As filed with the Securities and Exchange Commission on April 6,2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
SCG Holding Corporation
(Exact Name of Registrant as Specified in Its Charter)
Delaware 36-3840979
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
5005 E. McDowell Road
Phoenix, AZ 85008
(602) 244-6600
(Address of Registrant's Principal Executive Offices)
SCG HOLDING CORPORATION
1999 FOUNDERS STOCK OPTION PLAN
SCG HOLDING CORPORATION
2000 STOCK INCENTIVE PLAN
SCG HOLDING CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plans)
______________________
George H. Cave, Esq.
SCG Holding Corporation
5005 E. McDowell Road
Phoenix, AZ 85008
(602) 244-5226
with a copy to:
Arthur H. Kohn, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, NY 10006
(Name, Address, and Telephone Number, Including Area Code, of Agent for Service)
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Title of each class of securities Amount to be Proposed Proposed Amount of
to be registered registered (1) maximum maximum registration
offering aggregate fee
price per offering price
share (2)
Common Stock, par value $.01 per share 10,051,333 shares $ 1.50 $ 15,077,000 $ 3,980.33
6,025,334 shares $18.00 $108,456,012 $28,632.39
Total 16,076,667 shares -- $123,533,012 $32,612.72
(1) Together with an indeterminate number of shares that may be necessary to
adjust the number of shares reserved for issuance pursuant to the SCG
Holding Corporation 1999 Founders Stock Option Plan, the SCG Holding
Corporation 2000 Stock Incentive Plan, and the SCG Holding Corporation 2000
Employee Stock Purchase Plan, as the result of a stock split, stock
dividend or similar adjustment of the outstanding common stock of SCG
Holding Corporation. In addition, pursuant to Rule 416(c) under the
Securities Act of 1933, as amended (the "Act"), this Registration Statement
also covers an indeterminate amount of interest to be offered or sold
pursuant to the SCG Holding Corporation 2000 Employee Purchase Plan.
(2) With respect to 10,051,333 shares covered by options granted prior to the
filing of this Registration Statement, calculated pursuant to Rule 457(h)
under the Securities Act of 1933, as amended (the "Act"), based on the
price at which such options may be exercised. With respect to other option
grants, estimated solely for the purposes of calculating the registration
fee with respect to the 6,025,334 shares being registered hereby pursuant
to Rule 457 under the Act.
</TABLE>
<PAGE>
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which previously have been filed by the
Corporation with the Securities and Exchange Commission (the "Commission"), are
incorporated herein by reference and made a part hereof:
(i) The prospectus of SCG Holding Corporation (the "Company"), dated
February 7, 2000, filed pursuant to Rule 424(b) under the Securities Act of
1933, as amended (the "Securities Act"), relating to the Company's Registration
Statement on Form S-4 (Registration No. 333-90359) filed with the Commission on
November 5, 1999, as amended by Amendment No. 1, Amendment No. 2 and Amendment
No. 3 thereto filed by the Registrant under the Securities Act with the
Commission on January 11, 2000, January 27, 2000, and February 1, 2000,
respectively;
(ii) The Company's Current Reports on Form 8-K, filed with the Commission
on February 25, 2000;
(iii) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end
of the fiscal year covered by registration document referred to in (i) above.
All reports and other documents filed by the Corporation pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Registration Statement and prior to the filing of a post-effective
amendment hereto, which indicates that all securities offered hereunder have
been sold or which deregisters all securities remaining unsold, shall be deemed
to be incorporated by reference in this registration statement and to be a part
hereof from the date of filing of such documents.
For purposes of this Registration Statement, any document or any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded to the extent that a
subsequently filed document or a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated herein
by reference modifies or supersedes such document or such statement in such
document. Any 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.
The securities being offered hereby are shares of common stock, par value
$.01 per share, of the Company. As of the date hereof, the charter of the
Company authorized the Company to issue capital stock consisting of 300,000,000
shares of common stock, $.01 par value ("Common Stock"), and 100,000 shares of
preferred stock which may be issued in multiple series, the terms, provisions
and preferences of which may be designated from time to time by the Board of
Directors of the Company.
As of the date hereof, the Company had issued and outstanding 136,666,666
shares of Common Stock, and 2,090 shares of preferred stock. TPG Advisors II,
Inc. indirectly controls TPG Semiconductor Holdings, LLC, which directly owns
124,999,433 shares of Common Stock and 1,500 shares of preferred stock.
