{"id":40216,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/offer-to-exchange-outstanding-options-for-new-options-oak.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"offer-to-exchange-outstanding-options-for-new-options-oak","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/offer-to-exchange-outstanding-options-for-new-options-oak.html","title":{"rendered":"Offer to Exchange Outstanding Options For New Options – Oak Technology Inc."},"content":{"rendered":" OAK TECHNOLOGY, INC.\n\n OFFER TO EXCHANGE OUTSTANDING OPTIONS UNDER\n OAK TECHNOLOGY'S 1994 STOCK OPTION PLAN\n HELD BY ELIGIBLE EMPLOYEES THAT HAVE AN\n EXERCISE PRICE OF $15.00 PER SHARE OR MORE FOR NEW OPTIONS\n =====================================================================\n\n THIS OFFER AND WITHDRAWAL RIGHTS EXPIRE\n AT 11:59 P.M., PACIFIC DAYLIGHT SAVINGS TIME,\n ON SEPTEMBER 13, 2001,\n UNLESS THE OFFER IS EXTENDED\n =====================================================================\n\n Oak Technology, Inc., which we refer to as \"we,\" \"Oak Technology\" or \"Oak,\"\nis offering eligible employees holding outstanding options to purchase shares of\nour common stock granted under the Oak Technology, Inc. 1994 Stock Option Plan,\nas amended (the \" Plan\"), that have an exercise price of at least $15.00 per\nshare, the opportunity to exchange those options for new options that we will\ngrant under the Plan. We are extending this offer upon the terms and subject to\nthe conditions set forth in this offer to exchange and in the related acceptance\nletter (which together, as each may be amended or supplemented from time to\ntime, constitute the \"offer\"). We intend to grant options to acquire the same\nnumber of shares as are covered by the options you tender. We will grant the new\noptions on a date that is at least six months and one day following the date we\ncancel the options accepted for exchange.\n\n This offer is not conditioned upon a minimum number of options being\ntendered, but is subject to conditions that we describe in Section 6 of this\noffer to exchange, including our right to accept or reject any options tendered\nin response to this offer. Participation in this offer is completely voluntary.\nSubject to our rights to extend, terminate and amend the offer, we currently\nexpect that we will accept, promptly after the expiration of the offer, all\nproperly tendered options that have not been validly withdrawn.\n\n If you tender options for exchange and we accept them, we will grant you\nnew options under the Plan and a new option agreement between us and you, all as\nmore fully described in the offer. The exercise price per share of the new\noptions will equal the fair market value of our common stock on the date of the\ngrant. The new options will vest on the same schedule as the options you elect\nfor exchange and have other terms and conditions that are substantially the same\nas those of the cancelled options.\n\n ALTHOUGH OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER, NEITHER WE NOR OUR\nBOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT YOU SHOULD\nTENDER YOUR OPTIONS FOR EXCHANGE. YOU MUST MAKE YOUR OWN DECISION WHETHER TO\nTENDER YOUR OPTIONS.\n\n Shares of our common stock are quoted on the NASDAQ National Market under\nthe\n\n\n\n\nsymbol \"OAKT.\" On August 10, 2001, the last reported sale price of the common\nstock on the NASDAQ National Market was $9.05 per share. WE RECOMMEND THAT YOU\nOBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO\nTENDER YOUR OPTIONS.\n\n THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND\nEXCHANGE COMMISSION (THE \"SEC\") OR ANY STATE SECURITIES COMMISSION, NOR HAS THE\nSEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF\nSUCH TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED\nIN THIS OFFER TO EXCHANGE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL\nOFFENSE.\n\n You should direct questions about this offer or requests for assistance or\nfor additional copies of the offer to exchange or the acceptance letter to Karen\nPereira, Stock Administrator, at Oak Technology, Inc., 139 Kifer Court,\nSunnyvale, California 94086 (telephone number: (408) 328-6881).\n\n IMPORTANT\n\n HOW TO PARTICIPATE; HOW TO ACCEPT THE OFFER. To participate and accept the\noffer to exchange your eligible options for new options, you must be an eligible\nemployee. If you wish to tender your eligible options for exchange, you must\ncomplete and sign the acceptance letter in accordance with its instructions, and\nmail, fax or hand deliver it and any other required documents to us before 11:59\np.m., Pacific daylight savings time, on September 13, 2001, at Oak Technology,\nInc, 139 Kifer Court, Sunnyvale, California 94086, Attn: Karen Pereira, Stock\nAdministrator, Fax (408) 523-6623.\n\n WITHDRAWAL OF ACCEPTANCE. You can withdraw your acceptance of our offer to\nexchange by delivering, by mail, fax or hand delivery, the notice of withdrawal,\nproperly completed and signed, to us at the same address as the acceptance\nletter. You must withdraw all tendered options; you may not withdraw only a\nportion of tendered options.\n\n DEADLINE TO ACCEPT THE OFFER OR TO WITHDRAW A PREVIOUS ACCEPTANCE;\n\"EXPIRATION DATE\". Your acceptance letter and any notice of withdrawal must be\nreceived by us before 11:59 p.m., Pacific daylight savings time, on September\n13, 2001, unless we extend the expiration date for the offer. If we extend this\noffer beyond that time, you may tender your eligible options or withdraw a\nprevious acceptance of the offer to tender eligible options by delivering the\nsigned acceptance letter or notice of withdrawal, as the case may be, so long as\nwe receive your signed letter or notice before the extended expiration of this\noffer.\n\n OFFER SUBJECT TO LEGAL REQUIREMENTS OF JURISDICTIONS. We are not making\nthis offer to, nor will we accept any tender of options from or on behalf of,\neligible employees in any jurisdiction in which the offer to exchange or the\nacceptance of any tender of options would not be in compliance with the laws of\nsuch jurisdiction. However, we may, at our discretion, take any actions\nnecessary for us to make this offer to eligible employees in any such\njurisdiction.\n\n WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF\nAS TO WHETHER OR NOT YOU SHOULD TENDER YOUR OPTIONS PURSUANT TO THE OFFER. YOU\nSHOULD RELY\n\n\n\n\n ii\n\n\nONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED\nYOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY\nREPRESENTATION IN CONNECTION WITH THIS OFFER OTHER THAN THE INFORMATION AND\nREPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN THE RELATED ACCEPTANCE LETTER.\nIF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY\nINFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR\nINFORMATION AS HAVING BEEN AUTHORIZED BY US.\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n iii\n\n\n\n TABLE OF CONTENTS\n\n\nSUMMARY TERM SHEET.......................................................... 1\nINTRODUCTION................................................................ 13\nTHE OFFER................................................................... 13\n1. Number Of Options; Eligible Employees; Expiration Date .............. 13\n2. Purpose Of The Offer ................................................ 15\n3. Procedures For Tendering Options..................................... 17\n4. Withdrawal Rights.................................................... 18\n5. Acceptance Of Options For Exchange And Issuance Of New Options ...... 18\n6. Conditions Of The Offer.............................................. 19\n7. Price Range Of Common Stock Underlying The Options................... 21\n8. Source And Amount Of Consideration; Terms Of New Options............. 22\n9. Information Concerning Oak Technology................................ 27\n10. Interests Of Directors And Officers; Transactions And Arrangements\n Concerning The Options............................................... 27\n11. Status Of Options Acquired By Us In The Offer; Accounting\n Consequences Of The Offer ........................................... 29\n12. Legal Matters; Regulatory Approvals.................................. 30\n13. Material Federal Income Tax Consequences ............................ 30\n14. Extension Of Offer; Termination; Amendment .......................... 31\n15. Fees And Expenses.................................................... 32\n16. Additional Information............................................... 32\n17. Forward Looking Statements........................................... 33\n18. Miscellaneous........................................................ 34\n\n\nSCHEDULE A: Information concerning the directors and executive\n officers of Oak Technology\n\n\n iv\n\n\n\n\n SUMMARY TERM SHEET\n\n Below we provide answers to some of the questions that you may have about\nthis offer. We urge you to read carefully the summary of this offer to exchange,\nthe remainder of this offer to exchange and the accompanying acceptance letter\nbecause the information in this summary is not complete and additional important\ninformation is contained in the remainder of this offer to exchange and the\nother documents. We have included page references to the remainder of this offer\nto exchange where you can find a more complete description of the topics in this\nsummary.\n\nWHY ARE WE MAKING THE OFFER?\n\n We implemented this offer to exchange because a considerable number of our\nemployees have stock options, whether or not they are currently exercisable,\nthat are priced significantly above the current and recent trading prices of our\ncommon stock. We believe these options are unlikely to be exercised in the\nforeseeable future. For our stock option program to provide the intended\nretention and performance incentives for employees, they must feel that our\noptions provide them with an opportunity to realize value within a reasonable\nperiod of time. With the uncertainty of current market conditions, we believe\nthat employees may feel that the opportunity for realizing value is limited with\ntheir existing options. This program is voluntary and will allow employees to\nchoose whether to keep their current eligible options at their current exercise\nprice, or to rescind those options in exchange for a new option for the same\nnumber of shares to be granted on a date which is at least six months and one\nday from the date we cancel the options accepted for exchange. By making this\noffer to exchange, we hope to provide our employees with the benefit of owning\noptions that over time may have a greater potential to increase in value thereby\nencouraging our employees to remain with us, and ultimately maximize shareholder\nvalue. While it is hoped that this program will ameliorate the current\nunderwater options issue, this cannot be guaranteed considering the ever-present\nrisks associated with a volatile and unpredictable stock market. (Page 15)\n\nWHAT SECURITIES ARE WE OFFERING TO EXCHANGE?\n\n We are offering to exchange all stock options granted to eligible employees\nhaving an exercise price of $15.00 per share or more, that are outstanding under\nthe Oak Technology, Inc. 1994 Stock Option Plan, as amended, which we refer to\nas the Plan. (Page 13)\n\nWHO IS ELIGIBLE TO PARTICIPATE IN THE OFFER?\n\n The offer is available to eligible employees of Oak Technology who hold\noptions under the Plan that have an exercise price of $15.00 per share or more.\nAs of August 10, 2001, there were outstanding options to purchase 808,080 shares\nof our common stock that have an exercise price of $15.00 per share or more.\n\n \"Eligible employees\" are all employees, including executive officers, of\nOak Technology or one of its subsidiaries who are actively employed or on an\nauthorized short-term leave of absence on August 15, 2001 and on the date the\noffer expires and whose services are performed in the United States, the United\nKingdom, Germany, Korea, Taiwan or Japan. Also, an\n\n\n\n\nemployee will not be considered an \"eligible employee\" and accordingly, will not\nbe eligible to participate in this offer if, on or before the date the offer\nexpires, the employee is no longer employed by Oak Technology or any of its\nsubsidiaries, for any reason, including the employee:\n\n o receives a notice of involuntary termination (including, without\n limitation, redundancy), with or without cause, from Oak Technology or\n one of its subsidiaries;\n\n o resigns or gives notice of resignation from such employment, whether\n voluntarily or involuntarily or with or without good reason;\n\n o enters into an agreement with Oak Technology or any of its\n subsidiaries with respect to the employee's resignation, whether\n voluntarily or involuntarily or with or without good reason;\n\n o takes a long-term leave of absence (over six months in duration) or if\n currently on a short-term leave of absence, does not return within the\n authorized six month period, resulting in a recategorization of the\n leave as long-term; or\n\n o dies.\n\n Non-employee directors of Oak Technology are not eligible to participate in\nthe offer.\n\n IF, FOR ANY REASON, YOU ARE NOT AN EMPLOYEE OF OAK TECHNOLOGY OR ANY OF OUR\nSUBSIDIARIES, FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE THE OFFER\nEXPIRES, YOU WILL NOT BE ELIGIBLE TO PARTICIPATE IN THE OFFER. PARTICIPATION IN\nTHE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN IN THE EMPLOY OF OAK\nTECHNOLOGY OR ANY OF OUR SUBSIDIARIES. (Page 14)\n\nIF I TENDER OPTIONS IN THIS OFFER, ARE THERE ANY ELIGIBILITY REQUIREMENTS I MUST\nSATISFY AFTER THE EXPIRATION DATE OF THE OFFER IN ORDER TO RECEIVE THE NEW\nOPTIONS?