<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 1999
Registration No. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
(Exact Name of Registrant as Specified in Its Charter)
REPUBLIC OF SINGAPORE NOT APPLICABLE
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
60 WOODLANDS INDUSTRIAL 738406
PARK D, STREET 2, SINGAPORE (Zip Code)
(Address of principal executive
offices)
----------------------
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
SHARE OPTION PLAN 1999
----------------------
CHARTERED SEMICONDUCTOR MANUFACTURING, INC.
1450 McCANDLESS DRIVE, MILPITAS, CA 95035
(408) 941-1100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
CHRISTOPHER L. KAUFMAN, ESQ.
MICHAEL W. STURROCK, ESQ.
LATHAM & WATKINS
20 CECIL STREET
#25-02/03/04 THE EXCHANGE
SINGAPORE 049705
(65) 536-1161
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================
PROPOSED
AMOUNT PROPOSED MAXIMUM
TITLE OF EACH CLASS OF OF ORDINARY MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE SHARES TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ordinary Shares, par
value S$0.26 per 107,160,000 $0.54 $57,866,400 $16,087
share(3)
===============================================================================================
</TABLE>
(1) The Chartered Semiconductor Manufacturing Ltd Share Option Plan 1999
(the "Plan") authorizes the issuance of a maximum of 107,160,000
Ordinary Shares of Chartered Semiconductor Manufacturing Ltd (the
"Registrant").
(2) For purposes of computing the registration fee only, pursuant to Rule
457(h)(1), the proposed Maximum Offering Price Per Share is based on the
book value of the Ordinary Shares as calculated on September 30, 1999.
(3) Ordinary Shares are represented by American Depositary Shares, evidenced
by American Depositary Receipts. Each American Depositary Share
represents the right to receive ten Ordinary Shares.
<PAGE> 2
PART I
Item 1. Plan Information
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information
Not required to be filed with this Registration Statement.
PART II
Item 3. Incorporation of Documents by Reference
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the Registrant are incorporated as of their
respective dates in this Registration Statement on Form S-8 (the "Registration
Statement") by reference:
(a) The Registrant's Registration Statement on Form F-1
(Registration No. 333-88397), as amended.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, are incorporated by reference
in this Registration Statement and are a part hereof from the date of filing
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
The Registrant's Articles of Association provide that all of its
directors, secretaries and other officers shall be indemnified by the Registrant
against all costs, charges, losses, expenses and liabilities incurred by them in
the execution and discharge of their duties or in relation thereto, including
any liabilities in defending any proceedings, civil or criminal, which relate to
anything done or omitted or alleged to have been done or omitted by them as a
director, secretary or other officer of the Registrant. The Articles of
Association further provide that none of the Registrant's directors, secretaries
or other officers shall be liable:
- for the acts, receipts, neglects or defaults of any other
director or officer,
- for joining in any receipt or other act for conformity,
- for any loss or expense happening to the Registrant through the
insufficiency or
2
<PAGE> 3
deficiency of title to any property acquired by order of the
directors for or on behalf of the Registrant,
- for the insufficiency or deficiency of any security in or upon
which any of the moneys of the Registrant shall be invested,
- for any loss or damage arising from the bankruptcy, insolvency
or tortious act of any person with whom any moneys, securities
or effects shall be deposited or left, or
- for any other loss, damage or misfortune whatever which shall
happen in the execution of the duties of their office or in
relation thereto,
unless the same shall happen through their own negligence, willful default,
breach of duty or breach of trust.
The indemnification provisions in the Articles of Association provide
for indemnification of the Registrant's officers and directors to the maximum
extent permitted under the Companies Act (Chapter 50) of Singapore.
The Registrant intends to obtain directors and officers insurance
providing indemnification for certain of its directors, officers, affiliates and
employees for certain liabilities.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following is a list of exhibits filed as part of this Registration
Statement, which are incorporated herein:
4.1 Memorandum and New Articles of Association of the Registrant
(incorporated by reference to Exhibit 3 to Amendment No. 2 to
the Registration Statement on Form F-1 filed by the Registrant
on October 25, 1999, as amended (Registration No. 333-88397)).
4.2 Form of Deposit Agreement by and among the Registrant, Citibank,
N.A. and the holders and beneficial owners of Receipts issued
thereunder (including as an exhibit, the form of American
Depositary Receipt) (incorporated by reference to Exhibit 4 to
the Registration Statement on Form F-6 filed by Citibank, N.A.
on October 8, 1999 (Registration No. 333-88623)).
4.3 Form of specimen certificate for ordinary shares (incorporated
by reference to Exhibit 4.2 to Amendment No. 2 to the
Registration Statement on Form F-1 filed by the Registrant on
October 25, 1999, as amended (Registration No. 333-88397)).
4.4 Chartered Semiconductor Manufacturing Ltd Share Option Plan 1999
(including as an exhibit the form of Share Option Agreement).
5 Opinion of Allen & Gledhill.
23 Consent of KPMG.
3
<PAGE> 4
24 Power of Attorney (included on the signature page of this
Registration Statement).
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration Statement
or any material change to such information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) shall not
apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3 and the
information to be included in a post effective amendment to those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference
in this Registration Statement.
(2) That, for purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
4
<PAGE> 5
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Republic of Singapore on this 28th day of October, 1999.
CHARTERED SEMICONDUCTOR
MANUFACTURING LTD
By: / s / Chia Song Hwee
--------------------------------
Name: Chia Song Hwee
Title: Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Barry
Waite, Chia Song Hwee, Sum Soon Lim and Lim Ming Seong as attorneys-in-fact with
the power of substitution for him or her, in any and all capacities, to sign any
amendment to this Registration Statement (including post-effective amendments
and registration statements filed pursuant to Rule 462 and otherwise), and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact, and each of them individually, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact or each of them individually, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/ s / Ho Ching Chairman of the Board October 28, 1999
Ho Ching
/ s / Lim Ming Seong Deputy Chairman of the Board October 28, 1999
Lim Ming Seong
/ s / Barry Waite President and Chief Executive October 28, 1999
Barry Waite Officer (principal executive
officer)
/ s / Chia Song Hwee Chief Financial Officer (principal October 28, 1999
Chia Song Hwee financial and accounting officer)
/ s / Sum Soon Lim Director October 28, 1999
Sum Soon Lim
/ s / James H. Van Tassel Director October 28, 1999
James H. Van Tassel
/ s / Aubrey C. Tobey Director October 28, 1999
Aubrey C. Tobey
/ s / Robert Edmund La Blanc Director October 28, 1999
Robert Edmund La Blanc
</TABLE>
S-1
<PAGE> 7
SIGNATURES
<TABLE>
<S> <C> <C>
/ s / Andre Borrel Director October 28, 1999
Andre Borrel
/ s / Charles E. Thompson Director October 28, 1999
Charles E. Thompson
/ s / Koh Beng Seng Director October 28, 1999
Koh Beng Seng
/ s / Tsugio Makimoto Director October 28, 1999
Tsugio Makimoto
/ s / Thomas H.R. Gurnee Authorized Representative in the October 28, 1999
Thomas H.R. Gurnee United States
</TABLE>
S-2
<PAGE> 8
SIGNATURES
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
-------
<S> <C>
4.1 Memorandum and New Articles of Association of the Registrant
(incorporated by reference to Exhibit 3 to Amendment No. 2
to the Registration Statement on form F-1 filed by the
Registrant on October 25, 1999, as amended (Registration No.
333-88397)).
4.2 Form of Deposit Agreement by and among the Registrant,
Citibank, N.A. and the holders and beneficial owners of
Receipts issued thereunder (including as an exhibit, the
form of American Depositary Receipt) (incorporated by
reference to Exhibit 4 to the Registration Statement on Form
F-6 filed by Citibank, N.A. on October 8, 1999 (Registration
No. 333-88623)).
