<PAGE>
As filed with the Securities and Exchange Commission on January 6, 1999
Registration No. 333-____________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
OAK TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0161486
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
139 KIFER COURT
SUNNYVALE, CALIFORNIA 94086
(Address of principal executive offices) (Zip Code)
----------------------
OAK TECHNOLOGY, INC.
1994 STOCK OPTION PLAN
1994 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the Plan)
----------------------
RICHARD B. BLACK
PRESIDENT
OAK TECHNOLOGY, INC.
139 KIFER COURT
SUNNYVALE, CALIFORNIA 94086
(Name and address of agent for service)
(408) 737-0888
(Telephone number, including area code, of agent for service)
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
---------- ------------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Oak Technology, Inc. 1994 Stock
Option Plan
Common Stock, $0.001 par value 6,000,000 shares $3.469 $20,814,000.00 $5,786.29
Oak Technology, Inc. 1994
Employee Stock Purchase Plan
Common Stock, $0.001 par value 1,000,000 shares $3.469 $3,469,000.00 $ 964.38
Aggregate Registration Fee: $6,750.67
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any
additional shares of Common Stock which become issuable under the Oak
Technology, Inc. 1994 Stock Option Plan or the Oak Technology, Inc. 1994
Employee Stock Purchase Plan by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the
Registrant's receipt of consideration which results in an increase in the
number of the outstanding shares of Registrant's Common Stock.
(2) Calculated solely for purposes of this offering under
Rule 457(h) of the Securities Act of 1933, as amended (the "1933 Act"), on
the basis of the average of the high and low selling prices per share of the
Registrant's Common Stock on January 4, 1999, as reported on the Nasdaq
National Market.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Oak Technology, Inc. (the "Registrant") hereby incorporates by
reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the "Commission"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1998 filed with the Commission on
September 28, 1998 pursuant to Section 13 of the Securities
and Exchange Act of 1934, as amended (the "1934 Act");
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1998 filed with the Commission on
November 16, 1998 pursuant to Section 13 of the 1934 Act; and
(c) The Registrant's Registration Statement No. 000-25298 on Form
8-A filed with the Commission on December 16, 1994, in which
there is described the terms, rights and provisions applicable
to the Registrant's Common Stock.
(d) The Registrant's Registration Statement No. 000-25298 on Form
8-A12G filed with the Commission on August 21, 1997, together
with Amendment No. 1 on Form 8-A12B/A filed with the
Commission on November 25, 1998, in which there is described
the terms, rights and provisions applicable to the
Registrant's Preferred Stock Purchase Rights.
All reports and definitive proxy or information statements
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the
date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which de-registers all securities then remaining unsold
shall be deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. DESCRIPTION OF SECURITIES
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware law authorizes corporations to eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of the directors' "duty of care." While the relevant
statute does not change directors' duty of care, it enables corporations to
limit available relief to equitable remedies such as injunction or
rescission. The statute has no effect on directors' duty of loyalty, acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of law, illegal payment of dividends and approval of any
transaction from which a director derives an improper personal benefit. The
Registrant has adopted provisions in its Restated Certificate of
Incorporation which eliminate the personal liability of its directors to the
Registrant and its stockholders for monetary damages for breach or alleged
breach of their duty of care. The Restated By-Laws of the Registrant provide
for indemnification of its directors, officers, employees and agents to the
full extent permitted by the General Corporation Law of the State of
Delaware, the Registrant's state of incorporation, including those
circumstances in which indemnification would otherwise be discretionary under
Delaware Law. Section 145 of the General Corporation Law of the State of
Delaware provides for indemnification in terms sufficiently broad to
indemnify such individuals, under certain circumstances, for liabilities
(including reimbursement of expenses incurred) arising under the 1933 Act.
In addition, the Registrant has entered into indemnification
agreements with its directors and certain officers that provide for the
maximum indemnification permitted by law.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
<PAGE>
Item 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
- -------------- -------
<S> <C>
4 Instruments Defining the Rights of Stockholders.
Reference is made to Registrant's Registration
Statements No. 000-25298 on Form 8-A, together with
the exhibits thereto, which are incorporated herein
by reference pursuant to Items 3(c) and 3(d).
5 Opinion and consent of Brobeck, Phleger & Harrison
LLP.
23.1 Consent of KPMG LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is
contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-3
of this Registration Statement.
99.1 Oak Technology, Inc. 1994 Stock Option Plan.
99.2 Form of Non-Qualified Stock Option Agreement in
connection with the 1994 Stock Option Plan.
99.3 Oak Technology, Inc. 1994 Employee Stock Purchase
Plan.
99.4 Form of Participant Election Notice in connection
with the 1994 Employee Stock Purchase Plan.
</TABLE>
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement: (i) to include any prospectus
required by Section 10(a)(3) of the 1933 Act, (ii) to reflect in the
prospectus any facts or events arising after the effective date of this
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in
the information set forth in this Registration Statement and (iii) to include
any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement; provided, however, that
clauses (1)(i) and (1)(ii) shall not apply if the information required to be
included in a post-effective amendment by those clauses is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the 1934 Act that are incorporated by reference into this
Registration Statement; (2) that for the purpose of determining any liability
under the 1933 Act each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of either the Registrant's 1994 Stock Option Plan
or 1994 Employee Stock Purchase Plan.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act that is incorporated by reference into this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under
the 1933 Act may be permitted to directors, officers or controlling persons
of the Registrant pursuant to the indemnification provisions summarized in
Item 6 or otherwise, the Registrant has been advised that, in the opinion of
the Commission, such indemnification is against public policy as expressed in
the 1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the 1933 Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sunnyvale, State of California on this 6th day of
January, 1999.
OAK TECHNOLOGY, INC.
By: /s/ RICHARD B. BLACK
--------------------------------
Richard B. Black
President (Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Oak Technology,
Inc., a Delaware corporation, do hereby constitute and appoint Richard B.
Black and Robert O. Hersh, and each of them, the lawful attorneys-in-fact and
agents with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and any one
of them, determine may be necessary or advisable or required to enable said
corporation to comply with the 1933 Act, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with
this Registration Statement. Without limiting the generality of the foregoing
power and authority, the powers granted include the power and authority to
sign the names of the undersigned officers and directors in the capacities
indicated below to this Registration Statement, to any and all amendments,
both pre-effective and post-effective, and supplements to this Registration
Statement, and to any and all instruments or documents filed as part of or in
conjunction with this Registration Statement or amendments or supplements
thereof, and each of the undersigned hereby ratifies and confirms that all
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this
Power of Attorney as of the date indicated.
Pursuant to the requirements of the 1933 Act, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ RICHARD B. BLACK President and Director January 6, 1999
- ------------------------------------------ (Principal Executive Officer)
Richard B. Black
/s/ ROBERT O. HERSH Chief Financial Officer January 6, 1999
- ------------------------------------------ (Principal Financial Officer)
Robert O. Hersh
/s/ DAVID D. TSANG Chairman of the Board of January 6, 1999
- ------------------------------------------ Directors and Chief Executive
David D. Tsang Officer
- ------------------------------------------ Director _____________, 1999
Ta-lin Hsu
- ------------------------------------------ Director _____________, 1999
Young K. Sohn
/s/ TIMOTHY TOMLINSON
- ------------------------------------------ Director January 6, 1999
Timothy Tomlinson
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4 Instruments Defining the Rights of Stockholders.
Reference is made to Registrant's Registration
Statements No. 000-25298 on Form 8-A, together with
the exhibits thereto, which are incorporated herein
by reference pursuant to Items 3(c) and 3(d).
5 Opinion and consent of Brobeck, Phleger & Harrison LLP.
23.1 Consent of KPMG LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-3 of this Registration Statement.
99.1 Oak Technology, Inc. 1994 Stock Option Plan.
99.2 Form of Non-Qualified Stock Option Agreement in connection with the 1994 Stock
Option Plan.
99.3 Oak Technology, Inc. 1994 Employee Stock Purchase Plan.
99.4 Form of Participant Election Notice in connection with the 1994 Employee Stock
Purchase Plan.
</TABLE>
<PAGE>
EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
January 6, 1999
Oak Technology, Inc.
139 Kifer Court
Sunnyvale, California 94086
Re: Oak Technology, Inc. - Registration Statement for Offering of an
Aggregate of 7,000,000 Shares of Common Stock
Dear Ladies and Gentlemen:
We have acted as counsel to Oak Technology, Inc., a Delaware corporation
(the "Company"), in connection with the registration on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as amended, of an
additional 7,000,000 shares of common stock and related stock options for
issuance (the "Shares") under the Company's 1994 Stock Option Plan and 1994
Employee Stock Purchase Plan (collectively, the "Plans").
This opinion is being furnished in accordance with the requirements of
Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with share increases to the
Plans. Based on such review, we are of the opinion that, if, as and when the
Shares have been issued and sold (and the consideration therefor received)
pursuant to the provisions of option agreements and purchase agreements duly
authorized under the Plans and in accordance with the Registration Statement,
such Shares will be duly authorized, legally issued, fully paid and
nonassessable.
We consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement.
This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is
expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters relating to the
Company, the Plans or the Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Oak Technology, Inc. :
We consent to incorporation herein by reference in the registration statement
on Form S-8 to be filed January 6, 1999 of our report dated July 28, 1998,
except as to Note 14, which is as of August 12, 1998, relating to the
consolidated balance sheets of Oak Technology, Inc. and subsidiaries as of
June 30, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended June 30, 1998 and related financial statement
schedule, which report appears in the September 28, 1998, annual report on
Form 10-K of Oak Technology, Inc.
KPMG LLP
Mountain View, California
January 6, 1999
<PAGE>
OAK TECHNOLOGY, INC.
1994 STOCK OPTION PLAN
(AS AMENDED AUGUST 12, 1998)
1. PURPOSE. This Plan is intended to provide incentives to attract,
retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company and any Parent or
Subsidiary of the Company by offering them an opportunity to participate in
the Company's future performance through awards of Options, and to provide
such eligible persons with a proprietary interest (or increase their existing
proprietary interest) in the Company. Capitalized terms not defined in the
text of the Plan are defined in Section 15.
2. STOCK SUBJECT TO THE PLAN. The capital stock subject to the Plan
shall be shares of the Company's authorized but unissued Common Stock or
treasury shares of Common Stock. The maximum aggregate number of shares of
Common Stock which may be issued under the Plan is Twelve Million (12,000,000)
subject to adjustments pursuant to Section 8 hereof. In the event that any
outstanding Option under the Plan shall expire by its terms or is otherwise
terminated for any reason (or if shares of Common Stock of the Company that
are issued upon exercise of an Option are subsequently reacquired by the
Company pursuant to contractual rights of the Company under the particular
Option Agreement), the shares of Common Stock allocated to the unexercised
portion of such Option (or the shares so reacquired by the Company pursuant
to the terms of the Option Agreement) shall again become available to be made
subject to Options granted under the Plan.
