Exhibit 4.1








	





EXHIBIT 4.1



HiBand
Semiconductors Inc. 2000 Equity Incentive Plan











	TO:	Holders of Options to Purchase Common Stock
	 
	SUBJECT:	Employee Stock Options/Grants






	


     The
purpose of this memorandum is to clarify some of the procedures and consequences relating
to the grant of shares of Common Stock as well as options to purchase shares of Common
Stock of HiBand Semiconductors Inc., a California corporation (the “Corporation”), under
the HiBand Semiconductors Inc. 2000 Equity Incentive Plan (the “Plan”), and the purchase
and subsequent disposition of shares of the Corporation’s Common Stock received upon the
exercise of such options. The exact terms and conditions of the options, including the
exercise price of the shares of Common Stock, are governed by the provisions of the Plan
and the agreements thereunder between the Corporation and the participating employees,
directors, officers or other individuals. 










	 	
THIS
MEMORANDUM IS FOR GENERAL INFORMATION ONLY AND SHOULD NOT BE CONSTRUED AS AN OFFER FOR
THE SALE OF SECURITIES. EACH INDIVIDUAL IS ENCOURAGED TO CONSULT WITH INDEPENDENT COUNSEL
AS TO THE APPLICABILITY OF THE TAX AND SECURITIES LAWS AND OTHER MATTERS DISCUSSED HEREIN
TO HIS OR HER SPECIFIC SITUATION.






	


GENERAL



     The
Corporation’s Board of Directors adopted the Plan as of December 6, 1999. The
Corporation’s shareholders adopted the plan as of December 6, 1999. A total of 3,000,000
shares of Common Stock have been reserved for issuance upon the exercise of options and
stock grants under the Plan. 



     The
Plan allows for the grant of stock options intended to qualify as “incentive stock
options” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”),
as well as nonstatutory stock options. See “Federal Income Tax Consequences” below for
information concerning the tax treatment of incentive stock options and nonstatutory
stock options. The Plan also allows for the grant of Common Stock as a bonus for services
actually rendered to the Corporation. 



SUMMARY OF THE PLAN



     Set
forth below is a summary of the principal features of the Plan. 



Administration



     The
Plan is currently being administered by the Corporation’s Board of Directors (the
“Board”). The interpretation and construction of any provision of the Plan by the Board
shall be final and conclusive. 
















	





Eligibility



     The
Plan provides that options and/or stock may be granted to the Corporation’s employees,
directors, officers or other individuals or entities involved with the Corporation. One
or several Corporation officers designated by the Board, such as the President and/or
Chief Operating Officer will select the participants and determine the number of shares
to be subject to each option and/or grant. However, incentive stock options can only be
granted to employees. 



     The
Plan provides for a maximum number of shares of the Corporation’s Common Stock which may
be granted, either directly or under an option, to any one employee or other eligible
participant. In addition, the value of the shares subject to all incentive stock options
of an optionee that become exercisable for the first time during any calendar year cannot
exceed $100,000 (determined as of the date of grant). See “Federal Income Tax
Consequences” below. 











	



Terms of Options



     Each
option is evidenced by a stock option agreement between the Corporation and the person to
whom such option is granted, which sets forth the terms and conditions of the option. The
following terms and conditions generally apply to all options, unless the stock option
agreement provides otherwise: 










	(a) 		Exercise
of the Option. The optionee must earn the right to exercise his or her option by
continuing to work for the Corporation. The Board determines when options granted under
the Plan may be exercisable, but in no event shall an option be exercised more than ten
(10) years after the date of grant. An option is exercised by giving written notice of
exercise to the Corporation specifying the number of full shares of Common Stock to be
purchased, and by tendering payment to the Corporation for the purchase price. Unless
otherwise provided in the stock option agreement, the purchase price of shares purchased
upon exercise of an option shall be paid by any of the following means, or by any
combination thereof: (i) cash; (ii) certified or bank’s cashier’s check; or (iii)
surrender to the Corporation of shares of the Corporation’s Common Stock, provided a
public market then exists for such Common Stock.  







