Exhibit-10.20

 

 

MANAGEMENT SHAREHOLDERS AGREEMENT

by and among

Avago Technologies Limited,

Bali Investments S..r.l., a Luxembourg company

and

Name

Dated as of [___, 200_]

 

 

          This Management Shareholders Agreement (this Agreement) is entered into effective as of [___, 200_] by and between Avago Technologies Limited, (the Company), Bali Investments S.a.r.l., a Luxembourg company (Luxco) and Name (the Purchaser) (being hereinafter collectively referred to as the Parties).

RECITALS

          Pursuant to the terms of the Equity Incentive Plan for Executive Employees of Avago Technologies Limited and Subsidiaries, as the same may be amended from time to time (the Equity Plan), the Company is granting options to purchase ordinary shares (the Shares) in the Company to certain employees of the Company or one of its Subsidiaries, including the Purchaser. In addition, Purchaser intends to purchase Shares. This Agreement is one of several agreements (Other Purchasers Agreements) which have been, or which in the future will be, entered into between the Company and other individuals who are or will be employees of the Company or one of its Subsidiaries (collectively, the Other Purchasers). For purposes of this Agreement, Subsidiary, with respect to any entity, shall mean any Person in an unbroken chain of Persons beginning with such entity if each of the Persons, or group of commonly controlled Persons, other than the last Person in the unbroken chain, then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other Persons in such chain; Affiliate shall mean, with respect to any Person, a Person directly or indirectly controlling, controlled by, or under common control with, such Person; Person means an individual, partnership, limited liability company, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature, and control shall have the meaning given such term under Rule 405 of the United States Securities Act of 1933, as amended (the Securities Act).

          On the date hereof (the Option Date) and such other dates thereafter as the Company shall determine, the Company will grant to the Purchaser an option or options to purchase the number of Shares set forth on Exhibit A hereto as New Options (the New Options) at an exercise price equal to US$[___] per Share (the Initial Price Per Share), pursuant to the terms of the Equity Plan and the New Option Non-Qualified Share Option Agreement to be dated effective as of the Option Date. The New Options may be granted as Base Options or Performance Options (each as defined in the New Option Non-Qualified Share Option Agreement).

          Purchaser, on the Option Date and such other dates thereafter as the Company shall agree (the Option Date and each such other date, a Purchase Date), will purchase for cash the number of Shares, if any, as set forth on Exhibit A as Co-Investment Shares (the Co-Investment Shares) and/or in addition to the New Options, will be granted options under the Equity Plan for the number of Shares set forth on Exhibit A as Rollover Options, (the Rollover Options) pursuant to the terms of the Equity Plan and the Rollover Option Non-Qualified Share Option to be dated effective as of the relevant Purchase Date.

Name Management Shareholders Agrement

          The term Options as used in this Agreement shall include the Rollover Options, the New Options and any other options to purchase Shares granted to the Purchaser by the Company and held by the Purchaser at any time when this Agreement is in effect. The term Shares as used in this Agreement shall include all Co-Investment Shares and all Shares issued to the Purchaser by the Company upon exercise of the Options and of any other stock options held by the Purchaser and any other Shares otherwise acquired by the Purchaser at any time when this Agreement is in effect. Rollover Shares shall mean the Co-Investment Shares and Shares issued to the Purchaser by the Company upon exercise of Rollover Options.

AGREEMENT

          To implement the foregoing and in consideration of the mutual agreements contained herein, the Parties agree as follows:

     1. Issuance of Co-Investment Shares, New Options and Rollover Options.

          Upon and as of the Purchase Date, the Company shall issue to the Purchaser the Co-Investment Shares, the New Options and the Rollover Options subject to the terms and conditions hereinafter set forth and contained in the Equity Plan, the New Option Non-Qualified Share Option Agreement and the Rollover Option Non-Qualified Share Option Agreement, and the Parties shall execute and deliver to each other copies of the New Option Non-Qualified Share Option Agreement and the Rollover Option Non-Qualified Share Option Agreement in connection with the issuance of the New Options and Rollover Options.

