2004 Nonstatutory Stock Plan and form of nonstatutory option agreement



 Exhibit 10.1 
  
 HYTEK MICROSYSTEMS, INC. 
  
 2004 NONSTATUTORY STOCK PLAN 
  
 (As adopted by the Board of Directors on August 23, 2004) 
  
 1. Purposes of the Plan. The purposes of this 2004 Nonstatutory Stock Plan are: 
  

	 	•	to attract and retain the best available personnel for positions of substantial responsibility, 

  

	 	•	to provide additional incentive to Employees and Consultants, and 

  

	 	•	to promote the success of the Company’s business. 

  
 Options granted under the Plan are to be nonstatutory stock options. Stock Purchase Rights may also be granted under the Plan. 
  
 2. Definitions. As used herein, the following definitions shall apply:

  
 (a) “Administrator” means the Board or any
of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan. 
  
 (b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Options or Stock Purchase Rights are, or will be,
granted under the Plan. 
  
 (c) “Board” means the
Board of Directors of the Company. 
  
 (d) “Code”
means the Internal Revenue Code of 1986, as amended. 
  
 (e)
“Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan. 
  
 (f) “Common Stock” means the common stock of the Company. 
  
 (g) “Company” means Hytek Microsystems, Inc., a California corporation. 
  
 (h) “Consultant” means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such entity. 
  
 (i) “Director” means a member of the Board. 







 (j) “Disability” means total and permanent disability as defined in Section 22(e)(3) of
the Code. 
  
 (k) “Employee” means any person,
including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. An Employee shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any successor. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

  
 (l) “Exchange Act” means the Securities
Exchange Act of 1934, as amended. 
  
 (m) “Fair Market
Value” means, as of any date, the value of Common Stock determined as follows: 
  
 (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the day of determination, as reported in The Wall Street Journal or such other source
as the Administrator deems reliable; 
  
 (ii) If the Common Stock
is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination,
as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
  
 (iii) In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.

  
 (n) “Notice of Grant” means a written or
electronic notice evidencing certain terms and conditions of an individual Option or Stock Purchase Right grant. The Notice of Grant is part of the Option Agreement. 
  
 (o) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder. 
  
 (p) “Option” means a nonstatutory stock option granted pursuant to the Plan. Options are not intended to qualify as “incentive stock options” within the meaning of Section 422 of the Code and the regulations
promulgated thereunder. 
  
 (q) “Option
Agreement” means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 
  
 (r) “Option Exchange Program” means a program whereby (i)
outstanding Options are surrendered or cancelled in exchange for Options of the same type (which may have a lower exercise price or purchase price), of a different type, and/or cash; and/or (ii) the exercise price of an outstanding Option is
reduced. The Administrator will determine the terms and conditions of any Option Exchange Program in its sole discretion. 
  

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 (s) “Optioned Stock” means the Common Stock subject to an Option or Stock Purchase
Right. 
  
 (t) “Optionee” means the holder of an
outstanding Option or Stock Purchase Right granted under the Plan. 
  
 (u) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (v) “Plan” means this Hytek Microsystems, Inc. 2004 Nonstatutory Stock Plan. 
  
 (w) “Restricted Stock” means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan. 
  
 (x) “Restricted Stock Purchase Agreement” means a written agreement between the Company and the Optionee evidencing the terms and restrictions applying to stock purchased under a Stock Purchase Right.
The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the Notice of Grant. 
  
 (y) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan. 
  
 (z) “Section 16(b)
“ means Section 16(b) of the Exchange Act. 
  
 (aa)
“Service Provider” means an Employee or Consultant. 
  
 (bb) “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan. 
  
 (cc) “Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant and Restricted Stock Purchase Agreement. 
  
 (dd)
“Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 250,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. 
  
 If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares that were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have actually been issued under the
Plan, whether upon exercise of an Option or Stock Purchase Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if unvested Shares of Restricted Stock are repurchased or
otherwise reacquired by the Company, such Shares shall become available for future grant under the Plan. 
  

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 4. Administration of the Plan. 
  
 (a) Procedure. 
  
 (i) Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.

  
 (ii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. 
  
