INTEGRATED DEVICE TECHNOLOGY, INC.
1997 STOCK OPTION PLAN
As Adopted October 30, 1997
1. PURPOSE. The purpose of the Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company, its Parent,
Subsidiaries and Affiliates, by offering them an opportunity to participate in
the Company's future performance through awards of stock options. Capitalized
terms not defined in the text are defined in Section 19.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2
and 14, the total number of Shares reserved and available for grant and issuance
pursuant to Awards under the Plan shall be 2,500,000 Shares. Subject to Sections
2.2 and 14, Shares that are subject to issuance upon exercise of an Award but
cease to be subject to such Award for any reason other than exercise of such
Award will again be available for grant and issuance under this Plan.
2.2 Adjustment of Shares. In the event that the number
of outstanding Shares is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration, or
by a Corporate Transaction (as defined in Section 14.1) then, unless such change
results in the termination of all outstanding Awards as a result of the
Corporate Transaction, (a) the number of Shares reserved for issuance under the
Plan and (b) the Exercise Prices of and number of Shares subject to outstanding
Awards shall be proportionately adjusted, subject to any required action by the
Board or the stockholders of the Company and compliance with applicable
securities laws; provided, however, that fractions of a Share shall not be
issued but shall either be paid in cash at Fair Market Value or shall be rounded
up to the nearest Share, as determined by the Committee; and provided, further,
that the Exercise Price of any Award may not be decreased to below the par value
of the Shares.
3. ELIGIBILITY. All Awards issued under the Plan shall be
Nonqualified Stock Options. Awards may be granted to employees, consultants,
independent contractors and advisors of the Company or any Parent, Subsidiary or
Affiliate of the Company; provided that such employees, consultants, independent
contractors and advisors are not officers or directors of the Company or any
Parent, Subsidiary of Affiliate of the Company who are subject to Section 16 of
the Securities Exchange Act of 1934; and provided further that such consultants,
contractors and advisors render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction. A person may be
granted more than one Award under the Plan. Each person is eligible to receive
up to an aggregate maximum of 100,000 Shares per fiscal year.
4. ADMINISTRATION.
4.1 Committee Authority. The Plan shall be administered
by the Committee. Subject to the general purposes, terms and conditions of the
Plan, the Committee shall have full power to implement and carry out the Plan.
The Committee shall have the authority to:
(a) construe and interpret the Plan, any Stock Option
Agreement and any other agreement or document executed
pursuant to the Plan;
(b) prescribe, amend and rescind rules and regulations
relating to the Plan;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares subject to Awards;
(f) determine whether Awards will be granted in replacement
of, or as alternatives to, other Awards under the Plan
or any other incentive or compensation plan of the
Company or any Parent, Subsidiary or Affiliate of the
Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting and exercisability of Awards;
(i) correct any defect, supply any omission, or reconcile
any inconsistency in the Plan, any Award or any Stock
Option Agreement;
(j) determine the disposition of Awards in the event of a
Participant's divorce or dissolution of marriage; and
(k) make all other determinations necessary or advisable
for the administration of the Plan.
4.2 Committee Discretion. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award under the
Plan. The Committee may delegate to one or more officers of the Company the
authority to grant an Award under the Plan to Participants who are not Insiders
of the Company.
5. STOCK OPTIONS. The Committee may grant Awards to eligible
persons and shall determine the number of Shares subject to the Award, the
Exercise Price of the Award, the period during which the Award may be exercised,
and all other terms and conditions of the Award, subject to the following:
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5.1 Form of Option Grant. Each Award granted under the
Plan shall be evidenced by a Stock Option Agreement and shall be in such form
and contain such provisions (which need not be the same for each Participant) as
the Committee shall from time to time approve, and which shall comply with and
be subject to the terms and conditions of the Plan.
5.2 Date of Grant. The date of grant of an Award shall
be the date on which the Committee makes the determination to grant such Award,
unless otherwise specified by the Committee. The Stock Option Agreement and a
copy of the Plan will be delivered to the Participant within a reasonable time
after the granting of the Award.
5.3 Exercise Period. Awards shall be exercisable within
the times or upon the events determined by the Committee as set forth in the
Stock Option Agreement; provided, however, that no Award shall be exercisable
after the expiration of ten (10) years from the date the Award is granted. The
Committee also may provide for the exercise of Awards to become exercisable at
one time or from time to time, periodically or otherwise, in such number or
percentage as the Committee determines.
5.4 Exercise Price. The Exercise Price shall be
determined by the Committee when the Award is granted and shall be not less than
100% of the Fair Market Value of the Shares on the date of grant.
