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EXHIBIT 4.2
(PERFORMANCE ACCELERATED VESTING)
INCENTIVE STOCK OPTION AGREEMENT
FOR MANAGEMENT
Optionee: _______________________ [Name]
HMT Technology Corporation (the "Company") has granted you an option to
purchase shares of the common stock of the Company ("Common Stock") under the
HMT Technology Corporation 1995 Management Stock Option Plan (the "Plan"). This
option is intended to qualify for the federal income tax benefits available to
an "incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
The grant of this option is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's
employees, officers, directors, consultants and advisors and is intended to
comply with the provisions of Rule 701 promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act").
The grant of this option and the issuance of shares upon the exercise of this
option are also intended to be exempt from the securities qualification
requirements of the California Corporations Code pursuant to section 25102(f) of
that code.
The details of your option are as follows:
1. Total Number of Shares Subject to this Option. The total number of
shares of Common Stock subject to this option is .
2. Vesting. The date that the vesting period begins on this option is .
1/48th of the shares will vest on (the date which occurs 61 months after the
date on which the vesting period begins), and 1/48th of the shares will then
vest on the day of each month thereafter for the next 47 months until either (i)
you cease to provide services for the Company for any reason or (ii) this option
becomes fully vested. Notwithstanding the foregoing, fifty percent (50%) of the
total number of shares of Common Stock subject to this option (reduced by the
number of shares which became vested solely because of the provisions of the
previous sentence) shall become vested upon the closing of an initial public
offering of the Company's securities on or before December 31, 1996 which raises
at least $50 million at a pre-money valuation (fully diluted) for the Company of
not less than $200 million, and fifty percent (50%) of the total number of
shares of Common Stock subject to this option (reduced by the number of shares
which became vested solely because of the provisions of the previous sentence)
shall become vested upon the achievement of the following financial performance
benchmarks.
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The Company's "pre-money valuation (fully diluted)" shall be determined
by multiplying the initial offering price for the Company's common stock in the
initial public offering by the number of outstanding shares of the Company's
common stock (assuming that all outstanding options and warrants, whether or not
vested, have been exercised and all convertible securities have been converted)
prior to the issuance of shares of the Company's common stock by the Company as
part of the initial public offering.
This option may be exercised only with respect to those shares which
are vested except as permitted under section 4 of this Agreement.
These vesting provisions are subject to, and may be modified by, the
provisions of Section 10 of the Plan.
3. Exercise Price and Method of Payment.
(a) Exercise Price. The exercise price of this option is $ per
share, which is not less than the fair market value of the Common Stock on the
date this option was granted to you.
(b) Method of Payment. Payment of the exercise price per share is
due in full upon exercise of all or any part of this option. You may make
payment of the exercise price under one or a combination of the following
alternatives:
(i) Payment of the exercise price per share in cash or by check
at the time of exercise;
(ii) If at the time of exercise the Company's Common Stock is
publicly traded and quoted regularly in the Wall Street Journal, payment with
shares of the Company's Common Stock you already own. The Common Stock (i) will
be valued at its fair market value on the date of exercise, (ii) if originally
acquired from the Company, it must have been held for the period required to
avoid a charge to the Company's reported earnings, and (iii) it must be owned
free and clear of any liens, claims, encumbrances or security interests;
(iii) This option may also be exercised as part of a program
developed under Regulation T as promulgated by the Federal Reserve Board which
results in the receipt of cash (or a check) by the Company before Common Stock
is issued; or
(iv) Payment by a combination of the methods of payment listed
in paragraph 3(b)(i) through 3(b)(iii) above.
4. Early Exercise of Option (Exercise of Unvested Shares).
(a) At any time during your service with the Company or an
Affiliate, you may exercise any or all of the shares subject to this option
whether or not the shares have vested, provided, however, that:
(i) a partial exercise of this option will be deemed to cover
vested shares first and then the earliest vesting installment of unvested
shares;
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(ii) any unvested shares at the date of exercise will be subject
to the purchase option in favor of the Company which is described in the Early
Exercise Stock Purchase Agreement attached as an exhibit to this option;
(iii) you will enter into the Early Exercise Stock Purchase
Agreement which will contain the same vesting schedule as in this option
agreement; and
(iv) to the extent that the aggregate fair market value of any
shares subject to incentive stock options granted to you by the Company or an
Affiliate (valued as of their grant date) which would become exercisable for the
first time during any calendar year exceeds $100,000, any portion in excess of
$100,000 (determined by placing such options in chronological order by grant
date) shall instead be treated as and be exercisable as a nonstatutory stock
option, the terms of which are not intended to satisfy the requirements of
Section 422 of the Code.
(b) Your right to purchase unvested shares ends upon termination of
your service with the Company and all Affiliates.
5. Whole Shares. You may exercise this option only for whole shares and
the Company shall be under no obligation to issue any fractional shares of
Common Stock to you.
6. Securities Law Compliance. Notwithstanding anything to the contrary
contained in this option, this option may not be exercised unless the shares
issuable upon exercise of this option are then registered under the Securities
Act of 1933, as amended (the "Act") or, if the shares are not registered at that
time, the Company has determined that the exercise and issuance would be exempt
from the registration requirements of the Act.
This option has been granted under the terms of a compensatory benefit
plan established by the Company to provide financial incentives for the
Company's employees (including officers) and certain directors and consultants
to work for the financial success of the Company and is intended to comply with
the provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Act.
By executing this option agreement, you hereby warrant and represent
that you are acquiring this option for your own account and that you have no
intention of distributing, transferring or selling all or any part of this
option except in accordance with the terms of this option agreement and section
25102(f) of the California Corporations Code. You also hereby warrant and
represent that you have either (i) preexisting personal or business
relationships with the Company or any of its officers, directors or controlling
persons, or (ii) the capacity to protect your own interests in connection with
the grant of this option by virtue of the business or financial expertise of any
of your professional advisors who are unaffiliated with and who are not
compensated by the Company or any of its affiliates, directly or indirectly.
7. Term of Option. The term of this option begins on the date you were
granted this option and, unless it ends sooner for the reason described below,
terminates on (the "Expiration Date") (which date shall be no more than ten (10)
years from the date this option was granted). You may not, under any
circumstances, exercise this option after the Expiration Date. In addition, this
option may not be exercised if it would cause a violation of the short-
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swing trading profits provisions of Section 16(b) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") which are applicable to certain
shareholders of companies with publicly traded stock.
This option will also terminate prior to the end of its term if your
service as an employee or an advisor or consultant with the Company and all
Affiliates is terminated for any reason or for no reason. Your option will then
terminate three (3) months after the date on which you are no longer providing
services to the Company or any Affiliate unless one of the following
circumstances exists:
(a) Your termination of service is due to your disability. This
option will then terminate on the earlier of the Expiration Date or twelve (12)
months following the termination of your service. You should be aware that if
your disability is not considered a permanent and total disability within the
meaning of Section 422(c)(6) of the Code, if you exercise this option more than
three (3) months following the date of your termination of employment, your
exercise will be treated for tax purposes as the exercise of a Nonstatutory
Stock Option instead of an Incentive Stock Option.
(b) Your termination of service is due to your death. This option
will then terminate on the earlier of the Expiration Date or eighteen (18)
months after your death.
(c) If during any part of the three (3) month period you may not
exercise your option solely because of the condition described section 6 above,
then your option will not terminate until the earlier of the Expiration Date or
until this option shall become exercisable for a period of three (3) months
after the termination of your service.
