration requirements of the Securities Act of 1933 or an applicable exemption therefrom. The Committee may require the Participant to furnish to the Company, prior to the delivery of any vested shares of Common Stock, an agreement (in such form as the Committee may specify) in which the Participant represents that the shares of Common Stock are being acquired for investment and not with a view to the sale or distribution thereof.
| (b) | Rights as a Stockholder. During the period that shares of Restricted Stock remain unvested, the Participant shall have all of the rights of a stockholder of the Company with respect to the Restricted Stock including, but not limited to, the right to receive dividends paid on the shares of Restricted Stock and the full right to vote such shares. |
| (c) | Section 83(b) Election . Unless prior written consent of the Committee is secured, the Participant is not permitted to make a Section 83(b) election with respect to the Restricted Stock granted under this Stock Agreement. If the Committee consents to such Section 83(b) election, the Participant must notify the Committee within ten (10) days after filing the Section 83(b) election with the Internal Revenue Service. |
| (d) | Compliance with Federal and State Law . The Company may postpone issuing and delivering any Restricted Stock for so long as the Company reasonably determines to be necessary to satisfy the following: |
| (i) | its completing or amending any securities registration or qualification of the Restricted Stock or it or the Participant satisfying any exemption from registration under any federal or state law, rule, or regulation; |
| (ii) | the Participant complying with any requests for representations under the Plan; |
| (iii) | the Participant complying with any federal, state, or local tax withholding obligations; and |
| (iv) | its deferring payment of any amount that it reasonably determines would not be deductible under Code Section 162(m) until the earlier of: |
| (A) | the earliest date on which the Company reasonably determines that the deductibility of the payment will not be limited; or |
| (B) | the year following the Participant’s termination of employment. |
| 4. | Payment of Taxes . |
| (a) | General Rule . If the Company is obligated to withhold an amount on account of any tax imposed as a result of the issuance of the Restricted Stock, 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 Restricted Stock and its vesting. |
| 5. | Changes in Company’s Capital Structure . |
| (a) | Adjustment in Authorized Stock . As may be determined to be appropriate and equitable by the Committee, in its complete and sole discretion, the Committee shall make or authorize to be made an adjustment in the number and/or class of shares of Restricted Stock to prevent dilution or enlargement of rights, as a result of the following: |
| (i) | any adjustment, recapitalization, reorganization or other changes in the Company’s capital structure or its business; |
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| (ii) | any merger or consolidation of the Company; |
| (iii) | any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Company’s Common Stock or the rights thereof; |
| (iv) | the dissolution or liquidation of the Company; |
| (v) | any sale or transfer of all or any part of the Company’s assets or business; or |
| (vi) | any other corporate act or proceeding, whether of a similar character or otherwise. |
| 6. | Confidentiality, Non-Solicitation and Non-Compete . Participant agrees to, understands and acknowledges the following: |
| (a) | Confidential Information . Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company. For purposes of this Stock Agreement, Confidential Information means any and all financial, technical, commercial or other information concerning the business and affairs of the Company that is confidential and proprietary to the Company, including without limitation, |
| (i) | information relating to the Company’s past and existing customers and vendors and development of prospective customers and vendors, including specific customer product requirements, pricing arrangements, payments terms, customer lists and other similar information; |
| (ii) | inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; |
| (iii) | the Company’s proprietary programs, processes or software, consisting of but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including programs and documentation in incomplete stages of design or research and development; |
| (iv) | the subject matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including such information in incomplete stages of design or research and development; and |
| (v) | other confidential and proprietary information or documents relating to the Company’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential. |
The Company devotes significant financial, human and other resources to the development of its products, its customer base and the general goodwill associated with its business, and the Company diligently maintains the secrecy and confidentiality of its Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While employed by the Company and thereafter, Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or disclose to any individual or entity any Confidential Information, except as may be required by the Company in connection with Participant’s employment.
