UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (date of earliest event reported): May 29, 2007
GSI Technology, Inc.
(Exact name of registrant as specified in its charter)
Delaware |
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000-33387 |
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77-0398779 |
(State or other jurisdiction of |
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(Commission File No.) |
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(I.R.S. Employer Identification |
incorporation) |
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No.) |
2360
Owen Street
Santa Clara, California 95054
(Address of principal executive offices)
Registrants
telephone number, including area code:
(408) 980-8388
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On May 23, 2007, the Board of Directors of GSI Technology, Inc. (the Company) approved the grant of options for the Companys common stock, effective as of May 29, 2007, to the following executive officers of the Company:
Name of Officer |
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Position |
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No. of Shares |
Lee-Lean Shu |
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President, Chief Executive Officer and Chairman |
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61,875 |
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Robert Yau |
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Vice President, Engineering and Secretary |
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20,625 |
Each option vests and becomes 100% exercisable on January 13, 2011, subject to the optionees continued employment with the Company. The exercise price of each option is $4.20, which was the closing sale price per share of the Companys common stock reported on the Nasdaq Global Market on the effective date of grant. The options expire on May 29, 2017. The options were granted pursuant to the Companys 2007 Equity Incentive Plan (the Equity Plan).
On May 30, 2007, the Compensation Committee of the Board of Directors of the Company approved forms of notice of grant and stock option agreement for use with the Equity Plan. Copies of the Forms of Notice of Grant of Stock Option (U.S. Participant), Notice of Grant of Stock Option (Non-U.S. Participant), Stock Option Agreement (U.S. Participant) and Stock Option Agreement (Non-U.S. Participant) are filed herewith as Exhibits 99.1, 99.2, 99.3 and 99.4, respectively, and incorporated by reference herein. The form of Stock Option Agreement (U.S. Participant) and the form of Notice of Grant of Stock Option (U.S. Participant), except for the vesting schedule stated therein, will govern the options granted to Messrs. Shu and Yau.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
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Description |
99.1 |
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Form of Notice of Grant of Stock Option (U.S. Participant) |
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99.2 |
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Form of Notice of Grant of Stock Option (Non-U.S. Participant) |
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99.3 |
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Form of Stock Option Agreement (U.S. Participant) |
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99.4 |
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Form of Stock Option Agreement (Non-U.S. Participant) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: June 4, 2007
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GSI Technology, Inc. |
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By: |
/s/ Douglas M. Schirle |
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Douglas M. Schirle |
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Chief Financial Officer |
Exhibit Index
Exhibit No. |
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Description |
99.1 |
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Form of Notice of Grant of Stock Option (U.S. Participant) |
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99.2 |
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Form of Notice of Grant of Stock Option (Non-U.S. Participant) |
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99.3 |
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Form of Stock Option Agreement (U.S. Participant) |
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99.4 |
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Form of Stock Option Agreement (Non-U.S. Participant) |
Exhibit 99.1
GSI TECHNOLOGY, INC.