3. ADMINISTRATION.
3.1 POWER AND AUTHORITY. The Plan shall be administered by the
Board and/or the Committee. Subsequent references herein to the
Board shall also mean the Committee if such Committee has been
appointed, and, unless the powers of the Committee have been
specifically limited, the Committee shall have all of the powers of
the Board granted herein. Subject to the general purposes, terms and
conditions of the Plan, the Board shall have full power and
authority to implement and carry out the Plan. More specifically,
the Board shall have the following powers and authority (which
listing is provided by way of example and is not intended to be
comprehensive or limiting to the extent of powers not included):
3.1.1 SELECTION OF PARTICIPANTS. To determine the persons
providing services to the Company to whom, and the time or
times at which, Options to purchase Common Stock of the
Company shall be granted.
3.1.2 NUMBER OF OPTION SHARES. To determine the number of
shares of Common Stock to be subject to Options granted to
each Participant, provided that no person shall be eligible to
receive more than One Million Six Hundred Thousand
(1,600,000) shares of Common Stock at any time during the
term of the Plan pursuant to the grant of Options hereunder.
3.1.3 EXERCISE PRICE. To determine the price to be paid for
the shares of Common Stock upon the exercise of each Option.
3.1.4 TERM, VESTING AND EXERCISE SCHEDULE. To determine the
term, vesting and exercise schedule of each Option, including
the effect of a Participant's termination of employment or
service.
1
<PAGE>
3.1.5 OTHER TERMS OF OPTIONS. To determine the terms and
conditions of each Option Agreement (which need not be
identical) entered into between the Company and any
Participant.
3.1.6 INTERPRETATION OF PLAN. To construe and interpret the
Plan, any Option Agreement and any other agreement or document
executed pursuant to the Plan and to prescribe, amend and
rescind rules and regulations relating to the Plan.
3.1.7 WAIVERS; CORRECTION OF DEFECTS. To grant waivers of Plan
or Option Agreement conditions and to correct any defect,
supply any omission or reconcile any inconsistency in the Plan
or any Option Agreement.
3.1.8 MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. To
modify, extend, renew or grant a new Option in substitution
for, any Option granted under the Plan; provided, however,
that no such modification or cancellation and regrant of an
Option shall, without the written consent of the Participant,
alter or impair any rights of the Participant under any Option
previously granted under the Plan.
3.1.9 DELEGATION. To delegate to one or more officers or
employees of the Company the authority to execute and deliver
such instruments and documents, to do all such acts and
things, and to take all such other steps deemed necessary,
advisable or convenient for the effective administration of
the Plan in accordance with its terms and purpose; provided,
however, that the Committee shall exercise, and may not
delegate any discretionary authority with respect to, all
substantive decisions and functions regarding the Plan and
Options granted under the Plan as those relate to Insiders of
the Company.
3.1.10 GENERAL AUTHORITY. To take such actions and make such
determinations as the Board deems necessary or advisable for
the administration of the Plan, subject to complying with the
Plan and with applicable legal requirements.
3.2 BOARD DISCRETION. The interpretation and construction by
the Board of any provision of this Plan, or any Option granted
pursuant hereto (including the applicable Option Agreement), shall
be final, binding and conclusive upon all parties in interest. In
the event of any conflict between any Option Agreement and the Plan,
the terms of the Plan shall govern. No member of the Board shall be
liable to the Company, any Parent or Subsidiary of the Company, or
the holder of any Option granted under the Plan for any action,
inaction, determination or interpretation made in good faith with
respect to the Plan or any transaction under the Plan.
3.3 INTENT TO COMPLY WITH SEC RULE 16b-3. With respect to
Insiders, transactions under this Plan are intended to comply with
all applicable conditions of SEC Rule 16b-3 or its successors under
the Exchange Act. To the extent any provision of the Plan or any
action by the Board fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the
Board. Moreover, in the event the Plan does not include a provision
required by Rule 16b-3 to be stated therein, such provision (other
than one relating to eligibility requirements, or the price and
amounts of awards) shall be deemed automatically to be incorporated
by reference into the Plan insofar as Insider Participants are
concerned.
2
<PAGE>
4. ELIGIBILITY AND AWARD OF OPTIONS.
4.1 AUTHORITY TO GRANT AND ELIGIBILITY. The Board shall have
full and final authority, in its discretion and at any time and from
time to time during the term of this Plan, to grant or authorize the
granting of Options to such employees (including officers and
directors) of, non-employee directors of and consultants retained
by, the Company or any Parent or Subsidiary of the Company as it may
select. Any individual who is eligible to receive an Option under
this Plan shall be eligible to hold more than one Option at any
given time, in the discretion of the Board. The Board shall have
full and final authority in its discretion to determine, in the case
of employee Participants (including employees who are officers or
directors), whether such Options shall be incentive stock options
within the meaning of Section 422 of the Code ("INCENTIVE STOCK
OPTIONS") or options that do not qualify as Incentive Stock Options
("NON-QUALIFIED STOCK OPTIONS"); however, no Incentive Stock Option
may be granted to any person who is not a bona fide employee of the
Company or any Parent or Subsidiary of the Company. Persons selected
by the Board who are prospective employees of, non-employee
directors of or consultants to be retained by, the Company or any
Parent or Subsidiary of the Company shall be eligible to receive
Non-Qualified Stock Options; provided, however, that in the case of
such prospective employment or other engagement, the exercisability
of such Options shall be subject in each case to such person in fact
becoming an employee, non-employee director or consultant, as
applicable, of the Company or any Parent or Subsidiary of the
Company.
4.2 CERTAIN RESTRICTIONS APPLICABLE TO OPTIONS. No Incentive
Stock Option shall be granted to any Participant who, at the time
such Incentive Stock Option is granted, owns stock possessing more
than ten percent (10%) of the total combined voting power of all
classes of outstanding capital stock of the Company, or any Parent
or Subsidiary of the Company, unless the exercise price (as provided
in Section 5.1 hereof) is not less than one hundred ten percent
(110%) of the Fair Market Value of the Common Stock on the date the
Incentive Stock Option is granted and the period within which such
Incentive Stock Option may be exercised (as provided in Section 5.2
hereof) does not exceed five (5) years from the date the Incentive
Stock Option is granted. For purposes of this Section 4.2, in
determining stock ownership, a Participant shall be considered as
owning the voting capital stock owned, directly or indirectly, by or
for his or her brothers and sisters, spouse, ancestors and lineal
descendants. Voting capital stock owned, directly or indirectly, by
or for a corporation, partnership, estate or trust shall be
considered as being owned proportionately by or for its
stockholders, partners or beneficiaries, as applicable.
Additionally, for purposes of this Section 4.2, outstanding capital
stock shall include all capital stock actually issued and
outstanding immediately after the grant of the Option to the
Participant. Outstanding capital stock shall not include capital
stock authorized for issue under outstanding Options held by the
Participant or by any other person. Additionally, the aggregate Fair
Market Value (determined as of the date an Option is granted) of the
Common Stock with respect to which Incentive Stock Options granted
are exercisable for the first time by an employee Participant during
any one calendar year (under this Plan and under all other incentive
stock option plans of the Company and of any Parent or Subsidiary of
the Company) shall not exceed One Hundred Thousand Dollars
($100,000). If the aggregate Fair Market Value (determined as of the
date an Option is granted) of the Common Stock with respect to which
Incentive Stock Options granted are exercisable for
3
<PAGE>
the first time by a Participant during any calendar year exceeds One
Hundred Thousand Dollars ($100,000), the Options for the first One
Hundred Thousand Dollars ($100,000) worth of shares of Common Stock
to become exercisable in such calendar year shall be Incentive Stock
Options and the Options for the amount in excess of One Hundred
Thousand Dollars ($100,000) that become exercisable in that calendar
year shall be Non-Qualified Stock Options. In the event that the
Code or the regulations promulgated thereunder are amended after the
effective date of the Plan to provide for a different limit on the
Fair Market Value of shares of Common Stock permitted to be subject
to Incentive Stock Options, such different limit shall be
automatically incorporated herein and shall apply to Options granted
after the effective date of such amendment.
5. TERMS AND PROVISIONS OF OPTION AGREEMENTS. Each Option granted under
the Plan shall be evidenced by an Option Agreement between the Participant
and the Company. Each such Option Agreement shall set forth the number of
shares of Common Stock subject to the Option and shall be subject to the
following terms and conditions, and to such other terms and conditions not
inconsistent herewith as the Board may deem appropriate in each case:
5.1 EXERCISE PRICE. The price to be paid for each share of
Common Stock upon the exercise of an Option shall be determined by
the Board at the time the Option is granted; provided, however, that
(1) no Non-Qualified Stock Option shall have an exercise price less
than eighty-five percent (85%) of the Fair Market Value of the
Common Stock on the date the Option is granted; (2) no Incentive
Stock Option shall have an exercise price less than one hundred
percent (100%) of the Fair Market Value of the Common Stock on the
date the Option is granted and (3) all Incentive Stock Options
granted to ten percent (10%) stockholders of the Company shall have
an exercise price of not less than one hundred ten percent (110%) of
Fair Market Value at the date of the grant, as provided in Section
4.2 hereof. Notwithstanding the foregoing, an Option (whether an
Incentive Stock Option or a Non-Qualified Stock Option) may be
granted with an exercise price lower than the minimum exercise price
set forth above if such Option is granted pursuant to an assumption
or substitution for another option in a manner complying with the
provisions of Section 424(a) of the Code.
5.2 TERM OF OPTIONS. The period or periods within which an
Option may be exercised shall be determined by the Board at the time
the Option is granted, but no exercise period shall exceed ten (10)
years from the date the Option is granted (or five (5) years in the
case of any Incentive Stock Option granted to a ten percent (10%)
stockholder as described in Section 4.2 hereof).
5.3 EXERCISABILITY. Options granted under this Plan shall be
exercisable at such future time or times (or may be fully
exercisable upon grant), whether or not in installments, as shall be
determined by the Board and provided in the form of Option
Agreement. Notwithstanding any other provisions of this Plan, no
Option may be exercised after the expiration of ten (10) years from
the date of grant.