	(b) 		Exercise
Price. The exercise price of options granted under the Plan is determined by the Board
and must not be less than: (i) the fair market value of the Common Stock on the date the
option is granted in the case of incentive stock options; or (ii) eighty-five percent
(85%) of such fair market value in the case of nonstatutory stock options. Where the
participant owns stock representing more than ten percent (10%) of the total combined
voting power of the Corporation’s issued and outstanding capital stock., the exercise
price for options must not be less than 110% of such fair market value. Until such time
as there has been a registered public offering of the Corporation’s Common Stock and a
public trading market for the Corporation’s Common Stock exists, the fair market value of
Common Stock will be determined by the Board. In making its determination, the Board will
take into account such relevant factors as recent transactions (if any) in shares of the
Corporation’s Common Stock and the Corporation’s past financial performance and prospects
for future earnings.  






	


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	(c) 		Restricted
Stock Option Purchase Agreement. As a condition to the exercise of any option granted
under the Plan, the optionee must sign and deliver a Restricted Stock Option Purchase
Agreement in a form approved by the Board pursuant to which the Corporation is granted:
(1) a repurchase option when the optionee exercises his/her Option; and (2) a right of
first refusal if the optionee sells stock received under the Plan. See “Terms of
Restricted Stock Option Purchase Agreement” below.  







	(d) 		Termination
of Employment. If an optionee’s employment (or other service) with the Corporation
terminates either (i) for cause or (ii) voluntary on the part of the optionee and without
good reason (as determined by the Board, in its sole discretion), the options, to the
extent not previously exercised, will terminate on the date of such termination of
employment (or service). If an optionee’s employment or other service with the
Corporation terminates for reasons other than (a) termination that is either (i) for
cause, (ii) voluntary on the part of the optionee and without good reason, (b)
termination by reason of disability and (c) death, options under the Plan may be
exercised not later than three (3) months after such termination, but may be exercised
only to the extent the options were exercisable on the date of termination.  







	(e) 		Retirement
and Total and Permanent Disability. If an optionee should become permanently and totally
disabled while an employee, non-employee director or officer of the Corporation or while
providing other services to the Corporation, options shall become fully exercisable as to
all shares subject to them and may be exercised at any time within one (1) year following
the date of disability. If an optionee should retire with the written consent of the
Corporation, options shall become fully exercisable as to all shares subject to them and
may be exercised at any time within three (3) months of such retirement. Incentive stock
options that are not exercised within one (1) year of such termination will automatically
be converted to nonstatutory stock options, and will lose special tax treatment. (Please
see discussion on Federal Income Tax Consequences below.)  







	(f) 		Death.
If an optionee should die while an employee, non-employee director or officer of the
Corporation or while providing other services to the Corporation, options may be
exercised at any time within one (1) year following the date of death.  







	(g) 		Termination
of Options. All options granted under the Plan expire on the date specified in the option
agreement, but in no event shall the term of incentive stock options exceed ten (10)
years. However, all incentive stock options granted under the Plan to any participant who
owns stock possessing more than ten percent (10%) of the total combined voting power of
the Corporation’s outstanding capital stock must expire not later than five (5) years
from the date of grant.  







	(h) 		Nontransferability
of Options. An option is nontransferable by the optionee otherwise than by will or the
laws of descent and distribution, and is exercisable during his or her lifetime only by
him, or in the event of his or her death, by a person who acquires the right to exercise
the option by bequest or inheritance or by reason of the death of the optionee.  






	


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	(i) 		Other
Provisions. The option agreement may contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Board.  






	


