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EXHIBIT 99.5
FORM OF SILICON LABORATORIES INC.
STOCK OPTION ASSUMPTION AGREEMENT
OPTIONEE: < < First_Name > > < < Last_Name > >,
STOCK OPTION ASSUMPTION AGREEMENT effective as of the 9th day of August
2000 by Silicon Laboratories Inc., a Delaware corporation ("Silicon Labs").
WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of Krypton Isolation,
Inc., a California corporation ("Krypton"), which were granted to Optionee under
the Krypton Isolation, Inc. 1997 Stock Plan (the "Plan") and are each evidenced
by a Stock Option Agreement (the "Option Agreement").
WHEREAS, Krypton has been acquired by Silicon Labs through the merger
of Krypton with Silicon Labs (the "Merger") pursuant to the Merger Agreement and
Plan of Reorganization, by and among Silicon Labs, Krypton and Karst Corporation
(the "Merger Agreement").
WHEREAS, the provisions of the Merger Agreement require the obligations
of Krypton under each outstanding option under the Plan to be assumed by Silicon
Labs at the consummation of the Merger, and the holder of each such outstanding
option to be issued an agreement evidencing the assumption of such option.
WHEREAS, pursuant to the provisions of the Merger Agreement, the
exchange ratio (the "Exchange Ratio") in effect for the Merger is .065545794
of a share of Silicon Labs common stock, par value $0.0001 par value per
share ("Silicon Labs Stock"), for each outstanding share of Krypton common
stock ("Krypton Stock").
WHEREAS, the purpose of this Agreement is to evidence the assumption by
Silicon Labs of the outstanding options held by Optionee at the time of the
consummation of the Merger (the "Effective Time") and to reflect certain
adjustments to Optionee's outstanding options which have become necessary in
connection with their assumption by Silicon Labs.
NOW, THEREFORE, it is hereby agreed as follows:
1. The number of shares of Krypton Stock subject to the options held by
Optionee immediately prior to the Effective Time (the "Krypton Options") and the
exercise price payable per share are set forth below. Silicon Labs hereby
assumes, as of the Effective Time, all the duties and obligations of Krypton
under each of the Krypton Options. In connection with such assumption, the
number of shares of Silicon Labs Stock purchasable under each Krypton Option
hereby assumed and the exercise price payable thereunder have been adjusted to
reflect the Exchange Ratio. Accordingly, the number of shares of Silicon Labs
Stock subject to each Krypton Option hereby assumed shall be as specified for
that option below, and the adjusted exercise price payable per share of Silicon
Labs Stock under the assumed Krypton Option shall also be as indicated for that
option below.
<TABLE>
<CAPTION>
---------------------------------------------------------- ----------------------------------------------------
KRYPTON STOCK OPTIONS SILICON LABS ASSUMED OPTIONS
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----------------------------- ---------------------------- --------------------------- ------------------------
<S> <C> <C> <C>
# of Shares of Krypton Exercise Price # of Shares of Silicon Adjusted Exercise
Common Stock per Share Labs Common Stock Price per Share
----------------------------- ---------------------------- --------------------------- ------------------------
Krypton Shares $Krypton Price Silicon Labs Shares $Silicon Labs Price
----------------------------- ---------------------------- --------------------------- ------------------------
</TABLE>
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2. The intent of the foregoing adjustments to each assumed Krypton
Option is to assure that the spread between the aggregate fair market value of
the shares of Silicon Labs Stock purchasable under each such option and the
aggregate exercise price as adjusted pursuant to this Agreement will,
immediately after the consummation of the Merger, be substantially the same as
(and in no event greater than) than the spread which existed, immediately prior
to the Merger, between the then aggregate fair market value of the Krypton Stock
subject to the Krypton Option and the aggregate exercise price in effect at such
time under the Option Agreement. Such adjustments are also intended to preserve,
immediately after the Merger, on a per share basis, the same ratio of exercise
price per option share to fair market value per share which existed under the
Krypton Option immediately prior to the Merger.
