Exhibit 4.6
GIGAMEDIA LIMITED
2004 EMPLOYEE SHARE OPTION PLAN
1. Purposes of the Plan
The purposes of this Share Option Plan (the "Plan") are to attract and
retain the best available personnel for positions of substantial
responsibility and to provide additional incentives to Employees of
GigaMedia Limited and its Subsidiaries for achieving excellence in their
work performance.
2. Definitions
"Board" shall refer to the Board of Directors of the Company.
"Committee" shall refer to the Committee appointed by the Board of the
Company pursuant to Section 4.1 hereunder to administer the Plan.
"Company" shall refer to GigaMedia Limited, a company incorporated and
existing under the laws of the Republic of Singapore with its registered
office at 8 Robinson Road, #6-00, ASO Building, Singapore 048544.
"Continuous Status as an Employee" shall refer to the absence of any
interruption or termination of the employment relationship by the Employer.
Continuous Status as an Employee shall not be considered interrupted in the
case of; (1) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Committee, provided that such leave is for a period
of not more than ninety (90) days, unless reemployment upon the expiration
of such leave is guaranteed by contract or statute, or unless provided
otherwise pursuant to the policy of the Employer adopted from time to time;
or (iv) in the case of transfers between locations of the Employer or
between the Employers.
"Employee" shall refer to any employee, officer, director, supervisor,
advisor or consultant of the Employer.
"Employer" shall refer to the Company and/or its Subsidiaries.
"Fair Market Value" shall refer to the value of Shares determined as
follows:
(a) If the Shares are listed on stock exchange, its Fair Market Value
shall be the closing sales price.
(b) In the absence of an established market for the Shares, the Fair
Market Value thereof shall be determined in good faith by the
Committee.
"Option" shall refer to a right to subscribe for shares of the Company
granted under this Plan.
"Option Agreement" shall refer to the Share Option Agreement entered into
by and between the Company and the Optionee per form and substance of
Exhibit A for granting Options.
"Optionee" shall refer to the Employee who is designated by the Committee
to receive the Option granted under the Plan.
"Plan" shall refer to GigaMedia Limited 2004 Employee Share Option Plan.
"Shares" shall refer to the ordinary shares in the capital of the Company
designated by the Committee for the administration of the Plan.
"Subsidiaries" shall refer to the Subsidiaries in which the Company owns,
directly or indirectly, more than 50% of common shares.
3. Shares Available for Options
Unless otherwise provided in the Plan or determined by the Board, the
maximum aggregate number of Shares which may be optioned and sold under the
Plan is 7,000,000 Shares. Shares to be delivered under the Plan shall be
authorized and issued. If an Option expires or becomes unexercisable for
any reason without being exercised in full, the unsubscribed Shares subject
to such Option shall become available for future grant under the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of
the Plan and for issue under the Option by the number of Shares as to which
the Option is exercised. The Company, during the term of this Plan, shall
at all time reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirement of the Plan.
4. Administration of the Plan
4.1 Administration Generally
The Plan shall be administered by a Committee designated by the Board,
which Committee shall be constituted in such a manner as to satisfy the
legal requirements relating to the administration of the Plan
under applicable laws and regulations. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by
the Board. From time to time the Board may increase the size of the
Committee and appoint additional members, remove members (with or without
cause) and appoint new members in substitution therefor, fill vacancies,
however caused, and remove all members of the Committee and thereafter
directly administer the Plan, to the extent permitted by the applicable
laws and regulations.
4.2 Powers of the Committee
Subject to the provisions of the Plan and the authorization given by the
Board, the Committee shall have the authority, in its discretion:
(a) to determine the Fair Market Value of the Shares, in accordance with
the definition of Fair Market Value as stated in Section 2 of the
Plan;
(b) to select the Employees to whom Options shall be granted hereunder;
(c) to determine whether and how many Options shall be granted hereunder;
(d) to approve instruments or documents to be used under the Plan,
including the Option Agreement;
(e) to determine the terms and conditions, subject to the terms of the
Plan, of any Option granted hereunder (including, but not limited to,
the share price and any restriction or limitation, vesting schedules
or other restrictions regarding any Option and/or the Shares relating
thereto), provided that the term of the Option (i.e. the period the
Option remains exercisable) shall not exceed the maximum period of
time permitted under the applicable laws;
(f) to determine whether and under what circumstances an Option may be
exercised and Shares may be transferred in compliance with the laws of
the Republic of Singapore;
(g) to interpret and administer the Plan and any instrument or document
relating to the Plan; and
(h) to make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the
Plan.