Adjustments
Upon Changes in Capitalization



     In the
event of any change in the Corporation’s capital structure, appropriate adjustments shall
be made by the Board in the number of shares subject to each option and the per share
exercise price thereof. Upon the occurrence of the following events which constitute a
“Corporate Change”: (1) certain mergers or consolidations, (2) sale, lease or exchange of
substantially all of the assets of the Corporation, (3) liquidation or dissolution, (4)
acquisition by any person or entity of more than twenty-five percent (25%) (based on
voting power) of the Corporation’s outstanding capital stock or acquisition by a person
or entity who currently has beneficial ownership in the Corporation which increases such
ownership to fifty percent (50%) or more, (5) as a result of a contested election,
persons who were directors cease to constitute a majority of the Board, the Board also
may make provisions for proportionately adjusting the number or class of stock covered by
any option, as well as the option exercise price. The Board may take any of the following
actions in connection with the occurrence of a Corporate Change: (1) accelerate the
exercisability for the options to be exercised, (2) require the mandatory surrender of
outstanding options to the Corporation in exchange for cash for the bargain element the
optionee would have realized upon the occurrence of the Corporate Change, if any, (3)
make adjustments to the options to reflect such Corporate Change, (4) provide that upon
exercise of the option, the optionee will be entitled to purchase other securities or
property, or (5) cancel the options if the fair market value of the Common Stock of the
Corporation which underlies the options is below the option exercise price. 



Amendment and
Termination of the Plan



     The
Board may amend the Plan at any time or from time to time or may terminate it without the
approval of the Corporation’s shareholders: provided, however, that the approval of the
holders of a majority of the outstanding shares of the Corporation entitled to vote is
required for any amendment which increases the maximum number of shares for which options
may be granted, changes the minimum option exercise price or the standards of
eligibility, materially increases the benefits which may accrue to participants under the
Plan or decreases any authority granted to the Board in contravention of Rule 16b-3 of
the General Rules and Regulations of the Securities and Exchange Commission under the
Exchange Act (“Exchange Act”). However, no such action by the Board or shareholders may
alter or impair any option previously granted under the Plan. In any event, the Plan
shall terminate on February 20, 2007. 



Terms of
Restricted Stock Option Purchase Agreement



     All
optionees must execute and deliver to the Corporation a form of Restricted Stock Option
Purchase Agreement (the “Purchase Agreement”) approved by the Board in connection with
the exercise of options granted under the Plan. The Purchase Agreement provides, among
other things, that the Corporation shall have a repurchase option and a right of first
refusal to purchase any shares which are subject to a bona fide purchase offer from a
third party. The Corporation will repurchase shares received by an optionee upon exercise
of his or her options from the optionee. 



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     An
optionee may not sell or transfer (including transfer by operation of law) the shares
received upon exercise of his or her option unless he or she first gives written notice
to the Corporation of his or her intention to do so and first offers the shares to the
Corporation. Such written notice must include: (i) the name and address of the person or
firm to whom such shares are to be sold; (ii) the number of shares, or interest therein,
to be sold or transferred; (iii) the price or amount to be paid for the proposed transfer
(including the amount of any debt to be paid, canceled or forgiven upon foreclosure of a
security interest in the shares or upon any other transfer to the optionee’s creditors);
and (iv) all other terms of the proposed transfer. Within thirty (30) days after receipt
of the notice, the Corporation or its designee may elect to purchase all (but not less
than all) such shares so offered at the purchase price set forth in the optionee’s
notice, which purchase must be consummated no later than thirty (30) days following the
date of delivery of optionee’s notice to the Corporation. 



     If
none or only part of the shares referred to in the optionee’s notice to the Corporation
is bid for purchase by the Corporation, or its designee or designees, the optionee may
dispose of any or all shares referred to in the notice to the Corporation to any person
or persons, but only within a period of ninety (90) days from the date of delivery of the
notice to the Corporation, and provided further that any such sale is in accordance with
all the terms and conditions set forth in the Purchase Agreement. 



     The
optionee may make a gift of all or part of his or her shares to any of his or her
parents, spouse or issue or to a trust for his or their exclusive benefit; provided,
however, that the gift shall be held subject to the above-described repurchase option and
right of first refusal. 



Terms of Restricted
Stock Grant Agreement



     All
grantees must execute and deliver to the Corporation a form of Restricted Stock Grant
Agreement (the “Grant Agreement”), approved by the Board in connection with the granting
of Common Stock under the Plan. The Grant Agreement provides, among other things, that
the Corporation shall have a repurchase option to purchase any shares if during the term
of the Grant Agreement the grantee ceases to be employed or contracted by the Corporation
on a full-time basis for any reason, or no reason, with or without cause, including
involuntary termination, death or disability. The grantee may not sell or transfer any of
the shares without first delivering a Transfer Notice to the Corporation, which shall
have the option to purchase such shares. The Transfer Notice must specify: (i) the name
and address of the proposed transferee; (ii) the number of shares, or interest therein,
proposed to be sold or transferred; (iii) the price or amount to be paid for the proposed
transfer (including the amount of any debt to be paid, canceled or forgiven upon
foreclosure of a security interest in the shares or upon any other transfer to the
grantee’s creditors); and (iv) all other material terms and conditions of the proposed
transfer. 