3. The following provisions shall govern each Krypton Option hereby
assumed by Silicon Labs:
(a) Unless the context otherwise requires, all
references in the Option Agreements and, if applicable, in the Plan (as
incorporated into such Option Agreements) shall be adjusted as follows;
(i) all references to the "Company" shall mean Silicon Labs, (ii) all
references to "Share" shall mean shares of Silicon Labs Stock, (iii)
all references to "Common Stock" shall mean Silicon Labs Stock and (iv)
all references to the "Administrator" shall mean the Board of Directors
of Silicon Labs or the Compensation Committee of the Silicon Labs Board
of Directors.
(b) The grant date and the expiration date of each
assumed Krypton Option and all other provisions which govern either the
exercise or the termination of the assumed Krypton Option shall remain
the same as set forth in the Option Agreements applicable to that
option, and the provisions of the Plan and the Option Agreements shall
accordingly govern and control Optionee's rights to purchase Silicon
Labs Stock under the assumed Krypton Option.
(c) Pursuant to the terms of the Option Agreements
and the Plan, none of the assumed Krypton Options shall vest or become
exercisable on an accelerated basis upon the consummation of the
Merger. Accordingly, each Krypton Option assumed by Silicon Labs shall
continue to vest and become exercisable for any vested shares of
Silicon Labs Stock subject to that option in accordance with the same
installment vesting schedule in effect under the applicable Option
Agreements immediately prior to the Effective Time; provided, however,
that the number of shares subject to each such installment shall be
adjusted to reflect the Exchange Ratio.
(d) For purposes of applying any and all provisions
of the Option Agreements and/or the Plan relating to Optionee's status
as an employee or a consultant of Krypton, Optionee shall be deemed to
continue in such status as an employee or a consultant for so long as
Optionee renders services as an employee or a consultant to Krypton,
Silicon Labs or any present or future majority-owned Silicon Labs
subsidiary. Accordingly, the provisions of the Option Agreements
governing the termination of the assumed Krypton Options or the
exercise of Silicon Labs repurchase rights with respect to any unvested
Silicon Labs Stock purchased under such options and unvested at the
time of Optionee's cessation of service as an employee or a consultant
of Krypton shall hereafter be applied on the basis of Optionee's
cessation of employee or consultant status with Silicon Labs and its
majority-owned subsidiaries. Each assumed Krypton Option shall
accordingly terminate, within the designated time period in effect
under the Option Agreements for that option following such cessation of
service as an employee or a consultant of Silicon Labs and its
majority-owned subsidiaries, including Krypton.
(e) The adjusted exercise price payable for the
Silicon Labs Stock subject to each assumed Krypton Option shall be
payable in any of the forms authorized
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under the Option Agreement applicable to that option. For purposes of
determining the holding period of any shares of Silicon Labs Stock
delivered in payment of such adjusted exercise price, the period for
which such shares were held as Krypton Stock prior to the Merger shall
be taken into account.
(f) In order to exercise each assumed Krypton Option,
Optionee must deliver to Silicon Labs a written notice of exercise in
which the number of shares of Silicon Labs Stock to be purchased
thereunder must be indicated. The exercise notice must be accompanied
by payment of the adjusted exercise price payable for the purchased
shares of Silicon Labs Stock and should be delivered to Silicon Labs at
the following address:
Silicon Laboratories Inc.
4635 Boston Lane
Austin, Texas 78735
Attention: Stock Plan Administration
4. Except to the extent specifically modified by this Option Assumption
Agreement, all of the terms and conditions of each Option Agreement as in effect
immediately prior to the Merger shall continue in full force and effect and
shall not in any way be amended, revised or otherwise affected by this Stock
Option Assumption Agreement.
IN WITNESS WHEREOF, Silicon Laboratories Inc. has caused this Stock
Option Assumption Agreement to be executed on its behalf by its duly-authorized
officer as of the 9th day of August 2000.
SILICON LABORATORIES INC.
By: _____________________________
Name: __________________________
Title: __________________________
ACKNOWLEDGMENT
The undersigned acknowledges receipt of the foregoing Stock Option
Assumption Agreement and understands that all rights and liabilities with
respect to each of his or her Krypton Options hereby assumed by Silicon Labs are
as set forth in the Option Agreement, the Plan, as applicable, and such Stock
Option Assumption Agreement.
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< < First_Name > > < < Last_Name > >, OPTIONEE
DATED: ________ ___, 2000
