<PAGE> 1
XICOR, INC.
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 17, 1996
------------------------
To the Shareholders of XICOR, INC.:
The Annual Meeting of Shareholders of Xicor, Inc. (the "Company" or
"Xicor"), a California corporation will be held at 1618 Buckeye Drive, Milpitas,
California, on Monday, June 17, 1996 at 3:00 p.m. local time for the purpose of
considering and acting upon the following proposals:
(1) To elect a Board of five (5) directors;
(2) To approve and ratify amendments to the Amended and Restated
Xicor, Inc. 1990 Incentive and Non-Incentive Stock Option Plan including an
increase in the number of shares of common stock issuable thereunder from
1,500,000 to 3,200,000;
(4) To ratify the designation of Price Waterhouse LLP as independent
accountants for the period ending December 31, 1996; and
(5) To transact such other business as may properly come before the
Annual Meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on April 22, 1996 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting and at any continuation and adjournment thereof.
The Company's 1995 Annual Report to Shareholders accompanies this Notice of
Meeting.
By Order of the Board of Directors
Julius Blank, Secretary
Milpitas, California
April 26, 1996
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE EARNESTLY REQUESTED TO SIGN AND RETURN
THE ACCOMPANYING PROXY IN THE ENCLOSED POST-PAID ENVELOPE.
<PAGE> 2
XICOR, INC.
<TABLE>
<S> <C>
CORPORATE HEADQUARTERS: PLACE OF MEETING:
1511 Buckeye Drive 1618 Buckeye Drive
Milpitas, CA 95035 Milpitas, CA 95035
</TABLE>
Telephone: (408) 432-8888
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
JUNE 17, 1996
APPROXIMATE DATE OF MAILING: APRIL 26, 1996
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Xicor, Inc. (the "Company" or "Xicor") of proxies for
use at the Annual Meeting of Shareholders of Xicor (the "Annual Meeting") to be
held on Monday, June 17, 1996 at 3:00 p.m. local time or at any adjournment or
postponement thereof.
VOTING RIGHTS
Shareholders of record of Xicor as of the close of business on April 22,
1996 have the right to receive notice of and to vote at the Annual Meeting. On
April 22, 1996, Xicor had issued and outstanding 18,570,177 shares of Common
Stock, the only class of voting securities outstanding. Each share of Common
Stock is entitled to one vote.
Each shareholder voting at the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of votes to which the
shareholder's shares are entitled, or distribute such votes, on the same
principle, among as many candidates as the shareholder thinks fit, provided that
votes cannot be cast for more candidates than the number of directors to be
elected. However, no shareholder will be entitled to cumulate votes unless, in
conformance with the California Corporations Code, a shareholder has given
notice at the Annual Meeting, prior to the voting, of the shareholder's
intention to cumulate such shareholder's votes. If any one shareholder has given
such notice, all shareholders may cumulate their votes for candidates in
nomination.
PROXIES
Properly executed and unrevoked proxies received by Xicor will be voted at
the Annual Meeting in accordance with the instructions thereon. Where no
instructions are specified, the proxies will be voted in favor of all proposals
set forth in the Notice of Meeting.
Any person giving a proxy in the form accompanying this Proxy Statement has
the power to revoke it at any time before its exercise by filing with the
Secretary of Xicor (i) a signed written statement revoking the proxy or (ii) an
executed proxy bearing a date later than that of the proxy being revoked. A
proxy may also be revoked by attendance at the Annual Meeting and election to
vote in person. Attendance at the Annual Meeting will not by itself constitute
the revocation of a proxy.
QUORUM: ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR", "AGAINST" or "WITHHELD FROM" a matter are
treated as being present at the meeting for purposes of establishing a
<PAGE> 3
quorum and are also treated as shares "represented and voting" at the Annual
Meeting (the "Votes Cast") with respect to such matter.
While there is no definitive statutory or case law authority in California
as to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of a quorum for the transaction of business and (ii) the total number of Votes
Cast with respect to a proposal. In the absence of controlling precedent to the
contrary, the Company intends to treat abstentions in this manner. Accordingly,
abstentions will have the same effect as a vote against a proposal.
Broker non-votes will be counted for purposes of determining the presence
or absence of a quorum for the transaction of business, but will not be counted
for purposes of determining the number of Votes Cast with respect to a proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 22, 1996 the number of shares
beneficially owned by each director, by each of the executive officers named in
the Summary Compensation Table and by all executive officers and directors as a
group, together with their respective percentage ownership of outstanding
shares. As of April 22, 1996, there was no person or entity known to Xicor to
own beneficially more than five percent (5%) of its Common Stock.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME OWNED PERCENT
------------------------------------------------------------- ------------ -------
<S> <C> <C>
Raphael Klein................................................ 470,000(1)(2) 2.5
Julius Blank................................................. 69,500(1) *
Hans G. Dill................................................. 7,500(1) *
Andrew W. Elder.............................................. 22,500(1) *
S. Allan Kline............................................... 9,440(1) *
Joseph Drori................................................. 58,750(1) *
Klaus G. Hendig.............................................. 56,250(1) *
Bruce W. Mattern............................................. 56,700(1)(3) *
William H. Owen, III......................................... 189,550(1) 1.0
All Executive Officers and Directors as a Group (12
persons)................................................... 1,029,690(4) 5.5
</TABLE>
- ------------------------
* Less than 1%
(1) Includes shares purchasable upon exercise of stock options as of April 22,
1996 or within 60 days thereafter as follows:
<TABLE>
<S> <C>
Raphael Klein............................................... 55,000
Julius Blank................................................ 7,500
Hans G. Dill................................................ 7,500
Andrew W. Elder............................................. 7,500
S. Allan Kline.............................................. 7,500
Joseph Drori................................................ 51,250
Klaus G. Hendig............................................. 50,000
Bruce W. Mattern............................................ 53,500
William H. Owen, III........................................ 11,250
</TABLE>
(2) Includes 415,000 shares held in trust for Mr. Klein's family.
(3) Includes 300 shares with respect to which Mr. Mattern shares voting and
dispositive power.
(4) Includes outstanding options to purchase 338,750 shares, which were
exercisable as of April 22, 1996 or within 60 days from such date.
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<PAGE> 4
PROPOSAL NO. 1
ELECTION OF DIRECTORS
A Board of five directors will be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
"FOR" the five nominees named below, all of whom are presently directors of
Xicor. In the event that any nominee should become unavailable for any presently
unforeseen reason, the proxy holders will vote in their discretion for a
substitute nominee. The term of office of each person elected as a director will
continue until the next Annual Meeting of Shareholders or until his successor
has been elected and qualified.
The names of the nominees, and certain other information, are set forth
below:
<TABLE>
<CAPTION>
AGE (AS OF
NAME JUNE 17, 1996) OFFICE SINCE
------------------------------------- -------------- ----------------------- -----
<S> <C> <C> <C>
Raphael Klein........................ 52 President and Chairman 1978
of the Board
Julius Blank*........................ 71 Director 1978
Hans G. Dill*........................ 69 Director 1980
Andrew W. Elder*..................... 45 Director 1982
S. Allan Kline....................... 76 Director 1978
</TABLE>
- ---------------
* Member of Audit Committee
Raphael Klein, President and Chairman of the Board. Mr. Klein has been
Xicor's President and a director since founding Xicor in August 1978, its
Chairman of the Board since August 1982 and its Chief Financial Officer from
August 1980 to September 1987, with overall responsibility as chief executive
officer for implementing its business plan. Mr. Klein received the degree of
Master of Science in Physics from the Israeli Institute of Technology
("Technion") and is the inventor or co-inventor of two patented inventions.
Julius Blank, Director. Mr. Blank, one of Xicor's founders, holds a degree
in mechanical engineering from CCNY and has been a business consultant to high
technology companies and a private investor for in excess of five years.
Hans G. Dill, Director. Mr. Dill has been a business consultant for in
excess of five years. Until February 1988, he was a Vice President of
Spectrolab, Inc., a wholly-owned subsidiary of Hughes Aircraft company, a
position he had held since April 1982. Mr. Dill holds a degree of Ph.D. in
Electrical Engineering from the Swiss Federal Institute of Technology and is the
inventor or co-inventor of several patented inventions.
Andrew W. Elder, Director. Mr. Elder is the founder and since March 1992
has been President of Stratis Corporation, a producer of plastic material
handling products. From June 1990 to March 1992 he was the Director of Business
Development at Menasha Corporation. Mr. Elder was employed by Xytec Industries,
Inc. from April 1983 to May 1990. From June 1989 to May 1990 Mr. Elder was the
Vice Chairman and from April 1983 to June 1989 he was a Chief Executive Officer
and a Director of Xytec. Mr. Elder received a BA from Duke University and an MBA
from the Wharton School at the University of Pennsylvania.
S. Allan Kline, Director. Mr. Kline, one of Xicor's founders, was Chairman
of the Board from November 1978 to August 1982 and then served as Vice Chairman
of the Board until June 1983. Mr. Kline has been a business advisor instrumental
in organizing and financing a number of high technology companies for in excess
of five years. Mr. Kline studied physics at the University of Chicago.
COMMITTEES AND MEETINGS
The total number of regular and special meetings of the Board of Directors
held in the last fiscal year was ten. No director failed to attend at least 75%
of the meetings of the Board and the Committees on which such director serves.
The Audit Committee of the Board consists of Julius Blank, Hans G. Dill and
Andrew W. Elder. This Committee has the responsibility to review the scope of
the annual audit, recommend to the Board of
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<PAGE> 5
Directors the appointment of the independent public accountants, meet with the
independent accountants for review and analysis of Xicor's systems, the adequacy
of controls and the sufficiency of financial reporting. This Committee held two
meetings.
The Stock Option Committee, which presently consists of Raphael Klein, S.
Allan Kline and Julius Blank, met seven times during the last fiscal year. This
Committee administers Xicor's stock option plans.
The Employee Incentive Cash Bonus Profit Sharing Committee, which presently
consists of Raphael Klein, Julius Blank and Andrew W. Elder, met twice during
the last fiscal year.
The Compensation Committee which presently consists of Hans G. Dill, Andrew
W. Elder and S. Allan Kline, met once during the last fiscal year. This
Committee administers the compensation for Xicor's executive officers.
There is no nominating committee or any committee performing that function.
COMPENSATION OF DIRECTORS
All directors, except Raphael Klein, received $2,400 per month plus
expenses for serving as directors. Julius Blank received additional compensation
for consulting services at a monthly rate of $3,125.