\n\n To receive a grant of new options pursuant to the offer, you must be\neligible to receive options pursuant to the Plan from the date you tender\noptions through the date we grant the new options. You must be continuously and\nactively employed by or on an authorized short-term leave of absence from Oak\nTechnology or one of its subsidiaries from the date you tender eligible options\nfor exchange through, and including, the date of grant of the new options. An\nemployee who is on an authorized short-term leave of absence of six months or\nless, including a short-term disability leave, is considered to be an employee\nof Oak Technology or its subsidiaries. You will not be eligible to receive the\nnew options on the new option grant date if you are not employed by Oak\nTechnology or any of its subsidiaries at any time between the date you tender\noptions and the date of grant of the new options, for any reason, including the\nfollowing:\n\n o you receive a notice of involuntary termination (including, without\n limitation, redundancy), with or without cause, from Oak Technology or\n one of its subsidiaries;\n\n o you resign or give notice of resignation from such employment, whether\n\n\n 2\n\n\n voluntarily or involuntarily or with or without good reason;\n\n o you enter into an agreement with Oak Technology or one of its\n subsidiaries with respect to your resignation, whether voluntarily or\n involuntarily or with or without good reason;\n\n o you take a long-term leave of absence (lasting more than six months)\n or if you are currently on a short-term leave of absence, you do not\n return to active employment within the authorized six month period,\n resulting in a recategorization of the leave as long-term; or\n\n o you die.\n\n IF, FOR ANY REASON, INCLUDING THOSE DESCRIBED ABOVE, YOU ARE NOT AN\nEMPLOYEE OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES, FROM THE DATE YOU TENDER\nOPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW\nOPTIONS OR ANY OTHER CONSIDERATION IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT WE\nHAVE ACCEPTED FOR EXCHANGE.\n\n PARTICIPATION IN THE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN IN\nTHE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES. YOU ARE EMPLOYED BY OAK\nTECHNOLOGY OR ONE OF ITS SUBSIDIARIES ON AN \"AT-WILL\" BASIS. AS AN AT-WILL\nEMPLOYEE, YOUR CONTINUED EMPLOYMENT IS AT THE WILL AND SOLE DISCRETION OF OAK\nTECHNOLOGY OR ITS SUBSIDIARIES. WE CANNOT GUARANTEE OR PROVIDE YOU WITH ANY\nASSURANCES THAT YOU WILL NOT BE SUBJECT TO INVOLUNTARY TERMINATION OR THAT YOU\nWILL OTHERWISE REMAIN IN THE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES\nUNTIL THE NEW OPTION GRANT DATE. (Page 25)\n\nIS THIS A REPRICING?\n\n No, this is not a stock option repricing in the traditional sense. Under a\ntraditional stock option repricing, the exercise price of a holder's current\noptions would be immediately repriced to the then current fair value of the\ncompany's common stock and that company would have a variable accounting charge\nagainst earnings. (Page 29)\n\nWHY CAN'T OAK TECHNOLOGY SIMPLY REPRICE MY OPTIONS, AS I HAVE SEEN DONE AT OTHER\nCOMPANIES?\n\n In 1998, the Financial Accounting Standards Board adopted unfavorable\naccounting charge consequences for companies that reprice options. As a result\nof this action, many companies have ceased \"repricing\" options to avoid this\nnegative consequence. If we were to simply reprice options, this would result in\n\"variable\" accounting treatment for such options. This would require us, for\nfinancial reporting purposes, to record additional compensation expense each\nquarter until the repriced options are exercised, canceled or expired. This\nwould reduce our reported earnings for each fiscal quarter that the repriced\noptions remained outstanding. This could have a negative impact on our stock\nprice performance and would be unfavorable to Oak Technology and its\nshareholders. (Page 29)\n\n\n 3\n\n\nWHY WON'T I RECEIVE MY NEW OPTIONS IMMEDIATELY AFTER THE EXPIRATION DATE OF THE\nOFFER?\n\n If we were to grant the new options on any date that is earlier than six\nmonths and one day after the date we cancel the options accepted for exchange\nand the new options had an exercise price that was lower than the exercise price\nof the cancelled eligible options, we would be required to employ what is called\nvariable accounting, which, as described above, is an unfavorable accounting\ntreatment for financial reporting purposes. This would reduce our reported\nearnings for each fiscal quarter that the new options remained outstanding. This\ncould have a negative impact on our stock price performance. (Page 29)\n\nWHY CAN'T I JUST BE GRANTED MORE OPTIONS WITHOUT HAVING MY OPTIONS CANCELLED?\n\n We have a limited pool of options available for grant to our employees and\ndirectors. The grant of supplemental options, without the cancellation of\noutstanding eligible options, would reduce the number of options that are\ncurrently available for grant to our employees and directors under the Plan.\nBecause the outstanding options under the Plan are, to a large extent,\n\"underwater\" (i.e., the exercise prices of such options are greater than the\ncurrent trading price for our common stock), we have determined that it is in\nthe best interest of Oak Technology and our shareholders (including our employee\nshareholders) to offer this exchange program as designed. This offer attempts to\nminimize the future dilutive impact of our ongoing stock option program. Options\nthat are cancelled in this offer will become available for new option grants and\nfuture option grants under the Plan. (Page 29)\n\nWHAT ARE THE CONDITIONS TO THE OFFER?\n\n The offer is not conditioned upon a minimum number of options being\ntendered. Participation in this offer is completely voluntary. However, the\noffer is subject to a number of other conditions with regard to events that\ncould occur prior to the expiration of the offer. These events include, among\nother things, a change in accounting principles, a lawsuit challenging the\ntender offer, a third-party tender offer for our common stock or other\nacquisition proposal, or a change in your employment status with us. These and\nvarious other conditions are more fully described in Section 6 of this offer to\nexchange. Once the offer has expired and the tendered options have been accepted\nand cancelled in the offer, the conditions will no longer apply, even if the\nspecified events occur during the period between the expiration date and the\ndate of grant of the new options. However, as described herein, a change in your\nemployment status during that period could result in you not receiving a grant\nof new options. (Page 20)\n\nIF I TENDER OPTIONS IN THIS OFFER, HOW MANY NEW OPTIONS WILL I RECEIVE IN\nEXCHANGE FOR MY TENDERED OPTIONS?\n\n Provided you meet the eligibility requirements and subject to the terms of\nthis offer, we will grant to you new options to purchase a number of shares of\nour common stock equal to the number of shares of common stock subject to the\noptions that you tender and that we accept for exchange. All new options will be\ngranted under, and will be subject to the terms and conditions of, the Plan and\nof a new option agreement between you and us. The new option agreement will be\nin substantially the same form as the option agreement or agreements for your\ncurrent options,\n\n\n\n 4\n\n\nexcept for the exercise price and the term of the option. You must execute the\nnew option agreement prior to receiving new options. (Page 15)\n\nIF I TENDER OPTIONS IN THIS OFFER, WHEN WILL I RECEIVE MY NEW OPTIONS?\n\n We expect to grant the new options on a business day that is at least six\nmonths and one day after the date we cancel the options accepted for exchange.\nOur board of directors or compensation committee will select the actual grant\ndate of the new options after the expiration of the offer, in accordance with\nthe Plan. If we cancel tendered options on September 14, 2001, the business day\nfollowing the scheduled expiration date, the grant date of the new options will\nbe no earlier than March 16, 2002. However, if the expiration date of the offer\nis extended by us, the grant date for the new options may also be extended. You\nmust be an employee, or otherwise be eligible to receive options pursuant to the\nPlan on the grant date to receive the new options.\n\n The date on which the new options are granted may fall within certain\n\"black out\" periods designated by Oak Technology during which its officers,\ndirectors and employees are restricted from trading in our securities. These\ntrading restrictions normally go into effect at the close of market on the\nfifteenth day of the last month of each fiscal quarter and are lifted three days\nafter Oak Technology issues its earnings release for that quarter. Accordingly,\nyou may not be able to exercise the new options granted to you on the grant date\nuntil the expiration of any applicable black out periods. (Page 15)\n\nWILL THE TERMS OF THE NEW OPTIONS BE THE SAME AS THE TERMS OF THE OPTIONS\nTENDERED FOR EXCHANGE?\n\n The new options will be issued under the Plan, which is the same option\nplan as the related options cancelled in the offer, and will be issued pursuant\nto a new option agreement that is substantially similar to the option agreement\npursuant to which the related options tendered and cancelled in the offer were\nissued. The new options will have substantially the same terms and conditions as\nthe related options cancelled in the offer, except for the following:\n\n o EXERCISE PRICE. Although the method for determining the exercise price\n (also known as the grant price) of the new options is the same as the\n method used for determining the exercise price of the options tendered\n for exchange (i.e., based on the fair market value of our common stock\n on the date of grant for options granted), it is likely that the\n exercise price of the new options will be different from the exercise\n price of the tendered options.\n\n o TERM. The new options will have a term of ten years from the original\n date of grant of the tendered options (not from the new option grant\n date). However, as with the cancelled options, the new options are\n subject to earlier termination in the event of a termination of the\n eligible employee's employment. In accordance with the terms of the\n Plan or related option agreement, all of the new options will remain\n exercisable for three months following a termination of employment or\n possibly longer in certain circumstances such as death or disability.\n (Page 22)\n\n\n\n 5\n\n\nIF I TENDER OPTIONS IN THIS OFFER, WHEN WILL THE NEW OPTIONS VEST?\n\n The new options granted in the exchange will have the same vesting schedule\nas the related options cancelled in the offer. Accordingly, the new options will\nbe vested on the date of grant to the extent that the related options cancelled\nin this offer would have been vested on that date and the remaining new options\nwill become vested in accordance with the vesting schedule (based on the same\nvesting dates and percentages) applicable to the related grant of options that\nwere cancelled in the offer. Accordingly, you will not lose the benefit of any\nvesting under your tendered options that are accepted for exchange and cancelled\nin this offer.\n\n For example, new options that are granted in exchange for options that are\nalready vested today or that would have become vested after today and before the\ngrant date of the new options will be vested on the date of grant of such new\noptions. The remaining new options will become vested in accordance with the\ncurrent vesting schedule and on the same vesting dates applicable to the options\nfor which such new options are exchanged. The number of new options that are\nvested or become vested on the current vesting dates for the related eligible\noptions will correspond to the number of options that would have vested on such\ndates. (Page 24)\n\nWHAT WILL THE EXERCISE PRICE OF THE NEW OPTIONS BE?\n\n The exercise price (also known as the grant price) of the new options will\nequal the fair market value of our common stock on the date we grant the new\noptions, determined in accordance with the terms of the Plan. BECAUSE WE WILL\nNOT GRANT NEW OPTIONS UNTIL AT LEAST SIX MONTHS AND ONE DAY AFTER THE DATE WE\nCANCEL THE OPTIONS ACCEPTED FOR EXCHANGE, WE CANNOT PREDICT THE EXERCISE PRICE\nOF THE NEW OPTIONS. IT IS POSSIBLE THAT THE NEW OPTIONS MAY HAVE A HIGHER\nEXERCISE PRICE THAN SOME OR ALL OF YOUR CURRENT OPTIONS THAT ARE CANCELLED IN\nTHE OFFER, AND THEREFORE, YOUR NEW OPTIONS COULD BE WORTH LESS THAN YOUR OLD\nOPTIONS. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON\nSTOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. See Section 7 in the offer\nto exchange for information concerning our stock price during the past two\nyears. (Page 23)\n\nCAN I CANCEL ONLY PART OF MY ELIGIBLE OPTIONS?