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Exhibit 10.5
MONOLITHIC SYSTEM TECHNOLOGY, INC.
2000 STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentives to Employees, Directors and
Consultants of the Company and its Subsidiaries, and to promote the success of
the Company's business. Options granted hereunder may be either Incentive Stock
Options or Nonstatutory Stock Options at the discretion of the Committee and
subject to the applicable provisions of Section 422 of the Code and the
regulations promulgated thereunder.
2. DEFINITIONS. As used herein, and in any Option granted hereunder,
the following definitions shall apply:
"BOARD" shall mean the Board of Directors of the Company.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COMMON STOCK" shall mean the Common Stock of the Company.
"COMMITTEE" shall mean the Committee appointed by the Board in
accordance with Section 4(a) of the Plan. If the Board does not appoint or
ceases to maintain a Committee, the term "COMMITTEE" shall refer to the Board.
"COMPANY" shall mean Monolithic System Technology, Inc.
"CONSULTANT" shall mean any independent contractor retained to
perform services for the Company.
"CONTINUOUS EMPLOYMENT" shall mean the absence of any
interruption or termination of service as an Employee, Director or Consultant by
the Company or any Subsidiary. Continuous Employment shall not be considered
interrupted during any period of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the
Company and any Parent, Subsidiary or successor of the Company. A leave of
absence approved by the Company shall include sick leave, military leave or any
other personal leave approved by an authorized representative of the Company.
For purposes of Incentive Stock Options, no such leave may exceed ninety (90)
days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract.
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"CORPORATE TRANSACTION" shall mean any of the following
stockholder-approved transactions to which the Company is a party:
(i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Company (including the capital stock
of the Company's subsidiary corporations) in connection with the complete
liquidation or dissolution of the Company; or
(iii) any reverse merger in which the Company is the
surviving entity but in which securities possessing fifty percent (50%) or more
of the total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger.
"COVERED EMPLOYEE" shall mean any individual whose
compensation is subject to the limitations on tax deductibility provided by
Section 162(m) of the Code and any Treasury Regulations promulgated thereunder
in effect at the close of the taxable year of the Company in which an Option has
been granted to such individual.
"DIRECTOR" shall mean a director of the Company.
"EFFECTIVE DATE" shall mean the date on which the Plan is
initially approved by the stockholders in accordance with Section 19 of the
Plan.
"EMPLOYEE" shall mean any person, including officers (whether
or not they are directors), employed by the Company or any Subsidiary.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"FAIR MARKET VALUE" shall mean (i) the closing price of a
Share on the national securities exchange on which the Shares are traded, or
(ii) if the Shares are not traded on a national securities exchange but are
quoted on a Market, the closing price on such Market, or (iii) if the Shares are
not traded on a national securities exchange or quoted on a Market, the fair
market value of a Share as determined by the Company's Board of Directors in
good faith, based upon such factors as they deem relevant. Notwithstanding the
preceding, for federal, state, and local income tax reporting purposes, fair
market value shall be determined by the Committee in accordance with uniform and
nondiscriminatory standards adopted by it from time to time. Such determination
shall be conclusive and binding on all persons.
"GRANT DATE" shall mean, with respect to an Option, the date
that the Option is granted by the Committee.
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"INCENTIVE STOCK OPTION" shall mean any option granted under
this Plan and any other option granted to an Employee in accordance with the
provisions of Section 422 of the Code and the Treasury Regulations promulgated
thereunder.
"MARKET" shall mean the NASDAQ SmallCap Market or a regional
stock exchange or an automated quotation system or over-the-counter market.
"NON-EMPLOYEE DIRECTOR" shall mean a director of the Company
who qualifies as a Non-Employee Director as such term is defined in Section
240.16b-3(b)(3) of the General Rules and Regulations promulgated under the
Exchange Act (the "GENERAL RULES AND REGULATIONS").
"NONSTATUTORY STOCK OPTION" shall mean an Option granted under
the Plan that is subject to the provisions of Section 1.83-7 of the Treasury
Regulations promulgated under Section 83 of the Code.
"OPTION" shall mean a stock option granted pursuant to the \
Plan.
"OPTION AGREEMENT" shall mean a written agreement between the
Company and the Optionee regarding the grant and exercise of Options to purchase
Shares and the terms and conditions thereof as determined by the Committee
pursuant to the Plan.
"OPTIONED SHARES" shall mean the shares of Common Stock
subject to an Option.
"OPTIONEE" shall mean an Employee, Non-Employee Director or
Consultant who receives an Option.
"OUTSIDE DIRECTOR" shall mean a director of the Company who
qualifies as an Outside Director as such term is used in Section 162(m) of the
Code and defined in any applicable Treasury Regulations promulgated thereunder.
"PARENT" shall mean a parent corporation of the Company,
whether now or hereafter existing, as defined by Section 424(e) of the Code.
"PLAN" shall mean this 2000 Stock Option Plan.
"REGISTRATION DATE" shall mean the effective date of the first
registration of any class of the Company's equity securities pursuant to Section
12 of the Exchange Act.
"SECTION 162(m) EFFECTIVE DATE" shall mean the first date as
of which the limitations on the tax deductibility of certain compensation
provided by Section 162(m) of the Code and any Treasury Regulations promulgated
thereunder are applicable to Options granted under the Plan.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SECTION 16 PERSON" shall mean a person who, with respect to
the Shares, is subject to Section 16 of the Exchange Act.
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"SHARE" shall mean a share of the Common Stock subject to an
Option, as adjusted in accordance with Section 12 of the Plan.
"SUBSIDIARY" shall mean a subsidiary corporation of the
Company, whether now or hereafter existing, as defined in Section 424(f) of the
Code.
"TERMINATION OF SERVICE" shall mean (a) in the case of an
Employee, a cessation of the employee-employer relationship between the Employee
and the Company or a Parent or Subsidiary for any reason, including, but not by
way of limitation, a termination by resignation, discharge, death, disability,
or the disaffiliation of a Parent or Subsidiary, but excluding any such
termination where there is a simultaneous reemployment by the Company or a
Parent or Subsidiary; (b) in the case of a Consultant, a cessation of the
service relationship between the Consultant and the Company or a Parent or
Subsidiary for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, disability, or the disaffiliation
of a Parent or Subsidiary, but excluding any such termination where there is a
simultaneous re-engagement of the Consultant by the Company or a Parent or
Subsidiary; and (c) in the case of a Director, a cessation of the Director's
service on the Board or on the board of directors of a Parent or Subsidiary for
any reason, including, but not by way of limitation, a termination by
resignation, removal, death, disability, expiration of the term of directorship,
or the disaffiliation of a Parent or Subsidiary, but excluding any such
termination where there is a simultaneous reemployment by the Company or a
Parent or Subsidiary.
"VESTING COMMENCEMENT DATE" shall mean, with respect to an
Option, the date, determined by the Board, on which the vesting of the Option
shall commence, which may be the Grant Date or a date prior to or after the
Grant Date.
3. SHARES SUBJECT TO THE PLAN. Subject to the provisions of Section 12
of the Plan, unless amended by the Board and the stockholders of the Company,
the maximum aggregate number of Shares which may be optioned and sold under the
Plan is Five Million (5,000,000) Shares, plus an annual increase to be added on
the first day of the Company's fiscal year beginning in 2001 equal to the lesser
of either (i) 500,000 Shares, or (ii) two percent of the outstanding shares of
the Company's common stock on such date. The Shares may be authorized but
unissued or reacquired shares of Common Stock. If an Option expires or becomes
unexercisable for any reason without having been exercised in full, or is
surrendered pursuant to an Option exchange program, or if any unissued Shares
are retained by the Company upon exercise of an Option in order to satisfy the
exercise price for such Option or any withholding taxes due with respect to such
Option, such unissued or retained Shares shall become available for other Option
grants under the Plan, unless the Plan shall have been terminated.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE. The Plan shall be administered by the Board.
The Board may appoint a Committee consisting of not less than two (2) members of
the Board to administer the Plan, subject to such terms and conditions as the
Board may prescribe. Once appointed, the Committee shall continue to serve until
otherwise directed by the Board. From time to time, the Board may increase the
size of the Committee and appoint additional members thereof, remove
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members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and, thereafter, directly administer the Plan. Members of the Board or
Committee who are either eligible for Options or have been granted Options may
vote on any matters affecting the administration of the Plan or the grant of
Options pursuant to the Plan, except that no such member shall act upon the
granting of an Option to themselves, but any such member may be counted in
determining the existence of a quorum at any meeting of the Board or the
Committee during which action is taken with respect to the granting of an Option
to themselves.