In April 1995, Xicor adopted the 1995 Director Option Plan (the "Director
Plan") under which 200,000 shares of common stock have been reserved for
issuance. The Director Plan provides for an initial grant of 20,000 options to
each of the Company's directors, including Raphael Klein, and automatic annual
grants of 5,000 options thereafter. As of December 31, 1995, options for 100,000
shares had been granted under the Director Plan. The options are exercisable in
25% annual increments and expire no later than ten years from date of grant. All
outstanding options were granted at 100% of the fair market value of the stock
at the date of grant.
VOTE REQUIRED
The five nominees receiving the highest number of affirmative votes of the
shares entitled to be voted for them shall be elected as directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum, but have no other legal effect under California law.
Unless marked to the contrary, proxies received will be voted "FOR" the
five nominees listed above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL FIVE NOMINEES LISTED
ABOVE.
PROPOSAL NO. 2
APPROVAL AND RATIFICATION OF AMENDMENTS TO THE COMPANY'S AMENDED AND
RESTATED 1990 INCENTIVE AND NON-INCENTIVE STOCK OPTION PLAN
The Company's Amended and Restated 1990 Incentive and Non-Incentive Stock
Option Plan (the "1990 Plan") was adopted by the Board of Directors on April 28,
1995 and approved by the Shareholders on June 23, 1995. At that time, there were
a total of 1,500,000 shares of the Company's Common Stock reserved for issuance
under the 1990 Plan. Since then, in June 1995 and January 1996, the Board of
Directors approved amendments to the 1990 Plan, subject to shareholder approval,
to increase the number of shares reserved for issuance thereunder by 1,700,000
shares, increasing the total number of shares reserved for issuance under the
1990 Plan from 1,500,000 to 3,200,000.
At the Annual Meeting, the shareholders are being requested to approve and
ratify amendments to the 1990 Plan (i) to increase the number of shares of
Common Stock reserved for issuance thereunder from 1,500,000 shares to 3,200,000
shares and (ii) to amend the definition of "Continuous Status as an Employee or
Consultant" so that a terminated employee who is rehired within 90 days of
termination will fall within such definition and will be able to have his or her
options reinstated. The participation of key employees (including
4
<PAGE> 6
officers) in stock option plans has always been an essential component of the
Company's compensation program. The Board of Directors believes that the option
program should be continued by making provisions to ensure that the Company will
be able to continue to grant stock options to the Company's key employees,
including officers and key consultants. Additionally, the Board of Directors
believes that the ability to have options reinstated if a former employee is
rehired within 90 days of termination is a significant tool to entice selected
employees to return to the Company. Most high technology companies, including
the Company's competitors, maintain stock option programs. The Board of
Directors believes that a competitive disadvantage with respect to attracting
and retaining high caliber employees would result if the Company were unable to
continue granting stock options. This is particularly significant as competition
for high caliber employees often is fierce in the area where the Company's
headquarters and principal manufacturing facilities are located. Thus, the Board
of Directors believes that it is in the best interest of the Company to increase
the number of shares of Common Stock reserved for issuance under the Plan and to
broaden the definition of "Continuous Status as an Employee or Consultant."
GENERAL
The 1990 Plan is not a qualified deferred compensation plan under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), nor is it
subject to the Employee Retirement Income Security Act of 1974, as amended.
Purpose. The 1990 Plan, which permits the granting of incentive stock
options ("ISOs"), non-statutory stock options ("NSOs") and stock purchase rights
("Purchase Rights"), enables the Company to attract, retain and motivate
eligible employees and consultants whose present and potential contributions are
very important to the continued success of the Company. The 1990 Plan offers
these individuals an opportunity to participate in the Company's future
performance by awarding a proprietary interest in the Company.
Eligibility. Employees and consultants of the Company (or any parent or
subsidiary of the Company) are eligible to receive awards under the 1990 Plan.
The 1990 Plan provides that Non-Statutory Stock Options and Purchase Rights may
be granted to employees (including officers but excluding officers who are also
directors of the Company) and consultants of the Company or any parent or
subsidiary of the Company. Incentive Stock Options may be granted only to
employees (including officers but excluding officers who are also directors of
the Company) of the Company or any parent or subsidiary of the Company. As of
December 31, 1995, the Company had 641 employees and 14 consultants.
The 1990 Plan places specific limitations on the discretion allowed to the
administrator in granting ISOs, NSOs and Purchase Rights to officers. These
limitations are intended to preserve the Company's ability to deduct for federal
income tax purposes the compensation expense relating to ISOs, NSOs and Purchase
Rights granted to certain executive officers under the 1990 Plan. The
limitations provide that no officer shall be granted in any fiscal year ISOs,
NSOs and Purchase Rights to purchase more than 200,000 shares.
Administration. The 1990 Plan is being administered by the Stock Option
Committee consisting of three directors, presently Raphael Klein, Julius Blank
and S. Allan Kline. The 1990 Plan provides that it may be administered by the
Board of Directors of the Company or by a committee of the Board (the
"Administrator"). The administration of the 1990 Plan is intended to satisfy
certain requirements under the Federal securities laws, including Rule 16b-3,
applicable California corporate law, and the Code. The Administrator has full
power to select, from among the employees and consultants eligible for awards,
the individuals to whom awards will be granted, to make any combination of
awards to any participant and to determine the specific terms of each grant,
subject to the provisions of the 1990 Plan. The interpretation and construction
of any provision of the 1990 Plan is within the sole discretion of the
Administrator, whose determination will be final and conclusive.
AWARDS UNDER THE 1990 PLAN
Stock Options. The 1990 Plan permits the granting of non-transferable
stock options that either qualify as ISOs under Section 422 of the Code or that
do not so qualify, referred to as "Non-Statutory Options" or "NSOs".
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<PAGE> 7
The term of each option will be fixed by the Administrator. In the case of
ISOs the term may not exceed ten years from the date of grant. The Administrator
determines the time or times that each option may be exercised. In addition, the
exercisability of options may be accelerated upon the occurrence of certain
events described in the 1990 Plan or the Option Agreement on a discretionary
basis by the Administrator. See "Extraordinary Events" section following.
The Administrator sets the option exercise price, which may be less than
100% of the fair market value on the date of grant of the option in the case of
NSOs. The option exercise price for each share covered by an ISO must not be
less than 100% of the fair market value of the share of Common Stock on the date
of grant of such option.
The method of payment of consideration with respect to shares issued upon
exercise of options granted under the 1990 Plan shall be determined by the
Administrator (and, in the case of ISOs, must be determined at the time of
grant) and may be any legal form of consideration permitted by applicable laws.
The 1990 Plan specifically enumerates the following as acceptable forms of
consideration: cash, check, promissory note, and other shares of Common Stock or
delivery of irrevocable instructions to a broker to deliver to the Company the
appropriate amount of proceeds of the sale or loan of the shares exercised
(often referred to as a "cashless exercise").
Under the 1990 Plan, in the event of an optionee's termination of
employment or consulting relationship for any reason, an option may thereafter
be exercised, to the extent it was exercisable at the date of such termination,
for such period of time as is determined by the Administrator, up to a maximum
of 12 months in the case of death or permanent disability or 30 days in the case
of termination for any other reason. After termination of the employment or
consulting relationship, an option may thereafter be exercised during the
specified period, but in no event after the expiration of the original term of
the option. After termination, an option is generally only exercisable to the
extent it was exercisable at the date of such termination, unless otherwise
determined by the Administrator. The employment or consulting relationship is
not considered to be terminated in the event of certain leaves of absence or
transfers between the Company, its parent (if any), and its majority-owned
subsidiaries or the terminated employee is rehired within 90 days of
termination.
Stock Purchase Rights. The 1990 Plan permits the Company to grant Purchase
Rights which allow the offeree the opportunity, during a specified period of
time not exceeding six months, to purchase Common Stock of the Company on the
terms specified by the Administrator. The Administrator notifies the offeree in
writing of the terms, conditions and restrictions related to the offer,
including the number of shares of Common Stock that the offeree will be entitled
to purchase, the price to be paid and the time within which the offeree must
accept such offer (which will in no event exceed six months from the date upon
which the Administrator made the determination to grant the Purchase Rights).
Offers may be accepted by execution of a restricted stock purchase agreement
between the Company and the offeree and payment of the purchase price.
Unless the Administrator determines otherwise, the restricted stock
purchase agreement will grant the Company a repurchase option at the original
price paid by the purchaser exercisable upon the termination of the purchaser's
employment or consulting relationship with the Company for any reason. The
purchase price per share upon repurchase by the Company may be paid in cash or
by cancellation of indebtedness of the purchaser to the Company. The repurchase
option will lapse at such rate as the Administrator may determine.
Written Agreements; Rule 16b-3. All awards granted under the 1990 Plan
shall be evidenced by a written agreement between the Company and the employee
or consultant to whom such award is granted. Awards granted to persons subject
to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), referred to as "Insiders," are subject to any additional applicable
restrictions under Rule 16b-3.
Non-transferability of Rights. Options and Purchase Rights granted
pursuant to the 1990 Plan are non-transferable by the participant, other than by
will or by the laws of descent and distribution and may be exercised, during the
lifetime of the participant, only by the participant.
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<PAGE> 8
EXTRAORDINARY EVENTS
Adjustment Upon Changes in Capitalization. Subject to any required action
by the shareholders of the Company, in the event of any change in the Company's
capitalization, such as a stock split or dividend, which results in an increase
or decrease in the number of outstanding shares of Common Stock without receipt
of consideration by the Company, an appropriate adjustment shall be made in the
number of shares which have been reserved for issuance under the 1990 Plan
(including shares subject to outstanding options or Purchase Rights) and the
price per share covered by each outstanding option and Purchase Right. In the
event of any proposed dissolution or liquidation of the Company, all outstanding
options and Purchase Rights will terminate immediately prior to the consummation
of such proposed action. However, the Administrator may, in its discretion, make
provisions for accelerating the exercisability of any option or Purchase Right
under the 1990 Plan in such event.
Dissolution, Liquidation, Merger or Asset Sales. The 1990 Plan provides
that in the event of a dissolution, liquidation, merger or sale of assets (a
"change-in-control") of the Company, except as otherwise determined by the
Administrator in its discretion, all options and Purchase Rights will terminate
prior to the consummation of such proposed change in control event. However, the
Administrator may, in its discretion, make provisions for accelerating the
exercisability of any option or Purchase Right under the 1990 Plan in such
event.
Amendment and Termination. The Board may amend, alter, suspend or
discontinue the 1990 Plan at any time, but any such amendment, alteration,
suspension or discontinuation shall not adversely affect any outstanding option
or Purchase Right under the 1990 Plan without the written consent of the holder
thereof. To the extent necessary and desirable to comply with Rule 16b-3
promulgated under the Exchange Act or Section 422 of the Code (or any other
applicable law or regulation), the Company shall obtain shareholder approval of
any amendment to the 1990 Plan in such a manner and to such a degree as is
required. The 1990 Plan has a term of ten years.
