EXHIBIT 10.6(b)
2001 INCENTIVE COMPENSATION PLAN
SYNAPTICS INCORPORATED
INCENTIVE STOCK OPTION AGREEMENT
1. Grant of Option. SYNAPTICS INCORPORATED (the "Company") hereby
grants, as of the date of grant (the "Date of Grant") set forth in the attached
Notice of Grant of Stock Options attached hereto and made a part hereof, to the
person whose name is set forth in the Notice of Grant of Stock Options (the
"Optionee") an option (the "Option") to purchase the total number of shares of
the Company's Common Stock (the "Shares") set forth in the Notice of Grant of
Stock Options, at the exercise price per share set forth in the Notice of Grant
of Stock Options. The Option shall be subject to the terms and conditions set
forth herein. The Option was issued pursuant to the Company's 2001 Incentive
Compensation Plan (the "Plan"), which is incorporated herein for all purposes.
The Option is an Incentive Stock Option, and not a nonqualified stock option.
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all of the terms and conditions hereof and thereof and all applicable
laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein
that are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 10
of this Option Agreement, or in the Plan, the Option is exercisable in
installments as provided in the Notice of Grant of Stock Options, which shall be
cumulative. To the extent that the Option has become exercisable with respect to
a percentage of Shares as provided in the Notice of Grant of Stock Options, the
Option may thereafter be exercised by the Optionee, in whole or in part, at any
time or from time to time prior to the expiration of the Option as provided
herein. The Notice of Grant of Stock Options table indicates each date (the
"Vesting Date") upon which the Optionee shall be entitled to exercise the Option
with respect to the number of Shares granted as indicated beside the date,
provided that the Continuous Service of the Optionee continues through and on
the applicable Vesting Date. Except as otherwise specifically provided herein,
there shall be no proportionate or partial vesting in the periods prior to each
Vesting Date, and all vesting shall occur only on the appropriate Vesting Date.
Upon the termination of an Optionee's Continuous Service, any unvested portion
of the Option shall terminate and be null and void.
4. Method of Exercise. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in the Notice of Grant of Stock Options by written notice, which shall
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such Shares as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be deemed to
be exercised after both (a) receipt by the Company of such written notice
accompanied by the exercise price and (b) arrangements that are satisfactory to
the Committee or
the Board in its sole discretion have been made for Optionee's payment to the
Company of the amount, if any, that is necessary to be withheld in accordance
with applicable Federal or state withholding requirements. No Shares will be
issued pursuant to the Option unless and until such issuance and such exercise
shall comply with all relevant provisions of applicable law, including the
requirements of any stock exchange upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; or (c) such other consideration or in such other manner as may
be determined by the Board or the Committee in its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically
and without notice terminate and become null and void at the time of the
earliest to occur of the following:
(i) three months after the date on which the
Optionee's Continuous Service is terminated other than by reason of (A) Cause,
(B) a mental or physical disability (within the meaning of Internal Revenue Code
Section 22(e)) of the Optionee as determined by a medical doctor satisfactory to
the Committee or the Board, or (C) the death of the Optionee;
(ii) immediately upon the termination of the
Optionee's Continuous Service for Cause;
(iii) twelve months after the date on which the
Optionee's Continuous Service is terminated by reason of a mental or physical
disability (within the meaning of Section 22(e) of the Code) as determined by a
medical doctor satisfactory to the Committee or the Board;
(iv) (A) twelve months after the date of termination
of the Optionee's Continuous Service by reason of the death of the Optionee, or,
if later, (B) three months after the date on which the Optionee shall die if
such death shall occur during the one year period specified in Subsection
6(a)(iii) hereof; or
(v) the tenth anniversary of the date as of which the
Option is granted.
(b) To the extent not previously exercised, (i) the Option
shall terminate immediately in the event of (1) the liquidation or dissolution
of the Company, or (2) any reorganization, merger, consolidation or other form
of corporate transaction in which the Company does not survive or the shares of
Stock are converted into or exchanged for securities issued by another entity,
unless the successor or acquiring entity, or an affiliate of such successor or
acquiring entity, assumes the Option or substitutes an equivalent option or
right pursuant to Section 10(c) of the Plan, and (ii) the Committee or the Board
in its sole discretion may by written notice ("cancellation notice") cancel,
effective upon the consummation of any corporate transaction described in
Subsection 9(b)(i) of the Plan in which the Company does survive, the Option (or
portion thereof) that remains unexercised on such date. The Committee or the
Board shall give written notice of any proposed transaction referred to in this
Section 6(b) a reasonable
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period of time prior to the closing date for such transaction (which notice may
be given either before or after approval of such transaction), in order that the
Optionee may have a reasonable period of time prior to the closing date of such
transaction within which to exercise the Option if and to the extent that it
then is exercisable (including any portion of the Option that may become
exercisable upon the closing date of such transaction). The Optionee may
condition his exercise of the Option upon the consummation of a transaction
referred to in this Section 6(b).
7. Transferability. The Option is not transferable otherwise than by
will or the laws of descent and distribution, and during the lifetime of the
Optionee the Option shall be exercisable only by the Optionee. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
8. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
9. Market Stand-Off Agreement. At the request of the Company or the
underwriters managing any underwritten offering of the Company's securities, the
Optionee agrees not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any shares of Stock (other than those
included in the registration) acquired pursuant to the exercise of the Option,
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such managing
underwriters.
10. Acceleration of Exercisability of Option. This Option shall become
immediately fully exercisable in the event that, prior to the termination of the
Option pursuant to Section 6 hereof, (a) there is a "Change in Control", as
defined in Section 9(b) of the Plan, that occurs while the Optionee is employed
by the Company or any of its subsidiaries, (b) the Committee or the Board
exercises its discretion to provide a cancellation notice with respect to the
Option pursuant to Section 6(b)(ii) hereof, or (c) the Option is terminated
pursuant to Section 6(b)(i) hereof.