4.3 Form of specimen certificate for ordinary shares
(incorporated by reference to Exhibit 4.2 to Amendment No. 2
to the Registration Statement on Form F-1 filed by the
Registrant on October 25, 1999, as amended (Registration No.
333-88397)).
4.4 Chartered Semiconductor Manufacturing Ltd Share Option Plan 1999
(including as an exhibit the form of Share Option Agreement).
5 Opinion of Allen & Gledhill.
23 Consent of KPMG.
24 Power of Attorney (included on the signature page of this
Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.4
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
SHARE OPTION PLAN 1999
ADOPTED ON 30 MARCH 1999
AMENDED ON 27 OCTOBER 1999
BY THE EXECUTIVE RESOURCE AND COMPENSATION COMMITTEE
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
SECTION 1. ESTABLISHMENT AND PURPOSE......................................4
SECTION 2. ADMINISTRATION.................................................4
(a) Committee of the Board of Directors................................4
(b) Duties and Powers of the Committee.................................4
SECTION 3. ELIGIBILITY....................................................5
(a) General Rule.......................................................5
(b) Ten-Percent Shareholders...........................................5
SECTION 4. SHARES SUBJECT TO PLAN.........................................5
(a) Basic Limitation...................................................5
(b) Additional Shares..................................................6
SECTION 5. TERMS AND CONDITIONS OF OPTIONS................................6
(a) Share Option Agreement.............................................6
(b) Number of Shares...................................................6
(c) Exercise Price.....................................................7
(d) Withholding Taxes..................................................7
(e) Exercisability.....................................................7
(f) Accelerated Exercisability.........................................7
(g) Basic Term.........................................................7
(h) Nontransferability.................................................7
(i) Termination of Service (Except by Death)...........................7
(j) Leave of Absence...................................................8
(k) Death of Optionee..................................................8
(l) No Rights as a Shareholder.........................................8
(m) Provisions Applicable to Section 162(m) Options....................9
SECTION 6. PAYMENT FOR SHARES.............................................9
(a) General Rule.......................................................9
(b) Surrender of Shares................................................9
(c) Exercise/Sale......................................................9
(d) Exercise/Pledge....................................................9
SECTION 7. ADJUSTMENT OF SHARES...........................................9
(a) General............................................................9
</TABLE>
2
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
(b) Mergers and Consolidations.........................................10
(c) Reservation of Rights..............................................10
SECTION 8. SECURITIES LAWS REQUIREMENTS...................................10
(a) General............................................................11
(b) Financial Reports..................................................11
SECTION 9. NO RETENTION RIGHTS............................................11
SECTION 10. DURATION AND AMENDMENTS.......................................11
(a) Term of the Plan...................................................11
(b) Right to Amend or Terminate the Plan...............................11
(c) Effect of Amendment or Termination.................................11
SECTION 11. DEFINITIONS...................................................11
SECTION 12. EXECUTION.....................................................15
</TABLE>
3
<PAGE> 4
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
SHARE OPTION PLAN 1999
SECTION 1. ESTABLISHMENT AND PURPOSE.
The purpose of the Plan is to offer selected individuals an opportunity
to acquire a proprietary interest in the success of the Company, or to increase
such interest, by exercising Options to purchase the Company's Shares. Options
granted under the Plan may include Nonstatutory Options as well as ISOs intended
to qualify under Section 422 of the U.S. Tax Code.
Capitalized terms are defined in Section 11.
SECTION 2. ADMINISTRATION.
(a) COMMITTEE OF THE BOARD OF DIRECTORS. The Plan shall be
administered by the Committee. The Committee shall consist solely of two or more
members of the Board of Directors appointed by and holding office at the
pleasure of the Board of Directors; provided, however, that in the event that
the Board of Directors or the Committee determines that the Plan is to comply
with Section 162(m) of the U.S. Tax Code, the Committee shall consist solely of
two or more Company Independent Directors appointed by and holding office at the
pleasure of the Board of Directors, each of whom is an "outside director" for
purposes of Section 162(m) of the U.S. Tax Code. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board of Directors.
Vacancies in the Committee may be filled by the Board of Directors.
(b) DUTIES AND POWERS OF THE COMMITTEE. It shall be the duty of the
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and the
Share Option Agreements, and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Share Option
Agreement provided that the rights or obligations of the holder of the Option
that is the subject of any such Share Option Agreement are not affected
adversely. Any such interpretations and rules with respect to ISOs shall be
consistent with the provisions of Section 422 of the U.S. Tax Code. In its
absolute discretion, the Board of Directors may at any time and from time to
time exercise any and all rights and duties of the Committee under the Plan
except, in the case of Section 162(m) Options, with respect to matters which
under Section 162(m) of the U.S. Tax Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee. Notwithstanding the foregoing, the full Board of Directors, acting by
a majority of its members in office, shall conduct the general administration of
the Plan with respect to Options granted to Outside Directors. All decisions,
interpretations and other actions of the Committee or the Board of Directors, as
the case may be, shall be final and binding on all Optionees and all persons
4
<PAGE> 5
deriving their rights from an Optionee. The Committee may, but need not,
delegate from time to time some or all of its authority to grant Options under
the Plan to a committee consisting of one or more members of the Committee or of
one or more officers of the Company; provided, however, that the Committee may
not delegate its authority to grant (i) Section 162(m) Options or (ii) Options
to individuals who are officers of the Company who are delegated authority by
the Committee hereunder. Any delegation hereunder shall be subject to the
restrictions and limits that the Committee specifies at the time of such
delegation of authority and may be rescinded at any time by the Committee. At
all times, any delegate appointed under this Section 2(b) shall serve in such
capacity at the pleasure of the Committee.
SECTION 3. ELIGIBILITY.
(a) GENERAL RULE. Employees, Outside Directors and Consultants shall
be eligible for the grant of Options except as follows:
(i) Employees of Affiliated Companies and SMP, Outside Directors
and Consultants shall not be eligible for the grant of ISOs;
(ii) Employees, Outside Directors and Consultants of Affiliated
Companies who are citizens of the United States or who are deemed to be
resident in the United States shall not be eligible for the grant of
Options; and
(iii) Employees of SMP who are citizens of the United States or
who are deemed to be resident in the United States shall not be eligible
for the grant of Options.
(b) TEN-PERCENT SHAREHOLDERS. An individual who owns more than 10%
of the total combined voting power of all classes of outstanding shares of the
Company, its Parent or any of its Subsidiaries shall not be eligible for
designation as an Optionee unless (i) the Exercise Price is at least 110% of the
Fair Market Value of a Share on the date of grant and (ii) in the case of an
ISO, such ISO by its terms is not exercisable after the expiration of five years
from the date of grant. For purposes of this Subsection (b), in determining
share ownership, the attribution rules of Section 424(d) of the U.S. Tax Code
shall be applied.
SECTION 4. SHARES SUBJECT TO PLAN.
(a) BASIC LIMITATION. Shares offered under the Plan may be
authorized but unissued Shares. The aggregate number of Shares that may be
issued under this Plan and under or pursuant to all other share incentive and
option schemes approved by the Board of Directors and contracts of employment
(upon exercise of Options or other rights to acquire Shares) shall not exceed
107,160,000 Shares. Such number shall be subject to adjustment pursuant to
Section 7. The aggregate number of Shares that are subject to Options or other
rights outstanding at any time under the Plan and under or pursuant to all other
share incentive and option schemes approved by the Board of Directors and
contracts of employment shall not exceed the number of Shares that then remain
available for issuance. The Company, during the term of the Plan, shall at
5
<PAGE> 6
all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan. In the event that the Board of Directors or the
Committee determines that the Plan is to comply with Section 162(m) of the U.S.
