Exhibit 4.1
AMENDED AND RESTATED
CHIPS AND TECHNOLOGIES, INC.
1994 STOCK OPTION PLAN
(As Amended Through November 9, 1995)
1. Establishment and Purpose.
(a) Establishment. The Chips and Technologies, Inc.
1985 Stock Option Plan was adopted on January 11, 1985 and was
amended and restated on January 8, 1987 (the "Initial Plan").
The Initial Plan is amended and restated in its entirety and
renamed the Amended and Restated Chips and Technologies, Inc.
1994 Stock Option Plan (the "Plan") effective upon approval by
the stockholders of Chips and Technologies, Inc.
(b) Purpose. The Plan is established to create
additional incentive for key employees, directors and consultants
or advisors of Chips and Technologies, Inc. and any successor
corporation thereto (collectively referred to as the "Company"),
and any present or future parent and/or subsidiary corporations
of such corporation (all of whom along with the Company being
individually referred to as a "Participating Company" and
collectively referred to as the "Participating Company Group"),
to promote the financial success and progress of the
Participating Company Group. For purposes of the Plan, a parent
corporation and a subsidiary corporation shall be as defined in
sections 424(e) and 424(f) of the Internal Revenue Code of 1986,
as amended (the "Code").
2. Administration.
(a) Administration by Board and/or Compensation
Committee. The Plan shall be administered by the Board of
Directors of the Company (the "Board") and/or by a duly appointed
committee of the Board having such powers as shall be specified
by the Board. Any subsequent references herein to the Board
shall also mean the committee if such committee has been
appointed and, unless the powers of the committee have been
specifically limited, the committee shall have all of the powers
of the Board granted herein, including, without limitation, the
power to terminate or amend the Plan at any time, subject to the
terms of the Plan and any applicable limitations imposed by law.
All questions of interpretation of the Plan or of any options
granted under the Plan (an "Option") shall be determined by the
Board, and such determinations shall be final and binding upon
all persons having an interest in the Plan and/or any Option.
(b) Disinterested Administration. With respect to the
participation in the Plan of employees who are also officers or
directors of the Company subject to
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Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Plan shall be administered by the Board
in compliance with the "disinterested administration" requirement
of Rule 16b-3, as promulgated under the Exchange Act and amended
from time to time or any successor rule or regulation ("Rule 16b-
3").
(c) Compliance with Section 162(m) of the Code. In
the event a Participating Company is a "publicly held
corporation" as defined in paragraph (2) of section 162(m) of the
Code, as amended by the Revenue Reconciliation Act of 1993 (P.L.
103-66), and the regulations promulgated thereunder ("Section
162(m)"), the Company may establish a committee of outside
directors meeting the requirements of Section 162(m) to approve
the grant of Options which might reasonably be anticipated to
result in the payment of employee remuneration that would
otherwise exceed the limit on employee remuneration deductible
for income tax purposes pursuant to Section 162(m).
(d) Options Authorized. Options may be either
incentive stock options as defined in section 422(a) of the Code
("Incentive Stock Options") or options not intended to qualify as
Incentive Stock Options ("Nonqualified Stock Options").
(e) Authority of Officers. Any officer of a
Participating Company shall have the authority to act on behalf
of the Company with respect to any matter, right, obligation, or
election which is the responsibility of or which is allocated to
the Company herein, provided the officer has apparent authority
with respect to such matter, right, obligation, or election.
3. Eligibility. The Options may be granted only to
employees (including officers) and directors of the Participating
Company Group or to individuals who are rendering services as
consultants, advisors, or other independent contractors to the
Participating Company Group. The Board shall, in the Board's
sole discretion, determine which persons shall be granted Options
(an "Optionee"). A director of the Company shall be eligible to
be granted only a Nonqualified Stock Option unless the director
is also an employee of the Company. For purposes of the
foregoing sentence, "employees" shall include prospective
employees to whom Options are granted in connection with written
offers of employment with Participating Company Group and
"consultants" or "advisors" shall include prospective consultants
or advisors to whom Options are granted in connection with
written consulting or advising offers with the Participating
Company Group. An individual who is rendering services as a
consultant, advisor, or other independent contractor shall be
eligible to be granted only a Nonqualified Stock Option. An
Optionee may, if otherwise eligible, be granted additional
Options.
4. Shares Subject to Option. Options shall be options for
the purchase of the authorized but unissued Common Stock of the
Company (the "Stock"), subject to adjustment as provided in
paragraph 9 below. The maximum number of shares of Stock which
may be issued under the Plan (including the Initial Plan) shall
be eighteen
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million two hundred thousand (18,200,000) shares. Subject to
adjustment as provided in paragraph 9 below, at any such time as
a Participating Company is a "publicly held corporation" as
defined in Section 162(m), no person shall be granted within any
fiscal year of the Company Options which in the aggregate cover
more than five hundred thousand (500,000) shares (the "Per Person
Limit"). In the event that any outstanding Option under the Plan
(including the Initial Plan) for any reason expires or is
terminated or canceled and/or shares of Stock subject to
repurchase are repurchased by the Company, the shares allocable
to the unexercised portion of such Option, or such repurchased
shares, may again be subject to an Option grant. Notwithstanding
the foregoing, any such shares shall be made subject to a new
Option only if the grant of such new Option and the issuance of
such shares pursuant to such new Option would not cause the plan
or any Option granted under the Plan to contravene Rule 16b-3.