5.4 METHOD OF PAYMENT FOR COMMON STOCK UPON EXERCISE. Except
as otherwise provided in the applicable Option Agreement (subject to
the limitations of this Plan), the exercise price for each share of
Common Stock purchased under an Option shall be paid in full in cash
at the time of purchase (or by check acceptable to the Board). At
the discretion
4
<PAGE>
of the Board, the Option Agreement may provide for (or the Board may
permit) the exercise price to be paid by one or more of the
following additional alternative methods: (1) the surrender of
shares of the Company's Common Stock, in proper form for transfer,
owned by the Participant exercising the Option and having a Fair
Market Value on the date of exercise equal to the exercise price,
provided that such shares (a) have been owned by the Participant for
more than six (6) months and have been paid for within the meaning
of Rule 144 under the Securities Act (and, if such shares were
purchased from the Company by use of a promissory note, such note
has been fully paid with respect to such shares) or (b) were
obtained by the Participant in the public market, (2) to the extent
permitted under the applicable provisions of the Delaware General
Corporation Law, the delivery by the Participant exercising the
Option of a full recourse promissory note in a form approved by the
Company and executed by such Participant, bearing interest at a per
annum rate which is not less than the "test rate," as set by the
regulations promulgated under Sections 483 or 1274, as applicable,
of the Code and as in effect on the date of exercise, (3)
consummation of an immediate sale proceeds transaction ("IMMEDIATE
SALE PROCEEDS"), which transaction may be executed (a) through a
"same day sale" commitment from the Participant and a broker-dealer
that is a member of the National Association of Securities Dealers
(a "NASD DEALER") whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the shares of Common
Stock so purchased under the Option to pay for the aggregate
exercise price, and whereby the NASD Dealer irrevocably commits upon
receipt of such shares to forward the aggregate exercise price
directly to the Company or (b) through a "margin" commitment from
the Participant and a NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to pledge the shares
of Common Stock so purchased to the NASD Dealer in a margin account
as security for a loan from the NASD Dealer in the amount of the
aggregate exercise price, and whereby the NASD Dealer irrevocably
commits upon receipt of such shares to forward the aggregate
exercise price directly to the Company, or (4) any combination of
the foregoing, so long as the sum of the cash so paid, plus the Fair
Market Value of the shares of Common Stock so surrendered, the
principal amounts of the promissory notes so delivered, and the
Immediate Sale Proceeds so executed, is equal to the aggregate
exercise price. No share of Common Stock shall be issued under any
Option until full payment therefor has been made in accordance with
the terms of the Option Agreement (and in compliance with the Plan).
Any promissory note accepted upon the exercise of an Option from a
Participant who is a consultant retained by the Company or any
Parent or Subsidiary of the Company shall be adequately secured by
collateral other than the shares of Common Stock acquired upon such
exercise. Notwithstanding the foregoing, an Option may not be
exercised by surrender to the Company of shares of the Company's
Common Stock to the extent such surrender of stock would constitute
a violation of the provisions of any law, regulation and/or
agreement restricting the redemption of the Company's Common Stock.
Unless otherwise provided by the Board, in the event the Company at
any time is subject to the regulations promulgated by the Board of
Governors of the Federal Reserve System or any other governmental
entity affecting the extension of credit in connection with the
Company's securities, any promissory note shall comply with such
applicable regulations, and the Optionee shall pay the unpaid
principal and accrued interest, if any, to the extent necessary to
comply with such applicable regulations. The Company reserves, at
any and all times, the right, in the Company's sole and absolute
discretion, to establish, decline to approve and/or terminate any
program and/or procedure for the exercise of Options by means of an
execution of Immediate Sale Proceeds.
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5.5 NON-ASSIGNABILITY. No Option granted under the Plan shall
be assignable or transferable by a Participant except by will or the
laws of descent and distribution and each Option granted under the
Plan shall be exercisable only by the Participant during his or her
lifetime.
5.6 ALL OPTIONS SUBJECT TO TERMS OF THIS PLAN. In addition to
the provisions contained in any Option Agreement granted under this
Plan, each Option Agreement shall provide that it is subject to the
terms and conditions of this Plan and each Participant shall be
given a copy of this Plan. Further, any terms or conditions
contained in any Option Agreement which are inconsistent in any
respect with the provisions of this Plan shall be disregarded and
void, or shall be deemed amended to the extent necessary to comply
with the provisions of this Plan and the intent of the Board.
5.7 OTHER PROVISIONS. Option Agreements under the Plan shall
contain such other provisions, including, without limitation: (1)
restrictions and conditions upon the exercise of the Option, (2)
rights of first refusal in favor of the Company (or its assignees)
applicable to shares of Common Stock acquired upon exercise of an
Option which are subsequently proposed to be transferred by the
Participant, (3) lock-up agreements (applicable in the event of the
public offering of the Common Stock of the Company) restricting a
Participant from any sales or other transfers of Common Stock
received upon exercise of the Option for a designated period of time
following the effective date of a registration statement under the
Securities Act, (4) other restrictions on the transferability or
right to retain shares of the Common Stock received upon the
exercise of the Option, including repurchase rights at original cost
based on a vesting schedule, (5) commitments to pay cash bonuses,
make loans or transfer other property to a Participant upon exercise
of any Option, and (6) restrictions required by applicable federal,
state and foreign securities laws, as the Board shall deem necessary
or advisable; provided that no such additional provision shall be
inconsistent with any other term or condition of this Plan and no
such additional provision shall cause any Incentive Stock Option
granted hereunder to fail to qualify as an incentive stock option
under Section 422 of the Code. Without limiting the generality of
the foregoing, the Board may provide in the form of Option Agreement
that, in lieu of an exercise schedule, the Option may immediately be
exercisable in full and provide a "vesting schedule" with respect to
the Common Stock so purchased, giving the Company (or its assignees)
the right to repurchase the shares of Common Stock at cost (or some
other specified amount) to the extent such shares have not become
vested upon any termination of the Participant's employment or other
engagement with the Company, which vesting may depend upon or be
related to the attainment of performance goals or other conditions
(such as the passage of stated time periods) pursuant to which the
obligation to resell such shares to the Company shall lapse.
6. SECURITIES LAW REQUIREMENTS. No shares of Common Stock shall be
issued upon the exercise of any Option unless and until: (1) the Company and
the Participant have satisfied all applicable requirements under the
Securities Act and the Exchange Act, (2) any applicable listing requirement
of any stock exchange on which the Company's Common Stock is listed has been
satisfied, and (3) all other applicable provisions of state, federal and
foreign law have been satisfied. The Board shall cause such legends to be
placed on certificates evidencing shares of Common Stock issued upon exercise
of an Option as, in the opinion of the Company's counsel, may be
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required by applicable federal, state and foreign securities laws.
7. WITHHOLDING TAXES. The exercise of any Option granted under this
Plan shall be conditioned upon the Participant's payment to the Company of
all amounts (in addition to the exercise price) required to meet federal,
state, local or foreign taxes of any kind required by law to be withheld with
respect to shares of Common Stock to be issued upon the exercise of such
Option. The Company shall have the right to deduct from payments of any kind
otherwise due to a Participant (whether regular salary, commissions, or
otherwise) any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to any shares of Common Stock issued upon
exercise of Options granted under the Plan. The Board, in its discretion, may
permit or require satisfaction of any such withholding obligations by
withholding from the shares of Common Stock to be issued on exercise of an
Option that number of shares of Common Stock having a Fair Market Value equal
to the minimum amount required to be withheld, determined on the date that
the amount of tax to be withheld is to be determined. In addition, the Board,
in its discretion, may declare cash bonuses to a Participant to satisfy any
such withholding requirements or may incorporate provisions in the applicable
Option Agreement allowing (or after grant of the Option may permit, in its
discretion) a Participant to satisfy any such withholding obligations, in
whole or in part, by delivery of shares of the Company's Common Stock already
owned by such Participant and which are not subject to repurchase,
forfeiture, vesting or other similar requirements or restrictions. The Fair
Market Value of any such shares used to satisfy such withholding obligations
shall be determined as of the date the amount of tax to be withheld is to be
determined.
8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CHANGE OF CONTROL.
8.1 STOCK SPLITS AND SIMILAR EVENTS. Appropriate adjustments
shall be made in the number and class of shares of capital stock
subject to the Plan as described in Section 2 and to any outstanding
Options and in the exercise price of any outstanding Options in the
event of a stock dividend, stock split, reverse stock split,
recapitalization, combination, reclassification, or like change in
the capital structure of the Company. In the event a majority of the
shares which are of the same class as the shares that are subject to
outstanding Options are exchanged for, converted into, or otherwise
become shares of another corporation (the "NEW SHARES"), the Company
may unilaterally amend such Options to provide that each Option is
exercisable for New Shares. In the event of any such amendment, the
number of shares subject to and the exercise price of each Option
shall be adjusted in a fair and equitable manner.
8.2 CHANGE OF CONTROL. In the event of a Change of Control (as
defined below), the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the
"ACQUIRING CORPORATION"), shall either assume the Company's rights
and obligations under outstanding Options or substitute options for
the Acquiring Corporation's stock for such outstanding Options. Any
Options which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Change of Control nor
exercised as of the date of the Change of Control shall terminate
and cease to be outstanding effective as of the date of the Change
of Control. A "CHANGE OF CONTROL" shall be deemed to have occurred
in the event any of the following occurs with respect to the Company:
8.2.1 the direct or indirect sale or exchange by the
stockholders of the Company
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of all or substantially all of the stock of the Company
where the stockholders of the Company before such sale or
exchange do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of
the Company after such sale or exchange.
8.2.2 a merger or consolidation in which the Company is not
the surviving corporation, other than a merger or
consolidation with a wholly-owned Subsidiary, a
reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in
the Stockholders of the Company and the Options are assumed or
substituted by the Acquiring Corporation, which assumption or
substitution shall be binding on all Participants.
8.2.3 a merger or consolidation in which the Company is the
surviving corporation where the stockholders of the Company
before such merger or consolidation do not retain, directly or
indirectly, at least a majority of the beneficial interest in
the voting stock of the Company after such merger or
consolidation.
8.2.4 the sale, exchange, or transfer of all or substantially
all of the assets of the Company other than a sale, exchange,
or transfer to one (1) or more Subsidiaries of the Company.
8.2.5 a liquidation or dissolution of the Company.
8.2.6 any other transaction which qualifies as a "corporate
transaction" under Section 424 of the Code wherein the
stockholders of the Company give up all of their equity
interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the outstanding shares
of the Company).
8.3 BOARD'S DETERMINATION FINAL AND BINDING UPON PARTICIPANTS. The
foregoing determinations and adjustments in this Section 8 relating to
stock or securities of the Company shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
The Company shall give notice of any such adjustment or action to each
Optionee; provided, however, that any such adjustment or action shall
be effective and binding for all purposes, whether or not such notice
is given or received.