11. No Right to Continued Employment. Optionee acknowledges and agrees
that the vesting of shares pursuant to the Option granted is earned only by
continuing employment or consultancy at the will of the Company (not through the
act of being hired, being granted this Option or acquiring shares hereunder).
Optionee further acknowledges and agrees that nothing in this Option Agreement,
nor in the Plan, shall confer upon Optionee any right with respect to
continuation of employment or consultancy by the Company, nor shall it interfere
in any way with Optionee's right or the Company's right to terminate Optionee's
employment or consultancy at any time, with or without Cause.
12. Law Governing. This Option Agreement shall be governed in
accordance with and governed by the internal laws of the State of California.
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13. Incentive Stock Option Treatment. The terms of this Option shall be
interpreted in a manner consistent with the intent of the Company and the
Optionee that the Option qualify as an Incentive Stock Option under Section 422
of the Code. If any provision of the Plan or this Option Agreement shall be
impermissible in order for the Option to qualify as an Incentive Stock Option,
then the Option shall be construed and enforced as if such provision had never
been included in the Plan or the Option. If and to the extent that the number of
Options granted pursuant to this Option Agreement exceeds the limitations
contained in Section 4(b) of the Plan or the value of Shares with respect to
which this Option may qualify as an Incentive Stock Option, this Option shall be
a Non-Qualified Stock Option.
14. Interpretation / Provisions of Plan Control. This Option Agreement
is subject to all the terms, conditions and provisions of the Plan, including,
without limitation, the amendment provisions thereof, and to such rules,
regulations and interpretations relating to the Plan adopted by the Committee or
the Board as may be in effect from time to time. If and to the extent that this
Option Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Option Agreement shall
be deemed to be modified accordingly. The Optionee accepts the Option subject to
all the terms and provisions of the Plan and this Option Agreement. The
undersigned Optionee hereby accepts as binding, conclusive and final all
decisions or interpretations of the Committee or the Board upon any questions
arising under the Plan and this Option Agreement.
15. Notices. Any notice under this Option Agreement shall be in writing
and shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company, to the Company's Secretary at:
Synaptics Incorporated
2381 Bering Drive
San Jose, California 95131
or if the Company should move its principal office, to such principal office,
and, in the case of the Optionee, to the Optionee's last permanent address as
shown on the Company's records, subject to the right of either party to
designate some other address at any time hereafter in a notice satisfying the
requirements of this Section.
16. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. There will be no regular federal
income tax liability upon the exercise of the Option, although the excess, if
any, of the fair market value of the Shares on the date of exercise over the
exercise price will be treated as an adjustment to the
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alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.
(b) Disposition of Shares. If Shares transferred pursuant to
the Option are held for at least one year after exercise and are disposed of at
least two years after the date of grant, any gain realized on disposition of the
Shares will also be treated as long-term capital gain for federal income tax
purposes. If Shares purchased under an Option are disposed of within such
one-year period or within two years after the Date of Grant, any gain realized
on such disposition will be treated as compensation income (taxable at ordinary
income rates) to the extent of the difference between the exercise price and the
lesser of (1) the fair market value of the Shares on the date of exercise, or
(2) the sale price of the Shares.
(c) Notice of Disqualifying Disposition of Option Shares. If
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
the Option on or before the later of (1) the date two years after the date of
grant, (2) the date one year after the date of exercise, the Optionee shall
immediately notify the Company in writing of such disposition. Optionee agrees
that Optionee may be subject to the income tax withholding by the Company on the
compensation income recognized by the Optionee from the early disposition by
payment in cash or out of the current earnings paid to the Optionee.
If and to the extent that the number of Options granted hereunder
exceeds the limitations contained in Section 4(b) of the Plan or the value of
Shares with respect to which this Option may qualify as an Incentive Stock
Option, this Option shall be a Non-Qualified Stock Option. The holder of a
Non-Qualified Stock Option will be treated as having received compensation
income (taxable at ordinary income tax rates) at the time the Option is
exercised equal to the excess, if any, of the fair market value of the shares of
Stock on the date of exercise over the exercise price. If the shares of Stock
transferred pursuant to the Non-Qualified Stock Option are held for at least one
year after the Option is exercised, any gain realized on disposition of the
shares of Stock will be treated as long-term capital gain for federal income tax
purposes.
The foregoing discussion assumes that, and only is applicable if, the
fair market value of the Shares as of the date on which the Option is granted is
not less than the exercise price. The Company believes that it has made a good
faith effort to determine the fair market value of the Shares and does not
believe that the exercise price is less than the fair market value of the Shares
on the Date of Grant. No assurances can be given, however, that the Internal
Revenue Service would not take a contrary position, or that the Internal Revenue
Service would not treat the Option as an Incentive Stock Option for some other
reason. If the exercise price is determined to be less than the fair market
value of a Share on the Date of Grant, then the Option may be taxable as a
Non-Qualified Stock Option. It is also possible that if the fair market value is
determined to be significantly greater than the exercise price, the Internal
Revenue Service may take the position that the Option is not in effect a stock
option but should be treated as a restricted stock for tax purposes. The
Optionee should consult with his or her own tax advisors as to whether any
action should be taken to minimize these risks.
17. Execution. This Option Agreement is executed by the parties hereto
on the Notice of Grant of Stock Options, which is attached hereto and made a
part hereof.
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2001 INCENTIVE COMPENSATION PLAN
SYNAPTICS INCORPORATED
NON-QUALIFIED STOCK OPTION AGREEMENT
1. Grant of Option. SYNAPTICS INCORPORATED (the "Company") hereby
grants, as of the date of grant ("Date of Grant") set forth in the attached
Notice of Grant of Stock Options attached hereto and made a part hereof, to the
person whose name is set forth in the Notice of Grant of Stock Optons (the
"Optionee") an option (the "Option") to purchase the total number of shares of
the Company's Common Stock (the "Shares") set forth in the Notice of Grant of
Stock Options, at the exercise price per share set forth in the Notice of Grant
of Stock Options. The Option shall be subject to the terms and conditions set
forth herein. The Option was issued pursuant to the Company's 2001 Incentive
Compensation Plan (the "Plan"), which is incorporated herein for all purposes.