     2. The Purchasers Representations, Warranties and Agreements.

               a. The Purchaser agrees and acknowledges that Purchaser will not, directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of any Shares (any such act sometimes referred to herein as a Transfer, whether voluntary or involuntary) unless such Transfer complies with the terms and conditions of this Agreement, including the restrictions on Transfer contained in Section 3 hereof, and (i) the Transfer is pursuant to an effective registration statement under the Securities Act, or the rules and regulations in effect thereunder or (ii) (A) counsel for the Purchaser (which shall be OMelveny & Myers LLP or such other counsel acceptable to the Company) shall have furnished the Company with an opinion, satisfactory in form and substance to the Company, that no such registration is required because of the availability of an exemption from registration under the Securities Act and (B) if the Purchaser is a citizen or resident of any country other than the United States, or the Purchaser desires to effect any Transfer in any such country, counsel for the Purchaser (which counsel shall be reasonably satisfactory to the Company) shall have furnished the Company with an opinion or other advice satisfactory in form and substance to the Company to the effect that such Transfer will comply with the securities laws of such jurisdiction. Notwithstanding the foregoing, the Company acknowledges and agrees that any of the following Transfers are deemed to be in compliance with the Securities Act and this Agreement and no opinion of counsel is required in connection therewith: (x) a Transfer made pursuant to Section 5, 6, 8 or 9 hereof, (y) a Transfer upon the death of the Purchaser to his executors, administrators, testamentary trustees, legatees or beneficiaries (the Purchasers Estate) or a

Name Management Shareholders Agrement

Transfer to the executors, administrators, testamentary trustees, legatees or beneficiaries of an individual who has become a holder of Shares in accordance with the terms of this Agreement; provided, that it is expressly understood that any such transferee shall be bound by the provisions of this Agreement and (z) a Transfer made after the Purchase Date in compliance with the federal securities laws to a trust, custodianship or other similar entity the beneficiaries or holders of which may include only the Purchaser, his spouse or his lineal descendants (which term shall include biological as well as adoptive descendants) or directly to the Purchasers spouse or lineal descendants (a Purchasers Trust) or a transfer made after the fifth anniversary of the Purchase Date to such a trust by an individual who has become a holder of Shares in accordance with the terms of this Agreement; provided, that such Transfer is made expressly subject to this Agreement and that the transferee agrees in writing to be bound by the terms and conditions hereof.

               b. The certificate (or certificates) representing the Shares shall bear the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE MANAGEMENT SHAREHOLDERS AGREEMENT DATED AS OF [___, 200_] BY AND BETWEEN AVAGO TECHNOLOGIES LIMITED (THE COMPANY) AND THE PURCHASER NAMED ON THE FACE HEREOF (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). EXCEPT AS OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE ACT), OR (B) IF (I) THE COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT OR THE RULES AND REGULATIONS IN EFFECT THEREUNDER, AND IN COMPLIANCE WITH APPLICABLE PROVISIONS OF STATE SECURITIES LAWS, AND (II) IF THE HOLDER IS A CITIZEN OR RESIDENT OF ANY COUNTRY OTHER THAN THE UNITED STATES, OR THE HOLDER DESIRES TO EFFECT ANY SUCH TRANSACTION IN ANY SUCH COUNTRY, THE COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OR OTHER ADVICE OF COUNSEL FOR THE HOLDER THAT SUCH

Name Management Shareholders Agrement

TRANSACTION WILL NOT VIOLATE THE LAWS OF SUCH COUNTRY.

               c. The Purchaser acknowledges that Purchaser has been advised that (i) the issuance of the Options and the Shares have not been registered under the Securities Act, (ii) the Options and the Shares must be held indefinitely and the Purchaser must continue to bear the economic risk of the investment in the Options and the Shares unless the Shares are subsequently registered under the Securities Act or an exemption from registration is available, (iii) it is not anticipated that there will be any public market for the Options and the Shares, (iv) an exemption from registration under Rule 144 promulgated under the Securities Act is not currently available with respect to the sales of any securities of the Company, and except as provided in Section 11(b) hereof, the Company has made no covenant to make such Rule available, (v) when and if Options and the Shares may be disposed of without registration in reliance on Rule 144, such disposition can be made only in limited amounts in accordance with the terms and conditions of such Rule, (vi) if the Rule 144 exemption is not available, public sale without registration will require compliance with some other exemption under the Securities Act, (vii) a restrictive legend in the form heretofore set forth shall be placed on the certificates representing the Options and the Shares and (viii) a notation shall be made in the appropriate records of the Company indicating that the Shares are subject to restriction on transfer and, if the Company should at some time in the future engage the services of a stock transfer agent, appropriate stop transfer restrictions will be issued to such transfer agent with respect to the Shares.

               d. If any Shares are to be disposed of in accordance with Rule 144 under the Securities Act or otherwise, the Purchaser shall promptly notify the Company of such intended disposition and shall deliver to the Company at or prior to the time of such disposition such documentation as the Company may reasonably request in connection with such sale, and, in the case of a disposition pursuant to Rule 144, shall deliver to the Company an executed copy of any notice on Form 144 required to be filed with the Securities and Exchange Commission.