8.4 NO FRACTIONS OF SHARES. Fractions of shares shall not be
issued by the Company. Instead, such fractions of shares shall
either be paid in cash at Fair Market Value or shall be rounded up
or down to the nearest share, as determined by the Board.
8.5 NO RIGHTS EXCEPT AS EXPRESSLY STATED. Except as expressly
provided in this Section 8, no additional rights shall accrue to any
Participant by reason of any subdivision or combination of shares of
the capital stock of any class or the payment of any stock dividend
or any other increase or decrease in the number of shares of any
class or by reason of any dissolution, liquidation, merger,
consolidation or spin-off of assets or stock of another corporation,
and any issuance by the Company of shares of stock of any class or
of securities convertible into shares of stock of any class shall
not affect, and no adjustment by reason thereof shall be made with
respect to, the number or exercise price of shares of Common Stock
subject to Options granted hereunder.
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8.6 NO LIMITATIONS ON COMPANY'S DISCRETION. The grant of
Options under this Plan shall not affect in any way the right or
power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or
to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
9. NO ADDITIONAL EMPLOYMENT RELATED RIGHTS OR BENEFITS.
9.1 NO SPECIAL EMPLOYMENT RIGHTS. Nothing contained in this
Plan or in any Option Agreement shall confer upon any Participant
any right with respect to the continuation of his or her employment
or other engagement by the Company or any Parent or Subsidiary of
the Company or interfere in any way with the right of the Company,
subject to the terms of any separate employment or consulting
agreement to the contrary, at any time to terminate such employment
or consulting or other relationship or to increase or decrease the
compensation of any Participant. Whether an authorized leave of
absence, or absence in military or government service, shall
constitute termination of a Participant's employment or other
engagement shall be determined by the Board.
9.2 OTHER EMPLOYEE BENEFITS. The amount of any compensation
deemed to be received by any Participant as a result of the exercise
of an Option or the sale of shares received upon such exercise will
not constitute compensation with respect to which any other
employment (or other engagement) related benefits of such
Participant are determined, including, without limitation, benefits
under any bonus, pension, profit-sharing, life insurance or salary
continuation plan, except as otherwise specifically determined by
the Board or as expressly provided for in the Option Agreement. The
granting of an Option shall impose no obligation upon the
Participant to exercise such Option.
10. RIGHTS AS A STOCKHOLDER AND ACCESS TO INFORMATION. No Participant
and no person claiming under or through any such Participant shall be, or
have any of the rights or privileges of, a stockholder of the Company in
respect of any of the shares of capital stock issuable upon the exercise of
any Option granted under this Plan, unless and until the Option is properly
and lawfully exercised and a certificate representing the shares so purchased
is duly issued to the Participant or to his or her estate. No adjustment
shall be made for dividends or any other rights if the record date relating
to such dividend or other right predates the date the Participant became a
stockholder. Participants shall be provided annual financial statements of
the Company.
11. USE OF PROCEEDS. The proceeds received from the sale of shares of
the Common Stock upon exercise of Options granted under the Plan shall be
used for general corporate purposes.
12. RESERVATION OF SHARES. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of shares of its
Common Stock as shall be sufficient to satisfy the requirements of the Plan
and all Options issued hereunder.
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13. TERM OF PLAN.
13.1 EFFECTIVE DATE AND STOCKHOLDER APPROVAL. The Plan became
effective when adopted by the Board on December 13, 1994, but no
Option granted under the Plan shall become exercisable unless and
until the Plan shall have been approved by the Company's
stockholders by the vote of the holders of a majority of the
outstanding shares of the Company present and entitled to vote at a
duly held meeting of the Company's stockholders (or by consent of
the holders of the outstanding shares of the Company entitled to
vote) in accordance with the requirements of the Company's Bylaws
and the Delaware General Corporation Law. If such stockholder
approval is not obtained within twelve (12) months after the date of
the Board's adoption of the Plan, any Options previously granted
under the Plan shall terminate and no further Options shall be
granted. Subject to the foregoing limitation, Options may be granted
under the Plan at any time after the effective date and before the
date fixed for termination of the Plan.
13.2 TERMINATION. Unless sooner terminated in accordance with
Section 14, the Plan shall terminate upon the earlier of: (1) the
close of business on the last business day preceding the tenth
(10th) anniversary of the date the Plan is adopted by the Board, or
(2) the date on which all shares available for issuance under the
Plan shall have been issued pursuant to Options granted under the
Plan and none of such shares shall remain subject to contractual
repurchase rights of the Company pursuant to "vesting" or other
similar provisions. If the date of termination is determined under
clause (1) above, then any Options outstanding on such date shall
continue to have force and effect in accordance with the provisions
of the Option Agreements evidencing such Options.
14. EARLY TERMINATION AND AMENDMENT OF THE PLAN. The Board may from time
to time suspend or terminate the Plan or revise or amend it; provided,
however, that, no amendment shall be effective without the approval of the
Company's stockholders at a duly held meeting by the vote of a majority of
the shares present and entitled to vote (or by written consent of the holders
entitled to vote) in compliance with the requirements of the Company's Bylaws
and the Delaware General Corporation Law, if (1) the Board determines that
approval of such amendment is required in order that transactions in the
Company's Common Stock under the Plan be exempt from the operation of Section
16(b) of the Exchange Act, (2) such amendment materially increases the
aggregate number of shares of Common Stock that may be issued upon exercise
of Options granted under the Plan (except for adjustments made pursuant to
Section 8 hereof), or (3) materially modifies the requirements as to
eligibility for participation in the Plan.
15. DEFINITIONS. As used in the Plan, the following terms shall have the
following meanings:
15.1 "BOARD" means the Board of Directors of the Company as it
may be comprised from time to time.
15.2 "CODE" means the Internal Revenue Code of 1986, as amended,
and applicable regulations.
15.3 "COMMITTEE" means the Compensation Committee of the Board
comprised of at least two (2) directors; provided, however, that each
member of any such Committee must be a Disinterested Person, and
provided, further, that if two (2) or more directors are non-
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employee directors, the Committee shall be comprised of members of
the Board, all of whom are non-employee directors and Disinterested
Persons.
15.4 "COMPANY" means Oak Technology, Inc., a corporation
organized under the laws of the State of Delaware, or any successor
corporation.
15.5 "DISABILITY" means a disability, whether temporary or
permanent, partial or total, as determined by the Board.
15.6 "DISINTERESTED PERSON" shall have the meaning set forth in
Rule 16b-3(c)(2)(i), as promulgated by the SEC under Section 16(b)
of the Exchange Act, as such rule is amended from time to time and
as interpreted by the SEC.
15.7 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
15.8 "FAIR MARKET VALUE" means, as of any date, the value of a
share of the Company's Common Stock determined as follows:
15.8.1 if such Common Stock is then quoted on the Nasdaq
National Market System, its last reported sale price on the
Nasdaq National Market System on the trading day next
preceding that date or, if no such reported sale takes place
on the trading day next preceding such date, the average of
its closing bid and asked prices on the Nasdaq National Market
System on the trading day next preceding such date;
15.8.2 if such Common Stock is publicly traded and is then
listed on a national securities exchange, its last reported
sale price on the national securities exchange on which the
Common Stock is then listed on the trading day next preceding
that date or, if no such reported sale takes place on the
trading day next preceding such date, the average of its
closing bid and asked prices on the national securities
exchange on which the Common Stock is then listed on the
trading day next preceding such date;
15.8.3 if such Common Stock is publicly traded but is not
quoted on the Nasdaq National Market System nor listed or
admitted to trading on a national securities exchange, the
average of its closing bid and asked prices on the trading day
next preceding such date, as reported by The Wall Street
Journal, for the over-the-counter market; or
15.8.4 if none of the foregoing is applicable, by the Board in
good faith, with such determination being based upon past
arms'-length sales by the Company of its equity securities and
other factors considered relevant in determining the Company's
fair value.
Notwithstanding anything to the contrary in this Section 15.8,
any Option Agreement may provide for alternative means of
valuation for the purpose of repurchase at fair market value
of shares acquired.
15.9 "INSIDER" means an officer or director of the Company or
any other person whose
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transactions in the Company's Common Stock are subject to Section 16
of the Exchange Act.
15.10 "OPTION" means an option to purchase shares of Common Stock
pursuant to the Plan.
15.11 "OPTION AGREEMENT" means an agreement described in Section 5
entered into by the Company and a Participant, setting forth the terms,
conditions and limitations applicable to the Option granted to the
Participant.
15.12 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time
of granting of an Option, each of such corporations other than the
Company owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
15.13 "PARTICIPANT" means a person who is granted one or more
Options under the Plan.
15.14 "PLAN" means this Oak Technology, Inc. 1994 Stock Option
Plan, as amended from time to time.
15.15 "SEC" means the Securities and Exchange Commission.
15.16 "SECURITIES ACT" means the Securities Act of 1933, as amended.
15.17 "SUBSIDIARY" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if,
at the time of granting of an Option, each of the corporations other
than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in
such chain.
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<PAGE>
OAK TECHNOLOGY, INC.
EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT
THIS EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT")
by and between Oak Technology, Inc., a Delaware corporation (the "COMPANY"), and
___________(the "EMPLOYEE"), is made as of the ____________________ (such date
being sometimes referred to herein as the "DATE OF GRANT").
R E C I T A L S
A. The Company has adopted and implemented its 1994 Stock Option
Plan (the "PLAN") permitting the grant of stock options to employees and
consultants of the Company or any Parent or Subsidiary (each as defined in
the Plan) of the Company, some of which are intended to be non-qualified
stock options in that they do not qualify as incentive stock options within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the "CODE"), to purchase shares of the authorized but unissued Common Stock
or treasury shares of the Company, $0.001 par value ("COMMON STOCK").
B. The Board of Directors of the Company (the "BOARD") or the
Committee (as defined in the Plan) (subsequent references herein to the Board
shall also mean the Committee, if such Committee has been appointed) has
authorized the granting of a non-qualified stock option to Employee, thereby
allowing Employee to acquire an ownership interest (or increase his or her
existing ownership interest) in the Company. Unless otherwise defined in this
Agreement or the context otherwise requires, all capitalized terms used in
this Agreement shall have the respective meanings assigned to those terms in
the Plan.
A G R E E M E N T
NOW, THEREFORE, in reliance on the foregoing Recitals and in
consideration of the mutual covenants hereinafter set forth, the parties
hereby agree as follows:
1. GRANT OF STOCK OPTION. The Company hereby grants to the Employee a
non-transferable and non-assignable option to purchase an aggregate of up to
_______ shares of the Company's Common Stock at the exercise price of $____ per
share, upon the terms and conditions set forth herein (such purchase right being
sometimes referred to herein as "the Option" or "this Option").
