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Exhibit 10.3    
    


 
 

GIGA SEMICONDUCTOR, INC.
  2000 STOCK OPTION PLAN    
    


        1.    ESTABLISHMENT, PURPOSE AND TERM OF PLAN.



        1.1   Establishment.    The Giga Semiconductor, Inc. 2000 Stock Option Plan (the
"Plan") is hereby established effective as of                        , 2000
(the "Effective Date"). 


        1.2   Purpose.    The purpose of the Plan is to advance the interests of the Participating Company Group and its
shareholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group. 


        1.3   Term of Plan.    The Plan shall continue in effect until the earlier of its termination by the Board or the
date on which all of the shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing Options
granted under the Plan have lapsed. However, all Options shall be granted, if at all, within ten (10) years from the earlier of the date the Plan is adopted by the Board or the date the Plan is
duly approved by the shareholders of the Company. 




        2.    DEFINITIONS AND CONSTRUCTION.



        2.1   Definitions.    Whenever used herein, the following terms shall have their respective meanings set forth below: 



        (a)   "Board" means the Board of Directors of the Company. If one or more
Committees have been appointed by the Board to administer the Plan, "Board" also means such
Committee(s). 


        (b)   "Code" means the Internal Revenue Code of 1986, as amended, and any
applicable regulations promulgated thereunder. 


        (c)   "Committee" means the Compensation Committee or other committee of the
Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all
of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed
by law. 


        (d)   "Company" means Giga Semiconductor, Inc., a California
corporation, or any successor corporation thereto. 


        (e)   "Consultant" means a person engaged to provide consulting or advisory
services (other than as an Employee or a Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided
would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on either the exemption from registration provided by Rule 701 under the
Securities Act or, if the Company is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, registration on a Form S-8 Registration Statement under the
Securities Act. 


        (f)    "Director" means a member of the Board or of the board of directors of
any other Participating Company. 




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        (g)   "Disability" means the inability of the Optionee, in the opinion of a
qualified physician acceptable to the Company, to perform the major duties of the Optionee's position with the Participating Company Group because of the sickness or injury of the Optionee. 


        (h)   "Employee" means any person treated as an employee (including an Officer
or a Director who is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of
Section 422 of the Code; provided, however, that neither service as a Director nor payment of a director's fee shall be sufficient to constitute employment for purposes of the Plan. The Company
shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual's employment or
termination of employment, as the case may be. For purposes of an individual's rights, if any, under the Plan as of the time of the Company's determination, all such determinations by the Company
shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination. 



        (i)    "Exchange Act" means the Securities Exchange Act of 1934, as amended. 


        (j)    "Fair Market Value" means, as of any date, the value of a share of Stock
or other property as determined by the Board, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following: 



        (i)    If,
on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be the closing
price of a share of Stock (or the mean of the closing bid and asked prices of a share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or
such other national or regional securities exchange or market system constituting the primary market for the Stock, as reported in The Wall Street
Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market
system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be
determined by the Board, in its discretion. 


        (ii)   If,
on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be as
determined by the Board in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse. 




        (k)   "Incentive Stock Option" means an Option intended to be (as set forth in
the Option Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code. 


        (l)    "Insider" means an Officer, a Director of the Company or other person
whose transactions in Stock are subject to Section 16 of the Exchange Act. 


        (m)  "Nonstatutory Stock Option" means an Option not intended to be (as set
forth in the Option Agreement) or which does not qualify as an Incentive Stock Option. 


        (n)   "Officer" means any person designated by the Board as an officer of the
Company. 


        (o)   "Option" means a right to purchase Stock pursuant to the terms and
conditions of the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option. 




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        (p)   "Option Agreement" means a written agreement between the Company and an
Optionee setting forth the terms, conditions and restrictions of the Option granted to the Optionee and any shares acquired upon the exercise thereof. An Option Agreement may consist of a form of
"Notice of Grant of Stock Option" and a form of "Stock Option Agreement" incorporated therein by reference, or such other form or forms as the Board may approve from time to time. 


