Netgear 2012 Annual Report Download - page 125

E.
Term of Option .
This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such
term only in accordance with the Plan and the terms of this Option Agreement.
F. Tax Obligations .
(a) Withholding Taxes
. Optionee agrees to make appropriate arrangements with the Company (or the
Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all Federal, state, local and foreign income and
employment tax withholding requirements applicable to the Option exercise. Optionee acknowledges and agrees that the
Company may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the
time of exercise.
(b) Notice of Disqualifying Disposition of ISO Shares
. If the Option granted to Optionee herein is an
ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of
(1) the date two years after the Date of Grant, or (2) the date one year after the date of exercise, the Optionee shall
immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the Optionee.
(c) Code Section 409A
. Under Code Section 409A, an option that vests after December 31, 2004 (or
that vested on or prior to such date but which was materially modified after October 3, 2004) that was granted with a per
Share exercise price that is determined by the Internal Revenue Service (the “IRS”)
to be less than the Fair Market Value of
a Share on the date of grant (a “Discount Option”) may be considered “deferred compensation.”
A Discount Option may
result in (i) income recognition by Optionee prior to the exercise of the option, (ii) an additional twenty percent (20%)
federal income tax, and (iii) potential penalty and interest charges. The Discount Option may also result in additional state
income, penalty and interest charges to the Optionee. Optionee acknowledges that the Company cannot and has not
guaranteed that the IRS will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of
a Share on the Date of Grant in a later examination. Optionee agrees that if the IRS determines that the Option was granted
with a per Share exercise price that was less than the Fair Market Value of a Share on the date of grant, Optionee will be
solely responsible for Optionee's costs related to such a determination.
G. Entire Agreement; Governing Law .
The Plan is incorporated herein by reference. The Plan and this Option Agreement con-sti-
tute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements
of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of California.
H. NO GUARANTEE OF CONTINUED SERVICE.
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL
OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR
PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE
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