EXHIBIT 10.6
RSA COMMUNICATIONS, INC.
1998 NON-QUALIFIED STOCK PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
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This Nonqualified Stock Option Agreement ("Agreement") is made and
entered into as of the Date of Grant indicated below by and between RSA
Communications, Inc., a Delaware corporation (the "Company"), and the person
named below as Employee.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THAT ACT AND UNDER APPLICABLE STATE SECURITIES LAW
OR VIRATA LIMITED SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
REGISTRATION OF SUCH SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
WHEREAS, Employee is an employee of the Company and/or one or more of
its subsidiaries;
WHEREAS, the Company is an indirect subsidiary of Virata Limited, a
corporation organized in the United Kingdom ("Virata"); and
WHEREAS, pursuant to the Company's 1998 Non-Qualified Stock Plan (as
amended from time to time, the "Plan"), the committee of the Board of Directors
of Virata administering the Plan (the "Committee") has approved the grant to
Employee of an option to purchase Ordinary Shares, par value Great Britain
Pounds Sterling 0.01 per share, of Virata or any stock into which such Ordinary
Shares shall have been changed or any stock resulting from the reclassification
of such Ordinary Shares (the "Common Stock"), on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant of Option; Certain Terms and Conditions. The Company hereby
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grants to Employee, and Employee hereby accepts, as of the Date of Grant, an
option (the "Option") to purchase the number of shares of Common Stock indicated
below (the "Option Shares") at the Exercise Price per share indicated below,
which option shall expire at 5:00 o'clock p.m., California time, on the
Expiration Date indicated below and shall be subject to all of the terms and
conditions set forth in this Agreement (the "Option"). The Option shall become
exercisable to purchase immediately.
(a) Employee: (Employee Name)
(b) Date of Grant: July____,1998
(c) Number of shares purchasable: (Options)
(d) Exercise Price per share: $0.25
(e) Expiration Date: The Option shall lapse and expire on the
seventh anniversary of the Date of Grant. The period from Date
of Grant to the Expiration Date is referred to as the "Term."
The Option is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code.
2. Termination of Employment.
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(a) Termination for Any Reason. If Employee ceases to be an
employee the Company or any of its subsidiaries or affiliates (a "Termination of
Employment") for any reason whatsoever, other than death or Permanent
Disability, then the Option shall terminate on the date that is 90 days after
the date of such Termination of Employment.
(b) Death or Permanent Disability. If Employee's Employment is
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terminated by reason of the death or Permanent Disability (as hereinafter
defined) of Employee, then the Option shall terminate upon the earlier of the
Expiration Date or the date that is six months after the date of such
Termination of Employment. "Permanent Disability" shall mean the inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted or can be expected to last for a continuous period of
not less than 12 months. Employee shall not be deemed to have a Permanent
Disability until proof of the existence thereof shall have been furnished in
writing to the Board by two (2) independent physicians mutually acceptable to
the Company and Stockholder.
3. Adjustments. In the event that the outstanding securities of the
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class then subject to the Option are increased, decreased or exchanged for or
converted into cash, property and/or a different number or kind of securities,
or cash, property and/or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a
regular, quarterly cash dividend) or other distribution, stock split, reverse
stock split or the like, or in the event that substantially all of the property
and assets of the Company are sold, then, unless the terms of such transaction
provide otherwise, the Committee shall make appropriate and proportionate
adjustments in the number, exercise price and type of shares or other securities
or cash or other property, as applicable, that may thereafter be acquired upon
the exercise of the Option; provided, however, that any such adjustments in the
Option shall be
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made without changing the aggregate Exercise Price of the then unexercised
portion of the Option.
4. Exercise of Option. The Option shall be exercisable during
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Employee's lifetime only by Employee or by his or her guardian or legal
representative, and after Employee's death only by the person or entity entitled
to do so under Employee's last will and testament or applicable intestate law.
The Option may be exercised in whole or in part on not more than three occasions
during the Term and only by the delivery to the Company of a written notice of
such exercise, which notice shall specify the number of Option Shares to be
purchased (the "Purchased Shares") and the aggregate Exercise Price for such
shares (the "Exercise Notice"), together with payment in full of such aggregate
Exercise Price in cash or by check payable to the Company; provided, however,
that payment of such aggregate Exercise Price may instead be made, in whole or
in part, by (i) the delivery to the Company of a certificate or certificates
representing shares of Common Stock or other securities of the Company, duly
endorsed or accompanied by a duly executed stock power, which delivery
effectively Transfers to the Company good and valid title to such shares, free
and clear of any pledge, commitment, lien, claim or other encumbrance (such
shares to be valued on the basis of the aggregate Fair Market Value (as defined
in the Plan) thereof on the date of such exercise), or (ii) by a reduction in
the amount of Purchased Shares or other property otherwise issuable pursuant to
such Option (such reduction to be valued on the basis of the aggregate Fair
Market Value, on the date of exercise, of the additional Purchased Shares that
would have been delivered to the Employee upon exercise of the Option), provided
that the Company is not then prohibited from purchasing or acquiring such shares
of Common Stock.