        (q)   "Optionee" means a person who has been granted one or more Options. 


        (r)   "Parent Corporation" means any present or future "parent corporation" of
the Company, as defined in Section 424(e) of the Code. 



        (s)   "Participating Company" means the Company or any Parent Corporation or
Subsidiary Corporation. 


        (t)    "Participating Company Group" means, at any point in time, all
corporations collectively which are then Participating Companies. 


        (u)   "Rule 16b-3" means Rule 16b-3 under
the Exchange Act, as amended from time to time, or any successor rule or regulation. 


        (v)   "Securities Act" means the Securities Act of 1933, as amended. 


        (w)  "Service" means an Optionee's employment or service with the
Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant. An Optionee's Service shall not be deemed to have terminated merely because of a change in the capacity
in which the Optionee renders
Service to the Participating Company Group or a change in the Participating Company for which the Optionee renders such Service, provided that there is no interruption or termination of the Optionee's
Service. Furthermore, an Optionee's Service with the Participating Company Group shall not be deemed to have terminated if the Optionee takes any military leave, sick leave, or other bona fide leave
of absence approved by the Company; provided, however, that if any such leave exceeds ninety (90) days, on the ninety-first (91st) day of such leave the Optionee's Service shall be deemed to
have terminated unless the Optionee's right to return to Service with the Participating Company Group is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the Optionee's Option Agreement. The Optionee's Service shall be deemed
to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service ceasing to be a Participating Company. Subject to the foregoing, the
Company, in its discretion, shall determine whether the Optionee's Service has terminated and the effective date of such termination. 


        (x)   "Stock" means the common stock of the Company, as adjusted from time to
time in accordance with Section 4.2. 


        (y)   "Subsidiary Corporation" means any present or future "subsidiary
corporation" of the Company, as defined in Section 424(f) of the Code. 


        (z)   "Ten Percent Owner Optionee" means an Optionee who, at the time an Option
is granted to the Optionee, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company within the meaning of
Section 422(b)(6) of the Code. 




        2.2   Construction.    Captions and titles contained herein are for convenience only and shall not affect the meaning
or interpretation of any provision of the Plan. Except when otherwise 



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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. 




        3.    ADMINISTRATION.



        3.1   Administration by the Board.    The Plan shall be administered by the Board. All questions of interpretation of
the Plan or of any Option shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Option. 


        3.2   Authority of Officers.    Any Officer shall have the authority to act on behalf of the Company with respect to
any matter, right, obligation, determination 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, determination or election. 


        3.3   Powers of the Board.    In addition to any other powers set forth in the Plan and subject to the provisions of
the Plan, the Board shall have the full and final power and authority, in its discretion: 



        (a)   to
determine the persons to whom, and the time or times at which, Options shall be granted and the number of shares of Stock to be subject to each Option; 


        (b)   to
designate Options as Incentive Stock Options or Nonstatutory Stock Options; 


        (c)   to
determine the Fair Market Value of shares of Stock or other property; 


        (d)   to
determine the terms, conditions and restrictions applicable to each Option (which need not be identical) and any shares acquired upon the exercise thereof, including,
without limitation, (i) the exercise price of the Option, (ii) the method of payment for shares purchased upon the exercise of the Option, (iii) the method for satisfaction of any
tax withholding obligation arising in connection with the Option or such shares, including by the withholding or delivery of shares of stock, (iv) the timing, terms and conditions of the
exercisability of the Option or the vesting of any shares acquired upon the exercise thereof, (v) the time of the expiration of the Option, (vi) the effect of the Optionee's termination
of Service with the Participating Company Group on any of the foregoing, and (vii) all other terms, conditions and restrictions applicable to the Option or such shares not inconsistent with the
terms of the Plan; 


        (e)   to
approve one or more forms of Option Agreement; 