5. Time for Granting Options. All Options shall be
granted, if at all, on or before August 11, 2004.
6. Terms, Conditions and Form of Options. Subject to the
provisions of the Plan, the Board shall determine for each Option
(which need not be identical) the number of shares of Stock for
which the Option shall be granted, the option price of the
Option, the exercisability of the Option, whether the Option is
to be treated as an Incentive Stock Option or as a Nonqualified
Stock Option and all other terms and conditions of the Option not
inconsistent with the Plan. Options granted pursuant to the
Plan shall be evidenced by written agreements specifying the
number of shares of Stock covered thereby, in such form as the
Board shall from time to time establish, and shall comply with
and be subject to the following terms and conditions:
(a) Option Price. The option price for each Option
shall be established in the sole discretion of the Board;
provided, however, that (i) the option price per share for an
Option shall be not less than the fair market value, as
determined by the Board, of a share of Stock on the date of the
granting of the Option, and (ii) no Incentive Stock Option
granted to an Optionee who at the time the Option is granted owns
stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of a Participating
Company within the meaning of section 422(b)(6) of the Code
and/or ten percent (10%) of the total combined value of all
classes of stock of a Participating Company (a "Ten Percent Owner
Optionee") shall have an option price per share less than one
hundred ten percent (110%) of the fair market value of a share of
Stock on the date the Option is granted.
(b) Exercise Period of Options. The Board shall have
the power to set the time or times within which each Option shall
be exercisable or the event or events upon the occurrence of
which all or a portion of each Option shall be exercisable and
the term of each Option; provided, however, that (i) no Incentive
Stock Option shall be exercisable after the expiration of ten
(10) years after the date such Option is granted and (ii) no
Incentive Stock Option granted to a Ten Percent Owner Optionee
shall be exercisable after the expiration of five (5) years after
the date such Option is granted.
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(c) Payment of Option Price. Payment of the option
price for the number of shares of Stock being purchased pursuant
to any Option shall be made (i) in cash, by check, or cash
equivalent, (ii) by tender to the Company of shares of the
Company's stock owned by the Optionee having a value, as
determined by the Board (but without regard to any restrictions
on transferability applicable to such stock by reason of federal
or state securities laws or agreements with an underwriter for
the Company), not less than the option price, (iii) if
specifically permitted by the Board and set forth in the
Optionee's Option Agreement, by the Optionee's recourse
promissory note, (iv) by the assignment of the proceeds of a sale
of some or all of the shares being acquired upon the exercise of
an Option (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve
System), (v) by such other consideration and method of payment as
the Board, in its sole discretion, may allow, or (vi) by any
combination thereof.
The Board may at any time or from time to time, by adoption
of or by amendment to the form of Standard Option Agreement
described in paragraph 7 below, or by other means, grant Options
which do not permit all of the foregoing forms of consideration
to be used in payment of the option price and/or which otherwise
restrict one (1) or more forms of consideration. Notwithstanding
the foregoing, an Option may not be exercised by tender to the
Company of shares of the Company's stock to the extent such
tender of stock would constitute a violation of the provisions of
any law, regulation and/or agreement restricting the redemption
of the Company's stock. Furthermore, no promissory note shall be
permitted if an exercise using a promissory note would be a
violation of any law. Any permitted promissory note shall be due
and payable not more than five (5) years after the Option is
exercised, and interest shall be payable at least annually and be
at least equal to the minimum interest rate necessary to avoid
imputed interest pursuant to all applicable sections of the Code.
The Board shall have the authority to permit or require the
Optionee to secure any promissory note used to exercise an Option
with the shares of Stock acquired on exercise of the Option
and/or with other collateral acceptable to the Company.
(x) Unless otherwise provided by the Board,
an Option may not be exercised by tender to the Company of shares
of the Company's stock pursuant to clause (ii) of this paragraph
6(c) unless such shares of the Company's stock either have been
owned by the Optionee for more than six (6) months or were not
acquired, directly or indirectly, from the Company.
(y) Unless otherwise provided by the Board,
in the event the Company at any time becomes subject to the
regulations promulgated by the Board of Governors of the Federal
Reserve System or any other governmental entity affecting the
extension of credit in connection with the Company's securities,
any promissory note shall comply with such applicable
regulations, and the Optionee shall pay the unpaid principal and
accrued interest, if any, to the extent necessary to comply with
such applicable regulations.