5. Payment of Withholding Taxes. If the Company becomes obligated to
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withhold an amount on account of any tax imposed as a result of the exercise of
the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then Employee shall, on the first day upon which the Company becomes
obligated to pay such amount to the appropriate taxing authority, pay such
amount to the Company in cash or by check payable to the Company; provided,
however, that payment of such tax withholding obligations may instead be made,
in whole or in part, by (i) the delivery to the Company of a certificate or
certificates representing shares of Common Stock or other securities of the
Company, duly endorsed or accompanied by a duly executed stock power, which
delivery effectively Transfers to the Company good and valid title to such
shares, free and clear of any pledge, commitment, lien, claim or other
encumbrance (such shares to be valued on the basis of the aggregate Fair Market
Value (as defined in the Plan) thereof on the date of the exercise giving rise
to the tax withholding obligation), or (ii) by a reduction in the amount of
Purchased Shares or other property otherwise issuable pursuant to the exercise
of the Option giving rise to the tax withholding obligation (such reduction to
be valued on the basis of the aggregate Fair Market Value, on the date of such
exercise, of the additional Purchased Shares that would have been del ivered to
the Employee upon such exercise of the Option), provided that the Company is not
then prohibited from purchasing or acquiring such shares of Common Stock.
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6. Notices. All notices and other communications required or
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permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company at
0000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxxxxx 00000, telephone
number (000) 000-0000, or to Employee at the address set forth beneath his or
her signature on the signature page hereto, or at such other addresses as they
may designate by written notice in the manner aforesaid.
7. Nontransferability. Neither the Option nor any interest therein
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may be Transferred in any manner, including any sale, exchange, assignment,
transfer, pledge, mortgage, hypothecation, gift, grant, encumbrance or other
disposition of any kind, whether voluntary, involuntary or by operation of law
and whether indirect or indirect, other than by will or the laws of descent and
distribution.
8. Plan. The Option is granted pursuant to the Plan, as in effect on
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the Date of Grant, and is subject to all the terms and conditions of the Plan,
as the same may be amended from time to time; provided, however, that no such
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amendment shall deprive Employee, without his or her consent, of the Option or
of any of Employee's rights under this Agreement. The interpretation and
construction by the Committee of the Plan, this Agreement, the Option and such
rules and regulations as may be adopted by the Committee for the purpose of
administering the Plan shall be final and binding upon Employee. Until the
Option shall expire, terminate or be exercised in full, the Company shall, upon
written request therefor, send a copy of the Plan, in its then-current form, to
Employee or any other person or entity then entitled to exercise the Option.
9. Stockholder Rights. No person or entity shall be entitled to
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vote, receive dividends or be deemed for any purpose the holder of any Option
Shares until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
10. Employment Rights. No provision of this Agreement or of the
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Option granted hereunder shall (a) confer upon Employee any right to continue in
the employ of the Company or any of its subsidiaries, (b) affect the right of
the Company and each of its subsidiaries to terminate the employment of
Employee, with or without cause, or (c) confer upon Employee any right to
participate in any employee welfare or benefit plan or other program of the
Company or any of its subsidiaries other than the Plan. Employee hereby
acknowledges and agrees that the Company and each of its subsidiaries may
terminate the employment of Employee at any time and for any reason, or for no
reason, unless Employee and the Company or such subsidiary are parties to a
written employment agreement that expressly provides otherwise.
11. Governing Law. This Agreement and the Option granted hereunder
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shall be governed by and construed and enforced in accordance with the laws of
the State of California without reference to choice or conflict of law
principles.
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12. No Stockholder Rights. The Options are not considered to be
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equity securities of the Company or Virata and will not have any rights to vote
or receive dividends.
13. Options and Shares Issuable Upon Exercise Not Registered.
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Employee, by accepting the Options, acknowledges that the Options are not, and
the Common Stock and other securities issuable upon exercise of the Options may
not be, registered under the Securities Act, and represents that he or she has
acquired the Options for his or her own account and not with a present view to,
or in connection with, any distribution thereof in violation of the Securities
Act. Unless and until registered under the Securities Act, each stock
certificate representing the Common Stock and other securities purchased upon
exercise of one or more Options shall be stamped or otherwise imprinted with the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THAT ACT AND UNDER APPLICABLE STATE SECURITIES LAW
OR VIRATA LIMITED SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
REGISTRATION OF SUCH SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED."
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IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the Date of Grant.
RSA Communications, Inc., a Delaware corporation
By________________________________
Title:
__________________________________
Signature
__________________________________
Xxxxxx Xxxxxxx
__________________________________
City, State and Zip Code
__________________________________
Social Security Number
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