        (f)    to
amend, modify, extend, cancel or renew any Option or to waive any restrictions or conditions applicable to any Option or any shares acquired upon the exercise
thereof; 


        (g)   to
accelerate, continue, extend or defer the exercisability of any Option or the vesting of any shares acquired upon the exercise thereof, including with respect to the
period following an Optionee's termination of Service with the Participating Company Group; 


        (h)   to
prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt supplements to, or alternative versions of, the Plan, including, without
limitation, as the Board deems necessary or desirable to comply with the laws of, or to accommodate the tax policy or custom of, foreign jurisdictions whose citizens may be granted Options; and 


        (i)    to
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Option Agreement and to make all other determinations and take such other
actions with respect to the Plan or any Option as the Board may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law. 




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        3.4   Administration with Respect to Insiders.    With respect to participation by Insiders in the Plan, at any time
that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of
Rule 16b-3. 


        3.5   Indemnification.    In addition to such other rights of indemnification as they may have as members of the
Board or officers or employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act for the Board or the
Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any action,
suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any
right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for
gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer
to the Company, in writing, the opportunity at its own expense to handle and defend the same. 




        4.    SHARES SUBJECT TO PLAN.



        4.1   Maximum Number of Shares Issuable.    Subject to adjustment as provided in Section 4.2, the maximum
aggregate number of shares of Stock that may be issued under the Plan shall be three million five hundred thousand (3,500,000) and shall consist of authorized but unissued or reacquired shares of
Stock or any combination thereof. If an outstanding Option for any reason expires or is terminated or canceled or if shares of Stock are acquired upon the exercise of an Option subject to a Company
repurchase option and are repurchased by the Company at the Optionee's exercise price, the shares of Stock allocable to the unexercised portion of such Option or such repurchased shares of Stock shall
again be available for issuance under the Plan. However, except as adjusted pursuant to Section 4.2, in
no event shall more than three million five hundred thousand (3,500,000) shares of Stock be available for issuance pursuant to the exercise of Incentive Stock Options (the  "ISO Share Issuance
Limit"). Notwithstanding the foregoing, at any such time as the offer and sale of
securities pursuant to the Plan is subject to compliance with Section 260.140.45 of Title 10 of the California Code of Regulations
("Section 260.140.45"), the total number of shares of Stock issuable upon the exercise of all
outstanding Options (together with options outstanding under any other stock option plan of the Company) and the total number of shares provided for under any stock bonus or similar plan of the
Company shall not exceed thirty percent (30%) (or such other higher percentage limitation as may be approved by the shareholders of the Company pursuant to Section 260.140.45) of the then
outstanding shares of the Company as calculated in accordance with the conditions and exclusions of Section 260.140.45. 



        4.2   Adjustments for Changes in Capital Structure.    In the event of any stock dividend, stock split, reverse stock
split, recapitalization, combination, reclassification or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number and class of shares subject to the
Plan and to any outstanding Options, in the ISO Share Issuance Limit set forth in Section 4.1, and in the exercise price per share of any outstanding Options. If a majority of the shares which
are of the same class as the shares that are subject to outstanding Options are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event, as defined in
Section 8.1) shares of another corporation (the "New Shares"), the Board may unilaterally amend
the outstanding Options to provide that such Options are exercisable for New Shares. In the event of any such amendment, the number of shares subject to, 



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and
the exercise price per share of, the outstanding Options shall be adjusted in a fair and equitable manner as determined by the Board, in its discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may the exercise price of any Option be decreased
to an amount less than the par value, if any, of the stock subject to the Option. The adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and conclusive. 




        5.    ELIGIBILITY AND OPTION LIMITATIONS.



        5.1   Persons Eligible for Options.    Options may be granted only to Employees, Consultants, and Directors. For
purposes of the foregoing sentence, "Employees," "Consultants" and "Directors" shall include prospective Employees, prospective Consultants and prospective Directors to whom Options are granted in
connection with written offers of an employment or other service relationship with the Participating Company Group. Eligible persons may be granted more than one (1) Option. However,
eligibility in accordance with this Section shall not entitle any person to be granted an Option, or, having been granted an Option, to be granted an additional Option. 