\n\n No, we cannot partially cancel your eligible options. If you choose to\ncancel options, then you must tender for exchange all of your options that have\nan exercise price of $15 or more. This means that an eligible employee may not\ntender some of his or her eligible options for cancellation and retain some\neligible options; if an employee wishes to tender any of his or her eligible\noptions, the eligible employee must tender all of his or her eligible options.\n(Page 14)\n\nWHAT HAPPENS TO OPTIONS THAT I TENDER AND ARE ACCEPTED FOR EXCHANGE?\n\n Tendered options that are accepted for exchange will be cancelled and will\nbecome available for future grants (including the new options) under the Plan,\nunder which such options were originally granted. (Page 29)\n\n\n\n 6\n\n\n\nWHAT IF I TENDER OPTIONS AND OAK TECHNOLOGY UNDERGOES A CHANGE OF CONTROL, SUCH\nAS A MERGER, BEFORE THE NEW OPTIONS ARE GRANTED?\n\n If we undergo a change of control, such as a merger, prior to the grant of\nthe new options, it would be our intent to negotiate the terms of that change of\ncontrol transaction such that you could receive options to purchase securities\nof the acquiror. However, we have the right to take any actions we deem\nnecessary or appropriate to complete a transaction that our board of directors\nbelieves is in our best interest and our stockholders' best interest, and this\ncould result in your not being granted the new options. (Page 26)\n\nWHAT HAPPENS IF I TENDER MY ELIGIBLE OPTIONS AND I AM ON AN AUTHORIZED LEAVE OF\nABSENCE ON THE NEW OPTION GRANT DATE?\n\n An employee who is on an authorized short-term leave of absence, including\na short-term disability leave, is considered to be an employee of Oak Technology\nor its subsidiaries. An authorized short-term leave of absence is a leave of\nabsence that has been approved in accordance with policy or practice by Oak\nTechnology or its subsidiary that employs you, and that has a duration of six\nmonths or less, at the end of which the employee returns to active employment\nwith Oak Technology or one of its subsidiaries. Authorized short-term leaves may\ninclude approved bereavement leave, family medical leave, personal medical\nleave, including short term disability, jury duty leave, maternity and paternity\nleave and military leave.\n\n If you tender your options and they are cancelled in the offer and you are\non an authorized short-term leave of absence, including a short-term disability\nleave, on the new option grant date, you are considered to be an employee of Oak\nTechnology or its subsidiary that employs you, and will be entitled to a grant\nof new options on the new grant date.\n\n However, you will not be eligible to receive the new options on the new\noption grant date if at any time between the date you tender options and the\ndate of grant of the new option, including on the new option grant date, you are\non a long-term leave of absence (over six months in duration). Similarly, you\nwill not be eligible to receive the new options on the new option grant date if\nyou are currently on a short-term leave of absence, but do not return to active\nemployment within the authorized six month period, resulting in a\nrecategorization of your short-term leave as a long-term leave. (Page 19)\n\nWHAT HAPPENS IF I TENDER MY OPTIONS AND I RECEIVE A NOTICE OF INVOLUNTARY\nTERMINATION AFTER THE EXPIRATION DATE OF THE OFFER AND PRIOR TO THE NEW OPTION\nGRANT DATE?\n\n If you tender your eligible options and they are cancelled in the offer\nand, after the expiration date of the offer and prior to the new option grant\ndate, you receive a notice of involuntary termination (including, without\nlimitation, redundancy), with or without cause, from Oak Technology or one of\nits subsidiaries, you will not receive a grant of new options or any other\nconsideration or payment for such tendered and cancelled options. As indicated\nearlier, you must be an eligible employee of Oak Technology or any of our\nsubsidiaries, from the date you tender options through the date we grant the new\noptions, in order to be eligible to receive new options for your tendered\noptions that we have accepted for exchange.\n\n\n\n 7\n\n\n\n PARTICIPATION IN THE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN IN\nTHE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES. YOU ARE EMPLOYED BY OAK\nTECHNOLOGY OR ONE OF ITS SUBSIDIARIES ON AN \"AT-WILL\" BASIS. AS AN AT-WILL\nEMPLOYEE, YOUR CONTINUED EMPLOYMENT IS AT THE WILL AND SOLE DISCRETION OF OAK\nTECHNOLOGY OR ITS SUBSIDIARIES. WE CANNOT GUARANTEE OR PROVIDE YOU WITH ANY\nASSURANCES THAT YOU WILL NOT BE SUBJECT TO INVOLUNTARY TERMINATION OR THAT YOU\nWILL OTHERWISE REMAIN IN THE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES\nUNTIL THE NEW OPTION GRANT DATE. (Page 19, 25)\n\nWHAT HAPPENS IF I TENDER MY OPTIONS AND MY EMPLOYMENT WITH OAK TECHNOLOGY CEASES\nAS A DIRECT RESULT OF A BUSINESS TRANSACTION OR THE OUTSOURCING OF MY POSITION\nAFTER THE EXPIRATION DATE OF THE OFFER AND PRIOR TO THE NEW OPTION GRANT DATE?\n\n If you tender your eligible options and they are cancelled in the offer\nand, after the expiration date of the offer and prior to the new option grant\ndate your employment ceases as a direct result of the divestiture of your\nbusiness unit (either through a sale, corporate spin-off, joint venture or\nsimilar business transaction) or the outsourcing of your position, you are not\neligible for new options. You must be an eligible employee of Oak Technology or\nany of our subsidiaries, from the date you tender options through the date we\ngrant the new options, in order to be eligible to receive new options for your\ntendered options that we have accepted for exchange.\n\n PARTICIPATION IN THE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN IN\nTHE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES. YOU ARE EMPLOYED BY OAK\nTECHNOLOGY OR ONE OF ITS SUBSIDIARIES ON AN \"AT-WILL\" BASIS. AS AN AT-WILL\nEMPLOYEE, YOUR CONTINUED EMPLOYMENT IS AT THE WILL AND SOLE DISCRETION OF OAK\nTECHNOLOGY OR ITS SUBSIDIARIES. WE CANNOT GUARANTEE OR PROVIDE YOU WITH ANY\nASSURANCES THAT YOU WILL NOT BE SUBJECT TO INVOLUNTARY TERMINATION OR THAT YOU\nWILL OTHERWISE REMAIN IN THE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES\nUNTIL THE NEW OPTION GRANT DATE. (Page 19, 25)\n\nWHAT HAPPENS IF I TENDER MY OPTIONS AND I RESIGN AFTER THE EXPIRATION DATE OF\nTHE OFFER AND BEFORE THE NEW OPTION GRANT DATE?\n\n If you resign after the expiration date of the offer and prior to the new\noption grant date and your eligible options have been tendered and cancelled in\nthe offer, you will not receive a grant of new options or any other\nconsideration or payment for such tendered and cancelled eligible options. You\nmust be an eligible employee of Oak Technology or any of our subsidiaries, from\nthe date you tender options through the date we grant the new options, in order\nto be eligible to receive new options for your tendered options that we have\naccepted for exchange. (Page 19, 25)\n\n\n\n 8\n\n\nWHAT HAPPENS IF I TENDER MY ELIGIBLE OPTIONS AND I DIE AFTER THE EXPIRATION DATE\nOF THE OFFER AND BEFORE THE NEW OPTION GRANT DATE?\n\n If you die after the expiration date of the offer and prior to the new\noption grant date and your eligible options have been tendered and cancelled in\nthe offer, neither you nor your beneficiaries will receive a grant of new\noptions or any other consideration or payment for such tendered and cancelled\neligible options. You must be an eligible employee of Oak Technology or any of\nour subsidiaries, from the date you tender options through the date we grant the\nnew options, in order to be eligible to receive new options for your tendered\noptions that we have accepted for exchange. (Page 19, 25).\n\nARE THERE OTHER CIRCUMSTANCES UNDER WHICH I WOULD NOT BE GRANTED NEW OPTIONS?\n\n It is possible that even if we accept your tendered options, we will not\nissue new options to you if we are prohibited by applicable law or regulations\nfrom doing so. We will use reasonable efforts to avoid such prohibition. (Page\n30)\n\nWILL WE GRANT OPTIONS TO ELIGIBLE EMPLOYEES DURING THE PERIOD BETWEEN AUGUST 15,\n2001, THE DATE THIS OFFER COMMENCES, AND THE DATE TENDERED OPTIONS ARE CANCELLED\n(CURRENTLY SCHEDULED TO BE SEPTEMBER 14, 2001)?\n\n To avoid any possible adverse accounting consequences, we intend not to\ngrant options to eligible employees during the period starting on August 15,\n2001 (the date the offer commences) and ending on the date tendered eligible\noptions are cancelled (currently scheduled to be September 14, 2001). (Page 19)\n\nIF I TENDER OPTIONS IN THE OFFER, WILL I BE ELIGIBLE TO RECEIVE OTHER OPTION\nGRANTS BEFORE I RECEIVE MY NEW OPTIONS?\n\n If we accept options you tender in the offer, we will defer until the grant\ndate for your new options, our grant to you of other options, such as annual,\nbonus or promotional options, for which you may be eligible between the date\nhereof and the new option grant date. We will defer the grant to you of these\nother options if we determine it is necessary for us to do so to avoid incurring\nadverse accounting treatment because of accounting rules that could apply to\nthese interim option grants as a result of the offer. If you do not tender\noptions in the offer, however, we may grant you promptly following the\nexpiration of the offer options that you were eligible to receive between the\ndate hereof and the expiration date. (Page 19)\n\nWHAT WILL MY NEW OPTION TYPE BE, INCENTIVE STOCK OPTION OR NON-QUALIFIED STOCK\nOPTION?\n\n Currently all options granted under the Plan with an exercise price of at\nleast $15.00 per share and held by eligible employees are non-qualified stock\noptions. Accordingly, all new options will be granted as non-qualified stock\noptions. (Page 23)\n\n\n\n\n 9\n\n\nWILL I HAVE TO PAY TAXES IF I EXCHANGE MY OPTIONS IN THE OFFER?\n\n If you exchange your current options for new options, we believe you will\nnot be required under current law to recognize income for federal income tax\npurposes at the time of the exchange. We believe that the exchange will be\ntreated as a non-taxable exchange. Further, at the date of grant of the new\noptions, we believe that you will not be required under current law to recognize\nincome for federal income tax purposes.\n\n Special considerations may apply to employees located in the United\nKingdom, Germany, Korea, Taiwan and Japan. In some of these countries, the\napplication of local taxation rules may have an impact upon the re-grant.\n\n We recommend that you consult with your own tax advisor to determine the\ntax consequences of tendering options pursuant to the offer, including under the\nlaws of the country that applies to you. Oak Technology is not responsible for\nany personal adverse tax or other financial consequences that may result from\nyour voluntary participation in the exchange. (Page 30)\n\nAFTER THE RE-GRANT, WHAT HAPPENS IF I AGAIN END UP UNDERWATER?\n\n We are conducting this offer only at this time, considering the unusual\nstock market conditions that have affected many companies throughout the\ncountry. This is therefore considered a one-time offer and is not expected to be\noffered again in the future. As your stock options are valid for ten years from\nthe date of initial grant, subject to continued employment, the price of our\ncommon stock may appreciate over the long term even if your options are\nunderwater for some period of time after the grant date of the new options.\nHOWEVER, WE CAN PROVIDE NO ASSURANCE AS TO THE PRICE OF OUR COMMON STOCK AT ANY\nTIME IN THE FUTURE. (Page 16)\n\nWHAT HAPPENS TO OPTIONS THAT I CHOOSE NOT TO TENDER OR THAT ARE NOT ACCEPTED FOR\nEXCHANGE?\n\n Nothing. An option that you choose not to tender for exchange or that we do\nnot accept for exchange remains outstanding until it is exercised or expires in\naccordance with its terms and retains its current exercise price and current\nexercise schedule. We currently expect that we will accept all properly tendered\neligible options promptly after the expiration of this offer. (Page 17)\n\nWHAT HAPPENS TO ANY CURRENT OPTIONS GRANTED TO ME UNDER THE PLAN THAT DO NOT\nHAVE AN EXERCISE PRICE ABOVE $15.00 AND ARE NOT ELIGIBLE FOR TENDER?\n\n The offer will have no effect on those options that do not have an exercise\nprice above $15.00 and are therefore, not eligible for tender in this offer.\nThose options will remain outstanding in accordance with, and subject to, their\ncurrent terms, whether or not you tender your eligible options. (Page 14)\n\n\n\n 10\n\n\nHOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER OPTIONS IN THE OFFER? CAN THE\nOFFER BE EXTENDED, AND IF SO, HOW WILL I BE NOTIFIED IF IT IS EXTENDED?\n\n You have until at least 11:59 p.m., Pacific daylight savings time, on\nSeptember 13, 2001, to tender your options in the offer.\n\n Although we do not currently intend to do so, we may, in our discretion,\nextend the offer at any time. If we extend the offer, we will make a public\nannouncement of the extension no later than 9:00 a.m., Pacific daylight savings\ntime, on the next business day following the previously scheduled expiration\ndate. If the offer is extended, then the cancellation date for tendered eligible\noptions accepted for exchange and the grant date of the new options may be\nextended if necessary to avoid the possibility that we would have to recognize\nany charges in our financial statements which would reduce our reported\nearnings. Under the accounting rules applicable to us, the new options must be\ngranted more than six months following the date tendered eligible options are\ncancelled. (Page 15, 31)\n\nHOW DO I TENDER MY OPTIONS?