FEDERAL INCOME TAX INFORMATION
The following is a brief summary of the federal income tax consequences of
transactions under the 1990 Plan based on Federal securities and income tax laws
in effect on January 1, 1996. This summary is not intended to be exhaustive and
does not discuss the tax consequences of a participant's death or provisions of
the income tax laws of any municipality, state or foreign country in which an
optionee may reside.
Incentive Stock Options. No taxable income is recognized by the optionee
upon grant or exercise of an ISO unless the alternative minimum tax rules apply.
If Common Stock is issued to an optionee pursuant to the exercise of an ISO and
if no disqualifying disposition of such shares is made by such optionee within
two years after the date of grant or within one year after the transfer of such
shares to such optionee, then (i) upon the resale of such shares, any amount
realized in excess of the option exercise price will be treated as a long-term
capital gain and any loss sustained will be a long-term capital loss, and (ii)
no deduction will be allowed to the Company for federal income tax purposes. The
exercise of an ISO may result in alternative minimum tax liability for the
optionee.
If Common Stock acquired upon the exercise of an ISO is disposed of before
the expiration of either holding period described above, generally (i) the
optionee will recognize ordinary income in the year of disposition in an amount
equal to the excess (if any) of the fair market value of the shares at exercise
(or, if less, the amount realized on the disposition of shares) over the Option
Exercise Price paid for such shares, and (ii) the Company is entitled to a tax
deduction in the same amount. Any further gain or loss realized by the
participant will be taxed as short-term or long-term capital gain or loss, as
the case may be, and will not result in any deduction by the Company. Different
rules may apply if shares are purchased by an Optionee who is also an Insider.
See the discussion below under "Special Rules Applicable to Corporate Insiders
and Restricted Stock Purchasers."
Non-Statutory Stock Options. Except as noted below, with respect to NSOs
(i) no income is recognized by the optionee at the time the option is granted;
(ii) generally, at exercise, ordinary income is recognized by
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<PAGE> 9
the optionee in an amount equal to the difference between the option exercise
price paid for the shares and the fair market value of the shares on the date of
exercise, and the Company is entitled to a tax deduction in the same amount; and
(iii) at disposition, any gain or loss is treated as capital gain or loss. In
the case of an optionee who is also an employee, any income recognized upon
exercise of a NSO will constitute wages for which withholding will be required.
However, different rules may apply if shares subject to a repurchase option of
the Company ("Restricted Stock") are purchased or if shares are purchased by an
Optionee who is also an Insider. See discussion below of "Special Rules
Applicable to Corporate Insiders and Restricted Stock Purchasers."
Stock Purchase Rights. Purchase Rights will generally be taxed in the same
manner as NSOs.
Special Rules Applicable to Corporate Insiders and Restricted Stock
Purchasers. Generally, Insiders (who are subject to Section 16 of the Exchange
Act) and individuals who purchase Restricted Stock may have their recognition of
compensation income at the beginning of their capital gains holding period
deferred until the date that is up to six months after the option exercise (for
Insiders) or until the date that the restrictions lapse (for Restricted Stock
purchasers) (the "Deferral Date"). The excess of the fair market value of the
stock determined as of the Deferral Date over the purchase price will be taxed
as ordinary income, and the tax holding period for any subsequent gain or loss
will begin on the Deferral Date. However, an Insider or Restricted Stock
purchaser who so elects under Code Section 83(b) on a timely basis may instead
be taxed on the difference between the excess of the fair market value on the
date of transfer over the purchase price, with the tax holding period beginning
on such date. Similar rules apply for alternative minimum tax purposes with
respect to the exercise of an ISO by an Insider.
Participation in 1990 Plan. The grant of options and Purchase Rights under
the 1990 Plan to employees, including executive officers named in the Summary
Compensation Table appearing elsewhere in this Proxy Statement and consultants,
is subject to the discretion of the Administrator. As of the date of this proxy
statement, there has been no determination by the Administrator with respect to
future awards under the 1990 Plan. Accordingly, future awards are not
determinable. Directors are not eligible to participate in the 1990 Plan. The
table on the following page sets forth information with respect to the grant of
options under the 1990 Plan to executive officers named in the Summary
Compensation Table appearing elsewhere in this Proxy Statement, to all current
executive officers as a group and to all other employees as a group during the
last fiscal year:
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<PAGE> 10
AMENDED PLAN BENEFITS
1990 PLAN
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR NUMBER OF EXERCISE PRICE
IDENTITY OF GROUP AND POSITION OPTIONS GRANTED ($/SH)
- ---------------------------------------------------------------- --------------- --------------
<S> <C> <C>
Raphael Klein................................................... N/A
President, Chief Executive Officer and Chairman
Klaus G. Hendig................................................. 70,000(1) $ 4.34(2)
Vice President, Finance and Administration
Bruce W. Mattern................................................ 60,000(1) 4.71(2)
Vice President, Sales and Marketing
Joseph Drori.................................................... 60,000(1) 4.71(2)
Vice President, Product Design, Engineering, Quality and
Reliability
William H. Owen, III............................................ 40,000(1) 6.00
Vice President, Technology Development and Intellectual
Properties
All Executive Officers as a group (8 Persons)................... 354,000(1) 5.08(2)
All other employees as a group.................................. 834,000(1)(3) 5.07(2)
</TABLE>
- ---------------
(1) Includes options granted subject to shareholder approval of increase in
number of shares authorized for issuance under the 1990 Plan.
(2) Weighted average exercise price.
(3) Includes options to purchase 470,600 shares granted since January 1, 1996
with a weighted average exercise price of $5.90.
VOTE REQUIRED
Affirmative votes constituting a majority of the Votes Cast will be
required to ratify the amendments to the 1990 Plan.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE AMENDMENTS TO THE AMENDED AND RESTATED 1990 INCENTIVE AND
NON-INCENTIVE STOCK OPTION PLAN.
PROPOSAL NO. 3
DESIGNATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has approved the retention of Price Waterhouse LLP
as independent accountants for Xicor until revoked by further action. Price
Waterhouse LLP has been Xicor's independent accountants since 1979.
The shareholders are asked to ratify the designation of Price Waterhouse
LLP as independent accountants for Xicor for the fiscal year ending December 31,
1996. A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting to make a statement if he desires to do so, and such
representative is expected to be available to respond to appropriate questions.
Submission of this proposal to the shareholders is not required by Xicor's
Bylaws or otherwise. The management of Xicor has elected to do so as a matter of
good corporate practice. Should the shareholders fail
9
<PAGE> 11
to ratify the designation of Price Waterhouse LLP as independent accountants,
retention of the firm for the fiscal year ending December 31, 1996 will be
reconsidered by the Board of Directors.
Unless marked to the contrary, proxies received will be voted "FOR"
ratification of the designation of Price Waterhouse LLP as independent
accountants for Xicor's fiscal year ending December 31, 1996.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" SUCH RATIFICATION.
OTHER MATTERS
Management knows of no business that will be presented for consideration at
the Annual Meeting other than as stated in the Notice of Meeting. If, however,
other matters are properly brought before the Annual Meeting, it is the
intention of the persons named in the accompanying form of proxy to vote the
shares represented thereby on such matters in accordance with their best
judgment.
The expense of solicitation of proxies will be borne by Xicor. In addition
to solicitation of proxies by mail, certain officers, directors and Xicor
employees who will receive no additional compensation for their services may
solicit proxies by telephone, telegraph or personal interview. Xicor has
retained the services of Shareholder Communications Corporation ("SCC") to aid
in the solicitation of proxies from brokers, bank nominees and other
institutional owners, if necessary. Xicor will pay SCC a fee which is not
expected to exceed $7,500 for its services and will reimburse SCC for
out-of-pocket expenses estimated to be $8,500. Xicor is required to request
brokers and nominees who hold stock in their name to furnish this proxy material
to beneficial owners of the stock and will reimburse such brokers and nominees
for their reasonable out-of-pocket expenses in so doing.
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
10% of a registered class of the Company's equity securities, to file reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission (SEC). Such persons are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms for 1995, Xicor
believes that all applicable filing requirements have been complied with.
REPORT OF THE COMPENSATION COMMITTEE
Xicor applies a consistent philosophy to compensation for all employees,
including senior management, based on the premise that the achievements of Xicor
result from the coordinated efforts of all individuals working toward common
objectives. Xicor strives to achieve those objectives through teamwork that is
focused on meeting the expectations of customers and shareholders.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with
business objectives and performance, and to enable Xicor to attract, retain and
reward executive officers who contribute to the long-term success of Xicor.
Xicor's compensation program for its Chief Executive Officer and other executive
officers is based on the same four principles applicable to compensation
decisions for all Xicor employees:
- Xicor pays competitively.
Xicor is committed to providing a pay program that helps attract and
retain high caliber executives. To ensure that pay is competitive, Xicor
compares its pay practices for its Chief Executive Officer and other
executives with those of other electronics companies, with particular
emphasis on similar size semiconductor companies, and sets its pay
parameters based on this review.
10
<PAGE> 12
- Xicor pays for relative sustained performance.
The Chief Executive Officer and other executive officers are rewarded
based upon corporate performance and individual performance. Corporate
performance is evaluated by reviewing the extent to which business plan
goals are met, including such factors as operating profit, performance
relative to competitors and timely new product introductions. Individual
performance is evaluated by reviewing progress against set objectives and
business goals.
- Xicor strives for fairness in the administration of pay.
Xicor strives to achieve a balance of the compensation paid to a
particular executive and the compensation paid to other executives both
inside Xicor and at comparable companies.
- Xicor believes that executives should understand the performance
evaluation and pay administration process.
The process of assessing performance is as follows. At the beginning of
the performance cycle, the evaluating executive (or in the case of the
Chief Executive Officer, the Board of Directors) sets objectives and key
goals. The executive is given ongoing feedback on performance. At the end
of the performance cycle, the accomplishment of objectives and key goals
is evaluated, the results compared to the results of peers within the
Company and the comparative results are communicated to the executive. The
comparative result affects decisions on salary, bonuses and stock options.
COMPENSATION VEHICLES
Xicor uses a compensation program that consists of the following cash- and
equity-based vehicles:
CASH-BASED COMPENSATION
Salary and Bonus
Xicor sets base salary and determines bonus amounts for the Chief Executive
Officer and other executives by reviewing corporate and individual performance
and the aggregate of base salary and annual bonus for comparable positions in
the electronics industry, with emphasis on comparable size semiconductor
companies.