     Within
thirty (30) days after receipt of the Transfer Notice, the Corporation may elect to
purchase all, but not less than all, of the shares to which the Transfer Notice refers at
the per share price specified in the Transfer Notice. If no price is specified in the
Transfer Notice, the purchase price shall be the fair market value of the shares on the
date the Corporation receives the Transfer Notice, as determined in good faith by the
Board of Directors of the Corporation. 



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     In the
event the Corporation elects to acquire shares from the grantee as specified in the
Transfer Notice, the Secretary of the Corporation shall so notify the Grantee and
settlement thereof shall be made in cash within thirty (30) days after the Corporation
receives the Transfer Notice, provided that if the terms of payment set forth in the
Transfer Notice were other than cash against delivery, the Corporation shall pay for such
shares on the same terms and conditions set forth in the Transfer Notice. 



     If the
shares referred to in the Transfer Notice are not purchased by the Corporation, the
grantee, within a period of ninety (90) days from the date of delivery of the Transfer
Notice to the Corporation, may sell such shares to the person or persons named in the
Transfer Notice at the price and on the terms specified in the Transfer Notice, provided
that such sale or transfer is consummated within ninety (90) days following the date of
delivery of the Transfer Notice to the Corporation and, provided further, that such sale
is in accordance with all the terms and conditions hereof. The transferee will hold all
shares transferred hereunder subject to the provisions of this Agreement. 



     The
grantee may make a gift of all or part of the shares to any of his parents, brothers or
sisters, spouse or issue, or to a trust for his or their exclusive benefit. The donee or
donees shall hold such shares subject to all provisions of this Agreement. 



Federal Income
Tax Consequences











			(a) 		Incentive
Stock Options.






	


     Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”), provides favorable
federal income tax treatment for stock options which qualify as “incentive stock
options.” When an option granted under an option plan qualifies as an incentive stock
option, the optionee does not recognize income for federal income tax purposes upon the
grant or exercise of the incentive stock option (unless the alternative minimum tax
applies as discussed below). Upon a sale of the shares (assuming that the sale occurs no
sooner than two years after the grant of the option and one year after the receipt of the
shares by the optionee), any gain or loss will be treated as long-term capital gain or
loss for federal income tax purposes. 



     In
order for an option to qualify as an “incentive stock option,” it must be exercised while
the optionee is an employee of the Corporation or of a parent or subsidiary of the
Corporation, or within ninety (90) days after the optionee ceases to be an employee for
any reason other than death, in which case there is no statutory limitation, or permanent
and total disability, in which case the exercise may occur within one year after
termination of employment. See “Terms of Options” above. 



     Other
conditions which must be satisfied include the following: (i) the option cannot be
exercisable more than ten (10) years from the date of grant; (ii) the exercise price of
the option must not be less than the fair market value of the shares at the time the
option is granted; (iii) the Plan must have been approved by the shareholders of the
Corporation; (iv) the option must be nontransferable other than upon death and must be
exercisable during the optionee’s lifetime by him or her only; (v) the optionee may not
own more than 10% of the voting power or value of all classes of the Corporation’s
capital stock immediately before the option is granted, unless the exercise price is at
least 110% of the fair market value of the shares on the date of grant and the option is
exercisable only within five years of the date of grant; and (vi) the value of the shares
subject to one or more incentive stock options that are exercisable for the first time
during any calendar year (under all stock option plans of the Corporation and its parents
and subsidiaries) cannot exceed $100,000 (determined as of the date of grant). 