\n\n If you decide to tender your options, you must deliver, before the offer\nexpires, a properly completed and duly executed acceptance letter and any other\ndocuments required by the acceptance letter to Oak Technology, Inc., 139 Kifer\nCourt, Sunnyvale, California 94086, Attn: Karen Pereira, Stock Administrator\n(facsimile number: (408) 523-6623). We will only accept delivery of the signed\nacceptance letter by regular external mail, facsimile or hand delivery. If you\nchoose to deliver your signature page by external mail, we recommend that you\nuse registered mail with return receipt requested. Delivery by e-mail will NOT\nbe accepted. You must allow for delivery time based on the method of delivery\nthat you choose to ensure we receive your acceptance letter on time.\n\n This is a one-time offer, and we will strictly enforce the tender offer\nperiod. We reserve the right to reject any or all tenders of options that we\ndetermine are not in appropriate form or that we determine are unlawful to\naccept. We also reserve the right to waive any of the conditions of the offer or\nany defect or irregularity in any tender. Subject to our rights to extend,\nterminate and amend the offer, we currently expect that we will accept all\nproperly tendered options promptly after the expiration of the offer. (Page 17)\n\nDURING WHAT PERIOD OF TIME MAY I WITHDRAW PREVIOUSLY TENDERED OPTIONS?\n\n You may withdraw your tendered options at any time before the offer expires\nat 11:59 p.m., Pacific daylight savings time, on September 13, 2001. If we\nextend this offer beyond that time, you may withdraw your tendered options at\nany time until the extended expiration of this offer. To withdraw tendered\noptions, you must deliver to us at the address or facsimile number listed above\na written notice of withdrawal with the required information while you still\nhave the right to withdraw the tendered options. As in the case of delivery of\nthe acceptance letter, you may deliver the signed notice of withdrawal to us at\nthe address noted above by regular external mail, facsimile or hand delivery.\nOnce you have withdrawn options, you may re-tender options only by again\nfollowing the delivery procedures described above. (Page 18)\n\n\n\n 11\n\n\n\nIF I CHOOSE NOT TO TENDER MY ELIGIBLE OPTIONS FOR EXCHANGE, WHAT DO I HAVE TO\nDO?\n\n If you choose to keep your eligible options and not participate in the\noffer, we ask that you complete the decline letter indicating your intent not to\nparticipate in the exchange and promptly return the letter to us. This will aid\nus in our efforts with respect to administration of the option exchange program.\nEven if you return the decline letter to us indicating your nonparticipation in\nthe program, you may subsequently elect to participate in the exchange at any\ntime prior to the expiration of the offer by delivering to us a properly\ncompleted and signed acceptance letter. (Page 17)\n\nHOW WILL I KNOW IF OAK TECHNOLOGY HAS RECEIVED MY ACCEPTANCE LETTER ELECTING TO\nTENDER MY ELIGIBLE OPTIONS?\n\n We will confirm receipt of your acceptance letter tendering your eligible\noptions (and any withdrawal) shortly after we receive it. Also, after the\nexpiration date of the offer, we will advise you whether or not your tender was\naccepted. Personalized confirmations of your eligible options that have been\ntendered and cancelled in the offer will be sent to you within sixty (60) days\nof the expiration of the offer. (Page 20)\n\nWHAT DO WE AND OUR BOARD OF DIRECTORS THINK OF THE OFFER?\n\n Although our board of directors has approved this offer, neither we nor our\nboard of directors makes any recommendation as to whether or not you should\ntender your options. You must make your own decision whether to tender options.\nFor questions regarding tax implications or other investment-related questions,\nyou should talk to your own legal counsel, accountant and\/or financial advisor.\n(Page 31, 34)\n\nWHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?\n\n For additional information or assistance, you should contact:\n\n Karen Pereira\n Stock Administrator\n Oak Technology, Inc.\n 139 Kifer Court\n Sunnyvale, California 94086\n (telephone number: (408) 328-6881)\n\n\n\n 12\n\n\n\n INTRODUCTION\n\n Oak Technology, Inc. (\"Oak Technology,\" \"we\" or the \"Company\") is offering\neligible employees holding outstanding options to purchase shares of our common\nstock granted under the Oak Technology, Inc. 1994 Stock Option Plan, as amended\n(the \"Plan\"), that have an exercise price of at least $15.00 per share, the\nopportunity to exchange those options for new options that we will grant under\nthe Plan. We are extending this offer upon the terms and subject to the\nconditions set forth in this offer to exchange (the \"offer to exchange\") and in\nthe related acceptance letter (which together, as each may be amended or\nsupplemented from time to time, constitute the \"offer\"). We intend to grant\noptions to acquire the same number of shares as are covered by the options you\ntender. We will grant the new options on a date that is at least six months and\none day following the date we cancel the options accepted for exchange.\n\n This offer is not conditioned upon a minimum number of options being\ntendered, but is subject to conditions that we describe in Section 6 of this\noffer to exchange, including our right to accept or reject any options tendered\nin response to this offer. Subject to our rights to extend, terminate and amend\nthe offer, we currently expect that we will accept promptly after the expiration\nof the offer all properly tendered options that have not been validly withdrawn.\n\n As of August 10, 2001, options to purchase 8,268,522 shares of our common\nstock were issued and outstanding under the Plan. Of these options, options to\npurchase 808,080 shares of our common stock, constituting 9.8%, had an exercise\nprice of $15.00 or more and are eligible to be exchanged in the offer.\n\n If you tender options for exchange and we accept such options, we will\ngrant you new options under the Plan and enter into a new option agreement\nbetween us and you, all as more fully described below. The exercise price of the\nnew options will equal the fair market value of our common stock on the date of\nthe grant. The vesting schedule for the new options granted will be exactly the\nsame as the vesting schedule for the cancelled options, and the other terms and\nconditions of the new options will be substantially the same as the cancelled\noptions. Accordingly, the new options will be vested on the date of grant to the\nextent that the related options cancelled in this offer would have been vested\non that date and the remaining new options will become vested in accordance with\nthe vesting schedule (based on the same vesting dates and percentages)\napplicable to the related grant of options that were cancelled in the offer.\nAccordingly, you will not lose the benefit of any vesting under your tendered\neligible options that are accepted for exchange and cancelled in this offer.\n\nTHE OFFER\n\n1. Number Of Options; Eligible Employees; Expiration Date.\n\n Upon the terms and subject to the conditions of the offer, including our\nright to accept or reject any options tendered in response to this offer, we\nwill exchange for new options to purchase common stock under the Plan all\noutstanding options under the Plan held by eligible employees that have an\nexercise price of at least $15.00 per share, that are properly tendered in\n\n\n\n\n 13\n\n\naccordance with Section 3 and not validly withdrawn in accordance with Section 4\nbefore the \"expiration date,\" as defined below. We will not accept partial\ntenders of eligible options. Therefore, if you choose to participate, you must\ntender all of your eligible options.\n\n To receive a grant of new options pursuant to the offer and under the terms\nof the Plan, an employee must be eligible to receive options pursuant to the\nPlan from the date he or she tenders options through the date Oak Technology\ngrants the new options.\n\n \"Eligible employees\" are all employees, including executive officers, of\nOak Technology or one of its subsidiaries who are actively employed or on an\nauthorized short-term leave of absence on August 15, 2001 and on the date the\noffer expires and whose services are performed in the United States, the United\nKingdom, Germany, Korea, Taiwan or Japan. An employee who is on an authorized\nshort-term leave of absence of six months or less, including a short-term\ndisability leave, is considered to be an employee of Oak Technology or its\nsubsidiaries.\n\n Also, an employee will not be considered an \"eligible employee\" and\naccordingly, will not be eligible to participate in this offer if, on or before\nthe date the offer expires, the employee is no longer employed by Oak Technology\nor any of its subsidiaries, for any reason, including the employee:\n\n o receives a notice of involuntary termination (including, without\n limitation, redundancy), with or without cause, from Oak Technology or\n one of its subsidiaries;\n\n o resigns or gives notice of resignation from such employment, whether\n voluntarily or involuntarily or with or without good reason;\n\n o enters into an agreement with Oak Technology or any of its\n subsidiaries with respect to the employee's resignation, whether\n voluntarily or involuntarily or with or without good reason;\n\n o takes a long-term leave of absence (over six months in duration) or if\n currently on a short-term leave of absence, does not return within the\n authorized six month period, resulting in a recategorization of the\n leave as long-term; or\n\n o dies.\n\n\n Non-employee directors of Oak Technology are not eligible to participate in\nthe offer.\n\n IF, FOR ANY REASON, YOU ARE NOT AN EMPLOYEE OF OAK TECHNOLOGY OR ANY OF OUR\nSUBSIDIARIES, FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE THE OFFER\nEXPIRES, YOU WILL NOT BE ELIGIBLE TO PARTICIPATE IN THE OFFER. PARTICIPATION IN\nTHE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN IN THE EMPLOY OF OAK\nTECHNOLOGY OR ANY OF OUR SUBSIDIARIES.\n\n The offer is available to eligible employees of Oak Technology who hold\noptions under the Plan that have an exercise price of $15.00 per share or more.\nAs of August 10, 2001, there were outstanding options to purchase 808,080 shares\nof our common stock under the Plan that have an exercise price of $15.00 per\nshare or more.\n\n\n 14\n\n\n If your options are properly tendered and accepted for exchange, unless we\nterminate this offer pursuant to the terms and conditions hereof, you will be\nentitled to receive, on a business day that is at least six months and one day\nfollowing the date we accept the options tendered for exchange, new options to\npurchase the number of shares of our common stock that is equal to the number of\nshares subject to the options that you tendered and we accepted, subject to\nadjustments for any stock splits, stock dividends and similar events that occur\nprior to the grant date of the new options.\n\n The exercise price (also known as the grant price) on the date of grant of\nthe new options will be determined in accordance with the terms of the Plan.\nBecause the new options will be granted at least six months and one day\nfollowing the date eligible options are cancelled, we cannot predict the\nexercise price of the new options. Accordingly, the new options may have a\nhigher exercise price than some or all of the eligible options that are\ncancelled in the offer. We recommend that eligible employees obtain current\nmarket quotations for our common stock before deciding whether to tender their\neligible options. See section 8 for a description of the determination of market\nprice and for other terms of the new options.\n\n The term \"expiration date\" means 11:59 p.m., Pacific daylight savings time,\non September 13, 2001, unless and until we, in our discretion, have extended the\nperiod of time during which the offer will remain open, in which event the term\n\"expiration date\" refers to the latest time and date at which the offer, as so\nextended, expires. See Section 14 for a description of our rights to extend,\ndelay, terminate and amend the offer.\n\n For purposes of this offer, a \"business day\" means any day other than a\nSaturday, Sunday or United States Federal holiday and consists of the time\nperiod from 12:01 a.m. through 11:59 p.m., Pacific daylight savings time.\n\n2. Purpose Of The Offer.\n\n We issued the options outstanding under the Plan to:\n\n o provide our employees an opportunity to acquire or increase a\n proprietary interest in us, thereby creating a stronger incentive to\n expend maximum effort for our growth and success; and\n\n o encourage our employees to continue their employment with us.\n\n Many of our outstanding options, whether or not they are currently\nexercisable, have exercise prices that are higher than the current and recent\ntrading prices of our common stock. We believe many of these options are\nunlikely to be exercised in the foreseeable future. We understand that for our\nstock option program to provide the intended retention and performance\nincentives for our employees, they must feel that our options provide them with\nan opportunity to realize value within a reasonable period of time. With the\nuncertainty of current market conditions, we believe that our employees may feel\nthat the opportunity for realizing value is limited with their existing options.