All decisions, determinations and interpretations of the Committee shall be
final and binding on all persons, including the Company, the Company's
Subsidiaries, any Optionee and any other holder or beneficiary of an Option
or the Employee.
4.3 The Committee may delegate to one or more managerial officers of the
Company or its Subsidiaries or to a committee composed of such managerial
officers the authority to administer the Plan with respect to employees
other than managerial officers pursuant to the authorization given by the
Committee.
4.4 Each Option granted under the Plan shall be evidenced by an Option
Agreement specifying the terms and conditions of the Option and any rules
applicable thereto.
5. Eligibility
5.1 Options may be granted to the Employees of the Employer as determined by
the Committee, pursuant to the Option Agreement executed by the Optionee
and the Company. The Committee shall have sole and complete authority to
determine the Employees to whom Options shall be granted, the number of
Shares to be covered by each Option and the conditions and limitations
applicable to the exercise of the Option.
5.2 No Employee or other persons shall have any claim to be granted any Option,
and the Employee's exercise of any Option is subject to the restrictions
imposed by the Committee as it may deem advisable under the Plan, local
laws and regulations, the requirements of the stock exchange on which the
stocks of the Company are listed and other applicable rules, laws and
regulations. There is no obligation for the Company to treat all the
Employees, holders or beneficiaries of Options under the same terms and
conditions.
5.3 The eligibility for Options awarded under the Plan are conditioned upon an
Employee's Continuous Status as an Employee and the Options granted under
the Plan are subject to Section 10 of this Plan. However, nothing contained
in the Plan or the Option Agreement nor any Option granted hereunder shall
confer upon any Optionee the right to continuation of employment or
consulting relationship with the Employer or interfere in any way with the
Employee's right or the Employer's right to terminate his employment or
consulting relationship at any time, with or without cause.
6. Term of Plan
The Plan shall become effective upon the adoption by the Shareholders of
the Company in General Meeting. It shall continue in effect until the date
on which all shares available for issue under the Plan have been issued as
fully-vested shares, or the termination of all outstanding options in
connection with a merger under Section 9.3, or terminated under Section 11
of the Plan, or the elapsing of ten years from the effective date,
whichever is earlier.
7. Option Exercise Price and Consideration
7.1 The per Share exercise price shall be no less than the par value of a
Share.
7.2 The payment of the consideration for the Shares to be issued upon exercise
of an Option shall be determined by the Committee and, subject to the
discretion of the Committee, may consist entirely of (1) cash, (2) check,
(3) any combination of the foregoing methods of payment, or (4) such other
considerations and methods of payment for the transfer of Shares to the
extent permitted under applicable laws and regulations or the rules or
regulations of the stock exchange on which the Shares of the Company are
listed.
7.3 All taxes (including income tax) arising from the exercise of any Option by
an Optionee under the Plan shall be borne by the Optionee. The Optionee
shall be required to pay to the Company or its Subsidiaries the amount of
any applicable withholding taxes arising out of an Option, including but
not limited to the exercise of Options or transfer of shares, under the
Plan, if applicable; otherwise, the Company or its Subsidiaries shall have
the right and is hereby authorized to withhold from any compensation,
amount or value owing to the Optionee the amount or value equal to the
amount of tax due and to take such other actions as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such
taxes, if required by applicable law.
