<PAGE> 1
EXHIBIT 10.3
AMERICAN MULTIPLEXER(TM) CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
American Multiplexer(TM) Corporation, a California corporation (the
"Company"), has granted to ________________________ (the "Optionee"), an option
(the "Option") to purchase a total of _________________________ (_____________)
shares of Common Stock (the "Shares") of the Company on the terms and
conditions set forth below.
1. Nature of the Option. This Option is intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Code.
2. Exercise Price. The exercise price is __________________ for each share of
Common Stock, which price is not less than the fair market value per share
of the Common Stock on the date of grant.
3. Exercise of Option. This Option shall be exercisable during its term as
follows:
(i) Right to Exercise
(a) This Option shall be exercisable cumulatively, to the extent
of 25% on the one-year anniversary of the optionee's hire
date, and an additional 1/36 of the Shares on the last day
of each calendar month thereafter.
(b) Stock Acceleration
There is stock ownership acceleration for the completion of
agreed upon milestones in development, marketing, and sales. If
milestones per the business plan are met, the ISO stock ownership
will accelerate to vesting 50% of shares at completion of
SatExpress Beta Field trials and completion of the Digicop-2
development. The remaining 50% is proposed to accelerate with the
launch of the SatExpress and DSL products into the full market
place. The issued restricted stock warrants will accumulate at
30% at start of any SatExpress Equipment Sales and the remaining
20% at the completion of SatExpress Beta Field trials. An AMC
Warrant agreement will be defined in a separate agreement.
Otherwise, the ISO shares will vest normally at 25% per year as
per section 3 (I)(a).
(c) This Option may not be exercised for a fraction of a share.
(d) Rights of Survivorship
In the event of the optionee's death, disability or other
termination of employment, other than cause, the rights to
exercise the options will be transferable to the optionee's
beneficiary or other designatee defined by the optionee.
(ii) Merger, Consolidation or Sale of Assets. In the event of a proposed
sale of all or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, the Company shall provide
Optionee with written notice of such transaction not later
1998-99 American Multiplexer(TM) Corp. Confidential-Stock Option Agreement
Page 1 of 4
<PAGE> 2
than thirty (30) days prior to the projected date of such transaction.
Notwithstanding the vesting provisions of Section 3(i)(a)(b) above, after
delivery of such notice Optionee may exercise this Option to the full extent.
After delivery of such notice, the optionee can, upon providing notice,
accelerate vesting at 100% on or prior to the date of such transaction and may
condition his exercise upon the occurrence of the transaction. Whether or not
so exercised, this Option agreement shall terminate immediately upon the
consummation of such proposed sale, merger or offering.
(iii) Method of Exercise of Options. This Option shall be exercisable 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. 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 or designee. The written notice shall be deemed to be exercised upon
receipt by the Company of such written notice accompanied by the exercise price
at the fair market value at the time of exercise. Exhibit A contains the form
that should be used.
No shares will be issued pursuant to the exercise of an 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 may then be
listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
4. Method of Payment. Payment of the exercise price shall be by cash, check,
or delivery of Common Stock of the Company that has been vested by the
Optionee. The value of such common stock shall have a fair market value
equal to the exercise price payable with respect to the exercise hereof or
any combination of such methods of payment.
5. Termination of Status as an Employee. In the event of termination of
Optionee's status as an employee, he may, but only within one
hundred-eighty (180) days after date of such termination, exercise this
option to the extent that he was entitled to exercise it at the date of
such termination. To the extent that he was not entitled to exercise this
option at the date of such termination, or if he does not exercise this
Option within the time specified herein, the Option shall terminate.
6. Disability of Optionee. Notwithstanding the provisions of Section 5 above,
in the event of termination of Optionee's status as an employee as a result
of disability, he may, but only within six months from the date of
termination of employment, exercise his Option to the extent he was
entitled to exercise it at the date of such termination. To the extent that
he was not entitled to exercise the Option at the date of termination, or
if he does not exercise such Option within the time specified herein, the
Option shall terminate.