Tax Code, the maximum number of Shares which may be subject to Options granted
under the Plan to any individual in any fiscal year shall not exceed the Award
Limit and, to the extent required by Section 162(m) of the U.S. Tax Code, shares
subject to Options which are canceled continue to be counted against the Award
Limit.
(b) ADDITIONAL SHARES. In the event that any outstanding Option for
any reason expires or is cancelled or otherwise terminated, the Shares allocable
to the unexercised portion of such Option shall again be available for the
purposes of the Plan and all other share incentive and option schemes approved
by the Board of Directors and contracts of employment. Notwithstanding the
foregoing, no Shares may again be optioned hereunder if such action would cause
an ISO to fail to qualify as an incentive stock option under Section 422 of the
U.S. Tax Code.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS.
(a) SHARE OPTION AGREEMENT. Each grant of an Option under the Plan
shall be evidenced by a Share Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions which are not
inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Share Option Agreement; provided, however, that the terms and
conditions of Section 162(m) Options shall include, but not be limited to, such
terms and conditions as may be necessary to meet the applicable provisions of
Section 162(m) of the U.S. Tax Code. The provisions of the various Share Option
Agreements entered into under the Plan need not be identical. Share Option
Agreements evidencing Section 162 (m) Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the U.S. Tax Code. Share Option Agreements evidencing ISOs shall
contain such terms and conditions as may be necessary to meet the applicable
provisions of Section 422 of the U.S. Tax Code
(b) NUMBER OF SHARES. Each Share Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 7. The Share Option
Agreement shall also specify whether the Option is an ISO or a Nonstatutory
Option.
(c) EXERCISE PRICE. Each Share Option Agreement shall specify the
Exercise Price. The Exercise Price of an ISO shall not be less than 100% of the
Fair Market Value of a Share on the date of grant, and a higher percentage may
be required by Section 3(b). Subject to Section 3(b), the Exercise Price of an
Option shall not be less than the par value of a Share, unless otherwise
permitted by applicable law; provided, however, that in the case of Section
162(m) Options, such price shall not be less than 100% of the Fair Market Value
of a Share on the date the Option is granted. Subject to the foregoing, the
Exercise Price under any Option shall be determined by the Committee at its sole
discretion. The Exercise Price shall be payable in a form described in Section
6.
6
<PAGE> 7
(d) WITHHOLDING TAXES. As a condition to the exercise of an Option,
the Optionee shall make such arrangements as the Committee may require for the
satisfaction of any withholding tax obligations that may arise in connection
with such exercise. The Optionee shall also make such arrangements as the
Committee may require for the satisfaction of any withholding tax obligations
that may arise in connection with the disposition of Shares acquired by
exercising an Option.
(e) EXERCISABILITY. Each Share Option Agreement shall specify the
date when all or any installment of the Option is to become exercisable. The
exercisability provisions of any Share Option Agreement shall be determined by
the Committee at its sole discretion.
(f) ACCELERATED EXERCISABILITY. All of an Optionee's Options shall
become exercisable in full if (i) the applicable Share Option Agreement does not
provide otherwise, (ii) the Company is subject to a Change in Control before the
Optionee's Service terminates, (iii) such Options do not remain outstanding,
(iv) such Options are not assumed by the surviving corporation or its parent and
(v) the surviving corporation or its parent does not substitute options with
substantially the same terms for such Options. If (i) the Company is subject to
a Change in Control before an Optionee's Service terminates, (ii) the Optionee's
Options do not become exercisable in full under the preceding sentence and (iii)
the applicable Share Option Agreement does not provide otherwise, then the
exercisability schedule in respect of the Optionee's Options that were
outstanding at the time of such Change in Control shall thereupon accelerate by
12 months. If (i) the Company makes an underwritten initial public offering of
its equity securities before an Optionee's Service terminates and (ii) the
applicable Share Option Agreement does not provide otherwise, then the
exercisability schedule in respect of the Optionee's Options that were
outstanding at the time of such offering shall thereupon accelerate by 12
months.
(g) BASIC TERM. The Share Option Agreement shall specify the term of
the Option. The term shall not exceed 10 years from the date of grant, and a
shorter term may be required by Section 3(b). Subject to the preceding sentence,
the Committee at its sole discretion shall determine when an Option is to
expire.
(h) NONTRANSFERABILITY. No Option shall be transferable by the
Optionee other than to an Optionee's personal representative on the death of
that Optionee. An Option may be exercised during the lifetime of the Optionee
only by the Optionee or by the Optionee's guardian or legal representative or
such other person who has the management of the Optionee's estate. No Option or
interest therein may be transferred, assigned, pledged or hypothecated by the
Optionee or by the Optionee's guardian or legal representative or such person
who has the management of the Optionee's estate, or during the Optionee's
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
(i) TERMINATION OF SERVICE (EXCEPT BY DEATH). If an Optionee's
Service terminates for any reason other than the Optionee's death, then the
Optionee's Options shall expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection (g)
above;
7
<PAGE> 8
(ii) The date 30 days after the termination of the Optionee's
Service for any reason other than Disability, or such later date as the
Committee may determine; or
(iii) The date 12 months after the termination of the Optionee's
Service by reason of Disability, or such later date as the Committee may
determine.
The Optionee or his guardian or legal representative or such other person who
has the management of the Optionee's estate may exercise all or part of the
Optionee's Options at any time before the expiration of such Options under the
preceding sentence, but only to the extent that such Options had become
exercisable before the Optionee's Service terminated (or became exercisable as a
result of the termination). The balance of such Options shall lapse when the
Optionee's Service terminates. In the event that the Optionee dies after the
termination of the Optionee's Service but before the expiration of the
Optionee's Options, all or part of such Options may be exercised (prior to
expiration) by the Optionee's personal representatives, but only to the extent
that such Options had become exercisable before the Optionee's Service
terminated (or became exercisable as a result of the termination).
(j) LEAVE OF ABSENCE. For purposes of Subsection (i) above, Service
shall be deemed to continue while the Optionee is on a bona fide leave of
absence, if such leave was approved by the Company in writing and if continued
crediting of Service for this purpose is expressly required by the terms of such
leave or by applicable law (as determined by the Company); provided, however,
that, with respect to ISOs, unless otherwise determined by the Committee in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a termination of Service if, and to the extent that, such leave
of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the U.S. Tax Code and the then applicable
regulations and revenue rulings under such Section.
(k) DEATH OF OPTIONEE. If an Optionee dies while the Optionee is in
Service, then the Optionee's Options shall expire on the earlier of the
following dates:
(i) The expiration date determined pursuant to Subsection (g)
above; or
(ii) The date 12 months after the Optionee's death.
All or part of the Optionee's Options may be exercised at any time before the
expiration of such Options under the preceding sentence by the Optionee's
personal representatives, but only to the extent that such Options had become
exercisable before the Optionee's death or became exercisable as a result of the
death. The balance of such Options shall lapse when the Optionee dies.
(l) NO RIGHTS AS A SHAREHOLDER. An Optionee, or his guardian, legal
representative or such other person who has the management of the Optionee's
estate, or the personal representatives of an Optionee in the event of the death
of an Optionee, shall have no rights as a shareholder with respect to any Shares
covered by the Optionee's Option until such person has
8
<PAGE> 9
been allotted and issued such Shares by filing a notice of exercise and paying
the Exercise Price pursuant to the terms of such Option.
