Document:

exv4w2

Exhibit 4.2

GIGAMEDIA LIMITED

2010 EMPLOYEE SHARE PURCHASE PLAN

     1.      Purpose. The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase common stock of the Company.

     2.      Definitions.

          a.      “Board” shall mean the Board of Directors of the Company.

          b.      “Change in Capitalization” shall mean any increase, reduction, or change or exchange of
Common Stock for a different number or kind of shares or other securities of the Company by reason
of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend,
stock split or reverse stock split, combination or exchange of shares, repurchase of shares, change
in corporate structure or otherwise.

          c.      “Code” means the United States Internal Revenue Code of 1986, as amended.

          d.      “Committee” shall mean the Board, the Compensation Committee of the Board, or such other
Committee appointed by the Board to administer the Plan and to perform the functions set forth
herein.

          e.      “Common Stock” shall mean ordinary shares in the capital of the Company.

          f.      “Company” shall mean GigaMedia Limited, a company incorporated in the Republic of Singapore
(Registration No.: 199905474H ).

          g.      “Compensation” shall mean the fixed salary or base wage paid by the Company to an Employee
as reported for income tax purposes, including where applicable such Employee’s portion of salary
deferral contributions pursuant to Section 401(k) of the Code and any amount excludable pursuant to
Section 125 of the Code, but in any case excluding any bonus, fee, overtime pay, severance pay,
expenses, stock option or other equity incentive income, or other special emolument or any credit
or benefit under any employee plan maintained by the Company.

          h.      “Continuous Status as an Employee” shall mean the absence of any interruption or
termination of service as an Employee. Continuous Status as an Employee shall not be considered
interrupted in the case of a leave of absence agreed to in writing by the Company (including, but
not limited to, military or sick leave), provided that such leave is for a period of not
more than 90 days or reemployment upon the expiration of such leaves is guaranteed by contract or
statute.

          i.      “Designated Subsidiaries” shall mean the subsidiaries of the Company which have been
designated by the Company from time to time in its sole discretion as eligible to participate in
the Plan.

          j.      “Employee” shall mean any person, including an officer, who is regularly employed by the
Company or one of its Designated Subsidiaries.

          k.      “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

          l.      “Exercise Date” shall mean the last business day of each Offering Period.

          m.      “Fair Market Value” per Common Stock as of a particular date shall mean (i) the closing
sales price per Common Stock on the national securities exchange on which the Common Stock is
principally traded, on such date or on the last preceding date on which there was a sale of such
Common Stock on such exchange, or (ii) if the Common Stock are not then listed on a national
securities exchange or traded in an over-the-counter market, such value as the Committee, in its
sole discretion, shall determine.

          n.      “Offering Date” shall mean the date or dates determined by the Committee for an Offering
Period to Commence.

          o.      “Offering Period” shall mean the period or periods determined by the Committee commencing
on each Offering Date; provided, however, that (i) if the Offering Period is being
administered with the intent of qualifying the Common Stock to be purchased as eligible for
treatment as purchased under an employee stock purchase plan under Section 423 of the Code, such
Offering Period may not exceed 27 months in length and (ii) if the Offering Period is being
administered as provided in Section 4d hereof, the Offering Period may not exceed one calendar
month in length.

          p.      “Participant” shall mean an Employee who participates in the Plan.

          q.      “Plan” shall mean the GigaMedia Limited 2010 Employee Share Purchase Plan, as amended from
time to time.

     3.      Eligibility.

 

 

          Subject to the requirements of Section 4b hereof, any person who is an Employee as of an
Offering Date shall be eligible to participate in the Plan; provided, that the Committee
may exclude Employees from eligibility and participation in the Plan to the extent permissible
under Section 423(b)(4) of the Code and/or FAS 123(R).

     4. Grant of Purchase Right; Participation.

          a.      On each Offering Date, the Company shall commence an offer by granting each eligible
Employee the right to purchase Common Stock, subject to the limitations set forth in Sections 3 and
10 hereof. The resolutions adopted by the Committee with respect to the commencement of each offer
shall include either (i) the maximum number of shares of Common Stock that may be purchased by a
Participant with respect to the Offering Period or (ii) a formula, application of which shall
establish as of the first date of the Offering Period the maximum number of shares of Common Stock
that may be purchased by a Participant with respect to the Offering Period; provided, however, that
if such Committee resolutions with respect to an Offering Period do not set forth such number or
such formula, no more than five thousand (5,000) shares of Common Stock shall be purchasable by any
Participant with respect to such Offering Period.

