EXHIBIT 10.19
FORM OF 1996 NONSTATUTORY STOCK OPTION PLAN
TRIDENT MICROSYSTEMS, INC.
1996 NONSTATUTORY STOCK OPTION PLAN
(As Amended Through April 22, 2002)
1. Establishment and Purposes of Plan. The Trident Microsystems, Inc.
1996 Nonstatutory Stock Option Plan (the "Plan") is hereby established effective
as of January 17, 1996 (the "Effective Date"). The purposes of the Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to the Employees and Consultants
of the Company and to promote the success of the Company's business. Options
granted hereunder shall be only Nonstatutory Stock Options.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company. If a
Committee has been appointed by the Board to administer the Plan, "Board" shall
also mean such Committee.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan, if one is
appointed.
(d) "Common Stock" shall mean the Common Stock of the Company.
(e) "Company" shall mean Trident Microsystems, Inc., a Delaware
corporation.
(f) "Consultant" shall mean any person who is engaged by the Company
or any Parent or Subsidiary to render consulting services and is compensated for
such consulting services.
(g) "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Board; provided that such leave is for a period
of not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(h) "Employee" shall mean any person employed by the Company or any
Parent or Subsidiary of the Company.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(k) "Option" shall mean a stock option granted pursuant to the Plan.
(l) "Option Agreement" shall mean a written agreement between the
Company and an Optionee setting forth the terms, conditions and restrictions of
the Option granted to the Optionee and any shares acquired upon the exercise
thereof.
(m) "Optioned Stock" shall mean the Common Stock subject to an Option.
(n) "Optionee" shall mean an Employee or Consultant who receives an
Option.
(o) "Parent" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(p) "Plan" shall mean this 1996 Nonstatutory Stock Option Plan.
(q) "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(r) "Subsidiary" shall mean a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of shares may be issued under the Plan
shall be four million one hundred thousand (4,100,000) and shall consist of
authorized but unissued or reacquired shares of Common Stock or any combination
thereof.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. Notwithstanding any other provision of the Plan, shares
issued under the Plan and later repurchased by the Company shall not become
available for future grant or sale under the Plan.
4. Administration of the Plan.
(a) Procedure. The Plan shall be administered by the Board. The Board
may appoint a Committee consisting of not less than two members of the Board to
administer the Plan on behalf of the Board and to exercise any or all of the
powers set forth in paragraph (b), subject to such terms and conditions as the
Board may prescribe. From time to time the Board may increase the size of the
Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and thereafter directly
administer the Plan. The Board may delegate to the Chief Executive Officer the
authority to grant Options under the Plan; provided, however, that (i) the Chief
Executive Officer shall not grant an Option to himself or to any other person
subject to Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and (ii) the Chief Executive Officer shall not grant Options to
any one person for more than 30,000 shares without approval of the Board.
(b) Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to determine, upon review
of relevant information and in accordance with Section 8(b) of the Plan, the
fair market value of the Common Stock; (ii) to determine the exercise price per
share of Options to be granted, which exercise price shall be determined in
accordance with Section 8(a) of the Plan; (iii) to determine the Employees or
Consultants to whom, and the time or times at which, Options shall be granted
and the number of Shares to be represented by each Option; (iv) to interpret the
Plan; (v) to prescribe, amend and rescind rules and regulations relating to the
Plan; (vi) to determine the terms and provisions of each Option granted (which
need not be identical) and to modify or amend each Option including the exercise
price thereof; (vii) to accelerate or defer (with the consent of the Optionee)
the exercise date of any Option, consistent with the provisions of Section 5 of
the Plan; (viii) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted by
the Board; (ix) to determine the effect of the Optionee's termination of
employment or service on the Option; and (x) to make all other determinations
deemed necessary or advisable for the administration of the Plan.
(c) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
5. Eligibility.
(a) Options may be granted only to Employees and/or Consultants, who,
at the time an Option is granted to such person, is not an officer or a director
of the Company or any other person whose transactions in Common Stock are
subject to Section 16 of the Exchange Act. For purposes of the foregoing
sentence, "Employees" shall include prospective Employees to whom Options are
granted in connection with written offers of employment, and "Consultants" shall
include prospective Consultants to whom Options are granted in connection with
written
offers of engagement. An Employee or Consultant who has been granted an
Option may, if he is otherwise eligible, be granted an additional Option or
Options.
(b) The Plan shall not confer upon any Optionee any right with respect
to continuation of any employment or consulting relationship with the Company,
nor shall it interfere in any way with the Optionee's right or the Company's
right to terminate his employment or consulting relationship at any time, with
or without cause.
6. Term of Plan. The Plan shall continue in effect until the earlier of
its termination by the Board or the date on which all of the Shares available
for issuance under the Plan have been issued and all restrictions on such shares
under the terms of the Plan and the agreements evidencing Options granted under
the Plan have lapsed.
7. Term of Option. The term of each Option shall be ten (10) years from
the effective date of grant thereof or such shorter term as may be provided in
the Option Agreement.
8. Exercise Price and Forms of Payment.
(a) The per Share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be no less than 85% of the fair market value per Share on the effective
date of grant.
(b) The fair market value shall be determined by the Board in its
discretion; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be the mean of the bid and
asked prices (or the closing price per share if the Common Stock is listed on
the National Association of Securities Dealers Automated Quotation ("NASDAQ")
National Market System) of the Common Stock for the date of grant, as reported
in the Wall Street Journal (or, if not so reported, as otherwise reported by the
NASDAQ System) or, in the event the Common Stock is listed on a stock exchange,
the fair market value per Share shall be the closing price on such exchange on
the date of grant of the Option, as reported in the Wall Street Journal.
