SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
<TABLE>
<CAPTION>
<S> <C>
[_] Preliminary Proxy Statement [_] Confidential, For Use of the Commission Only
(As Permitted by Rule 14a-6(e)(2))
</TABLE>
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
V3 SEMICONDUCTOR INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
V3 SEMICONDUCTOR INC.
250 Consumers Road, Suite 901
North York, Ontario, Canada M2J 4V6
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 23, 2000
North York, Ontario, Canada
February 28, 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of V3
Semiconductor Inc., a Nevada corporation (the "Company"), will be held in the
Monet 1 Room at Bellagio, 3600 Las Vegas Blvd. South, Las Vegas, Nevada 89109 on
March 23, 2000 at 10:00 AM (local time) for the following purposes:
1. To elect six directors to the Corporation's Board of Directors, each to
hold office until his successor is elected and qualified or until his earlier
resignation or removal (Proposal No. 1);
2. To approve the Company's 2000 Employee Stock Option Plan and to reserve
up to 750,000 shares of Common Stock for issuance thereunder (Proposal No. 2);
3. To approve the Company's 2000 Employee Stock Purchase Plan and to
reserve up to 200,000 shares of Common Stock for issuance thereunder (Proposal
No. 3);
4. To consider and act upon a proposal to ratify the Board of Directors'
selection of KPMG Peat Marwick as the Corporation's independent auditors for the
fiscal year ending September 30, 2000 (Proposal No. 4); and
5. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors,
are more fully described in the Proxy Statement which is attached and made a
part of this Notice.
The Board of Directors has fixed the close of business on February 9,
2000 as the record date for determining the stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
/s/ CARL MITCHELL
Carl Mitchell
Secretary
IMPORTANT
---------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE OF
RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE, YOU
MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY
<PAGE>
V3 SEMICONDUCTOR INC.
250 Consumers Road, Suite 901
North York, Ontario, Canada M2J 4V6
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board") of V3 Semiconductor Inc., a Nevada
corporation (the "Company"), of proxies in the enclosed form for use in voting
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held at Monet
1 Room at Bellagio, 3600 Las Vegas Blvd. South, Las Vegas, Nevada 89109 on March
23, 2000 at 10:00 AM (local time), and any adjournment or postponement thereof.
Only holders of record of the Company's common stock, $.001 par value per share
(the "Common Stock"), on February 9, 2000 (the "Record Date") will be entitled
to vote at the Meeting. At the close of business on the Record Date, the Company
had outstanding 5,802,155 shares of Common Stock.
Any person giving a proxy in the form accompanying this Proxy Statement
has the power to revoke it prior to its exercise. Any proxy given is revocable
prior to the Meeting by an instrument revoking it or by a duly executed proxy
bearing a later date delivered to the Secretary of the Company. Such proxy is
also revoked if the stockholder is present at the Meeting and elects to vote in
person.
The Company will bear the entire cost of preparing, assembling,
printing and mailing the proxy materials furnished by the Board of Directors to
stockholders. Copies of the proxy materials will be furnished to brokerage
houses, fiduciaries and custodians to be forwarded to the beneficial owners of
the Common Stock. In addition to the solicitation of proxies by use of the mail,
some of the officers, directors and regular employees of the Company may
(without additional compensation) solicit proxies by telephone or personal
interview, the costs of which the Company will bear.
This Proxy Statement and the accompanying form of proxy is being sent
or given to stockholders on or about February 28, 2000.
Stockholders of the Company's Common Stock are entitled to one vote for
each share held. Such shares may not be voted cumulatively.
Each validly returned proxy (including proxies for which no specific
instruction is given) which is not revoked will be voted "FOR" each of the
proposals as described in this Proxy Statement and, at the proxy holders'
discretion, on such other matters, if any, which may come before the Meeting
(including any proposal to adjourn the Meeting).
Determination of whether a matter specified in the Notice of Annual
Meeting of Stockholders has been approved will be determined as follows. Those
persons will be elected directors who receive a plurality of the votes cast at
the Meeting in person or by proxy and entitled to vote on the election.
Accordingly, abstentions or directions to withhold authority will have no effect
on the outcome of the vote. For each other matter specified in the Notice of
Annual Meeting of Stockholders, the affirmative vote of a majority of the shares
of Common Stock present at the Meeting in person or by proxy and entitled to
vote on such matter is required for approval. Abstentions will be considered
shares present in person or by proxy and entitled to vote and, therefore, will
have the effect of a vote against the matter. Broker non-votes will be
considered shares not present for this purpose and will have no effect on the
outcome of the vote. Directions to withhold authority to vote for directors,
abstentions and broker non-votes will be counted for purposes of determining
whether a quorum is present for the Meeting.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
At the Annual Meeting, the stockholders will elect six (6) directors to
serve until the next Annual Meeting of Stockholders or until their respective
successors are elected and qualified. In the event any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting, the proxies
may be voted for the balance of those nominees named and for any substitute
nominee designated by the present Board or the proxy holders to fill such
vacancy, or for the balance of the nominees named without nomination of a
substitute, or the size of the Board may be reduced in accordance with the
Bylaws of the Company. The Board has no reason to believe that any of the
persons named below will be unable or unwilling to serve as a nominee or as a
director if elected.
Assuming a quorum is present, the six nominees receiving the highest
number of affirmative votes of shares entitled to be voted for them will be
elected as directors of the Company for the ensuing year. Unless marked
otherwise, proxies received will be voted "FOR" the election of each of the six
nominees named below. In the event that additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received by
them in such a manner as will ensure the election of as many of the nominees
listed below as possible, and, in such event, the specific nominees to be voted
for will be determined by the proxy holders.
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<CAPTION>
Name Age Position
<S> <C> <C>
John Zambakkides 49 President, CEO and Director
Bernard N. Slade 76 Director
Jim Wilkinson 52 Director
Robert Skinner 49 Director
Thomas H. R. Gurnee 49 Director
Ilbok Lee 54 Director
</TABLE>
The following information with respect to the principal occupation or
employment of each nominee for director, the principal business of the
corporation or other organization in which such occupation or employment is
carried on, and such nominee's business experience during the past five years,
has been furnished to the Company by the respective director nominees:
John Zambakkides. Mr. Zambakkides joined the Board of Directors of the
Company in May, 1995 and on April 13, 1996, he was appointed as President and
Chief Executive Officer of the Company. Mr. Zambakkides has an Electronics
Diploma from Niagara College and an Electronics Bachelor of Engineering from
Ryerson Polytechnical Institute. From 1992 to 1996, Mr. Zambakkides worked with
InTELaTECH Inc. From 1972 to 1992, Mr. Zambakkides served as Regional Manager
for Fairchild Semiconductor during which time he helped to establish Fairchild
in the Canadian market. After National Semiconductor Corp. ("NSC") acquired
Fairchild, Mr. Zambakkides was made General Manager for NSC. Mr. Zambakkides
served on the Board of Directors of the Canadian subsidiaries of both Fairchild
and NSC for a total of 13 years where he contributed his expertise in the areas
of sales, engineering and corporate development. In addition, his expertise was
supplemented by numerous courses in management, finance as well as Total Quality
Management ("TQM"), whereby he was also an accredited instructor for the
Canadian organization.
Bernard N. Slade. Mr. Slade was elected to the Company's Board of Directors
in April, 1996. Mr. Slade also serves on the board of directors of YieldUp
International, a firm he founded in 1993. From 1993 to 1984, Mr. Slade acted as
a consultant for Arthur D. Little, Inc. and Gemini Consulting. Prior to becoming
a consultant, Mr. Slade spent 28 years working for IBM, from 1956 to 1984, where
he held a number of senior positions including management of product development
and manufacturing for the components division and Corporate Director of
Manufacturing Technology. From 1948 to 1956 Mr. Slade worked in research and
development for RCA. Mr. Slade is the author of "Compressing Product Development
Cycle" and "Winning the Productivity Race."
<PAGE>
James Wilkinson. Mr. Wilkinson was elected to the Company's Board of
Directors in April, 1996 and is also currently working as a consultant in the
industry. From 1994 to 1997, Mr. Wilkinson served as the Vice-President, Chief
Operating Officer and Secretary to Tee-Comm Electronics, Inc. and has 30 years
of experience in corporate finance. From 1987 to 1994, Mr. Wilkinson served as
Vice President and Treasurer of Northern Telecom Ltd., and from 1984 to 1987 Mr.
Wilkinson was the Assistant Treasurer of Corporate Finance for Northern Telecom
Ltd. Prior thereto, he held senior financial positions with Shell Canada Ltd.
and Canadian National Railway Co.
Robert Skinner. Mr. Skinner was elected to the Board of Directors in March
1998. From 1992 to 1998 Mr. Skinner has managed his own investments,
specializing in emerging companies in the technology market. From 1980 to 1992,
Mr. Skinner was an Executive Director of Bain Capital Markets Ltd., Bain
Securities Ltd., and Bain and Co. Ltd., the group holding company. He first
joined Bain and Co. Ltd. in 1980 working in its Fixed Income Division, and soon
thereafter became a partner in the firm in December 1981. During his career with
Bain and Co. Ltd. he was also involved in risk management, mortgage
securitization and commodities markets with emphasis on both coal and industrial
metals. Mr. Skinner's experience in the securities industry commenced in 1977,
when he joined Capel Court Corporation Ltd., a merchant bank, where he engaged
in securities trading and structuring transactions.
Thomas H. R. Gurnee. Mr. Gurnee is currently being proposed for election to
the Board of Directors of the Company on March 23, 2000 at the Annual Meeting.
He is presently the Chief Financial Officer at Sohu.com, a leading internet
portal in China based in Beijing which filed for an initial public offering with
Securities and Exchange Commission ("SEC") on February 3rd, 2000. Sohu.Com
intends to commence trading on Hong Kong's GEM and on Nasdaq in Spring 2000. Mr.