8. Exercise
8.1 An Option shall be exercised in accordance with the terms and conditions
listed in the Option Agreement or otherwise directed by the Committee in
writing. An Option may not be exercised for a fraction of a share. An
Option shall be deemed to be exercised upon the Company's receipt of a
written notice of such exercise made in accordance with the terms of the
Option Agreement under which the Option is granted and the full payment for
the Shares to be issued. Full payment may, as authorized by the Committee,
consist of any consideration and method of payment allowable under Section
7.2 of the Plan. The Optionee, holder or the beneficiary of the option are
not entitled to exercise the right to vote or receive dividends or any
other rights as a shareholder with respect to the Shares subject to the
Option notwithstanding the exercise of the Option until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the share certificates
evidencing such Shares. The Company shall issue (or cause to be issued)
such share certificates promptly upon exercise of the Option.
Notwithstanding any provision contained herein, the Committee and the
Company shall not under any circumstances be held liable for any cost,
losses, expenses and damages arising in any event, including but not
limited to the Company's delay in issuing the Shares. The Optionee is not
entitled to any adjustment for dividends or other rights of which the
Record Date is prior to the date the share certificate is issued, unless
otherwise provided in the Plan. For the purpose of this sub-Section, the
term "Record Date" refers to the date fixed by the Company for the purposes
of determining entitlements to dividends or other distributions to or
rights of shareholders.
8.2 Conditions Upon Transfer of Shares
Shares shall not be issued pursuant to the exercise of any Option unless
the exercise of such Option and the delivery of such Shares shall comply
with all relevant provisions of applicable laws and regulations, the
requirements of the stock exchange on which the shares of the Company are
listed and shall be further subject to the approval of counsel for the
Company with respect to such compliance. Each Option shall be exercisable
at such times and subject to such terms and conditions as the Committee
may, in its sole discretion, specify in the applicable Option Agreement or
other written instruments in relation to the Plan. The Committee may impose
such conditions to the exercise of Options, including, without limitation,
any relating to the application of the local laws and regulations, the
requirements of the stock exchange on which the shares of the Company are
listed or other applicable laws or regulations, as it deems necessary or
advisable. The inability of the Company to obtain authority from any
regulatory body and/or self-regulatory organization having jurisdiction
over the Company or its Subsidiaries, which authority is deemed by the
Company's counsel to be necessary to the lawful sale of any shares
hereunder, shall relieve the Company of any liability in respect of the
failure to issue such Shares.
9. Adjustment
9.1 In order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available to the Employees under the Plan, and
subject to any required action by the shareholders and the Board of the
Company and the terms and conditions of the Plan, the Committee shall
adjust the number of Shares subject to outstanding Options or Options to be
granted and the grant or exercise price of any Option for any increase or
decrease in the number of issued shares resulting from a scrip dividend,
combination or reclassification of the Shares, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of Shares or other
securities of the Company or other similar events.
9.2 Upon any adjustment required to be made pursuant to Section 9.1, the
Company shall notify the Optionee in writing and deliver to him a statement
setting forth the exercise or grant price thereafter in effect and the
class and/or number of Shares thereafter to be issued on the exercise of
the Option. Any adjustment shall take effect upon such written notification
being given.
9.3 In the event of the proposed dissolution or liquidation of the Company, the
Board shall notify the Optionee at least 10 days prior to such proposed
action. Options not exercised shall terminate immediately prior to the
consummation of such proposed action. In the event of a merger of the
Company with or into another corporation, the Option shall be assumed or an
equivalent option shall be substituted by such successor corporation. In
the event that such successor corporation does not agree to assume the
Option or the
substitute of an equivalent option, the Optionees shall be entitled to
exercise all the Options that are exercisable on the date of the proposed
merger during a reasonable period of time as determined by the Committee.
The Committee shall notify the Optionees in writing of the fact that the
Option shall be fully exercisable during a given period of time, and the
Options will terminate upon expiration of such period.
10. If the Optionee's employment with the Employer is terminated for any reason
howsoever arising, the rights (if any) of the Optionee or his successor (as
in the case of the Optionee's death) to exercise any Option and if so, the
terms on which such rights may be exercised, shall, unless otherwise
specified in the Option Agreement, be determined at the sole discretion of
the Committee.
