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As filed with the Securities and Exchange Commission on August 29, 1996
Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PHOENIX TECHNOLOGIES LTD.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2685985
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no,)
2770 DE LA CRUZ BOULEVARD
SANTA CLARA, CALIFORNIA 95050
(Address of principal executive offices)
VIRTUAL CHIPS, INC. 1994 STOCK OPTION PLAN
OTHER CONSULTANT OPTIONS GRANTED
BY VIRTUAL CHIPS, INC.
(Full title of the plan)
SCOTT C. NEELY, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
PHOENIX TECHNOLOGIES LTD.
2770 DE LA CRUZ BOULEVARD
SANTA CLARA, CALIFORNIA 95050
408-654-9000
(Name, address and telephone number, including area code,
of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to be to be Offering Price Per Aggregate Offering Registration
Registered Registered Share(1) Price(1) Fee
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<S> <C> <C> <C> <C>
Common Stock,
$0.001 par value(2) 147,959 shares $17.3125 $2,561,540.19 $883.29
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</TABLE>
(1) Estimated as of August 27, 1996 pursuant to Rule 457 solely for the
purpose of calculating the registration fee.
(2) Associated with the Common Stock are stock purchase rights which
will not be exercisable or be evidenced separately from the Common Stock
prior to the occurrence of certain events.
The Index to exhibits appears on sequentially numbered page 7.
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Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference:
(a) The Registrant's latest annual report filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or the latest prospectus filed
pursuant to Rule 424(b) under the Securities Act of 1933, as
amended (the "Securities Act"), that contains audited financial
statements for the Registrant's latest fiscal year for which such
statements have been filed.
(b) All other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year
covered by the annual report or the prospectus referred to in (a)
above.
(c) The description of the Registrant's Common Stock
contained in the Registrant's registration statement filed with
the Commission under Section 12 of the Exchange Act, including
any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment which indicates that all securities registered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such documents.
The consolidated balance sheets as of September 30, 1995 and 1994, and the
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended September 30, 1995 incorporated by
reference herein and the related financial statement schedules incorporated by
reference herein have been included herein in reliance on the reports of Coopers
& Lybrand L.L.P., independent accountants.
In August 1996, the Registrant completed its acquisition of Virtual Chips,
Inc., a leading supplier of synthesizable cores for PC and computer industry
standards, in a transaction which will be accounted for as a pooling of
interests. The financial statements of the Company incorporated by reference
herein for periods prior to that in which Virtual Chips was acquired will be
restated to reflect the results of operation and financial position for Virtual
Chips for all such prior periods. The Registrant believes that such restatement
will impact the net income of the Registrant by less than ten percent in any
such prior period.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
As to named experts, Item 5 is inapplicable. Scott C. Neely, Vice
President, General Counsel and Secretary of the Company, whose opinion is
included as Exhibit 5.1 hereto, is a holder of options covering significantly
less than one percent (1%) of the outstanding shares of the outstanding Common
Stock, $.001 par value per share, of the Registrant.
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ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law grants to each
corporation organized thereunder the power to indemnify its officers and
directors for certain acts. Article TENTH of the Registrant's Restated
Certificate of Incorporation sets forth the extent to which officers and
directors of the Registrant may be indemnified against any liabilities which
they may incur in their capacities as directors or officers of the Registrant.
Article TENTH provides, in part, that each person who was or is made a party or
is threatened to be made a party or is involved in any action, suit or
proceeding by reason of the fact that he or she is or was a director or officer
of the Registrant or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation or enterprise shall
be indemnified and held harmless by the Registrant, to the fullest extent
authorized by the Delaware General Corporation Law, against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection with such proceeding;
provided, however, that if the person seeking indemnification initiated the
proceeding in respect to which he or she is seeking indemnification from the
Registrant, the Registrant shall provide such indemnification only if such
proceeding was authorized by the Registrant's Board of Directors. The right to
indemnification includes the right to be paid expenses incurred in defending any
such proceeding in advance of its final disposition; provided, however, that if
the Delaware General Corporation Law so requires, the payment of such expenses
in advance of the final disposition of a proceeding shall be made only upon
delivery to the Registrant of an undertaking, by or on behalf of such director
or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to indemnification.
Article NINTH of the Registrant's Restated Certificate of Incorporation
eliminates the personal liability of the Registrant's directors to the
Registrant or its stockholders for monetary damages for breach of a director's
fiduciary duty, except for liability: (1) for breach of a director's duty of
loyalty to the Registrant or its stockholders; (2) for acts or omissions not in
good faith or involving intentional misconduct or knowing violations of law; (3)
under Section 174 of the Delaware General Corporation Law; or (4) for any
transaction from which the director derived an improper personal benefit.
ITEM 8. EXHIBITS.
The exhibits required by Item 601 of Regulation S-K are listed in the
Exhibit Index which follows the signature page for this Form S-8.
ITEM 9. UNDERTAKINGS.
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:
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(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the 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 the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities 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.
(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 the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions discussed in Item 6 hereof, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities 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 hereby, 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 Securities Act and will be governed by
the final adjudication of such issue.
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each individual and corporation whose
signature appears below constitutes and appoints Jack Kay, Robert J. Riopel,
Scott C. Neely and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement on Form S-8, and to
file the same with all exhibits thereto and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Santa Clara, State of California, on this 29th day of
August, 1996.
PHOENIX TECHNOLOGIES LTD.
By: /s/Jack Kay
------------------------------
Jack Kay
President and Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
CHIEF EXECUTIVE OFFICER:
/s/Jack Kay President, Chief Executive August 29, 1996
- ------------------------- Officer, and Director
Jack Kay
CHIEF FINANCIAL OFFICER:
/s/Robert J. Riopel Vice President, Finance, Chief August 29, 1996
- ------------------------- Financial Officer and Treasurer
Robert J. Riopel
OTHER DIRECTORS:
/s/Charles Federman Director August 29, 1996
- -------------------------
Charles Federman
/s/Lawrence G. Finch Director August 29, 1996
- -------------------------
Lawrence G. Finch
/s/Ronald D. Fisher Chairman; Director August 29, 1996
- -------------------------
Ronald D. Fisher
/s/Lance E. Hansche Director August 29, 1996
- -------------------------
Lance E. Hansche
/s/Anthony P. Morris Director August 29, 1996
- -------------------------
Anthony P. Morris
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------ ----------------------
3.1 Certificate of Incorporation of the Company, as amended - filed as
Exhibit 3.1 to the Company's Registration Statement on Form S-1,
Registration No. 33-21793 (the "S-1"), and incorporated herein by this
reference.
3.2 By-laws of the Company, as amended through February 6, 1995.
3.3 Certificate of Correction to the Company's Certificate of
Incorporation - filed as Exhibit 3.3 to Amendment No. 2 to the S-1
("Amendment No. 2") and incorporated herein by this reference.
3.4 Certificate of Amendment to the Company's Certificate of Incorporation
- filed as Exhibit 3.4 to Amendment No. 2 and incorporated herein by
this reference.
3.5 Certificate of Correction to the Company's Certificate of
Incorporation - filed as Exhibit 3.5 to the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1988 (the "1988 Form
10-K") and incorporated herein by this reference.
3.6 Certificate of Correction to the Company's Certificate of
Incorporation - filed as Exhibit 3.7 to the 1988 Form 10-K and
incorporated herein by this reference.
3.7 Certificate of Designation of the Company's Series A Junior
Participating Preferred Stock - filed as Exhibit 4.1 to the Company's
Current Report on Form 8-K dated October 31, 1989 (the "October 31,
1989 Form 8-K"), and incorporated herein by this reference.
3.8 Certificate of Amendment of Restated Certificate of Incorporation
filed with the Delaware Secretary of State on April 18, 1996
(incorporated by reference to Exhibit 4.11 to the Registrant's
Registration Statement on Form S-8 relating to the Registrant's 1991
Employee Stock Purchase Plan (the "ESPP S-8").
3.9 Certificate of Increase of Shares Designated as Series A Junior
Participating Preferred Stock filed with the Delaware Secretary of
State on April 18, 1996 (incorporated by reference to Exhibit 4.12 to
the ESPP S-8).
4.1 Virtual Chips, Inc. 1994 Stock Option Plan as amended through December
15, 1995
4.2 Form of Incentive Stock Option Agreement for options granted under the
Virtual Chips, Inc. 1994 Stock Option Plan
4.3 Form of Nonstatutory Stock Option Agreement for options granted under
the Virtual Chips, Inc. 1994 Stock Option Plan
4.4 Form of Nonstatutory Stock Option Agreement for options granted
outside the Virtual Chips, Inc. 1994 Stock Option Plan
5.1 Opinion of Scott C. Neely, Esq., Vice President, General Counsel and
Secretary of the Company.
23.1 Consent of Scott C. Neely, Esq. (included in Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P., Independent Accountants
24.1 Power of Attorney (see page 5)
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EXHIBIT 3.2
PHOENIX TECHNOLOGIES LTD.
BY-LAWS
(as amended through February 6, 1995)
ARTICLE I
MEETING OF STOCKHOLDERS
Section 1. PLACE OF MEETINGS. All meetings of the stockholders shall
be held at such place within or without the State of Delaware as may be fixed
from time to time by the board of directors or the chief executive officer, or
if not so designated, at the registered office of the corporation.
Section 2. ANNUAL MEETING. An annual meeting of stockholders shall be
held at such date, time and place, either within or without the State of
Delaware, as the Board of Directors shall each year fix. At such annual
meeting, the stockholders shall elect by a plurality vote directors to succeed
those whose terms expire and shall transact such other business as may properly
be brought before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes, may, unless otherwise prescribed by statute or by the
certificate of incorporation, be called by the board of directors or the chief
executive officer and shall be called by the chief executive officer or
secretary at the request in writing of a majority of the board of directors.
Such request shall state the purposes or purposes of the proposed meeting.
Business transacted at any special meeting shall be limited to matters relating
to the purpose or purposes stated in the notice of meeting.
Section 4. NOTICE OF MEETINGS. Except as otherwise provided by law,
written notice of each meeting of stockholders, annual or special, stating the
place, date and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be given not less
than ten or more than sixty days before the date of the meeting, to each
stockholder entitled to vote at such meeting.
Section 5. VOTING LIST. The officer who has charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city or town where
the meeting is to be
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held, which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 6. QUORUM. the holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise provided by statute, the
certificate of incorporation or these by-laws; provided that where a separate
vote by a class or classes is required on any matter the holders of a majority
of the issued and outstanding shares of such class entitled to vote thereon,
present in person or represented by proxy, shall constitute a quorum entitled to
take action with respect to that matter.
Section 7. ADJOURNMENTS. Any meeting of stockholders may be adjourned
from time to time to any other time and to any other place at which a meeting of
stockholders may be held under these by-laws, which time and place shall be
announced at the meeting, by a majority of the stockholders present in person or
represented by proxy at the meeting and entitled to vote, though less than a
quorum, or, if no stockholder is present or represented by proxy, by any officer
entitled to preside at or to act as secretary of such meeting, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the original meeting. If the adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
Section 8. ACTION AT MEETINGS. When a quorum is present at any
meeting, in all matters other than the election of directors the vote of the
holders of a majority of the stock present in person or represented by proxy and
entitled to vote on the question shall decide any question brought before such
meeting, unless the question is one upon which by express provision of law, the
certificate of incorporation or these by-laws, a different vote is required, in
which case such express provision shall govern and control the decision of such
question, and directors shall be elected by the vote of holders of a plurality
of the shares present in person or represented by proxy and entitled to vote on
the election of directors; provided that where a separate vote by class or
classes is required, the vote of the holders of a majority of the shares of such
class or classes present in person or represented by proxy and entitled to vote
on the question shall be the act of such class.