The base salaries of the Chief Executive Officer and the other executive
officers were not changed during 1995. During 1995 the Compensation Committee
awarded performance bonuses to the Chief Executive Officer and the other
executive officers for their efforts in achieving improved profitability.
Cash Profit-Sharing
Xicor has an employee incentive cash profit-sharing program (the
"Program"). Under the Program, twice a year (two profit sharing periods) 5% to
15% of Xicor's consolidated operating income, excluding certain non-product
revenues, is distributed to all employees including the Chief Executive Officer
and other executive officers as Xicor believes that all employees share the
responsibility of achieving profits. The exact percentage to be distributed is
determined by a Committee of the Board of Directors; however, in no event may
the distribution result in a net loss after taxes to Xicor for any profit
sharing period. The same profit-sharing percentage applies to each employee,
with the payment determined by applying this percentage to the individuals base
salary. For 1995, such profit sharing awards amounted to the equivalent of
approximately 89 hours of base salary. Profit sharing awards are included in the
Bonus column in the Summary Compensation Table that follows.
EQUITY-BASED COMPENSATION
Stock Option Program
Stock options are granted to provide additional incentives to key employees
to work to maximize shareholder value. The option program also utilizes vesting
periods to encourage key employees, including
11
<PAGE> 13
executive officers, to continue in the employ of Xicor. Under Xicor's 1979 Stock
Option Plan, which expired in 1989, Xicor's Directors, including the Chief
Executive Officer, received stock options. Under the 1990 Incentive and
Non-Incentive Stock Option Plan, neither independent Directors nor any
executives who are also Board members may be granted options. In 1995 Xicor
established the 1995 Director Option Plan under which Xicor's Chief Executive
Officer, who is also the Chairman of the Board, was granted an option in 1995
based on a formula included in the Director Plan. Stock options granted to
Xicor's executive officers under the 1990 Plan were based on recommendations of
the Stock Option Committee which included the Chief Executive Officer.
COMPENSATION COMMITTEE
Hans G. Dill
Andrew W. Elder
S. Allan Kline
EXECUTIVE COMPENSATION
The following table sets forth a summary of the compensation earned by
Xicor's Chief Executive Officer and its four other most highly compensated
executive officers during the year ended December 31, 1995 and for the three
years then ended.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
------------------------------ UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS COMPENSATION(2)
- ----------------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Raphael Klein...................... 1995 $264,014 $97,268 20,000 $ --
President, Chief Executive 1994 264,014 19,491 -- --
Officer and Chairman of the Board 1993 264,014 -- -- --
Klaus G. Hendig.................... 1995 190,008 58,109 70,000(3) 164
Vice President, Finance and 1994 190,008 9,627 -- --
Administration 1993 190,008 -- 15,000 --
Bruce W. Mattern................... 1995 175,011 62,469 60,000(3) --
Vice President, Sales and 1994 175,011 11,420 -- --
Marketing
1993 175,011 -- 15,000 --
Joseph Drori....................... 1995 175,011 55,469 60,000(3) 224
Vice President, Product Design, 1994 175,011 6,420 -- --
Engineering, Quality and 1993 175,011 -- 15,000 --
Reliability
William H. Owen, III............... 1995 154,003 47,573 40,000(3) 385
Vice President, Technology 1994 154,003 8,129 -- --
Development and Intellectual 1993 154,003 -- 15,000 --
Properties
</TABLE>
- ---------------
(1) Includes performance bonus and amounts earned under the Employee Incentive
Cash Bonus Profit Sharing Program.
(2) Represents matching contributions under the Company's 401(k) Plan.
(3) Includes option grant for 40,000 shares each which grant is subject to
approval by the shareholders of an increase in the number of shares reserved
for issuance under the Xicor, Inc. 1990 Amended and Restated Incentive and
Non-Incentive Stock Option Plan. See Proposal No. 2 included in this Proxy
Statement.
12
<PAGE> 14
The following table sets forth information concerning stock options granted
to the executive officers named in the Summary Compensation Table during the
year ended December 31, 1995:
OPTION GRANTS IN 1995
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE
------------------------------------------------ AT ASSUMED
NUMBER OF % OF ANNUAL RATES OF
SECURITIES TOTAL STOCK PRICE
UNDERLYING OPTIONS APPRECIATION FOR
OPTIONS GRANTED EXERCISE OPTION TERM(1)
GRANTED(2) TO PRICE EXPIRATION -------------------
(#) EMPLOYEES ($/SHARE) DATE 5% ($) 10% ($)
---------- --------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Raphael Klein................... 20,000 2.72% $3.44 04/28/05 $ 43,268 $109,649
Klaus G. Hendig................. 30,000 4.08% 2.13 02/17/04(4) 28,370 67,444
40,000(3) 5.43% 6.00 07/21/05 150,935 382,498
Bruce W. Mattern................ 20,000 2.72% 2.13 02/17/04(4) 18,914 44,962
40,000(3) 5.43% 6.00 07/21/05 150,935 382,498
Joseph Drori.................... 20,000 2.72% 2.13 02/17/04(4) 18,914 44,962
40,000(3) 5.43% 6.00 07/21/05 150,935 382,498
William H. Owen, III............ 40,000(3) 5.43% 6.00 07/21/05 150,935 382,498
</TABLE>
- ---------------
(1) The potential realizable value is based on the term of the option (6 to 10
years) at the date of grant. It is calculated by assuming that the stock
price on the date of grant (which is equal to the exercise price)
appreciates at the indicated annual rate, compounded annually for the entire
term and that the option is exercised and sold on the last day of the option
term for the appreciated stock price. These values are calculated based on
requirements promulgated by the Securities and Exchange Commission and do
not reflect the Company's estimate of future stock price appreciation.
Actual gains, if any, are dependent on the actual future performance of the
Company's Common Stock.
(2) Options become exercisable at the rate of 25% of the underlying shares per
year, commencing one year from the date of grant.
(3) Grant is subject to approval by the shareholders of an increase in the
number of shares reserved for issuance under the Xicor, Inc. 1990 Amended
and Restated Incentive and Non-Incentive Stock Option Plan. See Proposal No.
2 included in this Proxy Statement.
(4) Options expire 5 years from the date they become exercisable with the final
25% expiring February 17, 2004.
The following table sets forth certain information concerning stock option
exercises during the year ended December 31, 1995 by the executive officers
named in the Summary Compensation Table and the number and value of unexercised
options held by each named executive officer at December 31, 1995:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUES AT DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
NUMBER OF OPTIONS HELD IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1995 AT DECEMBER 31, 1995(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Raphael Klein............... -- -- 50,000 20,000 $ 97,125 $ 77,450
Klaus G. Hendig............. 10,000 $ 32,688 38,750 77,500 198,810 250,669
Bruce W. Mattern............ 39,250 117,938 47,250 67,500 226,966 198,844
Joseph Drori................ 7,500 19,941 42,500 67,500 206,094 198,844
William H. Owen, III........ -- -- 7,500 47,500 42,694 95,194
</TABLE>
- ---------------
(1) Value represents the difference between the closing price of the Common
Stock on the date of exercise and the exercise price, multiplied by the
number of shares acquired on exercise.
(2) Value of unexercised in-the-money options represents the difference between
the closing price of the Company's Common Stock on the last trading day of
1995 and the exercise price of the option, multiplied by the number of
shares subject to the option.
13
<PAGE> 15
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Exchange
Act that might incorporate future filings, including this Proxy Statement, in
whole or in part, the following report and the Performance Graph shall not be
incorporated by reference into any such filings.
PERFORMANCE GRAPH
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
XICOR, INC., S&P 500 COMPOSITE INDEX
AND S&P HIGH TECHNOLOGY COMPOSITE INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P HIGH
(FISCAL YEAR COVERED) XICOR, INC. S&P 500 TECHNOLOGY
<S> <C> <C> <C>
1990 100 100 100
1991 130 130 114
1992 100 140 119
1993 120 155 146
1994 140 157 170
1995 585 215 245
</TABLE>
The chart above shows a five-year comparison of the cumulative total return
on Xicor, Inc. Common Stock, the Standard & Poor's 500 Composite Index, and the
Standard & Poor's High Technology Composite Index assuming a $100 investment
made on December 31, 1990.
PROPOSALS INTENDED TO BE PRESENTED AT NEXT ANNUAL MEETING
Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders of Xicor to be held in June 1997 must be received by
Xicor for inclusion in Xicor's Proxy Statement and form of proxy no later than
January 17, 1997.
By Order of the Board of Directors
Julius Blank,
Secretary
Milpitas, California
April 26, 1996
14
<PAGE> 16
X Please mark your
---
votes as in this
example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING MATTERS TO
COME BEFORE THE MEETING:
NOMINEES:
FOR WITHHELD Raphael Klein
1. Election of Julius Blank
Directors ____ ____ Hans G. Dill
For, except vote withheld from the Andrew W. Elder
following nominee(s): S. Allan Kline
- -----------------------------
2. To approve and ratify amendments to the FOR WITHHELD ABSTAIN
Amended and Restated XICOR, INC. 1990 ___ ___ ___
Incentive and Non-Incentive Stock Option
Plan including an increase in the number
of shares of Common Stock issuable
thereunder from 1,500,000 to 3,200,000.
3. To ratify the designation of Price FOR WITHHELD ABSTAIN
Waterhouse LLP as independent ___ ___ ___
accountants for the period ending
December 31, 1996.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE.
THIS PROXY, WHICH IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WILL BE
VOTED FOR THE MATTERS DESCRIBED IN PARAGRAPHS (1), (2), AND (3), UNLESS THE
SHAREHOLDER SPECIFIES OTHERWISE, IN WHICH CASE IT WILL BE VOTED AS SPECIFIED.
SIGNATURE(S)_______________________________________ DATE___________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
<PAGE> 17
XICOR, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints RAPHAEL KLEIN, S. ALLAN KLINE, and JULIUS
BLANK, or any of them, proxies, each with the power of substitution, to vote the
shares of the undersigned at the Annual Meeting of Shareholders of XICOR, INC.
on June 17, 1996, and at any adjournment thereof, upon all matters as may
properly come before the Meeting. Without otherwise limiting the foregoing
general authorization, the proxies are instructed to vote as indicated herein.
-------
See
Reverse
(To be Signed on Reverse Side) Side
-------
<PAGE> 18
XICOR, INC.
AMENDED AND RESTATED
1990 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Plan are:
. to attract and retain the best available personnel for positions
of substantial responsibility,
. to provide additional incentive to Employees and Consultants, and
. to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Administrator" means the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under state corporate and securities
laws and the Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Common Stock" means the Common Stock of the Company.
(g) "Company" means Xicor, Inc., a California corporation.