The Committee shall meet at such times and places and upon
such notice as the chairperson determines. A majority of the Committee shall
constitute a quorum. Any acts by the Committee may be taken at any meeting at
which a quorum is present and shall be by majority vote of those members
entitled to vote. Additionally, any acts reduced to writing or approved in
writing by all of the members of the Committee shall be valid acts of the
Committee.
(b) PROCEDURE AFTER REGISTRATION DATE. Notwithstanding
subsection (a) above, after the Registration Date, (i) the Plan shall be
administered by either the full Board or a Committee of two (2) or more
directors, each of whom is a Non-Employee Director; or (ii) all Options granted
to Optionees who are officers or directors for purposes of Section 16(a) of the
Exchange Act shall prohibit the sale of the underlying Optioned Shares within
six (6) months of the date of grant. After such date, the Board shall take all
action necessary to administer the Plan so that all transactions involving
Options and Shares issued pursuant to the Plan shall be exempt from Section
16(b) of the Exchange Act in accordance with the then effective provisions of
Section 240.16b-3 et. seq. of the General Rules and Regulations; provided that
any amendment to the Plan required for compliance with such provisions shall be
made consistent with the provisions of Section 14 of the Plan and the General
Rules and Regulations.
(c) PROCEDURE AFTER SECTION 162(m) EFFECTIVE DATE.
Notwithstanding subsections (a) and (b) above, after the Section 162(m)
Effective Date, the Plan and all Option grants shall be administered and
approved by a Committee comprised solely of two or more Outside Directors; or if
the Committee consists of members in addition to the Outside Directors, such
additional members must abstain from voting on or recuse themselves with respect
to all option grants and other compensation matters submitted to the Committee
with respect to any Covered Employee.
(d) POWERS OF THE COMMITTEE. Subject to the provisions of the
Plan, and except as otherwise provided by the Board, the Committee shall have
the authority: (i) to select the Employees, Directors and Consultants to whom
Options may be granted from time to time hereunder; (ii) to determine whether
and to what extent Options are granted hereunder; (iii) to determine, upon
review of relevant information, the Fair Market Value of the Common Stock; (iv)
to determine the exercise price of Options to be granted, the number of Shares
to be represented by each Option and the vesting schedule for such Option; (v)
to approve Option Agreements for use under the Plan, and to authorize the
execution and delivery of Option Agreements on behalf of the Company; (vi) to
interpret the Plan; (vii) to prescribe, amend, add and rescind rules and
regulations relating to the Plan; (viii) to determine the terms and provisions
of each Option granted under the Plan (which need not be identical) and, with
the consent of the holder thereof, to modify or amend
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any Option; (ix) to authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted by
the Committee; (x) to accelerate or (with the consent of the Optionee) defer an
exercise date of any Option, subject to the provisions of Section 9(a) of the
Plan; (xi) to determine whether Options granted under the Plan will be Incentive
Stock Options or Nonstatutory Stock Options; and (xii) to make all other
determinations deemed necessary or advisable for the administration of the Plan
and take such other action not inconsistent with the terms of the Plan as the
Committee deems appropriate.
(e) EFFECT OF COMMITTEE'S DECISION. All decisions,
determinations and interpretations of the Committee shall be final and binding
on all persons.
5. ELIGIBILITY.
(a) PERSONS ELIGIBLE FOR OPTIONS. Nonstatutory Stock Options
under the Plan may be granted to Employees, Directors or Consultants whom the
Committee, in its sole discretion, may designate from time to time. Incentive
Stock Options may be granted only to Employees. An Employee, Director or
Consultant who has been granted an Option, if he or she is otherwise eligible,
may be granted an additional Option or Options. Each Option shall be designated
in a written option agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designation, to the
extent that the aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by an Optionee during
any calendar year (under all stock option plans of the Company and its Parents
and Subsidiaries) exceeds $100,000, (determined as of the grant date) such
Options shall be treated as Nonstatutory Stock Options. As of the Section 162(m)
Effective Date, Options under the Plan shall be granted to Covered Employees
upon satisfaction of the conditions to such grants provided pursuant to Section
162(m) and any Treasury Regulations promulgated thereunder. In addition, after
the Section 162(m) Effective Date, the maximum number of Shares with respect to
which Options may be granted during any calendar year to any Employee shall not
exceed [1,000,000] Shares.
(b) NO RIGHT TO CONTINUING EMPLOYMENT, CONSULTING OR DIRECTOR
RELATIONSHIP. Neither the establishment nor the operation of the Plan shall
confer upon any Optionee or any other person any right with respect to
continuation of employment or other service with the Company or any Parent or
Subsidiary, nor shall the Plan interfere in any way with the right of the
Optionee or the right of the Company (or any Parent or Subsidiary) to terminate
such employment or service at any time.
6. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board and its approval by vote of the holders of
the outstanding shares of the Company entitled to vote on the adoption of the
Plan (in accordance with the provisions of Section 19 hereof). It shall continue
in effect for a term of ten (10) years unless sooner terminated under Section 14
of the Plan.
7. TERM OF OPTION. Unless the Committee determines otherwise, the term
of the Option shall be set forth in the Option Agreement. Notwithstanding this,
in no event shall any Option be exercisable after the expiration of ten (10)
years from the Grant Date thereof, and no Incentive Stock Option granted to any
Employee who, at the date such Option is granted, owns
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(within the meaning of Section 424(d) of the Code) more than ten percent (10%)
of the total combined voting power of all classes of the stock of the Company or
any Parent or Subsidiary shall be exercisable after the expiration of five (5)
years from the Grant Date.
8. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. Except as provided in subsections (b) and
(c) below, the exercise price for the Shares to be issued pursuant to any Option
shall be such price as is determined by the Committee, which shall in no event
be less than: (i) in the case of Incentive Stock Options, the Fair Market Value
of such Shares on the Grant Date; or (ii) in the case of Nonstatutory Stock
Options, 85% of such Fair Market Value.
(b) TEN PERCENT STOCKHOLDERS. No Incentive Stock Option shall
be granted to any Employee who, at the date such Option is granted, owns (within
the meaning of Section 424(d) of the Code) more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary, unless the exercise price for the Shares to be issued pursuant to
such Option is at least equal to 110% of the Fair Market Value of such Shares on
the Grant Date.
(c) SECTION 162(m) LIMITATIONS. After the Section 162(m)
Effective Date, the exercise price of any Option granted to a Covered Employee
shall be at least equal to the Fair Market Value of the Shares on the Grant
Date.
(d) CONSIDERATION. The consideration to be paid for the
Optioned Shares shall be payment in cash or by check, cashier's check, certified
check, or wire transfer, unless payment in some other manner, including by
promissory note, other shares of the Company's Common Stock or such other
consideration and method of payment for the issuance of Optioned Shares as may
be permitted under the California Corporations Code, is authorized by the
Committee at the time of the grant of the Option. Any cash or other property
received by the Company from the sale of Shares pursuant to the Plan shall
constitute part of the general assets of the Company.
(e) RELOAD OPTIONS. In the event the exercise price or tax
withholding of an Option is satisfied by the withholding by the Company or the
Optionee's employer of Shares otherwise deliverable to the Optionee, the
Committee may issue the Optionee an additional Option, with terms identical to
the Option Agreement under which the Option was exercised, but at an exercise
price as determined by the Committee in accordance with the Plan.
9. EXERCISE OF OPTION.
(a) VESTING PERIOD. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the
Committee and as shall be permissible under the terms of the Plan, which shall
be specified in the Option Agreement evidencing the Option. Unless the Committee
specifically determines otherwise at the time of the grant of the Option, each
Option shall vest and become exercisable, cumulatively, as to one-fourth of the
Optioned Shares at the first anniversary of the Vesting Commencement Date and as
to one thirty-sixty (1/36) of the remaining Optioned Shares at the end of each
of the following thirty-six (36) months until all of the
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Optioned Shares have vested, subject to the Optionee's Continuous Employment,
but in no event will the Option vest at a rate of less than 20% per year over
five (5) years from the date the Option is granted. An Option may not be
exercised for fractional shares or for less than 100 Shares.