\nBy making this offer to exchange eligible options for new options that will (1)\nhave an exercise price equal to 100% of the market price of our common\n\n\n\n 15\n\n\nstock on the grant date of the new options (determined under and subject to the\nterms of the Plan) and (2) vest in accordance with the vesting schedule\napplicable to the related eligible options cancelled in this offer, we hope to\nprovide our employees with the benefit of owning options that over time may have\na greater potential to increase in value thereby encouraging our employees to\nremain with us, and ultimately maximize shareholder value. While it is hoped\nthat this program will ameliorate the current underwater options issue, this\ncannot be guaranteed considering the ever-present risks associated with a\nvolatile and unpredictable stock market.\n\n Subject to the foregoing, and except as otherwise disclosed in this offer\nor in our filings with the Securities and Exchange Commission, and other than\ntransactions among or between our subsidiaries and our affiliates, we presently\nhave no plans or proposals that relate to or would result in:\n\n\n (a) any extraordinary corporate transaction, such as a merger,\n reorganization or liquidation, involving us or any of our\n subsidiaries;\n\n (b) any purchase, sale or transfer of a material amount of our assets or\n the assets of any of our subsidiaries;\n\n (c) any material change in our present dividend rate or policy, or our\n indebtedness or capitalization;\n\n (d) any material change in our present board of directors or management,\n other than changes in the number or term of directors or to fill any\n existing board vacancies, or as may otherwise occur in the ordinary\n course of business;\n\n (e) any other material change in our corporate structure or business;\n\n (f) our common stock not being authorized for quotation in an automated\n quotation system operated by a national securities association;\n\n (g) our common stock becoming eligible for termination of registration\n pursuant to Section 12(g)(4) of the Securities Exchange Act;\n\n (h) the suspension of our obligation to file reports pursuant to Section\n 15(d) of the Securities Exchange Act;\n\n (i) the acquisition by any person of any material amount of our securities\n or the disposition of any material amount of our securities; or\n\n (j) any change in our certificate of incorporation or bylaws, or any\n actions which may impede the acquisition of control of us by any\n person.\n\n From time to time we entertain proposals from third parties regarding\npotential strategic relationships or transactions, which in some cases could\ninclude a merger or sale of Oak Technology. We have no definitive plans with\nrespect to any such strategic relationship or transaction as of the date hereof.\n\n Neither we nor our Board of Directors makes any recommendation as to\nwhether you should tender your options, nor have we authorized any person to\nmake any such recommendation. You are urged to evaluate carefully all of the\ninformation in this offer to\n\n\n\n\n 16\n\n\n\nexchange and to consult your own legal, investment and\/or tax advisors. You must\nmake your own decision whether to tender your options for exchange.\n\n3. Procedures For Tendering Options.\n\n PROPER TENDER OF OPTIONS. To validly tender your options pursuant to the\noffer, you must, in accordance with the terms of the acceptance letter, properly\ncomplete, duly execute and deliver to us the acceptance letter, or a facsimile\nthereof, along with any other required documents. We must receive all of the\nrequired documents at Oak Technology, Inc., 139 Kifer Court, Sunnyvale,\nCalifornia 94086, Attn: Karen Pereira, Stock Administrator, before the\nexpiration date.\n\n The only acceptable methods of delivery are regular external mail,\nfacsimile and hand delivery. Your eligible options will not be considered\ntendered until we receive them. Delivery by e-mail will not be accepted.\n\n THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING THE ACCEPTANCE LETTER\nAND ANY OTHER REQUIRED DOCUMENTS, IS AT YOUR ELECTION AND RISK. IF YOU DELIVER\nBY MAIL, WE RECOMMEND THAT YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED\nAND PROPERLY INSURE THE MATERIALS. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT\nTIME TO ENSURE TIMELY DELIVERY.\n\n DETERMINATION OF VALIDITY; REJECTION OF OPTIONS; WAIVER OF DEFECTS; NO\nOBLIGATION TO GIVE NOTICE OF DEFECTS. We will determine, in our sole discretion,\nall questions as to form of documents and the validity, form, eligibility,\nincluding time of receipt, and acceptance of any tender of options. Our\ndetermination of these matters will be final and binding on all parties. We\nreserve the right to reject any or all tenders of options that we determine are\nnot in appropriate form or that we determine are unlawful to accept. Otherwise,\nwe will accept properly and timely tendered options that are not validly\nwithdrawn. We also reserve the right to waive any of the conditions of the offer\nor any defect or irregularity in any tender with respect to any particular\noptions or any particular option holder. No tender of options will be deemed to\nhave been properly made until all defects or irregularities have been cured by\nthe tendering option holder or waived by us. Neither we nor any other person is\nobligated to give notice of any defects or irregularities in tenders, nor will\nanyone incur any liability for failure to give any such notice.\n\n OUR ACCEPTANCE CONSTITUTES AN AGREEMENT. Your tender of options pursuant to\nthe procedures described above constitutes your acceptance of the terms and\nconditions of the offer. OUR ACCEPTANCE FOR EXCHANGE OF YOUR OPTIONS TENDERED BY\nYOU PURSUANT TO THE OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN US AND YOU\nUPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER.\n\n Subject to our rights to extend, terminate and amend the offer, we\ncurrently expect that we will accept promptly after the expiration of the offer\nall properly tendered options that have not been validly withdrawn.\n\n\n\n 17\n\n\n4. Withdrawal Rights.\n\n You may only withdraw your tendered options in accordance with the\nprovisions of this Section 4.\n\n You may withdraw your tendered options at any time before 11:59 p.m.,\nPacific daylight savings time, on September 13, 2001. If the offer is extended\nby us beyond that time, you may withdraw your tendered eligible options at any\ntime until the extended expiration of the offer. You must withdraw all tendered\neligible options; you may not withdraw only a portion of tendered eligible\noptions.\n\n To validly withdraw tendered options, an eligible employee must deliver to\nus at the address set forth in Section 3 a written notice of withdrawal, or a\nfacsimile thereof, with the required information, while such employee still has\nthe right to withdraw the tendered options. The notice of withdrawal must\nspecify the name of the employee who tendered the options to be withdrawn.\nExcept as described in the following sentence, the notice of withdrawal must be\nexecuted by the employee who tendered the options to be withdrawn exactly as\nsuch option holder's name appears on the acceptance letter previously submitted\nby the employee. If the signature is by a trustee, executor, administrator,\nguardian, attorney-in-fact or another person acting in a fiduciary or\nrepresentative capacity, the signer's full title and proper evidence of the\nauthority of such person to act in such capacity must be identified on the\nnotice of withdrawal.\n\n You may not rescind any withdrawal. Any options you withdraw will\nthereafter be deemed not properly tendered for purposes of the offer, unless you\nproperly re-tender those options before the expiration date by following the\nprocedures described in Section 3.\n\n Neither we nor any other person is obligated to give notice of any defects\nor irregularities in any notice of withdrawal, nor will anyone incur any\nliability for failure to give any such notice. We will determine, in our\ndiscretion, all questions as to the form and validity, including time of\nreceipt, of notices of withdrawal. Our determination of these matters will be\nfinal and binding.\n\n5. Acceptance Of Options For Exchange And Issuance Of New Options.\n\n Upon the terms and subject to the conditions of this offer and promptly\nfollowing the expiration date, we will accept for exchange and cancel options\nproperly tendered and not validly withdrawn before the expiration date. If we\ncancel eligible options accepted for exchange on September 14, 2001, the\nbusiness day following the scheduled expiration date of the offer, you will be\ngranted new options no earlier than March 16, 2002, which is the first business\nday that is at least six months and one day following the date we anticipate\naccepting options for exchange. If the offer is extended, then the grant date of\nthe new options will also be extended if necessary to ensure that the new option\ngrant date is six months and one day following the date eligible options are\ncancelled. Our board of directors or compensation committee will select the\nactual grant date for the new options after the expiration date of the offer in\naccordance with the Plan. The exercise price of the new options will equal the\nfair market value of our common stock on the date of grant.\n\n\n\n 18\n\n\n To be entitled to the new options after your tendered eligible options have\nbeen cancelled in the offer, you must be eligible to receive options pursuant to\nthe Plan from the date you tender options through the date Oak Technology grants\nthe new options. You must be continuously and actively employed by or on an\nauthorized short-term leave of absence from Oak Technology or one of its\nsubsidiaries from the date you tender eligible options for exchange through, and\nincluding, the date of grant of the new options. An employee who is on an\nauthorized short-term leave of absence of six months or less, including a\nshort-term disability leave, is considered to be an employee of Oak Technology\nor its subsidiaries. You will not be eligible to receive the new options on the\nnew option grant date if you are not employed by Oak Technology or any of its\nsubsidiaries at any time between the date you tender options and the date of\ngrant of the new options, for any reason, including the following:\n\n o you receive a notice of involuntary termination (including, without\n limitation, redundancy), with or without cause, from Oak Technology or\n one of its subsidiaries;\n\n o you resign or give notice of resignation from such employment, whether\n voluntarily or involuntarily or with or without good reason;\n\n o you enter into an agreement with Oak Technology or one of its\n subsidiaries with respect to your resignation, whether voluntarily or\n involuntarily or with or without good reason;\n\n o you take a long-term leave of absence (lasting more than six months)\n or if you are currently on a short-term leave of absence, you do not\n return to active employment within the authorized six month period,\n resulting in a recategorization of the leave as long-term; or\n\n o you die.\n\n IF, FOR ANY REASON, INCLUDING THOSE DESCRIBED ABOVE, YOU ARE NOT AN\nEMPLOYEE OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES, FROM THE DATE YOU TENDER\nOPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW\nOPTIONS OR ANY OTHER CONSIDERATION IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT WE\nHAVE ACCEPTED FOR EXCHANGE.\n\n PARTICIPATION IN THE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO REMAIN IN\nTHE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES. YOU ARE EMPLOYED BY OAK\nTECHNOLOGY OR ONE OF ITS SUBSIDIARIES ON AN \"AT-WILL\" BASIS. AS AN AT-WILL\nEMPLOYEE, YOUR CONTINUED EMPLOYMENT IS AT THE WILL AND SOLE DISCRETION OF OAK\nTECHNOLOGY OR ITS SUBSIDIARIES. WE CANNOT GUARANTEE OR PROVIDE YOU WITH ANY\nASSURANCES THAT YOU WILL NOT BE SUBJECT TO INVOLUNTARY TERMINATION OR THAT YOU\nWILL OTHERWISE REMAIN IN THE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES\nUNTIL THE NEW OPTION GRANT DATE.\n\n If we accept options you tender in the offer, we will defer until the grant\ndate for your new options our grant to you of other options, such as annual,\nbonus or promotional options, for which you may be eligible between the date\nhereof and the new option grant date. We will defer the grant to you of these\nother options if we determine it is necessary for us to do so to avoid incurring\nadverse accounting treatment because of accounting rules that could apply to\nthese\n\n\n\n 19\n\n\ninterim option grants as a result of the offer. If you do not tender options in\nthe offer, however, we may grant you promptly following the expiration of the\noffer options that you were eligible to receive between the date hereof and the\nexpiration date.\n\n For purposes of the offer, we will be deemed to have accepted for exchange\noptions that are validly tendered and not properly withdrawn as, if and when we\ngive oral or written notice to the option holders of our acceptance for exchange\nof such options. Subject to our rights to extend, terminate and amend the offer,\nwe currently expect that we will accept promptly after the expiration of the\noffer all properly tendered options that are not validly withdrawn. Promptly\nafter we accept tendered options for exchange, we will send each tendering\noption holder a letter indicating the number of shares subject to the options\nthat we have accepted for exchange.