(h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services and who is
compensated for such services. The term "Consultant" shall not include
Directors who are paid only a director's fee by the Company or who are not
compensated by the Company for their services as Directors.
(i) "Continuous Status as an Employee or Consultant" means
that the employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or
<PAGE> 19
terminated. Continuous Status as an Employee or Consultant shall not
be considered interrupted in the case of (i) any leave of absence approved by
the Company, (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor or (iii) the terminated
employee being rehired within 90 days of termination of employment. A leave of
absence approved by the Company shall include sick leave, military leave, or
any other personal leave approved by an authorized representative of the
Company. For purposes of Incentive Stock Options, no such leave may exceed 90
days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 91st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option.
(j) "Director" means a member of the Board.
(k) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers who are
not also directors, employed by the Company or any Parent or Subsidiary of the
Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last
market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq System
(but not on the Nasdaq National Market thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
-2-
<PAGE> 20
(o) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(p) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.
(q) "Notice of Grant" means a written notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
(r) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(s) "Option" means a stock option granted pursuant to the Plan.
(t) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of
the Plan.
(u) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.
(v) "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.
(w) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Stock Purchase Right.
(x) "Parent" means a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(y) "Plan" means this Amended and Restated 1990 Incentive and
Non-Incentive Stock Option Plan.
(z) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 below.
(aa) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.
-3-
<PAGE> 21
(bb) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(cc) "Section 16(b)" means Section 16(b) of the Securities
Exchange Act of 1934, as amended.
(dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
(ff) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section
13 of the Plan, the maximum aggregate number of Shares which may be optioned
and sold under the Plan is 1,500,000 Shares. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated); provided, however, that Shares that have actually
been issued under the Plan, whether upon exercise of an Option or Right, shall
not be returned to the Plan and shall not become available for future
distribution under the Plan, except that if Shares of Restricted Stock are
repurchased by the Company at their original purchase price, and the original
purchaser of such Shares did not receive any benefits of ownership of such
Shares, such Shares shall become available for future grant under the Plan.
For purposes of the preceding sentence, voting rights shall not be considered a
benefit of Share ownership.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. If permitted by
Rule 16b-3, the Plan may be administered by different bodies with respect to
Officers who are not Directors and Employees who are neither Directors nor
Officers.
(ii) Administration With Respect to Officers who are
not Directors Subject to Section 16(b). With respect to Option or Stock
Purchase Right grants made to Employees who are also Officers subject to
Section 16(b) of the Exchange Act, the Plan shall be administered by (A) the
Board, if the Board may administer the Plan in a manner complying with the
rules under Rule 16b-3 relating to the disinterested administration of employee
benefit plans under which Section 16(b) exempt discretionary grants and awards
of equity securities are
-4-
<PAGE> 22
to be made, or (B) a committee designated by the Board to administer the Plan,
which committee shall be constituted to comply with the rules under Rule 16b-3
relating to the disinterested administration of employee benefit plans under
which Section 16(b) exempt discretionary grants and awards of equity securities
are to be made. 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 substitute new members,
fill vacancies (however caused), and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
rules under Rule 16b-3 relating to the disinterested administration of employee
benefit plans under which Section 16(b) exempt discretionary grants and awards
of equity securities are to be made.
(iii) Administration With Respect to Other Persons.
With respect to Option or Stock Purchase Right grants made to Employees or
Consultants who are not Officers of the Company, the Plan shall be administered
by (A) the Board or (B) a committee designated by the Board, which committee
shall be constituted to satisfy Applicable Laws. Once appointed, such
Committee shall serve in its designated capacity until otherwise directed by
the Board. The Board may increase the size of the Committee and appoint
additional members, remove members (with or without cause) and substitute new
members, fill vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
(i) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2(n) of the Plan;
(ii) to select the Consultants and Employees to whom
Options and Stock Purchase Rights may be granted hereunder;
(iii) to determine whether and to what extent Options
and Stock Purchase Rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock
to be covered by each Option and Stock Purchase Right granted hereunder;
(v) to approve forms of agreement for use under the
Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised (which may
be based on performance criteria), any vesting acceleration or waiver of
-5-
<PAGE> 23
forfeiture restrictions, and any restriction or limitation regarding any Option
or Stock Purchase Right or the shares of Common Stock relating thereto, based
in each case on such factors as the Administrator, in its sole discretion,
shall determine;
(vii) to reduce the exercise price of any Option or
Stock Purchase Right to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or Stock Purchase Right shall
have declined since the date the Option or Stock Purchase Right was granted;
(viii) to construe and interpret the terms of the Plan
and awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
(x) to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options
longer than is otherwise provided for in the Plan;
(xi) to authorize any person to execute on behalf of
the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;
(xii) to institute an Option Exchange Program;
(xiii) to determine the terms and restrictions applicable
to Options and Stock Purchase Rights and any Restricted Stock; and
(xiv) to make all other determinations deemed necessary
or advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants. Incentive Stock Options
may be granted only to Employees. If otherwise eligible, an Employee or
Consultant who has been granted an Option or Stock Purchase Right may be
granted additional Options or Stock Purchase Rights.
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<PAGE> 24
6. Limitations.
(a) Each Option shall be designated in the Notice of Grant as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value:
(i) of Shares subject to an Optionee's Incentive Stock
Options granted by the Company, any Parent or Subsidiary, which
(ii) become exercisable for the first time during any
calendar year (under all plans of the Company or any Parent or Subsidiary)
exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time of grant.
(b) Neither the Plan nor any Option or Stock Purchase Right
shall confer upon an Optionee any right with respect to continuing the
Optionee's employment or consulting relationship with the Company, nor shall
they interfere in any way with the Optionee's right or the Company's right to
terminate such employment or consulting relationship at any time, with or
without cause.
(c) The following limitations shall apply to grants of Options
and Stock Purchase Rights to Employees:
(i) No Employee shall be granted, in any fiscal year
of the Company, Options and Stock Purchase Rights to purchase more than 200,000
Shares.
(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization
as described in Section 13.
(iii) If an Option or Stock Purchase Right is
canceled in the same fiscal year of the Company in which it was granted (other
than in connection with a transaction described in Section 13), the canceled
Option or Stock Purchase Right will be counted against the limit set forth in
Section 6(c)(i). For this purpose, if the exercise price of an Option or Stock
Purchase Right is reduced, the transaction will be treated as a cancellation of
the Option or Stock Purchase Right and the grant of a new Option or Stock
Purchase Right.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall
become effective upon the earlier to occur of its adoption by the Board or its
approval by the shareholders of the Company as described in Section 19 of the
Plan. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 15 of the Plan.
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<PAGE> 25
8. Term of Option. The term of each Option shall be stated in the
Notice of Grant; provided, however, that in the case of an Incentive Stock
Option, the term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Notice of Grant. Moreover, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Notice of
Grant.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by
the Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110%
of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
(ii) In the case of a Nonstatutory Stock Option, the
per Share exercise price shall be determined by the Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions which must be satisfied before
the Option may be exercised. In so doing, the Administrator may specify that
an Option may not be exercised until the completion of a service period.
(c) Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant.
Such consideration may consist entirely of:
(i) cash;
(ii) check;
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<PAGE> 26
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;
(v) delivery of a properly executed exercise notice
together with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;
(vi) a reduction in the amount of any Company liability
to the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of
payment; or
(viii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the
Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company
receives: (i) written notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option Agreement and the Plan. Shares
issued upon exercise of an Option shall be issued in the name of the Optionee
or, if requested by the Optionee, in the name of the Optionee and his or her
spouse. Until the stock certificate evidencing such Shares is issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such stock certificate promptly after the Option
is exercised. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the stock certificate is issued,
except as provided in Section 13 of the Plan.
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<PAGE> 27
Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.
(b) Termination of Employment or Consulting Relationship.
Upon termination of an Optionee's Continuous Status as an Employee or
Consultant, other than upon the Optionee's death or Disability, the Optionee
may exercise his or her Option, but only within such period of time as is
specified in the Notice of Grant, and only to the extent that the Optionee was
entitled to exercise it at the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Notice of Grant).
In the absence of a specified time in the Notice of Grant, the Option shall
remain exercisable for three months following the Optionee's termination of
Continuous Status as an Employee or Consultant. In the case of an Incentive
Stock Option, such period of time shall not exceed three months from the date
of termination. If, at the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(c) Disability of Optionee. In the event that an Optionee's
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination,
the Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered
by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an
Optionee, the Option may be exercised at any time within twelve (12) months
following the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent that the Optionee was entitled to
exercise the Option at the date of death. If, at the time of death, the
Optionee was not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall immediately revert to
the Plan. If, after death, the Optionee's estate or a person who acquired the
right to exercise the Option by bequest or inheritance does not exercise the
Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
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<PAGE> 28
(e) Rule 16b-3. Options granted to individuals subject to
Section 16 of the Exchange Act ("Insiders") must comply with the applicable
provisions of Rule 16b-3 and shall contain such additional conditions or
restrictions as may be required thereunder to qualify for the maximum exemption
from Section 16 of the Exchange Act with respect to Plan transactions.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid,
and the time within which the offeree must accept such offer, which shall in no
event exceed six (6) months from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be accepted
by execution of a Restricted Stock Purchase Agreement in the form determined by
the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.
(c) Rule 16b-3. Stock Purchase Rights granted to Insiders,
and Shares purchased by Insiders in connection with Stock Purchase Rights,
shall be subject to any restrictions applicable thereto in compliance with Rule
16b-3. An Insider may only purchase Shares pursuant to the grant of a Stock
Purchase Right, and may only sell Shares purchased pursuant to the grant of a
Stock Purchase Right, during such time or times as are permitted by Rule 16b-3.
(d) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be
the same with respect to each purchaser.
(e) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Stock Purchase Right is exercised, except as provided
in Section 13 of the Plan.
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<PAGE> 29
12. Non-Transferability of Options and Stock Purchase Rights. An
Option or Stock Purchase Right may not be sold, pledged, assigned,
hypothecated, transferred, or disposed 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. Adjustments Upon Changes in Capitalization, Dissolution, Merger
or Asset Sale.