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     The
favorable federal income tax consequences described above will not apply to the extent
the optionee disposes of the shares acquired within one year of the date of exercise or
within two years of the date of grant of the option (hereinafter a “disqualifying
disposition”). A disqualifying disposition does not include the disposition of shares
acquired upon exercise of an option after the employee’s death and, under certain
circumstances, the disposition of shares (acquired by exercising an incentive stock
option) by an insolvent individual to a trustee, receiver or other similar fiduciary in
an insolvency proceeding. 



     In the
event of a disqualifying disposition, the optionee generally will recognize ordinary
income in the year of disposition equal to the amount by which the fair market value of
the stock at the date of exercise exceeds the option exercise price. Any additional gain
will be long-term or short-term gain, depending on how long the optionee has held the
stock. The income recognized on a disqualifying disposition will be added to the
optionee’s tax basis for determining gain or loss with respect to a subsequent sale of
his or her stock. 



     The
Corporation is obligated to provide optionees with a statement regarding the transfer of
shares of the Corporation’s Common Stock pursuant to the exercise of an incentive stock
option on or before January 31 of the year following the year of the transfer. Generally,
this statement identifies the Corporation and the optionee and describes the transaction. 










			(b) 		Alternative
Minimum Tax.






	


     The
excess of the stock’s fair market value over the option exercise price of an incentive
stock option, which is generally not subject to tax at the time of exercise, is treated
as an item of income in determining an individual taxpayer’s alternative minimum tax
liability. The alternative minimum tax is defined under the Code as the excess of the
“tentative minimum tax” over the “regular tax.” The “tentative minimum tax” is the amount
of tax due on the individual’s alternative minimum taxable income (“AMTI”) at the
applicable alternative minimum tax rate. Under the Omnibus Budget Reconciliation Act of
1993 (“OBRA 1993”), the alternative minimum tax rates were increased to 26% of excess
tentative minimum tax up to $175,000 and 28% of so much of the taxable excess as exceeds
$175,000. 



     It is
advisable for all optionees holding incentive stock options to attempt to forecast their
income tax liabilities before deciding when to exercise incentive stock options, or even
whether to receive stock compensation in the form of incentive stock options. Despite the
potential advantages for capital gains income after OBRA 1993 (as discussed below), the
alternative minimum tax risk can make incentive stock options unappealing if the
potential spread on exercise of the option in any particular year will be substantial
(e.g., greater than $50,000). Moreover, the Internal Revenue Service (the “IRS”) takes
the position that an optionee owes alternative minimum tax and is not entitled to a
refund in the event of a disqualifying disposition of the stock in a subsequent year,
notwithstanding the loss of the original tax benefit, in determining his or her regular
tax liability for the year of the disqualifying disposition. In determining alternative
minimum tax liability in subsequent years, however, the optionee will be entitled to
increase the basis of the stock by the amount of this income adjustment. Furthermore, if
there is a disqualifying disposition of the stock in the year of exercise, the
alternative minimum taxable income adjustment will be limited to the gain on the sale. 



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			(c) 		Nonstatutory
Stock Options.






	


     Options
granted under the Plan that do not qualify as incentive stock options are considered
“nonstatutory” stock options and do not qualify for any special tax benefits to the
optionee. Under the Code, such stock options are not deemed to have a readily
ascertainable value, so the optionee generally does not recognize any taxable income at
the time he or she is granted a nonstatutory stock option. However, upon exercise of a
nonstatutory stock option, the optionee will generally recognize taxable compensation
measured by the excess of the fair market value of the shares on the date of exercise
over the option exercise price unless such shares are subject to a substantial risk of
forfeiture and are not freely transferable at such time, in which case the tax is
generally deferred until one of such restrictions lapse. 



     The
income recognized by the optionee will be treated as wage compensation and will be
subject to federal income tax and F.I.C.A. withholding by the Corporation out of the
current earnings paid to the optionee up to 28% of such income. There may be additional
state income tax withholding. If wage withholdings are insufficient to pay the tax, the
optionee will be required to make direct payment to the Corporation for the tax
liability. Upon a resale of such shares by the optionee, any difference between the sale
price and the fair market value of the shares on the date of exercise of the option will
be treated as capital gain or loss. 