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(z) The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion,
to establish, decline to approve and/or terminate any program
and/or procedures for the exercise of Options by means of an
assignment of the proceeds of a sale of some or all of the shares
of Stock to be acquired upon such exercise pursuant to clause
(iv) of this paragraph 6(c).
7. Standard Forms of Stock Option Agreement.
(a) Incentive Stock Options. Unless otherwise
provided for by the Board at the time an Option is granted, an
Option designated as an "Incentive Stock Option" shall comply
with and be subject to the terms and conditions set forth in the
form of incentive stock option agreement attached hereto as
Exhibit A and incorporated herein by reference.
(b) Nonqualified Stock Options. Unless otherwise
provided for by the Board at the time an Option is granted, an
Option designated as a "Nonqualified Stock Option" shall comply
with and be subject to the terms and conditions set forth in the
form of nonqualified stock option agreement attached hereto as
Exhibit B and incorporated herein by reference.
(c) Standard Term for Options. Unless otherwise
provided for by the Board in the grant of an Option, any Option
granted hereunder shall be exercisable for a term of ten (10)
years.
8. Authority to Vary Terms. The Board shall have the
authority from time to time to vary the terms of the standard
forms of stock option agreement either in connection with the
grant of an individual Option or in connection with the
authorization of a new standard form or forms; provided, however,
that the terms and conditions of such revised or amended standard
form or forms of stock option agreement shall be in accordance
with the terms of the Plan.
9. Effect of Change in Stock Subject to Plan. Appropriate
adjustments shall be made in the number and class of shares of
Stock subject to the Plan, to the Per Person Limit set forth in
paragraph 4 above, and to any outstanding Options and in the
option price of any outstanding Options in the event of a stock
dividend, stock split, reverse stock split, combination,
reclassification, or like change in the capital structure of the
Company.
10. Transfer of Control. A "Transfer of Control" shall be
deemed to have occurred in the event any of the following occurs
with respect to the Control Company. For purposes of applying
this Paragraph 10, the "Control Company" shall mean the
corporation whose stock is subject to the Option.
(a) the direct or indirect sale or exchange by the
stockholders of the Control Company of all or substantially all
of the stock of the Control Company where the stockholders of the
Control Company before such sale or exchange do not retain,
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directly or indirectly, at least a majority of the beneficial
interest in the voting stock of the Control Company;
(b) a merger in which the stockholders of the Control
Company before such merger do not retain, directly or indirectly,
at least a majority of the beneficial interest in the voting
stock of the Control Company; or
(c) the sale, exchange, or transfer of all or
substantially all of the Control Company's assets (other than a
sale, exchange, or transfer to one or more corporations where the
stockholders of the Control Company before such sale, exchange or
transfer retain, directly or indirectly, at least a majority of
the beneficial interest in the voting stock of the corporation(s)
to which the assets were transferred).
In the event of a Transfer of Control, any unexercisable
and/or unvested portion of the outstanding Options shall be
immediately exercisable and vested as of the date thirty (30)
days prior to the date of the Transfer of Control unless the
Board provides for the surviving, continuing, successor, or
purchasing corporation or parent corporation thereof, as the case
may be (the "Acquiring Corporation"), to either assume the
Control Company's rights and obligations under outstanding
Options or substitute options for the Acquiring Corporation's
stock for such outstanding Options. The exercise and/or vesting
of any Option that was permissible solely by reason of this
paragraph 10 shall be conditioned upon the consummation of the
Transfer of Control. Any Options which are neither assumed or
substituted for by the Acquiring Corporation in connection with
the Transfer of Control nor exercised as of the date of the
Transfer of Control shall terminate and cease to be outstanding
effective as of the date of the Transfer of Control.
11. Provision of Information. Each Optionee shall be given
access to information concerning the Company equivalent to that
information generally made available to the Company's common
stockholders.
12. Options Non-Transferable. Unless otherwise provided by
the Board, during the lifetime of the Optionee, the Option shall
be exercisable only by the Optionee and no Option shall be
assignable or transferable by the Optionee, except by will or by
the laws of descent and distribution.
13. Termination or Amendment of Plan and Options. The
Board, including any duly appointed committee of the Board, may
terminate or amend the Plan and/or any Option at any time;
provided, however, that without the approval of the Company's
stockholders, there shall be (a) no increase in the total number
of shares of Stock covered by the Plan (except by operation of
the provisions of paragraph 9 above), (b) no change in the class
of persons eligible to receive Incentive Stock Options, and (c)
no expansion in the class of persons eligible to receive
Nonqualified Stock Options. In addition to the foregoing, the
approval of the Company's stockholders shall be sought for any
amendment to the Plan or an Option for which the Board deems
stockholder approval necessary in order to comply with Rule 16b-
3. In any event, no amendment
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may adversely affect any then outstanding Option or any
unexercised portion thereof, without the consent of the Optionee,
unless such amendment is required to enable an Option designated
as an Incentive Stock Option to qualify as an Incentive Stock
Option.