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock
subject to an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or
Stock Purchase Right has not been previously exercised, it will terminate
immediately prior to the consummation of such proposed action. The Board may,
in the exercise of its sole discretion in such instances, declare that any
Option or Stock Purchase Right shall terminate as of a date fixed by the Board
and give each Optionee the right to exercise his or her Option or Stock
Purchase Right as to all or any part of the Optioned Stock, including Shares as
to which the Option or Stock Purchase Right would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right may
be assumed or an equivalent option or right may be substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. The
Administrator may, in lieu of such assumption or substitution, provide for the
Optionee to have the right to exercise the Option or Stock Purchase Right as to
all or a portion of the Optioned Stock, including Shares as to which it would
not otherwise be exercisable. If the Administrator makes an Option or Stock
Purchase Right exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee that
the Option or Stock Purchase Right shall be fully exercisable for a period of
fifteen (15)
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<PAGE> 30
days from the date of such notice, and the Option or Stock Purchase Right will
terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right
to purchase, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received
in the merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares); provided, however, that if such consideration
received in the merger or sale of assets was not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon
the exercise of the Option or Stock Purchase Right, for each Share of Optioned
Stock subject to the Option or Stock Purchase Right, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the
per share consideration received by holders of Common Stock in the merger or
sale of assets.
14. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall
be provided to each Optionee within a reasonable time after the date of such
grant.
15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain
shareholder approval of any Plan amendment to the extent necessary and
desirable to comply with Rule 16b-3 or with Section 422 of the Code (or any
successor rule or statute or other applicable law, rule or regulation,
including the requirements of any exchange or quotation system on which the
Common Stock is listed or quoted). Such shareholder approval, if required,
shall be obtained in such a manner and to such a degree as is required by the
applicable law, rule or regulation.
(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of
any Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee
and the Company.
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with all relevant provisions of law,
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<PAGE> 31
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, Applicable
Laws, and the requirements of any stock exchange or quotation system upon which
the Shares may then be listed or quoted, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.
17. Liability of Company.
(a) Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option or Stock Purchase Right exceeds, as of the date of grant,
the number of Shares which may be issued under the Plan without additional
shareholder approval, such Option or Stock Purchase Right shall be void with
respect to such excess Optioned Stock, unless shareholder approval of an
amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained in accordance with Section 15(b) of the Plan.
18. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
19. Shareholder Approval. Continuance of the Plan shall be subject
to approval by the shareholders of the Company within twelve (12) months before
or after the date the Plan is adopted. Such shareholder approval shall be
obtained in the manner and to the degree required under applicable federal and
state law.
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<PAGE> 32
AMENDED AND RESTATED
1990 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
I. NOTICE OF INCENTIVE STOCK OPTION GRANT ("ISO")
[Optionee's Name]
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Date of Grant _________________________
Vesting Commencement Date _________________________
Exercise Price per Share $________________________
Total Number of Shares
Underlying Option Granted _________________________
Expiration Date: _________________________
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 25% of the Shares subject to the Option
shall vest on each anniversary of the Commencement Date thereafter.
Termination Period:
This Option may be exercised for thirty days after termination of the
Optionee's employment or consulting relationship with the Company. Upon the
death or Disability of the Optionee, this Option may be exercised for such
longer period as provided in the Plan. In the event of the Optionee's change
in status from Employee to Consultant or Consultant to Employee, this
<PAGE> 33
Option Agreement shall remain in effect. In no event shall this Option be
exercised later than the Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee"), an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the "Exercise Price"), subject to the terms
and conditions of the Plan, which is incorporated herein by reference. Subject
to Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
This Option is intended to qualify as an Incentive Stock Option
under Section 422 of the Code. However, to the extent that it exceeds the
$100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory
Stock Option ("NSO").
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement. In the event
of Optionee's death, Disability or other termination of Optionee's employment
or consulting relationship, the exercisability of the Option is governed by the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached as Exhibit A (the
"Exercise Notice"), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and agreements as may be
required by the Company pursuant to the provisions of the Plan. The Exercise
Notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Vice President and Controller of the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of law
and the requirements of any stock exchange or quotation service upon which the
Shares are then listed. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date
the Option is exercised with respect to such Exercised Shares.
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<PAGE> 34
3. Method of Payment. Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash; or
(b) check; or
(c) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price.
4. 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 the
Optionee. The terms of the Plan and this Option Agreement shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
5. Term of Option. This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option Agreement.
6. Tax Consequences. Some of the federal and California tax
consequences relating to this Option, as of the date of this Option, are set
forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option. The Optionee will have no regular
federal income tax or California income tax liability upon its exercise,
although the excess, if any, of the Fair Market Value of the Exercised Shares
on the date of exercise over their aggregate Exercise Price will be treated as
an adjustment to alternative minimum taxable income for federal tax purposes
and may subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee undergoes a change of status from
Employee to Consultant, any Incentive Stock Option of the Optionee that remains
unexercised shall cease to qualify as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option on the ninety-first
(91st) day following such change of status.
(b) Disposition of Shares. If the Optionee holds ISO Shares
for at least one year after exercise AND two years after the grant date, any
gain realized on disposition of the Shares will be treated as long-term capital
gain for federal income tax purposes. If the Optionee disposes of ISO Shares
within one year after exercise or two years after the grant date, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the excess, if any, of the LESSER OF
(A) the difference between the FAIR
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<PAGE> 35
MARKET VALUE OF THE SHARES ACQUIRED ON THE DATE OF EXERCISE and the aggregate
Exercise Price, or (B) the difference between the SALE PRICE of such Shares and
the aggregate Exercise Price.
(c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii)
one year after the exercise date, the Optionee shall immediately notify the
Company in writing of such disposition. The Optionee agrees that he or she may
be subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.
7. Entire Agreement; Governing Law. The Plan is incorporated herein
by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by California
law except for that body of law pertaining to conflict of laws.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee
has reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option
Agreement. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Option Agreement. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.
OPTIONEE: XICOR, INC.
____________________________________ By:_________________________________
Signature
____________________________________ Title:______________________________
Print Name
____________________________________
Residence Address
____________________________________
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<PAGE> 36
AMENDED AND RESTATED
1990 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.
I. NOTICE OF NONSTATUTORY STOCK OPTION GRANT ("NSO")
[Optionee's Name]
You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:
Date of Grant _________________________
Vesting Commencement Date _________________________
Exercise Price per Share $________________________
Total Number of Shares
Underlying Option Granted _________________________
Expiration Date: _________________________
Vesting Schedule:
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 25% of the Shares subject to the Option
shall vest on each anniversary of the Commencement Date thereafter.
Termination Period:
This Option may be exercised for thirty days after termination of the
Optionee's employment or consulting relationship with the Company. Upon the
death or Disability of the Optionee, this Option may be exercised for such
longer period as provided in the Plan. In the event of the Optionee's change
in status from Employee to Consultant or Consultant to Employee, this
<PAGE> 37
Option Agreement shall remain in effect. In no event shall this Option be
exercised later than the Expiration Date as provided above.
II. AGREEMENT
1. Grant of Option. The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee"), an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the "Exercise Price"), subject to the terms
and conditions of the Plan, which is incorporated herein by reference. Subject
to Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.
2. Exercise of Option.
(a) Right to Exercise. This Option is exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement. In the event
of Optionee's death, Disability or other termination of Optionee's employment
or consulting relationship, the exercisability of the Option is governed by the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached as Exhibit A (the
"Exercise Notice"), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and agreements as may be
required by the Company pursuant to the provisions of the Plan. The Exercise
Notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Vice President and Controller of the Company. The
Exercise Notice shall be accompanied by payment of the aggregate Exercise Price
as to all Exercised Shares. This Option shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice accompanied by
such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of law
and the requirements of any stock exchange or quotation service upon which the
Shares are then listed. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date
the Option is exercised with respect to such Exercised Shares.
3. Method of Payment. Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of the
Optionee:
(a) cash; or
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<PAGE> 38
(b) check; or
(c) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price.
4. 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 the
Optionee. The terms of the Plan and this Option Agreement shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.
5. Term of Option. This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option Agreement.
6. Tax Consequences. Some of the federal and California tax
consequences relating to this Option, as of the date of this Option, are set
forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
(a) Exercising the Option. The Optionee may incur regular
federal income tax and California income tax liability upon exercise of a NSO.
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 Exercised Shares on the date of exercise over their aggregate
Exercise Price. If the Optionee is an Employee or a former Employee, the
Company will be required to withhold from his or her compensation or collect
from Optionee and pay to the applicable taxing authorities an amount in cash
equal to a percentage of this compensation income at the time of exercise, and
may refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.
(b) Disposition of Shares. If the Optionee holds NSO Shares
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.
7. Entire Agreement; Governing Law. The Plan is incorporated herein
by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by California
law except for that body of law pertaining to conflict of laws.
-3-
<PAGE> 39
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee
has reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option
Agreement. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Option Agreement. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.
OPTIONEE: XICOR, INC.
____________________________________ By:_________________________________
Signature
____________________________________ Title:______________________________
Print Name
____________________________________
Residence Address
____________________________________
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<PAGE> 40
EXHIBIT A
AMENDED AND RESTATED
1990 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
EXERCISE NOTICE
Xicor, Inc.
1511 Buckeye Drive
Milpitas, California 95035
Attention: Vice President and Controller
1. Exercise of Option. Effective as of today, ________________,
199__, the undersigned ("Purchaser") hereby elects to purchase ______________
shares (the "Shares") of the Common Stock of Xicor, Inc. (the "Company") under
and pursuant to the Amended and Restated 1990 Incentive and Non-Incentive Stock
Option Plan (the "Plan") and the Stock Option Agreement dated __________,
19___ (the "Option Agreement"). The purchase price for the Shares shall be
$_____________, as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company
the full purchase price for the Shares plus any federal or state taxes required
to be withheld by the Company.
3. Representations of Purchaser. Purchaser acknowledges that
Purchaser has received, read and understood the Plan and the Option Agreement
and agrees to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. 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 stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate for the number of Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment
will be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in Section 13
of the Plan.
5. Tax Consultation. Purchaser understands that Purchaser may
suffer adverse tax consequences as a result of Purchaser's purchase or
disposition of the Shares. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.
<PAGE> 41
6. Entire Agreement; Governing Law. The Plan and Option Agreement
are incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by California law except for that body of law pertaining to conflict
of laws.
Submitted by: Accepted by:
PURCHASER: XICOR, INC.
______________________________________ By:_________________________________
Signature
______________________________________ Its:________________________________
Print Name
Address: Address:
______________________________________ 1511 Buckeye Drive
______________________________________ Milpitas, CA 95035
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<PAGE> 42
EXHIBIT B
SECURITY AGREEMENT
This Security Agreement is made as of __________, 19___ between Xicor,
Inc., a California corporation ("Pledgee"), and _________________________
("Pledgor").
Recitals
Pursuant to Pledgor's election to purchase Shares under the Option
Agreement dated ________ (the "Option"), between Pledgor and Pledgee under
Pledgee's Amended and Restated 1990 Incentive and Non-Incentive Stock Option
Plan, and Pledgor's election under the terms of the Option to pay for such
shares with his promissory note (the "Note"), Pledgor has purchased _________
shares of Pledgee's Common Stock (the "Shares") at a price of $________ per
share, for a total purchase price of $__________. The Note and the obligations
thereunder are as set forth in Exhibit C to the Option.