5.5 Method of Exercise. Awards may be exercised only by
delivery to the Company of a written exercise agreement (the "Exercise
Agreement") in a form approved by the Committee (which need not be the same for
each Participant), stating the number of Shares being purchased, the
restrictions imposed on the Shares, if any, and such representations and
agreements regarding Participant's investment intent and access to information
and other matters, if any, as may be required or desirable by the Company to
comply with applicable securities laws, together with payment in full of the
Exercise Price for the number of Shares being purchased.
5.6 Termination. Notwithstanding the exercise periods
set forth in the Stock Option Agreement, exercise of an Award shall always be
subject to the following:
(a) If the Participant is Terminated for any reason except
death or Disability, then Participant may exercise such
Participant's Awards only to the extent that such
Awards would have been exercisable upon the Termination
Date no later than three (3) months after the
Termination Date (or such longer time period not
exceeding five years as may be determined by the
Committee), but in any event, no later than the
expiration date of the Awards.
(b) If the Participant is terminated because of death or
Disability (or the Participant dies within three months
of such termination), then Participant's Awards would
have been exercisable by Participant on the Termination
Date and must be exercised by Participant (or
Participant's legal representative or authorized
assignee) no later than (i)
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twelve (12) months after the Termination Date in the
case of disability or (ii) eighteen (18) months after
the Termination Date in the case of death (or such
longer time period not exceeding five years as may be
determined by the Committee), but in any event no later
than the expiration date of the Awards.
5.7 Limitations on Exercise. The Committee may specify
a reasonable minimum number of Shares that may be purchased on any exercise of
an Award; provided that such minimum number will not prevent Participant from
exercising the Award for the full number of Shares for which it is then
exercisable.
5.8 Modification, Extension or Renewal. The Committee
may modify, extend or renew outstanding Awards and authorize the grant of new
Awards in substitution therefor; provided that any such action may not, without
the written consent of Participant, impair any of Participant's rights under any
Award previously granted. The Committee may reduce the Exercise Price of
outstanding Awards without the consent of Participants affected by a written
notice to them; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.4 of
the Plan for Awards granted on the date the action is taken to reduce the
Exercise Price; and provided, further, that the Exercise Price shall not be
reduced below the par value of the Shares, if any.
6. PAYMENT FOR SHARE PURCHASES. Payment for Shares purchased
pursuant to the Plan may be made in cash (by check) or, where expressly approved
for the Participant by the Committee and where permitted by law:
(a) by surrender of Shares that either: (1) have been owned
by Participant for more than six (6) months and have
been paid for within the meaning of SEC Rule 144 (and,
if such shares were purchased from the Company by use
of a promissory note, such note has been fully paid
with respect to such Shares); or (2) were obtained by
Participant in the public market;
(b) by waiver of compensation due or accrued to Participant
for services rendered;
(c) provided that a public market for the Company's stock
exists:
(1) through a "same day sale" commitment from
Participant and a broker-dealer that is a
member of the National Association of
Securities Dealers (a "NASD Dealer") whereby
the Participant irrevocably elects to exercise
the Award and to sell a portion of the Shares
so purchased in order to pay for the Exercise
Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or
(2) through a "margin" commitment from Participant
and a NASD Dealer whereby Participant
irrevocably elects to exercise the Award and
to pledge the Shares so
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purchased to the NASD Dealer in a margin
account as security for a loan from the NASD
Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward
the exercise price directly to the Company; or
(d) by any combination of the foregoing.
7. WITHHOLDING TAXES.
7.1 Withholding Generally. Whenever Shares are to be
issued in satisfaction of Awards granted under the Plan, the Company may require
the Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under the Plan, payments
in satisfaction of Awards are to be made in cash, such payment shall be net of
an amount sufficient to satisfy federal, state, and local withholding tax
requirements.
7.2 Stock Withholding. When, under applicable tax laws,
a Participant incurs tax liability in connection with the exercise of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may allow the
Participant to satisfy the minimum withholding tax obligation by electing to
have the Company withhold from the Shares to be issued that number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose shall be made in writing in a form acceptable to the Committee.
8. PRIVILEGES OF STOCK OWNERSHIP.
8.1 Voting and Dividends. No Participant shall have any
of the rights of a stockholder with respect to any Shares until the Shares are
issued to the Participant. After Shares are issued to the Participant, the
Participant shall be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares.