Gurnee began his career in 1974 in semiconductors with Varian Associates in
various financial positions. He later moved to Fairchild Semiconductor where he
worked in several division controller positions until he was promoted to
Regional Director of Finance based in Singapore. From 1988 to 1995 he held the
position of Director of Finance with numerous companies. For the next four years
Mr. Gurnee held senior positions in the financial area of companies such as
Chartered Semiconductor in Milpitas, California. In 1974 Mr. Gurnee obtained his
Bachelor's degree from Stanford University majoring in economics, minoring in
math and physics. Mr. Gurnee also received his MBA - Finance degree in 1976 from
the University of Santa Clara.
Ilbok Lee. Mr. Lee is currently being proposed for election to the Board of
Directors of the Company on March 23, 2000 at the Annual Meeting. He began his
career in semiconductors as a Design Engineer for Intel Corp., and subsequently
as Senior Engineering Manager with National Semiconductor Corp. Today, he is
Vice President and General Manager of Cypress Semiconductor's Timing Technology
Division. From 1983 to 1994, he was also the President of Samsung Semiconductor,
Inc., (USA) which he co-founded in 1983. As a co-founder of Samsung
Semiconductor, Inc., he played a key role in establishing the company's first
VLSI business. Samsung utilized this technology to become one of the largest
DRAM suppliers in the world. He served as the President and Chief Executive
Officer of IC WORKS, which he founded in 1992. Mr. Lee is a native of South
Korea and a graduate of Seoul National University. He later went on to receive
his M.S. and Ph.D. degrees in electrical engineering in the USA from the
University of Minnesota.
No director or executive officer of the Company has any family relationship
with any other director or executive officer of the Company.
Directors serve until the next annual meeting of stockholders or until
their successors are elected and qualified. Officers serve at the discretion of
the Board of Directors.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended September 30, 1999, the Board of Directors of
the Corporation held six (6) meetings and acted by unanimous written consent on
two (2) occasions. No director nominated for election at the Annual Meeting
attended fewer than 75% of the total number of meetings of the Board of
Directors during the last fiscal year.
The Board of Directors has an Audit Committee and a Compensation Committee.
The Audit Committee is composed of two directors, Jim Wilkinson and John
Zambakkides. A third director will be appointed to the Audit Committee after the
Annual Meeting. The Audit Committee is responsible for (a) recommending the
engagement and termination of the independent public accountants to audit the
financial statements of the Company, (b) overseeing the scope of the external
audit services, (c) reviewing adjustments recommended by the independent public
accountant and address disagreements between the independent public accountants
and management, (d) reviewing the adequacy of internal controls and management's
handling of identified material inadequacies and reportable conditions in the
internal controls over financial reporting and compliance with laws and
regulations, and (e) supervises the internal audit function, which may include
approving the selection, compensation and termination of internal auditors. The
Audit Committee met two (2) times during the last fiscal year.
<PAGE>
The Compensation Committee consists of four directors, Jim Wilkinson,
Bernard Slade, John Zambakkides and Robert Skinner. The Committee is responsible
for overseeing the compensation of the executive officers and directors,
including annual executive salaries, bonuses and cash incentives and long-term
equity incentives, to ensure that such officers and directors receive adequate
and fair compensation. The Compensation Committee also administers the Company's
stock option plans. The Compensation Committee met twice during the last fiscal
year.
The Board does not have a nominating committee or a committee
performing the functions of a nominating committee. Although there are no formal
procedures for stockholders to nominate persons to serve as directors, the Board
will consider nominations from stockholders, which should be addressed to Carl
Mitchell at the Company's address set forth above.
COMPENSATION OF DIRECTORS
Directors currently receive no cash fees for services provided in that
capacity, but are reimbursed for reasonable out-of-pocket expenses incurred in
connection with attendance at meetings of the Board or any committee thereof
they attend. During the 1999 fiscal year, Mssrs. Slade, Wilkinson, Fazackerley
and Skinner were each granted 10,000 options to purchase Common Stock as
compensation for their services as directors of the Company.
The proxy holders intend to vote the shares represented by proxies for
all of the board's nominees, except to the extent authority to vote for the
nominees is withheld.
RECOMMENDATION OF THE BOARD:
---------------------------
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE.
PROPOSAL NO. 2
APPROVAL OF THE 2000 EMPLOYEE STOCK OPTION PLAN
At the Annual Meeting, the Company's stockholders are being asked to
approve the 2000 Employee Stock Option Plan (the "2000 Option Plan") and to
authorize 750,000 shares of Common Stock for issuance thereunder. The following
is a summary of principal features of the 2000 Option Plan. The summary,
however, does not purport to be a complete description of all the provisions of
the 2000 Option Plan, a copy of which is attached hereto.
GENERAL
The 2000 Option Plan was adopted by the Board of Directors in February
2000. The Board of Directors has initially reserved 750,000 shares of Common
Stock for issuance under the 2000 Option Plan. Under the Plan, options may be
granted which are intended to qualify as Incentive Stock Options ("ISOs") under
Section 422 of the Internal Revenue Code of 1986 (the "Code") or which are not
("Non-ISOs") intended to qualify as Incentive Stock Options thereunder.
The 2000 Option Plan and the right of participants to make purchases
thereunder are intended to qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). The
2000 Option Plan is not a qualified deferred compensation plan under Section
401(a) of the Internal Revenue Code and is not subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
PURPOSE
The primary purpose of the 2000 Option Plan is to attract and retain
the best available personnel for the Company in order to promote the success of
the Company's business and to facilitate the ownership of the Company's stock by
employees. In the event that the 2000 Option Plan is not adopted the Company may
have considerable difficulty in attracting and retaining qualified personnel,
officers, directors and consultants.
<PAGE>
ADMINISTRATION
The 2000 Option Plan, when approved, will be administered by the
Company's Board of Directors, as the Board of Directors may be composed from
time to time. All questions of interpretation of the 2000 Option Plan are
determined by the Board, and its decisions are final and binding upon all
participants. Any determination by a majority of the members of the Board of
Directors at any meeting, or by written consent in lieu of a meeting, shall be
deemed to have been made by the whole Board of Directors.
Notwithstanding the foregoing, the Board of Directors may at any time,
or from time to time, appoint a committee (the "Committee") of at least two
members of the Board of Directors, and delegate to the Committee the authority
of the Board of Directors to administer the Plan. Upon such appointment and
delegation, the Committee shall have all the powers, privileges and duties of
the Board of Directors, and shall be substituted for the Board of Directors, in
the administration of the Plan, subject to certain limitations.
Members of the Board of Directors who are eligible employees are
permitted to participate in the 2000 Option Plan, provided that any such
eligible member may not vote on any matter affecting the administration of the
2000 Option Plan or the grant of any option pursuant to it, or serve on a
committee appointed to administer the 2000 Option Plan. In the event that any
member of the Board of Directors is at any time not a "disinterested person", as
defined in Rule 16b-3(c)(3)(i) promulgated pursuant to the Securities Exchange
Act of 1934, the Plan shall not be administered by the Board of Directors, and
may only by administered by a Committee, all the members of which are
disinterested persons, as so defined.
ELIGIBILITY
Under the 2000 Option Plan, options may be granted to key employees,
officers, directors or consultants of the Company, as provided in the 2000
Option Plan.
TERMS OF OPTIONS
The term of each Option granted under the Plan shall be contained in a
stock option agreement between the Optionee and the Company and such terms shall
be determined by the Board of Directors consistent with the provisions of the
Plan, including the following:
(a) Purchase Price. The purchase price of the Common Shares subject to each
ISO shall not be less than the fair market value (as set forth in the
2000 Option Plan), or in the case of the grant of an ISO to a Principal
Stockholder, not less that 110% of fair market value of such Common
Shares at the time such Option is granted. The purchase price of the
Common Shares subject to each Non-ISO shall be determined at the time
such Option is granted, but in no case less than 85% of the fair market
value of such Common Shares at the time such Option is granted. The
purchase price of the Common Shares subject to each Non-ISO.
(b) Vesting. The dates on which each Option (or portion thereof) shall be
exercisable and the conditions precedent to such exercise, if any,
shall be fixed by the Board of Directors, in its discretion, at the
time such Option is granted.
(c) Expiration. The expiration of each Option shall be fixed by the Board
of Directors, in its discretion, at the time such Option is granted;
however, unless otherwise determined by the Board of Directors at the
time such Option is granted, an Option shall be exercisable for ten
(10) years after the date on which it was granted (the "Grant Date").
Each Option shall be subject to earlier termination as expressly
provided in the 2000 Option Plan or as determined by the Board of
Directors, in its discretion, at the time such Option is granted.
(d) Transferability. No Option shall be transferable, except by will or the
laws of descent and distribution, and any Option may be exercised
during the lifetime of the Optionee only by him. No Option granted
under the Plan shall be subject to execution, attachment or other
process.
<PAGE>
(e) Option Adjustments. The aggregate number and class of shares as to
which Options may be granted under the Plan, the number and class
shares covered by each outstanding Option and the exercise price per
share thereof (but not the total price), and all such Options, shall
each be proportionately adjusted for any increase decrease in the
number of issued Common Shares resulting from split-up spin-off or
consolidation of shares or any like Capital adjustment or the payment
of any stock dividend.
Except as otherwise provided in the 2000 Option Plan, any Option
granted hereunder shall terminate in the event of a merger,
consolidation, acquisition of property or stock, separation,
reorganization or liquidation of the Company. However, the Optionee
shall have the right immediately prior to any such transaction to
exercise his Option in whole or in part notwithstanding any otherwise
applicable vesting requirements.