NOW, THEREFORE, it is agreed as follows:
1. Creation and Description of Security Interest. In consideration
of the transfer of the Shares to Pledgor under the Option Agreement, Pledgor,
pursuant to the California Commercial Code, hereby pledges all of such Shares
(herein sometimes referred to as the "Collateral") represented by certificate
number(s) ______, duly endorsed in blank or with executed stock powers, and
herewith delivers said certificate to the Vice President and Controller of
Pledgee ("Pledgeholder"), who shall hold said certificate subject to the terms
and conditions of this Security Agreement.
The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.
2. Pledgor's Representations and Covenants. To induce Pledgee to
enter into this Security Agreement, Pledgor represents and covenants to
Pledgee, its successors and assigns, as follows:
a. Payment of Indebtedness. Pledgor will pay the principal
sum of the Note secured hereby, together with interest thereon, at the time and
in the manner provided in the Note.
<PAGE> 43
b. Encumbrances. The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
Shares without the prior written consent of Pledgee.
c. Margin Regulations. In the event that Pledgee's Common
Stock is now or later becomes margin-listed by the Federal Reserve Board and
Pledgee is classified as a "lender" within the meaning of the regulations under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G"),
Pledgor agrees to cooperate with Pledgee in making any amendments to the Note
or providing any additional collateral as may be necessary to comply with such
regulations.
3. Voting Rights. During the term of this pledge and so long as all
payments of principal and interest are made as they become due under the terms
of the Note, Pledgor shall have the right to vote all of the Shares pledged
hereunder.
4. Stock Adjustments. In the event that during the term of the
pledge any stock dividend, reclassification, readjustment or other changes are
declared or made in the capital structure of Pledgee, all new, substituted and
additional shares or other securities issued by reason of any such change shall
be delivered to and held by the Pledgee under the terms of this Security
Agreement in the same manner as the Shares originally pledged hereunder. In
the event of substitution of such securities, Pledgor, Pledgee and Pledgeholder
shall cooperate and execute such documents as are reasonable so as to provide
for the substitution of such Collateral and, upon such substitution, references
to "Shares" in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.
5. Options and Rights. In the event that, during the term of this
pledge, subscription Options or other rights or options shall be issued in
connection with the pledged Shares, such rights, Options and options shall be
the property of Pledgor and, if exercised by Pledgor, all new stock or other
securities so acquired by Pledgor as it relates to the pledged Shares then held
by Pledgeholder shall be immediately delivered to Pledgeholder, to be held
under the terms of this Security Agreement in the same manner as the Shares
pledged.
6. Default. Pledgor shall be deemed to be in default of the Note
and of this Security Agreement in the event:
a. Payment of principal or interest on the Note shall be
delinquent for a period of 10 days or more; or
b. Pledgor fails to perform any of the covenants set forth in
the Option or contained in this Security Agreement for a period of 10 days
after written notice thereof from Pledgee.
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<PAGE> 44
In the case of an event of Default, as set forth above, Pledgee shall
have the right to accelerate payment of the Note upon notice to Pledgor, and
Pledgee shall thereafter be entitled to pursue its remedies under the
California Commercial Code.
7. Release of Collateral. Subject to any applicable contrary rules
under Regulation G, there shall be released from this pledge a portion of the
pledged Shares held by Pledgeholder hereunder upon payments of the principal of
the Note. The number of the pledged Shares which shall be released shall be
that number of full Shares which bears the same proportion to the initial
number of Shares pledged hereunder as the payment of principal bears to the
initial full principal amount of the Note.
8. Withdrawal or Substitution of Collateral. Pledgor shall not
sell, withdraw, pledge, substitute or otherwise dispose of all or any part of
the Collateral without the prior written consent of Pledgee.
9. Term. The within pledge of Shares shall continue until the
payment of all indebtedness secured hereby, at which time the remaining pledged
stock shall be promptly delivered to Pledgor, subject to the provisions for
prior release of a portion of the Collateral as provided in paragraph 7 above.
10. Insolvency. Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for
the property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due
and payable, and Pledgee may proceed as provided in the case of default.
11. Pledgeholder Liability. In the absence of willful or gross
negligence, Pledgeholder shall not be liable to any party for any of his acts,
or omissions to act, as Pledgeholder.
12. Invalidity of Particular Provisions. Pledgor and Pledgee agree
that the enforceability or invalidity of any provision or provisions of this
Security Agreement shall not render any other provision or provisions herein
contained unenforceable or invalid.
13. Successors or Assigns. Pledgor and Pledgee agree that all of the
terms of this Security Agreement shall be binding on their respective
successors and assigns, and that the term "Pledgor" and the term "Pledgee" as
used herein shall be deemed to include, for all purposes, the respective
designees, successors, assigns, heirs, executors and administrators.
14. Governing Law. This Security Agreement shall be interpreted and
governed under the laws of the State of California.
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<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"PLEDGOR" By: ________________________________
____________________________________
Print Name
Address: ____________________________________
____________________________________
"PLEDGEE" Xicor, Inc.,
a California corporation
By: ________________________________
Title: _____________________________
"PLEDGEHOLDER" ____________________________________
Vice President and Controller
Xicor, Inc.
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<PAGE> 46
EXHIBIT C
NOTE
$_______________ Milpitas, CA
______________, 19___
FOR VALUE RECEIVED, _______________ promises to pay to Xicor, Inc., a
California corporation (the "Company"), or order, the principal sum of
_______________________ ($_____________), together with interest on the unpaid
principal hereof from the date hereof at the rate of _______________ percent
(____%) per annum, compounded semiannually.
Principal and interest shall be due and payable on __________, 19___.
Should the undersigned fail to make full payment of principal or interest for a
period of 10 days or more after the due date thereof, the whole unpaid balance
on this Note of principal and interest shall become immediately due at the
option of the holder of this Note. Payments of principal and interest shall be
made in lawful money of the United States of America.
The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.
This Note is subject to the terms of the Option, dated as of
________________. This Note is secured in part by a pledge of the Company's
Common Stock under the terms of a Security Agreement of even date herewith and
is subject to all the provisions thereof.
The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.
In the event the undersigned shall cease to be an employee or consultant
of the Company for any reason, this Note shall, at the option of the Company,
be accelerated, and the whole unpaid balance on this Note of principal and
accrued interest shall be immediately due and payable.
Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys' fees therein of the holder shall be paid by the
undersigned.
____________________________________
____________________________________
<PAGE> 47
AMENDED AND RESTATED
1990 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
NOTICE OF GRANT OF STOCK PURCHASE RIGHT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice of Grant.
[Grantee's Name]
You have been granted the right to purchase Common Stock of the Company,
subject to the Company's repurchase option and your ongoing Continuous Status
as an Employee or Consultant (as described in the Plan and the attached
Restricted Stock Purchase Agreement), as follows:
Date of Grant _________________________
Price Per Share $________________________
Total Number of Shares Subject _________________________
to This Stock Purchase Right
Expiration Date: _________________________
YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE EXPIRATION DATE
OR IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES.
By your signature and the signature of the Company's representative below, you
and the Company agree that this Stock Purchase Right is granted under and
governed by the terms and conditions of the Amended and Restated 1990 Incentive
and Non-Incentive Stock Option Plan and the Restricted Stock Purchase
Agreement, all of which are attached and made a part of this document. You
further agree to execute the attached Restricted Stock Purchase Agreement as a
condition to purchasing any shares under this Stock Purchase Right.
GRANTEE: XICOR, INC.
______________________________________ By: ________________________________
Signature
______________________________________ Title: _____________________________
Print Name
<PAGE> 48
EXHIBIT A-1
AMENDED AND RESTATED
1990 INCENTIVE AND NON-INCENTIVE
STOCK OPTION PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Restricted Stock Purchase Agreement.
WHEREAS the Purchaser named in the Notice of Grant, (the "Purchaser") is
an employee or consultant of the Company, and the Purchaser's continued
participation is considered by the Company to be important for the Company's
continued growth; and
WHEREAS in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Administrator has granted to the Purchaser
stock purchase rights subject to the terms and conditions of the Plan and the
Notice of Grant, which are incorporated herein by reference, and pursuant to
this restricted stock purchase agreement (the "Agreement").
THEREFORE, the parties agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to the
Purchaser and the Purchaser hereby agrees to purchase shares of the Company's
Common Stock (the "Shares"), at the per share purchase price and as otherwise
described in the Notice of Grant.
2. Payment of Purchase Price. The purchase price for the Shares may
be paid by delivery to the Company at the time of execution of this Agreement
of cash, a check, or some combination thereof.
3. Repurchase Option.
(a) In the event the Purchaser's Continuous Status as an
Employee or Consultant terminates for any or no reason (including death or
disability) before all of the Shares are released from the Company's repurchase
option (see Section 4), the Company shall, upon the date of such termination
(as reasonably fixed and determined by the Company) have an irrevocable,
exclusive option for a period of sixty (60) days from such date to repurchase
up to that number of shares which constitute the Unreleased Shares (as defined
in Section 4) at the original purchase price per share (the "Repurchase
Price"). Said option shall be exercised by the Company by delivering written
notice to the Purchaser or the Purchaser's executor (with a copy to the Escrow
Holder) AND, at the Company's option, (i) by delivering to the Purchaser or the
Purchaser's executor a check in the amount of the aggregate Repurchase Price,
or (ii) by the Company canceling an amount of the Purchaser's indebtedness to
the Company equal to the
<PAGE> 49
aggregate Repurchase Price, or (iii) by a combination of (i) and (ii) so that
the combined payment and cancellation of indebtedness equals such aggregate
Repurchase Price. Upon delivery of such notice and the payment of the
aggregate Repurchase Price in any of the ways described above, the Company
shall become the legal and beneficial owner of the Shares being repurchased and
all rights and interests therein or relating thereto, and the Company shall
have the right to retain and transfer to its own name the number of Shares
being repurchased by the Company.
(b) Whenever the Company shall have the right to repurchase
Shares hereunder, the Company may designate and assign one or more employees,
officers, directors or shareholders of the Company or other persons or
organizations to exercise all or a part of the Company's purchase rights under
this Agreement and purchase all or a part of such Shares; provided that if the
Fair Market Value of the Shares to be repurchased on the date of such
designation or assignment (the "Repurchase FMV") exceeds the aggregate
Repurchase Price of such Shares, then each such designee or assignee shall pay
the Company cash equal to the difference between the Repurchase FMV and the
aggregate Repurchase Price of such Shares.