Common Stock
Holders of Common Stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, TPG and certain of its affiliates or partners may elect all
of the directors standing for election. Holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the Board of
Directors of the Company out of funds legally available therefor, subject to any
preferential dividend rights of outstanding preferred stock. Upon the
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to receive ratably the net assets of the Company available
after the payment of all debts and other liabilities, subject to the prior
rights of any outstanding preferred stock. Holders of the Common Stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of Common Stock are, and the shares offered by the Company hereby will
be, when issued and paid for in accordance with the terms of the 1999 Founders
Stock Option Plan, the 2000 Stock Incentive Plan, and the 2000 Employee Stock
Purchase Plan, fully paid and nonassessable. The rights, preferences and
privileges of holders of Common Stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series of preferred
stock that the Company may designate and issue in the future.
The Company and the holders of its Common Stock as of the date hereof have
entered into a Stockholders' Agreement dated as of August 4, 1999 (the
"Stockholders' Agreement"). Among other things, the Stockholders' Agreement (i)
imposes certain restrictions on the transfer of shares of Common Stock and (ii)
gives such holders registration rights under certain circumstances. Prior to the
existence of a public market for the Common Stock, purchasers of shares of
Common Stock offered hereby will also be required to enter into a management
stockholders' agreement with the Company and TPG that (i) imposes substantial
restrictions on the transfer of shares of Common Stock and (ii) gives the
Company certain rights to purchase the Common Stock upon the termination of the
employment with the Company and its affiliates of such purchaser.
Preferred Stock
As of the date hereof, the Company has authorized one series of preferred
stock. The Preferred Stock accumulates dividends at the rate of 12% per annum,
which dividends will be payable in cash or additional shares of Preferred Stock,
at the option of the Company, subject to availability of funds and the terms of
its loan agreements, or through a corresponding increase in the liquidation
value of such stock. The Preferred Stock has an initial liquidation preference
of $100,000 per share.
The preferred stock will be redeemed by the Company on the thirteenth
anniversary of the issue date, and may be reduced by the Company under certain
circumstances prior thereto, at a price equal to the liquidation preference
thereof plus accumulated and unpaid dividends to the redemption date. In certain
other circumstances, including the occurrence of a change of control of the
Company, the Company will be required to redeem shares of preferred stock.
Holders of Preferred Stock will not have any voting rights with respect
thereto, except for such rights as are provided under applicable law.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company's Amended and Restated Certificate of Incorporation provide
that the Company shall, to the full extent permitted by Section 145 of the
Deleware General Corporation Law ("DGCL"), as amended from time to time,
indemnify all persons whom it may indemnify pursuant thereto. Title 8, Chapter
1, Subchapter IV, Section 145 of the DGCL provides as follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS; INSURANCE. -
(a) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the
person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
the person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
the person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the person's conduct was
unlawful.
(b) A corporation shall have power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in
a manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because the person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination,
(1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or
(2) by a committee of such directors designated by majority vote
of such directors, even though less than a quorum, or
(3) if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or
(4) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the corporation deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in such person's official capacity and as to action in another capacity
while holding such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such person
against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees).
The Company maintains directors' and officers' liability insurance.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed with or incorporated by reference into
this Registration Statement (numbering corresponds to Exhibit Table in Item 601
of Regulation S-K):
4.1 SCG Holding Corporation 1999 Founders Stock Option Plan
4.2 SCG Holding Corporation 2000 Stock Incentive Plan
4.3 SCG Holding Corporation 2000 Employee Stock Purchase Plan
4.4 Amended and Restated Certificate of Incorporation of SCG Holding
Corporation (filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-4 (No. 333-90359) and incorporated herein by
reference)
4.5 By-Laws of SCG Holding Corporation (filed as Exhibit 3.8 to the
Company's Registration Statement on Form S-4 (No. 333-90359) and
incorporated herein by reference)
4.6 Stockholders' Agreement dated as of August 4, 1999 among SCG
Holding Corporation, TPG Semiconductor Holdings, LLC and
Motorola, Inc. (filed as Exhibit 99.5 to the Company's
Registration Statement on Form S-4 (No. 333-90359) and
incorporated herein by reference)
5.1 Opinion of George H. Cave, Esq., regarding the validity of
securities being registered
23.1 Consent of KPMG LLP, Independent Auditors
23.2 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.3 Consent of George H. Cave, Esq. (included in Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
Item 9. Undertakings.
