EXHIBIT 10.15
Digital Theater Systems, Inc.
Digital Theater Systems, Inc. 2003 Equity Incentive Plan
OPTION EXERCISE
AND
STOCK PURCHASE AGREEMENT
INSTRUCTIONS
1. Read the entire Agreement carefully. This is a legally binding
agreement between you and the Company.
2. ITEMS A - C: insert your name and identifying information.
3. ITEMS D-G: identify the stock option you want to exercise.
4. ITEM H: identify how many shares you want to purchase.
5. ITEM I: Calculate the Option Price by multiplying the share number in
Item H by the purchase price per share in Item E.
6. ITEM J: Confirm with the Company whether a tax withholding amount
should be entered in this space.
7. ITEM K: Add the Option Price in Item I to the tax withholding amount,
if any, in Item J. Insert the resulting Purchase Price in Item K.
8. ITEM L: Identify your approved method of payment for the Shares.
9. SIGNATURES: Sign the Agreement in the space provided on page 10.
IMPORTANT NOTE: If you are married, your spouse also is required to
sign.
10. Submit your fully completed and signed Agreement, together with payment
of the Purchase Price, to [identify department, mailstop or person to
receive option forms].
Digital Theater Systems, Inc.
Digital Theater Systems, Inc. 2003 Equity Incentive Plan
OPTION EXERCISE AND
STOCK PURCHASE AGREEMENT
Date:_____________
OPTIONHOLDER / PURCHASER
(A) Name:_________________________________________________________________
(B) Employee number:_______________________________________________________
(C) Residence address:_____________________________________________________
_______________________________________________________________________
_______________________________________________________________________
STOCK OPTION
(D) Option Shares (total) subject to this Option:__________________________
(E) Purchase Price per Share:______________________________________________
(F) Grant Date:____________________________________________________________
(G) Option Control Number:_________________________________________________
OPTION SHARES PURCHASED UNDER THIS AGREEMENT
(H) Shares purchased:______________________________________________________
(I) Option Price [ (E) x (H) ]:____________________________________________
(J) Tax withholding (if applicable):_______________________________________
(to be calculated by Company)
(K) Purchase Price [ (I) + (J) ]:__________________________________________
PAYMENT METHOD (select one or more)
(L) Cash or check (enclosed):______________________________________________
Wire transfer:_________________________________________________________
(Identify sending bank and wire transfer number)
"Cashless exercise":___________________________________________________
(Identify approved NASD broker-dealer and attach agreement)
Other:_________________________________________________________________
(Attach Company approval for other form of payment)
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1. EXERCISE OF OPTION.
1.1. I am exercising my right to purchase the number of shares of
common stock of Digital Theater Systems, Inc. indicated on Line (H) by
exercising the option identified on Lines (D) through (G). The per share
purchase price of the option is indicated on Line (E) and the aggregate purchase
price of the shares I am purchasing is indicated on Line (I). I acknowledge that
I may be responsible for tax withholding on the shares, in which case the
aggregate purchase price would be as indicated on Line (K) (which the Company
will complete). The shares that I am purchasing by exercising my option are
referred to in this agreement as the "Shares". The total purchase price of the
shares is referred to in this agreement as the "Purchase Price". I acknowledge
that the option I am exercising was issued under and is subject to the rules of
the 2003 Equity Incentive Plan of Digital Theater Systems, Inc. (the "Plan").
1.2. With this signed agreement, I have submitted either (a) cash
or a check for the amount of the Purchase Price or (b) irrevocable wire transfer
instructions for the Purchase Price, or](c) a certificate or certificates (or
designation of such certificates if permitted by the Plan) representing shares
of company common stock that I have owned for at least six months if the shares
were acquired by me through exercise of an option, and that have a fair market
value (as determined in accordance with the Plan) as of this date equal to the
Purchase Price, or (d) one or more full recourse promissory notes, approved by
the Company, for a face amount equal to the Purchase Price (the "Note"). I
recognize that other forms of payment may be permitted by the written approval
of the Administrator.
2. REPRESENTATIONS
2.1. TAXES. The Company has made no warranties or representations
to me with respect to the income tax consequences of the transactions
contemplated by this Agreement and I am not relying on the Company or its
representatives for an assessment of such tax consequences. I have had adequate
opportunity to consult with my personal tax advisor prior to submitting this
Agreement to the Company.
2.2. REPURCHASE. If the Shares are subject to a right of repurchase
in favor of the Company at their original purchase price when I cease to provide
services for the Company, or if I could be subject to suit under Section 16(b)
of the Securities Exchange Act of 1934 with respect to the purchase of the
Shares, I will execute and deliver to the Company a copy of the Acknowledgment
and Statement of Decision Regarding Election Pursuant to Section 83(b) of the
Internal Revenue Code (the "Acknowledgment") attached as Exhibit A. I
acknowledge that I am primarily responsible for filing any Section 83(b)
elections although the Company will, as an accommodation to me and without
assuming any liability, file a duplicate election if I promptly provide an
executed form with the Acknowledgement and Statement of Decision Regarding
Section 83(b). I will consult with my own tax advisor to determine if there is a
comparable election to file
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in the state of where I reside and whether filing a federal or state Section
83(b) election is desirable under my circumstances.