NOTICE OF GRANT OF STOCK OPTION
(For U.S. Participant)
The Participant has been granted an option (the Option ) to purchase certain shares of Stock of GSI Technology, Inc. pursuant to the GSI Technology, Inc. 2007 Equity Incentive Plan (the Plan ), as follows:
Participant: |
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Employee ID: |
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Date of Grant: |
May 29, 2007 |
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Number of Option Shares: |
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Exercise Price Per Share: |
$4.20 |
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Vesting Commencement Date: |
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Option Expiration Date: |
The tenth anniversary of the Date of Grant. |
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Tax Status of Option: |
Nonstatutory Stock Option. |
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Vested Shares: |
Except as provided in the Stock Option Agreement and provided the Participants Service has not terminated prior to the applicable date, the number of Vested Shares (disregarding any resulting fractional share) as of any date is determined by multiplying the Number of Option Shares by the Vested Ratio determined as of such date as follows: |
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Vested Ratio |
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Prior to first anniversary of Vesting Commencement Date |
0 |
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On first anniversary of Vesting Commencement Date (the Initial Vesting Date) |
1/4 |
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Plus |
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On each subsequent anniversary of Initial Vesting Date until the Vested Ratio equals 1/1, an additional |
1/4 |
By their signatures below or by electronic acceptance or authentication in a form authorized by the Company, the Company and the Participant agree that the Option is governed by this Grant Notice and by the provisions of the Plan and the Stock Option Agreement, both of which are made a part of this document. The Participant acknowledges that copies of the Plan, the Stock Option Agreement and the prospectus for the Plan are available on the Companys internal web site and may be viewed and printed by the Participant for attachment to the Participants copy of this Grant Notice. The Participant represents that the Participant has read and is familiar with the provisions of the Plan and the Stock Option Agreement, and hereby accepts the Option subject to all of their terms and conditions.
GSI TECHNOLOGY, INC. |
PARTICIPANT |
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By: |
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Signature |
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Its: |
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Date |
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Address: |
2360 Owen Street |
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Santa Clara, California 95054 |
Address |
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ATTACHMENTS: |
2007 Equity Incentive Plan, as amended to the Date of Grant; Stock Option Agreement, Exercise Notice and Plan Prospectus |
Exhibit 99.2
GSI TECHNOLOGY, INC.
NOTICE OF GRANT OF STOCK OPTION
(For Non-U.S. Participant)
The Participant has been granted an option (the Option ) to purchase certain shares of Stock of GSI Technology, Inc. pursuant to the GSI Technology, Inc. 2007 Equity Incentive Plan (the Plan ), as follows:
Participant: |
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Employee ID: |
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Date of Grant: |
May 29, 2007 |
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Number of Option Shares: |
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Exercise Price Per Share: |
$4.20 |
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Vesting Commencement Date: |
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Option Expiration Date: |
The tenth anniversary of the Date of Grant. |
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Vested Shares: |
Except as provided in the Stock Option Agreement and provided the Participants Service has not terminated prior to the applicable date, the number of Vested Shares (disregarding any resulting fractional share) as of any date is determined by multiplying the Number of Option Shares by the Vested Ratio determined as of such date as follows: |
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Vested Ratio |
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Prior to first anniversary of Vesting Commencement Date |
0 |
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On first anniversary of Vesting Commencement Date (the Initial Vesting Date) |
1/4 |
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Plus |
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On each subsequent anniversary of Initial Vesting Date until the Vested Ratio equals 1/1, an additional |
1/4 |
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Local Law: |
The laws, rules and regulations of the Republic of China, of which the Participant is a resident. |
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By their signatures below or by electronic acceptance or authentication in a form authorized by the Company, the Company and the Participant agree that the Option is governed by this Grant Notice and by the provisions of the Plan and the Stock Option Agreement, both of which are made a part of this document. The Participant acknowledges that copies of the Plan, the Stock Option Agreement and the prospectus for the Plan are available on the Companys internal web site and may be viewed and printed by the Participant for attachment to the Participants copy of this Grant Notice. The Participant represents that the Participant has read and is familiar with the provisions of the Plan and the Stock Option Agreement, and hereby accepts the Option subject to all of their terms and conditions.
GSI TECHNOLOGY, INC. |
PARTICIPANT |
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By: |
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Signature |
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Its: |
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Date |
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Address: |
2360 Owen Street |
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Santa Clara, California 95054 |
Address |
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ATTACHMENTS: |
2007 Equity Incentive Plan, as amended to the Date of Grant; Stock Option Agreement, Exercise Notice and Plan Prospectus |
Exhibit 99.3
GSI TECHNOLOGY, INC.