(d) If your exercise of the option within three (3) months after
termination of your service with the Company and all Affiliates either will
result in liability under Section 16(b) of the Exchange Act, then your option
will terminate on the earlier of (i) the Expiration Date, or (ii) the tenth
(10th) day after the last date on which your exercise would result in such
liability under Section 16(b) of the Exchange Act or be prohibited under such
trading window policy.
Only the shares which are vested on the date of your termination of
service may be exercised following the termination of your service.
In order to obtain the federal income tax advantages associated with an
Incentive Stock option, the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
Affiliate, except in the event of your death or permanent and total disability.
The Company has provided for continued vesting or extended exercisability for
your option under certain circumstances for your benefit, but cannot guarantee
that your option will necessarily be treated as an Incentive Stock Option if you
provide services to the Company or an Affiliate as a consultant or exercise your
option more than three (3) months after the date your employment with the
Company and all Affiliates terminates.
8. Exercise of Option.
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(a) You may exercise this option to the extent specified above, by
delivering the Notice of Exercise attached to this option as an exhibit together
with the exercise price to the Secretary of the Company, or another person
designated by the Company, during regular business hours, together with any
additional documents required in the Notice of Exercise.
(b) By exercising this option you agree that:
(i) the Company may require you to pay to the Company any tax
withholding obligation of the Company arising from (1) your exercise of this
option; (2) the lapse of any substantial risk of forfeiture to which the shares
are subject at the time of exercise; or (3) the disposition of the shares of
Common Stock you acquired upon the exercise of this option;
(ii) you will notify the Company in writing within fifteen (15)
days after the date on which you dispose of any of the shares of the Common
Stock issued to you upon your exercise of this option if the disposition of
shares occurs within two (2) years after the date on which you were granted this
option or within one (1) year of the date on which you exercised this option;
and
(iii) in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, the Company (or a
representative of the underwriters) may require that you not sell or otherwise
transfer or dispose of any shares of Common Stock or other securities of the
Company during a period not to exceed one hundred eighty (180) days following
the effective date (the "Effective Date") of the registration statement of the
Company filed under the Act. You further agree that the Company may impose
stop-transfer instructions on the securities subject to these restrictions until
the end of the period.
9. Option Not Transferable. This option may not be transferred, except
by will or by the laws of descent and distribution, and may be exercised during
your life only by you.
10. Option Not an Employment Contract. This option is not an employment
contract and nothing in this option creates in any way whatsoever any obligation
on your part to continue in the employ of the Company, or of the Company to
continue your employment with the Company.
11. Notices. Any notices provided for in this option or the Plan will be
given in writing and will be considered to have been given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after deposit
in the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you later designate in writing to
the Company.
12. Governing Plan Document. This option is subject to all the
provisions of the Plan, which is attached as an exhibit to this option. All
provisions of the Plan are hereby made a part of this option. This option is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be set forth and adopted under the Plan. In the event of
any conflict between the provisions of this option and those of the Plan, the
provisions of the Plan shall control.
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Dated the ______ day of __________________, 19____.
Very truly yours,
HMT TECHNOLOGY CORPORATION
By ________
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS:
1995 HMT Technology Corporation
Management Stock Option Plan
Notice of Exercise
Early Exercise Stock Purchase Form
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(a) I acknowledge that I have received the foregoing option and the
attachments referenced in it and I understand that all rights and liabilities
with respect to this option are set forth in the option and the Plan; and
(b) I acknowledge that as of the date of grant of this option, this
option and its exhibits set forth the entire understanding between myself and
the Company and any Affiliates regarding the acquisition of stock in the Company
and supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to me under the
Plan or any other equity compensation plans adopted by the Company or its
Affiliates, and (ii) the following agreements only:
NONE
--------------
(Initial)
OTHER
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OPTIONEE
Address:
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IT IS UNLAWFUL TO CONSUMMATE A SALE OR
TRANSFER OF THIS SECURITY, OR ANY INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION
THEREFOR, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S
RULES.
INCENTIVE STOCK OPTION AGREEMENT
Optionee: [_______________]
HMT Technology Corporation (the "Company") has granted you an option to
purchase shares of the common stock of the Company ("Common Stock") under the
HMT Technology Corporation 1995 Stock Option Plan (the "Plan"). This option is
intended to qualify for the federal income tax benefits available to an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
The details of your option are as follows:
1. Total Number of Shares Subject to this Option. The total number of
shares of Common Stock subject to this option is [___].
2. Vesting. The date that the vesting period begins on this option is
[_______] 1/48th of the shares will then vest on the last day of each month
thereafter for the next 48 months until either (i) you cease to provide
services for the Company for any reason or (ii) this option becomes fully
vested.
This option may be exercised only with respect to those shares which
are vested except as permitted under section 4 of this Agreement.
3. Exercise Price and Method of Payment.
(a) Exercise Price. The exercise price of this option is [_______] per
share, which is not less then the fair market value of the Common Stock on the
date this option was granted to you.
(b) Method of Payment. Payment of the exercise price per share is due
in full upon exercise of all or any part of this option. You may make payment
of the exercise price under one or a combination of the following alternatives:
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(i) Payment of the exercise price per share in cash or by check at the
time of exercise;
(ii) If at the time of exercise the Company's Common Stock is publicly
traded and quoted regularly in the Wall Street Journal, payment with shares of
the Company's Common Stock you already own. The Common Stock (i) will be valued
at its fair market value on the date of exercise, (ii) if originally acquired
from the Company, it must have been held for the period required to avoid a
charge to the Company's reported earning, and (iii) it must be owned free and
clear of any liens, claims, encumbrances or security interests;
(iii) This option may also be exercised as part of a program
developed under Regulation T as promulgated by the Federal Reserve Board which
in the receipt of cash (or a check) by the Company before Common Stock is
issued; or
(iv) Payment by a combination of the methods of payment listed in
paragraph 3(b)(i) through 3(b)(iii) above.
4. Whole Shares. You may exercise this option only for whole shares and the
Company shall be under no obligation to issue any fractional shares of Common
Stock to you.
5. Securities Law Compliance. Notwithstanding anything to the contrary
contained in this opinion, this option may not be exercised unless the shares
issuable upon exercise of this option are then registered under the Securities
Act of 1933, as amended (the "Act") or, if the shares are not registered at that
time, the Company has determined that the exercise and issuance would be exempt
from the registration requirements of the Act.
This option has been granted under the terms of a compensatory benefit
plan established by the Company to provide financial incentives for the
Company's employees (including officers) and certain directors and consultants
to work for the financial success of the Company and is intended to comply with
the provisions of Rule 701 promulgated by the Securities and Exchange Commission
under the Act.
6. Term of Option. The term of this option begins on the date you were
granted this option and, unless it ends sooner for the reason described below,
terminates on [_____________] (the "Expiration Date") (which shall be no more
than ten (10) years from the date this option was granted). You may not, under
any circumstances, exercise this option after the Expiration Date. In addition,
this option may not be exercised if it would cause a violation of the
short-swing trading profits provisions of Section 16 (b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") which are applicable to
certain shareholders of companies with publicly traded stock.