     The
IRS takes the position that under Treasury Regulation Section 1.61-15(c)(1), an optionee
must report the grant of a nonstatutory stock option by attaching a statement concerning
the option grant to his or her federal income tax return for the taxable year in which he
or she acquired the option. Accordingly, the Corporation advises all recipients of
nonstatutory stock options under the Plan to file such a statement. 










			(d) 		Capital
Gains.






	


     The
Code provides a special tax rate of 20% for capital gains (10% for taxpayers in the 15%
bracket). This can be compared to the lowest ordinary income tax rate of 15% and the
maximum rate on such income of over 40% (with adjustments). In addition, while ordinary
compensation income is subject to certain payroll and Medicare taxes, capital gains are
not; this increases the effective tax rate advantage of capital gains. Capital losses may
generally be offset only against capital gains. Shares acquired upon exercise of an
option must generally be held for more than 12 months for gain or loss from the sale of
such shares to qualify for long-term capital gain or loss treatment. 



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			(e) 		Use
of Stock to Exercise Options.






	


     Under
certain circumstances, the Board may permit the exercise of options using shares of the
Corporation’s stock already owned by the optionee through appropriate provisions in the
stock option agreement. This allows the optionee to exercise additional options and,
under certain circumstances, provide for payment of his or her withholding taxes, without
the payment of cash. The federal income tax treatment of such exchanges depends upon the
nature of the stock option and the shares exchanged. Generally, incentive stock options
can be exercised using shares previously owned by the optionee in payment of the exercise
price (based on the value of the surrendered shares) without triggering the recognition
of income by the optionee (provided the exchange does not constitute a disqualifying
disposition of shares previously acquired upon exercise of an incentive stock option).
Also no gain will generally be recognized upon the exercise of a nonstatutory stock
option in this manner to the extent that the fair market value of all of the surrendered
shares does not exceed the aggregate option exercise price of the acquired shares. Any
excess will generally be treated as ordinary income. Finally, the tax basis of the
surrendered stock is generally carried over to the newly acquired shares. 










			(f) 		Stock
Grants.






	


     For
restricted stock grants that are nontransferable and subject to a substantial risk of
forfeiture pursuant to the Grant Agreement, grantees will recognize ordinary income in
the amount of the fair market value of the stock on the date of lapse of either
restriction less any amount paid for the stock. Any increase in value after such taxable
event generally will be taxed as capital gain upon disposition. 



     An
individual or entity receiving restricted stock pursuant to the Plan may elect to have
the ordinary income element of the restricted property close at the time the property is
transferred. Closing the taxable event under Code §.83(b) gives the employee the
opportunity to limit his/her ordinary income from the transaction to any spread on the
date the property is transferred between the fair market value and the amount paid for
the property. Any appreciation in property after the date of the transfer is then
potential capital gain income which will be recognized when the property is disposed of
by the employee. The Code §.83(b) election must be made within 30 days after the transfer
of the property; and once the election is made, it is irrevocable, unless the Internal
Revenue Service agrees to the revocation. The election is not without risk. If an
individual or entity makes the election and recognizes ordinary income and the property
is thereafter forfeited pursuant to the restrictions, no deduction is available to the
individual or entity. 










			(g) 		Qualified
Small Business Stock.






	


     A
provision of OBRA 1993 provides, in certain circumstances, for a reduction in the capital
gains tax rate for individuals or certain other taxpayers who acquire “qualified small
business stock” at its original issue and hold it for more than five years. One-half of
the gain (up to certain limits) on such stock is generally excluded from taxable income
for regular tax purposes and 25% of such gain (up to certain limits) is generally
excluded for alternative minimum tax purposes. 



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     The
new law has many limitations, only two of which are described here. In order to qualify,
the issuer must not have more than $50,000,000 in gross assets, including amounts
received on issuance of the stock. Gross assets generally means cash and the adjusted tax
basis of other property. In addition, the issuer must use at least 80% of its assets in
the “active conduct” of one or more qualified trades or businesses for substantially all
of the holding period of the stock. For issuers who have been in existence for more than
two years, up to 50% of the issuer’s assets may qualify as used in the “active conduct”
of a business by being held for reasonably required working capital needs or held for
investment and reasonably expected to be used within two years to finance research and
development. The Corporation must meet this test for substantially all of the taxpayer’s
holding period for the stock. If the Corporation meets this test, it must also submit
periodic reports to the IRS and to the Corporation’s shareholders detailing its
compliance with the law’s requirements. 