(b) EXERCISE PROCEDURES. An Option shall be deemed to be
exercised when written notice of such exercise has been given to the Company in
accordance with the terms of the Option Agreement by the person entitled to
exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company. As soon as practicable
following the exercise of an Option in the manner set forth above, the Company
shall issue or cause its transfer agent to issue stock certificates representing
the Shares purchased. Until the issuance of such stock certificates (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Optioned
Shares notwithstanding the exercise of the Option. No adjustment will be made
for a dividend or other rights for which the record date is prior to the date of
the transfer by the Optionee of the consideration for the purchase of the
Shares, except as provided in Section 12 of the Plan.
(c) EXERCISE OF OPTION WITH STOCK. If an Optionee is permitted
to exercise an Option by delivering shares of the Company's Common Stock, the
Option Agreement covering such Option may include provisions authorizing the
Optionee to exercise the Option, in whole or in part, by (i) delivering whole
shares of the Company's Common Stock previously owned by such Optionee (whether
or not acquired through the prior exercise of a stock option) having a Fair
Market Value equal to the Option price; or (ii) directing the Company to
withhold from the Shares that would otherwise be issued upon exercise of the
Option that number of whole Shares having a Fair Market Value equal to the
Option price. Shares of the Company's Common Stock so delivered or withheld
shall be valued at their Fair Market Value at the close of the last business day
immediately preceding the date of exercise of the Option, as determined by the
Committee. Any balance of the Option price shall be paid in cash. Any Shares
delivered or withheld in accordance with this provision shall again become
available for purposes of the Plan and for Options subsequently granted
thereunder. After the Registration Date, any exercise of an Option under Section
9(c)(i) or 9(c)(ii) above by a Section 16 Person shall comply with the relevant
requirements of Section 240.16b-1 et. seq. of the General Rules and Regulations.
(d) TERMINATION OF STATUS AS EMPLOYEE, DIRECTOR OR
CONSULTANT. If an Optionee shall cease to be an Employee, Director or Consultant
for any reason other than permanent and total disability or death, he or she
may, but only within thirty (30) days (or such other period of time as is
determined by the Committee) after the date of Termination of Service, exercise
his or her Option to the extent that he or she was entitled to exercise it at
the date of Termination of Service, subject to the condition that no Option
shall be exercised after the expiration of the Option period.
(e) DISABILITY OF OPTIONEE. If an Optionee shall cease to be
an Employee, Director or Consultant due to disability, and such Optionee was in
Continuous Employment as an Employee, Director or Consultant from the Grant Date
until the date of Termination of Service, the Option may be exercised at any
time within six (6) months following the date of Termination of Service, but
only to the extent of the accrued right to exercise at the time of Termination
of Service, subject to the condition that no option shall be exercised after the
expiration of the Option period.
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(f) DEATH OF OPTIONEE. In the event of the death during the
Option period of an Optionee who is at the time of his or her death an Employee,
Non- Employee Director or Consultant and who was in Continuous Employment as
such from the Grant Date until the date of death, the Option may be exercised at
any time within six (6) months following the date of death by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest,
inheritance or otherwise as a result of the Optionee's death, but only to the
extent of the accrued right to exercise at the time of death, subject to the
condition that no option shall be exercised after the expiration of the Option
period.
(g) TAX WITHHOLDING. After the Registration Date, when an
Optionee is required to pay to the Company an amount with respect to tax
withholding obligations in connection with the exercise of an Option granted
under the Plan, the Optionee may elect prior to the date the amount of such
withholding tax is determined (the "TAX DATE") to make such payment, or such
increased payment as the Optionee elects to make by: (i) delivering cash; (ii)
delivering part or all of the payment in previously owned shares of Common Stock
(whether or not acquired through the prior exercise of an Option); and/or (iii)
irrevocably directing the Company to withhold from the Shares that would
otherwise be issued upon exercise of the Option that number of whole Shares
having a fair market value equal to the amount of tax required or elected to be
withheld (a "WITHHOLDING ELECTION"). If an Optionee's Tax Date is deferred
beyond the date of exercise and the Optionee makes a Withholding Election, the
Optionee will initially receive the full amount of Optioned Shares otherwise
issuable upon exercise of the Option, but will be unconditionally obligated to
surrender to the Company on the Tax Date the number of Shares necessary to
satisfy his or her minimum withholding requirements, or such higher payment as
he or she may have elected to make, with adjustments to be made in cash after
the Tax Date.
After the Registration Date, notwithstanding anything in the preceding
paragraph to the contrary, any withholding of Shares with respect to taxes
arising in connection with the exercise of an Option by any Section 16 Person
shall satisfy the conditions for exemption therefrom set forth in Section
240.16b-1 et. seq. of the General Rules and Regulations.
Any adverse consequences incurred by the Optionee with respect to the
use of shares of Common Stock to pay any part of the Option Price or of any tax
in connection with the exercise of an Option, including, without limitation, any
adverse tax consequences arising as a result of a disqualifying disposition
within the meaning of Section 422 of the Code, shall be the sole responsibility
of the Optionee.
10. TRANSFER OF OPTIONS. An Option may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee; provided that, upon approval by the
Committee, an Option Agreement with respect to a Nonstatutory Stock Option may
permit the Optionee to transfer vested options through a gift or domestic
relations order in settlement of marital property rights to any of the following
donees or transferees:
(i) any "family member," which includes any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law,
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father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law,
including adoptive relations, and any person sharing the employee's household
(other than a tenant or employee);
(ii) a trust in which "family members" have more than 50%
of the beneficial interest;
(iii) a foundation in which "family members" or the
employee control the management of assets; and
(iv) any other entity in which the "family members" (or
the employee) own more than 50% of the voting interests;
provided that (x) there may be no consideration for any such transfer, (y) the
Option Agreement pursuant to which such Options are granted, and any amendment
thereto, must be approved by the Committee, and must expressly provide for
transferability in a manner consistent with this Section 10, and (z) subsequent
transfers of transferred Options shall be prohibited except those in accordance
with this Section 10. Following transfer, any such Options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that the term Optionee shall be deemed to refer to the
Transferee. The events of termination of service of Section 9 hereof or in the
Option Agreement shall continue to be applied with respect to the original
Optionee, following which the Options shall be exercisable by the transferee
only to the extent, and for the periods specified in the Option Agreement or
Section 9, as applicable.
11. AUTOMATIC OPTION GRANTS.
The provisions set forth in this Section 11 shall not be
amended more than once every six months other than to comport with changes in
the Code, the Employee Retirement Income Security Act of 1974, as amended, or
the rules promulgated thereunder. All grants of Options to Outside Directors
under this Plan shall be automatic and nondiscretionary and shall be made
strictly in accordance with the following provisions:
(a) No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the number of Shares
to be covered by Options granted to Outside Directors.
(b) Each Outside Director shall be automatically granted an
option (an "AUTOMATIC DIRECTOR OPTION") to purchase 10,000 Shares at the first
meeting of the Board following the Annual Meeting of Stockholders in each year,
commencing with the 2001 Annual Meeting of Stockholders, provided that he or she
is then an Outside Director and if, as of such date, he or she shall have served
on the Board for at least the preceding six (6) months.
(c) The terms of an Automatic Director Option granted
hereunder shall be as follows:
(i) the term of the Automatic Director Option shall
be ten (10) years.
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(ii) the exercise price per Share shall be one
hundred percent (100%) of the Fair Market Value per Share on the date of grant
of the Automatic Director Option. In the event that the date of grant of the
Automatic Director Option is not a trading day, the exercise price per Share
shall be one hundred percent (100%) of the Fair Market Value on the next trading
day immediately following the date of grant of the Automatic Director Option.
(iii) subject to Section 10 hereof, the Automatic
Director Option shall become exercisable as to 1/12th of the Shares subject to
the Automatic Director Option on each monthly anniversary of its date of grant,
provided that the Optionee continues to serve as a Director on such dates.
(iv) except as the terms of this Section 11 otherwise
provide, the terms and conditions of this Plan shall apply to Automatic Director
Options.