        5.2   Option Grant Restrictions.    Any person who is not an Employee on the effective date of the grant of an Option
to such person may be granted only a Nonstatutory Stock Option. An Incentive Stock Option granted to a prospective Employee upon the condition that such person become an Employee
shall be deemed granted effective on the date such person commences Service with a Participating Company, with an exercise price determined as of such date in accordance with Section 6.1. 


        5.3   Fair Market Value Limitation.    To the extent that options designated as Incentive Stock Options (granted
under all stock option plans of the Participating Company Group, including the Plan) become exercisable by an Optionee for the first time during any calendar year for stock having a Fair Market Value
greater than One Hundred Thousand Dollars ($100,000), the portions of such options which exceed such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section 5.3,
options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with
respect to such stock is granted. If the Code is amended to provide for a different limitation from that set forth in this Section 5.3, such different limitation shall be deemed incorporated
herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 5.3, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence
of such designation, the Optionee shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon
the exercise of the Option. 




        6.    TERMS AND CONDITIONS OF OPTIONS.


        Options
shall be evidenced by Option Agreements specifying the number of shares of Stock covered thereby, in such form as the Board shall from time to time establish. No Option or
purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Option Agreement. Option Agreements may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and conditions: 



        6.1   Exercise Price.    The exercise price for each Option shall be established in the discretion of the Board;
provided, however, that (a) the exercise price per share for an Incentive Stock Option shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the
Option, (b) the exercise price per share for a Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of a share of Stock on the
effective date of grant of the Option, and (c) no Option granted to a Ten Percent Owner Optionee shall 



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have
an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing, an
Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant
to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code. 


        6.2   Exercisability and Term of Options.    Options shall be exercisable at such time or times, or upon such event
or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Board and set forth in the Option Agreement evidencing such Option; provided,
however, that (a) no Option shall be exercisable after the expiration of ten (10) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to
a Ten Percent Owner Optionee shall be exercisable after the expiration of five (5) years after the effective date of grant of such Option, (c) no Option granted to a prospective
Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which such person commences Service with a Participating Company, and (d) with the exception
of an Option granted to an Officer, a Director or a Consultant, no Option shall become exercisable at a rate less than twenty percent (20%) per year over a period of five (5) years from the
effective date of grant of such Option, subject to the Optionee's continued Service. Subject to the foregoing, unless otherwise specified by the Board in the grant of an Option, any Option granted
hereunder shall terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions. 


        6.3   Payment of Exercise Price.



        (a)   Forms of Consideration Authorized.    Except as otherwise provided below, payment of the exercise price for the
number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Optionee having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice together with irrevocable instructions to a
broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (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) (a  "Cashless
Exercise"), (iv) provided that the Optionee is an Employee (unless otherwise not
prohibited by law, including, without limitation, any regulation promulgated by the Board of Governors of the Federal Reserve System) and in the Company's sole discretion at the time the Option is
exercised, by delivery of the Optionee's promissory note in a form approved by the Company for the aggregate exercise price, provided that, if the Company is incorporated in the State of Delaware, the
Optionee shall pay in cash that portion of the aggregate exercise price not less than the par value of the shares being acquired, (v) by such other consideration as may be approved by the Board
from time to time to the extent permitted by applicable law, or (vi) by any combination thereof. The Board may at any time or from time to time, by approval of or by amendment to the standard
forms of Option Agreement described in Section 7, or by other means, grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or
which otherwise restrict one or more forms of consideration. 


        (b)   Limitation on Forms of Consideration.