Section 9. VOTING AND PROXIES. Unless otherwise provided in the
certificate of incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote for each share of the capital stock having
voting power held of record by such stockholder. Each stockholder entitled to
vote at a meeting of stockholders, or to express consent or dissent to corporate
action in writing without a meeting, may authorize another
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person or persons to act for him by proxy, but no such proxy shall be voted or
acted upon after three years from its date, unless the proxy provides for a
longer period.
Section 10. ACTION WITHOUT MEETING. Until the consummation of the first
public offering of stock of the corporation pursuant to a registration statement
declared effective under the Securities Act of 1933, as amended, any action
required to be taken at any annual or special meeting of stockholders, or any
action which may be taken at any annual or special meeting of such stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken and bearing
the date of signature of each stockholder who signs the consent, shall be signed
by the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted and shall be
delivered to the corporation by delivery to its registered office in Delaware,
to its principal place of business, or to an officer or agent of the corporation
having custody of the book in which proceedings of meetings of stockholders are
recorded within sixty days of the earliest dated consent so delivered. Prompt
notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing.
Section 11. PROCEDURES FOR INTRODUCING BUSINESS AT STOCKHOLDER MEETINGS,
ETC. After the consummation of the first public offering of stock of the
corporation pursuant to a registration statement declared effective under the
Securities Act of 1933, as amended: Except as otherwise provided by law, at any
annual or special meeting of stockholders only such business shall be conducted
as shall have been properly brought before the meeting. In order to be properly
brought before the meeting, such business must have been either (A) specified in
the written notice of the meeting (or any supplement thereto) given to
stockholders of record on the record date for such meeting by or at the
direction of the board of directors or the chief executive officer, (B) brought
before the meeting at the direction of the board of directors or the chairman of
the meeting or (C) specified in a written notice given by or on behalf of a
stockholder or record on the record date for such meeting entitled to vote
thereat or a duly authorized proxy for such stockholder, in accordance with all
of the following requirements. A notice referred to in clause (C) hereof must
be delivered personally to or mailed to and received at the principal executive
office of the corporation, addressed to the attention of the secretary, not more
than ten (10) days after the date of the initial notice referred to in clause
(A) hereof, in the case of business to be brought before a special meeting of
stockholders, and not less than thirty (30) days prior to the first anniversary
date of the initial notice referred to in clause (A) hereof to the previous
year's annual meeting, in the case of business to be brought before an annual
meeting of stockholders, provided, however, that such notice shall not be
required to be given more than fifty (50) days prior to an annual meeting of
stockholders. Such notice referred to in clause (C) hereof shall set forth (i)
a full description of each such item of business proposed to be brought before
the meeting, (ii) the name and address of the person proposing to bring such
business before the meeting, (iii) the class and number of shares held of
record, held beneficially and represented by
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proxy by such person as of the record date for the meeting (if such date has
then been made publicly available) and as of the date of such notice, (iv) if
any item of such business involves a nomination for director, all information
regarding each such nominee that would be required to be set forth in a
definitive proxy statement filed with the Securities and Exchange Commission
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, or
any successor thereto, and the written consent of each such nominee to serve if
elected, and (v) all other information that would be required to be filed with
the Securities and Exchange Commission if, with respect to the business proposed
to be brought before the meeting, the person proposing such business was a
participant in a solicitation subject to Section 14 of the Securities Exchange
Act of 1934, as amended, or any successor thereto. No business shall be brought
before any meeting of stockholders of the corporation otherwise than as provided
in this section.
Notwithstanding the foregoing provisions, the board of directors shall not
be obligated to include information as to any nominee for director in any proxy
statement or other communication sent to stockholders.
The chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that any proposed item of business was not brought before
the meeting in accordance with the foregoing procedure and, if he should so
determine, he shall so declare to the meeting and the defective item of business
shall be disregarded.
In advance of any meeting of stockholders, the board of directors may
appoint judges of election, who need not be stockholders, to act at such meeting
or any adjournment thereof. If judges of election are not so appointed, the
chairman of any such meeting may and, on the request of any stockholder or his
proxy shall, make such appointment at the meeting. The number of judges shall
be one or three as shall be determined by the board of directors, except that,
if appointed at the meeting on the request of one or more stockholders or
proxies, the holders of a majority of the shares of the corporation present and
entitled to vote shall determine whether one or three judges are to be
appointed. No person who is a candidate for office shall act as a judge.
In case any person appointed as a judge fails to appear or fails or refuses
to act, the vacancy may be filled by appointment made by the board of directors
in advance of the convening of the meeting or at the meeting by the officer or
person acting as chairman.
The judges of election shall determine the number of shares outstanding and
the voting power of each, the shares represented at the meeting, the existence
of a quorum, and the authenticity, validity and effect of proxies, receive votes
or ballots, hear and determine all challenges and questions in any way arising
in connection with the right to vote, count and tabulate all votes, determine
the result, and do such other acts as may be proper to conduct the election or
vote with fairness to all stockholders. The judges of election shall perform
their duties impartially, in good faith, to the best of their ability, and as
expeditiously as is practical. If there be three judges of election, the
decision, act
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or certificate of a majority shall be effective in all respects as the decision,
act or certificate of all.
On request of the chairman of the meeting or of any stockholder or his
proxy, the judges shall make a report in writing of any challenge or question or
matter determined by them, and execute a certificate of any fact found by them.
Any report or certificate made by them shall be prima facie evidence of the
facts stated therein.
ARTICLE II
DIRECTORS
Section 1. RESIGNATION. Any director may resign at any time upon
written notice to the corporation at its principal place of business or to the
chief executive officer or secretary. Such resignation shall be effective upon
receipt unless it is specified to be effective at some other time or upon the
happening of some other event.
Section 2. GENERAL POWERS. The business and affairs of the corporation
shall be managed by its board of directors, which may exercise all powers of the
corporation and do all such lawful acts and things as are not by statute or by
the certificate of incorporation or by these by-laws directed or required to be
exercised or done by the stockholders.
Section 3. CHAIRMAN OF THE BOARD. If the board of directors appoints a
chairman of the board, he shall, when present, preside at all meetings of the
stockholders and the board of directors. He shall perform such duties and
possess such powers as are customarily vested in the office of the chairman of
the board or as may be vested in him by the board of directors.
Section 4. PLACE OF MEETINGS. The board of directors may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. REGULAR MEETINGS. Regular meetings of the board of
directors may be held without notice at such time and at such place as shall
from time to time be determined by the board; provided that any director who is
absent when such a determination is made shall be given prompt notice of such
determination. A regular meeting of the board of directors may be held without
notice immediately after and at the same place as the annual meeting of
stockholders.
Section 6. SPECIAL MEETINGS. Special meetings of the board may be
called by the chief executive officer, secretary, or on the written request of
two or more directors, or by one director in the event that there is only one
director in office. Two days' notice to each director, either personally or by
telegram, cable, telecopy, commercial delivery service, telex or similar means
sent to his business or home address, or three days' notice
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by written notice deposited in the mail, shall be given to each director by the
secretary or by the officer or one of the directors calling the meeting. A
notice or waiver of notice of a meeting of the board of directors need not
specify the purposes of the meeting.
Section 7. ACTION BY CONSENT. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if all members of the board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the board or committee.
Section 8. TELEPHONIC MEETINGS. Unless otherwise restricted by the
certificate of incorporation or these by-laws, members of the board of directors
or of any committee thereof may participate in a meeting of the board of
directors or of any committee, as the case may be, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation in a
meeting shall constitute presence in persons at the meeting.
Section 9. COMMITTEES. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees, each
committee to consist of one or more of the directors of the corporation. The
board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution designating such committee or the certificate of
incorporation expressly so provides, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors. Each committee
shall keep regular minutes of its meetings and make such reports to the board of
directors as the board of directors may request. Except as the board of
directors may otherwise determine, any committee may make rules for the conduct
of its business, but unless otherwise provided by the directors or in such
rules, its business shall be conducted as nearly as possible in the same manner
as is provided in these by-laws for the conduct of its business by the board of
directors.
Section 10. COMPENSATION. Unless otherwise restricted by the
certificate of incorporation or these by-laws, the board of directors shall have
the authority to fix from
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time to time the compensation of directors. The directors may be paid their
expense, if any, of attendance at each meeting of the board of directors and the
performance of their responsibilities as directors and may be paid a fixed sum
for attendance at each meeting of the board of directors and/or a stated salary
as director. No such payment shall preclude any director from serving the
corporation or its parent or subsidiary corporations in any other capacity and
receiving compensation therefor. The board of directors may also allow
compensation for members of special or standing committees for service on such
committees.
ARTICLE III
OFFICERS
Section 1. ENUMERATION. The officers of the corporation shall be chose
by the board of directors and shall be a president, a secretary and a treasurer
and such other officers with such titles, terms of office and duties as the
board of directors may from time to time determine, including a chairman of the
board, one or more vice-presidents, and one or more assistant secretaries and
assistant treasurers. If authorized by resolution of the board of directors,
the chief executive officer may be empowered to appoint from time to time
assistant secretaries and assistant treasurers. Any number of offices may be
held by the same person, unless the certificate of incorporation or these by-
laws otherwise provide.
Section 2. ELECTION. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a president, a secretary and a
treasurer. Other officers may be appointed by the board of directors at such
meeting, at any other meeting, or by written consent.
Section 3. TENURE. The officers of the corporation shall hold office
until their successors are chose and qualify, unless a different term is
specified in the vote choosing or appointing him, or until his earlier death,
resignation or removal. Any officer elected or appointed by the board of
directors or by the chief executive officer may be removed at any time by the
affirmative vote of a majority of the board of directors or a committee duly
authorized to do so, except that any officer appointed by the chief executive
officer may also be removed at any time by the chief executive officer. Any
vacancy occurring in any office of the corporation may be filled by the board of
directors, at its discretion. any officer may resign by delivering his written
resignation to the corporation at its principal place of business or to the
chief executive officer or the secretary. Such resignation shall be effective
upon receipt unless it is specified to be effective at some other time or upon
the happening of some other event.
Section 4. PRESIDENT. The president shall be the chief operating
officer of the corporation. He shall also be the chief executive officer unless
the board of directors otherwise provides. The president shall, unless the
board of directors provides otherwise
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in a specific instance or generally, preside at all meetings of the stockholders
and the board of directors, have general and active management of the business
of the corporation and see that all orders and resolutions of the board of
directors are carried into effect. The president shall execute bonds,
mortgages, and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation.
Section 5. VICE PRESIDENTS. In the absence of the president or in the
event of his inability or refusal to act, the vice president, or if there be
more than one vice president, the vice presidents in the order designated by the
board of directors or the chief executive officer (or in the absence o f any
designation, then in the order determined by their tenure in office) shall
perform the duties of the president, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the president. The vice
presidents shall perform such other duties and have such other powers as the
board of directors or the chief executive officer may from time to time
prescribe.
Suction 6. SECRETARY. The secretary shall have such powers and perform
such duties as are incident to the office of secretary. He shall maintain a
stock ledger and prepare lists of stockholders and their addresses as required
and shall be the custodian of corporate records. The secretary shall attend all
meetings of the board of directors and all meetings of the stockholders and
record all the proceedings of the meetings of the corporation and of the board
of directors in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be from time to time
prescribed by the board of directors or chief executive officer, under whose
supervision he shall be. He shall have custody of the corporate seal of the
corporation and he, or an assistant secretary, shall have authority to affix the
same to any instrument requiring it and when so affixed, it may be attested by
his signature or by the signature or such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his signature.