All Company Materials are and will be the sole property of the Company. Participant agrees that during and after his or her employment by the Company, Participant will not remove any Company Materials from the business premises of the Company or deliver any Company Materials to any person or entity outside the Company, except as Participant is required to do so in connection with performing the duties of his or her employment. Participant further agrees that, immediately upon the termination of his or her employment for any reason, or during Participant’s employment if so requested by the Company, Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only Participant’s copy of this Agreement. For purposes
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of this Stock Agreement, Company Materials means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company, whether such documents have been prepared by Participant or by others.
| (b) | Non-Solicitation and Non-Compete . For the period beginning on the date hereof and ending twelve (12) months following the termination of employment with the Company, Participant will not directly or indirectly: |
| (i) | employ, recruit or solicit for employment any person who is (or was within six (6) months prior to Participant’s employment termination date) an employee of the Company; |
| (ii) | accept employment or engage in a competing business which may require contact, solicitation, interference or diverting of any of the Company’s customers, or that may result in the disclosure, divulging, or other use, of Confidential Information or Company Materials acquired during Participant’s employment with the Company; or |
| (iii) | solicit or encourage any customer, vendor or potential customer or vendor of the Company with whom Participant had contact while employed by the Company to terminate or otherwise alter his, her or its relationship with the Company. Participant understands that any person or entity that Participant contacted during the twelve (12) months prior to the date of Participant’s termination of employment for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company has a protectible proprietary interest. |
| (c) | Remedies for Violation . |
| (i) | Injunctive Action . Participant acknowledges that if he or she violates the terms of this Section 6 the injury that would be suffered by the Company as a result of a breach of the provisions of this Stock Agreement (including any provision of Section 6(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy. Consequently, the Company will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Stock Agreement, and the Company will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s rights under this Section(c) (or Sections 6(a) or (b) hereof) or any other remedies of the Company, if the Participant breaches any of the provisions of Sections(a) or (b) hereof, the Company will have the right to cease making any payments otherwise due to the Participant under this Stock Agreement. |
| (ii) | Forfeiture of Restricted Stock and Repayment . In addition to the rights available to the Company under Section 6(c)(i) hereof, if Participant violates the terms of this Section 6 at any time, Participant, without any further action by the Company or Participant, shall forfeit, as of the first day of any such violation, all right, title and interest to unvested Restricted Stock, any Shares then owned by Participant due to vesting of Restricted Stock and any net proceeds received by Participant pursuant to any sales or transfer of any Restricted Stock prior to, on or after such date, and the Company shall have the right to issue a stop transfer order and other appropriate instructions to its transfer agent with respect to the Restricted Stock, and the Company further shall be entitled to reimbursement from Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company in enforcing the Company’s rights under this Section 6. By accepting this Restricted Stock grant, Participant hereby consents to a deduction from any amounts the Company owes to Participant from time to time (including amounts owed to Participant as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to Participant by the Company), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that Participant owes to the Company under this Section 6. In addition to any injunctive relief sought under Section 6(c)(i) hereof and whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount Participant owes to the Company, calculated as set forth in this Section 6(c)(ii), Participant agrees to immediately pay the unpaid balance to the Company. |
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| (d) | Enforceability of Restrictive Covenants . The scope and duration of the restrictive covenants contained in this Stock Agreement are reasonable and necessary to protect a legitimate, protectible interest of the Company. However, if one or more provisions of this Stock Agreement are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this Stock Agreement and the balance of the Stock Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms. |
| (e) | Written Acknowledgement by Participant . The Committee, in its sole discretion, may require the Participant, as a condition to lapsing any restriction on the Restricted Stock, to acknowledge in writing that he or she has not engaged, and is not in the process of engaging, in any of the activities described in this Section 6. |
| 7. | Miscellaneous Provisions . |
| (a) | No Service or Employment Right s . No provision of this Stock Agreement or of the Restricted Stock granted hereunder shall give the Participant any right to continue in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary. |
| (b) | Plan Document Governs . The Restricted Stock is granted pursuant to the Plan, and the Restricted Stock and this Stock Agreement are in all respects governed by the Plan and subject to all of the terms and provisions thereof, whether such terms and provisions are incorporated in this Stock Agreement by reference or are expressly cited. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Plan. Any inconsistency between the Stock Agreement and the Plan shall be resolved in favor of the Plan. Participant hereby acknowledges receipt of a copy of the Plan. |