This option will also terminate prior to the end of its term if your
service as an employee or an advisor or consultant with the Company and all
Affiliates is terminated for any reason or for no reason. Your option will
then terminate three (3) months after the date on which you are
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no longer providing services to the Company or any Affiliate unless one of the
following circumstances exists:
(a) Your termination of service is due to your disability. This
option will then terminate on the earlier of the Expiration Date or twelve (12)
months following the termination of your service. You should be aware that if
your disability is not considered a permanent and total disability within the
meaning of Section 422(c)(6) of the Code, if you exercise this option more
then three (3) months following the date of your termination of employment,
your exercise will be treated for tax purposes as the exercise of a
Nonstatutory Stock Option instead of an Incentive Stock Option.
(b) Your termination of service is due to your death. This option
will then terminate on the earlier of the Expiration Date or eighteen (18)
months after your death.
(c) If during any part of the three (3) month period you may not
exercise your option solely because of the condition described in section 5
above, then your option will not terminate until the earlier of the Expiration
Date or until this option shall become exercisable for a period of three (3)
months after the termination of your service.
(d) If your exercise of the option within three (3) months after
termination of your service with the Company and all Affiliates either will
result in liability under Section 16(b) of the Exchange Act, then your option
will terminate on the earlier of (i) the Expiration Date or (ii) the tenth
(10th) day after the last date on which your exercise would result in such
liability under Section 16(b) of the Exchange Act or be prohibited under such
trading window policy.
Only the shares which are vested on the date of your termination of
service may be exercised following the termination of your service.
In order to obtain the federal income tax advantages associated with an
Incentive Stock Option, the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
Affiliate, except in the event of your death or permanent and total disability.
The Company has provided for continued vesting or extended exercisability for
your option under certain circumstances for your benefit, but cannot guarantee
that your option will necessarily be treated as an Incentive Stock Option if
you provide services to the Company or an Affiliate as a consultant or
exercise your option more then three (3) months after the date your
employment with the Company and all Affiliates terminates.
7. Exercise of Option.
(a) You may exercise this option to the extent specified above, by
delivering the Notice of Exercise attached to this option as an exhibit
together with the exercise price to the Secretary of the Company, or another
person designated by the Company, during regular business hours, together with
any additional documents required in the Notice of Exercise.
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(b) By exercising this option your agree that:
(i) The Company may require you to pay to the Company any tax
withholding obligation of the Company arising from (1) your exercise of this
option; (2) the lapse of any substantial risk of forfeiture to which the shares
are subject at the time of exercise; or (3) the disposition of the shares of
Common Stock you acquired upon the exercise of this option;
(ii) you will notify the Company in writing within fifteen (15)
days after the date on which you dispose of any of the shares of the Common
Stock issued to you upon your exercise of this option if the disposition of
shares occurs within two (2) years after the date on which you were granted
this option or within one (1) year of the date on which you exercised this
option; and
(iii) in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, the Company (or a
representative of the underwriters) may require that you not sell or otherwise
transfer or dispose of any shares of Common Stock or other securities of the
Company during a period not to exceed one hundred eighty (180) days following
the effective date (the "Effective Date") of the registration statement of the
Company filed under the Act. You further agree that the Company may impose
stop-transfer instructions on the securities subject to these restrictions
until the end of the period.
8. Option Not Transferable. This option may not be transferred, except by
will or by the laws of descent and distribution, and may be exercised during
your life only by you.
9. Option Not an Employment Contract. This option is not an employment
contract and nothing in this option creates in any way whatsoever any
obligation on your part to continue in the employ of the Company, or of the
Company to continue your employment with the Company.
10. Notices. Any notices provided for in this option or the Plan will be
given in writing and will be considered to have been given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you later designate in
writing to the Company.
4.
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11. Governing Plan Document. This option is subject to all the provisions
of the Plan, which is attached as an exhibit to this option. All provisions of
the Plan are hereby made a part of this option. This option is further subject
to all interpretations, amendments, rules and regulations which may from time
to time be set forth and adopted under the Plan. In the event of any conflict
between the provisions of this option and those of the Plan, the provisions of
the Plan shall control.
Dated the [___] day of [______] [____.]
Very truly yours,
HMT TECHNOLOGY CORPORATION
By
--------------------------
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS:
1995 HMT Technology Corporation Stock Option Plan
Regulation 260.141.11
Notice of Exercise
5.
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(a) I acknowledge that I have received the foregoing option and the
attachments referenced in it and I understand that all rights and liabilities
with respect to this option are set forth in the option and the Plan; and
(b) I acknowledge that as of the date of grant of this option, this option
and its exhibits set forth the entire understanding between myself and the
Company and any Affiliates regarding the acquisition of stock in the Company
and supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to me under the
Plan or any other equity compensation plans adopted by the Company or its
Affiliates, and (ii) the following agreements only:
NONE _________
Initial
OTHER _________________________
_________________________
_________________________
(c) I acknowledge receipt of a copy of Section 260.141.11 of Title 10 of
the California Code of Regulations.
________________________________
OPTIONEE
Address ________________________
________________________
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HMT TECHNOLOGY CORPORATION
1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
NONSTATUTORY STOCK OPTION
______________________________________, Optionee:
On __________________, 19___, an option was automatically granted to you
(the "optionee") pursuant to the HMT Technology Corporation (the "Company") 1996
Non-Employee Directors' Stock Option Plan (the "Plan") to purchase shares of the
Company's common stock ("Common Stock"). This option is not intended to qualify
and will not be treated as an "incentive stock option" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for Non-Employee Directors (as defined in
the Plan).
The details of your option are as follows:
1. Eight thousand (8,000) shares of common stock of the Company are
subject to this option.
2. The exercise price of this option is _________________________
($________) per share, such amount being equal to the Fair Market Value (as
defined in the Plan) of the Common Stock on the date of grant of this option.
3. Subject to the limitations contained herein, one-fourth (1/4) of the
shares will vest (become exercisable) on ____________, 19__ and one forty-eighth
(1/48th) of the shares will then vest on the _____________ of each month
thereafter until either (i) you cease to be a Non-Employee Director for any
reason, or (ii) this option becomes fully vested.
4. (a) You may exercise this option, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to Section 6 of
the Plan. You may exercise this option only for whole shares.
(a) You may elect to pay the exercise price under one of the
following alternatives:
(i) Payment in cash or check at the time of exercise;
(ii) Provided that at the time of the exercise the Common Stock
is publicly traded and quoted regularly in the Wall Street Journal, payment by
delivery of shares of Common Stock already owned by you, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or
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security interest, which Common Stock shall be valued at its Fair Market Value
on the date preceding the date of exercise;
(iii) Payment pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board which results in the receipt of cash
(or check) by the Company either prior to the issuance of shares of the Common
Stock or pursuant to the terms of irrevocable instructions issued by you prior
to the issuance of shares of the Common Stock; or
(iv) Payment by a combination of the methods of payment
specified in subparagraphs (i) through (iii) above.
(c) By exercising this option you agree that the Company may require
you to enter an arrangement providing for the cash payment by you to the Company
of any tax-withholding obligation of the Company arising by reason of the
exercise of this option.
5. Notwithstanding anything to the contrary contained herein, you may
not exercise this option unless the shares issuable upon exercise of this option
are then registered under the Securities Act of 1933, as amended (the
"Securities Act"), or, if such shares are not then so registered, the Company
has determined that such exercise and issuance would be exempt from the
registration requirements of the Securities Act.