(m) PROVISIONS APPLICABLE TO SECTION 162(M) OPTIONS. The Committee,
in its discretion, may determine whether an Option is to qualify as a Section
162(m) Option. In the event that the Board of Directors or the Committee
determines that the Plan is to comply with Section 162(m) of the U.S. Tax Code,
the Plan and any Section 162(m) Option granted thereunder shall be subject to
any additional limitations set forth in Section 162(m) of the U.S. Tax Code
(including any amendment to Section 162(m) of the U.S. Tax Code) or any
regulations or rulings issued thereunder that are requirements for qualification
as performance-based compensation as described in Section 162(m)(4)(C) of the
U.S. Tax Code, and the Plan shall be deemed amended to the extent necessary to
conform to such requirements.
SECTION 6. PAYMENT FOR SHARES.
(a) GENERAL RULE. The entire Exercise Price of Shares issued under
the Plan shall be payable in cash or cash equivalents at the time when the
Options are exercised, except as otherwise provided in this Section 6.
(b) SURRENDER OF SHARES. To the extent that a Share Option Agreement
so provides and provided that the relevant requirements of the Companies Act,
Chapter 50 of Singapore and the requirements of all other prevailing laws and
regulations have been complied with, all or any part of the Exercise Price may
be paid by surrendering Shares that are already owned by the Optionee. Such
Shares shall be valued at their Fair Market Value on the date when the Option is
exercised. The Optionee shall not surrender Shares in payment of the Exercise
Price if such action would cause the Company to recognize compensation expense
(or additional compensation expense) with respect to the Option for financial
reporting purposes.
(c) EXERCISE/SALE. To the extent that a Share Option Agreement so
provides, and if Shares are publicly traded, payment may be made all or in part
by the delivery (on a form prescribed by the Company) of an irrevocable
direction to a securities broker approved by the Company to sell Shares and to
deliver all or part of the sales proceeds to the Company in payment of all or
part of the Exercise Price and any withholding taxes.
(d) EXERCISE/PLEDGE. To the extent that a Share Option Agreement so
provides, and if Shares are publicly traded, payment may be made all or in part
by the delivery (on a form prescribed by the Company) of an irrevocable
direction to pledge Shares to a securities broker or lender approved by the
Company, as security for a loan, and to deliver all or part of the loan proceeds
to the Company in payment of all or part of the Exercise Price and any
withholding taxes.
SECTION 7. ADJUSTMENT OF SHARES.
(a) GENERAL. In the event of a subdivision of the outstanding
Shares, a declaration of a dividend payable in Shares, a declaration of an
extraordinary dividend payable in a form other than Shares in an amount that has
a material effect on the Fair Market Value of the Shares, a
9
<PAGE> 10
consolidation of the outstanding Shares into a lesser number of Shares, a
recapitalization, a reclassification or a similar occurrence, the Board of
Directors or the Committee shall make appropriate adjustments in one or more of
(i) the number of Shares available for future grants under Section 4, (ii) the
number of Shares covered by each outstanding Option or (iii) the Exercise Price
under each outstanding Option. With respect to Section 162(m) Options which are
granted to Section 162(m) Participants, no adjustment or action described in
this Section 7 or in any other provision of the Plan shall be authorized to the
extent that such adjustment or action would cause such Option to fail to so
qualify under Section 162(m)(4)(C) of the U.S. Tax Code, or any successor
provisions thereto. No adjustment or action described in this Section 7 or in
any other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1) of the
U.S. Tax Code.
(b) MERGERS AND CONSOLIDATIONS. In the event that the Company is a
party to a merger or consolidation, outstanding Options shall be subject to the
agreement of merger or consolidation, and the Board of Directors or the
Committee shall make appropriate adjustments in one or more of (i) the number of
Shares available for future grants under Section 4, (ii) the number of Shares
covered by each outstanding Option or (iii) the Exercise Price under each
outstanding Option. Such agreement, without the Optionees' consent, shall
provide for one of the following:
(i) The continuation of such outstanding Options by the Company
(if the Company is the surviving corporation);
(ii) The assumption of the Plan and such outstanding Options by
the surviving corporation or its parent;
(iii) The substitution by the surviving corporation or its
parent of options with substantially the same terms for such outstanding
Options; or
(iv) The cancellation of each outstanding Option after payment
to the Optionee of an amount in cash or cash equivalents equal to (A)
the Fair Market Value of the Shares subject to such Option at the time
of the merger or consolidation minus (B) the Exercise Price of the
Shares subject to such Option.
(c) RESERVATION OF RIGHTS. Except as provided in this Section 7, an
Optionee shall have no rights by reason of (i) any subdivision or consolidation
of shares of any class, (ii) the payment of any dividend or (iii) any other
increase or decrease in the number of shares of any class. Any issuance by the
Company of shares of any class, or securities convertible into shares of any
class, shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or Exercise Price of Shares subject to an Option. The
grant of an Option pursuant to the Plan shall not affect in any way the right or
power of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure, to merge or consolidate or to
dissolve, liquidate, sell or transfer all or any part of its business or assets.
SECTION 8. SECURITIES LAW REQUIREMENTS.
10
<PAGE> 11
(a) GENERAL. Shares shall not be issued under the Plan unless the
issuance and delivery of such Shares comply with (or are exempt from) all
applicable requirements of law, including (without limitation) the U.S.
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, all other securities laws and regulations, and the regulations of
any exchange or other securities market on which the Company's securities may
then be traded.
(b) FINANCIAL REPORTS. The Company each year shall furnish to
Optionees and shareholders who have received Shares under the Plan its balance
sheet and income statement, unless such Optionees are key Employees whose duties
with the Company assure them access to equivalent information. Such balance
sheet and income statement need not be audited.
SECTION 9. NO RETENTION RIGHTS.
Nothing in the Plan or in any right or Option granted under the Plan
shall confer upon the Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Company (or any Parent or, Subsidiary employing or retaining the
Optionee) or of the Optionee, which rights are hereby expressly reserved by
each, to terminate his or her Service at any time and for any reason, with or
without cause.
SECTION 10. DURATION AND AMENDMENTS.
(a) TERM OF THE PLAN. The Plan, as set forth herein, shall become
effective on the date of its approval by the Company's shareholders. The Plan
shall terminate automatically 10 years after its adoption by the Board of
Directors and may be terminated on any earlier date pursuant to Subsection (b)
below.
(b) RIGHT TO AMEND OR TERMINATE THE PLAN. The Board of Directors may
amend, suspend or terminate the Plan at any time and for any reason; provided,
however, that any amendment of the Plan which increases the number of Shares
available for issuance under the Plan (except as provided in Section 7), or
which materially changes the class of persons who are eligible for the grant of
ISOs, shall be subject to the approval of the Company's shareholders.
Shareholder approval shall not be required for any other amendment of the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. No Options shall be granted
and no Shares shall be issued under the Plan after the termination thereof,
except upon exercise of an Option granted prior to such termination. The
termination of the Plan, or any amendment thereof, shall not affect any Share
previously issued or any Option previously granted under the Plan. No Option may
be granted during any period of suspension of the Plan, and in no event may any
ISO be granted under the Plan after the first to occur of (i) the expiration of
ten years from the date the Plan is originally adopted by the Board of
Directors, or (ii) the expiration of ten years from the date the Plan is
originally approved by the Company's stockholders.
SECTION 11. DEFINITIONS.
11
<PAGE> 12
(a) "AFFILIATED COMPANY" shall mean any corporation (other than the
Company, a Parent or a Subsidiary) in an unbroken chain of corporations
beginning with a Parent, if each of the corporations other than the last
corporation in the unbroken chain owns shares possessing more than 50% of the
total combined voting power of all classes of shares in one of the other
corporations in such chain.
(b) "AWARD LIMIT" shall mean 26,790,000 Shares, subject to
adjustment pursuant to Section 7.
(c) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.