Section 7. ASSISTANT SECRETARIES. The assistant secretary, or if there
be more than one, the assistant secretaries in the order determined by the board
of directors, the chief executive officer or the secretary (or if there be no
such determination, then in the order determined by their tenure in office),
shall, in the absence of the secretary or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the secretary and
shall perform such other duties and have such other powers as the board of
directors, the chief executive officer or the secretary may from time to time
prescribe. In the absence of the secretary or any assistant secretary at any
meeting of stockholders or directors, the person presiding at the meeting shall
designate a temporary or acting secretary to keep a record of the meeting.
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Section 8. TREASURER. The treasurer shall perform such duties and
shall have such powers as may be assigned to him by the board of directors or
the chief executive officer. In addition, the treasurer shall perform such
duties and have such powers as are incident to the office of treasurer. The
treasurer shall have the custody of the corporate funds and securities and shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as may be
designated by the board of directors. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the chief executive officer and the
board of directors, when the chief executive officer or board of directors so
requires, an account of all his transactions as treasurer and of the financial
condition of the corporation.
Section 9. ASSISTANT TREASURERS. The assistant treasurer, or if there
be more than one, the assistant treasurers in the order determined by the board
of directors, the chief executive officer or the treasurer (or if there be no
such determination, then in the order determined by their tenure in office),
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors, the chief executive officer or the treasurer may from time to time
prescribe.
Section 10. BOND. If required by the board of directors, any officer
shall give the corporation a bond in such sum and with such surety or sureties
and upon such terms and conditions as shall be satisfactory to the board of
directors, including without limitation a bond for the faithful performance of
the duties of his office and for the restoration to the corporation of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control and belong to the corporation.
ARTICLE IV
NOTICES
Section 1. DELIVERY. Whenever, under the provisions of law, or of the
certificate of incorporation or these by-laws, written notice is required to be
given to any director or stockholder, such notice may be given by mail,
addressed to such director or stockholder, at his address as it appears on the
records of the corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail. Unless written notice is required by law, written notice may also
be given by telegram, cable, telecopy, commercial delivery service, telex or
similar means, addressed to such director of stockholder at his address as it
appears on the records of the corporation, in which case such notice shall be
deemed to be given when delivered into the control of the persons charged with
effecting such transmission, the transmission charge to be paid by the
corporation or the person sending
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such notice and not by the addressee. Oral notice or other in-hand delivery (in
person or by telephone) shall be deemed given at the time it is actually given.
Section 2. WAIVER OF NOTICE. Whenever any notice is required to be
given under the provisions of law or of the certificate of incorporation or of
these by-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
CAPITAL STOCK
Section 1. CERTIFICATES OF STOCK. Every holder of stock in the
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the chairman or vice-chairman of the board of directors,
or the president or a vice president, and the treasurer or an assistant
treasurer, or the secretary or an assistant secretary of the corporation,
certifying the number of shares owned by him in the corporation. Any or all of
the signatures on the certificate may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer, it may be issued
by the corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue. Certificates may be issued for partly
paid shares, and in such case upon the face or back of the certificates issued
to represent any such partly paid shares, the total amount of the consideration
to be paid therefor and the amount paid thereon shall be specified.
Section 2. LOST CERTIFICATES. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed. When authorizing such issue of a new certificate or
certificates, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to give
reasonable evidence of such loss, theft or destruction, to advertise the same in
such manner as it shall require and/or to give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed or the issuance of such new certificate.
Section 3. TRANSFER OF STOCK. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares, duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, and proper evidence of compliance with other conditions to rightful
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
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Section 4. RECORD DATE. In order that the corporation may determine
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, the board of directors may fix a record date, which
shall not precede the date upon which the resolution fixing the record date is
adopted by the board of directors and which record date shall not be more than
sixty days nor less than ten days before the date of such meeting. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting. If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day before the day on which notice is given,
or, if notice is waived, at the close of business on the day before the day on
which the meeting is held. In order that the corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the board of directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the board of directors and which record date shall not be more than ten days
after the date upon which the resolution fixing the record date is adopted by
the board of directors. If no record date is fixed, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by delivery
to its registered office in Delaware, to its principal place of business, or to
an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. If no record date is
fixed and prior action by the board of directors is required, the record date
for determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
board of directors adopts the resolution taking such prior action. In order
that the corporation may determine the stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the board of directors may fix a record date, which record date shall not
precede the date on which the resolution fixing the record date is adopted and
which record date shall not be more than sixty days prior to such action. If no
record date is fixed, the record date for determining stockholders for any such
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
Section 5. REGISTERED STOCKHOLDERS. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
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ARTICLE VI
CERTAIN TRANSACTIONS
Section 1. TRANSACTIONS WITH INTERESTED PARTIES. No contract or
transaction between the corporation and one or more of its directors or
officers, or between the corporation and any other corporation, partnership,
association, or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interests, shall be void
or voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the board or committee thereof
which authorizes the contract or transaction or solely because his or their
votes are counted for such purpose, if:
(a) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the board of
directors or the committee, and the board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even through the disinterested
directors be less than a quorum; or
(b) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation as of
the time it is authorized approved or ratified by the board of directors, a
committee thereof, or the stockholders.
Section 2. QUORUM. Common or interested directors may be counted in
determining the present of a quorum at a meeting of the board of directors or of
a committee which authorizes the contract or transaction.
ARTICLE VII
GENERAL PROVISIONS
Section 1. DIVIDENDS. Dividends upon the capital stock of the
corporation, if any, may be declared by the board of directors at any regular or
special meeting or by written consent, pursuant to law. Dividends may be paid in
cash, in property, or in shares of the capital stock, subject to the provisions
of the certificate of incorporation.
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Section 2. RESERVES. The directors may set apart out of any funds of
the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve.
Section 3. CHECKS. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
Section 4. FISCAL YEAR. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
Section 5. SEAL. The board of directors may, by resolution, adopt a
corporate seal. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the word "Delaware". The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. The seal may be altered from time to time by the board
of directors.
ARTICLE VIII
AMENDMENTS
These by-laws may be altered, amended or repealed or new by-laws may be
adopted by the stockholders or by the board of directors, when such power is
conferred upon the board of directors by the certificate of incorporation, at
any regular meeting of the stockholders or of the board of directors or at any
special meeting of the stockholders or of the board of directors, provided,
however, that in the case of a regular or special meeting of stockholders,
notice of such alteration, amendment,. repeal or adoption of new by-law be
contained in the notice of such meeting.
* * *
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EXHIBIT 4.1
VIRTUAL CHIPS, INC.
Amended and Restated 1994 STOCK OPTION PLAN
(DECEMBER 15, 1995)
<PAGE>
TABLE OF CONTENTS
PAGE
----
SECTION 1. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 1
(a) "BOARD OF DIRECTORS" . . . . . . . . . . . . . . . . . . . . . 1
(b) "CODE" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(c) "COMMITTEE". . . . . . . . . . . . . . . . . . . . . . . . . . 1
(d) "COMPANY". . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(e) "DISABILITY" . . . . . . . . . . . . . . . . . . . . . . . . . 1
(f) "EMPLOYEE" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(g) "EXERCISE PRICE" . . . . . . . . . . . . . . . . . . . . . . . 2
(h) "FAIR MARKET VALUE". . . . . . . . . . . . . . . . . . . . . . 2
(i) "ISO". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(j) "NONSTATUTORY OPTION". . . . . . . . . . . . . . . . . . . . . 2
(k) "OPTION" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(l) "OPTIONEE" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(m) "PLAN" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(n) "SERVICE". . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(o) "SHARE". . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(p) "STOCK". . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(q) "STOCK OPTION AGREEMENT" . . . . . . . . . . . . . . . . . . . 2
(r) "SUBSIDIARY" . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3. ADMINISTRATION.. . . . . . . . . . . . . . . . . . . . . . . . 3
(a) COMMITTEE MEMBERSHIP.. . . . . . . . . . . . . . . . . . . . . 3
(b) COMMITTEE PROCEDURES.. . . . . . . . . . . . . . . . . . . . . 3
(c) COMMITTEE RESPONSIBILITIES.. . . . . . . . . . . . . . . . . . 3
(d) FINANCIAL REPORTS. . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4. ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) GENERAL RULE.. . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) TEN-PERCENT SHAREHOLDERS.. . . . . . . . . . . . . . . . . . . 5
(c) ATTRIBUTION RULES. . . . . . . . . . . . . . . . . . . . . . . 5
(d) OUTSTANDING STOCK. . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 5. STOCK SUBJECT TO PLAN. . . . . . . . . . . . . . . . . . . . . 5
(a) BASIC LIMITATION.. . . . . . . . . . . . . . . . . . . . . . . 5
(b) ADDITIONAL SHARES. . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.. . . . . . . . . . . . 6
(a) STOCK OPTION AGREEMENT.. . . . . . . . . . . . . . . . . . . . 6
(b) NUMBER OF SHARES.. . . . . . . . . . . . . . . . . . . . . . . 6
(c) EXERCISE PRICE.. . . . . . . . . . . . . . . . . . . . . . . . 6
(d) WITHHOLDING TAXES. . . . . . . . . . . . . . . . . . . . . . . 7
(e) EXERCISABILITY.. . . . . . . . . . . . . . . . . . . . . . . . 7
(f) TERM.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(g) NONTRANSFERABILITY.. . . . . . . . . . . . . . . . . . . . . . 7
(h) EXERCISE OF OPTIONS ON TERMINATION OF SERVICE. . . . . . . . . 8
(i) NO RIGHTS AS A SHAREHOLDER.. . . . . . . . . . . . . . . . . . 8
(j) MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. . . . . . . 8
(k) RESTRICTIONS ON TRANSFER OF SHARES.. . . . . . . . . . . . . . 8
SECTION 7. PAYMENT FOR SHARES.. . . . . . . . . . . . . . . . . . . . . . 9
(a) GENERAL RULE.. . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) SURRENDER OF STOCK.. . . . . . . . . . . . . . . . . . . . . . 9
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(c) PROMISSORY NOTES.. . . . . . . . . . . . . . . . . . . . . . . 9
(d) CASHLESS EXERCISE. . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 8. ADJUSTMENT OF SHARES.. . . . . . . . . . . . . . . . . . . . . 10
(a) GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) REORGANIZATIONS. . . . . . . . . . . . . . . . . . . . . . . . 10
(c) RESERVATION OF RIGHTS. . . . . . . . . . . . . . . . . . . . . 10
SECTION 9. LEGAL REQUIREMENTS.. . . . . . . . . . . . . . . . . . . . . . 11
SECTION 10. NO EMPLOYMENT RIGHTS . . . . . . . . . . . . . . . . . . . . . 11
SECTION 11. DURATION AND AMENDMENTS. . . . . . . . . . . . . . . . . . . . 11
(a) TERM OF THE PLAN.. . . . . . . . . . . . . . . . . . . . . . . 11
(b) RIGHT TO AMEND OR TERMINATE THE PLAN.. . . . . . . . . . . . . 11
(c) EFFECT OF AMENDMENT OR TERMINATION.. . . . . . . . . . . . . . 12
SECTION 12. EXECUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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<PAGE>
VIRTUAL CHIPS, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(DECEMBER 15, 1995)
SECTION 1. PURPOSE.
The purpose of the Plan is to offer selected employees, directors and
consultants an opportunity to acquire a proprietary interest in the success of
the Company, or to increase such interest, to encourage such selected persons to
remain in the employ of the Company and to attract new employees with
outstanding qualifications by purchasing Shares of the Company's Common Stock.
The Plan provides for the grant of Options to purchase Shares. Options granted
under the Plan may include Nonstatutory Options as well as incentive stock
options intended to qualify under section 422 of the Internal Revenue Code.
SECTION 2. DEFINITIONS.