(d) In the event that any Automatic Director Option granted
under the Plan would cause the number of Shares subject to outstanding Options
plus the number of Shares previously purchased under Options to exceed the total
number of authorized Shares then available under the Plan, then the remaining
Shares available for Option grant shall be granted under Options to the Outside
Directors on a pro rata basis. No further grants shall be made until such time,
if any, as additional Shares become available for grant under the Plan through
action of the Board or the stockholders to increase the number of Shares which
may be issued under the Plan or through cancellation or expiration of Options
previously granted hereunder.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) RECAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of Optioned Shares covered by each
outstanding Option, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan, and the per share exercise price of each
such Option, shall be proportionately adjusted for any increase or decrease in
the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, combination, reclassification, the payment of a stock
dividend on the Common Stock or any other increase or decrease in the number of
such shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been effected without receipt of
consideration. Such adjustment shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Option.
(b) CORPORATE TRANSACTION. In the event of a proposed
Corporate Transaction, the Committee shall notify the Optionee at least ten (10)
calendar days prior to such proposed Corporate Transaction. Except as provided
otherwise in individual Option Agreements, to the extent it has not been
previously exercised, the Option will terminate immediately prior to the
consummation of such proposed Corporate Transaction, unless the Option is
assumed or an equivalent Option is substituted by the successor corporation or a
parent or subsidiary of such
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successor corporation. For the purposes of this subsection, the Option shall be
considered assumed if, following the Corporate Transaction, the Option confers
the right to purchase, for each Share subject to the Option immediately prior to
the Corporate Transaction, the consideration (whether stock, cash, or other
securities or property) received in the Corporate Transaction by holders of
Common Stock for each Share subject to the Option held on the effective date of
the Corporate Transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the Corporate Transaction was not solely common stock of the successor
corporation or its parent or subsidiary, the Committee may, with the consent of
the successor corporation, provide for the consideration to be received upon the
exercise of the Option for each Share subject to the Option to be solely common
stock of the successor corporation or its parent or subsidiary equal in fair
market value to the per share consideration received by holders of Common Stock
in the Corporate Transaction.
13. TIME OF GRANTING OPTIONS. Unless otherwise specified by the
Committee, the date of grant of an Option under the Plan shall be the Grant
Date. Notice of the determination shall be given to each Optionee to whom an
Option is so granted within a reasonable time after the date of such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN. The Board may amend or
terminate the Plan from time to time in such respects as the Board may deem
advisable; provided, however, that any such amendment (a) shall comply with all
applicable laws and stock exchange listing requirements, and (b) with respect to
an increase in the number of Shares which may be optioned and sold under the
Plan, shall be subject to any approval by stockholders of the Company required
under the Code and applicable stock exchange listing requirements. Any such
amendment or termination of the Plan shall not affect Options already granted,
and such Options shall remain in full force and effect as if the Plan had not
been amended or terminated.
15. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an Option granted under the Plan unless the exercise of such Option
and the issuance and delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act, the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange or Market upon which the Shares may then be
listed, and shall be further subject to the approval of counsel for the Company
with respect to such compliance. As a condition to the exercise of an Option,
the Company may require the person exercising such Option to represent and
warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned relevant provisions of law.
16. RESERVATION OF SHARES. During the term of this Plan, the Company
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of
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the nonissuance or sale of such Shares as to which such requisite authority
shall not have been obtained.
17. INFORMATION TO OPTIONEE. During the term of any Option granted
under the Plan, the Company shall provide or otherwise make available to each
Optionee a copy of its annual financial statement and any other financial
information provided to its stockholders in accordance with the provisions of
the Company's Bylaws and applicable law.
18. OPTION AGREEMENT. Options granted under the Plan shall be evidenced
by Option Agreements.
19. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after the Plan
is adopted by the Board. Except as provided otherwise in Section 3, any
amendments to the Plan requiring stockholder approval must be approved by the
affirmative vote of the holders of a majority of the outstanding shares of
voting stock present or represented and entitled to vote at a duly held meeting
at which a quorum is present, or by the written consent of the stockholders in
the manner provided by California law.
* * *
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MONOLITHIC SYSTEM TECHNOLOGY, INC.
2000 STOCK OPTION PLAN
FORM OF
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the 2000 Stock
Option Plan (the "Plan") shall have the same defined meanings in this Stock
Option Agreement.
I. AGREEMENT
1. GRANT OF OPTION. Monolithic Systems Technology, Inc., a California
corporation (the "Company"), hereby grants to the Optionee (the "Optionee")
named in the attached Notice of Stock Option Grant (the "Notice of Grant") an
option (the "Option") to purchase the total number of shares of Common Stock
(the "Shares") set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the "Exercise Price") subject to the terms,
definitions and provisions of the Plan, which is incorporated herein by
reference.
If designated in the Notice of Grant as an Incentive Stock
Option ("ISO"), this Option is intended to qualify as an ISO as defined in
Section 422 of the Code. However, if this Option is intended to be an ISO, to
the extent that the aggregate Fair Market value of the Shares with respect to
which Incentive Stock Options are exercisable for the first time by the Optionee
during any calendar year (under all plans of the Company) exceeds $100,000, such
Options shall be treated as a Nonstatutory Stock Option ("NSO").
2. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the provisions of Section 8 of the Plan as follows:
(i) RIGHT TO EXERCISE.
(a) Subject to subsections 2(i)(b) through 2(i)(e)
below, this Option shall be exercisable cumulatively according to the vesting
schedule set out in the Notice of Grant. [Alternatively, at the election of the
Optionee, this option may be exercised in whole or in part at any time as to
Shares which have not yet vested.] For purposes of this Stock Option Agreement,
Options shall vest based on continued employment of the Optionee with the
Company. [Vested Shares shall not be subject to the Company's repurchase right
(as set forth in the Restricted Stock Purchase Agreement, attached hereto as
EXHIBIT C-1).]
(b) [As a condition to exercising this Option for
unvested Shares, the Optionee shall execute the Restricted Stock Purchase
Agreement.]
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(c) This Option may not be exercised for a fraction
of a Share.
(d) In the event of the Optionee's death, disability
or other termination of the employment or consulting relationship, the
exercisability of the Option is governed by Sections 6, 7 and 8 below, subject
to the limitation contained in subsection 2(i)(e).
(e) In no event may this Option be exercised after
the date of expiration of the term of this Option as set forth in the Notice of
Grant.
(ii) METHOD OF EXERCISE. This Option shall be exercisable by
written notice (in the form attached as EXHIBIT A) which shall state the
election to exercise the Option and the number of Shares in respect of which the
Option is being exercised pursuant to the provisions of the Plan. Such written
notice shall be signed by the Optionee and, [together with an executed copy of
the Restricted Stock Purchase Agreement, if applicable,] shall be delivered in
person or by certified mail to the Secretary of the Company. The written notice
[and Restricted Stock Purchase Agreement] shall be accompanied by payment of the
Exercise Price. This Option shall be deemed to be exercised upon receipt by the
Company of such written notice and Restricted Stock Purchase Agreement
accompanied by the Exercise Price.
No Shares shall be issued pursuant to the exercise of an
Option unless such issuance and such exercise shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Shares may then be listed. Assuming such compliance, for income tax purposes the
Shares shall be considered transferred to the Optionee on the date on which the
Option is exercised with respect to such Shares.
3. THE OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised, the
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as EXHIBIT B.
4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
(i) cash;
(ii) check; or
(iii) to the extent permitted by the Administrator, delivery
of a properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the Exercise Price.
The Optionee may elect to pay the exercise price by
authorizing a third party to sell shares subject to this Option and remit to the
Company a sufficient portion of the sale proceeds to pay the entire exercise
price and any tax withholding resulting from such exercise.
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5. RESTRICTIONS ON EXERCISE. This Option may not be exercised until
such time as the Plan has been approved by the stockholders of the Company, or
if the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation. As a condition to the
exercise of this Option, the Company may require the Optionee to make any
representation and warranty to the Company as may be required by any applicable
law or regulation.
6. TERMINATION OF RELATIONSHIP. In the event an Optionee's Continuous
Status as an Employee or Consultant terminates, the Optionee may, to the extent
the Option was vested at the date of such termination (the "Termination Date"),
exercise the Option during the Termination Period set out in the Notice of
Grant. To the extent that the Optionee was not vested in the Option at the date
of such termination, or if the Optionee does not exercise the Option within the
time specified herein, the Option shall terminate.