(d) "CHANGE IN CONTROL" shall mean:
(i) A transfer of the Company's equity securities to any person
who was not a shareholder of the Company immediately prior to such
transfer, if such person owns immediately after such transfer more than
50% of the voting power of the outstanding securities of the Company;
(ii) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate
reorganization, if persons who were not shareholders of the Company
immediately prior to such merger, consolidation or other reorganization
own immediately after such merger, consolidation or other reorganization
more than 50% of the voting power of the outstanding securities of each
of (A) the continuing or surviving entity and (B) any direct or indirect
parent corporation of such continuing or surviving entity; or
(iii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its sole purpose is to
create a holding company that will be owned in substantially the same
proportions by the persons who held the Company's securities immediately before
such transaction.
(e) "COMMITTEE" shall mean the Executive Resource and Compensation
Committee of the Board of Directors, or another committee or subcommittee of the
Board of Directors, appointed as provided in Section 2(a).
(f) "COMPANY" shall mean Chartered Semiconductor Manufacturing Ltd,
a company incorporated in the Republic of Singapore.
(g) "COMPANY INDEPENDENT DIRECTOR" shall mean a member of the Board
of Directors who is not an Employee of the Company, a Parent or a Subsidiary or
an Affiliated Company.
(h) "CONSULTANT" shall mean any consultant or advisor (other than an
Employee or Outside Director) if (i) the consultant or advisor renders bona fide
services to the Company, a
12
<PAGE> 13
Parent or a Subsidiary or an Affiliated Company, (ii) the services rendered by
the consultant or adviser are not in connection with the offer or sale of
securities in a capital-raising transaction and do not directly or indirectly
promote or maintain a market for the Company's securities, and (iii) the
consultant or advisor is a natural person who has contracted directly with the
Company, a Parent or a Subsidiary or an Affiliated Company, to render such
services.
(i) "DISABILITY" shall mean that the Optionee is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment.
(j) "EMPLOYEE" shall mean any individual who is an employee of
the Company, a Parent or a Subsidiary or an Affiliated Company or SMP.
(k) "EXERCISE PRICE" shall mean the amount for which one Share
may be purchased upon exercise of an Option, as specified by the Board of
Directors in the applicable Share Option Agreement.
(l) "FAIR MARKET VALUE" shall mean the fair market value of a
Share, determined as follows:
(i) if the Shares are listed on any established stock exchange
or a national market system, the Fair Market Value shall be the mean of
the closing sales prices for a Share (or the closing bids, if no sales
were reported) as quoted on such exchange or system for the last 10
market trading days prior to the date of determination, as reported in
The Straits Times or such other source as the Committee deems reliable;
(ii) if the Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market
Value shall be the mean between the high bid and low asked prices for a
Share on the last market trading day prior to the date of determination;
or
(iii) in the absence of an established market or quotation
system for the Shares, the Fair Market Value shall be determined by the
Board of Directors in good faith. Such determination shall be conclusive
and binding on all persons.
(m) "ISO" shall mean an employee incentive stock option described in
Section 422 of the U.S. Tax Code.
(n) "NONSTATUTORY OPTION" shall mean a stock option (or portion
thereof) that is not designated as an ISO by the Committee, or which is
designated as an ISO by the Committee but fails to qualify as an incentive stock
option within the meaning of Section 422 of the U.S. Tax Code.
(o) "OFFICER" shall mean any director or secretary or a person
employed in an executive capacity .
(p) "OPTION" shall mean an ISO or Nonstatutory Option granted under
the Plan and
13
<PAGE> 14
entitling the holder to purchase Shares.
(q) "OPTIONEE" shall mean an individual who holds an Option.
(r) "OUTSIDE DIRECTOR" shall mean an individual who (i) is a member
of the Board of Directors or a member of the board of directors of a Parent,
Subsidiary or Affiliated Company and (ii) is not an Employee.
(s) "PARENT" shall mean any corporation (other than the Company) in
an unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns shares possessing more than 50% of the
total combined voting power of all classes of shares in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.
(t) "PLAN" shall mean this Chartered Semiconductor Manufacturing Ltd
Share Option Plan 1999, as amended from time to time.
(u) "SECTION 162(m) PARTICIPANT" shall mean any key Employee
designated by the Committee as a key Employee whose compensation for the fiscal
year in which the key Employee is so designated or a future fiscal year may be
subject to the limit on deductible compensation imposed by Section 162(m) of the
U.S. Tax Code.
(v) "SECTION 162(m) OPTION" shall mean an Option intended to qualify
as performance-based compensation as described in Section 162(m)(4)(C) of the
U.S. Tax Code.
(w) "SERVICE" shall mean service as an Employee, Outside Director,
or Consultant.
(x) "SHARE" shall mean one ordinary share, of par value Singapore
$0.26, in the capital of the Company, as adjusted in accordance with Section 7
(if applicable).
(y) "SHARE OPTION AGREEMENT" shall mean the agreement between the
Company and an Optionee which contains the terms, conditions and restrictions
pertaining to the Optionee's Option.
(z) "SMP" means Silicon Manufacturing Partners Pte Ltd, a company
incorporated in Singapore and an associated company of the Company.
(aa) "SUBSIDIARY" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns shares
possessing more than 50% of the total combined voting power of all classes of
shares in one of the other corporations in such chain. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.
(bb) "U.S. TAX CODE" shall mean the U.S. Internal Revenue Code of
1986, as amended.
14
<PAGE> 15
SECTION 12. EXECUTION.
To record the adoption of the Plan by the Company's shareholders, the
Company has caused its authorized officer to execute the same.
Chartered Semiconductor Manufacturing Ltd
By: /s/ BARRY WAITE
--------------------------------------
Title: PRESIDENT & CEO
15
<PAGE> 16
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
SHARE OPTION PLAN 1999
NOTICE OF SHARE OPTION GRANT
You have been granted the following option to purchase Shares of
Chartered Semiconductor Manufacturing Ltd (the "Company"):
<TABLE>
<S> <C>
Name of Optionee:
Total Number of Shares Granted:
Type of Option: Incentive Share Option
Nonstatutory Share Option
Exercise Price Per Share: $
Date of Grant:
Date Exercisable: This option may be exercised with
respect to the first 20% of the
Shares subject to this option when
the Optionee completes 12 months of
continuous Service after the Vesting
Commencement Date. This option may
be exercised with respect to an
additional 20% of the Shares subject
to this option when the Optionee
completes each year of continuous
Service thereafter.
Vesting Commencement Date:
Expiration Date:
</TABLE>
By your signature and the signature of the Company's representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the Share Option Plan 1999 and the Share Option
Agreement, both of which are attached to and made a part of this document.
OPTIONEE: CHARTERED SEMICONDUCTOR MANUFACTURING LTD
By:
Title:
<PAGE> 17
[THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.]
CHARTERED SEMICONDUCTOR MANUFACTURING LTD
SHARE OPTION PLAN 1999:
[FORM OF]
SHARE OPTION AGREEMENT
SECTION 1. GRANT OF OPTION.
(a) OPTION. On the terms and conditions set forth in the Notice of Share
Option Grant and this Agreement, the Company grants to the Optionee on the Date
of Grant the option to purchase at the Exercise Price the number of Shares set
forth in the Notice of Share Option Grant. If the option is intended to be an
ISO, the Exercise Price is agreed to be at least 100% of the Fair Market Value
per Share on the Date of Grant (110% of Fair Market Value if Section 3(b) of the
Plan applies). If the option is intended to be a Nonstatutory Option, the
Exercise Price is agreed to be at least the par value of a Share, unless
otherwise permitted by applicable law (110% of the Fair Market Value per share
on the Date of Grant if Section 3(b) of the Plan applies)[; provided, however,
that if the option is a Section 162(m) Option, the Exercise Price is agreed to
be at least 100% of the Fair Market Value of a Share on the Date of Grant]. This
option is intended to be an ISO or a Nonstatutory Option, as provided in the
Notice of Share Option Grant.