        (i)    Tender of Stock.    Notwithstanding the foregoing, an 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 Company's stock. Unless 





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otherwise
provided by the Board, an 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 Optionee
for more than six (6) months (and not used for another Option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company. 



        (ii)   Cashless Exercise.    The Company reserves, at any and all times, the right, in the Company's sole and
absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise. 


        (iii)  Payment by Promissory Note.    No promissory note shall be permitted if the exercise of an Option using a
promissory note would be a violation of any law. Any permitted promissory note shall be on such terms as the Board shall determine. The Board shall have the authority to permit or require the Optionee
to secure any promissory note used to exercise an Option with the shares of Stock acquired upon the exercise of the Option or with other collateral acceptable to the Company. Unless otherwise provided
by the Board, if the Company at any time is subject to the regulations promulgated by the Board of Governors of the Federal Reserve System or any other governmental entity affecting the extension of
credit in connection with the Company's securities, any promissory note shall comply with such applicable regulations, and the Optionee shall pay the unpaid principal and accrued interest, if any, to
the extent necessary to comply with such applicable regulations. 





        6.4   Tax Withholding.    The Company shall have the right, but not the obligation, to deduct from the shares of
Stock issuable upon the exercise of an Option, or to accept from the Optionee the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or
any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to such Option or the shares acquired upon the exercise
thereof. Alternatively or in addition, in its discretion, the Company shall have the right to require the Optionee, through payroll withholding, cash payment or otherwise, including by means of a
Cashless Exercise, to make adequate provision for any such tax withholding obligations of the Participating Company Group arising in connection with the Option or the shares acquired upon the exercise
thereof. The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory
withholding rates. The Company shall have no obligation to deliver shares of Stock or to release shares of Stock from an escrow established pursuant to the Option Agreement until the Participating
Company Group's tax withholding obligations have been satisfied by the Optionee. 


        6.5   Repurchase Rights.    Shares issued under the Plan may be subject to a right of first refusal, one or more
repurchase options, or other conditions and restrictions as determined by the Board in its
discretion at the time the Option is granted. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more
persons as may be selected by the Company. Upon request by the Company, each Optionee shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock
hereunder and shall promptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing
any such transfer restrictions. 


        6.6   Effect of Termination of Service.



        (a)   Option Exercisability.    Subject to earlier termination of the Option as otherwise
provided herein and unless otherwise provided by the Board in the grant of an Option and set forth in the Option Agreement, an Option shall be exercisable after an Optionee's termination 




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of
Service only during the applicable time period determined in accordance with this Section 6.6 and thereafter shall terminate: 



        (i)    Disability.    If the Optionee's Service terminates because of the Disability of the Optionee, the Option, to
the extent unexercised and exercisable on the date on which the Optionee's Service terminated, may be exercised by the Optionee (or the Optionee's guardian or legal representative) at any time prior
to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee's Service terminated, but in any event
no later than the date of expiration of the Option's term as set forth in the Option Agreement evidencing such Option (the "Option Expiration
Date"). 


        (ii)   Death.    If the Optionee's Service terminates because of the death of the Optionee, the Option, to the extent
unexercised and exercisable on the date on which the Optionee's Service terminated, may be exercised by the Optionee's legal representative or other person who acquired the right to exercise the
Option by reason of the Optionee's death at any time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion) after the date
on which the Optionee's Service terminated, but in any event no later than the Option Expiration Date. The Optionee's Service shall be deemed to have terminated on account of death if the Optionee
dies within three (3) months (or such longer period of time as determined by the Board, in its discretion) after the Optionee's termination of Service. 