The Option is a nonqualified stock option, and not an Incentive Stock Option.
The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all of the terms and conditions hereof and thereof and all applicable
laws and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein
that are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 8
of this Option Agreement, or in the Plan, the Option is exercisable in
installments as provided in the Notice of Grant of Stock Options, which shall be
cumulative. To the extent that the Option has become exercisable with respect to
a percentage of Shares as provided in the Notice of Grant of Stock Options, the
Option may thereafter be exercised by the Optionee, in whole or in part, at any
time or from time to time prior to the expiration of the Option as provided
herein. The Notice of Grant of Stock Options table indicates each date (the
"Vesting Date") upon which the Optionee shall be entitled to exercise the Option
with respect to the number of Shares granted as indicated beside the date,
provided that the Continuous Service of the Optionee continues through and on
the applicable Vesting Date. Except as otherwise specifically provided herein,
there shall be no proportionate or partial vesting in the periods prior to each
Vesting Date, and all vesting shall occur only on the appropriate Vesting Date.
Upon the termination of an Optionee's Continuous Service, any unvested portion
of the Option shall terminate and be null and void.
4. Method of Exercise. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in the Notice of Grant of Stock Options by written notice, which shall
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such Shares as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. This Option shall be deemed to
be exercised after both (a) receipt by the Company of such written notice
accompanied by the exercise price and (b) arrangements that are satisfactory to
the Committee or the Board in its sole discretion have been made for Optionee's
payment to the Company of the
amount that is necessary to be withheld in accordance with applicable Federal or
state withholding requirements. No Shares will be issued pursuant to the Option
unless and until such issuance and such exercise shall comply with all relevant
provisions of applicable law, including the requirements of any stock exchange
upon which the Shares then may be traded.
5. Method of Payment. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee: (a)
cash; (b) check; or (c) such other consideration or in such other manner as may
be determined by the Board or the Committee in its absolute discretion.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically
and without notice terminate and become null and void at the time of the
earliest to occur of:
(i) three months after the date on which the
Optionee's Continuous Service is terminated other than by reason of (A) Cause,
(B) a mental or physical disability (within the meaning of Internal Revenue Code
Section 22(e)) of the Optionee as determined by a medical doctor satisfactory to
the Committee or the Board, or (C) the death of the Optionee;
(ii) immediately upon the termination of the
Optionee's Continuous Service for Cause;
(iii) twelve months after the date on which the
Optionee's Continuous Service is terminated by reason of a mental or physical
disability (within the meaning of Section 22(e) of the Code) as determined by a
medical doctor satisfactory to the Committee or the Board;
(iv) (A) twelve months after the date of termination
of the Optionee's Continuous Service by reason of the death of the Optionee, or
, if later, (B) three months after the date on which the Optionee shall die if
such death shall occur during the one year period specified in Subsection
6(a)(iii) hereof; or
(v) the tenth anniversary of the date as of which the
Option is granted.
(b) To the extent not previously exercised, (i) the Option
shall terminate immediately in the event of (1) the liquidation or dissolution
of the Company, or (2) any reorganization, merger, consolidation or other form
of corporate transaction in which the Company does not survive or the shares of
Stock are converted into or exchanged for securities issued by another entity,
unless the successor or acquiring entity, or an affiliate of such successor or
acquiring entity, assumes the Option or substitutes an equivalent option or
right pursuant to Section 10(c) of the Plan, and (ii) the Committee or the Board
in its sole discretion may by written notice ("cancellation notice") cancel,
effective upon the consummation of any corporate transaction described in
Subsection 9(b)(i) of the Plan in which the Company does survive, the Option (or
portion thereof) that remains unexercised on such date. The Committee or the
Board shall give written notice of any proposed transaction referred to in this
Section 6(b) a reasonable period of time prior to the closing date for such
transaction (which notice may be given either before or after approval of such
transaction), in order that the Optionee may have a reasonable
2
period of time prior to the closing date of such transaction within which to
exercise the Option if and to the extent that it then is exercisable (including
any portion of the Option that may become exercisable upon the closing date of
such transaction). The Optionee may condition his exercise of the Option upon
the consummation of a transaction referred to in this Section 6(b).
7. Transferability
(a) General. Except as provided herein, a Participant may not
assign, sell, transfer, or otherwise encumber or subject to any lien any Award
or other right or interest granted under this Plan, in whole or in part,
including any Award or right which constitutes a derivative security as
generally defined in Rule 16a-1(c) under the Exchange Act, other than by will or
by operation of the laws of descent and distribution, and such Awards or rights
that may be exercisable shall be exercised during the lifetime of the
Participant only by the Participant or his or her guardian or legal
representative.
(b) Permitted Transfer of Option. The Committee or Board, in
its sole discretion, may permit the transfer of an Option granted under this
Option Agreement as follows: (A) by gift to a member of the Participant's
Immediate Family or (B) by transfer by instrument to a trust providing that the
Option is to be passed to beneficiaries upon death of the Optionee. For purposes
of this Section 7(b), "Immediate Family" shall mean the Optionee's spouse
(including a former spouse subject to terms of a domestic relations order);
child, stepchild, grandchild, child-in-law; parent, stepparent, grandparent,
parent-in-law; sibling and sibling-in-law, and shall include adoptive
relationships. If a determination is made by counsel for the Company that the
restrictions contained in this Section 7(b) are not required by applicable
federal or state securities laws under the circumstances, then the Committee or
Board, in its sole discretion, may permit the transfer of Options granted under
this Option Agreement to one or more Beneficiaries or other transferees during
the lifetime of the Participant, which may be exercised by such transferees in
accordance with the terms of this Option Agreement, but only if and to the
extent permitted by the Committee or the Board pursuant to the express terms of
this Option Agreement (subject to any terms and conditions which the Committee
or the Board may impose thereon, and further subject to any prohibitions and
restrictions on such transfers pursuant to Rule 16b-3). A Beneficiary,
transferee, or other person claiming any rights under the Plan from or through
any Participant shall be subject to all terms and conditions of the Plan and any
Award agreement applicable to such Participant, except as otherwise determined
by the Committee or the Board, and to any additional terms and conditions deemed
necessary or appropriate by the Committee or the Board.