(f) Termination, Modification and Amendment. The 2000 Option Plan (but not
Options previously granted under the Plan) shall terminate ten (10)
years from the earlier of the date of its adoption by the Board of
Directors or the date on which the Plan is approved by the affirmative
vote of the holders of a majority of the outstanding shares of capital
stock of the Company entitled to vote thereon, and no Option shall be
granted after termination of the Plan. Subject to certain restrictions,
the Plan may at any time be terminated and from time to time be
modified or amended by the affirmative vote of the holders of a
majority of the outstanding shares of the capital stock of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the applicable laws of the State of Nevada.
FEDERAL INCOME TAX ASPECTS OF THE 2000 OPTION PLAN
THE FOLLOWING IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME
TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE PURCHASE OF
SHARES UNDER THE 2000 OPTION PLAN. THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE
AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS WITH
SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE PROVISIONS OF
THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE
PARTICIPANT MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER TAX
CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES. THE COMPANY ADVISES EACH
PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES
OF PARTICIPATION IN THE 2000 OPTION PLAN AND FOR REFERENCE TO APPLICABLE
PROVISIONS OF THE CODE.
The 2000 Option Plan and the right of participants to make purchases
thereunder are intended to qualify under the provisions of Sections 421, 422 and
423 of the Code. Under these provisions, no income will be recognized by a
participant prior to disposition of shares acquired under the 2000 Option Plan.
If the shares are sold or otherwise disposed of (including by way of
gift) more than two years after the first day of the offering period during
which shares were purchased (the "Offering Date"), a participant will recognize
as ordinary income at the time of such disposition the lesser of (a) the excess
of the fair market value of the shares at the time of such disposition over the
purchase price of the shares or (b) 15% of the fair market value of the shares
on the first day of the offering period. Any further gain or loss upon such
disposition will be treated as long-term capital gain or loss. If the shares are
sold for a sale price less than the purchase price, there is no ordinary income
and the participant has a capital loss for the difference.
If the shares are sold or otherwise disposed of (including by way of
gift) before the expiration of the two-year holding period described above, the
excess of the fair market value of the shares on the purchase date over the
purchase price will be treated as ordinary income to the participant. This
excess will constitute ordinary income in the year of sale or other disposition
even if no gain is realized on the sale or a gift of the shares is made. The
balance of any gain or loss will be treated as capital gain or loss and will be
treated as long-term capital gain or loss if the shares have been held more than
one year.
In the case of a participant who is subject to Section 16(b) of the
Exchange Act, the purchase date for purposes of calculating such participant's
compensation income and beginning of the capital gain holding period may be
deferred for up to six months under certain circumstances. Such individuals
should consult with their personal tax advisors prior to buying or selling
shares under the 2000 Option Plan.
<PAGE>
The ordinary income reported under the rules described above, added to
the actual purchase price of the shares, determines the tax basis of the shares
for the purpose of determining capital gain or loss on a sale or exchange of the
shares.
The Company is entitled to a deduction for amounts taxed as ordinary
income to a participant only to the extent that ordinary income must be reported
upon disposition of shares by the participant before the expiration of the
two-year holding period described above.
RESTRICTIONS ON RESALE
Certain officers and directors of the Company may be deemed to be
"affiliates" of the Company as that term is defined under the Securities Act.
The Common Stock acquired under the 2000 Option Plan by an affiliate may be
reoffered or resold only pursuant to an effective registration statement or
pursuant to Rule 144 under the Securities Act or another exemption from the
registration requirements of the Securities Act.
REQUIRED VOTE
The approval of the 2000 Option Plan and the reservation of 750,000
shares for issuance requires the affirmative vote of the holders of a majority
of the shares of the Company's Common Stock present at the Annual Meeting in
person or by proxy and entitled to vote and constituting at least a majority of
the required quorum.
The proxy holders intend to vote the shares represented by proxies to
approve, the 2000 Employee Stock Option Plan.
RECOMMENDATION OF THE BOARD:
---------------------------
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE 2000 EMPLOYEE STOCK OPTION PLAN.
PROPOSAL NO. 3
APPROVAL OF THE 2000 EMPLOYEE STOCK PURCHASE PLAN
At the Annual Meeting, the Company's stockholders are being asked to
approve the 2000 Employee Stock Purchase Plan (the "2000 Purchase Plan") and to
authorize 200,000 shares of Common Stock for issuance thereunder. The following
is a summary of principal features of the 2000 Purchase Plan. The summary,
however, does not purport to be a complete description of all the provisions of
the 2000 Purchase Plan, a copy of which is attached hereto.
GENERAL
The Company's 2000 Purchase Plan is designed to encourage the purchase
by participants of shares of Common Stock. The 2000 Purchase Plan is intended to
comply with the requirements of Section 423 of the Code, and to assure the
participants of the tax advantages provided thereby (and described below in the
section entitled "Certain Federal Income Tax Consequences"). In order for the
transfer of stock under the 2000 Purchase Plan to qualify for this treatment,
the 2000 Purchase Plan must be approved by stockholders of the Company within 12
months of the plan's adoption. A total of 200,000 shares of Common Stock will be
authorized for issuance under the 2000 Purchase Plan.
The number of shares of Common Stock initially authorized for issuance
under the related 2000 Purchase Plan are subject to adjustment by the Committee
in the event of a recapitalization, stock split, stock dividend or similar
corporate transaction.
ELIGIBILITY
Subject to certain procedural requirements, all employees of the
Company who have at least one year of service and work more than 20 hours per
week will be eligible to participate in the 2000 Purchase Plan, except that
employees who are "highly compensated" within the meaning of Section 414(q) of
the Code and employees who are five percent or more stockholders of the Company
or any subsidiary of the Company will not be eligible to participate.
<PAGE>
Pursuant to the 2000 Purchase Plan, each eligible employee will be
permitted to purchase shares of the Common Stock through regular payroll
deductions (and/or cash payments) in an amount equal to 10% of the employee's
base pay (as elected by the employee) for each payroll period. Participating
employees will be able to purchase shares of Common Stock with such accumulated
payroll deductions (and/or cash payments) at the end of a semi-annual cycle at a
purchase price equal to the lesser of: (i) 85 percent of the fair market value
of the Common Stock on the date the semi-annual cycle begins or (ii) 85 percent
of the fair market value of Common Stock on the date the semi-annual cycle ends.
Under the 2000 Purchase Plan, the fair market value of the shares of the Common
Stock which may be purchased by any employee during any calendar year may not
exceed $25,000.
PURPOSE
The purpose of the 2000 Purchase Plan is to align employee and
shareholder long-term interests by facilitating the purchase of Common Stock by
employees and to enable employees to develop and maintain significant ownership
of Common Stock. An additional purpose of the 2000 Purchase Plan is to comply
with the requirements of Section 423 of the Code, and thus to obtain for the
participants the tax advantages provided thereby (described below in the section
entitled "Certain Federal Income Tax Consequences").
ADMINISTRATION
The 2000 Purchase Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan
PARTICIPATION
Subject to certain procedural requirements, all employees of the
Company who have at least one year of service and work more than 20 hours per
week will be eligible to participate in the 2000 Purchase Plan, except that
employees who are "highly compensated" within the meaning of Section 414(q) of
the Code and employees who are five percent or more stockholders of the Company
or any subsidiary of the Company will not be eligible to participate.
Designations of corporations participating in the 2000 Purchase Plan may be made
from time to time by the Compensation Committee from among the subsidiary
corporations of the Company, including corporations which become subsidiaries
after the adoption and approval of the 2000 Purchase Plan.
PURCHASE OF SHARES
Pursuant to the 2000 Purchase Plan, each eligible employee will be
permitted to purchase shares of the Common Stock through regular payroll
deductions (and/or cash payments) in an aggregate amount equal to up to 10% of
the employee's base pay (as elected by the employee) for each payroll period.
Under the 2000 Purchase Plan, the fair market value of the shares of Common
Stock which may be purchased by any employee during any calendar year may not
exceed $25,000.
STOCK PURCHASE PRICE
Participating employees will be able to purchase shares of Common
Stock with payroll deductions and/or cash payments) at the end of a semi-annual
cycle at a purchase price equal to the lesser of: (i) 85 percent of the fair
market value of Common Stock on the date the semi-annual cycle begins or (ii) 85
percent of the fair market value of Common Stock on the date the semi-annual
cycle ends.
<PAGE>
NONTRANSFERABLE RIGHT TO PURCHASE
A right to purchase shares of a Common Stock which is granted to a
participant under the 2000 Purchase Plan is not transferable otherwise than by
will or the laws of descent and distribution, and is exercisable, during the
participant's lifetime, only by the participant.
TERM
No right to purchase shares may be granted under the 2000 Purchase
Plan with respect to any fiscal year after fiscal 2010. Rights to purchase
shares which are granted before or during fiscal 2010, however, may extend
beyond the end of fiscal 2010, and the provisions of the 2000 Purchase Plan will
continue to apply thereto.
AMENDMENTS TO OR DISCONTINUANCE OF THE 2000 PURCHASE PLAN
The Board may from time to time amend or terminate the 2000 Purchase
Plan; provided, however, that (i) no such amendment or termination may adversely
affect the rights of any participant without the consent of such participant and
(ii) to the extent required by Section 423 of the Code or any other law,
regulation or stock exchange rule, no such amendment shall be effective without
the approval of stockholders entitled to vote thereon. Additionally, the Board
may make such amendments as it deems necessary to comply with applicable laws,
rules and regulations.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A BRIEF SUMMARY OF THE EFFECT OF FEDERAL INCOME
TAXATION UPON THE PARTICIPANTS AND THE COMPANY WITH RESPECT TO THE PURCHASE OF
SHARES UNDER THE 2000 PURCHASE PLAN. THIS SUMMARY DOES NOT PURPORT TO BE
COMPLETE AND DOES NOT ADDRESS THE FEDERAL INCOME TAX CONSEQUENCES TO TAXPAYERS
WITH SPECIAL TAX STATUS. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS THE
PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY
IN WHICH THE PARTICIPANT MAY RESIDE, AND DOES NOT DISCUSS ESTATE, GIFT OR OTHER
TAX CONSEQUENCES OTHER THAN INCOME TAX CONSEQUENCES. THE COMPANY ADVISES EACH
PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES
OF PARTICIPATION IN THE 2000 OPTION PLAN AND FOR REFERENCE TO APPLICABLE
PROVISIONS OF THE CODE.