(a) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMITTEE" shall mean a committee of the Board of Directors which
is authorized to administer the Plan under Section 3. The Committee shall have
membership composition which enables the Plan to qualify under Rule 16b-3 with
regard to the grant of Options to persons who are subject to Section 16 of the
Securities Exchange Act of 1934.
(d) "COMPANY" shall mean Virtual Chips, Inc., a California corporation.
(e) "DISABILITY" shall means that an Optionee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted,
or can be expected to last, for a continuous period of not less than six months.
(f) "EMPLOYEE" shall mean (i) any individual who is a common-law
employee of the Company or of a Subsidiary, (ii) a member of the Board of
Directors, or (iii) an independent contractor who performs services for the
Company or a subsidiary. Service as a member of the Board of Directors or as an
independent contractor shall be considered empoyment for all purposes of the
Plan except the second sentence of Section 4(a).
(G) "EXERCISE PRICE" shall mean the amount for which one Share may be
purchased upon exercise of an Option, as specified by the Committee in the
applicable Stock Option Agreement.
(h) "FAIR MARKET VALUE" shall mean the fair market value of a Share, as
determined by the Committee in good faith. Such determination shall be
conclusive and binding on all persons.
(i) "ISO" shall mean an employee incentive stock option described in
Code section
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422(b).
(j) "NONSTATUTORY OPTION" shall mean an employee stock option that is
not an ISO.
(k) "OPTION" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.
(l) "OPTIONEE" shall mean an individual who holds an Option.
(m) "PLAN" shall mean this Virtual Chips, Inc. 1994 Stock Option Plan.
(n) "SERVICE" shall mean service as an Employee.
(o) "SHARE" shall mean one share of Stock, as adjusted in accordance
with Section 8 (if applicable).
(p) "STOCK" shall mean the common stock of the Company.
(q) "STOCK OPTION AGREEMENT" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to his or her Option.
(r) "SUBSIDIARY" shall mean any corporation, of which the Company and/or
one or more other Subsidiaries own not less than 50 percent of the total
combined voting power of all classes of outstanding stock of such corporation.
A corporation that attains the status of a Subsidiary on a date after the
adoption of the Plan shall be considered a Subsidiary commencing as of such
date.
SECTION 3. ADMINISTRATION.
(a) COMMITTEE MEMBERSHIP. The Plan shall be administered by the
Committee, which shall consist of members of the Board of Directors. The
members of the Committee shall be appointed by the Board of Directors. If no
Committee has been appointed, the entire Board of Directors shall constitute the
Committee.
(b) COMMITTEE PROCEDURES. The Board of Directors shall designate one of
the members of the Committee as chairperson. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts reduced
to or approved in writing by all Committee members, shall be valid acts of the
Committee.
(c) COMMITTEE RESPONSIBILITIES. Subject to the provisions of the Plan,
the Committee shall have full authority and discretion to take the following
actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms relating
to the Plan;
(iii) To authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan;
(iv) To determine when Options are to be granted under the Plan;
(v) To select the Optionees;
<PAGE>
(vi) To determine the number of Shares to be made subject to each
Option;
(vii) To prescribe the terms and conditions of each Option, including
(without limitation) the Exercise Price, to determine whether such Option
is to be classified as an ISO or as a Nonstatutory Option, and to specify
the provisions of the Stock Option Agreement relating to such Option;
(viii) To amend any outstanding Stock Option Agreement;
(ix) To determine the disposition of an Option in the event of an
Optionee's divorce or dissolution of marriage;
(x) To correct any defect, supply any omission, or reconcile any
inconsistency in the Plan and any Option;
(xi) To prescribe the consideration for the grant of each Option
under the Plan and to determine the sufficiency of such consideration; and
(xii) To take any other actions deemed necessary or advisable for the
administration of the Plan.
All decisions, interpretations and other actions of the Committee shall be
final and binding on all Optionees, and all persons deriving their rights from
an Optionee. No member of the Committee shall be liable for any action that he
or she has taken or has failed to take in good faith with respect to the Plan or
any Option.
(d) FINANCIAL REPORTS. To the extent required by applicable law, and not
less often than annually, the Company shall furnish to Optionees Company summary
financial information including a balance sheet regarding the Company's
financial condition and results of operations, unless such Optionees have duties
with the Company that assure them access to equivalent information. Such
financial statements need not be audited.
SECTION 4. ELIGIBILITY.
(a) GENERAL RULE. Only Employees, as defined in Section 2(f), shall be
eligible for designation as Optionees by the Committee. In addition, only
individuals who are employed as common-law employees by the Company or a
Subsidiary shall be eligible for the grant of ISOs.
(b) TEN-PERCENT SHAREHOLDERS. An Employee who owns more than 10 percent
of the total combined voting power of all classes of outstanding stock of the
Company or any of its Subsidiaries shall not be eligible for designation as an
Optionee unless (i) the Exercise Price for an ISO (and a NSO to the extent
required by applicable law) is at least 110 percent of the Fair Market Value of
a Share on the date of grant, and (ii) in the case of an ISO, such ISO by its
terms is not exercisable after the expiration of five years from the date of
grant.
(c) ATTRIBUTION RULES. For purposes of Subsection (b) above, in
determining stock ownership, an Employee shall be deemed to own the stock owned,
directly or indirectly, by or for his brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its shareholders, partners or beneficiaries. Stock
with respect to which such Employee holds an option shall not be counted.
(d) OUTSTANDING STOCK. For purposes of Subsection (b) above, "outstanding
stock" shall include all stock actually issued and outstanding immediately after
the grant. "Outstanding stock" shall not include shares authorized for issuance
under outstanding options held by the
<PAGE>
Employee or by any other person.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) BASIC LIMITATION. Shares offered under the Plan shall be authorized
but unissued Shares. The aggregate number of Shares which may be issued under
the Plan (upon exercise of Options) shall not exceed two million (2,000,000)
Shares, subject to adjustment pursuant to Section 8. The number of Shares which
are subject to Options outstanding at any time under the Plan shall not exceed
the number of Shares which then remain available for issuance under the Plan.
The Company, during the term of the Plan, shall at all times reserve and keep
available sufficient Shares to satisfy the requirements of the Plan.
(b) ADDITIONAL SHARES. In the event that any outstanding Option for any
reason expires or is canceled or otherwise terminated, the Shares allocable to
the unexercised portion of such Option shall again be available for the purposes
of the Plan.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
(a) STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms and conditions of the Plan
and may be subject to any other terms and conditions which are not inconsistent
with the Plan and which the Committee deems appropriate for inclusion in a Stock
Option Agreement. The provisions of the various Stock Option Agreements entered
into under the Plan need not be identical.
(b) NUMBER OF SHARES. Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 8. The Stock Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.
(c) EXERCISE PRICE. Each Stock Option Agreement shall specify the
Exercise Price. The Exercise Price of an ISO shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share on the date of grant, except
as otherwise provided in Section 4(b). The Exercise Price of a Nonstatutory
Option shall not be less than eighty-five percent (85%) of the Fair Market Value
of a Share on the date of grant, except as otherwise provided in Section 4(b).
Subject to the preceding two sentences, the Exercise Price under any Option
shall be determined by the Committee in its sole discretion. The Exercise Price
shall be payable in a form described in Section 7.
(d) WITHHOLDING TAXES. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such exercise. The Optionee shall also make
such arrangements as the Committee may require for the satisfaction of any
federal, state, local or foreign withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an
(e) EXERCISABILITY. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable. To the
extent required by applicable law, an Option shall become exercisable no less
rapidly than the rate of 20% per year for each of the
<PAGE>
first five years from the date of grant. Subject to the preceding sentence, the
vesting of any Option shall be determined by the Committee in its sole
discretion.
(f) TERM. The Stock Option Agreement shall specify the term of the
Option. The term shall not exceed ten (10) years from the date of grant, except
as otherwise provided in Section 4(b). Subject to the preceding sentence, the
Committee at its sole discretion shall determine when an Option is to expire.
(g) NONTRANSFERABILITY. No Option shall be transferable by the Optionee
other than by will or by the laws of descent and distribution. An Option may be
exercised during the lifetime of the Optionee only by him or by his guardian or
legal representative. No Option or interest therein may be transferred,
assigned, pledged or hypothecated by the Optionee during his lifetime, whether
by operation of law or otherwise, or be made subject to execution, attachment or
similar process.
(h) EXERCISE OF OPTIONS ON TERMINATION OF SERVICE. Each Option shall set
forth the extent to which the Optionee shall have the right to exercise the
Option following termination of the Optionee's service with the Company and its
Subsidiaries. Such provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Options issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of employment.
Notwithstanding the foregoing, to the extent required by applicable law, each
Option shall provide that the Optionee shall have the right to exercise the
vested portion of any Option held at termination for at least 30 days following
termination of service with the Company for any reason, and that the Optionee
shall have the right to exercise the Option for at least six months if the
Optionee's service terminates due to death or Disability.
(i) NO RIGHTS AS A SHAREHOLDER. An Optionee, or a transferee of an
Optionee, shall have no rights as a shareholder with respect to any Shares
covered by an Option until the date of the issuance of a stock certificate for
such Shares.
(j) MODIFICATION, EXTENSION AND ASSUMPTION OF OPTIONS. Within the
limitations of the Plan, the Committee may modify, extend or assume outstanding
Options or may accept the cancellation of outstanding Options (whether granted
by the Company or another issuer) in return for the grant of new Options for the
same or a different number of Shares and at the same or a different Exercise
Price.
(k) RESTRICTIONS ON TRANSFER OF SHARES. Any Shares issued upon exercise
of an Option shall be subject to such rights of repurchase, rights of first
refusal and other transfer restrictions as the Committee may determine. Such
restrictions shall be set forth in the applicable Stock Option Agreement and
shall apply in addition to any restrictions that may apply to holders of Shares
generally.
SECTION 7. PAYMENT FOR SHARES.
(a) GENERAL RULE. The entire Exercise Price of Shares issued under the
Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as provided in Subsections (b), (c)
and (d) below.
(b) SURRENDER OF STOCK. To the extent that a Stock Option Agreement so
provides,
<PAGE>
payment may be made all or in part with Shares which have already been owned by
the Optionee or the Optionee's representative for more than six months and which
are surrendered to the Company in good form for transfer. Such Shares shall be
valued at their Fair Market Value on the date when the new Shares are purchased
under the Plan.
(c) PROMISSORY NOTES. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part with a full recourse promissory
note executed by the Optionee. The interest rate and other terms and conditions
of such note shall be determined by the Committee. The Committee may require
that the Optionee pledge his or her Shares to the Company for the purpose of
securing the payment of such note. In no event shall the stock certificate(s)
representing such Shares be released to the Optionee until such note is paid in
full.
(d) CASHLESS EXERCISE. To the extent that a Stock Option Agreement so
provides and a public market for the Shares exists, payment may be made all or
in part by delivery (on a form prescribed by the Committee) of an irrevocable
direction to a securities broker to sell Shares and to deliver all or part of
the sale proceeds to the Company in payment of the aggregate Exercise Price.
SECTION 8. ADJUSTMENT OF SHARES.
(a) GENERAL. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of Shares, a combination or consolidation of the outstanding Stock into a lesser
number of Shares, a recapitalization, a reclassification or a similar
occurrence, the Committee shall make appropriate adjustments in one or more of
(i) the number of Shares available for future grants under Section 5, (ii) the
number of Shares covered by each outstanding Option or (iii) the Exercise Price
under each outstanding Option.
(b) REORGANIZATIONS. In the event that the Company is a party to a merger
or reorganization, outstanding Options shall be subject to the agreement of
merger or reorganization.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 8, an
Optionee shall have no rights by reason of (i) any subdivision or consolidation
of shares of stock of any class, (ii) the payment of any dividend or (iii) any
other increase or decrease in the number of shares of stock of any class. Any
issue by the Company of shares of stock of any class, or 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 an Option. The grant of an Option pursuant to the 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, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
SECTION 9. LEGAL REQUIREMENTS.