[8. Acceleration of Exercisability of Option. This Option shall become
immediately fully exercisable in the event that, prior to the termination of the
Option pursuant to Section 6 hereof, (a) there is a "Change in Control", as
defined in Section 9(b) of the Plan, that occurs while the Optionee is employed
by the Company or any of its subsidiaries, (b) the Committee or the Board
exercises its discretion to provide a cancellation notice with respect to the
Option pursuant to Section 6(b)(ii) hereof, or (c) the Option is terminated
pursuant to Section 6(b)(i) hereof. [Optional]
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9. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
10. Market Stand-Off Agreement. At the request of the Company or the
underwriters managing any underwritten offering of the Company's securities, the
Optionee agrees not to sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any shares of Stock (other than those
included in the registration) acquired pursuant to the exercise of the Option,
without the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such managing
underwriters.
11. No Right to Continued Employment. Neither the Option nor this
Option Agreement shall confer upon the Optionee any right to continued
employment or service with the Company.
12. Law Governing. Optionee acknowledges and agrees that the vesting of
shares pursuant to the Option granted is earned only by continuing employment or
consultancy at the will of the Company (not through the act of being hired,
being granted this Option or acquiring shares hereunder). Optionee further
acknowledges and agrees that nothing in this Option Agreement, nor in the Plan,
shall confer upon Optionee any right with respect to continuation of employment
or consultancy by the Company, nor shall it interfere in any way with Optionee's
right or the Company's right to terminate Optionee's employment or consultancy
at any time, with or without Cause.
13. Interpretation / Provisions of Plan Control. This Option Agreement
is subject to all the terms, conditions and provisions of the Plan, including,
without limitation, the amendment provisions thereof, and to such rules,
regulations and interpretations relating to the Plan adopted by the Committee or
the Board as may be in effect from time to time. If and to the extent that this
Option Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Option Agreement shall
be deemed to be modified accordingly. The Optionee accepts the Option subject to
all the terms and provisions of the Plan and this Option Agreement. The
undersigned Optionee hereby accepts as binding, conclusive and final all
decisions or interpretations of the Committee or the Board upon any questions
arising under the Plan and this Option Agreement.
14. Notices. Any notice under this Option Agreement shall be in writing
and shall be deemed to have been duly given when delivered personally or when
deposited in the United States mail, registered, postage prepaid, and addressed,
in the case of the Company, to the Company's Secretary at:
Synaptics Incorporated
2381 Bering Drive
San Jose, California 95131
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or if the Company should move its principal office, to such principal office,
and, in the case of the Optionee, to the Optionee's last permanent address as
shown on the Company's records, subject to the right of either party to
designate some other address at any time hereafter in a notice satisfying the
requirements of this Section.
15. Tax Consequences. Set forth below is a brief summary as of the date
of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT
A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercise of Option. There may be a regular federal income
tax liability upon the exercise of the Option. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Shares on the date of
exercise over the exercise price. If Optionee is an employee, the Company will
be required to withhold from Optionee's compensation or collect from Optionee
and pay to the applicable taxing authorities an amount equal to a percentage of
this compensation income at the time of exercise.
(b) Disposition of Shares. If Shares are held for at least one
year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.
The foregoing discussion assumes that, and only is applicable if, the
fair market value of the Shares as of the date on which the Option is granted is
not significantly less than the exercise price. The Company believes that it has
made a good faith effort to determine the fair market value of the Shares and
does not believe that the exercise price is significantly less than the fair
market value of the Shares on the Date of Grant. No assurances can be given,
however, that the Internal Revenue Service would not take a contrary position.
It is possible that if the fair market value is determined to be significantly
greater than the exercise price, the Internal Revenue Service may take the
position that the Option is not in effect a stock option but should be treated
as a restricted stock for tax purposes. The Optionee should consult with his or
her own tax advisors as to whether any action should be taken to minimize these
risks.
16. Execution. This Option Agreement is executed by the parties hereto
on the Notice of Grant of Stock Options, which is attached hereto and made a
part hereof.
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2001 INCENTIVE COMPENSATION PLAN
SYNAPTICS INCORPORATED
NON-QUALIFIED STOCK OPTION AGREEMENT FOR UK EMPLOYEES
1. Grant of Option. SYNAPTICS INCORPORATED (the "Company") hereby grants,
as of the _________ day of _________________, 20____ ("Date of Grant"),
to ________________________________________ (the "Optionee") an option
(the "Option") to purchase up to _________ shares of the Company's
Common Stock, $_______ par value per share (the "Shares"), at an
exercise price per share equal to $_______. The Option shall be subject
to the terms and conditions set forth herein and to the terms and
conditions of the Joint Election (as defined in paragraph 9 herein).
The Option was issued pursuant to the Company's 2001 Incentive
Compensation Plan (the "Plan"), which is incorporated herein for all
purposes. The Option is a nonqualified stock option, and not an
Incentive Stock Option. The Optionee hereby acknowledges receipt of a
copy of the Plan and the Joint Election and agrees to be bound by all
of the terms and conditions hereof and thereof and all applicable laws
and regulations.
2. Definitions. Unless otherwise provided herein, terms used herein that
are defined in the Plan and not defined herein shall have the meanings
attributed thereto in the Plan.
3. Exercise Schedule. Except as otherwise provided in Sections 6 or 12 of
this Agreement, or in the Plan, the Option is exercisable in
installments as provided below, which shall be cumulative. To the
extent that the Option has become exercisable with respect to a
percentage of Shares as provided below, the Option may thereafter be
exercised by the Optionee, in whole or in part, at any time or from
time to time prior to the expiration of the Option as provided herein.