The 2000 Purchase Plan is intended to qualify as an "employee stock
purchase plan" as defined in Section 423 of the Code. Assuming such
qualification, a participant will not recognize any taxable income as a result
of participating in the 2000 Purchase Plan, exercising options granted pursuant
to the 2000 Purchase Plan or receiving shares of Common Stock purchased pursuant
to such options. A participant may, however, be required to recognize taxable
income as described below.
If a participant disposes of any share of Common Stock purchased
pursuant to the 2000 Purchase Plan after the later to occur of (i) two years
from the grant date for the related option and (ii) one year after the exercise
date for the related option (such disposition, a "Qualifying Transfer"), or if
he or she dies (whenever occurring) while owning any share purchased under the
2000 Purchase Plan, the participant generally will recognize compensation
income, for the taxable year in which such disposition or death occurs, in an
amount equal to the lesser of (i) the excess of the market value of the disposed
share at the time of such disposition over its purchase price, and (ii) 15% of
the market value of the disposed share on the grant date for the option to which
such disposed share relates. In the case of a Qualifying Transfer, (a) the basis
of the disposed share will be increased by an amount equal to the amount of
compensation income so recognized, and (b) the participant will recognize a
capital gain or loss, as the case may be, equal to the difference between the
amount realized from the disposition of the shares and the basis for such
shares.
If the participant disposes of any share other than by a Qualifying
Transfer, the participant generally will recognize compensation income in an
amount equal to the excess of the market value of the disposed share on the date
of disposition over its purchase price. In such event, the Company will be
entitled to a tax deduction equal to the amount of compensation income
recognized by the participant. Otherwise, the Company will not be entitled to
any tax deduction with respect to the grant or exercise of options under the
2000 Purchase Plan or the subsequent sale by participants of shares purchased
pursuant to the 2000 Purchase Plan. A transfer by the estate of the participant
of shares purchased by the participant under the 2000 Purchase Plan has the same
federal income tax effects on the Company as a Qualifying Transfer.
<PAGE>
REQUIRED VOTE
The approval of the 2000 Option Plan and the reservation of 200,000
shares for issuance requires the affirmative vote of the holders of a majority
of the shares of the Company's Common Stock present at the Annual Meeting in
person or by proxy and entitled to vote and constituting at least a majority of
the required quorum.
The proxy holders intend to vote the shares represented by proxies to
approve, the 2000 Purchase Plan.
RECOMMENDATION OF THE BOARD:
---------------------------
THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE 2000 EMPLOYEE STOCK OPTION PLAN.
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
KPMG Peat Marwick has served as the Company's independent auditors
since 1994 and has been appointed by the Board to continue as the Company's
independent auditors for the fiscal year ending September 30, 2000. In the event
that ratification of this selection of auditors is not approved by a majority of
the shares of Common Stock voting at the Annual Meeting in person or by proxy,
the Board will reconsider its selection of auditors. KPMG Peat Marwick has no
interest, financial or otherwise, in the Company.
A representative of KPMG Peat Marwick is not expected to be present at
the Annual Meeting.
The proxy holders intend to vote the shares represented by proxies to
ratify the Board of Directors' selection of KPMG Peat Marwick as the Company's
independent auditors for the fiscal year ending September 30, 2000.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG PEAT
MARWICK AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
SEPTEMBER 30, 2000.
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding ownership
of the Company's Common Stock as of February 9, 2000, by all persons known by
the Company to be beneficial owners of five percent (5%) or more of the
outstanding shares of Common Stock.
<TABLE>
<CAPTION>
Number of Shares Approximate
Beneficially Percentage of
Name* Owned Common Stock**
<S> <C> <C> <C>
Carl Mitchell(1) 603,339 10.2%
Michael Alford(2) 407,248 6.7%
Bellingham Industries Inc. 599,857 10.3%
</TABLE>
- -------------------
* Except as noted above, the address for the above identified officers and
directors of the Company is c/o V3 Semiconductor, Inc., 250 Consumers Road,
Suite 901, North York, Ontario, Canada M2J 4V6.
** Percentages are based upon the assumption that the shareholder has exercised
all of the currently exercisable options he or she owns which are currently
exercisable or exercisable within 60 days and that no other shareholder has
exercised any options he or she owns.
(1) Includes 50,000 shares of Common Stock owned by Mr. Mitchell's wife and
30,000 shares of Common Stock issuable upon exercise of stock options
granted under the Company's Employee Stock Option Plan ("ESOP"), of which
10,000 are exercisable within 60 days.
(2) Includes 110,000 shares of Common Stock owned by Mr. Alford's wife and
64,000 shares of Common Stock issuable upon exercise of stock options
granted under the Company's ESOP. Of such options, 40,000 are immediately
exercisable and 3,000 are exercisable within 60 days.
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding ownership
of the Company's Common Stock as of February 9, 2000, by (i) each director of
the Company, (ii) each of the executive officers named in the Summary
Compensation Table of this proxy statement (the "Named Executive Officers"), and
(iii) all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
Number of Shares Approximate
Beneficially Percentage of
Name* Owned Common Stock**
<S> <C> <C> <C>
John Zambakkides(1) 489,400 7.8%
Bernard N. Slade(2) 85,900 1.5%
Jim Wilkinson(3) 20,000 0.3%
Robert Skinner(4) 226,711 3.8%
All Officers and Directors
as a Group (6 persons) 1,831,598 28.6%
</TABLE>
* Except as noted above, the address for the above identified officers and
directors of the Company is c/o V3 Semiconductor, Inc., 250 Consumers Road,
Suite 901, North York, Ontario, Canada M2J 4V6.
** Percentages are based upon the assumption that the shareholder has exercised
all of the options he or she owns and that no other shareholder has exercised
any options he or she owns.
(1) Includes 489,400 shares of Common Stock issuable upon exercise of the
stock options granted John Zambakkides, of which 225,300 are immediately
exercisable.
(2) Includes 20,000 shares of Common Stock issuable upon exercise of stock
options granted under the Company's ESOP plan, all of which are
immediately exercisable. Includes 54,500 shares owned by Mr. Slade's wife.
(3) Includes 20,000 shares of Common Stock issuable upon exercise of stock
options granted under the Company's ESOP plan, all of which are
immediately exercisable.
(4) Includes 200,002 shares of Common Stock owned by Cedar Capital Limited.
Robert Skinner is the sole shareholder of Cedar Capital Limited. Includes
20,000 shares of Common Stock issuable upon exercise of stock options
granted under the Company's ESOP plan, all of which are immediately
exercisable.
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain summary information with respect
to the compensation paid to the Company's Chief Executive Officer, and the
Company's Vice-President of Sales and Marketing, for services rendered in all
capacities to the Company for the fiscal period ended September 30, 1999. Other
than as listed below, the Company had no executive officers whose total annual
salary and bonus exceeded $100,000 for that fiscal year (unless otherwise
stated, all amounts are in U.S. dollars):
<TABLE>
<CAPTION>
Long-Term Compensation
Awards Payouts
Restricted Securities LTIP All
Other Stock Underlying Payouts Other
Compen- Award(s) Options/ ($) Compen-
Name Position Year Salary sation Bonus ($) SARs sation
(#) ($)
- ----------------- ------------- ------- ----------- ------------ ---------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
John Zambakkides President 1999 $134,008 $11,473(1) $41,223 ---- 400,000 ---- ----
and Chief 1998 $97,743 $13,117(2) $55,200 ---- ---- ---- ----
Executive 1997 $72,560 $5,966(2) ---- ---- ---- ---- ----
Officer
- ----------------- ------------- ------- ----------- ------------ ---------- ----------- ------------ --------- ----------
</TABLE>
- ----------------
(1) Represents $7,986 in car allowance and $3,487 in insurance benefits
paid to Mr. Zambakkides pursuant to his employment agreement with the Company.
(2) Represents car allowance commissions paid to Mr. Zambakkides pursuant
to his employment agreement with the Company.
STOCK OPTIONS GRANTS AND EXERCISES
The following table shows the value at September 30, 1999 of
unexercised options held by the named executive officers:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-end Option Values
Number of securities Value of unexercised
underlying unexercised in-the-money optionsat fiscal
options at fiscal year-end
year-end (#) ($)
Name Shares acquired on Value Realized
exercise (#) ($) Exercisable/unexercisable Exercisable/unexercisable*
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John Zambakkides, 54,700 453,899 225,300/280,000(1)(2) $1,731,766/$2,182,320(1)(2)
President and Chief
Executive Officer
</TABLE>
- ---------------------------
(1) Represents presently exercisable options to purchase 85,300 shares of
common stock at $3.75 per share and 140,000 shares of common stock at
$3.40, and unexercisable options to purchase 20,000 shares of common stock
at $3.75 per share and 260,000 shares of common stock at $3.40 per share.
(2) Assumes a fair market value of $11.22 per share of common stock which is
the closing price for the Company's common stock on September 30, 1999.
EMPLOYMENT CONTRACTS
From January 1, 1999 to December 31, 1999, John Zambakkides, the
Company's President and Chief Executive Officer, was employed pursuant to an
agreement providing for annual compensation of Cdn. $200,000. On January 1,
1998, Mr. Zambakkides entered into a new agreement with the Company whereby Mr.
Zambakkides will be employed as the Company's President and Chief Executive
Officer for a term of five years and, thereafter, the agreement shall be
renewable annually. The agreement provides for a base salary of Cdn. $200,000
effective January 1, 1999. The employment agreement provides for a car allowance
of Cdn. $1,000 per month. In addition, Mr. Zambakkides is entitled to receive a
bonus and options based upon achieving goals and objectives as determined by the
Board of Directors.