Shares shall not be issued under the Plan unless the issuance and delivery
of such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended, the
rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange on
<PAGE>
which the Company's securities may then be listed.
SECTION 10. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any Option granted under the Plan, shall be
construed to give any person any right to become, to be treated as, or to remain
an Employee. The Company and its Subsidiaries reserve the right to terminate
any person's Service at any time and for any reason.
SECTION 11. DURATION AND AMENDMENTS.
(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its adoption by the Board of Directors, subject to the
approval of the Company's shareholders. In the event that the shareholders fail
to approve the Plan within twelve (12) months after its adoption by the Board of
Directors, any Option grants already made shall be null and void, and no
additional Option grants shall be made after such date. The Plan shall
terminate automatically ten (10) years after its adoption by the Board of
Directors and may be terminated on any earlier date pursuant to Subsection (b)
below.
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may
amend the Plan at any time and from time to time. Rights and obligations under
any Option granted before amendment of the Plan shall not be materially altered,
or impaired adversely, by such amendment, except with consent of the person to
whom the Option was granted. An amendment of the Plan shall be subject to the
approval of the Company's stockholders only to the extent required by applicable
laws, regulations or rules.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any
amendment thereof, shall not affect any Option previously granted under the
Plan.
SECTION 12. EXECUTION.
To record the amendment and restatement of the Plan by the Board of
Directors as of December 15, 1995, the Company has caused its authorized officer
to execute the same.
VIRTUAL CHIPS, INC.
By /s/ Rajan Raghavan
----------------------------
Rajan Raghavan, Secretary
<PAGE>
EXHIBIT 4.2
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
VIRTUAL CHIPS, INC.
1994 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
MONTHLY VESTING OVER FOUR YEARS
Virtual Chips, Inc., a California corporation (the "Company"), hereby
grants an option to purchase Shares of its Common Stock to the optionee named
below. The terms and conditions of the option are set forth in this cover
sheet, in the attachment and in the Company's 1994 Stock Option Plan (the
"Plan").
Date of Option Grant: __________, 199__
Name of Optionee:
Optionee's Social Security Number: _____-____-_____
Number of Shares of Common Stock Covered by Option:
Exercise Price per Share: $___________________________________________________
Vesting Start Date: __________, 199__
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY
OF WHICH IS ALSO ENCLOSED.
Optionee:______________________________________________________________________
(Signature)
Company: ______________________________________________________________________
(Signature)
Title: ______________________________________________________________
Attachment
<PAGE>
INCENTIVE STOCK OPTION AGREEMENT
INCENTIVE STOCK OPTION This option is intended to be an incentive stock option
under section 422 of the Internal Revenue Code and will
be interpreted accordingly.
EXERCISE AND This option is immediately exercisable in full on
VESTING the later of (i) January 1, 1996 or (ii) the date of
the first anniversary of the Vesting Start Date as
shown on the cover sheet. The Shares under this option
will vest (i.e., no longer subject to right of
repurchase) over a four-year period at the rate
indicated below:
Portion of Shares Vested
------------------------
From the Vesting Start Date
until 12 months thereafter None
On the first anniversary of
the Vesting Start Date 25%
For each additional full month
of your continuous employment
with the Company thereafter 1/48
On the fourth anniversary of
the Vesting Start Date 100%
RIGHT OF REPURCHASE In the event the you cease to be continuously
employed by the Company for any reason, the
Company will have the right to repurchase all of
the shares subject to this Agreement that you had
exercised and have not yet vested. If the Company
fails to provide you with written notice of its
intention to purchase such shares before or within
90 days of the date the Company receives written
notice from you of your termination of employment,
the Company's right to purchase such shares shall
terminate. The purchase price for any shares
repurchased shall be the price that you paid for
those shares (or, in the event that the
consideration for the shares is services rendered
by you for the Company, the value of those
services) and shall be paid in cash. The Company's
right of repurchase shall terminate in the event
that Stock is listed on an established stock
exchange or is quoted regularly on the Nasdaq
Stock Market.
Your "continuous employment" shall cease when
you cease to be actively employed by, or a
consultant or adviser to, the Company as
determined in the sole discretion of the
Committee. A leave of absence, regardless of
the reason, shall be deemed to constitute the
cessation of your active employment unless
such leave is authorized by the Company, and
you return within the time specified in such
authorization.
TERM Your option will expire in any event at the
close of business at Company headquarters on
the day before the 10th anniversary of the
Date of Grant, as shown on the cover sheet.
(It will expire earlier if your Company
service terminates, as described below.)
<PAGE>
REGULAR TERMINATION If your service as an employee of the Company (or
any subsidiary) terminates for any reason except
death or Disability, then your option will expire
at the close of business at Company headquarters
on the 30th day after your termination date.
Notwithstanding anything else in this Agreement to
the contrary, in the event that you cease to be
employed by the Company within twelve months from
the Vesting Start Date for any reason all rights
to purchase shares under this Option shall
immediately terminate.
DEATH If you die as an employee of the Company (or any
subsidiary), then your option will expire at the
close of business at Company headquarters on the
date six months after the date of death. During
that six-month period, your estate or heirs may
exercise the vested portion of your option.
DISABILITY If your service as an employee of the Company (or
any subsidiary) terminates because of your
Disability, then your option will expire at the
close of business at Company headquarters on the
date six months after your termination date.
"Disability" means that you are unable to engage
in any substantial gainful activity by reason of
any medically determinable physical or mental
impairment.
LEAVES OF ABSENCE For purposes of this option, your service does not
terminate when you go on a BONA FIDE leave of
absence, that was approved by the Company in
writing, if the terms of the leave provide for
continued service crediting, or when continued
service crediting is required by applicable law.
However, your service will be treated as
terminating ninety (90) days after you went on
leave, unless your right to return to active work
is guaranteed by law or by a contract. Your
service terminates in any event when the approved
leave ends, unless you immediately return to
active work.
The Company determines which leaves count for this
purpose, and when your service terminates for all
purposes under the Plan.
RESTRICTIONS ON The Company will not permit you to exercise this option
EXERCISE if the issuance of Shares at that time would violate
any law or regulation.
NOTICE OF EXERCISE When you wish to exercise this option, you must
notify the Company by filing the proper "Notice of
Exercise" form attached hereto. Your notice must
specify how many Shares you wish to purchase.
Your notice must also specify how your Shares
should be registered (in your name only or in your
and your spouse's names as community property or
as joint tenants with right of survivorship). The
notice will be effective when it is received by
the Company.
If someone else wants to exercise this option
after your death, that person must prove to
the Company's satisfaction that he or she is
entitled to do so.
<PAGE>
PERIODS OF Any other provision of this Agreement
NONEXERCISABILITY notwithstanding, the Company shall have the right
to designate one or more periods of time, each of
which shall not exceed 180 days in length, during
which this option shall not be exercisable if the
Company determines (in its sole discretion) that
such limitation on exercise could in any way
facilitate a lessening of any restriction on
transfer pursuant to the Securities Act or any
state securities laws with respect to any issuance
of securities by the Company, facilitate the
registration or qualification of any securities by
the Company under the Securities Act or any state
securities laws, or facilitate the perfection of
any exemption from the registration or
qualification requirements of the Securities Act
or any applicable state securities laws for the
issuance or transfer of any securities. Such
limitation on exercise shall not alter the vesting
schedule set forth in this Agreement other than to
limit the periods during which this option shall
be exercisable.
FORM OF PAYMENT When you submit your notice of exercise, you must
include payment of the option price for the Shares
you are purchasing. Payment may be made in one
(or a combination) of the following forms:
- Your personal check, a cashier's check or a money
order.
- Common Shares which have already been owned by you
for any time period specified by the Committee and
which are surrendered to the Company. The value
of the Shares, determined as of the effective date
of the option exercise, will be applied to the
option price.
- To the extent that a public market for the Shares
exists as determined by the Company, by delivery
(on a form prescribed by the Committee) of an
irrevocable direction to a securities broker to
sell Shares and to deliver all or part of the sale
proceeds to the Company in payment of the
aggregate Exercise Price.
WITHHOLDING TAXES You will not be allowed to exercise this option unless
you make acceptable arrangements to pay any
withholding or other taxes that may be due as a result
of the option exercise or the sale of shares acquired
upon exercise of this option.
<PAGE>
MARKET STAND-OFF AGREEMENT In connection with any underwritten public
offering by the Company of its equity securities
pursuant to an effective registration statement
filed under the 1933 Act, including the Company's
initial public offering, you shall not sell, make
any short sale of, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise
dispose or transfer for value or agree to engage
in any of the foregoing transactions with respect
to any shares without the prior written consent of
the Company or its underwriters, for such period
of time after the effective date of such
registration statement as may be requested by the
Company or such underwriters (not to exceed one
hundred-eighty (180) days).
In order to enforce the provisions of this
paragraph, the Company may impose stop-
transfer instructions with respect to the
shares until the end of the applicable stand-
off period.
RESTRICTIONS ON RESALE By signing this Agreement, you agree not to
sell any option Shares at a time when
applicable laws, regulations or Company or
underwriter trading policies prohibit a sale.
You represent and agree that the Shares to be
acquired upon exercising this option will be
acquired for investment, and not with a view
to the sale or distribution thereof.
In the event that the sale of Shares under
the Plan is not registered under the
Securities Act of 1933 but an exemption is
available which requires an investment
representation or other representation, you
shall represent and agree at the time of
exercise to make such representations as are
deemed necessary or appropriate by the
Company and its counsel.
<PAGE>
THE COMPANY'S In the event that you propose to sell,
RIGHT OF FIRST pledge or otherwise transfer to a third
REFUSAL party any vested shares acquired under this
Agreement, or any interest in such shares,
the Company shall have the "Right of First
Refusal" with respect to all (and not less
than all) of such shares. If you desire to
transfer vested shares acquired under this
Agreement, you must give a written "Transfer
Notice" to the Company describing fully the
proposed transfer, including the number of
shares proposed to be transferred, the
proposed transfer price and the name and
address of the proposed transferee. The
Transfer Notice shall be signed both by you
and by the proposed new transferee and must
constitute a binding commitment of both
parties to the transfer of the shares. The
Company shall have the right to purchase all,
and not less than all, of the shares on the
terms of the proposal described in the
Transfer Notice (subject, however, to any
change in such terms permitted in the next
paragraph) by delivery of a notice of
exercise of the Right of First Refusal within
30 days after the date when the Transfer
Notice was received by the Company.
If the Company fails to exercise its Right of
First Refusal before or within 30 days after
the date when it received the Transfer
Notice, you may, not later than 90 days
following receipt of the Transfer Notice by
the Company, conclude a transfer of the
shares subject to the Transfer Notice on the
terms and conditions described in the
Transfer Notice. Any proposed transfer on
terms and conditions different from those
described in the Transfer Notice, as well as
any subsequent proposed transfer by you,
shall again be subject to the Right of First
Refusal and shall require compliance with the
procedure described in the paragraph above.
If the Company exercises its Right of First
Refusal, the parties shall consummate the
sale of the shares on the terms set forth in
the Transfer Notice within 60 days after the
date when the Company received the Transfer
Notice (or within such longer period as may
have been specified in the Transfer Notice);
provided, however, that in the event the
Transfer Notice provided that payment for the
shares was to be made in a form other than
lawful money paid at the time of transfer,
the Company shall have the option of paying
for the shares with lawful money equal to the
present value of the consideration described
in the Transfer Notice.
The Company's Right of First Refusal
shall inure to the benefit of its
successors and assigns, shall be freely
assignable in whole or in part and shall
be binding upon any transferee of the
shares.