     The
foregoing summary of the effect of current federal income taxation upon grantees and
optionees with respect to the grant of options for, and the purchase and subsequent
disposition of, shares under the Plan does not purport to be complete, and reference is
made to the applicable provisions of the Code. The laws, court decisions and
administrative rulings applicable to federal income taxation change frequently, and the
discussion in this summary is based only on such laws, court decisions and administrative
rulings as of the date hereof. 



     The
foregoing summary also does not reflect provisions of the income tax laws of any state or
foreign jurisdiction in which grantees or optionees may reside, and does not address
prospective estate, gift and other tax consequences of acquiring stock under the Plan. In
particular, the income tax laws of some states do not presently contain provisions
comparable to the incentive stock option provisions of the Code. All grantees and
optionees are urged to consult their own tax and financial advisers regarding the current
and prospective tax consequences of acquiring options and shares under the Plan. 



Restrictions
on Transfer and Absence of Public Market



     The
shares of Common Stock issuable under the Plan either upon grant or upon the exercise of
options granted under the Plan are “restricted securities” within the meaning of Rule 144
under the Securities Act of 1933, as amended (the “Act”), insofar as such securities have
not been registered thereunder and must be held indefinitely unless they are subsequently
registered or an exemption from such registration is available; provided, however, that,
in any event, the exemption from registration under Rule 144 will not be available for at
least one (1) year after the purchase and payment for the shares, unless the options and
the shares were issued pursuant to Rule 701, and even then will not be available unless:
(i) a public trading market then exists for the Common Stock; (ii) adequate information
concerning the Corporation is then available to the public; and (iii) other terms and
conditions of Rule 144 are complied with, including, among other things, the sale being
made through a broker in an unsolicited “broker’s transaction” or in transactions
directly with a “market maker” and the number of shares being sold in any three-month
period not exceeding specified limitations. There is not now a public market for shares
of the Corporation’s Common Stock and there can be no assurance that a public market will
ever exist. Accordingly, optionees should be prepared to hold the shares of Common Stock
received upon exercise of their options for an indefinite period of time. 



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     The
shares of Common Stock granted under the Plan or options granted under the Plan and the
shares of Common Stock issuable upon exercise of such options have not been qualified
under the securities laws of any state and are being issued in reliance upon available
exemptions from such qualification. Shares of Common Stock granted under the Plan or
acquired upon the exercise of any option granted under the Plan may be transferred only
in accordance with the provisions of applicable state securities or “blue sky” laws. To
make sure that another exemption from registration under the Act would be available for
the original grant of options and the issuance of shares upon exercise thereof, you will
be required to make certain “investment representations” to the Corporation at the time
you exercise the option. (See Exhibit A to this Summary Memorandum for the form of such
representations.) These representations relate to your investment intent and your
acknowledgment of disclosure by the Corporation of, and your access to, financial and
other information concerning the Corporation. A restrictive legend will be placed on the
stock certificate stating that no sale or other disposition of the stock may be made
without meeting certain conditions, which include registration of the stock by the
Corporation or an opinion to the Corporation by an attorney that an exemption is
available under the Act for a resale of the stock. You are advised that because the
Corporation’s securities have not been registered under the Act, any shares purchased
upon exercise of an option must be held indefinitely unless they are subsequently
registered for sale under the Act or an exception from such registration is available. 



Information
About the Corporation



     The
Corporation agrees to provide to all optionees and grantees during the term of the option
copies of all annual reports and other information which are provided to all shareholders
of the Corporation. 



-11- 
















	





EXHIBIT A



INVESTMENT
REPRESENTATION STATEMENT












	PURCHASER

Corporation

          
SECURITY

AMOUNT

DATE	:

:

:

:

:	

HiBand Semiconductors Inc., (the “Corporation”)
          

COMMON STOCK






	


     In
connection with the purchase or grant of the above-listed Securities, I, the Purchaser,
represent to the Corporation the following: 










	(a) 		I
am aware of the Corporation’s business affairs and financial condition, and have
acquired sufficient information about the Corporation to reach an informed and
knowledgeable decision to acquire the Securities. I am purchasing or receiving these
Securities for my own account for investment purposes only and not with a view to, or for
the resale in connection with, any “distribution” thereof for purposes of the Securities
Act of 1933, as amended (the “Securities Act”). 