<PAGE>
TRANSACTIONS WITH MANAGEMENT
None.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at next year's
Annual Meeting of Stockholders must be received by Carl Mitchell, V3
Semiconductor Inc., 250 Consumers Road, Suite 901, North York, Ontario, Canada
M2J 4V6, no later than November 1, 2000.
OTHER PROPOSED ACTION
The Board of Directors is not aware of any other business which will
come before the Meeting, but if any such matters are properly presented, the
proxies solicited hereby will be voted in accordance with the best judgment of
the persons holding the proxies. All shares represented by duly executed proxies
will be voted at the Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and changes in
ownership of the Company's Common Stock. Reporting Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's knowledge, based solely on its review of the copies of
such reports received or written representations from certain Reporting Persons
that no other reports were required, the Company believes that during its fiscal
year ended September 30, 1999, all Reporting Persons complied with all
applicable filing requirements.
AVAILABILITY OF CERTAIN DOCUMENTS REFERRED TO HEREIN
THIS PROXY STATEMENT REFERS TO CERTAIN DOCUMENTS OF THE COMPANY THAT
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS ARE AVAILABLE TO
ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT IS
DELIVERED, UPON ORAL OR WRITTEN REQUEST, WITHOUT CHARGE, DIRECTED TO CARL
MITCHELL, V3 SEMICONDUCTOR INC., 250 CONSUMERS ROAD, NORTH YORK, ONTARIO, CANADA
M2J 4V6, TELEPHONE NUMBER (416) 497-8884. IN ORDER TO ENSURE TIMELY DELIVERY OF
THE DOCUMENTS, SUCH REQUESTS SHOULD BE MADE BY MARCH 1, 2000.
OTHER MATTERS
The Board of Directors knows of no other business that will be
presented to the Annual Meeting. If any other business is properly brought
before the Annual Meeting, proxies in the enclosed form will be voted in respect
thereof as the proxy holders deem advisable.
It is important that the proxies be returned promptly and that your
shares be represented. Stockholders are urged to mark, date, execute and
promptly return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/ CARL MITCHELL
Carl Mitchell
Secretary
North York, Ontario
Canada
February 28, 2000
<PAGE>
PROXY PROXY
V3 SEMICONDUCTOR INC.
PROXY FOR ANNUAL MEETING TO BE HELD ON MARCH 23, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John Zambakkides and Carl Mitchell, or
either of them, as proxies, each with the power to appoint his substitute, to
represent and to vote all the shares of common stock of V3 Semiconductor Inc.
(the "Company"), which the undersigned would be entitled to vote, at the
Company's Annual Meeting of Stockholders to be held on March 23, 2000 and at any
adjournments thereof, subject to the directions indicated on the reverse side
hereof.
In their discretion, the Proxies are authorized to vote upon any other
matter that may properly come before the meeting or any adjournments thereof.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE,
BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
ALL NOMINEES AND FOR THE PROPOSALS LISTED ON THE REVERSE SIDE.
IMPORTANT--This Proxy must be signed and dated on the reverse side.
<PAGE>
THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT!
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of
V3 Semiconductor Inc. to be held in Monet 1 room at Bellagio, 3600 Las Vegas
Blvd. South, Las Vegas, Nevada 89109 on March 23, 2000 at 10:00 a.m. (local
time).
Please read the proxy statement which describes the proposals and
presents other important information, and complete, sign and return your proxy
promptly in the enclosed envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1-4
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS -- For Withhold
Nominees:
<S> <C> <C>
John Zambakkides [_] [_]
Bernard N. Slade [_] [_]
Jim Wilkinson [_] [_]
Thomas H. R. Gurnee [_] [_]
Robert Skinner [_] [_]
Ilbok Lee [_] [_]
</TABLE>
(Except nominee(s) written above)
For Against Abstain
2. Proposal to approve the Company's 2000 [_] [_] [_]
Employee Stock Option Plan.
For Against Abstain
3. Proposal to approve the Company's 2000 [_] [_] [_]
Employee Stock Purchase Plan.
For Against Abstain
4. Proposal to ratify KPMG Peat Marwick as [_] [_] [_]
independent auditors.
If you plan to attend the Annual Meeting please mark this box [_]
Dated:________________, 2000
Signature ______________________________________________________________________
Name (printed) _________________________________________________________________
Title __________________________________________________________________________
Important: Please sign exactly as name appears on this proxy. When signing
as attorney, executor, trustee, guardian, corporate officer, etc., please
indicate full title.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
V3 SEMICONDUCTOR INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide employees of
the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code
of 1986, as amended. The provisions of the Plan, accordingly,
shall be construed so as to extend and limit participation in
a manner consistent with the requirements of that section of
the Code.
2. Definitions.
a. "Board" shall mean the Board of Directors of the Company.
b. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
c. "Common Stock" shall mean the Common Stock of the Company.
d. "Company" shall mean V3 Semiconductor Inc., a Nevada
corporation, and any Designated Subsidiary of the Company.
e. "Compensation" shall mean all base straight time gross
earnings and commissions, exclusive of payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses and other
compensation.
f. "Designated Subsidiary" shall mean any Subsidiary which has
been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.
g. "Employee" shall mean any individual who is an Employee of the
Company for tax purposes whose customary employment with the Company
is at least twenty (20) hours per week and more than five (5) months
in any calendar year. For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed either by statute
or by contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.
h. "Enrollment Date" shall mean the first day of each Offering
Period.
i. "Exercise Date" shall mean the last day of each Offering
Period.
j. "Fair Market Value" shall mean, as of any date, the value of
Common Stock determined as follows:
i. If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap
Market of The Nasdaq Stock Market, its Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system for the
last market trading day on the date of such determination, as
reported in The Wall Street Journal or such other source as the
Board deems reliable, or;
<PAGE>
ii. If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked
prices for the Common Stock on the date of such determination, as
reported in The Wall Street Journal or such other source as the
Board deems reliable, or;
iii. In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good
faith by the Board.
k. "Offering Period" shall mean a period of approximately six (6)
months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after
[__________] and terminating on the last Trading Day in the period
ending the following [__________], or commencing on the first Trading
Day on or after [_________] and terminating on the last Trading Day in
the period ending the following [__________]; provided, however, that
the first Offering Period under the Plan shall commence with the first
Trading Day on or after the date on which the Securities and Exchange
Commission declares the Company's Registration Statement effective and
ending on the last Trading Day on or before [ _____________ ]. The
duration of Offering Periods may be changed pursuant to Section 4 of
this Plan.
l. "Plan" shall mean this Employee Stock Purchase Plan.
m. "Purchase Price" shall mean an amount equal to 85% of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on
the Exercise Date, whichever is lower; provided, however, that the
Purchase Price may be adjusted by the Board pursuant to Section 20.
n. "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been
exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but not yet placed under
option.
o. "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company
or a Subsidiary, whether or not such corporation now exists or is
hereafter organized or acquired by the Company or a Subsidiary.
p. "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.
3. Eligibility.
a. Any Employee employed by the Company for at least one year who
shall be employed by the Company on a given Enrollment Date shall be
eligible to participate in the Plan.
b. Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent
that, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section
424(d) of the Code) would own capital stock of the Company and/or hold
outstanding options to purchase such stock possessing five percent
<PAGE>
(5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Subsidiary, or
(ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000)
worth of stock (determined at the fair market value of the shares at
the time such option is granted) for each calendar year in which such
option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by
consecutive Offering Periods with a new Offering Period
commencing on the first Trading Day on or after [__________]
and [__________] each year, or on such other date as the
Board shall determine, and continuing thereafter until
terminated in accordance with Section 20 hereof; provided,
however, that the first Offering Period under the Plan shall
commence with the first Trading Day on or after the date on
which the Securities and Exchange Commission declares the
Company's Registration Statement effective and ending on the
last Trading Day on or before [ _____________ ]. The Board
shall have the power to change the duration of Offering
Periods (including the commencement dates thereof) with
respect to future offerings without stockholder approval if
such change is announced at least five (5) days prior to the
scheduled beginning of the first Offering Period to be
affected thereafter.
5. Participation.
a. An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in
the form of Exhibit A to this Plan and filing it with the Company's
payroll office prior to the applicable Enrollment Date.
b. Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last
payroll in the Offering Period to which such authorization is
applicable, unless sooner terminated by the participant as provided in
Section 10 hereof.
6. Payroll Deductions.
a. At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on
each pay day during the Offering Period in an amount not exceeding ten
percent (10%) of the Compensation which he or she receives on each pay
day during the Offering Period.
b. All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in
whole percentages only. A participant may not make any additional
payments into such account.
c. A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the
rate of his or her payroll deductions during the Offering Period by
completing or filing with the Company a new subscription agreement
authorizing a change in payroll deduction rate. The Board may, in its
discretion, limit the number of participation rate changes during any
Offering Period. The change in rate shall be effective with the first
full payroll period following five (5) business days after the
Company's receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A
participant's subscription agreement shall remain in effect for
successive Offering Periods unless terminated as provided in Section
10 hereof.
<PAGE>
d. Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%)
at any time during an Offering Period. Payroll deductions shall
recommence at the rate provided in such participant's subscription
agreement at the beginning of the first Offering Period which is
scheduled to end in the following calendar year, unless terminated by
the participant as provided in Section 10 hereof.
e. At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the
Plan is disposed of, the participant must make adequate provision for
the Company's federal, state, or other tax withholding obligations, if
any, which arise upon the exercise of the option or the disposition of
the Common Stock. At any time, the Company may, but shall not be
obligated to, withhold from the participant's compensation the amount
necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company
any tax deductions or benefits attributable to sale or early
disposition of Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each
Offering Period, each eligible Employee participating in
such Offering Period shall be granted an option to purchase
on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the
Company's Common Stock determined by dividing such
Employee's payroll deductions accumulated prior to such
Exercise Date and retained in the Participant's account as
of the Exercise Date by the applicable Purchase Price;
provided that in no event shall an Employee be permitted to
purchase during each Offering Period more than 2,500 shares
(subject to any adjustment pursuant to Section 19), and
provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof.
Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to
Section 10 hereof. The Option shall expire on the last day
of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from
the Plan as provided in Section 10 hereof, his or her option
for the purchase of shares shall be exercised automatically
on the Exercise Date, and the maximum number of full shares
to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll
deductions in his or her account. No fractional shares shall
be purchased; any payroll deductions accumulated in a
participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account
for the subsequent Offering Period, subject to earlier
withdrawal by the participant as provided in Section 10
hereof. Any other monies left over in a participant's
account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a
participant's option to purchase shares hereunder is
exercisable only by him or her.
<PAGE>
9. Delivery. As promptly as practicable after each Exercise
Date on which a purchase of shares occurs, the Company shall
arrange the delivery to each participant, as appropriate,
the shares purchased upon exercise of his or her option.
10. Withdrawal.
a. A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time by giving
written notice to the Company in the form of Exhibit B to this Plan.
All of the participant's payroll deductions credited to his or her
account shall be paid to such participant promptly after receipt of
notice of withdrawal and such participant's option for the Offering
Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such Offering
Period. If a participant withdraws from an Offering Period, payroll
deductions shall not resume at the beginning of the succeeding
Offering Period unless the participant delivers to the Company a new
subscription agreement.
b. A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any
similar plan which may hereafter be adopted by the Company or in
succeeding Offering Periods which commence after the termination of
the Offering Period from which the participant withdraws.
11. Termination of Employment. Upon a participant's
ceasing to be an Employee for any reason, he or she shall be
deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account
during the Offering Period but not yet used to exercise the
option shall be returned to such participant or, in the case
of his or her death, to the person or persons entitled
thereto under Section 15 hereof, and such participant's
option shall be automatically terminated. The preceding
sentence notwithstanding, a participant who receives payment
in lieu of notice of termination of employment shall be
treated as continuing to be an Employee for the
participant's customary number of hours per week of
employment during the period in which the participant is
subject to such payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions
of a participant in the Plan.
13. Stock.
a. Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares
of the Company's Common Stock which shall be made available for sale
under the Plan shall be two hundred thousand (200,000) shares. If, on
a given Exercise Date, the number of shares with respect to which
options are to be exercised exceeds the number of shares then
available under the Plan, the Company shall make a pro rata allocation
of the shares remaining available for purchase in as uniform a manner
as shall be practicable and as it shall determine to be equitable.
b. The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.
c. Shares to be delivered to a participant under the Plan shall
be registered in the name of the participant or in the name of the
participant and his or her spouse.
<PAGE>
14. Administration. The Plan shall be administered by the Board or
a committee of members of the Board appointed by the Board.
The Board or its committee shall have full and exclusive
discretionary authority to construe, interpret and apply the
terms of the Plan, to determine eligibility and to adjudicate
all disputed claims filed under the Plan. Every finding,
decision and determination made by the Board or its committee
shall, to the full extent permitted by law, be final and
binding upon all parties.
15. Designation of Beneficiary.
a. A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's
account under the Plan in the event of such participant's death
subsequent to an Exercise Date on which the option is exercised but
prior to delivery to such participant of such shares and cash. In
addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account
under the Plan in the event of such participant's death prior to
exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.
b. Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death
of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or cash
to the executor or administrator of the estate of the participant, or
if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents
or relatives of the participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the
Company may designate.
16. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the
exercise of an option or to receive shares under the Plan may
be assigned, transferred, pledged or otherwise disposed of in
any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the
participant. Any such attempt at assignment, transfer, pledge
or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds
from an Offering Period in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to
segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given
to participating Employees at least annually, which statements
shall set forth the amounts of payroll deductions, the Purchas
Price, the number of shares purchased and the remaining cash
balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.
a. Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the Reserves, the maximum number of
shares each participant may purchase per Offering Period (pursuant to
Section 7), as well as the price per share and the number of shares of
Common Stock covered by each option under the Plan which has not yet
been exercised shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from
a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be
deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board, whose determination in that
respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to
an option.
b. Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period then in
progress shall be shortened by setting a new Exercise Date (the "New
Exercise Date"), and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless
provided otherwise by the Board. The New Exercise Date shall be before
the date of the Company's proposed dissolution or liquidation. The
Board shall notify each participant in writing, at least ten (10)
business days prior to the New Exercise Date, that the Exercise Date
for the participant's option has been changed to the New Exercise Date
and that the participant's option shall be exercised automatically on
the New Exercise Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10 hereof.
c. Merger or Asset Sale. In the event of a proposed sale of all
or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, each outstanding option
shall be assumed or an equivalent option substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In
the event that the successor corporation refuses to assume or
substitute for the option, the Offering Period then in progress shall
be shortened by setting a new Exercise Date (the "New Exercise Date").
The New Exercise Date shall be before the date of the Company's
proposed sale or merger. The Board shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise
Date, that the Exercise Date for the participant's option has been
changed to the New Exercise Date and that the participant's option
shall be exercised automatically on the New Exercise Date, unless
prior to such date the participant has withdrawn from the Offering
Period as provided in Section 10 hereof.
<PAGE>
20. Amendment or Termination.
a. The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section
19 hereof, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Board of
Directors on any Exercise Date if the Board determines that the
termination of the Offering Period or the Plan is in the best
interests of the Company and its stockholders. Except as provided in
Section 19 and Section 20 hereof, no amendment may make any change in
any option theretofore granted which adversely affects the rights of
any participant. To the extent necessary to comply with Section 423 of
the Code (or any other applicable law, regulation or stock exchange
rule), the Company shall obtain shareholder approval in such a manner
and to such a degree as required.
b. Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely
affected," the Board (or its committee) shall be entitled to change
the Offering Periods, limit the frequency and/or number of changes in
the amount withheld during an Offering Period, establish the exchange
ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated
by a participant in order to adjust for delays or mistakes in the
Company's processing of properly completed withholding elections,
establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the
purchase of Common Stock for each participant properly correspond with
amounts withheld from the participant's Compensation, and establish
such other limitations or procedures as the Board (or its committee)
determines in its sole discretion advisable which are consistent with
the Plan.
c. In the event the Board determines that the ongoing operation
of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent
necessary or desirable, modify or amend the Plan to reduce or
eliminate such accounting consequence including, but not limited to:
i. altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change
in Purchase Price;
ii. shortening any Offering Period so that Offering Period
ends on a new Exercise Date, including an Offering Period
underway at the time of the Board action; and
iii. allocating shares.
Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.
<PAGE>
21. Notices. All notices or other communications by a participant
to the Company under or in connection with the Plan shall be
deemed to have been duly given when received in the form
specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued
with respect to an option unless the exercise of such option
and the issuance and delivery of such shares pursuant thereto
shall comply with all applicable provisions of law, domestic
or foreign, including, without limitation, the Securities Act
of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and
the requirements of any stock exchange upon which the shares
may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and
warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion
of counsel for the Company, such a representation is required
by any of the aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its
approval by the stockholders of the Company. It shall continue
in effect for a term of ten (10) years unless sooner
terminated under Section 20 hereof.
<PAGE>
EXHIBIT A
V3 SEMICONDUCTOR INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application Enrollment Date: __________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1._____________________________________ hereby elects to participate in the
V3 Semiconductor Inc. 2000 Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan") and subscribes to purchase shares of the Company's Common Stock
in accordance with this Subscription Agreement and the Employee Stock Purchase
Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (from 1 to _____%) during the
Offering Period in accordance with the Employee Stock Purchase Plan. (Please
note that no fractional percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price determined
in accordance with the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated payroll deductions will be
used to automatically exercise my option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I
understand that my participation in the Employee Stock Purchase Plan is in all
respects subject to the terms of the Plan. I understand that my ability to
exercise the option under this Subscription Agreement is subject to stockholder
approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse only):
6. I understand that if I dispose of any shares received by me pursuant to
the Plan within 2 years after the Enrollment Date (the first day of the Offering
Period during which I purchased such shares), I will be treated for federal
income tax purposes as having received ordinary income at the time of such
disposition in an amount equal to the excess of the fair market value of the
shares at the time such shares were purchased by me over the price which I paid
for the shares. I hereby agree to notify the Company in writing within 30 days
after the date of any disposition of shares and I will make adequate provision
for Federal, state or other tax withholding obligations, if any, which arise
upon the disposition of the Common Stock. The Company may, but will not be
obligated to, withhold from my compensation the amount necessary to meet any
applicable withholding obligation including any withholding necessary to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by me. If I dispose of such shares at any time
after the expiration of the 2-year holding period, I understand that I will be
treated for federal income tax purposes as having received income only at the
time of such disposition, and that such income will be taxed as ordinary income
only to the extent of an amount equal to the lesser of (1) the excess of the
fair market value of the shares at the time of such disposition over the
purchase price which I paid for the shares, or (2) 15% of the fair market value
of the shares on the first day of the Offering Period. The remainder of the
gain, if any, recognized on such disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the 2000 Employee Stock
Purchase Plan. The effectiveness of this Subscription Agreement is dependent
upon my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the Employee
Stock Purchase Plan:
NAME: (Please print) _______________________________________________________
(First) (Middle) (Last)
Relationship
- --------------------------------------------------
(Address)
Employee's Social
Security Number: _________________________________________________
Employee's Address: _________________________________________________
- --------------------------------------------------------------
- --------------------------------------------------------------
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated: ___________________ _________________________________________________
Signature of Employee
- -------------------------------------------------
Spouse's Signature (If beneficiary other than spouse)
- ------------------------------------------------
<PAGE>
EXHIBIT B
V3 SEMICONDUCTOR INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the V3 Semiconductor Inc.