2. TERM AND TYPE OF OPTION. Unless earlier terminated in accordance
with Sections 4 or 5.2 hereof, this Option and all rights of the Employee to
purchase Common Stock hereunder shall expire with respect to all of the
shares then subject to this Agreement at 5:00 p.m. Pacific time on
______________. This Option is a non-qualified stock option in that it is not
intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code. Accordingly, the Employee understands that under
current law he or she will recognize ordinary income for federal income tax
purposes upon exercise of this Option in an amount equal
<PAGE>
to the excess (if any) of the Fair Market Value (as defined in the Plan) of
the shares of Common Stock so purchased over the exercise price paid for such
shares.
3. EXERCISE SCHEDULE. Subject to the remaining provisions of this
Agreement, this Option shall be exercisable as follows:
3.1 FIRST INSTALLMENT. Commencing upon the date occurring twelve
(12) months after the Date of Grant (the "INITIAL EXERCISE DATE"), the
Employee may exercise this Option for up to twenty-four percent (24%) of the
shares covered hereby (rounded up to the nearest whole number of shares).
3.2 SUBSEQUENT INSTALLMENTS. Upon the date occurring one (1)
month after the Initial Exercise Date, and continuing thereafter on each
subsequent monthly anniversary of the Initial Exercise Date, the Employee may
exercise this Option for up to an additional two percent (2%) of the shares
covered hereby (rounded up to the nearest whole number of shares), so that
this Option shall become fully exercisable as of ______________. In no event
shall the Option be exercisable for more shares than the number of shares set
forth in Section 1.
3.3 CUMULATIVE NATURE OF EXERCISE SCHEDULE. The exercise dates
specified above refer to the earliest dates on which this Option may be
exercised with respect to the stated percentages of the Common Stock covered
by this Option, and this Option may be exercised with respect to all or any
part of any such percentage of the total shares at any time on or after such
dates (until the expiration date specified in Section 2 above or any earlier
termination of this Option pursuant to Section 4 or 5.2 of this Agreement).
Except as permitted in Section 4, the Employee must be and remain in the
employ of the Company, or of any Parent or Subsidiary of the Company, during
the entire period commencing with the date of grant of this Option and ending
with each of the periods appearing in the above schedule in order to exercise
this Option with respect to the shares applicable to any such period. Any
references in this Agreement to the Employee's employment with the Company
shall be deemed to refer also to the Employee's employment with any Parent or
Subsidiary of the Company, as applicable.
3.4 OVERRIDING LIMITATION ON TIME FOR EXERCISE. Notwithstanding
any other provisions of this Agreement, the Option may not be exercised after
the expiration of ten (10) years from the Date of Grant.
4. RIGHTS ON TERMINATION OF EMPLOYMENT. Upon the termination of the
Employee's employment with the Company (or with any Parent or Subsidiary of the
Company), the Employee's right to exercise this Option shall be limited in the
manner set forth in this Section 4 (and this Option shall terminate in the event
not so exercised), and subject to the limitation provided in Section 3.4.
4.1 DEATH. If the Employee's employment is terminated by death,
the Employee's estate may, for a period of twelve (12) months following the
date of such termination, exercise the Option to the extent it was
exercisable by the Employee on the date of such termination. The Employee's
estate shall mean the Employee's legal representative upon death or any
person who acquires the right to exercise the Option by reason of such death
in accordance with Section 6.2.
4.2 RETIREMENT. If the Employee's employment is terminated by
voluntary retirement at or after reaching sixty-five (65) years of age, the
Employee may, within three (3) months following the date of such termination,
exercise the Option to the extent it was
<PAGE>
exercisable by the Employee on the date of such termination unless the
Employee dies prior thereto, in which event the Employee shall be treated as
though the Employee had died on the date of retirement and the provisions of
Section 4.1 above shall apply.
4.3 DISABILITY. If the Employee's employment is terminated
because of a Disability, the Employee may, within twelve (12) months
following the date of such termination, exercise the Option to the extent it
was exercisable by the Employee on the date of such termination unless the
Employee dies prior to the expiration of such period, in which event the
Employee shall be treated as though the Employee's death occurred on the date
of termination because of Disability and the provisions of Section 4.1 above
shall apply.
4.4 OTHER TERMINATION. If the Employee's employment is
terminated for any reason other than provided in Sections 4.1, 4.2 and 4.3
above, the Employee or the Employee's estate may, within three (3) months
after the date of the Employee's termination, exercise the Option to the
extent it was exercisable by the Employee on the date of such termination.
4.5 TRANSFER OF EMPLOYMENT TO RELATED CORPORATION. In the event
the Employee leaves the employ of the Company to become an employee of any
Parent or Subsidiary of the Company or if the Employee leaves the employ of
any such Parent or Subsidiary to become an employee of the Company or of
another Parent or Subsidiary, the Employee shall be deemed to continue as an
employee of the Company for all purposes of this Agreement for so long as
employment with a Parent or Subsidiary continues.
5. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CHANGE OF CONTROL.
5.1 STOCK SPLITS AND SIMILAR EVENTS. Appropriate adjustments
shall be made in the number and class of shares of capital stock subject to
the Plan as described in Section 2 of the Plan and to any outstanding Options
and in the exercise price of any outstanding Options in the event of a stock
dividend, stock split, reverse stock split, recapitalization, combination,
reclassification, or like change in the capital structure of the Company. In
the event a majority of the shares which are of the same class as the shares
that are subject to outstanding Options are exchanged for, converted into, or
otherwise become shares of another corporation (the "NEW SHARES"), the
Company may unilaterally amend such Options to provide that each Option is
exercisable for New Shares. In the event of any such amendment, the number of
shares subject to and the exercise price of each Option shall be adjusted in
a fair and equitable manner.
5.2 CHANGE OF CONTROL. In the event of a Change of Control (as
defined below), the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), shall either assume the Company's rights and obligations under
outstanding Options or substitute options for the Acquiring Corporation's
stock for such outstanding Options. Any Options which are neither assumed or
substituted for by the Acquiring Corporation in connection with the Change of
Control nor exercised as of the date of the Change of Control shall terminate
and cease to be outstanding effective as of the date of the Change of
Control. A "CHANGE OF CONTROL" shall be deemed to have occurred in the event
any of the following occurs with respect to the Company:
5.2.1 the direct or indirect sale or exchange by the
stockholders of the Company of all or substantially all of the stock of the
Company where the stockholders of the Company before such sale or exchange do
not retain, directly or indirectly, at least a majority of the beneficial
interest in the voting stock of the Company after such sale or exchange.
<PAGE>
5.2.2 a merger or consolidation in which the Company is
not the surviving corporation, other than a merger or consolidation with a
wholly-owned Subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the Stockholders of the Company and the Options are assumed or substituted by
the Acquiring Corporation, which assumption or substitution shall be binding
on the Employee.
5.2.3 a merger or consolidation in which the Company is
the surviving corporation where the stockholders of the Company before such
merger or consolidation do not retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock of the Company after
such merger or consolidation.
5.2.4 the sale, exchange, or transfer of all or
substantially all of the assets of the Company other than a sale, exchange,
or transfer to one (1) or more Subsidiaries of the Company.
5.2.5 a liquidation or dissolution of the Company.
5.2.6 any other transaction which qualifies as a
"corporate transaction" under Section 424 of the Code wherein the
stockholders of the Company give up all of their equity interest in the
Company (except for the acquisition, sale or transfer of all or substantially
all of the outstanding shares of the Company).
5.3 BOARD'S DETERMINATION FINAL AND BINDING UPON EMPLOYEE. To
the extent that the foregoing adjustments in this Section 5 relate to stock
or securities of the Company, such adjustments shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
The Company agrees to give notice of any such adjustment to the Employee;
provided, however, that any such adjustment shall be effective and binding
for all purposes hereof whether or not such notice is given or received.
5.4 NO RIGHTS EXCEPT AS EXPRESSLY STATED. Except as hereinabove
expressly provided in this Section 5, no additional rights shall accrue to
the Employee by reason of any subdivision or combination of shares of the
capital stock of any class or the payment of any stock dividend or any other
increase or decrease in the number of shares of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or of
stock of another corporation, and any issue by the Company of shares of stock
of any class or of securities convertible into shares of stock of any class
shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or exercise price of shares subject to the Option.
Neither the Employee nor any person claiming under or through the Employee
shall be, or have any of the rights or privileges of, a stockholder of the
Company in respect of any of the shares issuable upon the exercise of this
Option, unless and until this Option is properly and lawfully exercised and a
certificate representing the shares so purchased is duly issued and delivered
to the Employee or to his or her estate.
5.5 NO LIMITATIONS ON COMPANY'S DISCRETION. The grant of the
Option hereby shall not affect in any way the right or power of the Company
to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.
<PAGE>
6. MANNER OF EXERCISE.
6.1 GENERAL INSTRUCTIONS FOR EXERCISE. The Option shall be
exercised by the Employee by completing, executing and delivering to the
Company a Notice of Exercise (the "NOTICE OF EXERCISE"), in substantially the
form attached hereto as Exhibit A, which Notice of Exercise shall specify the
number of shares of Common Stock which the Employee elects to purchase. The
Company's obligation to deliver shares upon the exercise of this Option shall
be subject to the Employee's satisfaction of all applicable federal, state,
local and foreign income and employment tax withholding requirements, if any.
Upon receipt of such Notice of Exercise and of payment of the purchase price
(and payment of applicable taxes as provided above), the Company shall, as
soon as reasonably possible and subject to all other provisions hereof,
deliver certificates for the shares of Common Stock so purchased, registered
in the Employee's name or in the name of his or her legal representative (if
applicable). Payment of the purchase price upon any exercise of the Option
shall be made by check acceptable to the Company or in cash; provided,
however, that the Committee may, in its sole and absolute discretion, accept
any other legal consideration to the extent permitted under applicable laws
and the Plan including, without limitation, consummation of an immediate sale
proceeds transaction ("IMMEDIATE SALE PROCEEDS"), which transaction may be
executed (a) through a "same day sale" commitment from the Employee and a
broker-dealer that is a member of the National Association of Securities
Dealers (a "NASD DEALER") whereby the Employee irrevocably elects to exercise
the Option and to sell a portion of the shares of Common Stock so purchased
under the Option to pay for the aggregate exercise price, and whereby the
NASD Dealer irrevocably commits upon receipt of such shares to forward the
aggregate exercise price directly to the Company or (b) through a "margin"
commitment from the Employee and a NASD Dealer whereby the Employee
irrevocably elects to exercise the Option and to pledge the shares of Common
Stock so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the aggregate exercise price, and
whereby the NASD Dealer irrevocably commits upon receipt of such shares to
forward the aggregate exercise price directly to the Company.