| (c) | Beneficiary Designation . The Participant may, from time to time, in accordance with procedures set forth by the Committee, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Stock Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate or exercised by the Participant’s estate. |
| (d) | Administration . This Stock Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Stock Agreement, all of which shall be binding upon the Participant. |
| (e) | No Vested Right In Future Awards . Participant acknowledges and agrees (by executing this Stock Agreement) that the granting of Restricted Stock under this Stock Agreement is made on a fully discretionary basis by the Company and that this Stock Agreement does not lead to a vested right to further Restricted Stock awards in the future. |
| (f) |
Use Of Personal Data . By executing this Stock Agreement, Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, salary, nationality, job title, position and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of personal data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant |
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and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan. |
| (g) | Severability . In the event that any provision of this Stock Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Stock Agreement, and this Stock Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. |
| (h) | Waiver; Cumulative Rights . The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time. |
| (i) | Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. |
| (j) | Counterparts . This Stock Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument. |
| (k) | Successors and Assigns . This Stock Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors. |
| (l) | Governing Law . This Stock Agreement and the Restricted Stock granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws. |
| (m) | Entire Agreement . This Stock Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction. |
| (n) | Amendment . Any amendment to this Stock Agreement shall be in writing and signed by the Company. |
| (o) | Headings . The headings contained in this Stock Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Stock Agreement. |
IN WITNESS WHEREOF , the Company has caused this Stock Agreement to be duly executed by an officer thereunto duly authorized, and the Participant has hereunto set his or her hand, all as of the day and year first above written.
| ZEBRA TECHNOLOGIES CORPORATION | Participant | |||
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| <<Officer and Title>> | <<Name>> | |||
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Exhibit 10.8
R ESTRICTED S TOCK A GREEMENT
This RESTRICTED STOCK AGREEMENT (this “Stock Agreement”), dated as of , 20 (the “Grant Date”), is between ZEBRA TECHNOLOGIES CORPORATION , a Delaware corporation (the “Company”), and << EXECUTIVE OFFICER NAME >> (the “Participant”), relating to restricted stock granted to the Participant under the 2006 Zebra Technologies Corporation Incentive Compensation Plan (the “Plan”). Capitalized terms used in this Stock Agreement without definition shall have the meanings ascribed to such terms in the Plan.
| 1. | Grant of Restricted Stock . |
| a. | Grant . Subject to the provisions of this Stock Agreement and pursuant to the provisions of the Plan, the Company hereby grants to the Participant as of the Grant Date <<Number>> shares of the Company’s Class A Common Stock, $.01 par value per share (the “Restricted Stock”). |
| b. | Nontransferability . Except as otherwise permitted under the Plan or this Stock Agreement, the Restricted Stock granted hereunder shall be non-transferable by the Participant during the Period of Restriction set forth under Section 2 of this Stock Agreement. |
| 2. | Vesting of Restricted Stock . |
| a. | Period of Restriction . The Restricted Stock shall be forfeitable and non-transferable during the Period of Restriction. The Period of Restriction with respect to the Restricted Stock shall begin on the Grant Date and shall end on September 4, 2012; provided, however, the Period of Restriction will lapse in accordance with the following schedule: |
| (i) | twenty-five percent (25%) of the Restricted Stock shall vest (and the restrictions on nontransferability shall lapse on such Restricted Stock) if at any time during the Period of Restriction 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 Restricted Stock shall vest (and the restrictions on nontransferability shall lapse on such Restricted Stock) if at any time during the Period of Restriction 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 Restricted Stock in the aggregate (which Vested Percentage shall include the 25% reflected in subparagraph (i), above), as follows (rounded to the nearest whole share):
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Total Shareholder Return |
Vested Percentage | |
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65% but less than 70% |
28.8% | |
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70% but less than 75% |
33.4% | |
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75% but less than 80% |
39.3% | |
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80% but less than 85% |
46.8% | |
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85% but less than 90% |
56.2% | |
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90% but less than 95% |
68.4% | |
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95% but less than 100% |
83.8% |
Except as otherwise provided for under this Stock Agreement or under the Employment Agreement between the Company and the Participant effective as of November 16, 2007 (the “Employment Agreement”), the Participant must remain employed continuously through each applicable vesting date. Any Restricted Stock which is unvested at the expiration of the Period of Restriction as a result of the failure to attain the required Total Shareholder Return shall immediately be forfeited to the Company.