(b) SHARE OPTION PLAN AND DEFINED TERMS. This option is granted pursuant
to the Plan, a copy of which the Optionee acknowledges having received. The
provisions of the Plan are incorporated into this Agreement by this reference.
Capitalized terms are defined in Section 13 of this Agreement.
SECTION 2. RIGHT TO EXERCISE.
(a) EXERCISABILITY. Subject to Subsection (c) below and the other
conditions set forth in this Agreement, all or part of this option may be
exercised prior to its expiration at the time or times set forth in the Notice
of Share Option Grant.
(b) ACCELERATED EXERCISABILITY. This option shall become exercisable in
full if (i) the Company is subject to a Change in Control before the Optionee's
Service terminates, (ii) this option does not remain outstanding, (iii) this
option is not assumed by the surviving corporation or its parent and (iv) the
surviving corporation or its parent does not substitute an option with
substantially the same terms for this option. If (i) the Company is subject to a
Change
2
<PAGE> 18
in Control before the Optionee's Service terminates and (ii) this option
does not become exercisable in full under the preceding sentence, then the
exercisability schedule in respect of this option shall thereupon accelerate by
12 months. If the Company makes an underwritten initial public offering of its
equity securities before the Optionee's Service terminates, then the
exercisability schedule in respect of this option shall thereupon accelerate by
12 months.
(c) $100,000 LIMITATION. If this option is designated as an ISO in the
Notice of Share Option Grant, then the option shall be treated as a Nonqualified
Option to the extent (and only to the extent) that the option otherwise would
not be treated as an ISO by reason of the $100,000 annual limitation under
Section 422(d) of the U.S. Tax Code.
SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION.
Except as otherwise provided in this Agreement, this option and the
rights and privileges conferred hereby shall not be sold, pledged or otherwise
transferred (whether by operation of law or otherwise) and shall not be subject
to sale under execution, attachment, levy or similar process.
SECTION 4. EXERCISE PROCEDURES.
(a) NOTICE OF EXERCISE. During a period described in Section 2(a), the
Optionee or his guardian or legal representative or such person who has the
management of the Optionee's estate, or the Optionee's personal representatives
in the case of the death of the Optionee may exercise this option by giving
written notice to the Company pursuant to Section 12(c). The notice shall
specify the election to exercise this option, the number of Shares for which it
is being exercised and the form of payment. The notice shall be signed by the
person exercising this option. In the event that this option is being exercised
by the guardian or legal representative or such person who has the management of
the Optionee's estate, or personal representatives of the Optionee, the notice
shall be accompanied by proof (satisfactory to the Company) of the guardian's or
legal representative's or such person's, or personal representatives right to
exercise this option. The Optionee guardian or legal representative or such
person who has the management of the Optionee's estate, or the Optionee's
personal representatives shall deliver to the Company, at the time of giving the
notice, payment in a form permissible under Section 5 for the full amount of the
Exercise Price.
(b) ISSUANCE OF SHARES. After receiving a proper notice of exercise, the
Company shall cause to be issued a certificate or certificates for the Shares as
to which this option has been exercised, registered in the name of the person
exercising this option. The Company shall cause such certificate or certificates
to be delivered to or upon the order of the person exercising this option.
(c) WITHHOLDING TAXES. In the event that the Company determines that it
is required to withhold any tax as a result of the exercise of this option, the
Optionee, as a condition to the exercise of this option, shall make arrangements
satisfactory to the Company to enable it to satisfy all withholding
requirements. The Optionee shall also make arrangements satisfactory to the
Company to enable it to satisfy any withholding requirements that may arise in
connection
3
<PAGE> 19
with the vesting or disposition of Shares acquired by exercising this
option.
SECTION 5. PAYMENT FOR SHARES.
(a) All of the Exercise Price must be paid in cash or cash
equivalents or such other mode of payment acceptable to the Committee.
(b) Exercise/Sale. If Shares are publicly traded, payment may be
made all or in part by the delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker approved by
the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
(c) Exercise/Pledge. If Shares are publicly traded, payment may
be made all or in part by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Shares to a securities
broker or lender approved by the Company, as security for a loan, and to
deliver all or part of the loan proceeds to the Company in payment of
all or part of the Exercise Price and any withholding taxes.
SECTION 6. TERM AND EXPIRATION.
(a) BASIC TERM. This option shall in any event expire on the
expiration date set forth in the Notice of Share Option Grant, which date is 10
years after the Date of Grant (five years after the Date of Grant if this option
is designated as an ISO in the Notice of Share Option Grant and Section 3(b) of
the Plan applies).
(b) TERMINATION OF SERVICE (EXCEPT BY DEATH). If the Optionee's
Service terminates for any reason other than death, then this option shall
expire on the earliest of the following occasions:
(i) The expiration date determined pursuant to Subsection
(a) above;
(ii) The date 30 days after the termination of the
Optionee's Service for any reason other than Disability; or
(iii) The date 12 months after the termination of the
Optionee's Service by reason of Disability.
The Optionee or his guardian or legal representative or such person who has the
management of the Optionee's estate, may exercise all or part of this option at
any time before its expiration under the preceding sentence, but only to the
extent that this option had become exercisable before the Optionee's Service
terminated. When the Optionee's Service terminates, this option shall expire
immediately with respect to the number of Shares for which this option is not
yet exercisable. In the event that the Optionee dies after termination of
Service but before the expiration of this option, all or part of this option may
be exercised (prior to expiration) by the
4
<PAGE> 20
Optionee's personal representatives, but only to the extent that this option had
become exercisable before the Optionee's Service terminated.
(c) DEATH OF THE OPTIONEE. If the Optionee dies while in Service,
then this option shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to Subsection
(a) above; or
(ii) The date 12 months after the Optionee's death.
All or part of this option may be exercised at any time before its expiration
under the preceding sentence by the Optionee's personal representatives, but
only to the extent that this option had become exercisable before the Optionee's
death. When the Optionee dies, this option shall expire immediately with respect
to the number of Shares for which this option is not yet exercisable.
(d) LEAVE OF ABSENCE. For any purpose under this Agreement,
Service shall be deemed to continue while the Optionee is on a bona fide leave
of absence, if such leave was approved by the Company in writing and if
continued crediting of Service for such purpose is expressly required by the
terms of such leave or by applicable law (as determined by the Company);
provided, however, that, if the option is intended to be an ISO, unless
otherwise determined by the Committee in its discretion, a leave of absence,
change in status from an employee to an independent contractor or other change
in the employee-employer relationship shall constitute a termination of Service
if, and to the extent that, such leave of absence, change in status or other
change interrupts employment for the purposes of Section 422(a)(2) of the U.S.
Tax Code and the then applicable regulations and revenue rulings under such
Section.
(e) NOTICE CONCERNING ISO TREATMENT. If this option is designated
as an ISO in the Notice of Share Option Grant, it ceases to qualify for
favorable tax treatment as an ISO to the extent it is exercised (i) more than
three months after the date the Optionee ceases to be an Employee for any reason
other than death or permanent and total disability (as defined in Section
22(e)(3) of the U.S. Tax Code), (ii) more than 12 months after the date the
Optionee ceases to be an Employee by reason of such permanent and total
disability or (iii) after the Optionee has been on a leave of absence for more
than 90 days, unless the Optionee's reemployment rights are guaranteed by
statute or by contract.
SECTION 7. LEGALITY OF INITIAL ISSUANCE.