6.2 EXERCISE PROCEDURE AFTER DEATH. To the extent exercisable
after the Employee's death, this Option shall be exercised only by the
Employee's executor(s) or administrator(s) or the person or persons to whom
this Option is transferred under the Employee's will or, if the Employee
shall fail to make testamentary disposition of this Option, under the
applicable laws of descent and distribution. Any such transferee exercising
this Option must furnish the Company with (1) written Notice of Exercise and
relevant information as to his, her or its status, (2) evidence satisfactory
to the Company to establish the validity of the transfer of this Option and
compliance with any laws or regulations pertaining to said transfer, and (3)
written acceptance of the terms and conditions of this Option as contained in
this Agreement.
7. NON-TRANSFERABLE. The Option shall, during the lifetime of the
Employee, be exercisable only by the Employee and shall not be transferable
or assignable by the Employee in whole or in part other than by will or the
laws of descent and distribution. If the Employee shall make any such
purported transfer or assignment of the Option, such assignment shall be null
and void and of no force or effect whatsoever.
8. COMPLIANCE WITH SECURITIES AND OTHER LAWS. The Option may not be
exercised and the Company shall not be obligated to deliver any certificates
evidencing shares of Common Stock hereunder if the issuance of shares upon
such exercise would constitute a violation of any applicable requirements of:
(i) the Securities Act of 1933, as amended, (ii) the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), (iii) applicable state or foreign
<PAGE>
securities laws, (iv) any applicable listing requirement of any stock
exchange on which the Company's Common Stock is then listed, and (v) any
other law or regulation applicable to the issuance of such shares. Nothing
herein shall be construed to require the Company to register or qualify any
securities under applicable federal, state or foreign securities laws, or
take any action to secure an exemption from such registration and
qualification for the issuance of any securities upon the exercise of the
Option. To the extent deemed necessary by the Company's counsel, shares of
Common Stock issued upon exercise of this Option shall include such legends
as in the opinion of the Company's counsel may be required by applicable
federal, state and foreign securities laws.
9. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in this
Agreement shall: (i) confer upon the Employee any right with respect to the
continuance of employment by the Company, or by any Parent or Subsidiary of
the Company, or (ii) limit in any way the right of the Company, or of any
Parent or Subsidiary, to terminate the Employee's employment at any time.
Except to the extent the Company and Employee shall have otherwise agreed in
writing, Employee's employment shall be terminable by the Company (or by a
Parent or Subsidiary, if applicable) at will. The Board in its sole
discretion shall determine whether any leave of absence or interruption in
service (including an interruption during military service) shall be deemed a
termination of employment for the purposes of this Agreement.
10. OPTION SUBJECT TO TERMS OF PLAN. In addition to the provisions
hereof, this Agreement and the Option are governed by, and subject to the
terms and conditions of, the Plan. The Employee acknowledges receipt of a
copy of the Plan (a copy of which is attached hereto as Exhibit B). The
Employee represents that he or she is familiar with the terms and conditions
of the Plan, and hereby accepts the Option subject to all of the terms and
conditions thereof, which terms and conditions shall control to the extent
inconsistent in any respect with the provisions of this Agreement. The
Employee hereby agrees to accept as binding, conclusive and final all
decisions and interpretations of the Board as to any questions arising under
the Plan or under this Agreement.
11. INTENT TO COMPLY WITH SEC RULE 16b-3. With respect to Insiders,
transactions under this Agreement are intended to comply with all applicable
conditions of SEC Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of this Agreement or any action by the Board fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Board. Moreover, in the event this Agreement does not
include a provision required by Rule 16b-3 to be stated herein, such
provision shall be deemed automatically to be incorporated by reference into
this Agreement insofar as Insiders are concerned.
12. NOTICES. All notices and other communications of any kind which
either party to this Agreement may be required or may desire to serve on the
other party hereto in connection with this Agreement shall be in writing and
may be delivered by personal service or by registered or certified mail,
return receipt requested, deposited in the United States mail with postage
thereon fully prepaid, addressed to the other party at the addresses
indicated on the signature page hereof or as otherwise provided below.
Service of any such notice or other communication so made by mail shall be
deemed complete on the date of actual delivery as shown by the addressee's
registry or certification receipt or at the expiration of the third (3rd)
business day after the date of mailing, whichever is earlier in time. Either
party may from time to time, by notice in writing served upon the other as
aforesaid, designate a different mailing address or a different person to
which such notices or other communications are thereafter to be addressed or
delivered.
<PAGE>
13. FURTHER ASSURANCES. The Employee shall, upon request of the
Company, take all actions and execute all documents requested by the Company
which the Company deems to be reasonably necessary to effectuate the terms
and intent of this Agreement and, when required or permitted by any provision
of this Agreement to transfer all or any portion of the Common Stock
purchased hereunder to the Company (and its assignees), the Employee shall
deliver such Common Stock endorsed in blank or accompanied by Stock
Assignments Separate from Certificate endorsed in blank, so that title
thereto will pass by delivery alone. Any sale or transfer by the Employee of
the Common Stock to the Company (and its assignees) shall be made free of any
and all claims, encumbrances, liens and restrictions of every kind, other
than those imposed by this Agreement.
14. SUCCESSORS. Except to the extent the same is specifically limited
by the terms and provisions of this Agreement, this Agreement is binding upon
the Employee and the Employee's successors, heirs and personal
representatives, and upon the Company, its successors and assigns.
15. TERMINATION OR AMENDMENT. Subject to the terms and conditions of
the Plan, the Board may terminate or amend the Plan and/or the Option at any
time; provided, however, that no such termination or amendment may adversely
affect the Option or any unexercised portion hereof without the consent of
the Employee.
16. INTEGRATED AGREEMENT. This Agreement and the Plan constitute the
entire understanding and agreement of the Employee and the Company with
respect to the subject matter contained herein, and there are no agreements,
understandings, restrictions, representations, or warranties between the
Employee and the Company other than those set forth or provided for herein.
To the extent contemplated herein, the provisions of this Agreement shall
survive any exercise of the Option and shall remain in full force and effect.
17. OTHER MISCELLANEOUS TERMS. Titles and captions contained in this
Agreement are inserted only as a matter of convenience and for reference, and
in no way define, limit, extend or describe the scope of this Agreement or
the intent of any provision hereof. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
irrespective of its choice of law principles.
18. INDEPENDENT TAX ADVICE. The Employee agrees that he or she has
obtained or will obtain the advice of independent tax counsel (or has
determined not to obtain such advice, having had adequate opportunity to do
so) regarding the federal, state and/or foreign income tax consequences of
the receipt and exercise of the Option and of the disposition of Common Stock
acquired upon exercise hereof. The Employee acknowledges that he or she has
not relied and will not rely upon any advice or representation by the Company
or by its employees or representatives with respect to the tax treatment of
the Option.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
<TABLE>
<CAPTION>
COMPANY: EMPLOYEE:
<S> <C>
OAK TECHNOLOGY, INC.
a Delaware Corporation
- ---------------------------------- ----------------------------------
Signature Signature
By: Name Printed:
------------------------------- ---------------------
Its: Chief Financial Officer Address:
---------------------
Address: 139 Kifer Court
Sunnyvale, CA 94086 ---------------------
U.S.A.
</TABLE>
<PAGE>
EXHIBIT A
FORM OF NOTICE OF EXERCISE
FOR OAK TECHNOLOGY, INC.
EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT
Oak Technology, Inc.
139 Kifer Court
Sunnyvale, CA 94086
Attention: Corporate Secretary
Re: NOTICE OF EXERCISE OF STOCK OPTION
Ladies and Gentlemen:
I hereby exercise, as of ____________________, ____, my stock option
(granted _____________, ______) to purchase ______________ shares (the
"OPTION SHARES") of the Common Stock of Oak Technology, Inc., a Delaware
corporation (the "COMPANY"). Payment of the option price of $________________
is attached to this notice.
I understand that to the extent deemed necessary by the Company's
counsel, the certificate(s) representing the Option Shares, whether upon
initial issuance or any transfer thereof, shall bear on their face such
legends, prominently stamped or printed thereon in capital letters, as in the
opinion of the Company's counsel may be required by applicable federal, state
and foreign securities laws.
I further understand that I may suffer adverse tax consequences as a
result of my purchase or disposition of the Option Shares. I represent that
I have consulted with any tax consultant(s) I deem advisable in connection
with the purchase or disposition of the Option Shares and that I am not
relying on the Company for any tax advice.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Exercise as of the date set forth below.
Signed:
Dated:
<PAGE>
OAK TECHNOLOGY, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN
Oak Technology, Inc. 1994 Employee Stock Purchase Plan (the
"Plan") is intended to provide a suitable means by which eligible employees
of Oak Technology, Inc. (the "Company") may accumulate, through voluntary,
systematic payroll deductions, amounts regularly credited to their account to
be applied to the purchase of shares of the common stock, par value $0.001,
of the Company (the "Common Stock") pursuant to the exercise of options
granted from time to time hereunder. The Plan provides employees with the
opportunities to acquire proprietary interests in the Company, and will also
provide them with additional incentives to continue their employment and
promote the best interests of the Company. Options granted under the Plan are
intended to qualify under Section 423 of the Internal Revenue Code of 1986,
as amended (the "Code").
2. SHARES OF STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 12, the maximum number
of Common Stock which may be issued on the exercise of options granted under
the Plan is 1,600,000 shares of the Company's Common Stock. Any shares subject
to an option under the Plan, which option for any reason expires or is
terminated unexercised as such shares, shall again be available for issuance
on the exercise of other options granted under the Plan. Shares delivered on
the exercise of options may, at the election of the Board of Directors of the
Company, be authorized but previously unissued Common Stock or Common Stock
reacquired by the Company, or both.
3. ADMINISTRATION
The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee"), which
shall be composed of not less than two members of the Board of Directors of
the Company, all of whom shall be ineligible to participate in this Plan and
shall otherwise qualify as disinterested persons for purposes of Rule 16b-3
(c) (2) (i) promulgated by the Securities and Exchange Commission. Subject to
the Provisions of the Plan, the Committee shall have full discretion and
exercise power (i) to determine the terms and conditions under which the
shares shall be offered and corresponding options shall be granted under the
Plan for the Purchase Period (as defined in Section 6) consistent with the
provisions of the Plan, and (ii) to resolve all questions relating to the
administration of the Plan.
The interpretation and application by the Committee of any
provision of the Plan shall be final and conclusive on all employees and
other persons having, or claiming to have, an interest under the Plan. The
Committee may, in its discretion, establish such rules and guidelines
relating to the Plan as it may deem desirable.