14. Continuation of Initial Plan as to Outstanding Options.
Notwithstanding any other provision to the contrary, the terms of
the Initial Plan shall remain in effect and apply to Options
granted pursuant to the Initial Plan.
IN WITNESS WHEREOF, the undersigned Secretary of the Company
certifies that the foregoing is the Amended and Restated Chips
and Technologies, Inc. 1994 Stock Option Plan as duly adopted by
the Board of Directors of the Company on August 11, 1994 and as
subsequently amended through November 9, 1995.
Jeffery Anne Tatum, Secretary
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EXHIBIT A
INCENTIVE STOCK OPTION AGREEMENT
Between
CHIPS AND TECHNOLOGIES, INC.
and
__________________________
You have been granted an option under the Amended and Restated
Chips and Technologies, Inc. 1994 Stock Option Plan (the "Plan").
This Agreement describes the terms and conditions of your option
(the "Agreement").
Number of Shares. Your option is for __________ shares of the
common stock of Chips and Technologies, Inc., a Delaware
corporation ("Chips").
Option Price. You may purchase your option shares for
$__________ per share, which was the closing price of the common
stock of Chips on __________, 199____.
Type of Option. This option is intended to be an incentive stock
option as provided in section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), but Chips does not warrant that it
qualifies as such. You should consult with your own tax advisor
regarding the tax effects of this option and the requirements
necessary to obtain favorable income tax treatment under section
422 of the Code.
Grant Date. The "Grant Date" of your option is __________,
19_____. This is the date the Board of Directors of Chips
approved your option grant.
Initial Vesting Date. The "Initial Vesting Date" of your option
is __________, 19_____. This is the date your option begins to
vest.
Exercisability. You may exercise your option immediately in its
entirety after the Grant Date unless the total value of all of
your incentive stock options from Chips which first become
exercisable in 19_____ exceeds $100,000 (see $100,000 Exercise
Limitation below). However, if you buy unvested option shares,
they may not be sold or otherwise transferred until they become
vested (see Right of Repurchase below).
Term. Your option will expire on __________, 19_____, unless
your employment with Chips (or a parent corporation or subsidiary
corporation of Chips as defined in section 424 of the Code) is
terminated as explained below, or unless Chips is involved in a
"transfer of control" transaction as explained below.
Vesting of Option. On the Initial Vesting Date, __________ of
the option shares will be vested. Thereafter, 1/48 of the option
shares will vest for each full month of your
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continuous employment with Chips (or a parent or subsidiary
corporation of Chips) from the Initial Vesting Date. Your option
stops vesting when your employment with Chips (or a parent
corporation or subsidiary corporation of Chips) terminates.
Vesting during an approved leave of absence is governed by the
applicable Leave of Absence Policy in effect at the time you go
on leave.
$100,000 Exercise Limitation. The total value of all of your
Chips' incentive stock options (including this option) which are
exercisable for the first time during 19_____ (the value is
determined at the time each option was granted) shall not exceed
one hundred thousand dollars ($100,000). Such limitation on
exercise shall be referred to in this Agreement as the "$100,000
Exercise Limitation." If compliance with the $100,000 Exercise
Limitation will prevent you from exercising the option for any
vested shares for more than thirty (30) days after the vesting
date for such shares, the option shall be deemed to be two (2)
options. The first option shall be for the maximum number of
shares that can comply with the $100,000 Exercise Limitation
without preventing the option from being exercisable as to vested
shares. The second option, which shall not be treated as an
incentive stock option, shall be for the balance of the shares
subject to the option and shall be exercisable on the same terms
and at the same time as set forth in this Agreement. Unless
otherwise specified in your notice of exercise, the first option
shall be deemed to be exercised first and then the second option
shall be deemed to be exercised.
Right of Repurchase. You can buy shares that have not yet
vested. The number of shares you buy over and above your vested
shares are "unvested shares." They may not be sold or otherwise
transferred until they become vested.
If your employment with Chips (or a parent corporation or
subsidiary corporation of Chips) terminates for any reason, with
or without cause while you are holding unvested shares, or if you
or your legal representative attempts to sell, exchange,
transfer, pledge, or otherwise dispose of any unvested shares
(other than pursuant to an "ownership change" as defined below),
Chips may buy those unvested shares back from you at the option
price you originally paid. If Chips wishes to exercise its right
to repurchase the unvested shares, it must give you notice within
60 days after (i) the termination of your employment, or exercise
of the option, if later, or (ii) Chips has received notice of the
attempted disposition. Chips must exercise its right to
repurchase the unvested shares, if at all, for all of the
unvested shares, except as Chips and you otherwise agree.