STOCK OPTION AGREEMENT
(For U.S. Participant)
GSI Technology, Inc. has granted to the Participant named in the Notice of Grant of Stock Option (the Grant Notice ) to which this Stock Option Agreement (the Option Agreement ) is attached an option (the Option ) to purchase certain shares of Stock upon the terms and conditions set forth in the Grant Notice and this Option Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the GSI Technology, Inc. 2007 Equity Incentive Plan (the Plan ), as amended to the Date of Grant, the provisions of which are incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Grant Notice, this Option Agreement, the Plan and a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of shares issuable pursuant to the Option (the Plan Prospectus ) , (b) accepts the Option subject to all of the terms and conditions of the Grant Notice, this Option Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this Option Agreement or the Plan.
All questions of interpretation concerning this Option Agreement shall be determined by the Committee. All determinations by the Committee shall be final and binding upon all persons having an interest in the Option as provided by the Plan. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election.
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During the lifetime of the Participant, the Option shall be exercisable only by the Participant or the Participants guardian or legal representative. The Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participants beneficiary, except transfer by will or by the laws of descent and distribution. Following the death of the Participant, the Option, to the extent provided in Section 7, may be exercised by the Participants legal representative or by any person empowered to do so under the deceased Participants will or under the then applicable laws of descent and distribution.
The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of business on the Option Expiration Date, (b) the close of business on the last date for exercising the Option following termination of the Participants Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8.
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In the event of a Change in Control, except to the extent that the Committee determines to cash out the Option in accordance with Section 15.1(c) of the Plan, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the Acquiror ), may, without the consent of the Participant, assume or continue in full force and effect the Companys rights and obligations under all or any portion of the Option or substitute for all or any portion of the Option a substantially equivalent option for the Acquirors stock. For purposes of this Section, the Option or any portion thereof shall be deemed assumed if, following the Change in Control, the Option confers the right to receive, subject to the terms and conditions of the Plan and this Option Agreement, for each share of Stock subject to such portion of the Option immediately prior to the Change in Control, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a share of Stock on the effective date of the Change in Control was entitled; provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon the exercise of the Option, for each share of Stock subject to the Option, to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Stock pursuant to the Change in Control. The Option shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control to the extent that the Option is neither
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assumed or continued by the Acquiror in connection with the Change in Control nor exercised as of the date of the Change in Control.
Subject to any required action by the stockholders of the Company, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number, Exercise Price and kind of shares subject to the Option, in order to prevent dilution or enlargement of the Participants rights under the Option. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as effected without receipt of consideration by the Company. Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number, and the Exercise Price shall be rounded up to the nearest whole cent. In no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. The Committee in its sole discretion, may also make such adjustments in the terms of the Option to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate. All adjustments pursuant to this Section shall be determined by the Committee, and its determination shall be final, binding and conclusive.
The Participant shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date the shares are issued, except as provided in Section 9. If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participants employment is at will and is for no specified term. Nothing in this Option Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Participants Service as a Director, an Employee or Consultant, as the case may be, at any time.
11. NOTICE OF SALES UPON DISQUALIFYING DISPOSITION .
The Participant shall dispose of the shares acquired pursuant to the Option only in accordance with the provisions of this Option Agreement. In addition, if the Grant Notice designates this Option as an Incentive Stock Option, the Participant shall (a) promptly notify the Chief Financial Officer of the Company if the Participant disposes of any of the shares acquired pursuant to the Option within one (1) year after the date the Participant exercises all or part of the
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Option or within two (2) years after the Date of Grant and (b) provide the Company with a description of the circumstances of such disposition. Until such time as the Participant disposes of such shares in a manner consistent with the provisions of this Option Agreement, unless otherwise expressly authorized by the Company, the Participant shall hold all shares acquired pursuant to the Option in the Participants name (and not in the name of any nominee) for the one-year period immediately after the exercise of the Option and the two-year period immediately after Date of Grant. At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the transfer agent for the Companys stock to notify the Company of any such transfers. The obligation of the Participant to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence.