2.3. DISQUALIFYING DISPOSITIONS OF ISO STOCK. I acknowledge that if
the Stock acquired by exercise of an Incentive Stock Option (as defined in
Section 2.1 of the Plan) is disposed of within two years after the Grant Date
(as defined in the Option Grant) or within one year after such exercise,
immediately prior to the disposition I will promptly notify the Company in
writing of the date and terms of the disposition and will provide such other
information regarding the disposition as the Company may reasonably require.
3. MISCELLANEOUS PROVISIONS.
3.1. SUCCESSORS AND ASSIGNS. Subject to the limitations set forth
in this Agreement, the benefits and obligations of this Agreement will be
binding on the executors, administrators, heirs, legal representatives,
successors, and assigns of the parties.
3.2. COSTS. I will repay the Company for all costs and damages,
including incidental and consequential damages and attorney's fees, resulting
from any transfer of the Shares which is not in compliance with the provisions
of this Agreement.
3.3. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware excluding those
laws that direct the application of the laws of another jurisdiction.
3.4. NOTICES. All notices and other communications under this
Agreement shall be in writing. Unless and until I am notified in writing to the
contrary, all notices, communications, and documents directed to the Company and
related to the Agreement, if not delivered by hand, shall be mailed, addressed
to:
Digital Theater Systems, Inc.Attention: Chief
Financial Officer
at the Company's published principal office location.
3.5. COMMUNICATIONS. Unless and until I notify the Company in
writing to the contrary, all notices, communications, and documents intended for
me and related to this Agreement, if not delivered by hand, shall be mailed to
my last known address as shown on the Company's books. Notices and
communications shall be mailed by first class mail, postage prepaid; documents
shall be mailed by registered mail, return receipt requested, postage prepaid.
All mailings and deliveries related to this Agreement shall be deemed received
when actually received, if by hand delivery, and three business days after
mailing, if by mail.
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3.6. ARBITRATION. All disputes arising out of this Agreement will
be finally settled by arbitration in accordance with the then existing rules of
the American Arbitration Association. The arbitration will be conducted in the
county of Los Angeles. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction over it; provided that nothing in
this Agreement shall prevent a party from applying to a court of competent
jurisdiction to obtain temporary relief pending resolution of the dispute
through arbitration. The parties agree that service of any notices in the course
of such arbitration at their respective addresses as provided for in this
agreement shall be valid and sufficient.
3.7. THIS IS NOT AN EMPLOYMENT CONTRACT. This Agreement is not to
be interpreted as a guarantee or contract of continuing employment.
DIGITAL THEATER SYSTEMS
By: __________________________________
Title: __________________________________
I hereby agree to be bound by all of the terms and
conditions of this Agreement and the Plan.
_________________________________________
Purchaser's signature
_________________________________________
Printed name
The purchaser's spouse indicates by the execution of
this Agreement his or her consent to be bound by the terms herein as to his or
her interests, whether as community property or otherwise, if any, in the Shares
hereby purchased.
_________________________________________
Purchaser's Spouse
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Exhibits
Exhibit 7A Acknowledgment and Statement of Decision Regarding Section
83(b) Election
Exhibit 7B Section 83(b) Election
6
ACKNOWLEDGEMENT AND
STATEMENT OF DECISION
REGARDING SECTION 83(b) ELECTION
The undersigned, a purchaser of shares of Common Stock of
Digital Theater Systems, Inc. (the "Company") and a party to a Nonqualified
Stock Option Purchase Agreement with the Company (the "Agreement"), hereby
states as follows:
1. I ACKNOWLEDGE RECEIPT OF A COPY OF THE AGREEMENT AND THE
MEMORANDUM ENTITLED "TAX CONSEQUENCES OF PURCHASING RESTRICTED STOCK; FILING A
SECTION 83(b) ELECTION." I HAVE CAREFULLY REVIEWED THE AGREEMENT AND THE
MEMORANDUM.