7. Death of Optionee. In the event of the death of Optionee, the Option may be
exercised, at any time within six months following the date of death, by
Optionee's estate, spouse or by a person who acquired the right to exercise
the Option by bequest or inheritance but only to the extent of the right to
exercise that has accrued at the date of death of the Optionee. To the
extent that an Optionee was not entitled to exercise the Option at the date
of his death, or if the Optionee's estate or legatee does not exercise the
Option within the time specified herein, the Option shall terminate.
1998-99 American Multiplexer(TM) Corp. Confidential-Stock Option Agreement
Page 2 of 4
<PAGE> 3
8. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than 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, successors and assigns of the Optionee.
9. Term of Option. This Option may not be exercised more than ten (10) years
from the date of grant of this Option, and may be exercised during such
term only in accordance with the Plan and the terms of this Option.
10. Early Disposition of Stock. Optionee understands that if he disposes of
any Shares received under this Option within two years after the date of
this Agreement or within one year after such Shares were transferred to
him, he will be treated for federal income tax purposes as having received
ordinary income at the time of such disposition in an amount generally
measured by the difference between the price paid for the Shares and the
lower of the fair market value of the Shares at the date of the exercise
or the fair market value of the Shares at the date of the disposition.
Optionee understands that if he disposes of such Shares at any time after
the expiration of such two-year and one-year holding periods, any gain on
such sale will be taxed as long-term capital gain.
Date of grant:
AMERICAN MULTIPLEXER CORPORATION,
a California corporation
By:
--------------------------
Edward Tan, President/CEO
1998-99 American Multiplexer(TM) Corp. Confidential-Stock Option Agreement
Page 3 of 4
<PAGE> 4
EXHIBIT A
NOTICE OF INTENT TO EXERCISE OF
INCENTIVE STOCK OPTION
AMERICAN MULTIPLEXER CORPORATION Date of Exercise:
Re: Incentive Stock Option Dated ______________________________
Gentlemen:
This constitutes notice under my Stock Option Agreement that I elect to purchase
the number of shares of Common Stock set forth below for the price set forth
below:
Stock option dated: ________________________
Number of shares as to which
option is exercised: ________________________
Total exercise price: ________________________
Cash payment delivered herewith: ________________________
Unless such documents are enclosed herewith, I hereby agree to execute such
additional documents evidencing such other representations and agreements as to
my investment intent with respect to these shares of Common Stock as may be
required by the Company pursuant to the provisions of the Stock Option
Agreement. Please advise what additional documents may be required.
Very truly yours,
__________________________
1998-99 American Multiplexer(TM) Corp. Confidential-Stock Option Agreement
Page 4 of 4
<PAGE> 5
[AMERICAN MULTIPLEXER(TM) CORPORATION LETTERHEAD]
Name Date:
Address
City,State,Zip
Dear ____________
AMC is pleased to offer you the position of _________________ reporting to
_______________. Your initial, exempt pay rate will be $___________ per month,
annualized at $_______________. Thereafter, you will be on an annual review
cycle.
As an employee of AMC, you will be given the companies present benefit package
including medical, dental, and life insurance, which is available to you and
your dependents. This benefit package is effective your first day of employment.
In addition, subject to the approval of the board of directors, you will be
recommended for a stock option of _____________ shares of AMC common stock. The
terms and conditions for normal vesting and accelerated vesting are contained in
the "Employee Incentive Stock Option Agreement" dated 12/98.
It is understood that either AMC or you can rescind this contract by giving the
other a 30-day notice in writing. If the employee violates any of the rules
under our Human Resources Policy handbook or acts in any unprofessional manner,
he may be terminated with cause without notice.
_____________, we are looking forward to your joining AMC and believe your
personal qualifications and professional experience will be an asset to our
future business growth. This offer is in effect through ____________, 1998.
Please sign and return the enclosed copy of this letter indicating your start
date should you decide to accept the offer. Please feel free to give Ron
Everoski a call at 408-730-8200 x102, if you have any further questions.
Sincerely,
American Multiplexer(TM) Corporation
__________________________
Edward Tan-President & CEO
Ron Everoski
VP/CTO
____________________________________ __________________________
Offer Accepted Start Date
1998-99 American Multiplexer(TM) Corp. Company Confidential Page 1 of 1