However, Chips will not repurchase your unvested shares if you
transfer your unvested shares to your ancestors, descendants, or
spouse or to a trustee for their benefit, provided that the
transferee agrees in writing to take the shares subject to Chips'
right of repurchase. In the event Chips is unable to exercise
the right of repurchase under the provisions of Section 160 of
the Delaware General Corporation Law, or the corresponding
provisions of other applicable law, Chips has the right to assign
the right of repurchase to one or more persons as may be selected
by Chips' Board of Directors. To ensure that the unvested shares
will be available for repurchase, you are required to deposit the
certificate for the shares with an escrow
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agent designated by Chips under the terms and conditions of an
escrow agreement approved by Chips. If Chips exercises its right
to repurchase your unvested shares, payment by Chips to the
escrow agent on behalf of you or your legal representative will
be made in cash within 60 days after the date of the mailing of
the written notice. For purposes of this payment, cancellation
of any outstanding promissory note that you have previously
delivered to Chips will be treated as payment in cash to the
extent of the unpaid principal and any accrued interest canceled.
Within 30 days after payment by Chips, the escrow agent will give
the shares which Chips has purchased to Chips and give the
payment received from Chips to you.
The certificates for unvested shares have stamped on them a
special legend referring to Chips' right of repurchase. As your
vesting percentage increases, you may request, at reasonable
intervals, that Chips exchange those legended shares which have
vested for shares that are freely transferable.
Transfer of Control. The following events constitute an
"ownership change" of Chips: (1) the direct or indirect sale or
exchange by Chips' stockholders of all or substantially all of
Chips' stock; (2) a merger in which Chips is a party; or (3) the
sale, exchange, or transfer of all or substantially all of Chips'
assets (other than a sale, exchange, or transfer to one or more
corporations where Chips' stockholders before such sale,
exchange, or transfer retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the
corporation(s) to which the assets were transferred).
A "transfer of control" of Chips means an ownership change in
which Chips' stockholders before such ownership change do not
retain, directly or indirectly, at least a majority of the
beneficial interest in Chips' voting stock. In the event of a
transfer of control, all shares acquired upon exercise of your
option shall become vested shares effective 30 days prior to the
transfer of control, unless the Chips' Board of Directors
arranges with the surviving, continuing, successor, or purchasing
corporation, as the case may be, for such corporation to assume
Chips' rights and obligations under this Agreement or substitute
its own option for your Chips' option. Your option will
terminate effective as of the date of the transfer of control to
the extent that your option is neither exercised as of the date
of the transfer of control nor assumed by the surviving,
continuing, successor, or purchasing corporation, as the case may
be.
Regular Termination. If your employment with Chips (or a parent
corporation or subsidiary corporation of Chips) terminates for
any reason, with or without cause, your option, to the extent
unexercised, may be exercised (to purchase vested shares only)
within 30 days after the date of your termination.
Restrictions on Resale: General. You may not sell shares that
you acquire by exercising your option at any time you are in
possession of material inside information concerning Chips. In
addition, sales of shares that you acquire by exercising your
option will be governed by Chips' employee trading policy, as in
effect at the time of the proposed sale.
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Restrictions on Resale: Officers. If you are an officer of
Chips, shares that you acquire by exercising your option may only
be sold during the officers' trading restriction period. This
period commences on the third business day following the release
of quarterly financial results and ends twenty-one days
thereafter, unless extended by Chips' President or Chief
Financial Officer.
Notice of Exercise. When you wish to exercise your option, you
must send an executed Notice of Exercise to:
Chips and Technologies, Inc.
2950 Zanker Road
San Jose, California 95134
Attn: Financial Services 1-7
Your notice must specify how many whole shares you wish to
purchase, and must contain such representations and agreements as
to your investment intent with respect to the shares as may be
required by Chips. Your notice must be delivered in person or by
certified mail to Chips' Stock Administrator prior to the
expiration date of the term of the Option, accompanied by an
executed copy of the then current form of escrow instructions, if
you are exercising your option for unvested shares, and full
payment of the option price for the number of shares being
purchased. The Notice of Exercise is effective when it is
received by Chips. Chips will not be required to issue
fractional shares upon the exercise of your option.
Form of Payment. When you submit your Notice of Exercise, you
must include payment of the option price for the number of shares
you are purchasing. Payment may be made in one (or a combination
of two or more) of the following forms:
- - Your personal check, a cashier's check, or a money order;
- - Irrevocable directions to a securities broker approved by
Chips to sell your option shares and to deliver all or a portion
of the sale proceeds to Chips in payment of the option price.
(The balance of the sales proceeds, if any, will be delivered to
you.) The directions must be given by signing a form provided by
Chips.
Withholding Taxes. In order to exercise your option, you must
make arrangements to pay any federal and state withholding taxes
that may be due as a result of the option exercise. In the
future, at any time requested by Chips, you must make
arrangements to pay any federal or state withholding taxes that
may be due as a result of any transfer of any shares acquired on
exercise of your option, the operation of any federal or state
law providing for the imputation of interest, or the lapse of any
restriction with respect to any shares acquired on exercise of
your option.
Certificate Registration. The certificate or certificates issued
upon the exercise of your option will be registered in your name.