The following table indicates each date (the "Vesting Date") upon which
the Optionee shall be entitled to exercise the Option with respect to
the percentage of Shares granted as indicated beside the date, provided
that the Continuous Service of the Optionee continues through and on
the applicable Vesting Date:
Percentage of Shares Vesting Date
Except as otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each Vesting
Date, and all vesting shall occur only on the appropriate Vesting Date.
Upon the termination of an Optionee's Continuous Service, any unvested
portion of the Option shall terminate and be null and void.
4. Method of Exercise. The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise
schedule set forth in Section 3 hereof by written notice which shall
state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent
with respect to such Shares as may be required by the Company pursuant
to the provisions of the Plan. Such written notice shall be signed by
the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The written notice shall be accompanied
by payment of the exercise price payment of the Option Tax Liability
(as defined in Section 8b herein) and payment of any liability arising
under the
terms of the Joint Election as so required by the Company. This Option
shall be deemed to be exercised after receipt by the Company of such
written notice accompanied by such payments or evidence of
arrangements, satisfactory to the Board or the committee in its sole
discretion, which have been made for the Optionee's payment to the
Company of the Option Tax Liability and/or the liability arising under
the terms of the Joint Election. No Shares will be issued pursuant to
the Option unless and until such issuance and such exercise shall
comply with all relevant provisions of applicable law, including the
requirements of any stock exchange upon which the Shares then may be
traded.
5. Method of Payment. Payment of the exercise price and of the Option Tax
Liability shall be by any of the following, or a combination thereof,
at the election of the Optionee: (a) cash; (b) cheque; or (c) such
other consideration or in such other manner as may be determined by the
Board or the Committee in its absolute discretion.
Payment of any liability arising under the terms of the Joint Election
will be pursuant to the provisions of the Joint Election.
6. Termination of Option.
(a) Any unexercised portion of the Option shall automatically and
without notice terminate and become null and void at the time
of the earliest to occur of:
(i) three months after the date on which the Optionee's
Continuous Service is terminated other than by reason
of (A) Cause, which, solely for purposes of this
Plan, shall mean the termination of the Optionee's
Continuous Service by reason of the Optionee's
willful misconduct or gross negligence, (B) a mental
or physical disability (within the meaning of
Internal Revenue Code Section 22(e)) of the Optionee
as determined by a medical doctor satisfactory to the
Committee or the Board, or (C) the death of the
Optionee;
(ii) immediately upon the termination of the Optionee's
Continuous Service for Cause;
(iii) twelve months after the date on which the Optionee's
Continuous Service is terminated by reason of a
mental or physical disability (within the meaning of
Section 22(e) of the Code) as determined by a medical
doctor satisfactory to the Committee or the Board;
(iv) (A) twelve months after the date of termination of
the Optionee's Continuous Service by reason of the
death of the Optionee, or , if later, (B) three
months after the date on which the Optionee shall die
if such death shall occur during the one year period
specified in Subsection 6(a)(iii) hereof; or
(v) the tenth anniversary of the date as of which the
Option is granted.
(b) To the extent not previously exercised, (i) the Option shall
terminate immediately in the event of (1) the liquidation or
dissolution of the Company, or (2) any reorganization, merger,
consolidation or other form of corporate transaction in which
the Company does not survive or the shares of Stock are
converted into or exchanged for securities issued by another
entity, unless the successor or acquiring entity, or an
-2-
affiliate of such successor or acquiring entity, assumes the
Option or substitutes an equivalent option or right pursuant
to Section 10(c) of the Plan, and (ii) the Committee or the
Board in its sole discretion may by written notice
("cancellation notice") cancel, effective upon the
consummation of any corporate transaction described in
Subsection 9(b)(i) of the Plan in which the Company does
survive, the Option (or portion thereof) that remains
unexercised on such date. The Committee or the Board shall
give written notice of any proposed transaction referred to in
this Section 6(b) a reasonable period of time prior to the
closing date for such transaction (which notice may be given
either before or after approval of such transaction), in order
that the Optionee may have a reasonable period of time prior
to the closing date of such transaction within which to
exercise the Option if and to the extent that it then is
exercisable (including any portion of the Option that may
become exercisable upon the closing date of such transaction).
The Optionee may condition his exercise of the Option upon the
consummation of a transaction referred to in this Section
6(b).
7. Tax Consequences
(a) The Optionee should obtain advice from an appropriate
independent professional adviser in relation to the United
Kingdom taxation implications of the grant, exercise,
assignment, release, cancellation or any other disposal of
this Option (the "Trigger Event") pursuant to the Plan and on
any subsequent sale of the Option Shares. The Optionee should
also take advice in respect of the United Kingdom taxation
indemnity provisions comprising Sections 8a and 8b below.
8. Optionee's Taxation Indemnity
(a) To the extent permitted by law, the Optionee hereby agrees to
indemnify and keep indemnified the Company and the Company, as
trustee for and on behalf of any related corporation, in
respect of any liability or obligation of the Company and/or
any related corporation to account for income tax (under PAYE)
or any other taxation provisions and primary class 1 National
Insurance contributions ("NICs") in the United Kingdom to the
extent arising from a Trigger Event or arising out of the
acquisition, retention and disposal of the Shares acquired
pursuant to this Option.
(b) The Company shall not be obliged to allot and issue any Shares
or any interest in Shares pursuant to the exercise of an
Option unless and until the Optionee has paid to the Company
such sum as is, in the opinion of the Company, sufficient to
indemnify the Company in full against any liability the
Company has to account to the Inland Revenue for any amount
of, or representing, income tax and/or primary NICs (the
"Option Tax Liability"), or the Optionee has made such other
arrangement as in the opinion of the Company will ensure that
the full amount of any Option Tax Liability will be recovered
from the Optionee within such period as the Company may then
determine.