The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of stock subject to the provisions of this Option Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following:
THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (ISO ). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT BE TRANSFERRED PRIOR TO [ INSERT DISQUALIFYING DISPOSITION DATE HERE ]. SHOULD THE REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDERS NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.
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Incentive Stock Option |
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Participant: |
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Nonstatutory Stock Option |
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Date: |
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STOCK OPTION EXERCISE NOTICE
GSI Technology, Inc.
Attention: Stock Administration
2360 Owen Street
Santa Clara, CA 95054
Ladies and Gentlemen:
1. Option . I was granted an option (the Option ) to purchase shares of the common stock (the Shares ) of GSI Technology, Inc. (the Company ) pursuant to the Companys 2007 Equity Incentive Plan (the Plan ), my Notice of Grant of Stock Option (the Grant Notice ) and my Stock Option Agreement (the Option Agreement ) as follows:
Date of Grant: |
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Number of Option Shares: |
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Exercise Price per Share: |
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$ |
2. Exercise of Option . I hereby elect to exercise the Option to purchase the following number of Shares, all of which are Vested Shares in accordance with the Grant Notice and the Option Agreement:
Total Shares Purchased: |
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Total Exercise Price (Total Shares X Price per Share) |
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3. Payments . I enclose payment in full of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement:
o Cash: |
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$ |
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o Check: |
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$ |
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o Tender of Company Stock: |
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Contact Plan Administrator |
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o Cashless Exercise (same-day sale): |
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Contact Plan Administrator |
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4. Tax Withholding . I authorize payroll withholding and otherwise will make adequate provision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with the Option. If I am exercising a Nonstatutory Stock Option, I enclose payment in full of my withholding taxes, if any, as follows:
(Contact Plan Administrator for amount of tax due.)
o Cash: |
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$ |
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o Check: |
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$ |
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o Tender of Company Stock: |
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Contact Plan Administrator |
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Cashless Exercise (same-day sale): |
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Contact Plan Administrator |
5. Participant Information .
My address is: |
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My Social Security Number is: |
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6. Notice of Disqualifying Disposition . If the Option is an Incentive Stock Option, I agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part of the Option or within two (2) years of the Date of Grant.
7. Binding Effect . I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Grant Notice, the Option Agreement and the Plan, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns.
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Very truly yours, |
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(Signature) |
Receipt of the above is hereby acknowledged.
GSI TECHNOLOGY, INC.
By: |
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Title: |
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Dated: |
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Exhibit 99.4
GSI TECHNOLOGY, INC.
STOCK OPTION AGREEMENT
(For Non-U.S. Participant)
GSI Technology, Inc. has granted to the Participant named in the Notice of Grant of Stock Option (the Grant Notice ) to which this Stock Option Agreement (the Option Agreement ) is attached an option (the Option ) to purchase certain shares of Stock upon the terms and conditions set forth in the Grant Notice and this Option Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the GSI Technology, Inc. 2007 Equity Incentive Plan (the Plan ), as amended to the Date of Grant, the provisions of which are incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Grant Notice, this Option Agreement, the Plan and a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of shares issuable pursuant to the Option (the Plan Prospectus ) , (b) accepts the Option subject to all of the terms and conditions of the Grant Notice, this Option Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this Option Agreement or the Plan.
1. DEFINITIONS AND CONSTRUCTION .
1.1 Definitions . Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.
1.2 Construction . Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term or is not intended to be exclusive, unless the context clearly requires otherwise.
2. CERTAIN CONDITIONS OF THE OPTION .
2.1 Compliance with Local Law. The Participant agrees that the Participant will not acquire shares pursuant to the Option or transfer, assign, sell or otherwise deal with such shares except in compliance with Local Law.
