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AMENDMENT TO OPTION AGREEMENTS
FOR CERTAIN INDIVIDUALS
UNDER THE
1996 STOCK PLAN
As it is in the interests of Integrated Telecom Express, Inc. (the "Company") to
attract and retain the highest quality and caliber members for its board on
terms that are competitive with those offered by other companies who seek the
help of such board members, the Company amends its 1996 Stock Plan to provide
such incentives as described further below.
I. ACCELERATION OF NSO VESTING AND EXERCISE UNDER STOCK PLAN OF THE COMPANY
A. Each person whose name is set forth on Exhibit A attached to this
Amendment who is or has been granted an option to purchase non-statutory options
within the meaning of Section 422 of the Internal Revenue Code shall be allowed
to accelerate the vesting of those options, and to purchase them under the
following terms:
The vesting for the nonstatutory stock options shown in Exhibit A shall
accelerate so as to become fully vested throughout the vesting period for the
individual(s) so effected upon the occurrence of the following conditions: (i)
the individual has offered and is willing to continue to serve for the duration
of the vesting period described in the above stock option grant resolution in
the capacity they held with the Company as of the date of this Amendment; and
(ii) the individual involved is not then in default of his/her material
obligations to the Company (for purposes of this provision, an individual is not
in default absent written notice from the Company of the claim of default and a
reasonable opportunity to cure in a prompt manner); and (iii) the Company, its
shareholders or directors do not offer that person a reasonable opportunity to
continue in the capacity held as of the date of this Amendment so as to fully
vest all remaining shares granted such person as shown in Exhibit A.
II. VESTING
A. The grants and vesting for the nonstatutory stock options shown in
Exhibit A shall be implemented in a manner that permits each member of the board
receiving such option grants to exercise the relevant options (whether vested or
not) in full at any time following January 1, 2000, under the terms outlined
below:
(i) With respect to the options which would vest in the second, third
and fourth years of the vesting period, each such director may purchase the
shares involved pursuant to an interest bearing full-recourse secured promissory
note payable to the Company, with the share certificates held by the Company as
security for the note;
(ii) With respect to all options exercised pursuant to subpart (a)
above, the exercise(s) will be done pursuant to a right to repurchase by the
Company at the Option exercise price, which right will be exercisable upon the
occurrence of any one or more of the following conditions: (i) if, for reasons
other than those for which the Company or its shareholders are responsible, the
individual director involved has failed to offer or is unwilling or unable to
continue
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to serve in the capacity they held with the Company as of the date of this
Amendment for the duration of the vesting period which would otherwise apply;
and/or (ii) if the individual director involved is in default of his/her
material obligations to the Company (for purposes of this provision, an
individual is not in default absent written notice from the Company of the claim
of default and a reasonable opportunity to cure in a prompt manner).
(iii) With respect to all options exercised pursuant to subpart (a)
above, the Company's right of repurchase will lapse in accordance with the
vesting schedule which would otherwise apply. In order to illustrate the board's
intention, and solely by way of example, consider a hypothetical individual
director who elected early exercise of all years of the grant, with the final
three years exercised pursuant to Section II(A)(i); for such a director, the
Company right to repurchase shall lapse at the rate of 20% of the Shares Subject
to the Option at the end of the 12th month following the Vesting Commencement
Date; 2 1/12% of the Shares Subject to the Option at the end of each of the 13th
through 24th months following the Vesting Commencement Date; at the rate of 2
1/2% of the Shares subject to the Option at the end of each of the 25th through
36th months following the Vesting Commencement Date, and at the rate of 2 1/12%
of the Shares subject to the Option at the end of each of the 37th through 48th
months following the Vesting Commencement Date;
III. ACCELERATION OF VESTING OF STOCK OPTION GRANTS: "CHANGE OF CONTROL"
A. The agreements under which persons have previously been granted options
to purchase non-statutory options within the meaning of Section 422 of the
Internal Revenue Code are hereby amended to allow for the acceleration of the
vesting of those options.
B. "Change of Control" shall mean any merger, acquisition, combination,
restructuring and/or reorganization of the Company (other than an offering of
shares on the open market) in which the shareholders of record of the Company
(as a group) immediately prior to the close of such transaction do not, as of
the close of such transaction, hold more than 50% of the then outstanding shares
of the Company (and/or the corporate entity resulting from such transaction).
C. That in the event of a Change of Control, the Company wishes to
incentives each person named on the attached Exhibit A to work in the interests
of the Company and its shareholders, without regard to the risk of loss of
option rights and/or resulting uncertainty as to potential change in their
particular employment status.
D. Each person named on the attached Exhibit A and solely as to those
options shown on Exhibit A to purchase shares of common stock of the Company
pursuant to the 1996 Stock Plan of the Company (the "Plan") shall be allowed to
accelerate the vesting of such options for such number of shares under the terms
of this resolution.
E. Upon a Change in Control, and notwithstanding the vesting provided in
the grant(s) involved, the vesting for the then outstanding options shown in
Exhibit A shall accelerate so as to become fully vested for the individual(s) so
effected upon the occurrence of the following conditions: (i) the individual has
offered in writing and is willing to continue to serve as an employee for the
duration of the vesting period described in the option grant in the general
capacity.
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that individual held with the Company immediately prior to the Change of
Control; and (ii) the individual involved is not then in default of any material
obligations to the Company (as to which the Company has provided written notice
of default and which default the individual has failed to cure within a
reasonable time after such notice); and (iii) the Company, its shareholders or
directors do not offer that person a reasonable opportunity to continue in such
general capacity following the Change of Control so as to fully vest all
remaining shares in the grants to such person as shown in Exhibit A.
THE COMPANY: INTEGRATED TELECOM EXPRESS, INC
By:
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Date:
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OPTION HOLDER
By:
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Date:
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EXHIBIT A
ITEX EXECUTIVE STOCK OPTIONS
<TABLE>
<CAPTION>
ISO
Name Prior Options to New Grant v Total
date (K's) (in K's) NSO (K's)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rich Forte 600 600 ISO 1200
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Robert Gardner 400 125 ISO 525
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Ralph Cognac 250 150 ISO 400
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Brian Gillings 225 75 ISO 300
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Max Liu 190 160 ISO 350
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Jow Peng 210 140 ISO 350
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Tim Rogers 230 70 ISO 300
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Wen Chi Chen 970 250 ISO 1220
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Young Way Liu 995 200 ISO 1195
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Peter Courture 50 50 NSO 100
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Subtotal 1820
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Terry Gou 50 n/a NSO 50
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David Lam 100 n/a NSO 100
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John Cioffi 100 n/a NSO 100
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</TABLE>