7. DISABILITY OF THE OPTIONEE. Notwithstanding the provisions of
Section 5 above, in the event of termination of an Optionee's consulting
relationship or Continuous Status as an Employee as a result of his or her
disability, the Optionee may, but only within twelve (12) months from the date
of such termination (and in no event later than the expiration date of the term
of such Option as set forth in the Stock Option Agreement), exercise the Option
to the extent the Option was vested at the date of such termination; provided,
however, that if such disability is not a "disability" as such term is defined
in Section 22(e)(3) of the Code, in the case of an ISO, such ISO shall cease to
be treated as an ISO and shall be treated for tax purposes as an NSO on the
ninety-first (91st) day following such termination. To the extent that the
Optionee is not vested in the Option at the date of termination, or if the
Optionee does not exercise such Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
8. DEATH OF THE OPTIONEE. In the event of the termination of the
Optionee's Continuous Status as an Employee or Consultant as a result of the
death of the Optionee, the Option may be exercised at any time within six (6)
months following the date of death (but in no event later than the date of
expiration of the term of this Option as set forth in Section 9 below) by the
Optionee's estate or by a person who acquires the right to exercise the Option
by bequest or inheritance, but only to the extent the Option was vested at the
date of death. To the extent that the Optionee is not vested in the Option at
the date of death, or if the Option is not exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
9. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.
10. TERM OF OPTION. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the
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terms of this Option. The limitations set out in Section 7 of the Plan regarding
Options designated as ISOs and Options granted to more than ten percent (10%)
stockholders shall apply to this Option.
11. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
of this Option of some of the federal and state tax consequences of exercise of
this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
(i) EXERCISE OF ISO. If this Option qualifies as an ISO, there
will be no regular federal income tax liability or state income tax liability
upon the exercise of the Option, although the excess, if any, of the Fair Market
Value of the Shares on the date of exercise over the Exercise Price will be
treated as an adjustment to the alternative minimum tax for federal tax purposes
and may subject the Optionee to the alternative minimum tax in the year of
exercise.
(ii) EXERCISE OF ISO FOLLOWING DISABILITY. If the Optionee's
Continuous Status as an Employee or Consultant terminates as a result of
disability that is not total and permanent disability as defined in Section
22(e)(3) of the Code, to the extent permitted on the date of termination, the
Optionee must exercise an ISO within three months of such termination for the
Option to be qualified as an ISO.
(iii) EXERCISE OF NSO. There may be a regular federal income
tax liability and state income tax liability upon the exercise of an NSO. The
Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If the Optionee
is an Employee, the Company will be required to withhold from the Optionee's
compensation or collect from the Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the
time of exercise. If the Optionee is subject to Section 16 of the Securities Act
of 1934, as amended, the date of income recognition may be deferred for up to
six months.
(iv) DISPOSITION OF SHARES. In the case of an NSO, if Shares
are held for more than one year, any gain realized on disposition of the Shares
will be treated as long-term capital gain for federal and state income tax
purposes. In the case of an ISO, if Shares transferred pursuant to the Option
are held for more than one year after exercise and are disposed of not earlier
than two years after the Date of Grant, any gain realized on disposition of the
Shares will also be treated as long-term capital gain for federal and state
income tax purposes. If Shares purchased under an ISO are disposed of within
one-year after date of exercise or within two years after the Date of Grant, any
gain realized on such disposition will be treated as compensation income
(taxable at ordinary income rates) to the extent of the difference between the
Exercise Price and the lesser of (1) the Fair Market Value of the Shares on the
date of exercise, or (2) the sale price of the Shares.
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(v) NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the
Option granted to the Optionee herein is an ISO, and if the Optionee sells or
otherwise disposes of any of the Shares acquired pursuant to the ISO on or
before the later of (1) the date two years after the Date of Grant, or (2) the
date one year after the date of exercise, the Optionee shall immediately notify
the Company in writing of such disposition. The Optionee agrees that the
Optionee may be subject to income tax withholding by the Company on the
compensation income recognized by the Optionee.
[(vi) SECTION 83(b) ELECTION FOR UNVESTED SHARES PURCHASED
PURSUANT TO NONQUALIFIED STOCK OPTIONS. With respect to the exercise of a
nonqualified stock option for unvested Shares, an election may be filed by the
Optionee with the Internal Revenue Service and, if necessary, the proper state
taxing authorities, WITHIN 30 DAYS of the purchase of the Shares, electing
pursuant to Section 83(b) of the Code (and similar state tax provisions if
applicable) to be taxed currently on any difference between the purchase price
of the Shares and their Fair Market Value on the date of purchase. This will
result in a recognition of taxable income to the Optionee on the date of
exercise, measured by the excess, if any, of the fair market value of the
Shares, at the time the Option is exercised over the purchase price for the
Shares. Absent such an election, taxable income will be measured and recognized
by the Optionee at the time or times on which the Company's Repurchase Option
lapses. The Optionee is strongly encouraged to seek the advice of his or her own
tax consultants in connection with the purchase of the Shares and the
advisability of filing of the Election under Section 83(b) and similar tax
provisions. A form of Election under Section 83(b) is attached hereto as EXHIBIT
C-4 for reference.
(vii) SECTION 83(b) ELECTION FOR UNVESTED SHARES PURCHASED
PURSUANT TO INCENTIVE STOCK OPTIONS. With respect to the exercise of an
incentive stock option for unvested Shares, an election may be filed by the
Optionee with the Internal Revenue Service and, if necessary, the proper state
taxing authorities, WITHIN 30 DAYS of the purchase of the Shares, electing
pursuant to Section 83(b) of the Code (and similar state tax provisions if
applicable) to be taxed currently on any difference between the purchase price
of the Shares and their Fair Market Value on the date of purchase for
alternative minimum tax purposes. This will result in a recognition of income to
the Optionee on the date of exercise, for alternative minimum tax purposes,
measured by the excess, if any, of the fair market value of the Shares, at the
time the option is exercised, over the purchase price for the Shares. Absent
such an election, alternative minimum taxable income will be measured and
recognized by the Optionee at the time or times on which the Company's
Repurchase Option lapses. The Optionee is strongly encouraged to seek the advice
of his or her tax consultants in connection with the purchase of the Shares and
the advisability of filing of the Election under Section 83(b) and similar tax
provisions. A form of Election under Section 83(b) for alternative minimum tax
purposes is attached hereto as EXHIBIT C-5 for reference.
THE OPTIONEE ACKNOWLEDGES THAT IT IS THE OPTIONEE'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF
THE OPTIONEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON
THE OPTIONEE'S BEHALF.]
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MONOLITHIC SYSTEM TECHNOLOGY, INC.
By:
--------------------------------
Name:
------------------------------
Its:
-------------------------------
THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR
EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). THE OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S
2000 STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER
UPON THE OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR
CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE
OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE THE OPTIONEE'S EMPLOYMENT
OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.
The Optionee acknowledges receipt of a copy of the Plan and represents
that he or she is familiar with the terms and provisions thereof, and hereby
accepts this Option Agreement subject to all of the terms and provisions
thereof. The Optionee has reviewed the Plan and this Option Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option Agreement and fully understands all provisions of the
Option Agreement. The Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Committee upon any questions
arising under the Plan or this Option Agreement. The Optionee further agrees to
notify the Company upon any change in the residence address indicated below.
Dated:
--------------------------
Signed:
-------------------------
Residence Address:
---------------------------------
---------------------------------
---------------------------------
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EXHIBIT A
2000 STOCK OPTION PLAN
EXERCISE NOTICE
Monolithic System Technology, Inc.
1020 Stewart Drive
Sunnyvale, California 94086
1. EXERCISE OF OPTION. Effective as of today, ___________, 20__, the
undersigned (the "Optionee") hereby elects to exercise the Optionee's option to
purchase _________ shares of the Common Stock (the "Shares") of Monolithic
System Technology, Inc. (the "Company") under and pursuant to the Monolithic
System Technology, Inc. 2000 Stock Option Plan (the "Plan") and the Stock Option
Agreement dated _________, 20__ (the "Option Agreement").
2. REPRESENTATIONS OF THE OPTIONEE. The Optionee acknowledges that the
Optionee has received, read and understood the Plan and the Option Agreement and
agrees to abide by and be bound by their terms and conditions.