2000 Employee Stock Purchase Plan which began on ___________ 20____ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period. He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated. The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.
Name and Address of Participant:
- ------------------------------------
- ------------------------------------
- ------------------------------------
Signature:
- ------------------------------------
Date: _______________________________
<PAGE>
V3 SEMICONDUCTOR INC.
2000 EMPLOYEE STOCK OPTION PLAN
1. Purposes
This 2000 Stock Option Plan (the "Plan") is intended to attract and retain the
best available personnel for positions with V3 Semiconductor Inc. or any of its
subsidiary corporations (collectively, the "Company"), and to provide additional
incentive to such employees and others to exert their maximum efforts toward the
success of the Company. The above aims will be effectuated through the granting
of certain stock options. Under the Plan, options may be granted which are
intended to qualify as Incentive Stock Options ("ISOs") under Section 422 of the
Internal Revenue Code of 1986 (the "Code") or which are not ("Non-ISOs")
intended to qualify as Incentive Stock Options thereunder. The term "subsidiary
corporation" shall, for the purposes of the Plan, be defined in the same manner
as such term is defined in Section 424(f) of the Code and shall include a
subsidiary of any subsidiary.
2. Administration of the Plan
(a) The Plan shall be administered by the Board of Directors of the Company (the
"Board of Directors"), as the Board of Directors may be composed from time to
time, except as provided in subparagraph (b) of this Paragraph 2. The
determinations of the Board of Directors under the Plan, including without
limitation as to the matters referred to in this Paragraph 2, shall be
conclusive. Any determination by a majority of the members of the Board of
Directors at any meeting, or by written consent in lieu of a meeting, shall be
deemed to have been made by the whole Board of Directors. Within the limits of
the express provisions of the Plan, the Board of Directors shall have the
authority, in its discretion, to take the following actions under the Plan:
(i) to determine the individuals to whom, and the time or times at
which, ISOs to purchase the Company's shares of Common Stock, par value $.001
per share ("Common Shares"), shall be granted, and the number of Common Shares
to be subject to each ISO,
(ii) to determine the individuals to whom, and the time or times at
which, Non-ISOs to purchase the Common Shares, shall be granted, and the number
of Common Shares to be subject to each Non-ISO,
(iii) to determine the terms and provisions of the respective stock
option agreements granting ISOs and Non-ISOs (which need not be identical),
(iv) to interpret the Plan,
(v) to prescribe, amend and rescind rules and regulations relating
to the Plan, and
(vi) to make all other determinations and take all other actions
necessary or advisable for the administration of the Plan. In making such
determinations, the Board of Directors may take into account the nature of the
services rendered by such individuals, their present and potential contributions
to the Company's success and such other factors as the Board of Directors, in
its discretion, shall deem relevant. An individual to whom an option has bee
granted under the Plan is referred to herein as an "Optionee."
<PAGE>
(b) Notwithstanding anything to the contrary contained herein, the Board of
Directors may at any time, or from time to time, appoint a committee (the
"Committee") of at least two members of the Board of Directors, and delegate to
the Committee the authority of the Board of Directors to administer the Plan.
Upon such appointment and delegation, the Committee shall have all the powers,
privileges and duties of the Board of Directors, and shall be substituted for
the Board of Directors, in the administration of the Plan, except that the power
to appoint members of the Committee and to terminate, modify or amend the Plan
shall be retained by the Board of Directors. In the event that any member of the
Board of Directors is at any time not a "disinterested person," as defined in
Rule 16b-3(c)(3)(i) promulgated pursuant to the Securities Exchange Act of 1934,
the Plan shall not be administered by the Board of Directors, and may only by
administered by a Committee, all the members of which are disinterested persons,
as so defined. The Board of Directors may from time to time appoint members of
the Committee in substitution for or in addition to members previously
appointed, may fill vacancies in the Committee and may discharge the Committee.
A majority of the Committee shall constitute a quorum and all determinations
shall be made by a majority of its members. Any determination reduced to writing
and signed by a majority of the members shall be fully as effective as if it had
been made by a majority vote at a meeting duly called and held. Members of the
Committee shall not be eligible to participate in this Plan.
3. Shares Subject to the Plan
The total number of Common Shares which shall be subject to ISOs and Non-ISOs
granted under the Plan (collectively, "Options") shall be 750,000 in the
aggregate, subject to adjustment as provided in Paragraph 8. The Company shall
at all times while the Plan is in force reserve such number of Common Shares as
will be sufficient to satisfy the requirements of outstanding Options. The
Common Shares to be issued upon exercise of Options shall in whole or in part be
authorized and unissued or reacquired Common Shares. The unexercised portion of
any expired, terminated or canceled Option shall again be available for the
grant of Options under the Plan.
4. Eligibility
(a) Subject to subparagraphs (b) and (c) of this Paragraph 4, Options may be
granted to key employees, officers, directors or consultants of the Company, as
determined by the Board of Directors.
(b) An ISO may be granted, consistent with the other terms of the Plan, to an
individual who owns (within the meaning of Sections 422(b)(6) and 424(d) of the
Code), more that ten (10%) percent of the total combined voting power or value
of all classes of stock of the Company or a subsidiary corporation (any such
person, a "Principal Stockholder") only if, at the time such ISO is granted, the
purchase price of the Common Shares subject to the ISO is an amount which equals
or exceeds one hundred ten percent (110%) of the fair market value of such
Common Shares, and such ISO by its terms is not exercisable more than five (5)
years after it is granted.
(c) A director or an officer of the Company who is not also an employee of the
Company and consultants to the Company shall be eligible to receive Non-ISOs but
shall not be eligible to receive ISOs.
(d) Nothing contained in the Plan shall be construed to limit the right to the
Board of Directors to grant an ISO and Non-ISO concurrently under a single stock
option agreement so long as each Option is clearly identified as to its status.
Furthermore, if an Option has been granted under the Plan, additional Options
may be granted from time to time to the Optionee holding such Options, and
Options may be granted from time to time to one or more employees, officers or
directors who have not previously been granted Options.
(e) To the extent that the grant of an Option results in the aggregate fair
market value (determined at the time of grant) of the Common Shares (or other
capital stock of the Company or any subsidiary) with respect to which Incentive
Stock Options are exercisable for the first time by an Optionee during any
calendar year (under all plans of the Company and subsidiary corporation) to
exceed $100,000, such Options shall be treated as a Non-ISO. The provisions of
this subparagraph (e) of Paragraph 4 shall be construed and applied in
accordance with Section 422(d) of the Code and the regulations, if any,
promulgated thereunder.
5. Terms of Options
<PAGE>
The term of each Option granted under the Plan shall be contained in a stock
option agreement between the Optionee and the Company and such terms shall be
determined by the Board of Directors consistent with the provisions of the Plan,
including the following:
(a) The purchase price of the Common Shares subject to each ISO shall not be
less than the fair market value (or in the case of the grant of an ISO to a
Principal Stockholder, not less that 110% of fair market value) of such Common
Shares at the time such Option is granted. Such fair market value shall be
determined by the Board of Directors and, if the Common Shares are listed on a
national securities exchange or traded on the over-the-counter market, the fair
market value shall be the mean of the highest and lowest trading prices or of
the high bid and low asked prices of the Common Shares on such exchange, or on
the over-the-counter market as reported by the NASDAQ system or the National
Quotation Bureau, Inc., as the case may be, on the day on which the ISO is
granted or, if there is no trading or bid or asked price on that day, the mean
of the highest and lowest trading or high bid and low asked prices on the most
recent day preceding the day on which the ISO is granted for which such prices
are available.
(b) The purchase price of the Common Shares subject to each Non-ISO shall not be
less than 85% of the fair market value of such Common Shares at the time such
Option is granted. Such fair market value shall be determined by the Board of
Directors in accordance with subparagraph (a) of this Paragraph 5. The purchase
price of the Common Shares subject to each Non-ISO shall be determined at the
time such Option is granted.
(c) The dates on which each Option (or portion thereof) shall be exercisable and
the conditions precedent to such exercise, if any, shall be fixed by the Board
of Directors, in its discretion, at the time such Option is granted.
(d) The expiration of each Option shall be fixed by the Board of Directors, in
its discretion, at the time such Option is granted; however, unless otherwise
determined by the Board of Directors at the time such Option is granted, an
Option shall be exercisable for ten (10) years after the date on which it was
granted (the "Grant Date"). Each Option shall be subject to earlier termination
as expressly provided in Paragraph 6 hereof or as determined by the Board of
Directors, in its discretion, at the time such Option is granted.
(e) Options shall be exercised by the delivery by the Optionee thereof to the
Company at its principal office, or at such other address as may be established
by the Board of Directors, of written notice of the number of Common Shares with
respect to which the Option is being exercised accompanied by payment in full of
the purchase price of such Common Shares. Payment for such Common Shares may be
made (as determined by the Board of Directors) (i) in cash, (ii) by certified
check or bank cashier's check payable to the order of the Company in the amount
of such purchase price, (iii) by a promissory note issued by the Optionee in
favor of the Company in the amount equal to such purchase price and payable on
terms prescribed by the Board of Directors, which provides for the payment of
interest at a fair market rate, as determined by the Board of Directors, (iv) by
delivery of capital stock to the Company having a fair market value (determined
on the date of exercise in accordance with the provisions of subparagraph (a) of
this Paragraph 5) equal to said purchase price, or (v) by any combination of the
methods of payment described in clauses (i) through (iv) above.
(f) An Optionee shall not have any of the rights of a stockholder with respect
to the Common Shares subject to his Option until such shares are issued to him
upon the exercise of his Option as provided herein.
(g) No Option shall be transferable, except by will or the laws of descent and
distribution, and any Option may be exercised during the lifetime of the
Optionee only by him. No Option granted under the Plan shall be subject to
execution, attachment or other process.