The Company's Right of First Refusal
shall terminate in the event that Stock
is listed on an established stock
exchange or is quoted regularly on the
Nasdaq Stock Market.
TRANSFER OF OPTION Prior to your death, only you may exercise
this option. You cannot transfer or assign
this option. For instance, you may not sell
this option or use it as security for a loan.
If you attempt to do any of these things,
this option will immediately become invalid.
You may, however, dispose of this option in
your will.
Regardless of any marital property settlement
agreement, the Company is not obligated to
honor a notice of exercise from your
<PAGE>
spouse or former spouse, nor is the Company
obligated to recognize such individual's
interest in your option in any other way.
RETENTION RIGHTS Your option or this Agreement do not give you
the right to be retained by the Company (or
any subsidiaries) in any capacity. The
Company (and any subsidiaries) reserve the
right to terminate your service at any time
and for any reason.
SHAREHOLDER RIGHTS You, or your estate or heirs, have no rights
as a shareholder of the Company until a
certificate for your option Shares has been
issued. No adjustments are made for
dividends or other rights if the applicable
record date occurs before your stock
certificate is issued, except as described in
the Plan.
ADJUSTMENTS In the event of a stock split, a stock
dividend or a similar change in the Company
stock, the number of Shares covered by this
option and the exercise price per share may
be adjusted pursuant to the Plan. Your
option shall be subject to the terms of the
agreement of merger, liquidation or
reorganization in the event the Company is
subject to such corporate activity.
LEGENDS All certificates representing the Shares
issued upon exercise of this option
shall, where applicable, have endorsed
thereon the following legends:
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER
DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE TERMS OF A WRITTEN AGREEMENT BETWEEN
THE COMPANY AND THE INITIAL HOLDER
HEREOF. SUCH AGREEMENT PROVIDES FOR
CERTAIN TRANSFER RESTRICTIONS, INCLUDING
RIGHTS OF FIRST REFUSAL UPON AN
ATTEMPTED TRANSFER OF THE SECURITIES AND
CERTAIN REPURCHASE RIGHTS IN FAVOR OF
THE COMPANY UPON TERMINATION OF SERVICE
WITH THE COMPANY. THE SECRETARY OF THE
COMPANY WILL UPON WRITTEN REQUEST
FURNISH A COPY OF SUCH AGREEMENT TO THE
HOLDER HEREOF WITHOUT CHARGE."
"THE SHARES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
APPLICABLE LAW This Agreement will be interpreted and
enforced under the laws of the State of
California.
<PAGE>
THE PLAN AND OTHER The text of the Plan is incorporated in this
AGREEMENTS Agreement by reference. Certain capitalized terms
used in this Agreement are defined in the Plan.
This Agreement and the Plan constitute the
entire understanding between you and the
Company regarding this option. Any prior
agreements, commitments or negotiations
concerning this option are superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
<PAGE>
NOTICE OF EXERCISE OF STOCK OPTION
Virtual Chips, Inc.
2107 N. First Street, #100
San Jose, CA 95131
Attn: Chief Financial Officer
Re: Exercise of Stock Option to Purchase
Shares of Company Stock
Ladies and Gentlemen:
Pursuant to the Stock Option Agreement dated __________, 199___ (the "Stock
Option Agreement"), between Virtual Chips, Inc., a California corporation (the
"Company"), and the undersigned, I hereby elect to purchase _____________ shares
of the common stock of the Company (the "Shares"), at the price of $__________
per Share. My check in the amount of $______________ is enclosed. The Shares
are to be issued in _____ certificate(s) and registered in the name(s) of:
__________________________
__________________________
The undersigned understands there may be tax consequences as a result of
the purchase or disposition of the Shares. The undersigned represents that
he/she has received and reviewed the Plan's federal income information and
consulted with any tax consultants he/she deems advisable in connection with the
purchase or disposition of the Shares and the undersigned is not relying on the
Company for any tax advice.
The undersigned acknowledges that he/she has received, read and understood
the Stock Option Agreement and agrees to abide by and be bound by their terms
and conditions. The undersigned represents that the Shares are being acquired
solely for its own account and not as a nominee for any other party, or for
investment, and that the undersigned purchaser will not offer, sell or otherwise
dispose of any such Shares except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws.
Dated: _____________________
---------------------------------------
(Signature)
---------------------------------------
(Please Print Name)
Social Security No.____________________
_______________________________________
_______________________________________
(Full Address)
<PAGE>
EXHIBIT 4.3
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
VIRTUAL CHIPS, INC.
1994 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
MONTHLY VESTING OVER FOUR YEARS
Virtual Chips, Inc., a California corporation (the "Company"), hereby
grants an option to purchase Shares of its Common Stock to the optionee named
below. The terms and conditions of the option are set forth in this cover
sheet, in the attachment and in the Company's 1994 Stock Option Plan (the
"Plan").
Date of Option Grant: __________, 199__
Name of Optionee:
Optionee's Social Security Number: _____-____-_____
Number of Shares of Common Stock Covered by Option:
Exercise Price per Share: $
Vesting Start Date: __________, 199__
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT AND IN THE PLAN, A COPY
OF WHICH IS ALSO ENCLOSED.
Optionee:
--------------------------------------------------------------------
(Signature)
Company:
---------------------------------------------------------------------
(Signature)
Title:
-------------------------------------------------------------
ATTACHMENT
<PAGE>
VIRTUAL CHIPS, INC.
1994 STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
MONTHLY VESTING OVER FOUR YEARS
NONSTATUTORY STOCK OPTION This option is not intended to be an incentive
stock option under section 422 of the Internal
Revenue Code and will be interpreted accordingly.
EXERCISE AND This option is immediately exercisable in
VESTING full on the date of first anniversary of the
Vesting Start Date as shown on the cover sheet.
The Shares under this option will vest (i.e., no
longer subject to right of repurchase) over a
four-year period at the rate indicated below:
Portion of Shares Vested
------------------------
From the Vesting Start Date until
12 months thereafter
None
On the first anniversary of
the Vesting Start Date 25%
For each additional full month
of your continuous employment
with the Company thereafter 1/48
On the fourth anniversary of
the Vesting Start Date 100%
RIGHT OF REPURCHASE In the event the you cease to be continuously
employed by the Company for any reason, the
Company will have the right to repurchase all of
the shares subject to this Agreement that you had
exercised and have not yet vested. If the Company
fails to provide you with written notice of its
intention to purchase such shares before or within
90 days of the date the Company receives written
notice from you of your termination of employment,
the Company's right to purchase such shares shall
terminate. The purchase price for any shares
repurchased shall be the price that you paid for
those shares (or, in the event that the
consideration for the shares is services rendered
by you for the Company, the value of those
services) and shall be paid in cash.
Your "continuous employment" shall cease when you
cease to be actively employed by, or a consultant
or adviser to, the Company as determined in the
sole discretion of the Committee. A leave of
absence, regardless of the reason, shall be deemed
to constitute the cessation of your active
employment unless such leave is authorized by the
Company, and you return within the time specified
in such authorization.
TERM Your option will expire in any event at the close
of business at Company headquarters on the day
before the 10th anniversary of the Date of Grant,
as shown on the cover sheet. (It will expire
earlier if your Company service terminates, as
described below.)
<PAGE>
REGULAR If your service as an employee of the Company
TERMINATION (or any subsidiary) terminates for any reason
except death or Disability, then your option will
expire at the close of business at Company
headquarters on the 30th day after your
termination date.
Notwithstanding anything else in this Agreement to
the contrary, in the event that you cease to be
employed by the Company within twelve months from
the Vesting Start Date for any reason all rights
to purchase shares under this Option shall
immediately terminate.
DEATH If you die as an employee of the Company (or any
subsidiary), then your option will expire at the
close of business at Company headquarters on the
date six months after the date of death. During
that six-month period, your estate or heirs may
exercise the vested portion of your option.
DISABILITY If your service as an employee of the Company (or
any subsidiary) terminates because of your
Disability, then your option will expire at the
close of business at Company headquarters on the
date six months after your termination date.
"Disability" means that you are unable to engage
in any substantial gainful activity by reason of
any medically determinable physical or mental
impairment.
LEAVES OF ABSENCE For purposes of this option, your service does not
terminate when you go on a BONA FIDE leave of
absence, that was approved by the Company in
writing or is required by applicable law. Your
service terminates in any event when the approved
leave ends, unless you immediately return to
active work.
The Company determines which leaves count for this
purpose, and when your service terminates for all
purposes under the Plan.
RESTRICTIONS ON The Company will not permit you to exercise
EXERCISE this option if the issuance of Shares at that time
would violate any law or regulation.
NOTICE OF EXERCISE When you wish to exercise this option, you must
notify the Company by filing the proper "Notice of
Exercise" form attached hereto. Your notice must
specify how many Shares you wish to purchase.
Your notice must also specify how your Shares
should be registered (in your name only or in your
and your spouse's names as community property or
as joint tenants with right of survivorship). The
notice will be effective when it is received by
the Company.
If someone else wants to exercise this option
after your death, that person must prove to the
Company's satisfaction that he or she is entitled
to do so.
<PAGE>
PERIODS OF Any other provision of this Agreement
NONEXERCISABILITY notwithstanding, the Company shall have the right
to designate one or more periods of time, each of
which shall not exceed 180 days in length, during
which this option shall not be exercisable if the
Company determines (in its sole discretion) that
such limitation on exercise could in any way
facilitate a lessening of any restriction on
transfer pursuant to the Securities Act or any
state securities laws with respect to any issuance
of securities by the Company, facilitate the
registration or qualification of any securities by
the Company under the Securities Act or any state
securities laws, or facilitate the perfection of
any exemption from the registration or
qualification requirements of the Securities Act
or any applicable state securities laws for the
issuance or transfer of any securities. Such
limitation on exercise shall not alter the vesting
schedule set forth in this Agreement other than to
limit the periods during which this option shall
be exercisable.
FORM OF PAYMENT When you submit your notice of exercise, you must
include payment of the option price for the Shares
you are purchasing. Payment may be made in one
(or a combination) of the following forms:
* Your personal check, a cashier's check or a
money order.
* Common Shares which have already been owned
by you any time period specified by the
Committee and which are surrendered to the
Company. The value of the Shares, determined
as of the effective date of the option
exercise, will be applied to the option
price.
* To the extent that a public market for the
Shares exists as determined by the Company,
by delivery (on a form prescribed by the
Committee) of an irrevocable direction to a
securities broker to sell Shares and to
deliver all or part of the sale proceeds to
the Company in payment of the aggregate
Exercise Price.
WITHHOLDING TAXES You will not be allowed to exercise this
option unless you make acceptable
arrangements to pay any withholding or other
taxes that may be due as a result of the
option exercise or the sale of shares
acquired upon exercise of this option.
<PAGE>
MARKET STAND-OFF AGREEMENT In connection with any underwritten public
offering by the Company of its equity
securities pursuant to an effective
registration statement filed under the 1933
Act, including the Company's initial public
offering, you shall not sell, make any short
sale of, loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise
dispose or transfer for value or agree to
engage in any of the foregoing transactions
with respect to any shares without the prior
written consent of the Company or its
underwriters, for such period of time after
the effective date of such registration
statement as may be requested by the Company
or such underwriters (not to exceed one
hundred-eighty (180) days).
In order to enforce the provisions of this
paragraph, the Company may impose stop-
transfer instructions with respect to the
shares until the end of the applicable stand-
off period.
RESTRICTIONS ON RESALE By signing this Agreement, you agree not to
sell any option Shares at a time when
applicable laws, regulations or Company or
underwriter trading policies prohibit a sale.