(c) In the absence of any such other arrangement being made, the
Company shall have the right to retain out of the aggregate
number of shares to which the Optionee would have otherwise
been entitled upon the exercise of an Option, such number of
Shares as, in the opinion of the Company, will enable the
Company to sell as agent for the Optionee (at the best price
which can reasonably expect to be obtained at the time of
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the sale) and to pay over to the Company sufficient monies out
of the net proceeds of sale, after deduction of all fees,
commissions and expenses incurred in relation to such sale, to
satisfy the Optionee's liability under such indemnity.
9. Employer's NICs. As a consideration of the grant of an Option under the
Plan the Optionee has joined with the Company, or if and to the extent
that there is a change in the law, any other company or person who is
or becomes a secondary contributor for NIC purposes in respect of this
Option (the "Secondary Contributor") in making an election (in such
terms and such form as provided in paragraphs 3A and 3B of Schedule 1
to the Social Security Contributions and Benefits Act 1992) which has
been approved by the Inland Revenue (the "Joint Election"), for the
transfer of the whole or any liability of the Secondary Contributor to
Employer's Class 1 NICs to be transferred to the Optionee.
10. Restrictions While Stock is Not Registered.
(a) Restricted Shares. Any shares of Stock acquired upon exercise
of the Option specified in Section 1 and (i) all shares of the
Company's capital stock received as a dividend or other
distribution upon such shares, and (ii) all shares of capital
stock or other securities of the Company into which such
shares may be changed or for which such shares shall be
exchanged, whether through reorganization, recapitalization,
stock split-ups or the like, shall be subject to the
provisions of this Section 10 at all times, and only at those
times, that shares of the Company's Common Stock are not
registered under the Securities Exchange Act of 1934, as
amended (such times during which the Stock is not so
registered sometimes hereinafter being referred to as the
"Restricted Period") and are during the Restricted Period
hereinafter referred to as "Restricted Shares."
(b) No Sale or Pledge of Restricted Shares. Except as otherwise
provided herein, Optionee agrees and covenants that during the
Restricted Period he or she will not sell, pledge, encumber or
otherwise transfer or dispose of, and will not permit to be
sold, encumbered, attached or otherwise disposed of or
transferred in any manner, either voluntarily or by operation
of law (all hereinafter collectively referred to as
"transfers"), all or any portion of the Restricted Shares or
any interest therein except in accordance with and subject to
the terms of this Section 10.
(c) Voluntary Transfer Repurchase Option. If Optionee desires to
effect a voluntary transfer of any of the Restricted Shares
during the Restricted Period, Optionee shall first give
written notice to the Company of such intent to transfer (the
"Offer Notice") specifying (i) the number of the Restricted
Shares (the "Offered Shares") and the date of the proposed
transfer (which shall not be less than thirty (30) days after
the giving of the Offer Notice), (ii) the name, address, and
principal business of the proposed transferee (the
"Transferee"), and (iii) the price and other terms and
conditions of the proposed transfer of the Offered Shares to
the Transferee. The Offer Notice by Optionee shall constitute
an offer to sell all, but not less than all, of the Offered
Shares, at the price and on the terms specified in such Offer
Notice, to the Company and/or its designated purchaser. If the
Company desires to accept Optionee's offer to sell, either for
itself or on behalf of its designated purchaser, the Company
shall signify such acceptance by written notice to Optionee
within thirty (30) days following the giving of the Option
Notice. Failing such acceptance, Optionee's offer
-4-
shall lapse on the thirty-first day following the giving of
the Option Notice. With such written acceptance, the Company
shall designate a day not later than ten days following the
date of giving its notice of acceptance on which the Company
or its designated purchaser shall deliver the purchase price
of the Offered Shares (in the same form as provided in the
Offer Notice) and Optionee shall deliver to the Company or its
designated Purchaser, as applicable, all certificates
evidencing the Offered Shares endorsed in blank for transfer
or with separate stock powers endorsed in blank for transfer.
Payment of the purchase price may, at the discretion of the
Company, include cancellation of all or a part of any
outstanding indebtedness of Optionee to the Company. Upon the
lapse without acceptance by the Company of Optionee's offer to
sell the Offered Shares, Optionee shall be free to transfer
the Offered Shares not purchased by the Company or the
designated purchaser to the Transferee (and no one else), for
a price and on terms and conditions which are no more
favorable to the Transferee than those set forth in the Offer
Notice, for a period of thirty days thereafter, but after such
period the restrictions of this Section 10 shall again apply
to the Restricted Shares. The Offered Shares so transferred by
Optionee to the Transferee shall continue to be subject to all
of the terms and conditions of this Section 10 and the Company
shall have the right to require, as a condition of such
transfer, that the Transferee execute an agreement
substantially in the form and content of the provisions of
this Section 10, as well as any shareholders agreement
required by the Company.
(d) Involuntary Transfer Repurchase Option. Whenever, during the
Restricted Period, Optionee has any notice or knowledge of any
attempted, pending, or consummated involuntary transfer or
lien or charge upon any of the Restricted Shares, whether by
operation of law or otherwise (including divorce), Optionee
shall give immediate written notice thereof to the Company.
Whenever the Company has any other notice or knowledge of any
such attempted, impending, or consummated involuntary
transfer, lien, or charge, it shall give written notice
thereof to the Optionee. In either case, Optionee agrees to
disclose forthwith to the Company all pertinent information in
his possession relating thereto. If during the Restricted
Period any of the Restricted Shares are subjected to any such
involuntary transfer, lien, or charge, the Company and its
designated purchaser shall at all times have the immediate and
continuing option to purchase such of the Restricted Shares
upon notice by the Company to Optionee or other record holder
at a price and on terms determined according to Section 10(f)
below, and any of the Restricted Shares so purchased by the
Company or its designated purchaser shall in every case be
free and clear of such transfer, lien, or charge.