4. Release of Shares From Repurchase Option.
(a) ___________________ (_______) of the Shares shall be
released from the Company's repurchase option
__________________________________________________________, provided in each
case that the Purchaser's Continuous Status as an Employee or Consultant has
not terminated prior to the date of any such release.
(b) Any of the Shares which have not yet been released from
the Company's repurchase option are referred to herein as "Unreleased Shares."
(c) The Shares which have been released from the Company's
repurchase option shall be delivered to the Purchaser at the Purchaser's
request (see Section 6).
5. Restriction on Transfer. Except for the escrow described in
Section 6 or transfer of the Shares to the Company or its assignees
contemplated by this Agreement, none of the Shares or any beneficial interest
therein shall be transferred, encumbered or otherwise disposed of in any way
until the release of such Shares from the Company's repurchase option in
accordance with the provisions of this Agreement, other than by will or the
laws of descent and distribution.
6. Escrow of Shares.
(a) To ensure the availability for delivery of the Purchaser's
Unreleased Shares upon repurchase by the Company pursuant to the Company's
repurchase option under Section 3 above, the Purchaser shall, upon execution of
this Agreement, deliver and deposit with an escrow holder designated by the
Company (the "Escrow Holder") the share certificates representing the
Unreleased Shares, together with the stock assignment duly endorsed in blank,
attached hereto as Exhibit A-2. The Unreleased Shares and stock assignment
shall be held by
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<PAGE> 50
the Escrow Holder, pursuant to the Joint Escrow Instructions of the Company and
Purchaser attached as Exhibit A-3 hereto, until such time as the Company's
repurchase option expires.
(b) The Escrow Holder shall not be liable for any act it may
do or omit to do with respect to holding the Unreleased Shares in escrow and
while acting in good faith and in the exercise of its judgment.
(c) If the Company or any assignee exercises its repurchase
option hereunder, the Escrow Holder, upon receipt of written notice of such
option exercise from the proposed transferee, shall take all steps necessary to
accomplish such transfer.
(d) When the repurchase option has been exercised or expires
unexercised or a portion of the Shares has been released from such repurchase
option, upon Purchaser's request the Escrow Holder shall promptly cause a new
certificate to be issued for such released Shares and shall deliver such
certificate to the Company or the Purchaser, as the case may be.
(e) Subject to the terms hereof, the Purchaser shall have all
the rights of a shareholder with respect to such Shares while they are held in
escrow, including without limitation, the right to vote the Shares and receive
any cash dividends declared thereon. If, from time to time during the term of
the Company's repurchase option, there is (i) any stock dividend, stock split
or other change in the Shares, or (ii) any merger or sale of all or
substantially all of the assets or other acquisition of the Company, any and
all new, substituted or additional securities to which the Purchaser is
entitled by reason of the Purchaser's ownership of the Shares shall be
immediately subject to this escrow, deposited with the Escrow Holder and
included thereafter as "Shares" for purposes of this Agreement and the
Company's repurchase option.
7. Legends. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legend (in addition to any
legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.
8. Adjustment for Stock Split. All references to the number of
Shares and the purchase price of the Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, stock dividend or other
change in the Shares which may be made by the Company after the date of this
Agreement.
9. Tax Consequences. The Purchaser has reviewed with the
Purchaser's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Purchaser is relying solely on such advisors
-3-
<PAGE> 51
and not on any statements or representations of the Company or any of its
agents. The Purchaser understands that the Purchaser (and not the Company)
shall be responsible for the Purchaser's own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.
The Purchaser understands that Section 83 of the Internal Revenue Code of 1986,
as amended (the "Code"), taxes as ordinary income the difference between the
purchase price for the Shares and the Fair Market Value of the Shares as of the
date any restrictions on the Shares lapse. In this context, "restriction"
includes the right of the Company to buy back the Shares pursuant to its
repurchase option. The Purchaser understands that the Purchaser may elect to
be taxed at the time the Shares are purchased rather than when and as the
Company's repurchase option expires by filing an election under Section 83(b)
of the Code with the I.R.S. within 30 days from the date of purchase. The form
for making this election is attached as Exhibit A-5 hereto.
THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON THE PURCHASER'S BEHALF.
10. General Provisions.
(a) This Agreement shall be governed by the laws of the State
of California. This Agreement, subject to the terms and conditions of the Plan
and the Notice of Grant, represents the entire agreement between the parties
with respect to the purchase of Common Stock by the Purchaser. Subject to
Section 15(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Agreement, the
terms and conditions of the Plan shall prevail. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in
this Agreement.
(b) Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end
of this Agreement or such other address as a party may request by notifying the
other in writing.
Any notice to the Escrow Holder shall be sent to the Company's
address with a copy to the other party not sending the notice.
(c) The rights and benefits of the Company under this
Agreement shall be transferable to any one or more persons or entities, and all
covenants and agreements hereunder shall inure to the benefit of, and be
enforceable by the Company's successors and assigns. The rights and
obligations of the Purchaser under this Agreement may only be assigned with the
prior written consent of the Company.
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<PAGE> 52
(d) Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party from thereafter
enforcing each and every other provision of this Agreement. The rights granted
both parties herein are cumulative and shall not constitute a waiver of either
party's right to assert all other legal remedies available to it under the
circumstances.
(e) The Purchaser agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
(f) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS AN
EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING
HIRED OR PURCHASING SHARES HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING
PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH PURCHASER'S
RIGHT OR THE COMPANY'S RIGHT TO TERMINATE PURCHASER'S EMPLOYMENT OR CONSULTING
RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.
By Purchaser's signature below, Purchaser represents that he or she is
familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof. Purchaser has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Purchaser agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.
Purchaser further agrees to notify the Company upon any change in the residence
indicated in the Notice of Grant.
PURCHASER: XICOR, INC.
______________________________________ By: ________________________________
Signature
______________________________________ Title: _____________________________
Print Name
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<PAGE> 53
EXHIBIT A-2
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________, hereby sell, assign
and transfer unto _________________________________________________
______________________________________________ (__________) shares of the
Common Stock of Xicor, Inc. standing in my name of the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint _____________________________________
_______ to transfer the said stock on the books of the within named corporation
with full power of substitution in the premises.
This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement between________________________ and the undersigned
dated ______________, 19__.
Dated: _______________, 19__
Signature: ____________________________
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option," as set forth in the Agreement, without requiring
additional signatures on the part of the Purchaser.
<PAGE> 54
EXHIBIT A-3
JOINT ESCROW INSTRUCTIONS
_____________, 19__
Vice President and Controller
Xicor, Inc.
1511 Buckeye Drive
Milpitas, California 95035
Dear _________________:
As Escrow Agent for both Xicor, Inc., a California corporation (the
"Company"), and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock
Purchase Agreement ("Agreement") between the Company and the undersigned, in
accordance with the following instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "Company") exercises
the Company's repurchase option set forth in the Agreement, the Company shall
give to Purchaser and you a written notice specifying the number of shares of
stock to be purchased, the purchase price, and the time for a closing hereunder
at the principal office of the Company. Purchaser and the Company hereby
irrevocably authorize and direct you to close the transaction contemplated by
such notice in accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock
assignments necessary for the transfer in question, (b) to fill in the number
of shares being transferred, and (c) to deliver same, together with the
certificate evidencing the shares of stock to be transferred, to the Company or
its assignee, against the simultaneous delivery to you of the purchase price
(by cash, a check, or some combination thereof) for the number of shares of
stock being purchased pursuant to the exercise of the Company's repurchase
option.
3. Purchaser irrevocably authorizes the Company to deposit with you
any certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer
of, the securities. Subject to the provisions of this paragraph 3, Purchaser
<PAGE> 55
shall exercise all rights and privileges of a shareholder of the Company while
the stock is held by you.
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's repurchase option.
Within 30 days after cessation of Purchaser's continuous employment by or
services to the Company, or any parent or subsidiary of the Company, you will
deliver to Purchaser a certificate or certificates representing the aggregate
number of shares held or issued pursuant to the Agreement and not purchased by
the Company or its assignees pursuant to exercise of the Company's repurchase
option.
5. If at the time of termination of this escrow you should have in
your possession any documents, securities, or other property belonging to
Purchaser, you shall deliver all of the same to Purchaser and shall be
discharged of all further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or
revoked only by a writing signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in
relying or refraining from acting on any instrument reasonably believed by you
to be genuine and to have been signed or presented by the proper party or
parties. You shall not be personally liable for any act you may do or omit to
do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting
in good faith, and any act done or omitted by you pursuant to the advice of
your own attorneys shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree,
you shall not be liable to any of the parties hereto or to any other person,
firm or corporation by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
10. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
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<PAGE> 56
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with
your obligations hereunder, may rely upon the advice of such counsel, and may
pay such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate
if you shall cease to be an officer or agent of the Company or if you shall
resign by written notice to each party. In the event of any such termination,
the Company shall appoint a successor Escrow Agent.
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or
defend any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
COMPANY: Xicor, Inc.
1511 Buckeye Drive
Milpitas, California 95035
PURCHASER: ____________________________________________
____________________________________________
____________________________________________
ESCROW AGENT: Vice President and Controller
Xicor, Inc.
1511 Buckeye Drive
Milpitas, California 95035
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not
become a party to the Agreement.
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<PAGE> 57
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
18. These Joint Escrow Instructions shall be governed by, and
construed and enforced in accordance with, the laws of the State of California.
Very truly yours,
XICOR, INC.
By: ________________________________
Title: _____________________________
PURCHASER:
____________________________________
(Signature)
____________________________________
(Typed or Printed Name)
ESCROW AGENT:
______________________________________
Vice President and Controller
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<PAGE> 58
EXHIBIT A-4
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to the above-referenced
Federal Tax Code, to include in taxpayer's gross income for the current taxable
year, the amount of any compensation taxable to taxpayer in connection with his
receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of
the undersigned are as follows:
NAME : TAXPAYER: SPOUSE:
ADDRESS: :
IDENTIFICATION NO. : TAXPAYER: SPOUSE:
TAXABLE YEAR:
2. The property with respect to which the election is made is described as
follows: __________ shares (the "Shares") of the Common Stock of
Xicor, Inc. (the "Company").
3. The date on which the property was transferred is: ______________,
19__.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, on
certain events. This right lapses with regard to a portion of the
Shares based on the continued performance of services by the taxpayer
over time.
5. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms
will never lapse, of such property is: $_______________.
6. The amount (if any) paid for such property is:
$_______________.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.
Dated: ___________________, 19__ ____________________________________
__________________________, Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: ___________________, 19__ ____________________________________
Spouse of Taxpayer