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“Total Shareholder Return” shall be equal to (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 $36.80 plus aggregate dividends paid on a share of the Company’s Common Stock since September 4, 2007, divided by (ii) $36.80.
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.
| b. | Vesting Exceptions . Notwithstanding the provisions of Section 2(a) hereof, a Participant’s unvested Restricted Stock shall be subject to the following additional vesting rules in the following circumstances: |
| (i) | Termination of Employment . Except as provided in Section 2(b)(ii), in the event the Participant’s employment with the Company and/or any Subsidiary is terminated for any reason, any unvested Restricted Stock as of the date of the Participant’s termination of employment shall immediately be forfeited to the Company. |
| (ii) | 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 Period of Restriction 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 Restricted Stock which is 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 |
Percentage of Unvested
That Vest |
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Prior to September 4, 2008 |
100% | |
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On or after September 4, 2008 but prior to September 4, 2009 |
80% | |
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On or after September 4, 2009 but prior to September 4, 2010 |
60% | |
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On or after September 4, 2010 but prior to September 4, 2011 |
40% | |
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On or after September 4, 2011 but prior to September 4, 2012 |
20% |
“Cause” and “Good Reason” shall have the respective meanings assigned to such terms in the Employment Agreement.
| 3. | Rights While Holding Restricted Stock . |
| a. | Legend . Each certificate issued for shares of Restricted Stock under this Stock Agreement shall be registered in the Participant’s name and deposited by the Participant, together with a stock power endorsed in blank, with the Company and shall bear the following (or a similar) legend: |
“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in a Stock Agreement entered into between the registered owner and Zebra Technologies Corporation.”
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When shares of Restricted Stock become vested, the Company shall redeliver to the Participant (or the Participant’s legal representatives, beneficiaries or heirs) the number of shares which have then vested. The Participant agrees that any sale of shares of Restricted Stock received upon vesting shall be made in compliance with the registration requirements of the Securities Act of 1933 or an applicable exemption therefrom. The Committee may require the Participant to furnish to the Company, prior to the delivery of any vested shares of Restricted Stock, an agreement (in such form as the Committee may specify) in which the Participant represents that the shares of stock are being acquired for investment and not with a view to the sale or distribution thereof.