          b.      Each eligible Employee may elect to become a Participant in the Plan with respect to an
Offering Period, only by filing a notice with the Company in the form determined by the Committee.
Each such notice shall be effective for subsequent Offering Periods until modified or terminated by
the Participant.

          c.      If the Offering Period is being administered with the intent of qualifying Common Stock to
be purchased as eligible for treatment as purchased under an employee stock purchase plan under
Section 423 of the Code, the purchase price per Common Stock subject to an offering shall be not
less than 85% of the lesser of (i) the Fair Market Value of Common Stock as of the Offering Date or
(ii) the Fair Market Value of Common Stock as of the Exercise Date (or as of such other time or
times determined by the Committee).

          d.      The Committee may determine that an Offering Period shall be administered with the intent
that the purchase rights granted with respect to such Offering Period shall qualify as
non-compensatory under FAS 123(R). In such event the purchase price for the Common Stock offering
during such Offering Period shall be not less than 95% of the Fair Market Value of Common Stock as
of the Exercise Date.

     5. Contributions.

          a.      A Participant may, in accordance with rules adopted by the Committee, authorize a payroll
deduction (or such other method of payment determined by the Committee) of any whole percentage
from 2 percent to 10 percent of such Participant’s Compensation for each pay period occurring
during the applicable Offering Period. A Participant may increase or decrease such payroll
deduction (including a cessation of payroll deductions) at any time but not more frequently than
once per calendar month, by filing a new authorization form with the Committee. Such authorization
will remain effective for subsequent Offering Periods until modified or terminated by the
Participant. For purposes of this Plan, any reference to contributions is deemed to also include
any other method of contribution determined by the Committee from time to time.

          b.      All contributions made by a Participant shall be credited to such Participant’s account
under the Plan.

          c.      No Participant may contribute more than $25,000 under the Plan per calendar year if the
Plan is being administered with the intent of qualifying the Common Stock to be purchased as
eligible for treatment as purchased under an employee stock purchase plan under Section 423 of the
Code.

     6.      Exercise of Purchase Rights.

          a.      Unless a Participant withdraws from the Plan as provided in Section 8 hereof, such
Participant’s right to purchase Common Stock will be exercised automatically on the Exercise Date,
and the maximum number of Common Stock subject to such right will be purchased for such participant
at the applicable purchase price with the accumulated contributions in such participant’s account.

          b.      Any cash balance remaining in a Participant’s account after the termination of an Offering
Period will be carried forward to the Participant’s account for the purchase of Common Stock during
the next Offering Period if the Participant elects to participate in such subsequent Offering
Period, and will be repaid to the Participant if the Participant does not participate in such
subsequent Offering Period.

     7.      Delivery of Common Stock.

          As promptly as practicable after Common Stock are purchased upon exercise of the purchase
right hereunder, the Company shall arrange the delivery to such Participant a share certificate
representing the Common Stock which the Participant purchases.

     8.      Withdrawal; Termination of Employment.

          a.      A Participant may withdraw all, but not less than all, the contributions credited to such
Participant’s account (that have not been used to purchase Common Stock) under the Plan at any time
by giving written notice to the Company received prior to the Exercise Date. All such
contributions credited to such Participant’s account will be paid to such Participant promptly
after receipt of such Participant’s notice of withdrawal and such Participant’s purchase right for
the Offering Period in which the withdrawal occurs will be automatically terminated. No further
payroll deductions for the purchase of Common Stock will be made for such participant during

 

 

such Offering Period and for the following Offering Period.

          b.      Upon termination of a Participant’s Continuous Status as an Employee during an Offering
Period for any reason, including voluntary termination, retirement or death, the contributions
credited to the Participant’s account that have not been used to purchase Common Stock will be
returned to such Participant or, in the case of such Participant’s death, to the person or persons
entitled thereto under Section 12 hereof, and such Participant’s purchase right will be
automatically terminated.

     9.      Interest.

          No interest shall accrue or be paid on any contributions credited to a Participant’s account
under the Plan.

