Exhibit (d)(5)
EXCESS BANDWIDTH CORPORATION
1998 EQUITY INCENTIVE PLAN
FORM OF NEW STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement") is made and entered into as of
the Date of Grant (indicated on the signature page hereto) among Virata
Corporation, a Delaware corporation (the "Company"), acting on behalf of Excess
Bandwidth Corporation, a California corporation and wholly owned subsidiary of
the Company ("Excess Bandwidth"), and the person named on the signature page
hereto as Employee.
WHEREAS, Employee is an employee of the Company and/or one or more of its
direct or indirect subsidiaries; and
WHEREAS, pursuant to Excess Bandwidth's 1998 Equity Incentive Plan (as
amended from time to time, the "Plan"), the Company has approved the grant to
Employee of an option to purchase shares of common stock, par value $0.001 per
share (the "Common Stock"), of the Company or any stock into which such Common
Stock shall have been changed or any stock resulting from any reclassification
of such 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.
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(a) Grant: The Company hereby grants to Employee, and Employee hereby
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accepts, as of the Date of Grant, an option (the "Option") to purchase the
number of shares of Common Stock indicated on the signature page hereto (the
"Option Shares") at the Exercise Price per share indicated on the signature page
hereto, which Option shall expire at 5:00 o'clock p.m., California time, on the
Expiration Date indicated below (unless terminated earlier pursuant to Section 2
hereof) and shall be subject to all of the terms and conditions set forth in
this Agreement and the Plan. The Option shall become exercisable to purchase
upon vesting, and shall vest with respect to that number of Option Shares
(rounded to the nearest whole share) equal to the total number of Option Shares
multiplied by the vesting rate indicated below.
(b) Expiration Date: Subject to earlier termination as provided by
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Section 2 hereof, the Option shall lapse and expire on the seventh anniversary
of the Date of Grant (the "Expiration Date"). The Period from Date of Grant to
the Expiration Date is referred to as the "Term."
(c) Vesting Rate: Subject to Section 2 hereof, 25% of the Option
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Shares shall vest on the Date of Grant and the remaining option shares shall
vest in equal monthly portions thereafter for thirty months until 100% vested.
(d) Incentive Stock Option: Unless otherwise indicated on the
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signature page hereto, the Option is 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
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of the Company or any of its subsidiaries (a "Termination of Employment") for
any reason whatsoever, including for cause as defined in the Plan, other than
death or Permanent Disability, then (A) the portion of the Option that has not
vested on or prior to the date of such Termination of Employment shall terminate
on such date and (B) the remaining vested portion of the Option shall terminate
upon the earlier of the Expiration Date or the date that is ninety (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 (A) the portion of the Option that has not vested on
or prior to the date of such Termination of Employment shall terminate on such
date and (B) the remaining vested portion of the Option shall terminate upon the
earlier of the Expiration Date or the date that is one hundred and eighty (180)
days 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 Employee.
3. Adjustments. Subject to the terms of the Plan, in the event that the
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outstanding securities of the 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
administering the Plan (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
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adjustments in the Option shall be 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 Employee's
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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 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 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. Notwithstanding the
foregoing, other than an exercise of the Option which results in the purchase of
all remaining Option Shares then subject to the Option, any exercise of the
Option must be with respect to at least the lesser of (i) 12,500 Option Shares
and (ii) 12.5% of the total number of Option Shares originally subject to the
Option; provided that in no event shall the Option be exercised on more than ten
(10) occasions during the Term and,
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notwithstanding anything to the contrary contained herein, in no event shall the
Option be exercisable after the earlier of (A) the Expiration Date and (b) the
applicable termination date set forth in Section 2 above.
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 foreign or U.S. federal, state,
local or other income tax, or any F.I.C.A., state disability insurance tax or
other employment tax, then Employee shall, as a condition to exercising the
option, pay such amount to the Company in cash or by check payable to the
Company.
6. Notices. All notices and other communications required or permitted to
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be given pursuant to this Agreement shall be in writing and shall be deemed
given if delivered personally or five (5) 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. Stock Exchange Requirements; Applicable Laws. Notwithstanding anything
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to the contrary in this Agreement, no securities purchased upon exercise of the
Option, and no certificate representing all or any part of such securities,
shall be issued or delivered if (a) such securities have not been admitted to
listing upon official notice of issuance on each stock exchange upon which
securities of that class are then listed or (b) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of
or to incur liability under any foreign, U.S. federal, state or other securities
law, or any requirement of any stock exchange listing agreement to which the
Company is a party, or any other requirement of law or of any administrative or
regulatory body having jurisdiction over the Company.
8. Nontransferability. Neither the Option nor any interest therein may be
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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
direct or indirect, other than by will or the laws of descent and distribution.
9. Plan. The Option is granted pursuant to the Plan, as in effect on the
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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.
10. Stockholder Rights. No person or entity shall be entitled to vote,
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receive dividends or be deemed for any purpose the holder of any Option Shares
until the Option shall
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have been duly exercised to purchase such Option Shares in accordance with the
provisions of this Agreement and the certificate of such shares shall have been
issued.
11. Employment Rights. No provision of this Agreement or of the Option
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granted hereunder shall (a) confer upon Employee any right to continue in the
employ of the Company or any of its direct or indirect subsidiaries, (b) affect
the right of the Company and any of its direct or indirect 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 direct or indirect subsidiaries other
than the Plan. Employee hereby acknowledges and agrees that the Company and
each of its direct and indirect 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 direct or indirect subsidiary are parties to a written
employment agreement that expressly provides otherwise.
12. Governing Law. This Agreement and the Option granted hereunder shall
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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.
13. Financial Information. The Company shall provide summary financial
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statements to Employee on an annual basis.
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IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the Date of Grant.
VIRATA CORPORATION
By:_____________________________
Name:________________________
Title:_______________________
EMPLOYEE
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Signature
(Employee Name)
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Name
________________________________
Street Address
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City, State and Zip Code
________________________________
Telephone
________________________________
Facsimile
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Social Security Number
Date of Grant: (Date of Grant)
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Number of shares purchasable: (Number of Options)
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Exercise Price per share: (Exercise Price)
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[Incentive Stock Option: Notwithstanding Section
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1(d) of the Agreement, the Option is not intended to
qualify as an incentive stock option under Section 422
of the Internal Revenue Code.]
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