3. RIGHTS AS STOCKHOLDER. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the stock certificate is issued, except as provided in Section 11 of
the Plan.
The Optionee shall enjoy rights as a stockholder until such
time as the Optionee disposes of the Shares or the Company and/or its
assignee(s) exercises the Right of First Refusal, as defined below. Upon such
exercise, the Optionee shall have no further rights as a holder of the Shares so
purchased except the right to receive payment for the Shares so purchased in
accordance with the provisions of this Agreement, and the Optionee shall
forthwith cause the certificate(s) evidencing the Shares so purchased to be
surrendered to the Company for transfer or cancellation.
4. COMPANY'S RIGHT OF FIRST REFUSAL. Before any Shares held by the
Optionee or any permitted transferee (either being sometimes referred to herein
as the "Holder") may be sold or otherwise transferred (including transfer by
gift or operation of law), the Company or its assignee(s) shall have a right of
first refusal to purchase the Shares on the terms and conditions set forth in
this Section (the "Right of First Refusal").
(a) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares
shall deliver to the Company a written notice (the "Notice") stating: (i) the
Holder's bona fide intention to sell or otherwise transfer such Shares; (ii) the
name of each proposed purchaser or other transferee (the "Proposed Transferee");
(iii) the number of Shares to be transferred to each Proposed
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Transferee; and (iv) the bona fide cash price or other consideration for which
the Holder proposes to transfer the Shares (the "Offered Price"), and offering
the Shares at the Offered Price to the Company and its assignee(s).
(b) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.
(c) PURCHASE PRICE. The purchase price ("Purchase Price") for
the Shares purchased by the Company or its assignee(s) under this Section shall
be the Offered Price. If the Offered Price includes consideration other than
cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
(d) PAYMENT. Payment of the Purchase Price shall be made, at
the option of the Company or its assignee(s), in cash (by check or wire
transfer), by cancellation of all or a portion of any outstanding indebtedness
of the Holder to the Company (or, in the case of repurchase by an assignee, to
the assignee), or by any combination thereof within 30 days after receipt of the
Notice or in the manner and at the times set forth in the Notice.
(e) HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed
in the Notice to be transferred to a given Proposed Transferee are not purchased
by the Company and/or its assignee(s) as provided in this Section, then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 120 days after the date of the Notice and
provided further that any such sale or other transfer is effected in accordance
with any applicable securities laws and the Proposed Transferee agrees in
writing that the provisions of this Section shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described in the
Notice are not transferred to the Proposed Transferee within such period, a new
Notice shall be given to the Company, and the Company and/or its assignees shall
again be offered the Right of First Refusal before any Shares held by the Holder
may be sold or otherwise transferred.
(f) EXCEPTION FOR CERTAIN FAMILY TRANSFER. Anything to the
contrary contained in this Section notwithstanding, the transfer of any or all
of the Shares during the Optionee's lifetime or on the Optionee's death by will
or intestacy to the Optionee's immediate family or a trust for the benefit of
the Optionee's immediate family shall be exempt from the provisions of this
Section. "Immediate Family" as used herein shall mean spouse, lineal descendant
or antecedent, father, mother, brother or sister. In such case, the transferee
or other recipient shall receive and hold the Shares so transferred subject to
the provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section.
(g) TERMINATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal shall terminate as to any Shares 90 days after the first sale of Common
Stock of the Company to the general public
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pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
5. MARKET STAND-OFF AGREEMENT. The Optionee hereby agrees that if so
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any securities of the Company under the
Securities Act, the Optionee shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period following the
effective date of a registration statement of the Company filed under the
Securities Act; [provided, however, that such restriction shall only apply to
the first registration statement of the Company to become effective under the
Securities Act which include securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act.] The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such 180-day period.
6. TAX CONSULTATION. The Optionee understands that the Optionee may
suffer adverse tax consequences as a result of the Optionee's purchase or
disposition of the Shares. The Optionee represents that the Optionee has
consulted with any tax consultants the Optionee deems advisable in connection
with the purchase or disposition of the Shares and that the Optionee is not
relying on the Company for any tax advice.
7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
(a) LEGENDS. The Optionee understands and agrees that the
Company may cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing ownership of
the Shares, together with any other legends that may be required by state or
federal securities laws:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL
OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN
THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND
RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE
SHARES.
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The Optionee understands that transfer of the Shares may be
restricted by Section 260.141.11 of the Rules of the California Corporations
Commissioner.
(b) STOP-TRANSFER NOTICES. The Optionee agrees that, in order
to ensure compliance with the restrictions referred to herein, the Company may
issue appropriate "stop transfer" instructions to its transfer agent, if any,
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.
(c) REFUSAL TO TRANSFER. The Company shall not be required (i)
to transfer on its books any Shares that have been sold or otherwise transferred
in violation of any of the provisions of this Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.
8. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon the Optionee and his or her heirs, executors, administrators, successors
and assigns.
9. INTERPRETATION. Any dispute regarding the interpretation of this
Agreement shall be submitted by the Optionee or by the Company forthwith to the
Company's Board of Directors or the committee thereof that administers the Plan,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Board or committee shall be final and binding on the
Company and on the Optionee.
10. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by
and construed in accordance with the laws of the State of California, excluding
that body of law pertaining to conflicts of law. Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.
11. NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.
12. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
13. DELIVERY OF PAYMENT. The Optionee herewith delivers to the Company
the full Exercise Price for the Shares.
14. ENTIRE AGREEMENT. The Plan and Notice of Grant/Option Agreement are
incorporated herein by reference. This Agreement, the Plan, the Option
Agreement, the Restricted Stock Purchase
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Agreement, and the Investment Representation Statement constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and the Optionee with respect to the subject
matter hereof.
Submitted by: Accepted by:
OPTIONEE: MONOLITHIC SYSTEM TECHNOLOGY, INC.
------------------------------------- -------------------------------------
(Print Name) By:
------------------------------------- -------------------------------------
(Signature) Title:
Address:
-------
-------------------------------------
-------------------------------------
5
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EXHIBIT B
INVESTMENT REPRESENTATION STATEMENT
OPTIONEE :
COMPANY : MONOLITHIC SYSTEM TECHNOLOGY, INC.
SECURITY : COMMON STOCK
AMOUNT :
DATE :
In connection with the purchase of the above-listed Securities, the undersigned
the Optionee represents to the Company the following:
(a) The Optionee is aware of the Company's business affairs
and financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Securities. The Optionee is acquiring these Securities for investment for the
Optionee's own account only and not with a view to, or for resale in connection
with, any "distribution" thereof within the meaning of the Securities Act of
1933, as amended (the "Securities Act").
(b) The Optionee acknowledges and understands that the
Securities constitute "restricted securities" under the Securities Act and have
not been registered under the Securities Act in reliance upon a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of the Optionee's investment intent as expressed herein. In this
connection, the Optionee understands that, in the view of the Securities and
Exchange Commission, the statutory basis for such exemption may be unavailable
if the Optionee's representation was predicated solely upon a present intention
to hold these Securities for the minimum capital gains period specified under
tax statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. The Optionee further understands that the Securities must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. The Optionee
further acknowledges and understands that the Company is under no obligation to
register the Securities. The Optionee understands that the certificate
evidencing the Securities will be imprinted with a legend which prohibits the
transfer of the Securities unless they are registered or such registration is
not required, a legend prohibiting their transfer without the consent of the
Commissioner of Corporations of the State of California and any other legend
required under applicable state securities laws.
(c) The Optionee is familiar with the provisions of Rule 701
and Rule 144, each promulgated under the Securities Act, which, in substance,
permit limited public resale of "restricted
1
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securities" acquired, directly or indirectly from the issuer thereof, in a
non-public offering subject to the satisfaction of certain conditions. Rule 701
provides that, if the issuer qualifies under Rule 701 at the time of the grant
of the Option to the Optionee, the exercise will be exempt from registration
under the Securities Act. In the event the Company becomes subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, ninety (90) days thereafter (or such longer period as any market stand-off
agreement may require) the Securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including: (1) the resale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker (as said
term is defined under the Securities Exchange Act of 1934); and, in the case of
an affiliate, (2) the availability of certain public information about the
Company, (3) the amount of Securities being sold during any three month period
not exceeding the limitations specified in Rule 144(e), and (4) the timely
filing of a Form 144, if applicable.