     10.      Common Stock.

          a.      The maximum number of Common Stock which shall be reserved for sale under the Plan shall be
200,000, subject to adjustment upon Changes in Capitalization of the Company as provided in Section
15 hereof. If the total number of Common Stock which would otherwise be subject to purchase rights
granted pursuant to Section 4.a. hereof on an Offering Date exceeds the number of Common Stock then
available under the Plan (after deduction of all Common Stock for which purchase rights have been
exercised or are then outstanding), the Committee shall make a pro rata allocation of the Common
Stock remaining available for purchase in as uniform a manner as shall be practicable and as it
shall determine to be equitable. In such event, the Committee shall give written notice to each
Participant of such reduction of the number of Common Stock available for purchase and shall
similarly reduce the rate of payroll deductions if necessary.

          b.      Common Stock to be delivered to a Participant under the Plan will be registered in the name
of the Participant.

     11.      Administration. The Plan shall be administered by the Committee, and the
Committee may select an administrator to whom its duties and responsibilities hereunder may be
delegated. The Committee shall have full power and authority, subject to the provisions of the
Plan, to promulgate such rules and regulations as it deems necessary for the proper administration
of the Plan, to interpret the provisions and supervise the administration of the Plan, and to take
all action in connection therewith or in relation thereto as it deems necessary or advisable. Any
decision reduced to writing and signed by a majority of the members of the Committee shall be fully
effective as if it had been make at a meeting duly held and shall be binding on all parties. The
Company will pay all expenses incurred in the administration of the Plan. No member of the
Committee shall be personally liable for any action, determination, or interpretation make in good
faith with respect to the Plan, and all members of the Committee shall be fully indemnified by the
Company with respect to any such action, determination or interpretation.

     12.      Designation of Beneficiary.

          a.      A Participant may file, on forms supplied by and delivered to the Company, a written
designation of a beneficiary who is to receive any Common Stock and cash remaining in such
Participant’s account under the Plan in the event of the Participant’s death.

          b.      Such designation of beneficiary may be changed by the Participant at any time by written
notice. In the event of the death of a Participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such Participant’s death, the Company shall
deliver such Common Stock and/or cash to the executor or administrator of the estate of the
Participant or, if no such executor or administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such Common Stock and/or cash to the spouse
or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may designate.

     13.      Transferability. Neither contributions credited to a Participant’s account nor
any rights to purchase or to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and distribution or as
provided in Section 12 hereof) by the Participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may treat such act as
an election to withdraw funds in accordance with section 8 hereof.

     14.      Use of Funds. All contributions received or held by the Company under the Plan
may be used by the Company for any corporate purpose, and the Company shall not be obligated to
segregate such contributions.

     15.      Effect of Certain Changes. In the event of a Change in Capitalization or the
distribution of an extraordinary dividend, the Committee shall conclusively determine the
appropriate equitable adjustments, if any, to be made under the Plan, including without limitation
adjustments to the number of Common Stock which have been authorized for issuance under the Plan
but have not yet been placed under purchase rights, as well as the price per Common Stock covered
by each purchase right under the Plan which has not yet been exercised.

     16.      Plan Amendment or Termination. The Board may terminate or amend the Plan at any
time and for any reason or no reason. Except as provided in Section 15 hereof, no such termination
can adversely affect purchase rights previously granted and no amendment may make any change in any
purchase right theretofore granted which adversely affects the rights of any Participant.

     17.      Notices. All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.

 

 

     18.      Regulations and Other Approvals; Governing Law.

          a.      This Plan and the rights of all persons claiming hereunder shall be construed and
determined in accordance with the laws of the Republic of Singapore without giving effect to the
choice of law principles thereof.

          b.      The obligation of the Company to sell or deliver Common Stock with respect to purchase
rights granted under the Plan shall be subject to all applicable laws, rules and regulations, and
the obtaining of all such approvals by governmental agencies as may be deemed necessary or
appropriate by the Committee.

     19.      Effective Date. The Plan shall become effective upon the later to occur of (i)
the date of its adoption and (ii) the date on which it is approved by the stockholders of the
Company. The Plan shall be voted on by the stockholders of the Company within one year prior to,
or following, the date on which it is authorized and approved by the Company.Exhibit 4.1

Exhibit 4.1

SECOND

AMENDMENT TO

PROMISSORY NOTE

THIS SECOND AMENDMENT TO PROMISSORY NOTE (the “Second Amendment”) is made and
entered into as of July 14, 2010 by and between Supplemental Manufacturing & Ingredients, LLC, an
Arizona limited liability company (“Obligor”) and HealthSport, Inc. a Delaware corporation
(“Holder”), holder of that certain Promissory Note executed by Obligor dated as of December 1, 2009
in the original principal amount of Eight Million Dollars (US$8,000,000), as amended by that
certain Amendment to Promissory Note dated March 19, 2010 (as amended, the “Note”).