No Shares shall be issued upon the exercise of this option unless
and until the Company has determined that:
(a) It and the Optionee have taken any actions required to
register the Shares under the U.S. Securities Act or to perfect an exemption
from the registration requirements thereof;
(b) Any applicable listing requirement of any securities exchange
or other securities market on which Shares are listed has been satisfied; and
5
<PAGE> 21
(c) Any other provision of applicable law has been satisfied.
SECTION 8. NO REGISTRATION RIGHTS.
The Company may, but shall not be obligated to, register or
qualify the sale of Shares under the U.S. Securities Act or any other applicable
law. The Company shall not be obligated to take any affirmative action in order
to cause the sale of Shares under this Agreement to comply with any law.
SECTION 9. RESTRICTIONS ON TRANSFER.
(a) SECURITIES LAW RESTRICTIONS. Regardless of whether the
offering and sale of Shares under the Plan have been registered under the U.S.
Securities Act or have been registered or qualified under the securities laws of
any state, the Company at its discretion may impose restrictions upon the sale,
pledge or other transfer of such Shares (including the placement of appropriate
legends on share certificates or the imposition of stop-transfer instructions)
if, in the judgment of the Company, such restrictions are necessary or desirable
in order to achieve compliance with the U.S. Securities Act and/or any
applicable securities laws of any state of country or any other law.
(b) MARKET STAND-OFF. In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the U.S. Securities Act or any applicable
laws, including the Company's initial public offering, the Optionee shall not
directly or indirectly sell, make any short sale of, loan, hypothecate, pledge,
offer, grant or sell any option or other contract for the purchase of, purchase
any option or other contract for the sale of, or otherwise dispose of or
transfer, or agree to engage in any of the foregoing transactions with respect
to, any Shares acquired under this Agreement without the prior written consent
of the Company or its underwriters. Such restriction (the "Market Stand-Off")
shall be in effect for such period of time following the date of the final
prospectus for the offering as may be requested by the Company or such
underwriters. In no event, however, shall such period exceed 180 days. The
Market Stand-Off shall in any event terminate two years after the date of the
Company's initial public offering. In the event of the declaration of a dividend
payable in Shares, a division of the outstanding Shares, a recapitalization or a
similar transaction affecting the Company's outstanding securities without
receipt of consideration, any new, substituted or additional securities which
are by reason of such transaction distributed with respect to any Shares subject
to the Market Stand-Off, or into which such Shares thereby become convertible,
shall immediately be subject to the Market Stand-Off. In order to enforce the
Market Stand-Off, the Company may impose stop-transfer instructions with respect
to the Shares acquired under this Agreement until the end of the applicable
stand-off period. The Company's underwriters shall be beneficiaries of the
agreement set forth in this Subsection (b). This Subsection (b) shall not apply
to Shares registered in the public offering under the U.S. Securities Act, and
the Optionee shall be subject to this Subsection (b) only if the directors and
officers of the Company are subject to similar arrangements.
(c) INVESTMENT INTENT AT GRANT. The Optionee represents and
agrees that the Shares to be acquired upon exercising this option will be
acquired for investment, and not with a
6
<PAGE> 22
view to the sale or distribution thereof.
(d) INVESTMENT INTENT AT EXERCISE. In the event that the sale of
Shares under the Plan is not registered under the U.S. Securities Act but an
exemption is available which requires an investment representation or other
representation, the Optionee shall represent and agree at the time of exercise
that the Shares being acquired upon exercising this option are being acquired
for investment, and not with a view to the sale or distribution thereof, and
shall make such other representations as are deemed necessary or appropriate by
the Company and its counsel.
(e) LEGENDS. All certificates evidencing Shares allotted under
this Agreement to residents of the United States in an unregistered transaction
shall bear the following legend (and such other restrictive legends as are
required or deemed advisable under the provisions of any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED,
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
(f) REMOVAL OF LEGENDS. If, in the opinion of the Company and its
counsel, any legend placed on a share certificate representing Shares sold under
this Agreement is no longer required, the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same
number of Shares but without such legend.
(g) ADMINISTRATION. Any determination by the Company and its
counsel in connection with any of the matters set forth in this Section 10 shall
be conclusive and binding on the Optionee and all other persons.
SECTION 10. ADJUSTMENT OF SHARES.
In the event of any transaction described in Section 7(a) of the
Plan, the terms of this option (including, without limitation, the number and
kind of Shares subject to this option and the Exercise Price) shall be adjusted
as set forth in Section 7(a) of the Plan. In the event that the Company is a
party to a merger or consolidation, the terms of this option (including, without
limitation, the number and kind of Shares subject to this option and the
Exercise Price) shall be adjusted as set forth in Section 7(b) of the Plan and
this option shall be subject to the agreement of merger or consolidation, as
provided in Section 7(b) of the Plan.
SECTION 11. MISCELLANEOUS PROVISIONS.
(a) RIGHTS AS A SHAREHOLDER. Neither the Optionee nor his guardian or
legal representative or such person who has the management of the Optionee's
estate, or the Optionee's personal representatives in the event of the death of
the Optionee shall have any rights
7
<PAGE> 23
as a shareholder with respect to any Shares subject to this option until the
Optionee or his guardian or legal representative or such person who has the
management of the Optionee's estate, or the Optionee's personal representatives
(as the case may be) has been allotted and issued such Shares by filing a notice
of exercise and paying the Purchase Price pursuant to Sections 4 and 5.
(b) NO RETENTION RIGHTS. Nothing in this option or in the Plan
shall confer upon the Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Company (or any Parent or Subsidiary employing or retaining the
Optionee) or of the Optionee, which rights are hereby expressly reserved by
each, to terminate his or her Service at any time and for any reason, with or
without cause.
(c) NOTICE. Any notice required by the terms of this Agreement
shall be given in writing and shall be deemed effective upon personal delivery
or upon deposit in the post by registered or certified mail, with postage and
fees prepaid. Notices to the Company shall be addressed to The Human Resource
Manager, Compensation and Benefits at 60 Woodlands Industrial Park D, Street 2,
Singapore 738406 and to the Optionee at the address that he or she most recently
provided to the Company.
(d) ENTIRE AGREEMENT. The Notice of Share Option Grant, this
Agreement and the Plan constitute the entire contract between the parties hereto
with regard to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.
(e) CHOICE OF LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of Singapore, as such laws are applied to
contracts entered into and performed in Singapore.
SECTION 12. DEFINITIONS.
(a) "AFFILIATED COMPANY" shall mean any corporation (other than
the Company, a Parent or a Subsidiary) in an unbroken chain of corporations
beginning with a Parent, if each of the corporations other than the last
corporation in the unbroken chain owns shares possessing more than 50% of the
total combined voting power of all classes of shares in one of the other
corporations in such chain.
(b) "AGREEMENT" shall mean this Share Option Agreement.
(c) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company, as constituted from time to time.
(d) "CHANGE IN CONTROL" shall mean:
(i) A transfer of the Company's equity securities to any
person who was not a shareholder of the Company immediately prior to
such transfer, if such person owns immediately after such transfer more
than 50% of the voting power of the outstanding securities of the
Company;
8
<PAGE> 24
(ii) The consummation of a merger or consolidation of the
Company with or into another entity or any other corporate
reorganization, if persons who were not shareholders of the Company
immediately prior to such merger, consolidation or other reorganization
own immediately after such merger, consolidation or other reorganization
more than 50% of the voting power of the outstanding securities of each
of (A) the continuing or surviving entity and (B) any direct or indirect
parent corporation of such continuing or surviving entity; or
(iii) The sale, transfer or other disposition of all or
substantially all of the Company's assets.
A transaction shall not constitute a Change in Control if its sole
purpose is to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company's
securities immediately before such transaction.