	(b) 		I
understand that the Securities have not been registered under the Securities Act in
reliance upon a specific exemption there from, which exemption depends upon, among other
things, the bona fide nature of my investment intent as expressed herein. In this
connection, I understand that, in the view of the Securities and Exchange Commission (the
“SEC”), the statutory basis for such exemption may be unavailable if my representation
was predicated solely upon a present intention to hold these Securities for the minimum
capital gains period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of one year
or any other fixed period in the future. 







	(c) 		I
further understand that the Securities must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from registration is otherwise
available. Moreover, I understand that the Corporation is under no obligation to register
the Securities. In addition, I understand that the certificate evidencing the Securities
will be imprinted with a legend which prohibits the transfer of the Securities unless
they are registered or such registration is not required in the opinion of counsel for
the Corporation. 







	(d) 		I
am familiar with the provisions of Rule 701 and Rule 144, each promulgated under the
Securities Act, which, in substance, permit limited public resale of “restricted
securities” acquired, directly or indirectly, from the issuer thereof, in a non-public
offering subject to the satisfaction of certain conditions. Rule 701 provides that if the
issuer qualified under Rule 701 at the time of issuance of the Securities, such issuance
will be exempt from registration under the Securities Act. In the event the Corporation
later becomes subject to the reporting requirements of Sections 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter the securities exempt under
Rule 701 may be resold, subject to the satisfaction of certain of the conditions
specified by Rule 144, including, among other things: (1) the sale being made through a
broker in an unsolicited “broker’s transaction” or in transactions directly with a market
maker (as such term is defined under the Securities Exchange Act of 1934); and, in the
case of an affiliate, (2) the availability of certain public information about the
Corporation, and the amount of securities being sold during any three- month period not
exceeding the limitations specified in Rule 144(e), if applicable. Notwithstanding this
paragraph (d), I acknowledge and agree to the restrictions set forth in paragraph (e)
hereof. 












	










	 	     In
the event that the Corporation does not qualify under Rule 701 at the time of issuance of
the Securities, then the Securities may be resold in certain limited circumstances
subject to the provisions of Rule 144, which requires among other things: (1) the
availability of certain public information about the Corporation, (2) the resale
occurring not less than one year after the party has purchased, and made full payment
for, within the meaning of Rule 144, the securities to be sold; and, in the case of an
affiliate, or of a non-affiliate who has held the securities less than two years, (3) the
sale being made through a broker in an unsolicited “broker’s transaction” or in
transactions directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934) and the amount of securities being sold during any three month
period not exceeding the specified limitations stated therein, if applicable.






	(e) 		I
agree, in connection with any initial underwritten public offering of the Corporation’s
securities, (1) not to sell, make short sale of, loan, grant any options for the purchase
of, or otherwise dispose of any shares of Common Stock of the Corporation held by me
(other than those shares included in the registration) without the prior written consent
of the Corporation or the underwriters managing such initial underwritten public offering
of the Corporation’s securities for one hundred eighty (180) days from the effective date
of such registration, and (2) I further agree to execute any agreement reflecting (1)
above as may be requested by the underwriters at the time of the public offering:
provided, however, that the officers and directors of the Corporation who own the stock
of the Corporation also agree to such restrictions. 






	


-2- 
















	










	(f) 		I
further understand that in the event all of the applicable requirements of Rule 144 or
Rule 701 are not satisfied, registration under the Securities Act, compliance with
Regulation A, or some other registration exemption will be required; and that,
notwithstanding the fact that Rule 144 and Rule 701 are not exclusive, the Staff of the
SEC has expressed its opinion that persons proposing to sell private placement securities
other than in a registered offering and otherwise than pursuant to Rule 144 or Rule 701
will have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk. 








		Signature of Purchaser:
          




Dated: __________, 199_