11. Amendment and Termination.
11.1 The Board may amend, alter, suspend, discontinue or terminate the Plan or
any portion thereof at any time; provided that no such amendment,
alteration, suspension, discontinuation or termination shall be made
without shareholder's approval if such approval is necessary under
applicable laws or regulations. Notwithstanding anything to the contrary
herein, the Board may amend the Plan in such manner as necessary to make
the Plan in conformity with local rules and regulations in any
jurisdiction.
11.2 The Committee may waive or amend any terms of, or alter, suspend,
discontinue, cancel or terminate any Option granted hereunder,
prospectively or retroactively, provided that the Optionee being adversely
affected by such change consents in writing to such change of the Options.
12. The Option may not be sold, pledged, assigned, disposed, transferred, or
encumbered of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Optionee,
only by the Optionee.
13. The Company shall provide to each Optionee, during the period for which
such Optionee has one or more Options outstanding, copies of all annual
reports and other information which are provided to all shareholders of the
Company.
14. Nothing contained in the Plan shall prevent the Company or its Subsidiaries
from adopting or continuing in effect other compensation arrangements which
may or may not provide for the grant of options of shares.
15. The grant of an Option or any thing contained in the Plan or the Option
Agreement shall not be construed as conferring upon the Optionees any right
with respect to continuation of employment by the Company, nor shall it
interfere in any way with the Employer's right to terminate the employment
at any time, with or without cause. The terms of employment of an Employee
shall not be affected by the execution of the Plan. The Options granted
under the Plan shall not form a part of the terms of employment of an
Employee or entitle him to take into account the Options granted under the
Plan in calculating any compensation or damages on the termination of his
employment for any reason.
16. The validity, interpretation and application of the Plan shall be governed
by the laws of the Republic of Singapore.
17. Any provision of this Plan or the Option Agreement which is invalid or
unenforceable in whole or in part or shall cause the disqualification of
the Company from the application of any laws, regulations, rules or
requirements of which the qualification is deemed necessary by the Board,
shall be construed in a way that will satisfy the requirements under such
laws, regulations and requirements. If it cannot be so construed, such
provision shall be severable in whole or part from the Plan or the Option
Agreement, so that such invalidity, unenforceability or disqualification
shall not affect any other provision hereof.
18. The Plan or the Option Agreement shall not be construed as creating a trust
or separate fund of any kind or a fiduciary relationship between the
Company or its Subsidiaries and an Optionee or any other person. The right
of any person to receive payments from the Company under the Plan or the
Agreement shall be no greater than the right of any unsecured general
creditor of the Company.
Exhibit A Option Agreement
SHARE OPTION AGREEMENT
This SHARE OPTION AGREEMENT ("Agreement") is entered into on [Date] by and
between GigaMedia Limited ("Company"), a company incorporated in and existing
under the laws of the Republic of Singapore, with its registered office business
at 8 Robinson Road, #6-00, ASO Building, Singapore 048544 and [Name]
("Optionee"), a citizen of [Nationality] residing at __________________________.
WHEREAS, the Company agrees to award to Optionee and Optionee agrees to accept
an option ("Option") to purchase shares ("Shares") in the capital of the Company
under the GigaMedia Limited 2004 Employee Share Option Plan ("Plan").
NOW, THEREFORE, subject to the terms and conditions stated in the Agreement and
the Plan, the parties agree as follows:
1. Plan
The award of the Option granted hereunder is subject to the terms and
conditions stated in the Plan, the terms of which are hereby incorporated
into this Agreement. Terms used in this Agreement which are not defined
herein shall have the meanings as defined in the Plan.
2. Grant of Option
The Company hereby grants to the Optionee and the Optionee agrees to accept
from the Company the Option to purchase a total number of Shares as set
forth in Annex A, Notice of Grant, at the price specified in Annex A
("Exercise Price") pursuant to the terms of the Plan and this Agreement.