 (iii) Other Administration. Other than as provided above, the Plan shall be administered by (A) the Board or (B) a
Committee, which committee shall be constituted to satisfy Applicable Laws. 
  
 (b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion: 
  
 (i) to determine the Fair
Market Value; 
  
 (ii) to select the Service Providers to whom
Options and Stock Purchase Rights may be granted hereunder; 
  
 (iii) to determine the number of shares of Common Stock to be covered by each Option and Stock Purchase Right granted hereunder; 
  
 (iv) to approve forms of agreement for use under the Plan; 
  
 (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Option or Stock Purchase Right granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 
  
 (vi) to reduce the exercise price of any Option or Stock Purchase Right to
the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option or Stock Purchase Right shall have declined since the date the Option or Stock Purchase Right was granted; 
  
 (vii) to institute an Option Exchange Program; 
  

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 (viii) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan;

  
 (ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws; 
  
 (x) to modify or amend each Option or Stock Purchase Right (subject to Section 15(b) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise provided for in the Plan; 
  
 (xi) to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an
Option or Stock Purchase Right that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be
withheld is to be determined. All elections by an Optionee to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; 
  
 (xii) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock Purchase Right previously granted by the Administrator; and 
  
 (xiii) to make all other determinations deemed necessary or advisable for administering the Plan. 
  
 (c) Effect of Administrator’s Decision. The Administrator’s
decisions, determinations and interpretations shall be final and binding on all Optionees and any other holders of Options or Stock Purchase Rights. 
  
 5. Eligibility. Options and Stock Purchase Rights may be granted to Employees and Consultants. 
  
 6. No Employment Agreement. Neither the Plan nor any Option or Stock
Purchase Right shall confer upon an Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall they interfere in any way with the Optionee’s right or the Company’s right
to terminate such relationship at any time, with or without cause. 
  
 7. Term of Plan. The Plan shall become effective upon its approval by the Board. It shall continue in effect for a term of ten (10) years unless terminated earlier under Section 15 of the Plan. 
  
 8. Term of Option. The term of each Option shall be stated in the
Option Agreement. 
  
 9. Option Exercise Price and
Consideration. 
  
 (a) Exercise Price. The per share
exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator; provided, however, that the per 
  

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 Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant. Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less than 85% of the Fair Market Value per Share on the date of grant pursuant to a merger or other corporate transaction. 
  
 (b) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised. 
  
 (c) Form of Consideration. The Administrator shall determine the acceptable form of consideration for exercising an
Option, including the method of payment. Such consideration may consist entirely of: 
  
 (i) cash; 
  
 (ii) check;

  
 (iii) promissory note; 
  
 (iv) other Shares which (A) in the case of Shares acquired upon exercise of
an option, have been owned by the Optionee for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised;

  
 (v) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; 
  
 (vi) a reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee’s participation in any Company-sponsored deferred compensation program or arrangement;

  
 (vii) any combination of the foregoing methods of payment; or

  
 (viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws. 
  
 10. Exercise of Option. 
  
 (a) Procedure for
Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. Unless
the Administrator provides otherwise, vesting of Options granted hereunder shall be suspended during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. 
  
 An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance
with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised, together with any applicable withholding taxes. Full payment may consist of any

  

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 consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13
of the Plan. 
  
 Exercising an Option in any manner shall
decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 
  
 (b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, other than
upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s termination. If,
on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise
his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for six (6) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan. 
  
 (d) Death
of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the
Notice of Grant), by the Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for six (6) months following the Optionee’s termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the Optionee’s will or the laws of
descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  

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 (e) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or
Shares an Option previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 
  
 11. Stock Purchase Rights. 
  

(a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of Shares that the offeree shall be entitled to purchase, the price to be paid, and the time within which the offeree must accept such offer. The offer shall be accepted by
execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator. 
  
 (b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or Disability). Unless the Administrator provides otherwise, the purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate determined by the
Administrator. 
  
 (c) Other Provisions. The Restricted
Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 
  
 (d) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the purchaser shall have the rights
equivalent to those of a shareholder, and shall be a shareholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan. 
  