In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires the
resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.
(d) The Optionee further understands that in the event all of
the applicable requirements of Rule 701 or 144 are not satisfied, registration
under the Securities Act, compliance with Regulation A, or some other
registration exemption will be required; and that, notwithstanding the fact that
Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange
Commission has expressed its opinion that persons proposing to sell private
placement securities other than in a registered offering and otherwise than
pursuant to Rules 144 or 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk. The Optionee understands that no
assurances can be given that any such other registration exemption will be
available in such event.
(e) The Optionee understands that the certificate evidencing
the Securities will be imprinted with a legend which prohibits the transfer of
the Securities without the consent of the Commissioner of Corporations of
California.
Print Name of The Optionee:
Signature of The Optionee
2
<PAGE>
EXHIBIT C-1
2000 STOCK OPTION PLAN
FORM OF RESTRICTED
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made between ____________________________________
(the "Purchaser") and Monolithic System Technology, Inc., a California
corporation (the "Company"), as of __________________, 20__.
RECITALS
Pursuant to the exercise of the stock option granted to the Purchaser
under the Company's 2000 Stock Option Plan and pursuant to the Stock Option
Agreement (the "Option Agreement") dated ___________, 20___ by and between the
Company and the Purchaser with respect to such grant, which Option Agreement is
hereby incorporated by reference, the Purchaser has elected to purchase
_________ shares of the Company's Common Stock of which ________ shares are not,
as of the date hereof, vested under the vesting schedule set forth in the Notice
of Option Grant attached to the Option Agreement, shares of the Company's Common
Stock that are not vested under said vesting schedule as of the date of
determination are referred to in this Agreement as "Unvested Shares." The
Unvested Shares and the shares subject to the Option Agreement that have become
vested are sometimes collectively referred to herein as the "Shares."
As required by the Option Agreement, as a condition to the Purchaser's
election to exercise the option, the Purchaser must execute and deliver this
Restricted Stock Purchase Agreement, which sets forth the rights and obligations
of the parties with respect to Shares acquired upon exercise of the Option.
2. REPURCHASE OPTION.
(a) If the Purchaser's employment or consulting relationship
with the Company is terminated for any reason, including without limitation, for
cause or on the death or disability of the Purchaser (a "Termination"), the
Company shall have the right and option to purchase from the Purchaser, or the
Purchaser's personal representative, as the case may be, all or any part of the
Purchaser's Unvested Shares as of the date of such termination at the price paid
by the Purchaser for such Unvested Shares (the "Repurchase Option").
(b) Upon the occurrence of a Termination, the Company may
exercise its Repurchase Option by delivering personally or by registered mail,
to the Purchaser (or his transferee or legal representative, as the case may
be), within ninety (90) days of the Termination, a notice in writing indicating
the Company's intention to exercise the Repurchase Option and setting forth a
date for closing not later than thirty (30) days from the mailing of such
notice. The closing shall take place at
1
<PAGE>
the Company's office. At the closing, the holder of the certificates for the
Unvested Shares being transferred shall deliver the stock certificate or
certificates evidencing the Unvested Shares, and the Company shall deliver the
purchase price therefor.
(c) If the Company does not elect to exercise the Repurchase
Option conferred above by giving the requisite notice within ninety (90) days
following the termination, the Repurchase Option shall terminate.
3. TRANSFERABILITY OF THE SHARES; ESCROW.
(a) The Purchaser hereby authorizes and directs the secretary
of the Company, or such other person designated by the Company, to transfer the
Unvested Shares from the Purchaser to the Company.
(b) To insure the availability for delivery of the Purchaser's
Unvested Shares upon repurchase by the Company pursuant to the Repurchase Option
under Section 1, the Purchaser hereby appoints the secretary, or any other
person designated by the Company as escrow agent (either party, the "Escrow
Agent"), as its attorney-in-fact to sell, assign and transfer unto the Company
such Unvested Shares, if any, repurchased by the Company pursuant to the
Repurchase Option. The Purchaser shall, upon execution of this Agreement,
deliver and deposit with the Escrow Agent the share certificates representing
the Unvested Shares, together with the stock assignment duly endorsed in blank,
attached hereto as EXHIBIT C-2. The Unvested Shares and stock assignment shall
be held by the Escrow Agent in escrow, pursuant to the Joint Escrow Instructions
of the Company and the Purchaser attached as EXHIBIT C-3 hereto, until the
Company exercises its purchase right as provided in Section 1, until such
Unvested Shares are vested, or until such time as this Agreement no longer is in
effect. Upon the vesting of all of the Unvested Shares, the Escrow Agent shall
promptly deliver to the Purchaser the certificate or certificates representing
such Shares in the Escrow Agent's possession belonging to the Purchaser, and the
Escrow Agent shall be discharged of all further obligations hereunder; provided,
however, that the Escrow Agent shall nevertheless retain such certificate or
certificates as Escrow Agent if so required pursuant to other restrictions
imposed pursuant to this Agreement.
(c) Neither the Company nor the Escrow Agent shall be liable
for any act it may do or omit to do with respect to holding the Shares in escrow
and while acting in good faith and in the exercise of its judgment.
(d) Transfer or sale of the Shares is subject to restrictions
on transfer imposed by any applicable state and federal securities laws. Any
transferee shall hold such Shares subject to all the provisions hereof and the
Exercise Notice executed by the Purchaser with respect to any Unvested Shares
and shall acknowledge the same by signing a copy of this Agreement.
3. MARKET STAND-OFF AGREEMENT. The Purchaser hereby agrees that, if so
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any securities of the Company under the
Securities Act, the Purchaser shall not sell or
2
<PAGE>
otherwise transfer any Shares or other securities of the Company during the
180-day period following the effective date of a registration statement of the
Company filed under the Securities Act; [provided, however, that such
restriction shall only apply to the first registration statement of the Company
to become effective under the Securities Act which include securities to be sold
on behalf of the Company to the public in an underwritten public offering under
the Securities Act.] The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such 180-day period.
4. OWNERSHIP, VOTING RIGHTS, DUTIES. This Agreement shall not affect in
any way the ownership, voting rights or other rights or duties of the Purchaser,
except as specifically provided herein.
5. LEGENDS. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legends (in addition to any
legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR SUCH OFFER, SALE OR TRANSFER, PLEDGE OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND REPURCHASE OPTION HELD BY THE ISSUER OR
ITS ASSIGNEE(S) AS SET FORTH IN A RESTRICTED STOCK PURCHASE AGREEMENT
BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF
WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH
TRANSFER RESTRICTIONS AND RIGHT OF REPURCHASE ARE BINDING ON
TRANSFEREES OF THESE SHARES.
6. ADJUSTMENT FOR STOCK SPLIT. All references to the number of Shares
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
7. NOTICES. Notices required hereunder shall be given in person or by
registered mail to the address of the Purchaser shown on the records of the
Company, and to the Company, at their respective principal executive offices.
8. SURVIVAL OF TERMS. This Agreement shall apply to and bind the
Purchaser and the Company and their respective permitted assignees and
transferees, heirs, legatees, executors, administrators and legal successors.
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9. SECTION 83(b) ELECTIONS.
(a) ELECTION FOR UNVESTED SHARES PURCHASED PURSUANT TO
NONQUALIFIED STOCK OPTIONS. The Purchaser hereby acknowledges that he or she has
been informed that, with respect to the exercise of a nonqualified stock option
for Unvested Shares, that unless an election is filed by the Purchaser with the
Internal Revenue Service and, if necessary, the proper state taxing authorities,
WITHIN 30 DAYS of the purchase of the Shares, electing pursuant to Section 83(b)
of the Code (and similar state tax provisions if applicable) to be taxed
currently on any difference between the purchase price of the Shares and their
Fair Market Value on the date of purchase, there will be a recognition of
taxable income to the Optionee, measured by the excess, if any, of the fair
market value of the Shares, at the time the Company's Repurchase Option lapses
over the purchase price for the Shares. The Optionee represents that the
Optionee has consulted any tax consultant(s) the Optionee deems advisable in
connection with the purchase of the Shares or the filing of the Election under
Section 83(b) and similar tax provisions. A form of Election under Section 83(b)
is attached hereto as EXHIBIT C-4 for reference.