You represent and agree that the Shares to be
acquired upon exercising this option will be
acquired for investment, and not with a view
to the sale or distribution thereof.
In the event that the sale of Shares under
the Plan is not registered under the
Securities Act of 1933 but an exemption is
available which requires an investment
representation or other representation, you
shall represent and agree at the time of
exercise to make such representations as are
deemed necessary or appropriate by the
Company and its counsel.
<PAGE>
THE COMPANY'S RIGHT In the event that you propose to sell,
OF FIRST REFUSAL pledge or otherwise transfer to a third party
any vested shares acquired under this
Agreement, or any interest in such shares,
the Company shall have the "Right of First
Refusal" with respect to all (and not less
than all) of such shares. If you desire to
transfer vested shares acquired under this
Agreement, you must give a written "Transfer
Notice" to the Company describing fully the
proposed transfer, including the number of
shares proposed to be transferred, the
proposed transfer price and the name and
address of the proposed transferee. The
Transfer Notice shall be signed both by you
and by the proposed new transferee and must
constitute a binding commitment of both
parties to the transfer of the shares. The
Company shall have the right to purchase all,
and not less than all, of the shares on the
terms of the proposal described in the
Transfer Notice (subject, however, to any
change in such terms permitted in the next
paragraph) by delivery of a notice of
exercise of the Right of First Refusal within
30 days after the date when the Transfer
Notice was received by the Company.
If the Company fails to exercise its Right of
First Refusal before or within 30 days after
the date when it received the Transfer
Notice, you may, not later than 90 days
following receipt of the Transfer Notice by
the Company, conclude a transfer of the
shares subject to the Transfer Notice on the
terms and conditions described in the
Transfer Notice. Any proposed transfer on
terms and conditions different from those
described in the Transfer Notice, as well as
any subsequent proposed transfer by you,
shall again be subject to the Right of First
Refusal and shall require compliance with the
procedure described in the paragraph above.
If the Company exercises its Right of First
Refusal, the parties shall consummate the
sale of the shares on the terms set forth in
the Transfer Notice within 60 days after the
date when the Company received the Transfer
Notice (or within such longer period as may
have been specified in the Transfer Notice);
provided, however, that in the event the
Transfer Notice provided that payment for the
shares was to be made in a form other than
lawful money paid at the time of transfer,
the Company shall have the option of paying
for the shares with lawful money equal to the
present value of the consideration described
in the Transfer Notice.
The Company's Right of First Refusal shall
inure to the benefit of its successors and
assigns, shall be freely assignable in whole
or in part and shall be binding upon any
transferee of the shares.
The Company's Right of First Refusal shall
terminate in the event that Stock is listed
on an established stock exchange or is quoted
regularly on the Nasdaq Stock Market.
<PAGE>
TRANSFER OF OPTION Prior to your death, only you may exercise
this option. You cannot transfer or assign
this option. For instance, you may not sell
this option or use it as security for a loan.
If you attempt to do any of these things,
this option will immediately become invalid.
You may, however, dispose of this option in
your will.
Regardless of any marital property settlement
agreement, the Company is not obligated to
honor a notice of exercise from your spouse
or former spouse, nor is the Company
obligated to recognize such individual's
interest in your option in any other way.
RETENTION RIGHTS Your option or this Agreement do not give you
the right to be retained by the Company (or
any subsidiaries) in any capacity. The
Company (and any subsidiaries) reserve the
right to terminate your service at any time
and for any reason.
SHAREHOLDER RIGHTS You, or your estate or heirs, have no rights
as a shareholder of the Company until a
certificate for your option Shares has been
issued. No adjustments are made for
dividends or other rights if the applicable
record date occurs before your stock
certificate is issued, except as described in
the Plan.
ADJUSTMENTS In the event of a stock split, a stock
dividend or a similar change in the Company
stock, the number of Shares covered by this
option and the exercise price per share may
be adjusted pursuant to the Plan. Your
option shall be subject to the terms of the
agreement of merger, liquidation or
reorganization in the event the Company is
subject to such corporate activity.
<PAGE>
LEGENDS All certificates representing the Shares
issued upon exercise of this option shall,
where applicable, have endorsed thereon the
following legends:
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER
DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE TERMS OF A WRITTEN AGREEMENT BETWEEN
THE COMPANY AND THE INITIAL HOLDER
HEREOF. SUCH AGREEMENT PROVIDES FOR
CERTAIN TRANSFER RESTRICTIONS, INCLUDING
RIGHTS OF FIRST REFUSAL UPON AN
ATTEMPTED TRANSFER OF THE SECURITIES AND
CERTAIN REPURCHASE RIGHTS IN FAVOR OF
THE COMPANY UPON TERMINATION OF SERVICE
WITH THE COMPANY. THE SECRETARY OF THE
COMPANY WILL UPON WRITTEN REQUEST
FURNISH A COPY OF SUCH AGREEMENT TO THE
HOLDER HEREOF WITHOUT CHARGE."
"THE SHARES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
APPLICABLE LAW This Agreement will be interpreted and
enforced under the laws of the State of
California.
THE PLAN AND OTHER AGREEMENTS The text of the Plan is incorporated in this
Agreement by reference. Certain capitalized
terms used in this Agreement are defined in
the Plan.
This Agreement and the Plan constitute the
entire understanding between you and the
Company regarding this option. Any prior
agreements, commitments or negotiations
concerning this option are superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
<PAGE>
NOTICE OF EXERCISE OF STOCK OPTION
Virtual Chips, Inc.
2107 N. First Street, #100
San Jose, CA 95131
Attn: Chief Financial Officer
Re: EXERCISE OF STOCK OPTION TO PURCHASE
SHARES OF COMPANY STOCK
Ladies and Gentlemen:
Pursuant to the Stock Option Agreement dated __________, 199__ (the "Stock
Option Agreement"), between Virtual Chips, Inc., a California corporation (the
"Company"), and the undersigned, I hereby elect to purchase _____________ shares
of the common stock of the Company (the "Shares"), at the price of $__________
per Share. My check in the amount of $______________ is enclosed. The Shares
are to be issued in _____ certificate(s) and registered in the name(s) of:
__________________________
__________________________
The undersigned understands there may be tax consequences as a result of
the purchase or disposition of the Shares. The undersigned represents that
he/she has received and reviewed the Plan's federal income information and
consulted with any tax consultants he/she deems advisable in connection with the
purchase or disposition of the Shares and the undersigned is not relying on the
Company for any tax advice.
The undersigned acknowledges that he/she has received, read and understood
the Stock Option Agreement and agrees to abide by and be bound by their terms
and conditions. The undersigned represents that the Shares are being acquired
solely for its own account and not as a nominee for any other party, or for
investment, and that the undersigned purchaser will not offer, sell or otherwise
dispose of any such Shares except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws.
Dated: _____________________
------------------------------------
(Signature)
-------------------------------------
(Please Print Name)
Social Security No. __________________
_______________________________________
_______________________________________
(Full Address)
<PAGE>
EXHIBIT 4.4
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS
NOT REQUIRED.
VIRTUAL CHIPS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
MONTHLY VESTING OVER FOUR YEARS
Virtual Chips, Inc., a California corporation (the "Company"), hereby
grants an option to purchase Shares of its Common Stock to the optionee named
below. The terms and conditions of the option are set forth in this cover sheet
and in the attached agreement.
Date of Option Grant: May 23, 1996
Name of Optionee: _________________
Optionee's Social Security Number: _____________
Number of Shares of Common Stock Covered by Option: ____________________
Exercise Price Per Share: ______________________________________________
Vesting Start Date: October 27, 1995
BY SIGNING THIS COVER SHEET, YOU AGREE TO ALL OF THE TERMS AND
CONDITIONS DESCRIBED IN THE ATTACHED AGREEMENT.
Optionee:
---------------------------------------------------------------------
(Signature)
Company:
----------------------------------------------------------------------
(Signature)
Title:
--------------------------------------------------------------
ATTACHMENT
<PAGE>
VIRTUAL CHIPS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
MONTHLY VESTING OVER FOUR YEARS
NONSTATUTORY STOCK OPTION This option is not intended to be an
incentive stock option under section 422 of
the Internal Revenue Code and will be
interpreted accordingly.
EXERCISE AND This option is immediately exercisable in
VESTING full on the Date of Option Grant as shown on
the cover sheet. The shares issued or
issuable under this option (the "Shares")
will vest (i.e., no longer subject to right
of repurchase) over a four-year period at the
rate indicated below:
Portion of Shares Vested
------------------------
For each additional full month
of your continuous employment
with the Company from the
Vesting Start Date 1/48
On the fourth anniversary of
the Vesting Start Date 100%
RIGHT OF REPURCHASE In the event the you cease to be continuously
employed by the Company for any reason, the
Company will have the right to repurchase all
of the shares subject to this Agreement that
you had exercised and have not yet vested. If
the Company fails to provide you with written
notice of its intention to purchase such
shares before or within 90 days of the date
the Company receives written notice from you
of your termination of employment, the
Company's right to purchase such shares shall
terminate. The purchase price for any shares
repurchased shall be the price that you paid
for those shares (or, in the event that the
consideration for the shares is services
rendered by you for the Company, the value of
those services) and shall be paid in cash.
Your "continuous employment" shall cease when
you cease to be actively employed by, or a
consultant or adviser to, the Company as
determined in the sole discretion of the
Company. A leave of absence, regardless of
the reason, shall be deemed to constitute the
cessation of your active employment unless
such leave is authorized by the Company, and
you return within the time specified in such
authorization.
TERM Your option will expire in any event at the
close of business at Company headquarters on
the day before the 10th anniversary of the
Date of Grant, as shown on the cover sheet.
(It will expire earlier if your Company
service terminates, as described below.)
-2-
<PAGE>
REGULAR TERMINATION If your service as an employee of the Company
(or any subsidiary) terminates for any reason
except death or Disability, then your option
will expire at the close of business at
Company headquarters on the 30th day after
your termination date.
DEATH If you die as an employee of the Company (or
any subsidiary), then your option will expire
at the close of business at Company
headquarters on the date 6 months after the
date of death. During that 6-month period,
your estate or heirs may exercise the vested
portion of your option.
DISABILITY If your service as an employee of the Company
(or any subsidiary) terminates because of
your disability, then your option will expire
at the close of business at Company
headquarters on the date 6 months after your
termination date.
"Disability" means that you are unable to
engage in any substantial gainful activity by
reason of any medically determinable physical
or mental impairment.
LEAVES OF ABSENCE For purposes of this option, your service
does not terminate when you go on a BONA FIDE
leave of absence, that was approved by the
Company in writing, if the terms of the leave
provide for continued service crediting, or
when continued crediting is required by
applicable law. Your service terminates in
any event when the approved leave ends,
unless you immediately return to active work.
The Company determines which leaves count for
this purpose.
NOTICE OF EXERCISE When you wish to exercise this option, you
must notify the company by filing the proper
"notice of exercise" form attached hereto.
Your notice must specify how many shares you
wish to purchase. Your notice must also
specify how your shares should be registered
(in your name only or in your and your
spouse's names as community property or as
joint tenants with right of survivorship).
The notice will be effective when it is
received by the Company.
If someone else wants to exercise this option
after your death, that person must prove to
the Company's satisfaction that he or she is
entitled to do so.
RESTRICTIONS ON EXERCISE The Company will not permit you to exercise
this option if the issuance of Shares at that
time would violate any law or regulation.