(e) "COMMITTEE" shall mean the Executive Resource and
Compensation Committee of the Board of Directors, or another committee or
subcommittee of the Board of Directors, appointed as provided in Section 2(a) of
the Plan.
(f) "COMPANY" shall mean Chartered Semiconductor Manufacturing
Ltd, a company incorporated in the Republic of Singapore.
(g) "DATE OF GRANT" shall mean the date specified in the Notice
of Share Option Grant, which date shall be the later of (i) the date on which
the Board of Directors resolved to grant this option or (ii) the first day of
the Optionee's Service.
(h) "DISABILITY" shall mean that the Optionee is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment.
(i) "EMPLOYEE" shall mean any individual who is an employee of
the Company, a Parent or a Subsidiary or an Affiliated Company or SMP.
(j) "EXERCISE PRICE" shall mean the amount for which one Share
may be acquired upon exercise of this option, as specified in the Notice of
Share Option Grant.
(k) "FAIR MARKET VALUE" shall mean the fair market value of a
Share, determined as follows:
(i) if the Shares are listed on any established stock
exchange or a national market system, the Fair Market Value shall be the
closing sales price for a Share (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market
trading day prior to the date of determination, as reported in The Wall
Street Journal or such other source as the Committee deems reliable;
(ii) if the Shares are regularly quoted by a recognized
securities
9
<PAGE> 25
dealer but selling prices are not reported, the Fair Market Value shall
be the mean between the high bid and low asked prices for a Share on the
last market trading day prior to the date of determination; or
(iii) in the absence of an established market or quotation
system for the Shares, the Fair Market Value shall be determined by the
Board of Directors in good faith. Such determination shall be conclusive
and binding on all persons.
(l) "ISO" shall mean an employee incentive stock option described
in Section 422 of the U.S. Tax Code.
(m) "NONSTATUTORY OPTION" shall mean a stock option (or portion
thereof) that is not designated as an ISO by the Committee, or which is
designated as an ISO by the Committee but fails to qualify as an incentive stock
option within the meaning of Section 422 of the U.S. Tax Code.
(n) "NOTICE OF SHARE OPTION GRANT" shall mean the document so
entitled to which this Agreement is attached.
(o) "OFFICER" shall mean any director or secretary or a person
employed in an executive capacity.
(p) "OPTIONEE" shall mean the individual named in the Notice of
Share Option Grant.
(q) "PARENT" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns shares possessing more than 50% of the
total combined voting power of all classes of shares in one of the other
corporations in such chain.
(r) "PLAN" shall mean the Chartered Semiconductor Manufacturing
Ltd Share Option Plan 1999, as amended from time to time.
(s) "U.S. SECURITIES ACT" shall mean the Securities Act of 1933
of the United States of America, as amended.
(t) "SERVICE" shall mean service as an Employee.
(u) "SHARE" shall mean one ordinary share, of par value Singapore
$0.26, in the capital of the Company, as adjusted in accordance with Section 7
of the Plan (if applicable).
(v) "SMP" means Silicon Manufacturing Partners Pte Ltd, a company
incorporated in Singapore and an associated company of the Company.
10
<PAGE> 26
(w) "SUBSIDIARY" shall mean any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company, if
each of the corporations other than the last corporation in the unbroken chain
owns shares possessing more than 50%of the total combined voting power of all
classes of shares in one of the other corporations in such chain.
(x) "U.S. TAX CODE" shall mean the Internal Revenue Code of 1986
of the United States of America, as amended.
11
<PAGE> 1
EXHIBIT 5
Chartered Semiconductor Manufacturing Ltd,
60, Woodlands Industrial Park D,
Street 2,
Singapore 738406. 28th October, 1999
Dear Sirs,
1. We have acted as Singapore legal advisers to Chartered Semiconductor
Manufacturing Ltd (the "Company"), a company organised under the laws of
Singapore, in connection with a registration statement on Form S-8 to be filed
by the Company with the Securities and Exchange Commission ("SEC") in the United
States on 28th October, 1999 (the "Registration Statement"), for the
registration under the United States Securities Act of 1933, as amended, of up
to 107,160,000 ordinary shares (the "Shares"), par value of S$0.26 per Share, of
the Company, directly or in the form of American Depository Shares representing
Ordinary Shares, issuable pursuant to the Company's Share Option Plan 1999, as
amended (the "Plan").
2. We have examined the following documents:-
(a) a copy of the Plan;
(b) a draft of the Registration Statement;
(c) copies of the Memorandum of Association and Articles of
Association of the Company, the Certificate of Incorporation
of the Company and the Certificate of Incorporation on
Conversion to a public company of the Company;
(d) copies of the extract of minutes of the Board of Directors of
the Company (the "Board Resolutions") held on 29th July, 1999,
and the minutes of an extraordinary general meeting of the
Company held on 30th March, 1999, the minutes of the annual
general meeting of the Company held on 29th April, 1999 and
the minutes of the extraordinary general meeting of the
Company held on 14th October, 1999 (the "Shareholders'
Resolutions"), authorising, inter alia, the issue of the
Shares pursuant to the Plan; and
(e) such records of the corporate proceedings of the Company as we
have deemed relevant and such other certificates, records and
documents as we deemed necessary for the purposes of this
opinion.
3. We have assumed:-
(a) the genuineness of all signatures, seals and chops (if any) on
all documents and the completeness, and the conformity to
original documents, of all copies submitted to us;
(b) that copies of the Memorandum and Articles of Association and
the Certificate of Incorporation of the Company and the
Certificate of Incorporation on Conversion to a public company
of the Company
<PAGE> 2
2
submitted to us for examination are true, complete and
up-to-date copies;
(c) the conformity to the original documents of all documents
produced to us as copies and the authenticity of the original
documents, which or copies of which have been submitted to us;
(d) that copies of the Board Resolutions and the Shareholders'
Resolutions submitted to us for examination are true, complete
and up to date copies; and
(e) that the Board Resolutions and the Shareholders' Resolutions
have not been rescinded or modified and they remain in full
force and effect and that no other resolution or other action
has been taken which may affect the validity of the Board
Resolutions or the Shareholders' Resolutions.
4. Based upon and subject to the foregoing, we are of the opinion that the
Shares will be duly authorised and, when and to the extent Options are issued
pursuant to the Plan and exercised in accordance with the terms of the Plan and
upon receipt of the approval of the Board of Directors of the Company or a
committee thereof for the allotment and issue of the Shares and, upon the issue
of share certificates representing the Shares in accordance with the Articles of
Association of the Company against payment for the Shares, the Shares will be
validly issued, fully paid and non-assessable. For the purposes of this opinion
we have assumed that the term "non-assessable" in relation to the Shares to be
issued means under Singapore law that holders of such Shares, having fully paid
up all amounts due on such Shares as to nominal amount and premium thereon, are
under no further personal liability to contribute to the assets or liabilities
of the Company in their capacities purely as holders of such Shares.
5. We hereby consent to the filing of this letter as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
United States Securities Act of 1933, as amended or the rules and regulations of
the SEC thereunder.
Yours faithfully,
/s/ Allen & Gledhill
<PAGE> 1
EXHIBIT 23
[Letterhead of KPMG]
The Board of Directors and Shareholders
Chartered Semiconductor Manufacturing Ltd:
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Chartered Semiconductor Manufacturing Ltd (the "Company") regarding
the Company's Share Option Plan 1999 of our report dated August 12, 1999, except
as to Note 26, which is as of October 14, 1999, with respect to the Company's
consolidated financial statements included in the Company's Registration
Statement on Form F-1, as amended (File No. 333-88397).
/s/ KPMG
KPMG
Singapore
October 28, 1999