6. This option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you.
Notwithstanding the foregoing, by delivering written notice to the Company, in a
form satisfactory to the Company, you may designate a third party who, in the
event of your death, shall thereafter be entitled to exercise this option.
7. This option expires at the end of the day of the day immediately
preceding the tenth anniversary of this option's grant date (the "Expiration
Date"), subject, however, to earlier termination upon your termination of
service, as set forth in Section 6 of the Plan.
8. Any notices provided for in this option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you, five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the address specified
below or at such other address as you hereafter designate by written notice to
the Company.
9. This option is subject to all the provisions of the Plan, a copy of
which is attached hereto, and its provisions are hereby made a part of this
option, including without limitation the provisions of Section 6 of the Plan
relating to option provisions, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the Plan
shall control.
10. Notwithstanding anything to the foregoing, this option shall not be
exercisable in whole or in part unless and until the Company's stockholders have
approved the Plan.
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Dated the ____ day of ___________________________ , 19__.
Very truly yours,
HMT TECHNOLOGY CORPORATION
By:
---------------------------------
Duly authorized on behalf of
the Board of Directors
ATTACHMENTS:
1996 Non-Employee Directors' Stock Option Plan
Optionee's Acknowledgments
Notice of Exercise
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OPTIONEE'S ACKNOWLEDGMENTS
The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachment
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it
sets forth the entire understanding between the undersigned optionee and the
Company and its Affiliates regarding the acquisition of Common Stock in the
Company and supersedes all prior oral and written agreements on that subject
with the exception of (i) the options and any other stock awards previously
granted and delivered to the undersigned under any stock award plan of the
Company, and (ii) the following agreements only:
NONE:
---------------------------------
OTHER:
---------------------------------
---------------------------------
---------------------------------
--------------------------------------------
Optionee
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NOTICE OF EXERCISE
Date of Exercise:
Ladies and Gentlemen:
This constitutes notice under my nonstatutory stock option that I elect
to purchase the number of shares for the price set forth below.
Stock option dated: ___________________
Number of shares as to which option is exercised: ___________________
Certificates to be issued in name of: ___________________
Total exercise price: $__________________
Cash payment delivered herewith: $__________________
Value of ____________ shares of
HMT Technology Corporation
Common Stock delivered herewith(1) $__________________
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the 1996 Non-Employee Directors' Stock
Option Plan, and (ii) to provide for the payment by me to you (in the manner
designated by you) of your withholding obligation, if any, relating to the
exercise of this option.
Very truly yours,
---------------------------------------
--------
(1) Shares must meet the public trading requirements set forth in the option.
Shares must be valued in accordance with the terms of the option being
exercised, must have been owned for the minimum period required in the option,
and must be owned free and clear of any liens, claims, encumbrances or security
interests. Certificates must be endorsed or accompanied by an executed
assignment separate from certificate.
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HMT TECHNOLOGY CORPORATION
1996 EQUITY INCENTIVE PLAN
INCENTIVE STOCK OPTION
_________________________, Optionee:
HMT Technology Corporation (the "Company"), pursuant to its 1996 Equity
Incentive Plan (the "Plan"), has granted to you, the optionee named above, an
option to purchase shares of the common stock of the Company ("Common Stock").
This option is intended to qualify as an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants. Defined terms not explicitly
defined in this agreement but defined in the Plan shall have the same
definitions as in the Plan.
The details of your option are as follows:
1. TOTAL NUMBER OF SHARES SUBJECT TO THIS OPTION. The total number of
shares of Common Stock subject to this option is ____________________ (______).
2. VESTING. Subject to the limitations contained herein, twelve
forty-eighths (12/48ths) of the shares will vest (become exercisable) on
____________, 19__ and one forty-eighth (1/48th) of the shares will then vest
each month thereafter until either (i) you cease to provide services to the
Company for any reason, or (ii) this option becomes fully vested.
3. EXERCISE PRICE AND METHOD OF PAYMENT.
(a) EXERCISE PRICE. The exercise price of this option is
_______________________ ($____) per share, being not less than the fair market
value of the Common Stock on the date of grant of this option.
(b) METHOD OF PAYMENT. Payment of the exercise price per share is
due in full upon exercise of all or any part of each installment which has
accrued to you. You may elect, to the extent permitted by applicable statutes
and regulations, to make payment of the exercise price under one of the
following alternatives:
(i) Payment of the exercise price per share in cash (including
check) at the time of exercise;
(ii) Payment pursuant to a program developed under Regulation T
as promulgated by the Federal Reserve Board which, prior to the issuance of
Common Stock, results in either the receipt of cash (or check) by the Company or
the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds;
20
(iii) Provided that at the time of exercise the Company's Common
Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock, held for the period
required to avoid a charge to the Company's reported earnings, and owned free
and clear of any liens, claims, encumbrances or security interests, which Common
Stock shall be valued at its fair market value on the date of exercise; or
(iv) Payment by a combination of the methods of payment
permitted by subparagraph 3(b)(i) through 3(b)(iii) above.
4. EXERCISE PRIOR TO VESTING PERMITTED.
(a) CONDITIONS OF EARLY EXERCISE. Subject to the provisions of this
option you may elect at any time during your Continuous Status as an Employee,
Director or Consultant with the Company or an Affiliate of the Company, to
exercise the option as to any part or all of the shares subject to this option
at any time during the term hereof, including without limitation, a time prior
to the date of earliest exercise ("vesting") stated in paragraph 2 hereof;
provided, however, that:
(i) a partial exercise of this option shall be deemed to cover
first vested shares and then the earliest vesting installment of unvested
shares;
(ii) any shares so purchased from installments which have not
vested as of the date of exercise shall be subject to the purchase option in
favor of the Company as described in the Early Exercise Stock Purchase Agreement
attached hereto;
(iii) you shall enter into an Early Exercise Stock Purchase
Agreement in the form attached hereto with a vesting schedule that will result
in the same vesting as if no early exercise had occurred; and
(iv) the date of exercisability of any share(s) subject to this
option under this paragraph 4 shall be delayed, if necessary (i.e., because the
aggregate fair market value of any shares subject to incentive stock options
granted you by the Company or any Affiliate of the Company (valued as of their
grant date) would otherwise become exercisable for the first time during any
calendar year in an amount exceeding $100,000), until the earliest date
permissible in order to preserve treatment under Section 421 of the Code of each
share subject to this option.
(b) EXPIRATION OF EARLY EXERCISE ELECTION. The election provided in
this paragraph 4 to purchase shares upon the exercise of this option prior to
the vesting dates shall cease upon termination of your Continuous Status as an
Employee, Director or Consultant with the Company or an Affiliate of the Company
and may not be exercised after the date thereof.
5. WHOLE SHARES. This option may not be exercised for any number of
shares which would require the issuance of anything other than whole shares.
6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary
contained herein, this option may not be exercised unless the shares issuable
upon exercise of
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this option are then registered under the Act or, if such shares are not then so
registered, the Company has determined that such exercise and issuance would be
exempt from the registration requirements of the Act.
7. TERM. The term of this option commences on __________, 19__, the date
of grant, and expires on ______________________ (the "Expiration Date," which
date shall be no more than ten (10) years from date this option is granted),
unless this option expires sooner as set forth below or in the Plan. In no event
may this option be exercised on or after the Expiration Date. This option shall
terminate prior to the Expiration Date as follows: three (3) months after the
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or an Affiliate of the Company unless one of the following
circumstances exists:
(a) Your termination of Continuous Status as an Employee, Director
or Consultant is due to your permanent and total disability (within the meaning
of Section 422(c)(6) of the Code). This option will then expire on the earlier
of the Expiration Date set forth above or twelve (12) months following such
termination of Continuous Status as an Employee, Director or Consultant.