 12. Non-Transferability of Options and Stock Purchase Rights. Unless determined otherwise by the Administrator, an Option or Stock Purchase Right
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option or Stock Purchase Right shall contain such additional terms and conditions as the Administrator deems appropriate. 
  

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 13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale. 
  
 (a) Changes in Capitalization. In the event that any dividend or
other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under the Plan, may (in its sole discretion) adjust the number and class of Shares that may be delivered under the Plan and/or
the number, class, and price of Shares covered by each outstanding Option and Stock Purchase Right. 
  
 (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until ten (10) days prior to such transaction
as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option
or Stock Purchase Right will terminate immediately prior to the consummation of such proposed action. 
  
 (c) Merger or Asset Sale. In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase Right, the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it
would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in
writing or electronically that the Option or Stock Purchase Right shall be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Purchase Right shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Option or Stock Purchase Right shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common
Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock 
  

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 Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock
of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. 
  
 (d) Change in Control. In the event of a “Change in Control” of the Company, as defined in paragraph (e)
below, unless otherwise determined by the Administrator prior to the occurrence of such Change in Control, any Options outstanding on the date such Change in Control is determined to have occurred that are not yet exercisable and vested on such date
shall become fully exercisable and vested. 
  
 (e) Definition
of “Change in Control”. For purposes of this Section 13, a “Change in Control” means the happening of any of the following: 
  
 (i) When any “person”, as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, a Subsidiary or a Company
employee benefit plan, including any trustee of such plan acting as trustee) is or becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; or 
  
 (ii) The shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation
that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent
(50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the shareholders of the Company approve an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets; or 
  
 (iii) A change in the composition of the Board as a result of which fewer than a majority of the directors in office are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are
directors of the Company as of the date of adoption of the Plan by the Board, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company). 
  
 14. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other later date as is determined by the Administrator. Notice of the determination shall be provided
to each Optionee within a reasonable time after the date of such grant. 
  
 15. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. 
  

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 (b) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the
Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 
  
 16. Conditions Upon Issuance of Shares. 
  
 (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless
the exercise of such Option or Stock Purchase Right and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 

 
 (b) Investment Representations. As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising such Option or Stock Purchase Right to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 
  
 (c) Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s 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. 
  
 17. Reservation of
Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  

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 HYTEK MICROSYSTEMS, INC. 
  
 2004 NONSTATUTORY STOCK PLAN 
  

STOCK OPTION AGREEMENT 
  
 Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 
  
 I. NOTICE OF STOCK OPTION GRANT 
  
 [Optionee’s Name and Address] 
  
 You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as follows: 
  

			
	Grant Number	 	_______________________________
		
	Date of Grant	 	_______________________________
		
	Vesting Commencement Date	 	_______________________________
		
	Total Number of Shares Granted	 	_______________________________
		
	Exercise Price per Share	 	$______________________________
		
	Total Exercise Price	 	$______________________________
		
	Type of Option:	 	Nonstatutory Stock Option
		
	Expiration Date:	 	_______________________________

  
 Vesting
Schedule: 
  
 This Option may be exercised, in whole or in
part, in accordance with the following schedule: 
  
 One-fourth (1/4) of the Shares subject to the Option (rounded down to the nearest whole share) shall first become exercisable one year after the Vesting Commencement Date. After the first year anniversary of the option grant, shares
shall vest and become exercisable monthly at the rate of 1/48th per month for the balance of the 4 year option exercisable
subject to the Optionee continuing to be a Service Provider on such dates. 







 Post-Termination Exercisability Period: 
  
 This Option may be exercised for ninety (90) days after Optionee ceases to
be a Service Provider. Upon the death or Disability of the Optionee, this Option may be exercised for six (6) months after Optionee ceases to be a Service Provider. In no event shall this Option be exercised later than the Expiration Date as
provided above. 
  
 II. AGREEMENT 
  
 A. Grant of Option. 
  
 The Plan Administrator of the Company hereby grants to the Optionee named in
the Notice of Grant set forth as Part I of this Agreement (the “Optionee”) an option (the “Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of
Grant (the “Exercise Price”), subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 15(b) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail. 
  