8.2 Financial Statements. The Company shall provide
financial statements to each Participant prior to such Participant's purchase of
Shares under the Plan, and to each Participant annually during the period such
Participant has Awards outstanding; provided, however, the Company shall not be
required to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
9. TRANSFERABILITY. Subject to Section 4.1(j), Awards granted
under the Plan, and any interest therein, shall not: (a) be transferable or
assignable by the Participant, (b) be made subject to execution, attachment or
similar process, otherwise than by will or by the laws of descent and
distribution or as consistent with the specific Plan and Stock Option Agreement
provisions relating thereto or (c) during the lifetime of the
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Participant, be exercisable by anyone other than the Participant, and any
elections with respect to an Award, may be made only by the Participant.
10. CERTIFICATES. All certificates for Shares or other
securities delivered under the Plan shall be subject to such stock transfer
orders, legends and other restrictions as the Committee may deem necessary or
advisable, including restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be
listed.
11. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award
shall not be effective unless such Award is in compliance with all applicable
federal and state securities laws, rules and regulations of any governmental
body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed, as they are in effect on the date of
grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in the Plan, the Company shall have no
obligation to issue or deliver certificates for Shares under the Plan prior to
(a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (b) completion of any registration
or other qualification of such shares under any state or federal law or ruling
of any governmental body that the Company determines to be necessary or
advisable. The Company shall be under no obligation to register the Shares with
the SEC or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated quotation
system, and the Company shall have no liability for any inability or failure to
do so.
12. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award
granted under the Plan shall confer or be deemed to confer on any Participant
any right to continue in the employ of, or to continue any other relationship
with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit
in any way the right of the Company or any Parent, Subsidiary or Affiliate of
the Company to terminate Participant's employment or other relationship at any
time, with or without cause.
13. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any
time or from time to time, authorize the Company, with the consent of the
respective Participants, to issue new Awards in exchange for the surrender and
cancellation of any or all outstanding Awards. The Committee may at any time buy
from a Participant an Award previously granted with payment in cash, Shares or
other consideration, based on such terms and conditions as the Committee and the
Participant shall agree.
14. CORPORATE TRANSACTIONS.
14.1 Corporate Transactions. In the event of a
Corporate Transaction (as defined in this Section 14.1), the exercisability of
each Award shall be automatically accelerated so that each Award shall,
immediately before the specified effective date for the Corporate Transaction,
become fully exercisable with respect to the total number of Shares and may be
exercised for all or any portion of such Shares; provided, that an Award shall
not be accelerated if and to the extent that such Award is, in connection with
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the Corporate Transaction, either to be assumed by the successor corporation or
parent thereof or to be replaced with a comparable option to purchase shares of
the capital stock of the successor corporation or parent thereof. The
determination of comparability shall be made by the Committee, and the
Committee's determination shall be final, binding and conclusive. Upon the
consummation of a Corporate Transaction, all outstanding Awards shall, to the
extent not previously exercised or assumed by the successor corporation or its
parent, terminate and cease to be exercisable.
"Corporate Transaction" means (a) a merger
or acquisition in which the Company is not the surviving entity (except for a
transaction the principal purpose of which is to change the State in which the
Company is incorporated), (b) the sale, transfer or other disposition of all or
substantially all of the assets of the Company or (c) any other corporate
reorganization or business combination that is not approved by the Board and in
which the beneficial ownership of 50% or more of the Company's outstanding
voting stock is transferred.
14.2 Change in Control. Notwithstanding any provision
in Section 14.1 to the contrary, in the event of a Change in Control (as defined
in this Section 14.2), each Award shall automatically accelerate effective
fifteen (15) days following the effective date of the Change in Control, so that
each Award shall become fully exercisable with respect to the total number of
Shares and may be exercised for all or any portion of such Shares. Upon a Change
in Control, all outstanding Awards accelerated shall remain fully exercisable
until the expiration or sooner termination of the Award term specified in the
Stock Option Agreement.
A "Change in Control" shall be deemed to
occur: (a) should a person or related group of persons, other than the Company
or a person that directly or indirectly controls, is controlled by or is under
common control with the Company, becomes the beneficial owner (within the
meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange
Act) of 25% or more of the Company's outstanding voting stock pursuant to a
tender or exchange offer that the Board does not recommend and that the
stockholders of the Company accept; or (b) on the first date within any period
of twenty-four (24) consecutive months or less on which there is effected a
change in the composition of the Board by reason of a contested election such
that a majority of the Board members cease to be comprised of individuals who
either (i) have been members of the Board continuously since the beginning of
such period or (ii) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (i) who were still in office at the time such election or nomination was
approved by the Board.
14.3 Dissolution. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify the
Participant at least fifteen (15) days prior to such proposed action. To the
extent that Awards have not been previously exercised, such Awards will
terminate immediately prior to the consummation of such proposed action.