\n\n6. Conditions Of The Offer.\n\n Notwithstanding any other provision of the offer, we will not be required\nto accept any options tendered for exchange, and we may terminate or amend the\noffer, or postpone our acceptance and cancellation of any options tendered for\nexchange, in each case, subject to Rule 13e-4(f)(5) under the Securities\nExchange Act, if at any time on or after August 15, 2001 and prior to the\nexpiration date (1) any of the following events has occurred, or has been\ndetermined by us to have occurred, and, (2) in our reasonable judgment in any\nsuch case and regardless of the circumstances giving rise thereto, including any\naction or omission to act by us, the occurrence of such event or events makes it\ninadvisable for us to proceed with the offer or with such acceptance and\ncancellation of options tendered for exchange:\n\n (a) there shall have been threatened or instituted or be pending any\n action or proceeding by any government or governmental, regulatory or\n administrative agency, authority or tribunal or any other person,\n before any court, authority, agency or tribunal that directly or\n indirectly challenges the making of the offer, the acquisition of some\n or all of the tendered options pursuant to the offer, the issuance of\n new options, or otherwise relates in any manner to the offer or that,\n in our reasonable judgment, could materially and adversely affect the\n business, condition (financial or other), income, operations or\n prospects of Oak Technology or our subsidiaries, or otherwise\n materially impair in any way the contemplated future conduct of our\n business or the business of any of our subsidiaries or materially\n impair the contemplated benefits of the offer to us;\n\n (b) there shall have been any action threatened, pending or taken, or\n approval withheld, or any statute, rule, regulation, judgment, order\n or injunction threatened, proposed, sought, promulgated, enacted,\n entered, amended, enforced or deemed to be applicable to the offer or\n Oak Technology or any of our subsidiaries, by any court or any\n authority, agency or tribunal that, in our reasonable judgment, would\n or might directly or indirectly:\n\n (1) make the acceptance for exchange of, or issuance of new options\n for, some or all of the tendered options illegal or otherwise\n restrict or prohibit consummation of the offer or otherwise\n relates in any manner to the offer;\n\n\n\n 20\n\n\n\n (2) delay or restrict our ability, or render us unable, to accept for\n exchange, or issue new options for, some or all of the tendered\n options;\n\n (3) materially impair the contemplated benefits of the offer to us;\n or\n\n (4) materially and adversely affect the business, condition\n (financial or other), income, operations or prospects of Oak\n Technology or our subsidiaries, or otherwise materially impair in\n any way the contemplated future conduct of our business or the\n business of any of our subsidiaries or materially impair the\n contemplated benefits of the offer to us.\n\n (c) there shall have occurred any change, development, clarification or\n position taken in generally accepted accounting principles which could\n or would require us to record compensation expense against our\n earnings in connection with the offer for financial reporting\n purposes;\n\n (d) a tender or exchange offer with respect to some or all of our common\n stock, or a merger or acquisition proposal for us, shall have been\n proposed, announced or made by another person or entity or shall have\n been publicly disclosed; or\n\n (e) any change or changes shall have occurred in the business, condition\n (financial or other), assets, income, operations, prospects or stock\n ownership of Oak Technology or our subsidiaries that, in our\n reasonable judgment, is or may be material to Oak Technology or our\n subsidiaries or materially impairs or may materially impair the\n contemplated benefits of the offer to us.\n\n The conditions to the offer are for our benefit. We may assert them in our\ndiscretion regardless of the circumstances giving rise to them prior to the\nexpiration date. We may waive them, in whole or in part, at any time and from\ntime to time prior to the expiration date, in our discretion, whether or not we\nwaive any other condition to the offer. Our failure at any time to exercise any\nof these rights will not be deemed a waiver of any such rights. The waiver of\nany of these rights with respect to particular facts and circumstances will not\nbe deemed a waiver with respect to any other facts and circumstances. Any\ndetermination we make concerning the events described in this Section 6 will be\nfinal and binding upon all persons.\n\n7. Price Range Of Common Stock Underlying The Options.\n\n Our common stock is quoted on the NASDAQ National Market under the symbol\n\"OAKT.\" The following table shows, for the periods indicated, the high and low\nclosing prices per share of our common stock as reported by the NASDAQ National\nMarket.\n\n<\/pre>\n
\n\n FISCAL YEAR ENDED JUNE 30, 2001 HIGH LOW
\n —- —
\n
\n First Quarter $ 30.500 $ 20.375
\n Second Quarter 28.313 6.133
\n Third Quarter 10.250 4.531
\n Fourth Quarter 11.940 4.344
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n 21<\/p>\n
\n\n FISCAL YEAR ENDED JUNE 30, 2000 HIGH LOW
\n —- —
\n
\n First Quarter $ 5.688 $ 3.625
\n Second Quarter 10.438 4.438
\n Third Quarter 19.938 8.813
\n Fourth Quarter 22.875 11.875
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n As of August 10, 2001, the last reported sale price of our common stock, as
\nreported by the NASDAQ National Market, was $9.05 per share.<\/p>\n
WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK
\nBEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS.<\/p>\n
8. Source And Amount Of Consideration; Terms Of New Options.<\/p>\n
CONSIDERATION. We will issue new options to purchase common stock under the
\nPlan in exchange for outstanding eligible options properly tendered and accepted
\nfor exchange by us. We will grant the new options on a business day that is at
\nleast six months and one day following the date we cancel the options accepted
\nfor exchange. The number of shares of common stock subject to new options to be
\ngranted to each employee will be equal to the number of shares subject to the
\noptions tendered by such employee and accepted for exchange, subject to
\nadjustments for any stock splits, stock dividends and similar events that occur
\nprior to the grant date of the new options. However, we will not issue any
\noptions exercisable for fractional shares. Instead, we will round down to the
\nnearest whole number.<\/p>\n
As of August 10, 2001, approximately 8,268,522 options were issued and
\noutstanding under the Plan. Of these options, approximately 1,244,360 options
\n(representing 15% of all such options) were held by eligible employees. The
\neligible options that we are offering to exchange represent approximately 9.8%
\nof all options outstanding as of August 10, 2001.<\/p>\n
If we receive and accept tenders of all outstanding eligible options, we
\nwill grant new options to purchase a total of approximately 808,080 shares of
\nour common stock and the common stock issuable upon exercise of the new options
\nwill equal approximately 1.5% of the total shares of our common stock
\noutstanding as of August 10, 2001.<\/p>\n
TERMS OF NEW OPTIONS. The new options will be issued under the Plan and
\npursuant to new option agreements that are substantially similar to those used
\nfor the options tendered for exchange. Accordingly, except as otherwise noted in
\nthe offer and except with respect to the exercise price and the term, we expect
\nthat the terms and conditions of the new options will be the same as the terms
\nand conditions of the options tendered for exchange. On the date the new options
\nare granted, we will deliver a new option agreement to each tendering employee
\nwhose tendered options were accepted for exchange and canceled by us. After
\nreceipt of the new option agreement, the employee will be expected to execute
\nand deliver to us their option agreements as soon as practical. The following
\ndescription summarizes the material terms of the Plan and the options granted
\nunder the Plan.<\/p>\n
22<\/p>\n
The following description of the Plan and the new options is only a summary
\nand may not be complete. For complete information please refer to the copy of
\nthe Plan and the form of new option agreement that have been filed with the SEC
\nas exhibits to the Tender Offer Statement on Schedule TO. You may also contact
\nus to request copies of the Plan or the form of the new option agreement, which
\nwill be provided at our expense.<\/p>\n
o GENERAL. The number of shares of common stock subject to the Plan is
\n 13,900,000. There are currently options to purchase 8,268,522 shares
\n of our common stock outstanding under the Plan. The Plan permits the
\n granting of stock options that are incentive stock options within the
\n meaning of Section 422 of the Internal Revenue Code of 1986, as
\n amended (the “Code”)) and non-qualified stock options (i.e., stock
\n options that do not qualify as incentive stock options). All eligible
\n options subject to this offer are non-qualified options. All new
\n options that may be granted pursuant to this offer will also be
\n non-qualified options. Under the Plan, officers and other employees of
\n Oak Technology and its parent or subsidiaries, non-employee members of
\n the board and the board of directors of its parent or subsidiaries and
\n consultants and independent advisors of Oak Technology and its parent
\n and subsidiaries are eligible to participate in the Plan.<\/p>\n
o ADMINISTRATION. The compensation committee of the board and the board
\n have separate but concurrent authority to administer the Plan, with
\n broad discretion to fashion the terms of grants of options, including
\n type, size and exercise price, as it deems appropriate. The Plan
\n administrator (either the compensation committee or the board to the
\n extent each such entity is administering the Plan) also selects the
\n persons to whom options are granted.<\/p>\n
o EXERCISE PRICE. The exercise price of each option is determined by the
\n Plan administrator. To the extent that the exercise price of an option
\n grant is less than the fair market value of our common stock on the
\n date of grant, we would incur compensation expense. Consistent with
\n our prior grants under the Plan, the exercise price of the new
\n non-qualified options to be granted pursuant to the offer will equal
\n the fair market value of our common stock on the date of the grant to
\n avoid recognizing compensation expense. In accordance with the terms
\n of the Plan, the fair market value per share of common stock on any
\n relevant date under the Plan will be the closing sale price per share
\n on the day preceding that date on the NASDAQ National Market. BECAUSE
\n WE WILL NOT GRANT NEW OPTIONS UNTIL AT LEAST SIX MONTHS AND ONE DAY
\n AFTER THE DATE WE CANCEL THE OPTIONS ACCEPTED FOR EXCHANGE, IT IS
\n POSSIBLE THAT THE NEW OPTIONS MAY HAVE A HIGHER EXERCISE PRICE THAN
\n SOME OR ALL OF YOUR CURRENT OPTIONS, AND THEREFORE, YOUR NEW OPTIONS
\n COULD BE WORTH LESS THAN YOUR OLD OPTIONS. WE RECOMMEND THAT YOU
\n OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING
\n WHETHER TO TENDER YOUR OPTIONS.<\/p>\n
23<\/p>\n
o VESTING AND EXERCISE. The Plan administrator determines at what time
\n or times each option may be exercised. The term of the new options
\n granted under the Plan will commence on the date of grant of the
\n related eligible options tendered and cancelled in the exchange and,
\n subject to the applicable vesting requirements, will be exercisable
\n during the period beginning on the effective date of grant of the new
\n options and ending on the day before the tenth anniversary of the date
\n of grant of the related eligible options, except that the period for
\n exercise of the new options will end on an earlier date in the event
\n of the termination of an eligible employee’s employment. In accordance
\n with the terms of the Plan and the option agreement, all of the new
\n options will remain exercisable for three months following a
\n termination of employment, or possibly longer in certain circumstances
\n such as termination of employment due to death or disability. The new
\n options will have the same vesting schedule and vesting dates as the
\n related eligible options cancelled in the exchange. Accordingly, the
\n new options will be vested on the date of grant to the extent that the
\n related eligible options tendered for exchange would have been vested
\n on that date and the remaining new options will become vested in
\n accordance with the vesting schedule as the related eligible options
\n that were cancelled in the exchange. For example, new options that are
\n granted in exchange for options that are already vested today or that
\n would have become vested after today and before the grant date of the
\n new options will be vested on the date of grant of such new options.