| b. | Rights as a Stockholder . During the period that shares of Restricted Stock remain unvested, the Participant shall have all of the rights of a stockholder of the Company with respect to the Restricted Stock including, but not limited to, the right to receive dividends paid on the shares of Restricted Stock and the full right to vote such shares. |
| c. | Section 83(b) Election . Unless prior written consent of the Committee is secured, the Participant is not permitted to make a Section 83(b) election with respect to the Restricted Stock granted under this Stock Agreement. If the Committee consents to such Section 83(b) election, the Participant must notify the Committee within ten (10) days after filing the Section 83(b) election with the Internal Revenue Service. |
| d. | Compliance with Federal and State Law . The Company may postpone issuing and delivering any Restricted Stock for so long as the Company reasonably determines to be necessary to satisfy the following: |
| (i) | it completing or amending any securities registration or qualification of the Restricted Stock or it or the Participant satisfying any exemption from registration under any federal or state law, rule or regulation; |
| (ii) | the Participant complying with any requests for representations under the Plan; and |
| (iii) | the Participant complying with any federal, state or local tax withholding obligations. |
| 4. | Payment of Taxes . If the Company is obligated to withhold an amount on account of any tax imposed as a result of the issuance of the Restricted Stock, 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 Restricted Stock and its vesting. |
| 5. | Confidentiality, Non-Solicitation and Non-Compete . Participant agrees to, understands and acknowledges the following: |
| a. | Confidential Information . Participant will be furnished, use or otherwise have access to certain Confidential Information of the Company. For purposes of this Stock Agreement, “Confidential Information” means any and all financial, technical, commercial or other information concerning the business and affairs of the Company that is confidential and proprietary to the Company, including without limitation, |
| (i) | information relating to the Company’s past and existing customers and vendors and development of prospective customers and vendors, including, without limitation, specific customer product requirements, pricing arrangements, payment terms, customer lists and other similar information; |
| (ii) | inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; |
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| (iii) | the Company’s proprietary programs, processes or software, consisting of, but not limited to, computer programs in source or object code and all related documentation and training materials, including all upgrades, updates, improvements, derivatives and modifications thereof and including, without limitation, programs and documentation in incomplete stages of design or research and development; |
| (iv) | the subject matter of the Company’s patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property, including, without limitation, such information in incomplete stages of design or research and development; and |
| (v) | other confidential and proprietary information or documents relating to the Company’s products, business and marketing plans and techniques, sales and distribution networks and any other information or documents which the Company reasonably regards as being confidential. |
The Company devotes significant financial, human and other resources to the development of its products, its customer base and the general goodwill associated with its business, and the Company diligently maintains the secrecy and confidentiality of its Confidential Information. Each and every component of the Confidential Information is sufficiently secret to derive economic value from its not being generally known to other persons. While employed by the Company and thereafter, Participant will hold in the strictest confidence and not use in any manner which is detrimental to the Company or disclose to any individual or entity any Confidential Information, except as may be required by the Company in connection with Participant’s employment.
All Company Materials are and will be the sole property of the Company. Participant agrees that during and after his or her employment by the Company, Participant will not remove any Company Materials from the business premises of the Company or deliver any Company Materials to any person or entity outside the Company, except as Participant is required to do so in connection with performing the duties of his or her employment. Participant further agrees that, immediately upon the termination of his or her employment for any reason, or during Participant’s employment if so requested by the Company, Participant will return all Company Materials and other physical property, and any reproduction thereof, excepting only Participant’s copy of this Agreement. For purposes of this Stock Agreement, “Company Materials” means documents or other media or tangible items that contain or embody Confidential Information or any other information concerning the business, operations or future/strategic plans of the Company, regardless of whether such documents have been prepared by Participant or by others.