(b) Your termination of Continuous Status as an Employee, Director
or Consultant is due to your death or your death occurs within three (3) months
following your termination of Continuous Status as an Employee, Director or
Consultant for any other reason. This option will then expire on the earlier of
the Expiration Date set forth above or eighteen (18) months after your death.
(c) If during any part of such three (3) month period you may not
exercise your option solely because of the condition set forth in paragraph 6
above, then your option will not expire until the earlier of the Expiration Date
set forth above or until this option shall have been exercisable for an
aggregate period of three (3) months after your termination of Continuous Status
as an Employee, Director or Consultant.
(d) If your exercise of the option within three (3) months after
termination of your Continuous Status as an Employee, Director or Consultant
with the Company or with an Affiliate of the Company would result in liability
under section 16(b) of the Securities Exchange Act of 1934, then your option
will expire on the earlier of (i) the Expiration Date set forth above, (ii) the
tenth (10th) day after the last date upon which exercise would result in such
liability or (iii) six (6) months and ten (10) days after the termination of
your Continuous Status as an Employee, Director or Consultant with the Company
or an Affiliate of the Company.
However, this option may be exercised following termination of
Continuous Status as an Employee, Director or Consultant only as to that number
of shares as to which it was exercisable on the date of termination of
Continuous Status as an Employee, Director or Consultant under the provisions of
paragraph 2 of this option.
In order to obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
date of grant of the option and ending on the day three (3) months before the
date of the option's exercise, you must be an employee of the Company or an
Affiliate of the Company, except in the event of your death or
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22
permanent and total disability. The Company has provided for continued vesting
or extended exercisability of your option under certain circumstances for your
benefit, but cannot guarantee that your option will necessarily be treated as an
"incentive stock option" if you provide services to the Company or an Affiliate
of the Company as a consultant or exercise your option more than three (3)
months after the date your employment with the Company and all Affiliates of the
Company terminates.
8. EXERCISE.
(a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the Company) together
with the exercise price to the Secretary of the Company, or to such other person
as the Company may designate, during regular business hours, together with such
additional documents as the Company may then require pursuant to subsection
12(f) of the Plan.
(b) By exercising this option you agree that:
(i) as a precondition to the completion of any exercise of this
option, the Company may require you to enter an arrangement providing for the
payment by you to the Company of any tax withholding obligation of the Company
arising by reason of (1) the exercise of this option; (2) the lapse of any
substantial risk of forfeiture to which the shares are subject at the time of
exercise; or (3) the disposition of shares acquired upon such exercise; and
(ii) you will notify the Company in writing within fifteen (15)
days after the date of any disposition of any of the shares of the Common Stock
issued upon exercise of this option that occurs within two (2) years after the
date of this option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of this option.
9. TRANSFERABILITY. This option is not transferable, except by will or
by the laws of descent and distribution, and is exercisable during your life
only by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise this
option.
10. OPTION NOT A SERVICE CONTRACT. This option is not an employment
contract and nothing in this option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company,
or of the Company to continue your employment with the Company. In addition,
nothing in this option shall obligate the Company or any Affiliate of the
Company, or their respective stockholders, Board of Directors, officers or
employees to continue any relationship which you might have as a Director or
Consultant for the Company or Affiliate of the Company.
11. NOTICES. Any notices provided for in this option or the Plan shall
be given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after deposit
in the United States mail, postage prepaid, addressed to you at the address
specified below or at such other address as you hereafter designate by written
notice to the Company.
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23
12. GOVERNING PLAN DOCUMENT. This option is subject to all the
provisions of the Plan, a copy of which is attached hereto and its provisions
are hereby made a part of this option, including without limitation the
provisions of Section 6 of the Plan relating to option provisions, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of this option and those of the
Plan, the provisions of the Plan shall control.
Dated the ____ day of __________________, 19__.
Very truly yours,
--------------------------------------------
By
-----------------------------------------
Duly authorized on behalf
of the Board of Directors
ATTACHMENTS:
HMT Technology Corporation 1996 Equity Incentive Plan
Notice of Exercise (Vested Shares)
Early Exercise Stock Purchase Agreement (Unvested Shares)
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The undersigned:
(a) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the Company
and its Affiliates regarding the acquisition of stock in the Company and
supersedes all prior oral and written agreements on that subject with the
exception of (i) the options previously granted and delivered to the undersigned
under stock option plans of the Company, and (ii) the following agreements only:
NONE
----------------
(Initial)
OTHER
-----------------------------------------
-----------------------------------------
-----------------------------------------
---------------------------------------------
OPTIONEE
Address:
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NOTICE OF EXERCISE
HMT Technology Corporation
--------------------------------------------------------------------------------
Ladies and Gentlemen:
This constitutes notice under my stock option that I elect to purchase
the number of shares for the price set forth below.
Type of option (check one): Incentive : Nonstatutory :
Stock option dated: ___________________
Number of shares as
to which option is
exercised: ___________________
Certificates to be
issued in name of: ___________________
Total exercise price: $__________________
Cash payment delivered
herewith: $__________________
Value of ______ shares of
HMT Technology Corporation
common stock delivered
herewith(1): $__________________
By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the HMT Technology Corporation 1996
Equity Incentive Plan, (ii) to provide for the payment by me to you (in the
manner designated by you) of your withholding obligation, if any, relating to
the exercise of this option, and (iii) if this exercise relates to an incentive
stock option, to notify you in writing within fifteen (15) days after the date
of any
--------
(1) Shares must meet the public trading requirements set forth in the option.
Shares must be valued in accordance with the terms of the option being
exercised, must have been owned for the minimum period required in the
option, and must be owned free and clear of any liens, claims, encumbrances
or security interests. Certificates must be endorsed or accompanied by an
executed assignment separate from certificate.
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disposition of any of the shares of Common Stock issued upon exercise of this
option that occurs within two (2) years after the date of grant of this option
or within one (1) year after such shares of Common Stock are issued upon
exercise of this option.
I acknowledge that all certificates representing any of the Shares
subject to the provisions of the option shall have endorsed thereon appropriate
legends reflecting restrictions pursuant to the Company's Articles of
Incorporation, Bylaws, and/or applicable securities laws.
Very truly yours,
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27
HMT TECHNOLOGY CORPORATION
1996 EQUITY INCENTIVE PLAN
EARLY EXERCISE STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made by and between HMT Technology Corporation, a
Delaware corporation (the "Company"), and ____________________________
("Purchaser").
WITNESSETH:
WHEREAS, Purchaser holds an incentive stock option to purchase shares of
common stock of the Company pursuant to the Company's 1996 Equity Incentive Plan
(the "Plan") which Purchaser desires to exercise; and
WHEREAS, Purchaser wishes to take advantage of the early exercise
provision of his option and therefore to enter into this Agreement;
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. Purchaser hereby agrees to purchase from the Company, and the Company
hereby agrees to sell to Purchaser, an aggregate of _______ shares of the common
stock (the "Stock") of the Company, for an exercise price of $_______ per share
(total exercise price: $____), payable as follows:
Cash at Closing $__________________
Value of _____ shares of
HMT Technology Corporation
common stock(2) $__________________
Total Exercise Price $__________________
The closing hereunder shall occur at the offices of the Company on the
date of this Agreement or at such other time and place as the parties may
mutually agree upon in writing.