(e) Excepted Transfers. The provisions of Sections 10(b) and (c)
shall not apply to transfers by Optionee to his or her spouse,
lineal descendants or trustee of trusts for their benefit,
provided, however, that during the Restricted Period Optionee
shall continue to be subject to all of the terms and
provisions of this Section 10 with respect to any remaining
present or future interest whatsoever he or she may have in
the transferred Restricted Shares, and, further provided that
during the Restricted Period any shares transferred pursuant
to this subsection (e) shall continue to be treated as
Restricted Shares and the transferee of any such Restricted
Shares shall likewise be subject to all such terms and
conditions of this Section 10 as though such transferee were a
party hereto.
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(f) Repurchase Price. For purposes of Section 10(d) hereof, the
per share purchase price of Restricted Shares shall be an
amount equal to the fair market value of such share,
determined by the Board and agreed by the Inland Revenue Share
Valuation division as of any date determined by the Board that
is not more than one year prior to the date of the event
giving rise to the Company's right to purchase such Restricted
Shares. The Company shall notify Optionee or his or her
executor of the price so determined within 30 days after
receipt of notice of the involuntary transfer, lien or charge.
Any determination of fair market value made by the Board shall
be binding and conclusive on all parties unless shown to have
been made in an arbitrary and capricious manner. The purchase
price shall, at the option of the Company, be payable in cash
or in the form of the Company's promissory note payable in up
to two equal annual installments commencing on the date of the
acquisition by the Company (the "Restricted Share Acquisition
Date") of the Restricted Shares, together with interest on the
unpaid balance thereof at the rate equal to the prime rate of
interest as quoted in the Wall Street Journal on the
Restricted Share Acquisition Date.
(g) Legends. The certificate or certificates representing any
Shares acquired pursuant to the exercise of an Option prior to
the last day of the Restricted Period shall bear the following
legends (as well as any legends required by applicable state
and federal corporate and securities laws):
(A) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN
THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH."
(B) "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST
REFUSAL AND REPURCHASE OPTIONS HELD BY THE ISSUER OR ITS
ASSIGNEE(S) AS SET FORTH IN A STOCK OPTION AGREEMENT DATED
______________________, AS MAY BE AMENDED FROM TIME TO TIME, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH TRANSFER RESTRICTIONS, RIGHT OF FIRST REFUSAL AND
REPURCHASE RIGHTS ARE BINDING ON TRANSFEREES OF THESE SHARES."
11. Transferability
(a) General. Except as provided herein, a Participant may not
assign, sell, transfer, or otherwise encumber or subject to
any lien any Award or other right or interest granted under
this Plan, in whole or in part, including any Award or right
which constitutes a derivative security as generally defined
in Rule 16a-1(c) under the Exchange Act, other than by will or
by operation of the laws of descent and distribution, and such
Awards or rights that may be exercisable shall be exercised
during the lifetime of the Participant only by the Participant
or his or her guardian or legal representative.
-6-
(b) Permitted Transfer of Option. The Committee or Board, in its
sole discretion, may permit the transfer of an Option granted
under this Agreement as follows: (A) by gift to a member of
the Participant's Immediate Family or (B) by transfer by
instrument to a trust providing that the Option is to be
passed to beneficiaries upon death of the Optionee. For
purposes of this Section 11(b), "Immediate Family" shall mean
the Optionee's spouse (including a former spouse subject to
terms of a domestic relations order); child, stepchild,
grandchild, child-in-law; parent, stepparent, grandparent,
parent-in-law; sibling and sibling-in-law, and shall include
adoptive relationships. If a determination is made by counsel
for the Company that the restrictions contained in this
Section 11(b) are not required by applicable federal or state
securities laws under the circumstances, then the Committee or
Board, in its sole discretion, may permit the transfer of
Options granted under this Agreement to one or more
Beneficiaries or other transferees during the lifetime of the
Participant, which may be exercised by such transferees in
accordance with the terms of this Agreement, but only if and
to the extent permitted by the Committee or the Board pursuant
to the express terms of this Agreement (subject to any terms
and conditions which the Committee or the Board may impose
thereon, and further subject to any prohibitions and
restrictions on such transfers pursuant to Rule 16b-3). A
Beneficiary, transferee, or other person claiming any rights
under the Plan from or through any Participant shall be
subject to all terms and conditions of the Plan and any Award
agreement applicable to such Participant, except as otherwise
determined by the Committee or the Board, and to any
additional terms and conditions deemed necessary or
appropriate by the Committee or the Board.
12. Acceleration of Exercisability of Option. This Option [shall] [shall
not] become immediately fully exercisable in the event that, prior to
the termination of the Option pursuant to Section 6 hereof, (a) there
is a "Change in Control", as defined in Section 9(b) of the Plan, that
occurs while the Optionee is employed by the Company or any of its
subsidiaries, (b) the Committee or the Board exercises its discretion
to provide a cancellation notice with respect to the Option pursuant to
Section 6(b)(ii) hereof, or (c) the Option is terminated pursuant to
Section 6(b)(i) hereof.
13. No Rights of Stockholders. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the
rights and privileges of, a stockholder of the Company with respect to
any shares of Stock purchasable or issuable upon the exercise of the
Option, in whole or in part, prior to the date of exercise of the
Option.
14. Market Stand-Off Agreement. In the event of an initial public offering
of the Company's securities and upon request of the Company or the
underwriters managing any underwritten offering of the Company's
securities, the Optionee agrees not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any
shares of Stock (other than those included in the registration)
acquired pursuant to the exercise of the Option, without the prior
written consent of the Company or such underwriters, as the case may
be, for such period of time (not to exceed 180 days) from the effective
date of such registration as may be requested by the Company or such
managing underwriters.
15. Optionee's Representations. In the event the Company's issuance of the
shares of Stock purchasable pursuant to the exercise of this Option has
not been registered under the Securities Act of 1933, as amended, at
the time this Option is exercised, Optionee shall, if
-7-
required by the Company, concurrently with the exercise of all or any
portion of this Option, deliver to the Company his Investment
Representation Statement in the form attached to this Agreement as
Exhibit A or in such other form as the Company may request.