| b. | Non-Solicitation and Non-Compete . For the period beginning on the date hereof and ending twenty-four (24) months following the termination of employment with the Company, Participant will not directly or indirectly: |
| (i) | employ, recruit or solicit for employment any person who is (or was within six (6) months prior to Participant’s employment termination date) an employee of the Company; |
| (ii) | accept employment or engage in a competing business which may require contact, solicitation, interference or diverting of any of the Company’s customers, or that may result in the disclosure, divulging, or other use, of Confidential Information or Company Materials acquired during Participant’s employment with the Company; or |
| (iii) | solicit or encourage any customer, vendor or potential customer or vendor of the Company with whom Participant had contact while employed by the Company to terminate or otherwise alter his, her or its relationship with the Company. Participant understands that any person or entity that Participant contacted during the twelve (12) months prior to the date of Participant’s termination of employment with the Company for the purpose of soliciting sales from such person or entity shall be regarded as a “potential customer” of the Company to whom the Company has a protectible proprietary interest. |
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| c . | Remedies for Violation . |
| (i) | Injunctive Action . Participant acknowledges that if he or she violates the terms of this Section 5 the injury that would be suffered by the Company as a result of a breach of the provisions of this Stock Agreement (including any provision of Section 5(a) or (b) hereof) would be irreparable and that an award of monetary damages to the Company for such a breach would be an inadequate remedy. Consequently, the Company will have the right, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provision of this Stock Agreement, and the Company will not be obligated to post bond or other security in seeking such relief. Without limiting the Company’s rights under this Section 5(c) (or Sections 5(a) or (b) hereof) or any other remedies of the Company, if the Participant breaches any of the provisions of Sections 5(a) or (b) hereof, the Company will have the right to cease making any payments otherwise due to the Participant under this Stock Agreement. |
| (ii) | Forfeiture of Restricted Stock and Repayment . In addition to the rights available to the Company under Section 5(c)(i) hereof, if Participant violates the terms of this Section 5 at any time, Participant, without any further action by the Company or Participant, shall forfeit, as of the first day of any such violation, all right, title and interest to unvested Restricted Stock, any Shares then owned by Participant due to vesting of Restricted Stock and any net proceeds received by Participant pursuant to any sales or transfer of any Restricted Stock (or Shares held as a result of the vesting of the Restricted Stock) prior to, on or after such date, and the Company shall have the right to issue a stop transfer order and other appropriate instructions to its transfer agent with respect to the Restricted Stock (and Shares held as a result of the vesting of the Restricted Stock), and the Company further shall be entitled to reimbursement from Participant of any fees and expenses (including attorneys’ fees) incurred by or on behalf of the Company in enforcing the Company’s rights under this Section 5. By accepting this Restricted Stock grant, Participant hereby consents to a deduction from any amounts the Company owes to Participant from time to time (including amounts owed to Participant as wages or other compensation, fringe benefits or vacation pay, as well as any other amounts owed to Participant by the Company), unless such amount is subject to Section 409A of the Code, to the extent of any amounts that Participant owes to the Company under this Section 5. In addition to any injunctive relief sought under Section 5(c)(i) hereof and whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount Participant owes to the Company, calculated as set forth in this Section 5(c)(ii), Participant agrees to immediately pay the unpaid balance to the Company. |
| d. | Enforceability of Restrictive Covenants . The scope and duration of the restrictive covenants contained in this Stock Agreement are reasonable and necessary to protect a legitimate, protectible interest of the Company. |
| e. | Written Acknowledgement by Participant . The Committee, in its sole discretion, may require the Participant, as a condition to lapsing any restriction on the Restricted Stock, to acknowledge in writing that he or she has not engaged, and is not in the process of engaging, in any of the activities described in this Section 5. |
| 6. | Miscellaneous Provisions . |
| a. | No Service or Employment Rights . No provision of this Stock Agreement or of the Restricted Stock granted hereunder shall give the Participant any right to continue in the service or employ of the Company or any Subsidiary, create any inference as to the length of employment or service of the Participant, affect the right of the Company or any Subsidiary to terminate the employment or service of the Participant, with or without Cause, or give the Participant any right to participate in any employee welfare or benefit plan or other program (other than the Plan) of the Company or any Subsidiary. |