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Restriction on Grant of Option and Issuance of Shares. The grant
of your option and the issuance of shares upon the exercise of
the option are subject to compliance with all applicable
requirements of federal or state law with respect to such
securities. Your option may not be exercised if the issuance of
shares upon such exercise would constitute a violation of any
applicable federal or state securities law or other law or
regulations. As a condition to the exercise of your option,
Chips may require you to make any representation or warranty to
Chips as may be necessary or appropriate to evidence compliance
with any applicable law or regulation. Chips may place legends
on the certificates for your option shares referring to any
applicable federal or state securities law restrictions.
Restriction on Issuance of Shares to Section 16 Insiders. In the
event that the adoption of any amendment of the Plan is subject
to the approval of Chips' stockholders in order for the option
to comply with the requirements of Rule 16b-3, promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the option shall not be exercisable prior to such
stockholder approval if you are subject to Section 16(b) of the
Exchange Act, unless the Board, in its sole discretion, approves
the exercise of the option prior to such stockholder approval.
Transfer of Option. Prior to your death, only you may exercise
your option, and you cannot transfer or assign your option.
However, you may dispose of your option in your will.
Regardless of any marital property settlement agreement, Chips is
not obligated to honor a Notice of Exercise from your former
spouse, nor is Chips obligated to recognize your former spouse's
interest in your option in any other way.
Changes in Stock Subject to the Option. Appropriate adjustments
shall be made in the number, exercise price and class of shares
of stock subject to the option in the event of a stock dividend,
stock split, reverse stock split, combination, reclassification
or like change in the capital structure of Chips.
In the event of any such change in the capital structure of
Chips, any and all new substituted or additional securities to
which you are entitled by reason of your ownership of the shares
acquired upon exercise of your option will be immediately subject
to Chips' right of repurchase with the same force and effect as
the shares subject to the right of repurchase immediately before
such event (see Right of Repurchase above).
Employee Rights. Your option or this Agreement do not give you
the right to be retained as an employee by Chips (or a parent
corporation or subsidiary corporation of Chips). Chips reserves
the right to terminate your employment at any time, with or
without cause.
Stockholder Rights. You, or your estate or heirs, have no rights
as a stockholder of Chips until a certificate for your option
shares has been issued. No adjustments are
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made for dividends or other rights if the applicable record date
occurs prior to the date your stock certificate is issued, except
in the event of a change in the stock subject to the option as
described above.
Applicable Law. This Agreement will be interpreted and enforced
under the laws of the State of California.
Other Agreements. The text of the Plan is incorporated in this
Agreement by reference. This Agreement and the Plan constitute
the entire understanding between you and Chips regarding your
option. Any prior agreements, understandings, commitments, or
negotiations concerning your option are superseded.
Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
Amendment. Chips may at any time amend or terminate the Plan
and/or your option. However, no amendment or termination may
adversely affect your option without your consent, unless such
amendment is necessary in order to enable the option to qualify
as an incentive stock option.
Time of Expiration. Whenever there is a reference in this
Agreement to a date when your option expires, the option will
expire on that date at 5:00 p.m. local time in San Jose,
California.
By signing this Agreement, you agree to all of the terms and
conditions described above and in the Plan, including Chips'
right to repurchase unvested shares.
CHIPS AND TECHNOLOGIES, INC.
By: ______________________________
Optionee: ______________________________
14
EXHIBIT B
NONQUALIFIED STOCK OPTION AGREEMENT
Between
CHIPS AND TECHNOLOGIES, INC.
and
__________________________
You have been granted an option under the Amended and Restated
Chips and Technologies, Inc. 1994 Stock Option Plan (the "Plan").
This Agreement describes the terms and conditions of your option
(the "Agreement").
Number of Shares. Your option is for __________ shares of the
common stock of Chips and Technologies, Inc., a Delaware
corporation ("Chips").
Option Price. You may purchase your option shares for
$__________ per share, which was the closing price of the common
stock of Chips on __________, 199____.
Type of Option. This option is intended to be a nonqualified
stock option and will not be treated as an incentive stock option
as provided in section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
Grant Date. The "Grant Date" of your option is __________,
19_____. This is the date the Board of Directors of Chips
approved your option grant.
Initial Vesting Date. The "Initial Vesting Date" of your option
is __________, 19_____. This is the date your option begins to
vest.
Exercisability. You may exercise your option immediately in its
entirety after the Grant Date. However, if you buy unvested
option shares, they may not be sold or otherwise transferred
until they become vested (see Right of Repurchase below).
Term. Your option will expire on __________, 19_____, unless
your employment or service with Chips (or a parent corporation or
subsidiary corporation of Chips as defined in section 424 of the
Code) is terminated as explained below, or unless Chips is
involved in a "transfer of control" transaction as explained
below.