2.2 Employment Conditions. In accepting the Option, the Participant acknowledges that:
(a) Any notice period mandated under Local Law shall not be treated as Service for the purpose of determining the vesting of the Option; and the Participants right to exercise the Option after termination of Service, if any, will be measured by the date of termination of the Participants active Service and will not be extended by any notice period mandated under Local Law. Subject to the foregoing and the provisions of the Plan, the Company, in its sole discretion, shall determine whether the Participants Service has terminated and the effective date of such termination.
(b) The Plan is established voluntarily by the Company. It is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Option Agreement.
(c) The grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if Options have been granted repeatedly in the past.
(d) All decisions with respect to future Option grants, if any, will be at the sole discretion of the Company.
(e) The Participants participation in the Plan shall not create a right to further Service with any Participating Company and shall not interfere with the ability of any Participating Company to terminate the Participants Service at any time, with or without cause.
(f) The Participant is voluntarily participating in the Plan.
(g) The Option is an extraordinary item that does not constitute compensation of any kind for Service of any kind rendered to any Participating Company, and which is outside the scope of the Participants employment contract, if any.
(h) The Option is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.
(i) In the event that the Participant is not an employee of the Company, the Option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore the Option grant will not be interpreted to form an employment contract with any other Participating Company.
(j) The future value of the underlying shares is unknown and cannot be predicted with certainty. If the underlying shares do not increase in value, the Option will have no value. If the Participant exercises the Option and obtains shares, the value of those shares acquired upon exercise may increase or decrease in value, even below the Exercise Price.
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All questions of interpretation concerning this Option Agreement shall be determined by the Committee. All determinations by the Committee shall be final and binding upon all persons having an interest in the Option as provided by the Plan. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election.
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4. EXERCISE OF THE OPTION .
4.1 Right to Exercise . Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Vesting Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired upon exercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares, as adjusted pursuant to Section 9.
4.2 Method of Exercise . Exercise of the Option shall be by means of electronic or written notice (the Exercise Notice ) in a form authorized by the Company. An electronic Exercise Notice must be digitally signed or authenticated by the Participant in such manner as required by the notice and transmitted to the Company or an authorized representative of the Company (including a third-party administrator designated by the Company). In the event that the Participant is not authorized or is unable to provide an electronic Exercise Notice, the Option shall be exercised by a written Exercise Notice addressed to the Company, which shall be signed by the Participant and delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Company, or an authorized representative of the Company (including a third-party administrator designated by the Company). Each Exercise Notice, whether electronic or written, must state the Participants election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Participants investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. Further, each Exercise Notice must be received by the Company prior to the termination of the Option as set forth in Section 6 and must be accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such electronic or written Exercise Notice and the aggregate Exercise Price.
4.3 Payment of Exercise Price.
(a) Forms of Consideration Authorized . Except as otherwise provided below, payment of the aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised shall be made (i) in cash or by check or cash equivalent, (ii) if permitted by the Company, by tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the Participant having a Fair Market Value not less than the aggregate Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(b), or (iv) by any combination of the foregoing.
(b) Limitations on Forms of Consideration.
(i) Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Companys stock. If required by the Company, the Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Participant for more than six (6) months or such other period, if any, required by the Company (and not used for
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another option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company.
(ii) Cashless Exercise. A Cashless Exercise means the delivery of a properly executed notice together with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Companys sole and absolute discretion, to establish, decline to approve or terminate any such program or procedure, including with respect to the Participant notwithstanding that such program or procedures may be available to others.