3. Exercise of Option
Upon vesting of the Option pursuant to the Vesting Schedule listed in Annex
A, the Option shall be exercisable, in whole or in part, during its term
and subject to the provisions of Section 10 of the Plan. The Option shall
be exercised by a written notice to the Company stating 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 per form and substance of Annex B. Such written notice shall
be signed by the Optionee and shall be delivered in person or by certified
mail to the Company. The written notice shall be accompanied by payment of
the exercise price.
4. Method of Payment
Payment of the exercise price shall be made in accordance with Section 7.2
of the Plan. No Share shall be issued pursuant to any exercise of the
Option until payment has been made in full of the Exercise Price for the
Shares in respect of which the Option is being exercised to the Company.
5. Restrictions on Exercise
5.1 No Shares will be issued pursuant to the exercise of the Option unless such
issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the shares of the
Company are listed as determined by the counsel of the Company. The
inability of the Company to obtain authority from any regulatory body
and/or self-regulatory organization having jurisdiction over the Company,
which authority is deemed by the Company's counsel to be necessary to the
lawful issuance of any shares hereunder, shall relieve the company of any
liability in respect of the failure to sell such Shares.
5.2 This Option may not be exercised for a fraction of a share.
5.3 Once vested, this Option may be exercised up to the expiration date of the
term of this Option as set forth in Annex A.
5.4 As a condition to the exercise of this Option, the Company may require the
Optionee to make any representation and warranty to the Company as may be
required by any applicable laws and regulations.
6. Termination of Employment
6.1 In the event of termination of the Optionee's employment with the Company
or the subsidiary of the Company (the "Subsidiary") for reasons other than
due to gross negligence, willful misconduct or criminal offense of the
Optionee, the Optionee shall have the right to exercise the Option
following such termination of employment to the extent it is exercisable at
the date of such termination of employment and has not been exercised,
subject to Section 5.3 of this Agreement.
6.2 Subject to Section 6.1 of this Agreement, if an Optionee's employment with
the Employer is terminated by reason of death or permanent and total
disability, the Optionee or its successor, in the case of the Optionee's
death, shall have the right to exercise the Option following such
termination of employment to the extent it
was exercisable at the date of such termination of employment and has not
been exercised, subject to Section 5.3 of this Agreement.
7. Obligations of Optionee
The Optionee agrees to cooperate with the Company and promptly complete and
deliver all documents, forms and other materials, and timely take all
action, as may be requested by Company in connection with this Option. The
Optionee agrees to pay all processing charges, fees, taxes and other
governmental assessments or charges, transaction costs, and other costs in
relation to the Option.
8. Non-transferability.
This Option may not be transferred in any manner except by will or by the
laws of descent or distribution and may be exercised during the lifetime of
Optionee only by him. The terms of this Option shall be binding upon the
executors, administrators, heirs and successors of the Optionee.
9. No Rights as a Shareholder.
The Optionee is not entitled to exercise the right to vote or receive
dividends or other rights as a shareholder with respect to any Shares
subject to the Option granted hereunder prior to the issuance of the
Shares.
10. Other Laws.
10.1 The Committee may refuse to issue any Shares, if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares
might violate any applicable law or regulation or entitle the Company to
recover under Section 16(b) of the Exchange Act of the United States, and
in such event any payment tendered to the Company by an Optionee, other
holder or beneficiary in connection with the exercise of such Option shall
be promptly refunded to the relevant Optionee, holder or beneficiary.
Without limiting the generality of the foregoing, the Option granted
hereunder shall be construed as an offer to acquire or to sell Shares of
the Company, and no such offer shall be outstanding, unless and until the
Committee in its sole discretion has determined that any such offer, if
made, would be in compliance with all applicable requirements of the U.S.
federal securities laws and any other laws to which such offer, if made,
would be subject.
10.2 If at any time the Committee shall determine in its discretion that the
Shares subject to the Option granted hereunder must be listed or qualified
on any securities exchange or registered or qualified under any applicable
law or that the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with the
granting of the Option, or the delivery or purchase of Shares pursuant to
the Option, such Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have
been effected or obtained.