The Committee may employ such legal counsel, consultant and
agents as it may deem desirable for the administration of the Plan and may rely
upon any opinion received from
<PAGE>
any such counsel or consultant and any computation received from any such
counsel or consultant or agent. The Committee shall keep minutes of its
actions under the Plan.
No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any options granted hereunder.
4. ELIGIBILITY TO PARTICIPATE
The persons eligible to participate in this Plan shall be all
employees (including officers) of the Company who have been actively employed by
the Company by the 15th day of the month preceding the first day of any Purchase
Period, but excluding employees whose customary employment is for not more than
five (5) months in any calendar year or twenty five (25) hours or less per week.
An employee who is eligible to participate in this Plan pursuant to the
foregoing sentence is hereinafter referred to as an "Employee".
On or before the beginning of each Purchase Period, the
Company will furnish to each Employee a notice (hereinafter called a "Notice of
Shares offered") stating the maximum number of shares which such Employee shall
be eligible to purchase for such Purchase Period in accordance with the
provisions of clause (ii) in the first paragraph of Section 5.
Nothing contained in the Plan shall confer upon any Employee
any right to continue in the employ of the Company or any of its subsidiaries,
or interfere in any way with the right of the Company or any of its subsidiaries
to terminate his employment at any time.
5. PARTICIPATION IN THE PLAN
An Employee may participate in the Plan only as of the
beginning of the Purchase Period. If an employee becomes eligible to
participate in the Plan after the commencement of a Purchase Period, that
Employee may not participate in the Plan until the beginning of the next
Purchase Period. A copy of the Plan will be furnished to each Employee prior
to the beginning of the first Purchase Period during which he may participate
in the Plan. To participate in the Plan, an employee must deliver (or cause
to be delivered) to the Company, within seven (7) days prior to the
commencement of the first Purchase Period during which he wishes to
participate in the Plan, a contingent subscription for Common Stock and
authorize for payroll deductions to effect the purchase of Common Stock
(hereinafter called a "Participation Election"). In the Participation
Election an Employee must:
i. authorize payroll deductions within the limits
prescribed in Sections 8 and 9 and specify the
percentage to be deducted regularly from his
Compensation (as defined in Section 8);
ii. elect and authorize the purchase by him for each
Purchase Period of a specific number of shares of
Common Stock on the Exercise Date (as defined in
Section 7) with respect to the applicable Purchase
Period, provided that such specific number of
shares shall not exceed 125% of the number of
shares which may be purchased at a price equal to
85% of the Fair Market Value (determined in
accordance with Section 7) of the
2
<PAGE>
Common Stock on the first day of such Purchase Period
with the anticipated aggregate amount of payroll
deductions authorized for the Purchase Period;
iii. furnish the exact name or names and address or
addresses in which the stock certificates for Common
Stock purchased by him under the Plan are to be
issued; and
iv. agree to notify the Company if he should dispose of
Common Stock purchased through the Plan within two
(2) years of the commencement of the Purchase Period
in which he purchased the Common Stock.
Stock certificates for shares of Common Stock purchased under
the Plan may be issued in the Employee's name or, if so designated by the
Employee, in his name and the name of another person who is a member of his
family, with right of survivorship; for this purpose the "family" of an Employee
shall include only his spouse, his ancestors and lineal descendants and his
brothers and sisters.
An Employee need not, and may not, make a down payment in
order to participate in the Plan. Participation in the Plan is entirely
voluntary, and a participating Employee may withdraw from participation, as
provided in Section 15, during any Purchase Period at any time prior to the
Exercise Date for such Purchase Period.
The Committee may establish a maximum number of shares of
Common Stock which any Employee may purchase under the Plan for the Purchase
Period, which amount need not be the same for each Purchase Period.
6. PURCHASE PERIOD; GRANT OF OPTIONS
Each Purchase Period under the Plan shall commence on the
first day of a calendar half (or, for the first Purchase Period, such date
established by the Committee following the effective date specified in section
20) and end on the last day of such calendar half, and shall include all pay
periods ending within it. For this purpose, calendar halves begin on January 1
and July 1. During each Purchase Period, participating employees shall
accumulate credits to a bookkeeping account maintained by the Company
(hereinafter referred to as a "Stock Purchase Account") through payroll
deductions to be made at the close of each pay period for the purchase of shares
of Common stock under the Plan. For each Purchase Period, the Company shall
grant options to participating Employees with respect to the number of shares of
Common Stock (subject to the provisions of sections 2, 5, 11 and 12) which shall
be purchasable through the application of the amounts credited to such
Employee's Stock Purchase Account at the purchase price per share determined on
the Exercise Date for the Purchase Period (such number of shares to be subject
to reduction in the event of a pro rata apportionment provided for in Section
17).
7. EXERCISE DATES AND PURCHASE PRICES
The last business day of each Purchase Period shall constitute
the "Exercise Date" for such Purchase Period. Subject to the provisions of
Section 12, the purchase price per share of Common Stock to be purchased on an
Exercise Date pursuant to the exercise of options granted
3
<PAGE>
for the Purchase Period, through the application of amounts credited during
such Purchase Period to the Stock Purchase Accounts of participating
Employees, shall be the lesser of:
(A) an amount equal to 85% of the Fair Market Value of
the Common Stock at the time such option is granted
(i.e., the first day of the Purchase Period), or
(B) an amount equal to 85% of the Fair Market Value of
the Common Stock at the time each option is
exercised (i.e., the Exercise Date). For purposes of
the Plan, the Fair Market Value of a share of Common
Stock on any date shall be (i) if the Common Stock
is traded on an established securities market, the
mean between the high and low prices of such Common
Stock for such date, and (ii) if the Common Stock is
not so traded, an amount determined by the Committee
in good faith and based upon such factors as it
deems relevant to such determination.
8. PAYROLL DEDUCTIONS - AUTHORIZATION AND AMOUNT
Employees shall authorize in their Participation Elections
from 1% to 10% (in whole percentage increments) of their Compensation to
which such election relates (subject to the limitations of Section 9). For
purposes of the Plan, the "Compensation" of an Employee for any Purchase
Period shall mean the gross amount of his base pay on the basis of his
regular, straight-time hourly, weekly or monthly rate for the number of hours
normally worked, plus any sales commission that contributes to an employee's
total target compensation during the Purchase Period, exclusive of overtime,
bonuses, shift premiums and other forms of compensation.
By delivering to the Company within seven (7) days prior to
the commencement of the next Purchase Period a revised Participation Election, a
participating Employee may change the amount to be deducted from his
Compensation during the next Purchase Period, subject to the limitations of
Sections 8 and 9.
A participating Employee's authorization for payroll
deductions will remain in effect for the duration of the Plan, subject to the
provisions of Sections 11 and 14, unless his election to purchase Common Stock
shall have been terminated pursuant to the provisions of Section 13, the amount
of the deduction is changed, as provided in this Section 8, or the Employee
withdraws or is considered to have withdrawn from the Plan under section 15 or
16.
All amounts credited to the Stock Purchase Accounts of
participating Employees shall be held in the general funds of the Company but
shall be used from time to time in accordance with the provisions of the Plan.
9. LIMITATIONS ON THE GRANTING OF OPTIONS
Anything in the Plan to the contrary notwithstanding, no
participating employee may be granted an option which permits his rights to
purchase Common Stock under all employee stock purchase plans of the Company
and its parent and subsidiary companies (if any) to accrue at a rate which
exceeds $25,000 of the Fair Market Value of such Common Stock (determined at
the time such option is granted) for each calendar year in which such option
is outstanding at any time. For purposes of this Section 9:
4
<PAGE>
i. the right to purchase stock under an option accrues
when the option (or any portion thereof) first
becomes exercisable during the calendar year;
ii. the right to purchase stock under an option accrues
at the rate provided in the option, but in no case
may such rate exceed $25,000 of the Fair Market
Value of such stock (determined at the time such
option is granted) for any one calendar year; and
iii. a right to purchase stock which has accrued under
one option granted pursuant to the Plan may not be
carried over to any other option.
No participating Employee may be granted an option
hereunder if such Employee, immediately after the option is granted, owns
(within the meaning of Section 423(b)(3) of the Code) stock possessing five
(5) percent or more of the total combined voting power or value of all
classes of stock of the Company or of its parent or subsidiary company. For
purposes of the Plan, the terms, "parent corporation" and "subsidiary
corporation" shall have the respective meanings set forth in section 424 of
the Code.
10. STOCK PURCHASE AMOUNTS
The amount deducted from the Compensation of each
participating Employee shall be credited to his individual Stock Purchase
Account. Employees participating in the Plan may not make direct cash
payments to their Stock Purchase Accounts.
Following the close of each Purchase Period, the Company
will furnish to each participating Employee a statement of that Employee's
individual Stock Purchase account. This statement shall show (i) the total
amount of payroll deductions for the Purchase Period just closed, (ii) the
number of full shares (and the purchase price per share of Common stock
purchased, pursuant to the provisions of Section 11, by the participating
Employee for the Purchase Period, and (iii) any remaining balance of payroll
deductions which are to be refunded to the Employee following the close of
the Purchase Period (or carried-forward to the next Purchase Period in the
case of amounts representing fractional shares).
11. ISSUANCE AND PURCHASE OF COMMON STOCK
Shares of Common Stock may be purchased by a participating
Employee only on the Exercise Date for each Purchase Period; and the options
which the Company grants to participating Employees to the purchase of Common
Stock for a Purchase Period may be exercised only on the Exercise Date, and
their elections to purchase Common Stock pursuant to the exercise of such
option shall not become irrevocable until the close of business on the day
prior to the Exercise Date. No fractional shares of common stock may be
purchased hereunder. The purchase price per share shall be determined as set
forth in Section 7.
A participating Employee who purchases Common Stock, pursuant
to the exercise of options granted under the Plan, shall purchase as many full
shares as shall be stated in the his Participation Election that the Employee
has completed, subject to the Limitations set forth in sections 8, 9, 12 and 17;
provided that in no event may shares be purchased other than by application of
the balance in the Stock Purchase Account on the Exercise Date and that in no
5
<PAGE>
event may a participating Employee purchase a greater number of shares than
would be purchasable at the purchase price determined in accordance with Section
7 through the application of the balance in his Stock Purchase Account on the
Exercise Date for the Purchase Period to which the option relates. Any balance
remaining in such a participating Employee's Stock Purchase Account following an
Exercise Date shall be refunded to the Employee as soon as practicable
thereafter; provided, however, that the participating Employee may elect to
carry over any such balance representing a fractional share to the next
succeeding Purchase Period.
Certificates for Common Stock so purchased shall be delivered
to the employee as soon as practicable.