4.4 Tax Withholding. Regardless of any action taken by the Company or any other Participating Company with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (the Tax Obligations ), the Participant acknowledges that the ultimate liability for all Tax Obligations legally due by the Participant is and remains the Participants responsibility and that the Company (a) makes no representations or undertakings regarding the treatment of any Tax Obligations in connection with any aspect of the Option, including the grant, vesting or exercise of the Option, the subsequent sale of shares acquired pursuant to such exercise, or the receipt of any dividends and (b) does not commit to structure the terms of the grant or any other aspect of the Option to reduce or eliminate the Participants liability for Tax Obligations. At the time of exercise of the Option, the Participant shall pay or make adequate arrangements satisfactory to the Company to satisfy all withholding obligations of the Company and any other Participating Company. In this regard, at the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company or any other Participating Company, the Participant hereby authorizes withholding of all applicable Tax Obligations from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for withholding of all applicable Tax Obligations, if any, by each Participating Company which arise in connection with the Option. Alternatively, or in addition, if permissible under applicable law, including Local Law, the Company or any other Participating Company may (i) sell or arrange for the sale of shares acquired by the Participant to satisfy the Tax Obligations, and/or (ii) withhold in shares, provided that only the amount of shares necessary to satisfy the minimum withholding amount required by applicable law, including Local Law, is withheld. Finally, the Participant shall pay to the Company or any other Participating Company any amount of the Tax Obligations that any such company may be required to withhold as a result of the Participants participation in the Plan that cannot be satisfied by the means previously described. The Company shall have no obligation to process the exercise of the Option or to deliver shares until the Tax Obligations as described in this Section have been satisfied by the Participant.
4.5 Beneficial Ownership of Shares; Certificate Registration . The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with any broker with which the Participant has an account relationship of which the Company has notice any or all shares acquired by the Participant pursuant to the exercise of the Option. Except as provided by the preceding sentence, a certificate for the shares as to which the
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Option is exercised shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.
During the lifetime of the Participant, the Option shall be exercisable only by the Participant or the Participants guardian or legal representative. The Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participants beneficiary, except transfer by will or by the laws of descent and distribution. Following the death of the Participant, the Option, to the extent provided in Section 7, may be exercised by the Participants legal representative or by any person empowered to do so under the deceased Participants will or under the then applicable laws of descent and distribution.
The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of business on the Option Expiration Date, (b) the close of business on the last date for exercising the Option following termination of the Participants Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8.
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7. EFFECT OF TERMINATION OF SERVICE .
7.1 Option Exercisability. The Option shall terminate immediately upon the Participants termination of Service to the extent that it is then unvested and shall be exercisable after the Participants termination of Service to the extent it is then vested only during the applicable time period as determined below and thereafter shall terminate.
(a) Disability . If the Participants Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participants Service terminated, may be exercised by the Participant (or the Participants guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Participants Service terminated, but in any event no later than the Option Expiration Date.
(b) Death . If the Participants Service terminates because of the death of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participants Service terminated, may be exercised by the Participants legal representative or other person who acquired the right to exercise the Option by reason of the Participants death at any time prior to the expiration of twelve (12) months after the date on which the Participants Service terminated, but in any event no later than the Option Expiration Date. The Participants Service shall be deemed to have terminated on account of death if the Participant dies within three (3) months after the Participants termination of Service.
(c) Termination for Cause . If the Participants Service is terminated for Cause or if, following the Participants termination of Service and during any period in which the Option otherwise would remain exercisable, the Participant engages in any act that would constitute Cause, the Option shall terminate in its entirety and cease to be exercisable immediately upon such termination of Service or act.
(d) Other Termination of Service . If the Participants Service terminates for any reason, except Disability, death or Cause, the Option, to the extent unexercised and exercisable for Vested Shares by the Participant on the date on which the Participants Service terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months after the date on which the Participants Service terminated, but in any event no later than the Option Expiration Date.
7.2 Extension if Exercise Prevented by Law or Insider Trading Policy . Notwithstanding the foregoing, other than termination of Service for Cause, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6 or a sale of shares pursuant to a Cashless Exercise of the Option would violate the provisions of the Insider Trading Policy, the Option shall remain exercisable until thirty (30) days after the date such exercise or sale, as the case may be, would no longer be prevented by such provisions, but in any event no later than the Option Expiration Date.