(c) Payment of the exercise price for the number of Shares 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 Common 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 exercise price, (iii) by the Optionee's promissory note in a form
approved by the Company, (iv) by the assignment of the proceeds of a sale or
loan with respect to some or all of the shares being acquired upon the exercise
of the 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) (a "Cashless Exercise"), or (v) by any
combination thereof. The Board may at any time or from time to time grant
Options which do not permit all of the foregoing forms of consideration to be
used in payment of the exercise price and/or which otherwise restrict one (1) or
more forms of consideration.
(i) Notwithstanding the foregoing, an Option may not be
exercised by tender to the Company of shares of Common Stock to the extent such
tender of Common Stock would constitute a violation of the provisions of any
law, regulation or agreement restricting the redemption of the Company's stock.
Unless otherwise provided by the Board, an Option may not be exercised by tender
to the Company of shares of Common Stock unless such shares either have been
owned by the Optionee for more than six (6) months or were not acquired,
directly or indirectly, from the Company.
(ii) No promissory note shall be permitted if the exercise of an
Option using a promissory note would be a violation of any law. Any permitted
promissory note shall be on such terms as the Board shall determine at the time
the Option is granted. 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 acquired upon the exercise of the Option or with other collateral
acceptable to the Company. Unless otherwise provided by the Board, if the
Company at any time is 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.
(iii) The Company reserves, at any and all times, the right, in
the Company's sole and absolute discretion, to establish, decline to approve or
terminate any program or procedures for the exercise of Options by means of a
Cashless Exercise.
9. Exercise of Option.
(a) Exercisability. Any Option granted hereunder shall be exercisable
at such times and under such conditions as determined by the Board, including
performance criteria with respect to the Company and/or the Optionee, and as
shall be permissible under the terms of the Plan. However, no Option granted to
a prospective Employee or prospective Consultant may become exercisable prior to
the date on which such person commences employment or service with the Company
or a Parent or Subsidiary.
(b) Procedure for Exercise; Rights as a Stockholder. An Option shall
be deemed to be exercised when written notice of such exercise has been given to
the Company in accordance with the terms of the Option by the person entitled to
exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company. Full payment may, as
authorized by the Board, consist of any consideration and method of payment
allowable under Section 8(c) of the Plan. Until the issuance (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such Shares,
no right to vote or receive dividends or any other rights as a stockholder shall
exist with respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Company shall issue (or cause to be issued) such stock certificate
promptly upon exercise of the Option. No adjustment will be made for a dividend
or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 11 of the Plan.
(c) Tax Withholding. The Company shall have the right, but not the
obligation, to deduct from the Shares issuable upon the exercise of an Option,
or to accept from the Optionee the tender of, a number of whole Shares having a
fair market value, as determined by the Company, equal to all or any part of the
federal, state, local and foreign taxes, if any, required by law to be withheld
by the Company or any Parent or Subsidiary with respect to such Option or the
Shares acquired upon the exercise thereof. Alternatively or in addition, in its
sole discretion, the Company shall have the right to require the Optionee,
through payroll withholding, cash payment or otherwise, to make adequate
provision for any such tax withholding obligations of the Company or any Parent
or Subsidiary arising in connection with the Option or the Shares acquired upon
the exercise thereof. The Company shall have no obligation to deliver Shares
until the such tax withholding obligations have been satisfied by the Optionee.
10. Nontransferability of Options. No Option may be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent and distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. Notwithstanding the foregoing, a
Nonstatutory Stock Option shall be assignable or transferable to the extent
permitted by the Board and set forth in the Nonstatutory Stock Option Agreement
evidencing such Option.
11. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, the number of shares of Common
Stock which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination, recapitalization or reclassification of the Common Stock, or any
other increase or decrease in the number of issued shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Board shall notify the Optionee at least fifteen (15) days prior to such
proposed action. To the extent it has not been previously exercised, the Option
will terminate immediately prior to the consummation of such proposed action. In
the event of a merger of the Company with or into another corporation, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation.
In the event that such successor corporation, parent or subsidiary does not
agree to assume the Option or to substitute an equivalent option, the Board
shall, in lieu of such assumption or substitution, provide for the Optionee to
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. If the Board
makes an Option fully exercisable in lieu of assumption or substitution in the
event of a merger, the Board shall notify the Optionee that the Option shall be
fully exercisable for a period of fifteen (15) days from the date of such
notice, and the Option will terminate upon the expiration of such period.
12. Time of Granting Options. The effective date of grant of an Option
shall for all purposes be, in the discretion of the Board, either (a) the date
on which the Board makes the determination granting such Option if an immediate
grant is intended or (b) a particular date determined by the Board if a grant is
intended to become effective on a subsequent date. Notice of the determination
shall be given to each Employee or Consultant to whom an Option is so granted
within a reasonable time after the date of such determination.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may amend or terminate the
Plan from time to time in such respects as the Board may deem advisable.
(b) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not adversely affect Options already granted,
unless mutually agreed otherwise between the Optionee and the Board, which
agreement must be in writing and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to satisfy any qualifications that may be
necessary or appropriate, to evidence compliance with any applicable law or
regulation, and to make any representation or warranty with respect thereto as
may be requested by the Company.
15. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
16. Option Agreements. Options shall be evidenced by written Option
Agreements in such form as the Board or the Committee shall approve.
17. Information to Optionees. The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are provided to all
stockholders of the Company. The Company shall not be required to provide such
information if the issuance of Options under the Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information.