6. Death or Termination of Employment
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(a) If employment or other relationship of an Optionee with the Company shall be
terminated voluntarily by the Optionee and without the consent of the Company or
for "Cause" (as hereinafter defined), and immediately after such termination
such Optionee shall not then be employed by the Company, any Options granted to
such Optionee to the extent not theretofore exercised shall expire forthwith.
For purposes of the Plan, "Cause" shall mean "Cause" as defined in any
employment agreement ("Employment Agreement") between Optionee and the Company,
and, in the absence of an Employment Agreement or in the absence of a definition
of "Cause" in such Employment Agreement, "Cause" shall mean (i) any continued
failure by the Optionee to obey the reasonable instructions of the President or
any member of the Board of Directors, (ii) continued neglect by the Optionee of
his duties and obligations as an employee of the Company, or a failure to
perform such duties and obligations to the reasonable satisfaction of the
President or the Board of Directors, (iii) willful misconduct of the Optionee or
other actions in bad faith by the Optionee which are to the detriment of the
Company, including without limitation commission of a felony, embezzlement or
misappropriation of funds or commission of any act of fraud or (iv) a breach of
any material provision of any Employment Agreement not cured within 10 days
after written notice thereof.
(b) If such employment or other relationship shall terminate other than (i) by
reason of death, (ii) voluntarily by the optionee and without the consent of the
Company, or (iii) for Cause, and immediately after such termination such
Optionee shall not them be employed by the Company, any Options granted to such
Optionee may be exercised at any time within three months after such
termination, subject to the provisions of subparagraph (d) of this Paragraph 6.
After such three-month period, the unexercised Options shall expire. For the
purposes of the Plan, the retirement of an Optionee either pursuant to a pension
or retirement plan adopted by the Company or on the normal retirement date
prescribed from time to time by the Company, and the termination of employment
as a result of a disability (as defined in Section 22(e) (3) of the Code) shall
be deemed to be a termination of such Optionee's employment or other
relationship other than voluntarily by the Optionee or for Cause.
(c) If an Optionee dies (i) while employed by, or engaged in such other
relationship with, the Company or (ii) within three months after the termination
of his employment or other relationship other than voluntarily by the Optionee
and without the consent of the Company or for Cause, any options granted to such
Optionee may be exercised at any time within twelve months after such Optionee's
death, subject to the provisions of subparagraph (d) of this Paragraph 6. After
the three month period, the unexercised Options shall expire.
(d) An Option may not be exercised pursuant to this paragraph 6 except to the
extent that the Optionee was entitled to exercise the Option at the time of
termination of employment or Such other relationship, or death, and in any event
may not be exercised after the expiration of the earlier of (i) the term of the
option or (ii) ten (10) years from the date the Option was granted, or five (5)
years from the date an ISO was granted if the optionee was a Principal
Stockholder at that date.
7. Leave of Absence.
For purposes of the Plan, an individual who is on military or sick leave or
other bona fide leave of absence (such temporary employment by the United States
or any state government) shall be considered as remaining in the employ of the
Company for 90 days or such longer period as shall be determined by the Board of
Directors.
8. Option Adjustments.
(a) The aggregate number and class of shares as to which Options may be granted
under the Plan, the number and class shares covered by each outstanding Option
and the exercise price per share thereof (but not the total price), and all such
Options, shall each be proportionately adjusted for any increase decrease in the
number of issued Common Shares resulting from split-up spin-off or consolidation
of shares or any like Capital adjustment or the payment of any stock dividend.
<PAGE>
(b) Except as provided in subparagraph (c) of this Paragraph 8, upon a merger,
consolidation, acquisition of property or stock, separation, reorganization
(other than a merger or reorganization of the Company in which the holders of
Common Shares immediately prior to the merger or reorganization have the same
proportionate ownership of Common Shares in the surviving corporation
immediately after the merger or reorganization) or liquidation of the Company,
as a result of which the stockholders of the Company receive cash, stock or
other property in exchange for their Common Shares, any Option granted hereunder
shall terminate, but, provided that the Optionee shall have the right
immediately prior to any such merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation to exercise his Option in whole
or in part whether or not the vesting requirements set forth in the stock option
agreement have been satisfied.
(c) If the stockholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their Common Shares in any
transaction involving a merger, consolidation, acquisition of property or stock,
separation or reorganization (other than a merger or reorganization of the
Company in which the holders of Common Shares immediately prior to the merger or
reorganization have the same proportionate ownership of Common Shares in the
surviving corporation immediately after the merger or reorganization), all
options granted hereunder shall terminate in accordance with the provision of
subparagraph (b) of this Paragraph 8 unless the of Directors and the corporation
issuing the Exchange Stock in their sole and arbitrary discretion and subject to
any required action by the stockholders of the Company and such corporation,
agree that all such Options granted hereunder are converted into options to
purchase shares of Exchange Stock. The amount and price of such options shall be
determined by adjusting the amount and price of the Options granted hereunder in
the same proportion as used for determining the number of shares of Exchange
Stock the holders of the Common Shares receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The vesting
schedule set forth in the stock option agreement shall continue to apply to the
options granted for the Exchange Stock.
(d) All adjustments pursuant to this Paragraph 8 shall be made by the Board of
Directors and its determination as to what adjustments shall be made, and the
extent thereof, shall be final, binding and conclusive.
9. Further Conditions of Exercise.
(a) Unless prior to the exercise of an Option the Common Shares issuable upon
such exercise are the subject of a registration statement filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), and there is then in effect a prospectus filed
as part of such registration statement meeting the Requirements of Section
10(a)(3) of the Securities Act, the notice of exercise with respect to such
Option shall be accompanied by a representation or agreement of the individual
exercising the Option to the Company to the effect that such shares are being
acquired for investment only and not with a view to the resale or distribution
thereof, or such other, documentation as may be required by the Company, unless,
in the opinion of counsel to the Company, such representation, agreement or
documentation is not necessary to comply with the Securities Act.
(b) Anything in the Plan to the contrary notwithstanding, the Company shall not
be obligated to issue or sell any Common Shares until they have been listed on
each securities exchange on which the Common Shares may then be listed and until
and unless, in the opinion of counsel to the Company, the Company may issue such
shares pursuant to a qualification or an effective registration statement, or an
exemption from registration, under such state and federal laws, rules or
regulations as such counsel may deem applicable. The Company shall use
reasonable efforts to effect such listing, qualification and registration, as
the case may be.
10. Termination, Modification and Amendment
<PAGE>
(a) The Plan (but not Options previously granted under the Plan) shall terminate
ten (10) years from the earlier of the date of its adoption by the Board of
Directors or the date on which the Plan is approved by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon, and no Option shall be granted after
termination of the Plan.
(b) The Plan may at any time be terminated and from time to time be modified or
amended by the affirmative vote of the holders of a majority of the outstanding
shares of the capital stock of the Company present, or represented, and entitled
to vote at a meeting duly held in accordance with the applicable laws of the
State of Nevada.
(c) The Board of Directors of the Company may at any time terminate the Plan or
from time to time make such modifications or amendments of the Plan as it may
deem advisable; provided, however, that the Board of Directors shall not (i)
modify or amend the Plan in any way that would disqualify any ISO issued
pursuant to the Plan as an Incentive Stock Option or (ii) without approval by
the affirmative vote of the holders of a majority of the outstanding shares of
the capital stock of the Company present, or represented, and entitled to vote
at a meeting duly held in accordance with the applicable laws of the State of
Nevada, increase (except as provided by Paragraph 8) the maximum number of
Common Shares as to which Options may be granted under the Plan or change the
class of persons eligible to Options under the Plan.
(d) No termination, modification or amendment of the Plan may adversely affect
the rights conferred by any Options the consent of the Optionee thereof.
11. Effectiveness of the Plan
The Plan shall become effective upon adoption by the Board of Directors. The
Plan shall be subject to approval by the affirmative vote of the holders of a
majority of the outstanding shares of the capital stock of the Company entitled
to vote thereon within one year following adoption of the Plan by the Board of
Directors, and all Options granted prior to such approval shall be subject
thereto. In the event such approval is withheld, the Plan and all Options which
may have been granted thereunder shall become null and void.
12. Not a Contract of Employment
Nothing contained in the Plan or in any stock option agreement executed pursuant
hereto shall be deemed to confer upon any individual to whom an Option is or may
be granted hereunder any right to remain in the employ of, or in another
relationship with, the relationship with, the Company.
13. Miscellaneous
(a) Nothing contained in the Plan or in any stock option agreement executed
pursuant hereto shall be deemed to confer upon any individual to whom an Option
is or may be granted hereunder any right to remain in the employ of, or other
relationship with, the Company.
(b) If an Option has been granted under the Plan, additional Options may be
granted from time to time to the Optionee, and Options may be granted from time
to time to one or more individuals who have not previously been granted options.
(c) Nothing contained in the Plan shall be construed to limit the right of the
Company to grant options otherwise than under the Plan in connection with the
acquisition of the business and assets of any corporation, firm, person or
association, including options granted to employees thereof who become employees
of the Company, nor shall the provisions of the Plan be to limit the right of
the Company to grant options Otherwise than under the Plan for other proper
corporate purposes.
<PAGE>
(d) The Company shall have the right to require the Optionee to pay the Company
the cash amount of any taxes the Company is required to withhold in connection
with the exercise of an Option.
(e) No award under this Plan shall be taken into account in determining an
Optionee's compensation for purposes of an employee benefit plan of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its behalf by one of its officers and sealed by its corporate seal,
as of the date set forth below, and the Employee has hereunto set his hand on or
as of said date, which date is the date such option rights were approved for
grant, with Employee by his aid execution hereof hereby representing that the
residence indicated below his (or her) name is his (or her) bona fide residence
and domicile.