        (iii)  Termination After Change in Control.    The Board may, in its discretion, provide in any Option Agreement
that if the Optionee's Service ceases as a result of "Termination After Change in Control" (as defined in such Option Agreement), then (1) the Option, to the extent unexercised and exercisable
on the date on which the Optionee's Service terminated, may be exercised by the Optionee (or the Optionee's guardian or legal representative) at any time prior to the expiration of six
(6) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the
Optionee's Service terminated, but in any event no later than the Option Expiration Date, and (2) the exercisability and vesting of the Option and any shares acquired upon the exercise thereof
shall be accelerated effective as of the date on which the Optionee's Service terminated to such extent, if any, as shall have been determined by the Board, in its discretion, and set forth in the
Option Agreement. Notwithstanding the foregoing, if the Company and the other party to the transaction constituting a Change in Control agree to treat such transaction as a
"pooling-of-interests" for accounting purposes and it is determined that the provisions or operation of this Section 6.6(a)(iii) would preclude treatment of such
transaction as a "pooling-of-interests" and provided further that in the absence of the preceding sentence such transaction would be treated as a
"pooling-of-interests," then this Section 6.6(a)(iii) shall be without force or effect, and the vesting and exercisability of the Option shall be determined under
any other applicable provision of the Plan or the Option Agreement evidencing such Option. 



        (iv)  Other Termination of Service.    If the Optionee's Service terminates for any reason, except Disability, death
or Termination After Change in Control, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee's Service terminated, may be exercised by the Optionee
at any time prior to the expiration of three (3) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee's Service terminated,
but in any event no later than the Option Expiration Date. 





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        (b)   Extension if Exercise Prevented by Law.    Notwithstanding the foregoing, if the
exercise of an Option within the applicable time periods set forth in Section 6.6(a) is prevented by the provisions of Section 10 below, the Option shall remain exercisable until three
(3) months (or such longer period of time as determined by the Board, in its discretion) after the date the Optionee is notified by the Company that the Option is exercisable, but in any event
no later than the Option Expiration Date. 


        (c)   Extension if Optionee Subject to Section 16(b).    Notwithstanding the
foregoing, if a sale within the applicable time periods set forth in Section 6.6(a) of shares acquired upon the exercise of the Option would subject the Optionee to suit under
Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the
Optionee would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Optionee's termination of Service, or (iii) the Option Expiration Date. 




        6.7   Transferability of Options.    During the lifetime of the Optionee, an Option shall be exercisable only by the
Optionee or the Optionee's guardian or legal representative. No Option shall be assignable or transferable by the Optionee, except by will or by the laws of descent and distribution. Notwithstanding
the foregoing, to the extent permitted by the Board, in its discretion, and set forth in the Option Agreement evidencing such Option, a Nonstatutory Stock Option shall be assignable or transferable
subject to the applicable limitations, if any, described in Section 260.140.41 of Title 10 of the California
Code of Regulations, Rule 701 under the Securities Act, and the General Instructions to Form S-8 Registration Statement under the Securities Act. 




        7.    STANDARD FORMS OF OPTION AGREEMENT.



        7.1   Option Agreement.    Unless otherwise provided by the Board at the time the Option is granted, an Option shall
comply with and be subject to the terms and conditions set forth in the form of Option Agreement approved by the Board concurrently with its adoption of the Plan and as amended from time to time. 


        7.2   Authority to Vary Terms.    The Board shall have the authority from time to time to vary the terms of any
standard form of Option Agreement described in this Section 7 either in connection with the grant or amendment of an individual Option or in connection with the authorization of a new standard
form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Option Agreement are not inconsistent with the terms of the Plan. 




        8.    CHANGE IN CONTROL.



        8.1   Definitions.



        (a)   An
"Ownership Change Event" shall be deemed to have occurred if any of
the following occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the shareholders of the Company of more than fifty
percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the
assets of the Company; or (iv) a liquidation or dissolution of the Company. 


        (b)   A
"Change in Control" shall mean an Ownership Change Event or a series of
related Ownership Change Events (collectively, a "Transaction") wherein the shareholders of the Company
immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company's voting stock immediately before
the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a
Transaction described in Section 8.1(a)(iii), the corporation 




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or
other business entity to which the assets of the Company were transferred (the "Transferee"), as the
case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more
corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The
Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be
final, binding and conclusive. 