\n The remaining new options will become vested in accordance with the
\n current vesting schedule and on the same vesting dates applicable to
\n the options for which such new options are exchanged. The number of
\n new options that are vested or become vested on the current vesting
\n dates for the related eligible options will correspond to the number
\n of options that would have vested on such dates.<\/p>\n
o METHOD OF EXERCISING OPTIONS. After the new options are exercisable,
\n the option holder may exercise the options in accordance with the
\n terms of the Plan and the option holder’s option agreement by
\n providing to us (1) a written notice identifying the option and
\n stating the number of shares of common stock that the option holder
\n desires to purchase and (2) payment in full of the option price per
\n share for the shares of common stock then being acquired by check
\n payable to the order of Oak Technology in full payment for the shares
\n of common stock being purchased.<\/p>\n
o PROHIBITION AGAINST TRANSFER, PLEDGE AND ATTACHMENT. The options, and
\n the rights and privileges conferred by them, are personal to the
\n option holder and may not be transferred, assigned, pledged or
\n hypothecated in any way (whether by operation of law or otherwise),
\n and during the option holder’s lifetime shall be exercisable only by
\n the option holder. The option holder may transfer the options, and the
\n rights and privileges conferred by it, upon the option holder’s death,
\n either by will or under the laws of descent and distribution. All
\n transferees shall be subject to all of the terms and conditions of the
\n options to the same extent as the option holder.<\/p>\n
24<\/p>\n
o TERMINATION OF EMPLOYMENT. An eligible employee who tenders eligible
\n options that are cancelled pursuant to this offer will receive a grant
\n of new options only if such eligible employee is eligible to receive
\n options pursuant to the Plan from the date he or she tender options
\n through, and including, the date Oak Technology grants the new
\n options. You will not be eligible to receive the new options on the
\n new option grant date if you are not employed by Oak Technology or any
\n of its subsidiaries at any time between the date you tender options
\n and the date of grant of the new options, for any reason, including
\n the following:<\/p>\n
– you receive a notice of involuntary termination (including,
\n without limitation, redundancy), with or without cause, from Oak
\n Technology or one of its subsidiaries;<\/p>\n
– you resign or give notice of resignation from such employment,
\n whether voluntarily or involuntarily or with or without good
\n reason;<\/p>\n
– You enter into an agreement with Oak Technology or one of its
\n subsidiaries with respect to your resignation, whether
\n voluntarily or involuntarily or with or without good reason;<\/p>\n
– you take a long-term leave of absence (lasting more than six
\n months) or if you are currently on a short-term leave of absence,
\n you do not return to active employment within the authorized six
\n month period, resulting in a recategorization of the leave as
\n long-term; or<\/p>\n
– You die<\/p>\n
IF, FOR ANY REASON, INCLUDING THOSE DESCRIBED ABOVE, YOU ARE NOT
\n AN EMPLOYEE OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES, FROM
\n THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW
\n OPTIONS, YOU WILL NOT RECEIVE ANY NEW OPTIONS OR ANY OTHER
\n CONSIDERATION IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT WE HAVE
\n ACCEPTED FOR EXCHANGE.<\/p>\n
PARTICIPATION IN THE OFFER DOES NOT CONFER UPON YOU THE RIGHT TO
\n REMAIN IN THE EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR
\n SUBSIDIARIES. YOU ARE EMPLOYED BY OAK TECHNOLOGY OR ONE OF ITS
\n SUBSIDIARIES ON AN “AT-WILL” BASIS. AS AN AT-WILL EMPLOYEE, YOUR
\n CONTINUED EMPLOYMENT IS AT THE WILL AND SOLE DISCRETION OF OAK
\n TECHNOLOGY OR ITS SUBSIDIARIES. WE CANNOT GUARANTEE OR PROVIDE
\n YOU WITH ANY ASSURANCES THAT YOU WILL NOT BE SUBJECT TO
\n INVOLUNTARY TERMINATION OR THAT YOU WILL OTHERWISE REMAIN IN THE
\n EMPLOY OF OAK TECHNOLOGY OR ANY OF OUR SUBSIDIARIES UNTIL THE NEW
\n OPTION GRANT DATE.<\/p>\n
After the grant date of the new options, if the option holder
\n ceases to be an employee of Oak Technology for any reason other
\n than disability or death, then the option holder shall have until
\n three months from the date of termination to exercise the options
\n to the extent to which the option holder would otherwise have
\n been entitled to exercise the option on or prior to the date of
\n such termination. To the extent the option holder is not entitled
\n to exercise the options prior to the date of the<\/p>\n
25<\/p>\n
option holder’s termination, such outstanding and unexercised
\n option shall immediately lapse and the option holder shall have
\n no further rights with respect to it, effective as of the date of
\n termination of the option holder’s employment. After the date of
\n grant of the new options, if the option holder’s employment with
\n Oak Technology is terminated due to disability or death, the
\n options shall be exercisable until twelve months from the date of
\n termination due to such disability or death to the extent to
\n which the option holder would otherwise be entitled to exercise
\n the options on or prior to the date of such termination. To the
\n extent the option holder is not entitled to exercise any portion
\n of the options prior to the date of the option holder’s
\n termination due to disability or death, such unexercised portion
\n of the options shall immediately lapse, effective as of the date
\n of termination of the option holder’s employment, on account of
\n disability or death.<\/p>\n
o REGISTRATION OF OPTION SHARES. All shares of common stock
\n issuable upon exercise of options under the Plan, including the
\n shares that will be issuable upon exercise of all new options,
\n have been registered under the Securities Act on a registration
\n statement on Form S-8 filed with the SEC. Unless you are one of
\n our affiliates, you will be able to sell your common stock issued
\n upon exercise of new options free of any transfer restrictions
\n under applicable securities laws.<\/p>\n
o EFFECT OF CHANGE OF CONTROL. If we merge or are consolidated
\n with, or sell substantially all of our assets or stock to,
\n another entity before we grant the new options, it would be our
\n intent to negotiate the terms of that change of control
\n transaction such that eligible employees who tender options
\n pursuant to the offer would receive options to purchase
\n securities of the acquiror. However, we have the right to take
\n any actions we deem necessary or appropriate to complete a
\n transaction that our board of directors believes is in our best
\n interest and our stockholders’ best interest. This could include
\n terminating the offer and any obligation to grant the new
\n options. If we were to terminate the offer in connection with a
\n change of control transaction, tendering option holders would not
\n receive options to purchase securities of the acquiror or any
\n other consideration for their tendered options.<\/p>\n
o AMENDMENT OF PLAN. The board may amend or modify the Plan in any
\n or all respects whatsoever, subject to any required stockholder
\n approval.<\/p>\n
Option holders have no stockholder rights with respect to any of our common
\nstock subject to outstanding options until such shares are purchased in
\naccordance with the provisions of the Plan and option agreement. Nothing in the
\nPlan confers upon any option holder any right to continued employment.<\/p>\n
You should refer to sections 13 for a discussion of the U.S. Federal income
\ntax consequences of accepting or rejecting this offer to tender eligible options
\nfor cancellation and of the grant of the new options under this offer to
\nexchange. In addition, in certain countries other than the United States, the
\nnew options may be subject to different tax rules than the rules applicable to
\nthe tendered options. Whether you are an employee based inside or outside of the<\/p>\n
26<\/p>\n
United States, we recommend that you consult with your own tax advisor to
\ndetermine the tax consequences of the offer under the laws of the country or
\ncountries in which you are a taxpayer.<\/p>\n
Our statements in this offer concerning the Plan and the new options are
\nmerely summaries and do not purport to be complete. The statements are subject
\nto, and are qualified in their entirety by reference to, all provisions of the
\nPlan and the form of option agreement under the Plan, each of which is filed as
\nan exhibit to the Tender Offer Statement on Schedule TO, of which this offer to
\nexchange is a part. See Section 16 for a discussion of how to obtain copies of
\nthe Plan and form of option agreement.<\/p>\n
9. Information Concerning Oak Technology.<\/p>\n
Oak Technology designs, develops and markets high performance embedded
\nsoftware and integrated semiconductor solutions to original equipment
\nmanufacturers worldwide that serve the optical storage and imaging markets. Our
\nproducts consist primarily of embedded software, integrated circuits and
\nsupporting software and firmware to provide a complete solution for customers,
\nthereby enabling them to deliver cost effective, powerful systems to end users
\nfor home and business use. Our mission is to be a leading solutions provider for
\nthe storage and distribution of digital content.<\/p>\n
We were originally incorporated in California in 1987 and were
\nreincorporated in Delaware in 1994. Our principal executive offices and
\nprincipal marketing, sales and product development operations are located at 139
\nKifer Court, Sunnyvale, California 94086 and our telephone number is (408)
\n737-0888. Our web site is located at www.oaktech.com. The information on our web
\nsite is not a part of this offer to exchange. For additional information
\nregarding Oak Technology, we recommend that you also review the materials which
\nwe have filed with the SEC.<\/p>\n
10. Interests Of Directors And Officers; Transactions And Arrangements
\n Concerning The Options.<\/p>\n
A list of our directors and executive officers as of August 10, 2001 is
\nattached to this offer to exchange as SCHEDULE A. As of August 10, 2001, our
\nexecutive officers and non-employee directors as a group beneficially owned
\noptions to purchase a total of approximately 3,964,000 shares of our common
\nstock, which represented approximately 37% of all options outstanding as of that
\ndate. Of these options held by executive officers, only 60,000 options,
\nconstituting 1.5% of their total options, are eligible to be tendered in the
\noffer. None of our non-employee directors are eligible to participate in the
\noffer.<\/p>\n
27<\/p>\n
The following table sets forth the beneficial ownership by each of our
\nexecutive officers and directors of options outstanding under the Plan as of
\nAugust 10, 2001:<\/p>\n
\n\n NUMBER OF PERCENTAGE OF NUMBER OF
\n OPTIONS TO PURCHASE TOTAL OPTIONS ELIGIBLE
\nNAME OF BENEFICIAL OWNERS COMMON STOCK OUTSTANDING OPTIONS
\n————————- ———————- ——————- —————–
\n
\nYoung K. Sohn……………………. 2,660,000 25 % 0
\nJohn S. Edmunds………………….. 250,000 2 0
\nDavid J. Power ………………….. 100,000 * 60,000
\nSimon P. Dolan…………………… 230,000 2 0
\nShlomo Waser…………………….. 200,000 2 0
\nRichard B. Black…………………. 294,000 0
\nDavid Rynne……………………… 50,000 * 0
\nPeter Simone…………………….. 26,000 * 0
\nTimothy Tomlinson………………… 84,000 * 0
\nAlbert Y.C. Yu…………………… 70,000 * 0
\nAll directors and executive officers
\n as a group (10 persons)…………. 3,964,000 37 % 60,000
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n————————————
\n* Represents less than 1% of our outstanding options<\/p>\n
We do not know to what extent our executive officers will exchange their
\noptions in this offer. We anticipate that each executive officer will exchange
\nall eligible options in the offer.<\/p>\n
On June 13, 2001, David Rynne received an option to purchase 50,000 shares
\nof common stock at an exercise price of $10.41 per share, in connection with his
\nappointment as a director of Oak Technology.<\/p>\n
During the 60 days prior to August 15, 2001, no officers or directors have
\nexercised options to acquire any shares of our common stock.<\/p>\n
Except as otherwise described above, there have been no transactions in
\noptions to purchase our common stock or in our common stock which were effected
\nduring the 60 days prior to August 15, 2001 by Oak Technology or, to our
\nknowledge, by any executive officer, director, affiliate or subsidiary of Oak
\nTechnology.<\/p>\n
28<\/p>\n
11. Status Of Options Acquired By Us In The Offer; Accounting Consequences Of
\n The Offer.<\/p>\n
Many of our employees hold options with exercise prices significantly
\nhigher than the current market price of our common stock. We believe it is in
\nour best interest to invite these option holders to exchange these options to
\nprovide an opportunity to more effectively participate in the potential growth
\nin our stock price. We could accomplish this goal by repricing existing options,
\nwhich would enable option holders to immediately receive new options with a
\nlower exercise price. However, the repriced options would be subject to variable
\naccounting, which would require us to record additional compensation expense
\neach quarter until the repriced options were exercised, canceled or expired.
\nFurthermore, if we were to cancel a stock option and issue another option with
\nan exercise price that is lower than the exercise price of the canceled option
\nwithin the shorter of (1) the six-month period immediately prior to the date on
\nwhich the option was required to be tendered for cancellation or (2) the period
\nfrom the date of grant of the canceled option to the date on which the option
\nwas required to be tendered for cancellation, the cancellation and exchange
\nwould be deemed a repricing that results in variable accounting. The
\ncancellation of an existing option and the issuance of another option within
\nthis time period will be deemed a repricing even if the issuance of the second
\noption occurs before the cancellation of the first option.<\/p>\n
We believe that we can accomplish our goals of providing option holders the
\nbenefit of choosing whether they want to receive options that over time may have
\na greater potential to increase in value, without incurring additional current
\nor future compensation expense because:<\/p>\n
o we will not grant any new options until a day that is at least six
\n months and one day after the date that we accept and cancel options
\n tendered for exchange;<\/p>\n
o the exercise price of all new options will equal the fair market value
\n of our common stock on the future date we grant the new options; and<\/p>\n
o we will not grant any other options to an eligible employee who
\n tenders eligible options in the offer that are cancelled in the
\n exchange until after the date on which we grant the new options.<\/p>\n
If we were to grant any options to any eligible employee before the
\nscheduled new grant date, our grant of those options to the electing employee
\nwould be treated for financial reporting purposes as a variable award to the
\nextent that the number of shares subject to the newly granted options is equal
\nto or less than the number of the option holder’s option shares elected for
\nexchange and the exercise price of those awards is less than the exercise price
\nof those cancelled options. In this event, we would be required to record as
\ncompensation expense the amount by which the market value of the shares subject
\nto the newly granted options exceeds the exercise price of those shares. This
\ncompensation expense would accrue as a variable accounting charge to our
\nearnings over the period when the newly granted options are outstanding. We
\nwould have to adjust this compensation expense periodically during the option
\nterm based on increases or decreases in the market value of the shares subject
\nto the newly granted options.<\/p>\n
Options we accept for exchange and acquire pursuant to this offer will be
\ncancelled and will be returned to the pool of options available for future
\noption grants under the Plan. To the<\/p>\n
29<\/p>\n
extent such options are not granted in connection with this offer, the options
\nwill be available for future grants to employees and other eligible plan
\nparticipants without further stockholder action, except as may be required by
\napplicable law or the rules of NASDAQ Stock Market or any other stock exchange
\non which our common stock is then quoted or listed.<\/p>\n
12. Legal Matters; Regulatory Approvals.<\/p>\n
We are not aware of any license or regulatory permit that appears to be
\nmaterial to our business that might be adversely affected by our exchange of
\noptions and issuance of new options as contemplated by the offer, or of any
\napproval or other action by any government or governmental, administrative or
\nregulatory authority or agency, domestic or foreign, that would be required for
\nthe acquisition or ownership of our options as contemplated herein. Should any
\nsuch approval or other action be required, we presently contemplate that we will
\nseek such approval or take such other action. We cannot assure you that any such
\napproval or other action, if needed, would be obtained or would be obtained
\nwithout substantial conditions or that the failure to obtain any such approval
\nor other action might not result in adverse consequences to our business. Our
\nobligation under the offer to accept tendered options for exchange and to issue
\nnew options for tendered options is subject to the conditions described in
\nSection 6.<\/p>\n
13. Material Federal Income Tax Consequences.<\/p>\n
The following is a general summary of the material U.S. federal income tax
\nconsequences of the exchange of eligible options and the grant of the new
\noptions pursuant to this offer applicable to those eligible employees who are
\nU.S. citizens or residents of the U.S. This discussion is based on the now
\napplicable provisions of the U.S. Internal Revenue Code and the regulations
\nthereunder, all of which are subject to change, possibly on a retroactive basis.