11. No Rights to Continuation of Employment
Nothing in this Agreement, nor in the Plan which is incorporated herein by
reference, shall confer upon the Optionee any right with respect to
continuation of employment by the Company or the Subsidiary, nor shall it
interfere in any way with the right of the Company or the Subsidiary to
terminate his employment at any time, with or without cause.
12. Notices
Any notice given under this Agreement or the Plan shall be in writing and
shall be deemed to have been duly given, if delivered by hand with proof of
receipt, at the time of receipt, or if communicated by facsimile, cable or
similar electronic means to the facsimile number or cable/electronic
identification number as provided below, at the time that receipt thereof
has been confirmed by return electronic communication or signal that the
message has been clearly received, or if mailed by postage prepaid and
registered mail with acknowledgment of receipt to the addresses of the
parties as set forth below:
to the Company
GigaMedia Limited
Address: 14F, 122, Duenhua N. Rd., Sungshan Chiu, Taipei, Taiwan, R.O.C.
Fax: 886-2-87707826
Attention: Human Resources Department
to the Optionee
Name:
Address:
Fax:
13. Governing Law
The Agreement and the Plan will be governed by and construed in accordance
with the laws of the Republic of Singapore, without regard to conflicts of
law principles that would result in the application of the law of another
jurisdiction. By executing this Agreement, the Optionee agrees to submit to
the jurisdiction of the courts of Singapore for any dispute arising out of
the Plan and the Agreement.
14. Counterparts
This Agreement may be executed in duplicates, each of which shall be deemed
an original, but which together shall constitute a single instrument.
IN WITNESS WHEREOF, the Company and the Optionee have duly executed and
delivered this Agreement on the date first above written.
The Company The Optionee
GigaMedia Limited
By _________________________ __________________________
Name: Name:
Title: Director Passport No.:
Annex A Notice of Grant
GIGAMEDIA LIMITED
2004 EMPLOYEE SHARE OPTION PLAN
NOTICE OF GRANT
[Optionee's Name and Address]
You have been granted a Nonstatutory Share Option to purchase Shares of
GigaMedia Limited as follows:
Grant No.
Date of Grant
Exercise Price Per Share
Total Number of Shares Granted
Total Price of Shares Granted
Term/Expiration Date:
Vesting Schedule:
DATE OF VESTING NUMBER OF SHARES
Exercise Schedule: Subject to the terms and conditions of the Plan and
the Agreement, the Option becomes exercisable upon
vesting. In addition, the Option shall expire and
may not be exercised after the Expiration Date.
Annex B Exercise Notice
GIGAMEDIA LIMITED
2004 EMPLOYEE SHARE OPTION PLAN
EXERCISE NOTICE
GigaMedia Limited
14F, 122, Duenhua N. Rd., Sungshan Chiu, Taipei, Taiwan, R.O.C.
Attention: Human Resources Department
1. Effective as of today, __________________________, the undersigned
("Optionee") hereby elects to exercise the Optionee's option to purchase
____________ shares (the "Shares") in the capital of GigaMedia Limited (the
"Company") under and pursuant to the Company's 2004 Employee Share Option Plan
(the "Plan") and the Share Option Agreement dated _____________ (the "Option
Agreement").
2. The Optionee understands and acknowledges that the subscription of the
Shares is subject to the terms and conditions of the Plan and Option Agreement,
applicable local and foreign laws and regulations as determined by the Board,
and the requirement of the stock exchange on which the shares of the Company are
or may hereafter be listed. The Optionee agrees to cooperate with the Company to
ensure compliance with such laws and requirements.
3. The Optionee agrees to pay any applicable taxes and transaction costs in
relation to the exercise of the Option.
4. The Optionee agrees to execute such further instruments and to take such
further action as may be reasonably necessary to carry out the purposes and
intent of this Agreement.
5. The Optionee herewith delivers to the Company the full Exercise Price
for the Shares.
Submitted by Grant No. ___________________
Optionee Date of Grant ___________________
Exercise Price Per Share ___________________
____________________ Total Number of Shares Granted ___________________
Name:
Passport No. Term/Expiration Date ___________________
Address:
Number of Shares on which the
Option has been exercised ___________________
Total Exercise Price ___________________