RECITALS

WHEREAS, Obligor has purchased stock in Holder pursuant to that certain Stock Purchase
Agreement dated November 6, 2009 by and between the parties (the “Stock Purchase”). In connection
therewith, Obligor and Holder executed the Note (of which $2,550,000 in principal has already been
paid), as well as that certain Stock Pledge Agreement dated as of December 1, 2009, as amended (the
“Pledge”) and that certain Escrow Agreement dated as of December 1, 2009, as amended (collectively,
all such amended documents, the “Stock Purchase Documents”);

WHEREAS, Obligor and Holder have also entered into a Merger Agreement dated as of May 21, 2010
and in connection with that transaction and certain amendments of even date herewith to the Pledge
and the Merger Agreement, Obligor and Holder desire to amend the terms of the Note, as set forth
herein;

NOW, THEREFORE, in consideration of the covenants set forth herein, and for other good and
valuable consideration, intending to be legally bound hereby, the parties agree as follows:

1. Definitions. Capitalized terms not otherwise defined in this Second Amendment
shall have the respective meanings ascribed to them in the Note.

2. Payments. Section 2 of the Note is hereby amended and restated in its entirety as
follows:

Section 2. Payments. Principal payments, together with all accrued and
unpaid interest shall be payable as follows:

a) $500,000 on or before November 15, 2009 (paid);

b) $2,050,000 on or before May 15, 2010, subject to Section 2A below (paid);

c) $2,500,000 on or before August 15, 2010; and

d) $2,950,000 on or before September 15, 2010

 

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All remaining principal and interest shall be due and payable on September 15, 2010
(the “Maturity Date”). Obligor shall have the right to prepay all or any portion of
this Note at any time or from time to time prior to the Maturity Date. All payments
pursuant to this Note shall be paid in lawful money of the United States at the
principal office of Holder or at such other place as Holder may designate in
writing.

3. Counsel. The parties hereby acknowledge that (i) Keller Rohrback P.L.C. has
represented only Obligor in connection with the Stock Purchase Documents, the Merger Agreement and
this Second Amendment and (ii) Sheppard Mullin Richter & Hampton LLP has represented Holder in
connection with the Stock Purchase Documents, the Merger Agreement and this Second Amendment.

4. Conflicts; Reaffirmation; Waiver. In the event of any conflict or inconsistency
between the provisions of the Stock Purchase Documents and the provisions of this Second Amendment,
the provisions of this Second Amendment shall govern. Except to the extent expressly amended
hereby, all terms and conditions of the Note shall remain in full force and effect. Each party
hereto hereby expressly ratifies and affirms all such terms and conditions as of the effective date
hereof. Holder acknowledges receipt of the payments described in Section 2.a) and 2.b) above.
Holder hereby acknowledges and agrees that no events of default of Obligor have occurred, or exist
as of the date first set forth above, under the Note, the Merger Agreement and the other Stock
Purchase Documents.

5. Governing Law; Jurisdiction. THIS SECOND AMENDMENT AND THE OBLIGATIONS OF THE
PARTIES HEREUNDER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO ANY CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD OTHERWISE REQUIRE
THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. Each party hereto knowingly and voluntarily
waives any and all rights it may have to a trial by jury with respect to any litigation based on,
or arising out of, under, or in connection with, this Second Amendment. Each party is hereby
authorized to submit, as conclusive evidence of such waiver of jury trial, this Second Amendment to
a court that has jurisdiction over the subject matter of such litigation and the parties to this
Second Amendment.

9. Additional Acts and Assurances. Each party hereto agrees to do all such things and
take all such actions, and to make, execute and deliver such other documents and instruments, as
shall be reasonably requested to carry out the provisions, intent and purpose of this Second
Amendment, including without limitation amending any Stock Purchase Document as may be necessary to
reflect the revised Note payment due dates as set forth herein.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed
under seal as of the date first above written.

	 	 	 	 	 
	 	 	Obligor:
	 	 	Supplemental Manufacturing & Ingredients, LLC, an
	 	 	Arizona limited liability company
	 
	 	 	 	 
	 

	 	By
	 	/s/ Ferrel Raskin
	 

	 	 	 	 
	 

	 	Its
	 	Chief Executive Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Holder:
	 	 	HealthSport, Inc. a Delaware corporation
	 
	 	 	 	 
	 

	 	By
	 	/s/ Robert S. Davidson
	 

	 	 	 	 
	 

	 	Its
	 	President
	 

	 	 	 	 

 

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