(a) 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the 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 the 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 the
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 the Registration
Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs (a)(1)(i)
and (a)(1)(ii) do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or 15(d) of the Exchange Act that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose 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.
(b) 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 15(d) of the Exchange
Act (and, where applicable, each filing of the employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the 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.
(h) 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 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8, and has duly caused this Registration
Statement to be signed on its behalf, thereunto duly authorized, in the City of
Phoenix, State of Arizona, on this day of April 6, 2000.
SCG HOLDING CORPORATION
By:/s/ Steven Hanson
-----------------
Steven Hanson, Chief Executive
Officer and Member, Board of
Directors
POWER OF ATTORNEY
Each person whose signature appears below on this Registration Statement
hereby constitutes and appoints Steven Hanson, James Thorburn and Dario
Sacomani, and each of them, with full power to act without the other, his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (unless revoked in writing) to sign any and all amendments (including
post-effective amendments thereto) to this Registration Statement to which this
power of attorney is attached, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting to such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as full to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated, on April 6, 2000.
Signature Title
--------- -----
/s/ Steven Hanson
------------------------- President, Chief Executive Officer and Director
Steven Hanson
/s/ Dario Sacomani
- ------------------------- Senior Vice President, Chief Financial Officer
Dario Sacomani and Chief Accounting Officer
/s/ Curtis J. Crawford
- ------------------------- Chairman of the Board of Directors
Curtis J. Crawford
/s/ David Bonderman
- ------------------------- Director
David Bonderman
/s/ Richard W. Boyce
- ------------------------- Director
Richard W. Boyce
/s/ Justin T. Chang
- ------------------------- Director
Justin T. Chang
/s/ William A. Franke
- ------------------------- Director
William A. Franke
/s/ David M. Stanton
- ------------------------- Director
David M. Stanton
/s/ Jerome N. Gregoire
- ------------------------- Director
Jerome N. Gregoire
/s/ Albert Hugo-Martinez
- ------------------------- Director
Albert Hugo-Martinez
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Board of Directors of the Company have duly caused this Registration
Statement to be signed on its behalf, thereunto duly authorized, in the City of
Phoenix, State of Arizona, on this day of April 6, 2000.
SCG HOLDING CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
By: /s/ Dario Sacomani
------------------------------------------
Dario Sacomani, Senior Vice President, Chief
Financial Officer and Chief Accounting Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C> <C> <C>
Sequentially Numbered
Exhibit No. Description Method of Filing Page Location
- ---------------------------------------------------------------------------------------
4.1 SCG Holding Corporation Filed herewith 14
1999 Founders Stock Option
Plan with amendments
4.2 SCG Holding Corporation Filed Herewith 46
2000 Stock Incentive Plan
4.3 SCG Holding Corporation Filed herewith 64
2000 Employee Stock Purchase
Plan
4.4 Amended and Restated Filed as Exhibit 3.1 to --
Certificate of Incorporation the Company's Registration
of SCG Holding Corporation Statement on Form S-4
(No. 333-90359) and
incorporated herein by
reference
4.5 By-Laws of SCG Holding Filed as Exhibit 3.8 to --
Corporation the Company's Registration
Statement on Form S-4
(No. 333-90359) and
incorporated herein by
reference
4.6 Stockholders' Agreement dated Filed as Exhibit 99.5 to --
as of August 4, 1999 among SCG the Company's Registration
Holding Corporation, Statement on Form S-4
TPG Semiconductor Holdings, (No. 333-90359) and incorporated
LLC and Motorola, Inc. herein by reference
5.1 Opinion of George H. Cave, Filed herewith 74
Esq., regarding the validity
of securities being registered
23.1 Consent of KPMG LLP, Filed herewith 75
Independent Auditors
23.2 Consent of Filed herewith 76
PricewaterhouseCoopers
LLP, Independent Accountants
23.3 Consent George H. Cave, Filed herewith 74
Esq. (included in
Exhibit 5.1)
24.1 Power of Attorney (included Filed herewith 11
on signature page)
</TABLE>
SCG HOLDING CORPORATION
1999 FOUNDERS STOCK OPTION PLAN
(Adopted September 9, 1999; amended and restated October 19, 1999)
1. Purpose of the Plan
The purpose of the SCG Holding Corporation 1999 Founders Stock Option Plan
(the "Plan") is to promote the interests of the Company and its stockholders by
providing the key employees, directors and consultants of the Company and its
Affiliates with an appropriate incentive to encourage them to continue in the
employ of the Company or Affiliate and to improve the growth and profitability
of the Company.