 B. Exercise of Option. 
  
 1. Right to Exercise. This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. 
  
 2. Method of Exercise. This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be
completed by the Optionee and delivered to the Secretary of the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the
Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. 
  
 3. Compliance with Laws. No Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Exercised Shares. 
  
 C. Method of Payment. 
  
 Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: 
  
 1. cash; 
  
 2. check; 
  

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 3. surrender of other Shares that (i) in the case of Shares acquired upon exercise of an option, have
been owned by the Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares; or 
  
 4. to the extent permitted by the Administrator, delivery of a properly
executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale proceeds required to pay the aggregate
Exercise Price. 
  
 D. Non-Transferability of Option.

  
 This Option may not be transferred in any manner otherwise
than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee. The designation of a beneficiary by the Optionee does not constitute a transfer. The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 
  
 E. Term of Option. 
  
 This Option may be exercised only on or before the Expiration Date set forth in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement. 
  
 F. Tax Consequences. 
  
 Some of the federal tax
consequences relating to this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES. 
  
 G. Exercising the
Option. 
  
 1. Tax Withholding and Payment Obligation.
The Optionee may incur regular federal income tax liability upon exercise of the Option. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her compensation or to collect from Optionee and pay to
the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the
time of exercise. 
  
 2. Disposition of Shares. If the
Optionee holds Shares issued upon exercise of an NSO for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. 
  

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 H. Entire Agreement; Governing Law. 
  
 The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s
interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California. 
  
 I. NO GUARANTEE OF CONTINUED SERVICE. 
  
 OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT
OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 
  
 By your signature and the signature of the Company’s representative below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully
understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Option Agreement.
Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  

			
	OPTIONEE:	 	HYTEK MICROSYSTEMS, INC.
		
	
 Signature
	 	
 By

		
	
 Print Name
	 	
 Title

		
	
 Residence Address
	 	 
		
	
	 	 

  

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 CONSENT OF SPOUSE 
  
 The undersigned spouse of Optionee has read and hereby approves the terms and conditions of the Plan and this Option
Agreement. In consideration of the Company’s granting his or her spouse the right to purchase Shares as set forth in the Plan and this Option Agreement, the undersigned hereby agrees to be irrevocably bound by the terms and conditions of the
Plan and this Option Agreement and further agrees that any community property interest shall be similarly bound. The undersigned hereby appoints the undersigned’s spouse as attorney-in-fact for the undersigned with respect to any amendment or
exercise of rights under the Plan or this Option Agreement. 
  

	
	
	
 Spouse of Optionee










 EXHIBIT A 
  
 HYTEK MICROSYSTEMS, INC. 
  
 2004 NONSTATUTORY STOCK PLAN 
  
 EXERCISE NOTICE 
  
 Hytek Microsystems, Inc. 
 400 Hot Springs Road 
 Carson City, NV 
  
 Attention: Corporate Secretary 
  
 1. Exercise of Option. Effective as of today,                         , 20    ,
the undersigned (“Purchaser”) hereby elects to purchase                          shares (the “Shares”)
of the Common Stock of Hytek Microsystems, Inc. (the “Company”) under and pursuant to the 2004 Nonstatutory Stock Plan (the “Plan”) and the Stock Option Agreement dated
                             (the “Option Agreement”). The purchase price for the Shares
shall be $           per share, as required by the Option Agreement. 
  
 2. Delivery of Payment. Purchaser herewith delivers to the Company the full aggregate purchase price for the Shares. 
  
 3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
  
 4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the
Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 13 of the Plan. 
  
 5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of
the Shares and that Purchaser is not relying on the Company for any tax advice. 







 6. Entire Agreement; Governing Law. The Plan and Option Agreement are incorporated herein by
reference. This Agreement, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser
with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive laws, but not the
choice of law rules, of California. 
  

			
	Submitted by:	 	Accepted by:
		
	PURCHASER:	 	HYTEK MICROSYSTEMS, INC.
		
	
 Signature
	 	
 By

		
	
 Print Name
	 	
 Title

		
	Address:	 	Address:
		
	
	 	HYTEK MICROSYSTEMS, INC.
	 	 	400 Hot Springs Road
	
	 	Carson City, NV
		
	 	 	
 Date Received


  

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