(b) ELECTION FOR UNVESTED SHARES PURCHASED PURSUANT TO
INCENTIVE STOCK OPTIONS. The Purchaser hereby acknowledges that he or she has
been informed that, with respect to the exercise of an incentive stock option
for Unvested Shares, that unless an election is filed by the Purchaser with the
Internal Revenue Service and, if necessary, the proper state taxing authorities,
WITHIN 30 DAYS of the purchase of the Shares, electing pursuant to Section 83(b)
of the Code (and similar state tax provisions if applicable) to be taxed
currently on any difference between the purchase price of the Shares and their
Fair Market Value on the date of purchase, there will be a recognition of income
to the Optionee, for alternative minimum tax purposes, measured by the excess,
if any, of the fair market value of the Shares, at the time the Company's
Repurchase Option lapses over the purchase price for the Shares. The Optionee
represents that the Optionee has consulted any tax consultant(s) the Optionee
deems advisable in connection with the purchase of the Shares or the filing of
the Election under Section 83(b) and similar tax provisions. A form of Election
under Section 83(b) for alternative minimum tax purposes is attached hereto as
EXHIBIT C-5 for reference.
PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND
NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN
IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS
FILING ON PURCHASER'S BEHALF.
10. REPRESENTATIONS. The Purchaser has reviewed with his own tax
advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The Purchaser is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents. The Purchaser understands that he (and not the
Company) shall be responsible for his own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.
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<PAGE>
11. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with applicable state laws.
The Purchaser represents that he has read this Agreement and is
familiar with its terms and provisions. The Purchaser hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under this Agreement.
* * *
5
<PAGE>
IN WITNESS WHEREOF, this Restricted Stock Purchase Agreement is deemed
made as of the date first set forth above.
"COMPANY"
MONOLITHIC SYSTEM TECHNOLOGY, INC.
By:
----------------------------------------
Title:
-------------------------------------
"PURCHASER"
--------------------------------------------
(Signature)
--------------------------------------------
(Print Name)
Address:
-----------------------------------
-----------------------------------
Soc. Sec. No.:
-----------------------------
6
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EXHIBIT C-2
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________, hereby sell,
assign and transfer unto _________________ (__________) shares of the Common
Stock of Monolithic System Technology, Inc. standing in my name of the books
of said corporation represented by Certificate No. _____ herewith and do
hereby irrevocably constitute and appoint _________________ to transfer the
said stock on the books of the corporation with full power of substitution in
the premises.
This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement between ________________________ and the
undersigned dated ______________, 20__.
Dated: _______________, 20 _
Signature:
----------------------------
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option," as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
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EXHIBIT C-3
JOINT ESCROW INSTRUCTIONS
, 20
----- --
Monolithic System Technology, Inc.
1020 Stewart Drive
Sunnyvale, California 94086
Attention: Corporate Secretary
Dear :
---------------
As Escrow Agent for both Monolithic System Technology, Inc. (the
"Company"), and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock Purchase
Agreement ("Agreement") between the Company and the undersigned, in accordance
with the following instructions:
1. In the event the Company and/or any assignee of the Company
(referred to collectively for convenience herein as the "Company") exercises the
Company's repurchase option set forth in the Agreement, the Company shall give
to the Purchaser and you a written notice specifying the number of shares of
stock to be purchased, the purchase price, and the time for a closing hereunder
at the principal office of the Company. The Purchaser and the Company hereby
irrevocably authorize and direct you to close the transaction contemplated by
such notice in accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's repurchase option.
3. The Purchaser irrevocably authorizes the Company to deposit with you
any certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement. The
Purchaser does hereby irrevocably constitute and appoint you as the Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, the Purchaser
shall exercise all rights and privileges of a stockholder of the Company while
the stock is held by you.
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4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to the Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's repurchase option.
Within 120 days after cessation of the Purchaser's continuous employment by or
services to the Company, or any parent or subsidiary of the Company, you will
deliver to the Purchaser a certificate or certificates representing the
aggregate number of shares held or issued pursuant to the Agreement and not
purchased by the Company or its assignees pursuant to exercise of the Company's
repurchase option and this escrow shall terminate.
5. If at the time of the termination of this escrow you should have in
your possession any documents, securities, or other property belonging to the
Purchaser, you shall deliver all of the same to the Purchaser and shall be
discharged of all further obligations hereunder.
6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.
7. You shall be obligated to perform only such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for the Purchaser while acting in good
faith, and any act done or omitted by you pursuant to the advice of your own
attorneys shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case you obey or comply with any such order, judgment or decree, you
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.
10. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.
11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary to advise you properly in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.
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<PAGE>
13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.
15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.
COMPANY: Monolithic System Technology, Inc.
1020 Stewart Drive
Sunnyvale, California 94086
Attn.: Corporate Secretary
PURCHASER:
ESCROW AGENT: [Corporate Secretary
Monolithic System Technology, Inc.
1020 Stewart Drive
Sunnyvale, California 94086]
16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.
18. These Joint Escrow Instructions shall be governed by, and construed
and enforced in accordance with, the laws of the State of California.
MONOLITHIC SYSTEM TECHNOLOGY, INC.
3
<PAGE>
By:
-----------------------------------------
Title:
--------------------------------------
the Purchaser:
------------------------------
(Signature)
---------------------------------------------
(Typed or Printed Name)
Escrow Agent:
-------------------------------
Corporate Secretary:
------------------------
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<PAGE>
EXHIBIT C-4
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to the above-referenced Federal
Tax Code, to include in taxpayer's gross income for the current taxable year,
the amount of any compensation taxable to taxpayer in connection with his
receipt of the property described below:
1. The name, address, taxpayer identification number and taxable year of
the undersigned are as follows:
NAME: TAXPAYER: __________________ SPOUSE: ___________________
ADDRESS: _______________________________________________
IDENTIFICATION NO.: TAXPAYER: ________________ SPOUSE: ______________
TAXABLE YEAR: ________________________
2. The property with respect to which the election is made is described as
follows: shares (the "Shares") of the Common Stock of Monolithic System
Technology, Inc. (the "Company").
3. The date on which the property was transferred is: __________, 20__.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, on
certain events. This right lapses with regard to a portion of the
Shares based on the continued performance of services by the taxpayer
over time.
5. The fair market value at the time of transfer, determined without
regard to any restriction other than a restriction which by its terms
will never lapse, of such property is:
$_______________.
6. The amount (if any) paid for such property is:
$_______________.
The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
<PAGE>
THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT BE REVOKED
EXCEPT WITH THE CONSENT OF THE COMMISSIONER.
Dated: ___________________, 20__ _________________________________________
(signature of Taxpayer)
_________________________________________
(print name of Taxpayer)
The undersigned spouse of taxpayer joins in this election.
Dated: ___________________, 20__ _____________________________________________
<PAGE>
EXHIBIT C-5
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986
The undersigned taxpayer hereby elects, pursuant to the provisions of Sections
55-56 and 83(b) of the Internal Revenue Code of 1986, as amended, to include in
taxpayer's alternative minimum taxable income for the current taxable year, as
compensation for services, the excess, if any, of the fair market value of the
property described below at the time of transfer over the amount paid for such
property.
1. The name, address, taxpayer identification number and taxable year of the
undersigned are as follows:
NAME: TAXPAYER: ____________________ SPOUSE: _____________________
ADDRESS: __________________________________________________________________
IDENTIFICATION NO.: TAXPAYER: _________________ SPOUSE: ________________
TAXABLE YEAR: _______________________
2. The property with respect to which the election is made is described as
follows: __________ shares (the "Shares") of the Common Stock of Monolithic
System Technology, Inc. (the "Company").
3. The date on which the property was transferred is: _______________.
4. The property is subject to the following restrictions:
The Shares may be repurchased by the Company, or its assignee, at its
original purchase price, on certain events. This right lapses with regard
to a portion of the Shares over time.
5. The fair market value at the time of transfer, determined without regard to
any restriction other than a restriction which by its terms will never
lapse, of such property is:
$_______________
6. The amount paid for such property is:
$_______________
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The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.
THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT BE REVOKED
EXCEPT WITH THE CONSENT OF THE COMMISSIONER.
Dated: _________________________, Taxpayer
The undersigned spouse of taxpayer joins in this election.
Dated: ___________________, 20__ _____________________________________________
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