----------
(2) Shares must meet the public trading requirements set forth in the option.
Shares must be valued in accordance with the terms of the option being
exercised, must have been owned for the minimum period required in the
option, and must be owned free and clear of any liens, claims, encumbrances
or security interests. Certificates must be endorsed or accompanied by an
executed assignment separate from certificate.
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At the closing, Purchaser shall deliver three (3) stock assignments in
the form of Exhibit B, duly endorsed (with date and number of shares left
blank), joint escrow instructions (the "Joint Escrow Instructions") in the form
of Exhibit C, duly executed by Purchaser, and the total exercise price
(including endorsed certificates representing the appropriate number of shares
of the Company's common stock if a portion of the total exercise price is to be
paid by common stock).
At the closing or as soon thereafter as practicable, the Company shall
deliver to the Escrow Agent (as defined in paragraph 6 below) share certificates
for all of the Stock that is to be subject to the Purchase Option (as defined in
paragraph 2 below), and shall deliver share certificates to Purchaser for all of
the Stock, if any, that is not to be subject to the Purchase Option or the
Pledge Agreement. The certificates for all of the Stock that is subject to the
Pledge Agreement but not the Purchase Option shall be retained by the Company as
security pursuant to the Pledge Agreement.
2. In accordance with the provisions of section 408(b) of the California
General Company Law, the Stock to be purchased by Purchaser pursuant to this
Agreement shall be subject to the following option ("Purchase Option"):
(a) In the event that Purchaser shall cease to be an employee of the
Company for any reason (including his death), or no reason, with or without
cause, the Purchase Option may be exercised. The Company shall have the right at
any time within the ninety (90) day period after Purchaser's termination of
service with the Company and all Related Companies or such longer period as may
be agreed to by the Company and Purchaser (for example, for purposes of
satisfying the requirements of Section 1202(c)(3) of the Internal Revenue Code)
to purchase from Purchaser or his personal representative, as the case may be,
at the price per share paid by Purchaser pursuant to this Agreement ("Option
Price"), up to but not exceeding the number of shares of the Stock set forth on
Exhibit A hereto which is incorporated herein by this reference.
(b) In addition, and without limiting the foregoing Purchase Option,
if at any time during the term of the Purchase Option, there occurs: (a) a
dissolution, liquidation, or sale of all or substantially all of the assets of
the Company; (b) a merger or consolidation involving the Company in which the
Company is not the surviving corporation; (c) a reverse merger in which the
Company is the surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of other securities, cash or
otherwise; or (d) the acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any Affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors, then: (i) if there is no successor to the
Company, the Company shall have the right to exercise its Purchase Option as to
all or any portion of the Stock then subject to the Purchase Option set forth
above to the same extent as if Purchaser's employment by the Company had ceased
on the date preceding the date of consummation of said event or transaction or
(ii) the Purchase Option may be assigned to any successor of the Company, and
the Purchase Option shall apply if Purchaser shall cease for any
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29
reason to be an employee of such successor on the same basis as set forth above.
In that case, references herein to the "Company" shall be deemed to refer to
such successor.
(c) The Company shall be entitled to pay for any shares purchased
pursuant to its Purchase Option at the Company's option in cash, by offset
against any indebtedness owing to the Company by Purchaser including without
limitation any note given in payment for the Stock, or a combination of both.
(d) As used herein, employment with the Company shall include
employment with an affiliate of the Company.
(e) This Agreement is not an employment contract and nothing in this
Agreement shall be deemed to create in any way whatsoever any obligation on the
part of Purchaser to continue in the employ of the Company, or of the Company to
continue Purchaser in the employ of the Company.
3. The Purchase Option may be exercised by giving written notice of
exercise delivered or mailed as provided in paragraph 11. Upon providing of such
notice and payment or tender of the purchase price, the Company shall become the
legal and beneficial owner of the Stock being purchased and all rights and
interests therein or related thereto.
4. If from time to time during the term of the Purchase Option there is
any stock dividend or liquidating dividend or distribution of cash and/or
property, stock split or other change in the character or amount of any of the
outstanding securities of the Company, then, in such event, any and all new,
substituted or additional securities or other property to which Purchaser is
entitled by reason of his ownership of Stock will be immediately subject to the
Purchase Option and be included in the word "Stock" for all purposes of the
Purchase Option with the same force and effect as the shares of Stock then
subject to the Purchase Option. While the total Option Price shall remain the
same after each such event, the Option Price per share of Stock upon exercise of
the Purchase Option shall be appropriately adjusted.
5. All certificates representing any shares of Stock of the Company
subject to the provisions of this Agreement shall have endorsed thereon a legend
in substantially the following form:
"The shares represented by this certificate are subject to an option set
forth in an agreement between the corporation and the registered holder,
or his predecessor in interest, a copy of which is on file at the
principal office of this corporation. Any transfer or attempted transfer
of any shares subject to such option is void without the prior express
written consent of the issuer of these shares."
6. As security for Purchaser's faithful performance of the terms of this
Agreement and to insure the availability for delivery of Purchaser's Stock upon
exercise of the Purchase Option herein provided for, Purchaser agrees, at the
closing hereunder (or as soon thereafter as practicable), to deliver (or have
the Company deliver on the Purchaser's behalf) to and deposit with the Secretary
of the Company ("Escrow Agent"), as Escrow Agent in this transaction, three
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30
(3) stock assignments duly endorsed (with date and number of shares left blank)
in the form attached hereto as Exhibit B, together with a certificate or
certificates evidencing all of the Stock subject to the Purchase Option; said
documents are to be held by the Escrow Agent and delivered by said Escrow Agent
pursuant to the Joint Escrow Instructions of the Company and Purchaser set forth
in Exhibit C attached hereto and incorporated herein by this reference, which
instructions shall also be delivered to the Escrow Agent at the closing
hereunder (or as soon thereafter as practicable). If a portion of the total
purchase price is paid by a promissory note, the Stock is also subject to the
Pledge Agreement, and possession of the certificates and stock assignments by
the Escrow Agent shall also constitute possession by the Company of such
instruments pursuant to the Pledge Agreement.
7. Purchaser shall not sell or transfer any of the Stock subject to the
Purchase Option or any interest therein so long as such Stock is subject to the
Purchase Option or the Pledge Agreement.
8. The Company shall not be required (i) to transfer on its books any
shares of Stock of the Company which shall have been sold or transferred in
violation of any of the provisions set forth in this Agreement or (ii) to treat
as owner of such shares or to accord the right to vote as such owner or to pay
dividends to any transferee to whom such shares shall have been so transferred.
9. Subject to the provisions of paragraphs 7 and 8 above, Purchaser (but
not any unapproved transferee) shall, during the term of this Agreement,
exercise all rights and privileges of a stockholder of the Company with respect
to the Stock.
10. The parties agree to execute such further instruments and to take
such further action as reasonably may be necessary to carry out the intent of
this Agreement.
11. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
any United States Postal Service mailbox, by registered or certified mail with
First Class postage and fees prepaid, addressed to the other party hereto at his
address hereinafter shown below his signature or at such other address as such
party may designate by ten (10) days' advance written notice to the other party
hereto.