        8.2   Effect of Change in Control on Options.    In the event of a Change in Control, the surviving, continuing,
successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the "Acquiring
Corporation"), may, without the consent of any Optionee, either assume the Company's rights and obligations under outstanding Options or substitute for
outstanding Options substantially equivalent options for the Acquiring Corporation's stock. In the event the Acquiring Corporation elects not to assume or substitute for outstanding Options in
connection with a Change in Control, the exercisability and vesting of each such outstanding Option and any shares acquired upon the exercise thereof held by Optionees whose Service has not terminated
prior to such date shall be accelerated, effective as of the date ten (10) days prior to the date of the Change in Control, to such extent, if any, as shall have been determined by the Board,
in its discretion, and set forth in the Option Agreement evidencing such Option. The exercise or vesting of any Option and any shares acquired upon the exercise thereof that was permissible solely by
reason of this Section 8.2 and the provisions of such Option Agreement shall be conditioned upon the consummation of the Change in Control. Any Options which are neither assumed or substituted
for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of
the Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of an Option prior to the Change in Control and any consideration received pursuant to the Change in Control with
respect to such shares shall continue to be subject to all applicable provisions of the Option Agreement evidencing such Option except as otherwise provided in such Option Agreement. Furthermore,
notwithstanding the foregoing, if the corporation the stock of which is subject to the outstanding Options immediately prior to an Ownership Change Event described in
Section 8.1(a)(i) constituting a Change in Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total
combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code
without regard to the provisions of Section 1504(b) of the Code, the outstanding Options shall not terminate unless the Board otherwise provides in its discretion. 




        9.    PROVISION OF INFORMATION.


        At
least annually, copies of the Company's balance sheet and income statement for the just completed fiscal year shall be made available to each Optionee and purchaser of shares of Stock
upon the exercise of an Option. The Company shall not be required to provide such information to key employees whose duties in connection with the Company assure them access to equivalent information.
Furthermore, the Company shall deliver to each Optionee such disclosures as are required in accordance with Rule 701 under the Securities Act. 



        10.    COMPLIANCE WITH SECURITIES LAW.


        The
grant of Options and the issuance of shares of Stock upon exercise of Options shall be subject to compliance with all applicable requirements of federal, state and foreign law with
respect to such securities. Options may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or
other law or 


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regulations
or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Option may be exercised unless (a) a registration statement under
the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (b) in the opinion of legal counsel to the
Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability
of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company's legal counsel to be necessary to the lawful issuance and sale of any shares
hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the
exercise of any Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by the Company. 


        11.    TERMINATION OR AMENDMENT OF PLAN.


        The
Board may terminate or amend the Plan at any time. However, subject to changes in applicable law, regulations or rules that would permit otherwise, without the approval of the
Company's shareholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of
Section 4.2), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the
Company's shareholders under any applicable law, regulation or rule. No termination or amendment of the Plan shall affect any then outstanding Option unless expressly provided by the Board. In any
event, no termination or amendment of the Plan may adversely
affect any then outstanding Option without the consent of the Optionee, unless such termination or amendment is required to enable an Option designated as an Incentive Stock Option to qualify as an
Incentive Stock Option or is necessary to comply with any applicable law, regulation or rule. 


        12.    SHAREHOLDER APPROVAL.


        The
Plan or any increase in the maximum aggregate number of shares of Stock issuable thereunder as provided in Section 4.1 (the  "Authorized Shares") shall be approved by the shareholders of the Company within twelve
(12) months of the date of adoption thereof by the Board. Options granted prior to shareholder approval of the Plan or in excess of the Authorized Shares previously approved by the shareholders
shall become exercisable no earlier than the date of shareholder approval of the Plan or such increase in the Authorized Shares, as the case may be. 


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Exhibit 10.3


GIGA SEMICONDUCTOR, INC. 2000 STOCK OPTION PLAN