All rights as an owner of shares of the Common Stock purchased
under the Plan shall accrue to the participating Employee who purchased the
shares effective as of the Exercise Date on which the amounts credited to his
Stock Purchase Account were applied to the purchase of the shares; and such
Employee shall not have any rights as a shareholder prior to such Exercise Date
by reason of his having elected to purchase such shares.
12. DILUTION OR OTHER ADJUSTMENT
If the Company is a party to any merger or consolidation, or
undergoes any separation, reorganization or liquidation, the Board of Directors
of the Company shall have the power to make arrangements, which shall be binding
upon the Employees then participating in the Plan, for (i) the purchase of
shares subject to outstanding Participation Elections for the Purchase Period
occurring at such time, (ii) for the assumption of the Company's undertakings
with respect to the Plan by another corporation, or (iii) for the cancellation
of outstanding Participant Elections and options to purchase shares and payment
by the Company of an amount (not less than the amount then credited to the
Employee's respective Stock Purchase Accounts) determined by the Board of
Directors in consideration thereof. In addition, in the event of a
reclassification, stock split, combination of shares, separation (including a
spin-off), dividend on shares of the Common Stock payable in stock, or other
similar change in capitalization or in the corporate structure of the shares of
the Common Stock of the Company, the Committee shall conclusively determine the
appropriate adjustment in the purchase price and other terms of purchase for
shares subject to outstanding Participation Elections for the Purchase Period
occurring at such time, in the number and kind of shares or other securities
which may by purchased for such Purchase Period and in the aggregate number of
shares which may be purchased under the Plan. Any such adjustment in the shares
or other securities subject to the outstanding options granted to such Employee
(including any adjustments in the option price) shall be made in such manner as
not to constitute a modification as defined by Section 424(h)(3) of the Code
and only to the extent permitted by Sections 423 and 424 of the Code.
13. NO ASSIGNMENT OF PLAN RIGHTS OR OF PURCHASED STOCK
An Employee must promptly advise the Company if a disposition
shall he made of any shares of Common Stock purchased by him under the Plan if
such disposition shall have occurred within two years of the commencement of the
Purchase Period in which he purchased such shares.
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A participating Employee's privilege to purchase Common Stock
under the Plan can be exercised only by him; and he cannot purchase Common Stock
for someone else, although he may designate (in accordance with the provisions
of Section 5) that stock certificates of Common Stock purchased by the Employee
be issued in the joint names of the Employee and a family member.
An Employee participating in the Plan may not sell, transfer,
pledge, or assign to any other person any interest, privilege or right under the
Plan or in any amounts credited to his Stock Purchase Account; and if this
provision shall be violated, his election to purchase Common Stock shall
terminate, and the only right remaining thereunder will be to have paid to the
person entitled thereto the amount then credited to the Employee's Stock
Purchase Account.
14. SUSPENSION OF DEDUCTIONS
A participating Employee's payroll deductions under the
Plan shall be suspended if on account of a leave of absence, layoff or other
reason a participating Employee does not have sufficient Compensation in any
payroll period to permit payroll deductions authorized under the Plan to be
made in full. The suspension will last until the participating Employee again
has sufficient Compensation to permit such payroll deductions to be made in
full; but if the suspension shall not have been removed by the Exercise Date
for the Purchase Period in which it began, the participating Employee will be
considered to have withdrawn from the Plan as provided for in Section 15.
15. WITHDRAWAL FROM, AND REPARTICIPATION IN THE PLAN
During any Purchase Period a participating Employee may
withdraw from the Plan at any time prior to the Exercise Date for the
Purchase Period; and, subject to, and in accordance with the provisions of
sections 5 and 8, he may again participate in the Plan at the beginning of
any Purchase Period subsequent to the Purchase Period in which he withdrew.
Withdrawal of a participating Employee shall be effected by written
notification prior to such Exercise Date to the Company on a form which the
Company shall provide for this purpose ("Notice of Withdrawal"). In the event
a participating Employee shall withdraw from the Plan, all amounts then
credited to his Stock Purchase Account shall be returned as soon as
practicable after his Notice of Withdrawal shall have been received.
If an Employee's payroll deductions shall be interrupted by
any legal process, a Notice of Withdrawal will be considered as having been
received on the day the interruption shall occur.
16. TERMINATION OF PARTICIPATION
A participating Employee's right to continue participation in
the Plan will terminate upon the earliest to occur of (i) the Company's
termination of the Plan, (ii) the Employee's transfer to ineligible employment
status, or (iii) retirement, disability, death or other termination of
employment with the Company. Upon the termination of an Employee's right to
continue participation in the Plan on account of the occurrence of any of the
foregoing events, all amounts then credited to the individual's Stock Purchase
Account not already used for the purchase of Common Stock will be repaid as soon
as practicable. Such repayments shall be made
7
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to the participating Employee unless the termination of participation
occurred by reason of such Employee's death, in which event such repayment
shall be made to such Employee's beneficiary. For this purpose, an Employee's
beneficiary shall be the person, persons or entity designated by the Employee
on a form prescribed by and delivered to the Company or, in the absence of an
effective beneficiary designation, the Employee's estate; provided, however,
that the determination of the Employee's beneficiary hereunder shall be
subject to any applicable community property or other laws.
17. APPORTIONMENT OF STOCK
If at any time shares of Common Stock authorized for
purposes of the Plan shall not be available in sufficient number to meet the
purchase requirements under all outstanding Participation elections, the
Committee shall apportion the remaining available shares among the
participating Employees on a pro rata basis. In no case shall any
apportionment of shares be made with respect to a participating Employee's
election to purchase unless such election is then in effect (subject only to
any suspension provided for in the Plan). The Committee shall give notice of
such apportionment and of the method of apportionment used to each
participating Employee to whom shares shall have been apportioned.
18. GOVERNMENT REGULATIONS
The Plan, and the obligation of the company to issue, sell and
deliver Common Stock under the Plan are subject to all applicable laws and to
all applicable rules, regulations and approvals of government agencies.
19. AMENDMENT OR TERMINATION
The Board of Directors of the Company may at any time amend,
suspend or terminate the Plan; provided, however, that no amendment (other than
an amendment authorized by Section 12) may be made increasing the aggregate
number of shares of Common Stock which may be issued pursuant to the Plan,
reducing the minimum purchase price at which shares may be purchased hereunder,
extending the maximum period during which shares may be purchased hereunder or
changing the class of employees eligible to participate hereunder, without the
approval of the holders of a majority of the outstanding voting shares of the
Company.
20. EFFECTIVE DATE
The Plan shall become effective on the later of (i) the IPO
date (as hereafter defined) or (ii) the date of its adoption by the Board of
Directors of the Company, subject to approval of the Plan by the holders of a
majority of the outstanding voting shares of the Company within 12 months
after the date of the Plan's adoption by said Board of Directors. In the
event of the failure to obtain such shareholder approval, the Plan shall be
null and void and the Company shall have no liability thereunder. No shares
of the Common Stock may be issued under the Plan until such shareholder
approval has been obtained. For purposes of this Section 20, the "IPO Date"
shall mean the date on which shares of Common Stock of the Company are first
sold to the public.
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21. TERMINATION
Subject to earlier discontinuance, in accordance with
Section 19, the Plan shall terminate on the date preceding the date which is
ten (10) years following the effective date specified in Section 20. Any
unexpired Purchase Period that commenced prior to such termination date shall
forthwith expire on such termination date, which shall be deemed the Exercise
Date for such Purchase Period.
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OAK TECHNOLOGY, INC.
1994 EMPLOYEE STOCK PURCHASE PLAN
"PARTICIPATION ELECTION"
/ / Original Application - Enrollment Date______________________
/ / Change in Payroll Deduction Rate
/ / Change in Beneficiary(ies)
/ / Withdrawal and Refund of Current Contributions
1. ___________________________________________________ hereby elects to
participate in the Oak Technology, Inc. Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan") and subscribes to purchase shares of the
Company's Common Stock in accordance with this Participation Election and the
Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of
________% of my Compensation on each payday (1-10%) during the Offering Period
in accordance with the Employee Stock Purchase Plan. (Please note that no
fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price determined
in accordance with the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated payroll deductions will be
used to automatically exercise my option.
4. Pursuant to all provisions of the Plan, my authorization for payroll
deductions will remain in effect unless I withdraw from the Plan or change my
deduction rate.
5. I have received a copy of the "Oak Technology, Inc. 1994 Employee Stock
Purchase Plan" (available on the Company's intranet website and from the Stock
Administrator). I understand that my participation in the Employee Stock
Purchase Plan is in all respects subject to the terms of the Plan.
6. I have received a copy of the "Oak Technology, Inc. 1994 Employee Stock
Purchase Plan" Prospectus (available on the Company's intranet website and from
the Stock Administrator).
7. Shares purchased for me under the Employee Stock Purchase Plan will be
delivered to an account established in my name at OptionsLink/Etrade.
8. I understand that if I dispose of any shares received by me pursuant to the
Plan within 2 years after the Enrollment Date (the first day of the Offering
Period during which I purchased such shares) or one year after the Exercise
Date, I will be treated for federal income tax purposes as having received
ordinary income at the time of such disposition in an amount equal to the excess
of the fair market value of the shares at the time such shares were purchased
over the price which I paid for the shares. I hereby agree to notify the Company
in writing of any disposition of my shares and I will make adequate provision
for Federal, state or other tax withholding obligations, if any, which arise
upon the disposition of the Common Stock. The Company may, but will not be
obligated to, withhold from my compensation the amount
<PAGE>
necessary to meet any applicable withholding obligation including any
withholding necessary to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Common Stock by me. If
I dispose of such shares at any time after the expiration of the 2-year and
1-year holding periods, I understand that I will be treated for federal
income tax purposes as having received income only at the time of such
disposition, and that such income will be taxed as ordinary income only to
the extent of an amount equal to the lesser of (1) the excess of the fair
market value of the shares at the time of such disposition over the purchase
price which I paid for the shares, or (2) 15% of the fair market value of the
shares on the first day of the Offering Period. The remainder of the gain, if
any, recognized on such disposition will be taxed as capital gain.
9. I hereby agree to be bound by the terms of the Employee Stock Purchase Plan.
The effectiveness of this Subscription Agreement is dependent upon my
eligibility to participate in the Employee Stock Purchase Plan.
10. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Employee
Stock Purchase Plan:
NAME: (Please print)
-------------------------------------------------------
(First) (Middle) (Last)
-------------------------------------------------------
Relationship
-------------------------------------------------------
(Address)
-------------------------------------------------------
Participant Signature:
-----------------------------------------
Printed Name:
-----------------------------------------
Date:
-----------------------------------------
Social Security Number:
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