16. No Right to Continued Employment. Neither the Option nor this Agreement
shall confer upon the Optionee any right to continued employment or
service with the Company.
17. Data Protection
(a) In order to facilitate the administration of the Plan, it will
be necessary for Synaptics UK Limited (or its payroll
administrators) to collect, hold and process certain personal
information about the Optionee and to transfer this data to
the Company and to certain third parties such as brokers with
whom the Optionee may elect to deposit any share capital under
the Plan. The Optionee consents to Synaptics (UK) Limited (or
its payroll administrators) collecting, holding and processing
its personal data and transferring this data to the Company or
any other third parties insofar as is reasonably necessary to
implement, administer and manage the Plan.
(b) Where the transfer is to be to a destination outside the
European Economic Area, the Company shall take reasonable
steps to ensure that the Optionee's personal data continues to
be adequate protected and securely held.
(c) The Optionee understands that the Optionee may, at any time,
view its personal data, require any necessary corrections to
it or withdraw the consents herein in writing by contacting
the [Human Resources Department] of the Company (but
acknowledges that without the use of such data it may not be
practicable for Synaptics (UK) Limited and the Company to
administer the Optionee's involvement in the Plan in a timely
fashion or at all and this may be detrimental to the Optionee.
18. Law Governing. This Agreement shall be governed in accordance with and
governed by the internal laws of the State of California. The Joint
Election is governed by the laws of England and Wales.
19. Interpretation / Provisions of Plan Control. This Agreement is subject
to all the terms, conditions and provisions of the Plan, including,
without limitation, the amendment provisions thereof, and to such
rules, regulations and interpretations relating to the Plan adopted by
the Committee or the Board as may be in effect from time to time. If
and to the extent that this Agreement conflicts or is inconsistent with
the terms, conditions and provisions of the Plan or the Joint Election,
the Plan shall control, except in respect to the liabilities arising
under the Joint Election in relation to which the Joint Election shall
control, and this Agreement shall be deemed to be modified accordingly.
The Optionee accepts the Option subject to all the terms and provisions
of the Plan, the Joint Election and this Agreement. The undersigned
Optionee hereby accepts as binding, conclusive and final all decisions
or interpretations of the Committee or the Board upon any questions
arising under the Plan, the Joint Election and this Agreement.
20. Notices. Any notice under this Agreement shall be in writing and shall
be deemed to have been duly given when delivered personally or when
deposited in the Royal Mail, registered, postage prepaid, and
addressed, in the case of the Company, to the Company's Secretary at:
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Synaptics Incorporated
2381 Bering Drive
San Jose, California 95131
or if the Company should move its principal office, to such principal
office, and, in the case of the Optionee, to the Optionee's last
permanent address as shown on the Company's records, subject to the
right of either party to designate some other address at any time
hereafter in a notice satisfying the requirements of this Section.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the _______ day of ________________, 20_____.
COMPANY:
SYNAPTICS INCORPORATED, A
CALIFORNIA CORPORATION
By:
-------------------------------
Name:
Title:
Optionee acknowledges receipt of a copy of the Plan and the Joint
Election and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts this Option subject to all of
the terms and provisions thereof. Optionee has reviewed the Plan, the
Joint Election and this Option in their entirety, has had an
opportunity to obtain independent legal advice prior to executing this
Option, and fully understands all provisions of the Option.
Dated: OPTIONEE:
---------------------
By:
-------------------------------
Name:
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EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
PURCHASER :
COMPANY :
SECURITY : COMMON STOCK
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Company the following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act").
(b) I understand that the Company's issuance of the Securities has not
been registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of my investment intent as expressed herein. In this connection, I
understand that, in the view of the Securities and Exchange Commission (the
"SEC"), the statutory basis for such exemption may be unavailable if my
representation was predicated solely upon a present intention to hold these
Securities for the minimum capital gains period specified under tax statutes,
for a deferred sale, for or until an increase or decrease in the market price of
the Securities, or for a period of one year or any other fixed period in the
future.
(c) I further understand that the Securities must be held indefinitely
unless the transfer is subsequently registered under the Securities Act or
unless an exemption from registration is otherwise available. Moreover, I
understand that the Company is under no obligation to register any transfer of
the Securities. In addition, I understand that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless registered or such registration is not required in the opinion
of counsel for the Company.
(d) I am familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly, from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the
time of issuance of the Securities, such issuance will be exempt from
registration under the Securities Act. In the event the Company later becomes
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, ninety (90) days thereafter the securities exempt under
Rule 701 may be resold, subject to the satisfaction of certain of the conditions
specified by Rule 144, including among other things: (1) the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of
certain public information about the Company, and the amount of securities being
sold during any three month period not exceeding the limitations specified in
Rule 144(e), if applicable. Notwithstanding this paragraph (d), I acknowledge
and agree to the restrictions set forth in paragraph (e) hereof.
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In the event that the Company does not qualify under Rule 701 at the
time of issuance of the Securities, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires
among other things: (1) the availability of certain public information about the
Company, (2) the resale occurring not less than one year after the party has
purchased, and made full payment for, within the meaning of Rule 144, the
securities to be sold; and, in the case of an affiliate, or of a non-affiliate
who has held the securities less than two years, (3) the sale being made through
a broker in an unsolicited "broker's transaction" or in transactions directly
with a market maker (as said term is defined under the Securities Exchange Act
of 1934) and the amount of securities being sold during any three month period
not exceeding the specified limitations stated therein, if applicable.
(e) I further understand that in the event all of the applicable
requirements of Rule 144 or Rule 701 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rule 144 and
Rule 701 are not exclusive, the Staff of the SEC has expressed its opinion that
persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 or Rule 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own
risk.
Signature of Purchaser:
-----------------------------
Date:
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