\nThis summary does not discuss all of the tax consequences that may be relevant
\nto you in light of your particular circumstances, nor is it intended to be
\napplicable in all respects to all categories of option holders.<\/p>\n
Eligible employees who are U.S. citizens or residents of the U.S. who
\nexchange eligible options for new options will not be required to recognize
\nincome for U.S. Federal income tax purposes at the time of the exchange. We
\nbelieve that the exchange will be treated as a non-taxable exchange for U.S.
\nfederal income tax purposes. At the date of grant of the new options, eligible
\nemployees who are U.S. citizens or residents of the U.S. will not be required to
\nrecognize income for U.S. federal income tax purposes. The grant of options is
\nnot recognized as taxable income for U.S. federal income tax purposes.<\/p>\n
Upon the exercise of a new option for cash, the eligible employee will
\nrecognize compensation income, taxable as ordinary income, in an amount equal to
\nthe excess of (i) the fair market value of the shares purchased upon such
\nexercise, on the date such option is exercised, over (ii) the exercise price of
\nthe shares purchased upon such exercise.<\/p>\n
The tax basis of any share received upon the exercise of a new option will
\nbe equal to the fair market value of such share on the date of exercise of such
\noption. Upon any subsequent sale of such share, the eligible employee will
\nrealize a capital gain (or loss) in an amount equal to the<\/p>\n
30<\/p>\n
difference between the amount realized on the sale and such tax basis. An
\neligible employee’s holding period for Federal income tax purposes for such
\nshare will commence on the date following the date of exercise of the option.<\/p>\n
The employer generally will be entitled to a tax deduction in an amount
\nequal to the amount of compensation income, taxable as ordinary income,
\nrecognized by the eligible employee as a result of the exercise of a new option,
\nin the year of recognition by the eligible employee.<\/p>\n
WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE
\nFEDERAL, STATE, LOCAL AND OTHER TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER.<\/p>\n
14. Extension Of Offer; Termination; Amendment.<\/p>\n
We expressly reserve the right, in our discretion, at any time and from
\ntime to time, and regardless of whether or not any event set forth in Section 6
\nhas occurred or is deemed by us to have occurred, to extend the period of time
\nduring which the offer is open and thereby delay the acceptance for exchange of
\nany options by giving oral or written notice of such extension to the option
\nholders and making a public announcement thereof.<\/p>\n
We also expressly reserve the right, in our reasonable judgment, prior to
\nthe expiration date to terminate or amend the offer and to postpone our
\nacceptance and cancellation of any options tendered for exchange upon the
\noccurrence of any of the conditions specified in Section 6, by giving oral or
\nwritten notice of such termination or postponement to the option holders and
\nmaking a public announcement thereof. Our reservation of the right to delay our
\nacceptance and cancellation of options tendered for exchange is limited by Rule
\n13e-4(f)(5) promulgated under the Securities Exchange Act of 1934, which
\nrequires that we must pay the consideration offered or return the options
\ntendered promptly after termination or withdrawal of the offer.<\/p>\n
Subject to compliance with applicable law, we further reserve the right, in
\nour discretion, and regardless of whether any event set forth in Section 6 has
\noccurred or is deemed by us to have occurred, to amend this offer in any
\nrespect, including, without limitation, by decreasing or increasing the
\nconsideration offered in this offer to eligible employees or by decreasing or
\nincreasing the number of options being sought in the offer.<\/p>\n
Amendments to the offer may be made at any time and from time to time by
\npublic announcement of the amendment. In the case of an extension, the amendment
\nmust be issued no later than 9:00 a.m., Pacific daylight savings time, on the
\nnext business day after the last previously scheduled or announced expiration
\ndate. Any announcement made pursuant to the offer will be disseminated promptly
\nto eligible employees in a manner reasonably designated to inform eligible
\nemployees of such change.<\/p>\n
If we materially change the terms of the offer or the information
\nconcerning the offer, or if we waive a material condition of the offer, we will
\nextend the offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3)
\nunder the Securities Exchange Act of 1934. These rules require that the minimum
\nperiod during which an offer must remain open following material<\/p>\n
31<\/p>\n
changes in the terms of the offer or information concerning the offer,
\n other than a change in price or a change in percentage of securities
\n sought, will depend on the facts and circumstances, including the relative
\n materiality of such terms or information.<\/p>\n
15. Fees And Expenses.<\/p>\n
We will not pay any fees or commissions to any broker, dealer or other
\nperson for soliciting tenders of options pursuant to this offer to exchange. Nor
\nwill we pay any fees for professional services you may incur from your tax,
\nfinancial planning or other advisors.<\/p>\n
16. Additional Information.<\/p>\n
With respect to the offer, we have filed with the SEC a Tender Offer
\nStatement on Schedule TO, as amended, of which this offer to exchange is a part.
\nThis offer to exchange does not contain all of the information contained in the
\nSchedule TO and the exhibits to the Schedule TO. We recommend that you review
\nthe Schedule TO, including its exhibits, and the following materials which we
\nhave filed with the SEC before making a decision on whether to tender your
\neligible options:<\/p>\n
(a) Our Annual Report on Form 10-K\/A for the fiscal year ended June 30,
\n2000, filed with the SEC on September 28, 2000;<\/p>\n
(b) Our Quarterly Report on Form l0-Q for the quarter ended March 31, 2001,
\nfiled with the SEC on May 15, 2001;<\/p>\n
(c) Our Form S-8 (registering shares to be issued under the Oak Technology,
\nInc. 1994 Stock Option Plan) filed with the SEC on January 6, 1999;<\/p>\n
(d) Our Form S-8 (registering shares to be issued under the Oak Technology,
\nInc. 1994 Stock Option Plan) filed with the SEC on June 16, 2001;<\/p>\n
(e) The description of our common stock contained in our registration
\nstatement on Form 8-A (No. 000-25298), as filed with the SEC on December 16,
\n1994, including all amendments or reports updating this description; and<\/p>\n
(f) Our Reports on Form 8-K, dated June 12, 2001 and July 24, 2001.<\/p>\n
These filings, our other annual, quarterly and current reports, our proxy
\nstatements and our other SEC filings may be examined, and copies may be
\nobtained, at the public reference facilities maintained by the SEC at Judiciary
\nPlaza, 450 Fifth Street, N.W., Room 2120, Washington D.C. 20549; and at its
\nregional offices located at Citicorp Center, 500 West Madison Street, Suite
\n1400, Chicago, Illinois 60661- 2511 and at 7 World Trade Center, New York, New
\nYork 10048. Copies of such materials may also be obtained (1) at no charge from
\nour web site at http:\/\/www.oaktech.com or (2) by mail, upon payment of the SEC’s
\ncustomary charges, from the SEC’s Public Reference Room at Judiciary Plaza, 450
\nFifth Street, N.W., Washington D.C. 20549. Information about the operation of
\nthis public reference room can be obtained by calling<\/p>\n
32<\/p>\n
the SEC at 1-800-SEC-0330. The SEC also maintains a web site at
\nhttp:\/\/www.sec.gov that contains reports, proxy statements and information
\nstatements and other information regarding registrants, including Oak
\nTechnology, that file electronically with the SEC.<\/p>\n
Our common stock is listed for trading on NASDAQ National Market under the
\nsymbol “OAKT.”<\/p>\n
We will also provide without charge to each person to whom a copy of this
\noffer to exchange is delivered, upon the written or oral request of any such
\nperson, a copy of any or all of the documents to which we have referred you,
\nother than exhibits to such documents (unless such exhibits are specifically
\nincorporated by reference into such documents). Requests should be directed to:<\/p>\n
Oak Technology, Inc.
\n Investor Relations
\n 139 Kifer Court
\n Sunnyvale, California 94086
\n (telephone number: (408) 328-6899)<\/p>\n
between the hours of 9:00 a.m. and 4:00 p.m., Pacific daylight savings time.<\/p>\n
As you read the documents listed in Section 16, you may find some
\ninconsistencies in information from one document to another. Should you find
\ninconsistencies between the documents, or between a document and this offer to
\nexchange, you should rely on the statements made in the most recent document.
\nThe information contained in this offer to exchange about Oak Technology should
\nbe read together with the information contained in the documents to which we
\nhave referred you.<\/p>\n
17. Forward Looking Statements.<\/p>\n
This offer to exchange and our SEC reports referred to above, include
\nforward-looking statements that reflect our current expectations and projections
\nabout our future results, performance, prospects and opportunities. We have
\ntried to identify these forward-looking statements by using words including
\n“may,” “will,” “expects,” “anticipates,” “believes,” “intends”, “could”,
\n“should” and “estimates” and similar expressions. These forward-looking
\nstatements are based on information currently available to us and are subject to
\na number of risks, uncertainties and other factors that could cause our actual
\nresults, performance, prospects or opportunities in 2001 and beyond to differ
\nmaterially from those expressed in, or implied by, these forward-looking
\nstatements.<\/p>\n
For information about risks, uncertainties and other factors that may
\naffect our business, please review the disclosure included under the captions
\n“Item 7. Management’s Discussion and Analysis of Financial Condition and Results
\nof Operations” in our annual report on Form 10-K for the fiscal year ended June
\n30, 2000 and in our quarterly report on Form 10-Q for the fiscal period ended
\nMarch 31, 2001. Except as otherwise required by federal securities laws, we
\nundertake no obligation to publicly update or revise any forward-looking
\nstatements, whether as<\/p>\n
33<\/p>\n
a result of new information, future events, changed circumstances or any other
\nreason after the date of this offer to exchange.<\/p>\n
18. Miscellaneous.<\/p>\n
We are not aware of any jurisdiction where the making of the offer is not
\nin compliance with applicable law. If we become aware of any jurisdiction where
\nthe making of the offer is not in compliance with any valid applicable law, we
\nwill make a good faith effort to comply with such law. If, after such good faith
\neffort, we cannot comply with such law, the offer will not be made to, nor will
\ntenders be accepted from or on behalf of, the eligible employees residing in
\nsuch jurisdiction.<\/p>\n
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF
\nAS TO WHETHER OR NOT YOU SHOULD TENDER YOUR OPTIONS PURSUANT TO THE OFFER. YOU
\nSHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE
\nHAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR
\nTO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THE
\nINFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN THE RELATED
\nACCEPTANCE LETTER. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU
\nOR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION,
\nREPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US.<\/p>\n
Oak Technology, Inc.
\nAugust 15, 2001<\/p>\n
34<\/p>\n
SCHEDULE A<\/p>\n
INFORMATION CONCERNING
\n THE DIRECTORS AND EXECUTIVE OFFICERS OF
\n OAK TECHNOLOGY, INC.<\/p>\n
The directors and executive officers of Oak Technology and their positions
\nand offices as of August 10, 2001, are set forth in the following table:<\/p>\n
\n\nName Age Position
\n ——— ———————————
\n
\nYoung K. Sohn 45 President, Chief Executive
\n Officer and Director<\/p>\nJohn S. Edmunds 44 Senior Vice President of
\n Finance and Chief Financial
\n Officer<\/p>\n
Simon P. Dolan 42 Senior Vice President and
\n General Manager, Imaging Group<\/p>\n
Shlomo Waser 56 Senior Vice President and
\n General Manager, Optical Storage<\/p>\n
David J. Power 44 Vice President of Legal,
\n General Counsel and Secretary<\/p>\n
Richard B. Black 68 Director<\/p>\n
David Rynne (1)(2) 60 Director<\/p>\n
Peter Simone (1) 54 Director<\/p>\n
Timothy Tomlinson (1) 51 Director<\/p>\n
Albert Y.C. Yu (2) 60 Director
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
——————————–
\n(1) Member of the Audit Committee
\n(2) Member of the Compensation Committee<\/p>\n
The address of each director and executive officer is: c\/o Oak Technology,
\n139 Kifer Court, Sunnyvale, California 94086.<\/p>\n
35<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8391],"corporate_contracts_industries":[9512],"corporate_contracts_types":[9539,9545],"class_list":["post-40216","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-oak-technology-inc","corporate_contracts_industries-technology__semiconductors","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40216"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40216"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40216"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}