PERIODS OF NONEXERCISABILITY Any other provision of this Agreement
notwithstanding, the Company shall have the
right to designate one or more periods of
time, each of which shall not exceed 180 days
in length, during which this option shall not
be exercisable if the Company determines (in
its sole discretion) that such limitation on
exercise could in any way facilitate a
lessening of any restriction on transfer
pursuant to the Securities Act of 1933, as
amended (the "Securities Act") or any state
securities laws with respect to any issuance
of securities by the Company, facilitate the
registration or qualification of any
securities by the Company under the
Securities Act or any state securities laws,
or facilitate the perfection of any exemption
-3-
<PAGE>
from the registration or qualification
requirements of the Securities Act or any
applicable state securities laws for the
issuance or transfer of any securities. Such
limitation on exercise shall not alter the
vesting schedule set forth in this Agreement
other than to limit the periods during which
this option shall be exercisable.
FORM OF PAYMENT When you submit your notice of exercise, you
must include payment of the option price for
the Shares you are purchasing. Payment may
be made in one (or a combination) of the
following forms:
* Your personal check, a cashier's check
or a money order.
* Common Shares which have already been
owned by you for more than six months
and which are surrendered to the
Company. The value of the Shares,
determined as of the effective date of
the option exercise, will be applied to
the option price.
* To the extent that a public market for
the Shares exists, by delivery (on a
form prescribed by the Committee) of an
irrevocable direction to a securities
broker to sell Shares and to deliver all
or part of the sale proceeds to the
Company in payment of the aggregate
Exercise Price.
WITHHOLDING TAXES You will not be allowed to exercise this
option unless you make acceptable
arrangements to pay any withholding or
other taxes that may be due as a result
of the option exercise and the sale of
the shares.
MARKET STAND-OFF AGREEMENT In connection with any underwritten
public offering by the Company of its
equity securities pursuant to an
effective registration statement filed
under the 1933 Act, including the
Company's initial public offering, you
shall not sell, make any short sale of,
loan, hypothecate, pledge, grant any
option for the purchase of, or otherwise
dispose or transfer for value or agree
to engage in any of the foregoing
transactions with respect to any Shares
without the prior written consent of the
Company or its underwriters, for such
period of time after the effective date
of such registration statement as may be
requested by the Company or such
underwriters.
In order to enforce the provisions of
this paragraph, the Company may impose
stop-transfer instructions with respect
to the shares until the end of the
applicable stand-off period.
RESTRICTIONS ON RESALE By signing this Agreement, you agree not
to sell any Shares at a time when
applicable laws, regulations or Company
or underwriter trading policies prohibit
a sale.
You represent and agree that the Shares
to be acquired upon exercising this
option will be acquired for investment,
and not with a view to the sale or
distribution thereof.
In the event that the sale of Shares is
not registered under the Securities Act
but an exemption is available which
requires an
-4-
<PAGE>
investment representation or other
representation, you shall represent and
agree at the time of exercise to make
such representations as are deemed
necessary or appropriate by the Company
and its counsel.
THE COMPANY'S RIGHT In the event that you propose to sell,
OF FIRST REFUSAL pledge or otherwise transfer to a third
party any Shares acquired under this
Agreement, or any interest in such
Shares, the Company shall have the
"Right of First Refusal" with respect to
all (and not less than all) of such
Shares. If you desire to transfer
Shares acquired under this Agreement,
you must give a written "Transfer
Notice" to the Company describing fully
the proposed transfer, including the
number of Shares proposed to be
transferred, the proposed transfer price
and the name and address of the proposed
transferee. The Transfer Notice shall
be signed both by you and by the
proposed new transferee and must
constitute a binding commitment of both
parties to the transfer of the Shares.
The Company shall have the right to
purchase all, and not less than all, of
the Shares on the terms of the proposal
described in the Transfer Notice
(subject, however, to any change in such
terms permitted in the next paragraph)
by delivery of a notice of exercise of
the Right of First Refusal within 30
days after the date when the Transfer
Notice was received by the Company.
If the Company fails to exercise its
Right of First Refusal within 30 days
after the date when it received the
Transfer Notice, you may, not later than
90 days following receipt of the
Transfer Notice by the Company, conclude
a transfer of the Shares subject to the
Transfer Notice on the terms and
conditions described in the Transfer
Notice. Any proposed transfer on terms
and conditions different from those
described in the Transfer Notice, as
well as any subsequent proposed transfer
by you, shall again be subject to the
Right of First Refusal and shall require
compliance with the procedure described
in the paragraph above. If the Company
exercises its Right of First Refusal,
the parties shall consummate the sale of
the Shares on the terms set forth in the
Transfer Notice within 60 days after the
date when the Company received the
Transfer Notice (or within such longer
period as may have been specified in the
Transfer Notice); provided, however,
that in the event the Transfer Notice
provided that payment for the Shares was
to be made in a form other than lawful
money paid at the time of transfer, the
Company shall have the option of paying
for the Shares with lawful money equal
to the present value of the
consideration described in the Transfer
Notice.
The Company's Right of First Refusal
shall inure to the benefit of its
successors and assigns, shall be freely
assignable, in whole or in part, and
shall be binding upon any transferee of
the Shares.
The Company's Right of First Refusal
shall terminate in the event that Stock
is listed on an established stock
exchange or is quoted regularly on the
Nasdaq Stock Market.
-5-
<PAGE>
TRANSFER OF OPTION Prior to your death, only you may
exercise this option. You cannot
transfer or assign this option. For
instance, you may not sell this option
or use it as security for a loan. If
you attempt to do any of these things,
this option will immediately become
invalid. You may, however, dispose of
this option in your will.
Regardless of any marital property
settlement agreement, the Company is not
obligated to honor a notice of exercise
from your spouse, nor is the Company
obligated to recognize your spouse's
interest in your option in any other
way.
RETENTION RIGHTS Your option or this Agreement do not
give you the right to be retained by the
Company (or any subsidiaries) in any
capacity. The Company (and any
subsidiaries) reserve the right to
terminate your service at any time and
for any reason.
SHAREHOLDER RIGHTS You, or your estate or heirs, have no
rights as a shareholder of the Company
until a certificate for your Shares has
been issued. No adjustments are made
for dividends or other rights if the
applicable record date occurs before
your stock certificate is issued.
ADJUSTMENTS In the event of a subdivision, a
combination or consolidation of the
outstanding stock of the Company, a
recapitalization, a reclassification or
a similar occurrence, the Company shall
make appropriate adjustments in one or
both of (i) the number of Shares covered
by this option or (ii) the Exercise
Price. Your option shall be subject to
the terms of the agreement of merger,
liquidation or reorganization in the
event the Company is subject to such
corporate activity.
LEGENDS All certificates representing the Shares
issued upon exercise of this option
shall, where applicable, have endorsed
thereon the following legends:
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, ENCUMBERED OR IN ANY
MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A
WRITTEN AGREEMENT BETWEEN THE
COMPANY AND THE INITIAL HOLDER
HEREOF. SUCH AGREEMENT PROVIDES
FOR CERTAIN TRANSFER RESTRICTIONS,
INCLUDING RIGHTS OF FIRST REFUSAL
UPON AN ATTEMPTED TRANSFER OF THE
SECURITIES AND CERTAIN REPURCHASE
RIGHTS IN FAVOR OF THE COMPANY UPON
TERMINATION OF SERVICE WITH THE
COMPANY. THE SECRETARY OF THE
COMPANY WILL UPON WRITTEN REQUEST
FURNISH A COPY OF SUCH AGREEMENT TO
THE HOLDER HEREOF WITHOUT CHARGE."
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE, AND
MAY BE OFFERED AND
-6-
<PAGE>
SOLD ONLY IF REGISTERED AND
QUALIFIED PURSUANT TO THE RELEVANT
PROVISIONS OF FEDERAL AND STATE
SECURITIES LAWS OR IF THE COMPANY
IS PROVIDED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT
REGISTRATION AND QUALIFICATION
UNDER FEDERAL AND STATE SECURITIES
LAWS IS NOT REQUIRED."
APPLICABLE LAW This Agreement will be interpreted and
enforced under the laws of the State of
California.
ENTIRE AGREEMENT This Agreement constitutes the entire
understanding between you and the
Company regarding this option. Any
prior agreements, commitments or
negotiations concerning this option are
superseded.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE
TERMS AND CONDITIONS DESCRIBED ABOVE.
-7-
<PAGE>
NOTICE OF EXERCISE OF STOCK OPTION
Virtual Chips, Inc.
2107 N. First Street, #100
San Jose, CA 95131
Attn: Chief Financial Officer
Re: EXERCISE OF STOCK OPTION TO PURCHASE
SHARES OF COMPANY STOCK
Ladies and Gentlemen:
Pursuant to the Stock Option Agreement dated __________, 199__ (the "Stock
Option Agreement"), between Virtual Chips, Inc., a California corporation (the
"Company"), and the undersigned, I hereby elect to purchase _____________ shares
of the common stock of the Company (the "Shares"), at the price of $__________
per Share. My check in the amount of $______________ is enclosed. The Shares
are to be issued in _____ certificate(s) and registered in the name(s) of:
__________________________
__________________________
The undersigned understands there may be tax consequences as a result of
the purchase or disposition of the Shares. The undersigned represents that
he/she has received and reviewed the federal income information and consulted
with any tax consultants he/she deems advisable in connection with the purchase
or disposition of the Shares and the undersigned is not relying on the Company
for any tax advice.
The undersigned acknowledges that he/she has received, read and understood
the Stock Option Agreement and agrees to abide by and be bound by their terms
and conditions. The undersigned represents that the Shares are being acquired
solely for its own account and not as a nominee for any other party, or for
investment, and that the undersigned purchaser will not offer, sell or otherwise
dispose of any such Shares except under circumstances that will not result in a
violation of the Securities Act of 1933, as amended, or any state securities
laws.
Dated: _____________________
---------------------------------------
(Signature)
---------------------------------------
(Please Print Name)
Social Security No. ___________________
_______________________________________
_______________________________________
(Full Address)
<PAGE>
EXHIBIT 5.1
August 29, 1996
Phoenix Technologies Ltd.
2770 De La Cruz Boulevard
Santa Clara, California 95050
Ladies and Gentlemen:
I have been asked by you to examine the Registration Statement on Form S-8
(the "Registration Statement") to be filed by you with the Securities and
Exchange Commission on August 29, 1996 in connection with the registration under
the Securities Act of 1933, as amended, of 147,959 shares of your Common Stock,
par value $.001 per share (the "Stock"), that may be sold by you pursuant to
options granted by Virtual Chips, Inc. ("Virtual Chips") to its employees,
consultants, independent contractors and consultants pursuant to its 1994 Stock
Option Plan, as amended (the "Virtual Chips Plan"), or otherwise. Such options
were assumed by you pursuant to that certain Agreement and Plan of
Reorganization dated July 16, 1996 among you, Spud Acquisition Corporation, and
Virtual Chips.
As Vice President, General Counsel and Secretary of the Company, I have
examined the proceedings taken by Virtual Chips and by you in connection with
the granting and assumption of such options.
It is my opinion that the 147,959 shares of Stock that may be issued and
sold by you pursuant to the exercise of such options will, when issued and sold
in the manner referred to in the prospectus associated with the Registration
Statement and the Virtual Chips Plan and the related option agreements, be
legally issued, fully-paid and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to me, if any, in the
Registration Statement and any amendments thereto.
Very truly yours,
/s/Scott C. Neely
Scott C. Neely
Vice President, General Counsel and Secretary
SCN:me
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement on
Form S-8 of our reports dated October 27, 1995, on our audits of the
consolidated financial statements and financial statement schedule of
Phoenix Technologies Ltd. (Commission File No. 0-17111) as of September 30,
1995 and 1994, and for each of the three fiscal years in the period ended
September 30, 1995, which report is included in the Registrant's Annual
Report on Form 10-K for the year ended September 30, 1995.
/s/Coopers & Lybrand, L.L.P.
COOPERS & LYBRAND, L.L.P.
San Jose, California
August 28, 1996