2. I EITHER [CHECK AS APPLICABLE]:
__ (a) have consulted, and have been fully advised by, my tax advisor
__________________________, whose business address is
______________________________________________________________
_____________________________________________________________,
regarding the federal, state, and local tax consequences of
purchasing shares under the Agreement, and particularly
regarding the advisability of making elections pursuant to
Section 83(b) of the Internal Revenue Code of 1986, (the
"Code"), and pursuant to any corresponding provisions of
applicable state laws; OR
__ (b) have knowingly chosen not to consult such a tax advisor.
3. I HAVE DECIDED[CHECK AS APPLICABLE]:
__ (a) to make an election pursuant to Section 83(b) of the Code by
filing an election form with the appropriate tax authorities
within 30 days of the undersigned's purchase under the
Agreement, and am submitting to the Company, together with my
executed Agreement, three duplicate copies of executed
election forms; OR
__ (b) not to make an election pursuant to Section 83(b) of the Code.
I ACKNOWLEDGE THAT, EVEN IF THE COMPANY FILES, OR ENGAGES
ANOTHER PARTY TO FILE, A DUPLICATE SECTION 83(b) ELECTION FORM WITH THE INTERNAL
REVENUE SERVICE AS AN ACCOMMODATION TO ME, I HAVE THE PRIMARY RESPONSIBILITY FOR
TIMELY FILING ANY SECTION 83(b) ELECTION WITH THE INTERNAL REVENUE SERVICE AND
ANY STATE REVENUE AUTHORITIES, AND WILL HOLD THE COMPANY AND ITS AGENTS HARMLESS
FROM ANY FAILURE TO TIMELY FILE A DUPLICATE COPY OF THE SECTION 83(b) ELECTION.
Date: ______________________ _________________________________
EXHIBIT 7A
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE
I hereby elect, under Section 83(b) of the Internal Revenue
Code, to include in gross income any excess of the fair market value of the
property described in paragraph 2, disregarding any lapse restrictions on that
property, over the amount I paid for such property, as described below.
1. My name, address and taxpayer identification number are:
Name: _____________________________________
Address: _____________________________________
_____________________________________
_____________________________________
Social Security Number: _____________________________________
2. The property with respect to which this election is made consists of
__________ shares of common stock (the "Shares") of Digital Theater
Systems, Inc. (the "Company").
3. The date on which the Shares were acquired was ______________, 2___,
and the taxable year to which this election relates is calendar year
____________.
4. The Shares are subject to the following restrictions: the right of
the Company to repurchase the Shares at the lower of the initial
purchase price or the price at the date of repurchase. This right
lapses based on my continued performance of services over time.
5. The fair market value of the Shares at the time of transfer
(determined without regard to any restrictions other than
restrictions which by their terms will never lapse) was $________
per share.
6. The amount paid for the Shares was $_______ per share.
7. A copy of this election has been furnished to the Company. I am the
person performing services and the transferee of the Shares.
_______________________________________ _______________________________
Signature Date
The spouse of the taxpayer acknowledges the making of this election.
_______________________________________
Signature
Regular Election
PROTECTIVE ELECTION UNDER
SECTION 83(b) OF THE INTERNAL REVENUE CODE
(INCENTIVE STOCK OPTION)
I hereby elect, under Section 83(b) of the Internal Revenue
Code, to include in gross income, with the effect and under the circumstances
described in paragraph 4, any excess of the fair market value of the property
described in paragraph 2, disregarding any lapse restrictions on that property,
over the amount I paid for such property.
1. My name, address and taxpayer identification number are:
Name: _____________________________________
Address: _____________________________________
_____________________________________
_____________________________________
_____________________________________
Social Security Number: _____________________________________
2. The property with respect to which the election is made consists of ______
shares of common stock (the "Shares") of Digital Theater Systems, Inc. (the
"Company").
3. The date on which the Shares were acquired was ____________, ____, and the
taxable year to which this election relates is ________.
4. The Shares were acquired pursuant to my exercise of an incentive stock
option. This filing is therefore made for the purpose of determining the
amount of my adjustment under Section 56(b)(3) of the Internal Revenue Code
with respect to my purchase of the Shares. This filing will also be effective
for regular income tax purposes in the event that the option is determined
not to qualify as an incentive stock option or I dispose (as defined in
Section 424(c) of the Internal Revenue Code) of the Shares within either
period described in Section 422(a)(1) of the Internal Revenue Code.
5. The Shares are subject to the following restrictions: the right of the
Company to repurchase the Shares at the lower of the initial purchase price
or the price on the date of repurchase. This right lapses based on my
continued performance of services].
EXHIBIT 7B
6. The fair market value of the Shares at the time of transfer (determined
without regard to any restrictions other than those which by their terms will
never lapse) was $_______ per share.
7. The amount paid for the Shares was $_______ per share.
8. A copy of this election has been furnished to the Company. I am the person
performing services and the transferee of the Shares.
_______________________________________ _______________________________
Signature Date of Execution
The spouse of the taxpayer acknowledges the making of this election.
_______________________________________
Signature
EXHIBIT 7B
SPOUSAL CONSENT
I acknowledge that I have read the foregoing Option Exercise and Stock
Purchase Agreement (the "Agreement") and that I know its contents. I hereby
consent to and approve all of the provisions of the Agreement, and agree that
the shares of the Common Stock of Digital Theater Systems, Inc. purchased
thereunder (the "Shares") and any interest I may have in such Shares are subject
to all the provisions of the Agreement. I will take no action at any time to
hinder operation of the Agreement on these Shares or any interest I may have in
or to them.
____________________________________ Date:___________
Signature of Optionee's spouse
____________________________________
Spouse's Name - Typed or Printed
____________________________________
Optionees's Name - Typed or Printed
EXHIBIT 7B