| b. | Plan Document Governs . The Restricted Stock is granted pursuant to the Plan, and the Restricted Stock and this Stock Agreement are in all respects governed by the Plan and subject to all of the terms and provisions thereof, regardless of whether such terms and provisions are incorporated in this Stock Agreement by reference or are expressly cited. Any inconsistency between the Stock Agreement and the Plan shall be resolved in favor of the Plan. Participant hereby acknowledges receipt of a copy of the Plan. |
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| c. | Beneficiary Designation . The Participant may, from time to time, in accordance with procedures set forth by the Committee, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Stock Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Committee during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate or exercised by the Participant’s estate. |
| d. | Administration . This Stock Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Stock Agreement, all of which shall be binding upon the Participant. |
| e. | No Vested Right In Future Awards . Participant acknowledges and agrees (by executing this Stock Agreement) that the granting of Restricted Stock under this Stock Agreement is made on a fully discretionary basis by the Company and that this Stock Agreement does not lead to a vested right to further restricted stock awards in the future. |
| f. | Use Of Personal Data . By executing this Stock Agreement, Participant acknowledges and agrees to the collection, use, processing and transfer of certain personal data, including his or her name, salary, nationality, job title, position and details of all past Awards and current Awards outstanding under the Plan (“Data”), for the purpose of managing and administering the Plan. The Participant is not obliged to consent to such collection, use, processing and transfer of Data, but a refusal to provide such consent may affect his or her ability to participate in the Plan. The Company, or its Subsidiaries, may transfer Data among themselves or to third parties as necessary for the purpose of implementation, administration and management of the Plan. These various recipients of Data may be located elsewhere throughout the world. The Participant authorizes these various recipients of Data to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Plan. The Participant may, at any time, review Data with respect to the Participant and require any necessary amendments to such Data. The Participant may withdraw his or her consent to use Data herein by notifying the Company in writing; however, the Participant understands that by withdrawing his or her consent to use Data, the Participant may affect his or her ability to participate in the Plan. |
| g. | Severability . If one or more provisions of this Stock Agreement (including, without limitations, the provisions of Section 5 hereof) are held to be unenforceable under applicable law to any extent, such provision(s) shall, to that extent, be excluded from this Stock Agreement and the balance of the Stock Agreement shall be interpreted as if such provision(s) were so excluded to that extent and shall be enforceable in accordance with its terms. |
| h. | Waiver; Cumulative Rights . The failure or delay of either party to require performance by the other party of any provision hereof shall not affect its right to require performance of such provision unless and until such performance has been waived in writing. Each and every right hereunder is cumulative and may be exercised in part or in whole from time to time. |
| i. | Notices . Any notice which either party hereto may be required or permitted to give the other shall be in writing and may be delivered personally or by mail, postage prepaid, addressed to the Secretary of the Company, at its then corporate headquarters, and the Participant at the Participant’s address as shown on the Company’s records, or to such other address as the Participant, by notice to the Company, may designate in writing from time to time. |
| j. | Counterparts . This Stock Agreement may be signed in two counterparts, each of which shall be an original, but both of which shall constitute but one and the same instrument. |
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| k. | Successors and Assigns . This Stock Agreement shall inure to the benefit of and be binding upon each successor and assign of the Company. All obligations imposed upon the Participant, and all rights granted to the Company hereunder, shall be binding upon the Participant’s heirs, legal representatives and successors. |
| l. | Governing Law . This Stock Agreement and the Restricted Stock granted hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws. |
| m. | Entire Agreement . This Stock Agreement, together with the Plan, constitute the entire obligation of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to this transaction. |
| n. | Amendment . Any amendment to this Stock Agreement shall be in writing and signed by the Company. |
| o. | Headings and Construction . The headings contained in this Stock Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Stock Agreement. This Stock Agreement is intended to be a stock right excluded from the requirements of Code Section 409A. The terms of this Stock Agreement shall be administered and construed in a manner consistent with the intent that it be a stock right excluded from the requirements of Code Section 409A. |
IN WITNESS WHEREOF , the Company has caused this Stock Agreement to be duly executed by an officer thereunto duly authorized, and the Participant has hereunto set his or her hand, all as of the day and year first above written.
| ZEBRA TECHNOLOGIES CORPORATION | Participant | |||
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| <<Officer and Title>> | <<Name>> | |||
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