Vesting of Option. On the Initial Vesting Date, __________ of
the option shares will be vested. Thereafter, 1/48 of the option
shares will vest for each full month of your continuous
employment or service with Chips (or a parent or subsidiary
corporation of Chips) from the Initial Vesting Date. Your option
stops vesting when your employment or service with Chips (or a
parent corporation or subsidiary corporation of Chips)
15
terminates. Vesting during an approved leave of absence is
governed by the applicable Leave of Absence Policy in effect at
the time you go on leave.
Right of Repurchase. You can buy shares that have not yet
vested. The number of shares you buy over and above your vested
shares are "unvested shares." They may not be sold or otherwise
transferred until they become vested.
If your employment or service with Chips (or a parent corporation
or subsidiary corporation of Chips) terminates for any reason,
with or without cause while you are holding unvested shares, or
if you or your legal representative attempts to sell, exchange,
transfer, pledge, or otherwise dispose of any unvested shares
(other than pursuant to an "ownership change" as defined below),
Chips may buy those unvested shares back from you at the option
price you originally paid. If Chips wishes to exercise its
right to repurchase the unvested shares, it must give you notice
within 60 days after (i) the termination of your employment or
service, or exercise of the option, if later, or (ii) Chips has
received notice of the attempted disposition. Chips must
exercise its right to repurchase the unvested shares, if at all,
for all of the unvested shares, except as Chips and you otherwise
agree. However, Chips will not repurchase your unvested shares
if you transfer your unvested shares to your ancestors,
descendants, or spouse or to a trustee for their benefit,
provided that the transferee agrees in writing to take the shares
subject to Chips' right of repurchase. In the event Chips is
unable to exercise the right of repurchase under the provisions
of Section 160 of the Delaware General Corporation Law, or the
corresponding provisions of other applicable law, Chips has the
right to assign the right of repurchase to one or more persons as
may be selected by Chips' Board of Directors.
To ensure that the unvested shares will be available for
repurchase, you are required to deposit the certificate for the
shares with an escrow agent designated by Chips under the terms
and conditions of an escrow agreement approved by Chips.
If Chips exercises its right to repurchase your unvested shares,
payment by Chips to the escrow agent on behalf of you or your
legal representative will be made in cash within 60 days after
the date of the mailing of the written notice. For purposes of
this payment, cancellation of any outstanding promissory note
that you have previously delivered to Chips will be treated as
payment in cash to the extent of the unpaid principal and any
accrued interest canceled. Within 30 days after payment by
Chips, the escrow agent will give the shares which Chips has
purchased to Chips and give the payment received from Chips to
you.
The certificates for unvested shares have stamped on them a
special legend referring to Chips' right of repurchase. As your
vesting percentage increases, you may request, at reasonable
intervals, that Chips exchange those legended shares which have
vested for shares that are freely transferable.
Transfer of Control. The following events constitute an
"ownership change" of Chips: (1) the direct or indirect sale or
exchange by Chips' stockholders of all or substantially
16
all of Chips' stock; (2) a merger in which Chips is a party; or
(3) the sale, exchange, or transfer of all or substantially all
of Chips' assets (other than a sale, exchange, or transfer to one
or more corporations where Chips' stockholders before such sale,
exchange, or transfer retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the
corporation(s) to which the assets were transferred).
A "transfer of control" of Chips means an ownership change in
which Chips' stockholders before such ownership change do not
retain, directly or indirectly, at least a majority of the
beneficial interest in Chips' voting stock.
In the event of a transfer of control, all shares acquired upon
exercise of your option shall become vested shares effective 30
days prior to the transfer of control, unless the Chips' Board of
Directors arranges with the surviving, continuing, successor, or
purchasing corporation, as the case may be, for such corporation
to assume Chips' rights and obligations under this Agreement or
substitute its own option for your Chips' option. Your option
will terminate effective as of the date of the transfer of
control to the extent that your option is neither exercised as of
the date of the transfer of control nor assumed by the surviving,
continuing, successor, or purchasing corporation, as the case may
be.
Regular Termination. If your employment or service with Chips
(or a parent corporation or subsidiary corporation of Chips)
terminates for any reason, with or without cause, your option, to
the extent unexercised, may be exercised (to purchase vested
shares only) within 30 days after the date of your termination.
Restrictions on Resale: General. You may not sell shares that
you acquire by exercising your option at any time you are in
possession of material inside information concerning Chips. In
addition, sales of shares that you acquire by exercising your
option will be governed by Chips' employee trading policy, as in
effect at the time of the proposed sale.
Restrictions on Resale: Officers. If you are an officer of
Chips, shares that you acquire by exercising your option may only
be sold during the officers' trading restriction period. This
period commences on the third business day following the release
of quarterly financial results and ends twenty-one days
thereafter, unless extended by Chips' President or Chief
Financial Officer.
Notice of Exercise. When you wish to exercise your option, you
must send an executed Notice of Exercise to:
Chips and Technologies, Inc.