12. This Agreement shall bind and inure to the benefit of the successors
and assigns of the Company and, subject to the restrictions on transfer herein
set forth, inure to the benefit of and be binding upon Purchaser, his heirs,
executors, administrators, successors, and assigns. Without limiting the
generality of the foregoing, the Purchase Option of the Company hereunder shall
be assignable by the Company at any time or from time to time, in whole or in
part.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the ____ day of __________, 19__.
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By
--------------------------------
Address:
----------------------------------
----------------------------------
Purchaser
Address:
----------------------------------
ATTACHMENTS:
Exhibit A Vesting Schedule
Exhibit B Assignment Separate from Certificate
Exhibit C Joint Escrow Instructions
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EXHIBIT A
VESTING SCHEDULE
NUMBER OF SHARES
SUBJECT TO
IF CESSATION OF EMPLOYMENT OCCURS: PURCHASE OPTION:
Before _______, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
After _______________, 19__
but before _______________, 19__ _____________________ shares
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EXHIBIT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED and pursuant to that certain Early Exercise Stock
Purchase Agreement dated as of ____________, 19__ (the "Agreement"),
______________________________ hereby sells, assigns and transfers unto
_____________________________________________ (_________) shares of common stock
of HMT Technology Corporation, a Delaware corporation, standing in the
undersigned's name on the books of said corporation represented by Certificate
No. _____ herewith, and does hereby irrevocably constitute and appoint
__________________________ attorney to transfer the said stock on the books of
the said corporation with full power of substitution in the premises. This
Assignment may be used only in accordance with and subject to the terms and
conditions of the Agreement, in connection with the repurchase of shares of
Common Stock issued to the undersigned pursuant to the Agreement, and only to
the extent that such shares remain subject to the Company's Purchase Option
under the Agreement.
Dated: _________________________
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EXHIBIT C
JOINT ESCROW INSTRUCTIONS
Signature
________________________________
________________________________
________________________________
Dear Sir:
As Escrow Agent for both HMT Technology Corporation, a Delaware
corporation ("Company"), and the undersigned purchaser of stock of the Company
("Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Early Exercise Stock
Purchase Agreement (the "Agreement"), dated ____________________, to which a
copy of these Joint Escrow Instructions is attached as Exhibit C, in accordance
with the following instructions:
1. In the event the Company or an assignee shall elect to exercise the
Purchase Option set forth in the Agreement, the Company or its assignee will
give to Purchaser and you a written notice specifying the number of shares of
stock to be purchased, the purchase price, and the time for a closing hereunder
at the principal office of the Company. Purchaser and the Company hereby
irrevocably authorize and direct you to close the transaction contemplated by
such notice in accordance with the terms of said notice.
2. At the closing you are directed (a) to date any 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 against the
simultaneous delivery to you of the purchase price (which may include suitable
acknowledgment of cancellation of indebtedness) of the number of shares of stock
being purchased pursuant to the exercise of the Purchase Option.
3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as specified in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as his
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of assignment and/or
transfer and all stock certificates necessary or appropriate to make all
securities negotiable and complete any transaction herein contemplated.
4. This escrow shall terminate upon expiration or exercise in full of
the Purchase Option, whichever occurs first.
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5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of same to Purchaser and shall be discharged of all
further obligations hereunder; provided, however, that if at the time of
termination of this escrow you are advised by the Company that the property
subject to this escrow is the subject of a pledge or other security agreement,
you shall deliver all such property to the pledgeholder or other person
designated by the Company.
6. Except at otherwise provided in these Joint Escrow Instructions, your
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.
7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties or
their assignees. You shall not be personally liable for any act you may do or
omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while
acting in good faith and any act done or omitted by you pursuant to the advice
of your own attorneys shall be conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law, and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree of any court,
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,
authority 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 any
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 (including
without limitation the firm of ββββββ Godward LLP) and other experts as you may
deem necessary properly to advise you in connection with your obligations
hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor.
12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be Secretary of the Company or if you shall resign by written
notice to each party. In the event of any such termination, the Company may
appoint any officer or assistant officer of the Company as successor Escrow
Agent and Purchaser hereby confirms the appointment of such successor or
successors as his attorney-in-fact and agent to the full extent of your
appointment.
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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, you may (but are not obligated to) retain in your possession without
liability to anyone all or any part of said securities until such dispute 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
any United States Post Box, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties hereunto entitled at the
following addresses, or at such other addresses as a party may designate by ten
(10) days' written notice to each of the other parties hereto:
COMPANY: _______________________________
_____________________________________
_____________________________________
PURCHASER: _____________________________________
_____________________________________
_____________________________________
SECRETARY: Secretary
_____________________________________
_____________________________________
_____________________________________
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. It is
understood and agreed that references to "you" or "your" herein refer to the
original Escrow Agent and to any and all successor Escrow Agents. It is
understood and agreed that the Company may at any time or from time to time
assign its rights under the Agreement and these Joint Escrow Instructions in
whole or in part.
Very truly yours,
____________________________________
By__________________________________
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PURCHASER:
____________________________________
ESCROW AGENT:
_____________________________________
Secretary
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HMT TECHNOLOGY CORPORATION
EMPLOYEE STOCK PURCHASE PLAN OFFERING
(for Offerings commencing after April 30, 1999)
1. GRANT; OFFERING DATE; TERMINATION.
(a) The Board of Directors of HMT Technology Corporation, a Delaware
corporation (the "Company"), pursuant to the Company's Employee Stock Purchase
Plan (the "Plan"), hereby authorizes the grant of rights to purchase shares of
the common stock of the Company ("Common Stock") to all Eligible Employees (an
"Offering"). The first Offering shall begin on May 1, 1999 and end on April 30,
2001 (the "Initial Offering"). Further, an Offering shall begin on each November
1 and May 1 thereafter, commencing with November 1, 1999, and shall end on the
day prior to the second anniversary of each such Offering's Offering Date unless
sooner terminated in accordance with the provisions of this Offering or the
Plan. The first day of an Offering is that Offering's "Offering Date."
(b) Prior to the commencement of any Offering, the Board of Directors
(or the Committee described in subparagraph 2(c) of the Plan, if any) may change
any or all terms of such Offering and any subsequent Offerings. The granting of
rights pursuant to each Offering hereunder shall occur on each respective
Offering Date unless, prior to such date (a) the Board of Directors (or such
Committee) determines that such Offering shall not occur, or (b) no shares
remain available for issuance under the Plan in connection with the Offering.
(c) If the Company's accountants advise the Company that the accounting
treatment of purchases under these Offerings has changed in a manner the Company
determines is detrimental to its best interests, then each Offering commenced
under this offering document shall terminate as of the next Purchase Date (after
the purchase of stock on such Purchase Date) under such Offering.
2. ELIGIBLE EMPLOYEES.
(a) Each employee of either the Company or its designated Affiliates (as
defined in the Plan) incorporated in the United States shall be granted rights
to purchase Common Stock under the Offering on the Offering Date of such
Offering, provided that such employee has been continuously employed by the
Company or one of its designated Affiliates throughout the ten-day period
immediately prior to and ending on that Offering's Offering Date (an "Eligible
Employee").
(b) Notwithstanding subparagraph 2(a) above, the following employees
shall not be Eligible Employees or be granted rights under an Offering: (i)
part-time or seasonal employees whose customary employment is less than twenty
(20) hours per week or five (5) months per calendar year or (ii) five percent
(5%) stockholders (including ownership through unexercised options) described in
subparagraph 5(c) of the Plan.