14.4 Assumption of Awards by the Company. The Company,
from time to time, also may substitute or assume outstanding awards granted by
another company, whether in connection with an acquisition of such other
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company or otherwise, by either (a) granting an Award under the Plan in
substitution of such other company's award, or (b) assuming such award as if it
had been granted under the Plan if the terms of such assumed award could be
applied to an Award granted under the Plan. Such substitution or assumption
shall be permissible if the holder of the substituted or assumed award would
have been eligible to be granted an Award under the Plan if the other company
had applied the rules of the Plan to such grant. In the event the Company
assumes an award granted by another company, the terms and conditions of such
award shall remain unchanged (except that the exercise price and the number and
nature of Shares issuable upon exercise of any such option will be adjusted
appropriately pursuant to Section 424(a) of the Code). In the event the Company
elects to grant a new Award rather than assuming an existing option, such new
Award may be granted with a similarly adjusted Exercise Price.
15. ADOPTION AND STOCKHOLDER APPROVAL. The Plan shall become
effective on the date that it is adopted by the Board (the "Effective Date").
16. TERM OF PLAN. Unless earlier terminated as provided herein,
the Plan will terminate ten (10) years from the Effective Date.
17. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time
terminate or amend the Plan in any respect, including without limitation
amendment of any form of Stock Option Agreement or instrument to be executed
pursuant to the Plan, provided, however, that no amendment may be made to
outstanding Awards without the consent of the Participant.
18. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan
by the Board, nor any provision of the Plan, shall be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either generally applicable or applicable only in specific cases.
19. DEFINITIONS. As used in the Plan, the following terms shall
have the following meanings:
"Affiliate" means any corporation that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with the Company where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation, whether through the ownership of voting securities, by contract
or otherwise.
"Award" means an award of a nonqualified stock option
to purchase Shares.
"Stock Option Agreement" means, with respect to each
Award, the signed written agreement between the Company and the Participant
setting forth the terms and conditions of the Award.
"Board" means the Board of Directors of the Company.
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"Code" means the Internal Revenue Code of 1986, as
amended.
"Committee" means the committee appointed by the Board
to administer the Plan, or if no committee is appointed, the Board.
"Company" means Integrated Device Technology, Inc., a
corporation organized under the laws of the State of Delaware, or any successor
corporation.
"Disability" means a disability, whether temporary or
permanent, partial or total, within the meaning of Section 22(e)(3) of the Code,
as determined by the Committee.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Exercise Price" means the price at which a holder of
an Award may purchase the Shares issuable upon exercise of the Award.
"Fair Market Value" means the value of a share of the
Company's Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq
National Market the closing price on the Nasdaq
National Market System on the trading day immediately
preceeding the date on which Fair Market Value is
determined, or, if no such reported sale takes place on
such date, the closing price on the next preceding
trading date on which a reported sale occurred;
(b) if such Common Stock is publicly traded and is then
listed on a national securities exchange, the closing
price or, if no reported sale takes place on such date,
the closing price on the next preceding trading day on
which a reported sale occurred;
(c) if such Common Stock is publicly traded but is not
quoted on the Nasdaq National Market nor listed or
admitted to trading on a national securities exchange,
the average of the closing bid and asked prices on such
date, as reported by The Wall Street Journal, for the
over-the-counter market; or
(d) if none of the foregoing is applicable, by the Board in
good faith.
"Insider" means an officer or director of the Company
or any other person whose transactions in the Company's Common Stock are subject
to Section 16 of the Exchange Act.
"Parent" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if at the time of
the granting of an Award under the Plan, each of such corporations other than
the Company owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
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"Participant" means a person who receives an Award
under the Plan.
"Plan" means this Integrated Device Technology, Inc.
1997 Stock Option Plan, as amended from time-to-time.
"SEC" means the Securities and Exchange Commission.
"Shares" means shares of the Company's Common Stock
$0.001 par value, reserved for issuance under the Plan, as adjusted pursuant to
Sections 2 and 14, and any successor security.
"Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of granting of the Award, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
"Termination" or "Terminated" means, for purposes of
the Plan with respect to a Participant, that the Participant has ceased to
provide services as an employee, director, consultant, independent contractor or
adviser, to the Company or a Parent, Subsidiary or Affiliate of the Company,
except in the case of sick leave, military leave, or any other leave of absence
approved by the Committee; provided, that such leave is for a period of not more
than ninety (90) days, or reinstatement upon the expiration of such leave is
guaranteed by contract or statute. The Committee shall have sole discretion to
determine whether a Participant has ceased to provide services and the effective
date on which the Participant ceased to provide services (the "Termination
Date").
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