2950 Zanker Road
San Jose, California 95134
Attn: Financial Services 1-7
17
Your notice must specify how many whole shares you wish to
purchase, and must contain such representations and agreements as
to your investment intent with respect to the shares as may be
required by Chips. Your notice must be delivered in person or by
certified mail to Chips' Stock Administrator prior to the
expiration date of the term of the Option, accompanied by an
executed copy of the then current form of escrow instructions, if
you are exercising your option for unvested shares, and full
payment of the option price for the number of shares being
purchased. The Notice of Exercise is effective when it is
received by Chips. Chips will not be required to issue
fractional shares upon the exercise of your option.
Form of Payment. When you submit your Notice of Exercise, you
must include payment of the option price for the number of shares
you are purchasing. Payment may be made in one (or a combination
of two or more) of the following forms:
- - Your personal check, a cashier's check, or a money order;
- - Irrevocable directions to a securities broker approved by
Chips to sell your option shares and to deliver all or a portion
of the sale proceeds to Chips in payment of the option price.
(The balance of the sales proceeds, if any, will be delivered to
you.) The directions must be given by signing a form provided by
Chips.
Withholding Taxes. In order to exercise your option, you must
make arrangements to pay any federal and state withholding taxes
that may be due as a result of the option exercise. In the
future, at any time requested by Chips, you must make
arrangements to pay any federal or state withholding taxes that
may be due as a result of any transfer of any shares acquired on
exercise of your option, the operation of any federal or state
law providing for the imputation of interest, or the lapse of any
restriction with respect to any shares acquired on exercise of
your option.
Certificate Registration. The certificate or certificates issued
upon the exercise of your option will be registered in your name.
Restriction on Grant of Option and Issuance of Shares. The grant
of your option and the issuance of shares upon the exercise of
the option are subject to compliance with all applicable
requirements of federal or state law with respect to such
securities. Your option may not be exercised if the issuance of
shares upon such exercise would constitute a violation of any
applicable federal or state securities law or other law or
regulations.
As a condition to the exercise of your option, Chips may require
you to make any representation or warranty to Chips as may be
necessary or appropriate to evidence compliance with any
applicable law or regulation. Chips may place legends on the
certificates for your option shares referring to any applicable
federal or state securities law restrictions.
Restriction on Issuance of Shares to Section 16 Insiders. In the
event that the adoption of any amendment of the Plan is subject
to the approval of Chips' stockholders in order for the option to
comply with the requirements of Rule 16b-3, promulgated under the
18
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
the option shall not be exercisable prior to such stockholder
approval if you are subject to Section 16(b) of the Exchange Act,
unless the Board, in its sole discretion, approves the exercise
of the option prior to such stockholder approval.
Transfer of Option. Prior to your death, only you may exercise
your option, and you cannot transfer or assign your option.
However, you may dispose of your option in your will.
Regardless of any marital property settlement agreement, Chips is
not obligated to honor a Notice of Exercise from your former
spouse, nor is Chips obligated to recognize your former spouse's
interest in your option in any other way.
Changes in Stock Subject to the Option. Appropriate adjustments
shall be made in the number, exercise price and class of shares
of stock subject to the option in the event of a stock dividend,
stock split, reverse stock split, combination, reclassification
or like change in the capital structure of Chips.
In the event of any such change in the capital structure of
Chips, any and all new substituted or additional securities to
which you are entitled by reason of your ownership of the shares
acquired upon exercise of your option will be immediately subject
to Chips' right of repurchase with the same force and effect as
the shares subject to the right of repurchase immediately before
such event (see Right of Repurchase above).
Employee Rights. Your option or this Agreement do not give you
the right to be retained as an employee by Chips (or a parent
corporation or subsidiary corporation of Chips). Chips reserves
the right to terminate your employment at any time, with or
without cause.
Stockholder Rights. You, or your estate or heirs, have no rights
as a stockholder of Chips until a certificate for your option
shares has been issued. No adjustments are made for dividends or
other rights if the applicable record date occurs prior to the
date your stock certificate is issued, except in the event of a
change in the stock subject to the option as described above.
Applicable Law. This Agreement will be interpreted and enforced
under the laws of the State of California.
Other Agreements. The text of the Plan is incorporated in this
Agreement by reference. This Agreement and the Plan constitute
the entire understanding between you and Chips regarding your
option. Any prior agreements, understandings, commitments, or
negotiations concerning your option are superseded.
19
Binding Effect. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
Amendment. Chips may at any time amend or terminate the Plan
and/or your option. However, no amendment or termination may
adversely affect your option without your consent.
Time of Expiration. Whenever there is a reference in this
Agreement to a date when your option expires, the option will
expire on that date at 5:00 p.m. local time in San Jose,
California.
By signing this Agreement, you agree to all of the terms and
conditions described above and in the Plan, including Chips'
right to repurchase unvested shares.
CHIPS AND TECHNOLOGIES, INC.
By: ______________________________
Optionee: ______________________________