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3. RIGHTS.
(a) Subject to the limitations contained herein and in the Plan, on each
Offering Date each Eligible Employee shall be granted the right to purchase the
number of shares of Common Stock purchasable with up to fifteen percent (15%) of
such Eligible Employee's Earnings (defined as base salary or wages plus
overtime) paid during the period of such Offering beginning after such Eligible
Employee first commences participation; provided, however, that no Eligible
Employee may purchase Common Stock on a particular Purchase Date that would
result in more than fifteen percent (15%) of such Eligible Employee's Earnings
paid during the period from the date the Eligible Employee first commences
participation in the Offering to such Purchase Date having been applied to
purchase shares under all ongoing Offerings under the Plan and all other Company
plans intended to qualify as "employee stock purchase plans" under Section 423
of the Internal Revenue Code of 1986, as amended (the "Code").
(b) Notwithstanding the foregoing, the maximum number of shares of
Common Stock an Eligible Employee may purchase on any Purchase Date in an
Offering shall be such number of shares as has a fair market value (determined
as of the Offering Date for such Offering) equal to (x) $25,000 multiplied by
the number of calendar years in which the right under such Offering has been
outstanding at any time, minus (y) the fair market value of any other shares of
Common Stock (determined as of the relevant Offering Date with respect to such
shares) which, for purposes of the limitation of Section 423(b)(8) of the Code,
are attributed to any of such calendar years in which the right is outstanding.
The amount in clause (y) of the previous sentence shall be determined in
accordance with regulations applicable under Section 423(b)(8) of the Code based
on (i) the number of shares previously purchased with respect to such calendar
years pursuant to such Offering or any other Offering under the Plan, or
pursuant to any other Company plans intended to qualify as "employee stock
purchase plans" under Section 423 of the Code, and (ii) the number of shares
subject to other rights outstanding on the Offering Date for such Offering
pursuant to the Plan or any other such Company plan.
(c) The maximum aggregate number of shares available to be purchased by
all Eligible Employees under an Offering shall be the number of shares remaining
available under the Plan on the Offering Date. If the aggregate purchase of
shares of Common Stock upon exercise of rights granted under the Offering would
exceed the maximum aggregate number of shares available, the Board shall make a
pro rata allocation of the shares available in a uniform and equitable manner.
4. PURCHASE PRICE.
The purchase price of the Common Stock under the Offering shall be the
lesser of eighty-five percent (85%) of the fair market value of the Common Stock
on the Offering Date (eighty-five percent (85%) of the fair market value of the
Common Stock on the first day on which the Company's Common Stock is actively
traded that immediately follows the Offering Date if an Offering Date does not
fall on a day during which the Company's Common Stock is actively traded) or
eighty-five percent (85%) of the fair market value of the Common Stock on the
Purchase Date (eighty-five percent (85%) of the fair market value of the Common
Stock on the first day on which the Company's Common Stock is actively traded
that immediately precedes
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the Purchase Date if a Purchase Date does not fall on a day during which the
Company's Common Stock is actively traded), in each case rounded up to the
nearest whole cent per share.
5. PARTICIPATION.
(a) Except as otherwise provided in this paragraph 5, an Eligible
Employee may elect to participate in an Offering at the beginning of the
Offering or in the case of an Offering in which an Eligible Employee was
eligible to participate at such Offering's commencement, as of any day
immediately following a Purchase Date (i.e. May 1, or November 1) during such
Offering. An Eligible Employee shall become a participant in an Offering by
delivering an agreement authorizing payroll deductions. Such deductions must be
in whole dollars, with a minimum dollar amount of ten dollars ($10) per pay
period and a maximum amount not expected to exceed fifteen percent (15%) of
Earnings over the course of an Offering, or in whole percentages, with a minimum
percentage of one percent (1%) and a maximum percentage of fifteen percent (15%)
of Earnings over the course of an Offering. A participant may not make
additional payments into his or her account. In the absence of the delivery of
an agreement authorizing payroll deductions, a participant's initial
participation level shall be zero, provided however, that for participant's
already enrolled in an offering under the Plan, as of the day prior to the
Offering Date of the Initial Offering and similarly as to Offerings thereafter
under this offering document, the initial level of participation shall be as
provided in the most recent agreement authorizing payroll deductions from the
pay of such participant that has been delivered to the Company. The agreement
shall be made on such enrollment form as the Company provides, and must be
delivered to the Company before the Offering Date to be effective for the
remaining portion of that Offering, unless a later time for filing the
enrollment form is set by the Board for all Eligible Employees with respect to a
given Offering Date. Notwithstanding the foregoing, the time by which an
agreement authorizing payroll deductions must be delivered to the Company for
determining a participant's initial level of participation in the Initial
Offering shall be not later than the end of the second full payroll period
following the Offering Date of the Initial Offering.
(b) By delivering a notice to the Company on such form as the Company
provides, a participant may increase or decrease his or her participation level
during the course of an Offering or withdraw from an Offering as follows: (i) a
participant may decrease (including to zero) his or her participation level only
once (except for a second reduction to zero) during each May 1 to October 31 and
November 1 to April 30, at any time except during the ten (10) day period
immediately preceding a Purchase Date, (ii) during the course of an Offering a
participant may increase or decrease his or her participation level during each
May 1 to October 31 and November 1 to April 30, with such change not to take
effect until after the Purchase Date that first follows the date such change is
delivered to the Company, and (iii) a participant may withdraw from an Offering
and receive his or her accumulated payroll deductions from the Offering (reduced
to the extent, if any, such deductions have been used to acquire Common Stock
for the participant on any prior Purchase Dates), without interest, at any time
prior to the end of the Offering, excluding only each ten (10) day period
immediately preceding a Purchase Date.
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6. PURCHASES.
Subject to the limitations contained herein, on each Purchase Date, each
participant's accumulated payroll deductions (without any increase for interest)
shall be applied to the purchase of whole shares of Common Stock, up to the
maximum number of shares permitted under the Plan and the Offering. "Purchase
Date" shall be defined as the April 30, and October 31 of each Offering. On a
Purchase Date each participant's purchases will first be made under the
Offering, for which purchases are made on such date, that results in stock being
purchased for such participant at the lowest price under all Offerings in which
such participant then has been granted rights and under which stock is purchased
on such Purchase Date.
7. NOTICES AND AGREEMENTS.
Any notices or agreements provided for in an Offering or the Plan shall
be given in writing, in a form provided by the Company, and unless specifically
provided for in the Plan or this Offering shall be deemed effectively given upon
receipt or, in the case of notices and agreements delivered by the Company, five
(5) days after deposit in the United States mail, postage prepaid.
8. EXERCISE CONTINGENT ON STOCKHOLDER APPROVAL.
The rights granted under an Offering are subject to the approval of the
Plan by the stockholders as required for the Plan to obtain treatment as a
tax-qualified employee stock purchase plan under Section 423 of the Code and as
necessary to comply with the requirements of exemption from potential liability
under Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") set forth in Rule 16b-3 promulgated under the Exchange Act.
9. OFFERING SUBJECT TO PLAN.
Each Offering is subject to all the provisions of the Plan, and its
provisions are hereby made a part of the Offering, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan. In the event of any conflict
between the provisions of an Offering and those of the Plan (including
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan), the provisions of the Plan
shall control.
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