8. EFFECT OF CHANGE IN CONTROL .
In the event of a Change in Control, except to the extent that the Committee determines to cash out the Option in accordance with Section 15.1(c) of the Plan, the surviving,
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continuing, successor, or purchasing entity or parent thereof, as the case may be (the Acquiror ), may, without the consent of the Participant, assume or continue in full force and effect the Companys rights and obligations under all or any portion of the Option or substitute for all or any portion of the Option a substantially equivalent option for the Acquirors stock. For purposes of this Section, the Option or any portion thereof shall be deemed assumed if, following the Change in Control, the Option confers the right to receive, subject to the terms and conditions of the Plan and this Option Agreement, for each share of Stock subject to such portion of the Option immediately prior to the Change in Control, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a share of Stock on the effective date of the Change in Control was entitled; provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may, with the consent of the Acquiror, provide for the consideration to be received upon the exercise of the Option, for each share of Stock subject to the Option, to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Stock pursuant to the Change in Control. The Option shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control to the extent that the Option is neither assumed or continued by the Acquiror in connection with the Change in Control nor exercised as of the date of the Change in Control.
Subject to any required action by the stockholders of the Company, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number, Exercise Price and kind of shares subject to the Option, in order to prevent dilution or enlargement of the Participants rights under the Option. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as effected without receipt of consideration by the Company. Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number, and the Exercise Price shall be rounded up to the nearest whole cent. In no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. The Committee in its sole discretion, may also make such adjustments in the terms of the Option to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate. All adjustments pursuant to this Section shall be determined by the Committee, and its determination shall be final, binding and conclusive.
The Participant shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends,
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distributions or other rights for which the record date is prior to the date the shares are issued, except as provided in Section 9. If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participants employment is at will and is for no specified term. Nothing in this Option Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Participants Service as a Director, an Employee or Consultant, as the case may be, at any time.
The Company may at any time place legends referencing any applicable federal, state or foreign securities law, including Local Law, restrictions on all certificates representing shares of stock subject to the provisions of this Option Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following:
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Participant: |
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Date: |
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STOCK OPTION EXERCISE NOTICE
GSI Technology, Inc.
Attention: Stock Administration
2360 Owen Street
Santa Clara, CA 95054
Ladies and Gentlemen:
1. Option . I was granted an option (the Option ) to purchase shares of the common stock (the Shares ) of GSI Technology, Inc. (the Company ) pursuant to the Companys 2007 Equity Incentive Plan (the Plan ), my Notice of Grant of Stock Option (the Grant Notice ) and my Stock Option Agreement (the Option Agreement ) as follows:
Date of Grant: |
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Number of Option Shares: |
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Exercise Price per Share: |
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2. Exercise of Option . I hereby elect to exercise the Option to purchase the following number of Shares, all of which are Vested Shares in accordance with the Grant Notice and the Option Agreement:
Total Shares Purchased: |
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Total Exercise Price (Total Shares X Price per Share)$ |
$ |
3. Payments . I enclose payment in full of the total exercise price for the Shares in the following form(s), as authorized by my Option Agreement:
o Cash: |
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o Check: |
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o Tender of Company Stock: |
Contact Plan Administrator |
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o Cashless Exercise (same-day sale): |
Administrator Contact Plan |
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4. Tax Withholding . I authorize payroll withholding and otherwise will make adequate provision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with the Option. If I am exercising a Nonstatutory Stock Option, I enclose payment in full of my withholding taxes, if any, as follows:
(Contact Plan Administrator for amount of tax due.)
o Cash: |
$ |
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o Check: |
$ |
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o Tender of Company Stock: |
Contact Plan Administrator |
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o Cashless Exercise (same-day sale): |
Contact Plan Administrator |
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5. Participant Information .
My address is: |
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My Tax Identification Number is: |
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6. Binding Effect . I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and conditions of the Grant Notice, the Option Agreement and the Plan, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns.
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Very truly yours, |
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(Signature) |
Receipt of the above is hereby acknowledged.
GSI TECHNOLOGY, INC.
By: |
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Title: |
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Dated: |
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