2. Definitions
As used in this Plan, the following capitalized terms shall have the
following meanings:
(a) "Affiliate" shall mean the Company and any of its direct or indirect
subsidiaries.
(b) "Board" shall mean the Board of Directors of the Company or any
committee appointed by the Board to administer the Plan pursuant to Section 3.
(c) "Cause" shall mean, when used in connection with the termination of a
Participant's Employment, unless otherwise provided in the Participant's Stock
Option Grant Agreement, the termination of a Participant's Employment for
"cause" as specified in the Personnel Policies and Procedures of the Company's
Employment Handbook or any similar employee handbook or manual (the "Handbook"),
as the same may be modified from time to time by the Company, provided, that in
the event no definition of "Cause" is specified in the Participant's Stock
Option Agreement or the Handbook, Cause shall mean the termination of the
Participant's Employment by the Company or an Affiliate on account of (i) a
failure of the Participant to substantially perform his duties (other than as a
result of physical or mental illness or injury), after the Board or the
executive to which the Participant reports delivers to the Participant a written
demand for substantial performance that specifically identifies the manner in
which the Participant has not substantially performed his duties; (ii) the
Participant's willful misconduct or gross negligence which is materially
injurious to the Company; (iii) a breach by a Participant of the Participant's
duty of loyalty to the Company and its Affiliates; (iv) the Participant's
unauthorized removal from the premises of the Company or Affiliate of any
document (in any medium or form) relating to the Company or an Affiliate or the
customers of the Company or an Affiliate; or (v) the commission by the
Participant of any felony or other serious crime involving moral turpitude. Any
rights the Company or an Affiliate may have hereunder in respect of the events
giving rise to Cause shall be in addition to the rights the Company or Affiliate
may have under any other agreement with the Employee or at law or in equity. If,
subsequent to a Participant's termination of Employment, it is discovered that
such Participant's Employment could have been terminated for Cause, the
Participant's Employment shall, at the election of the Board, in its sole
discretion, be deemed to have been terminated for Cause retroactively to the
date the events giving rise to Cause occurred.
(d) "Change in Control" shall mean the occurrence of any of the following
events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company or Semiconductor Components Industries, LLC (the "Operating Subsidiary")
to any Person or group of related persons for purposes of Section 13(d) of the
Exchange Act (a "Group"), together with any affiliates thereof other than TPG
Semiconductor Holdings LLC, TPG Partners II, L.P., or any of their affiliates
(hereinafter collectively referred to as "TPG"); (ii) the approval by the
holders of capital stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company; (iii) (A) any Person or Group (other
than TPG) shall become the owner, directly or indirectly, beneficially or of
record, of shares representing more than 25% of the aggregate voting power of
the issued and outstanding stock entitled to vote in the election of directors,
managers or trustees (the "Voting Stock") of the Company and (B) TPG
beneficially owns, directly or indirectly, in the aggregate a lesser percentage
of the Voting Stock of the Company than such other Person or Group; (iv) the
replacement of a majority of the Board of Directors of the Company over a
two-year period from the directors who constituted the Board of Directors of the
Company at the beginning of such period, and such replacement shall not have
been approved by a vote of at least a majority of the Board of Directors of the
Company then still in office who either were members of such Board of Directors
at the beginning of such period or whose election as a member of such Board of
Directors was previously so approved or who were nominated by, or designees of,
TPG; (v) any Person or Group other than TPG shall have acquired the power to
elect a majority of the members of the Board of Directors of the Company; or
(vi) a merger or consolidation of the Company with another entity in which
holders of the Common Stock of the Company immediately prior to the consummation
of the transaction hold, directly or indirectly, immediately following the
consummation of the transaction, 50% or less of the common equity interest in
the surviving corporation in such transaction. Notwithstanding the foregoing, in
no event shall a Change in Control be deemed to have occurred as a result of an
initial public offering of the Common Stock.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Commission" shall mean the U.S. Securities and Exchange Commission.
(g) "Common Stock" shall mean the ordinary shares of the Company, par value
US $0.01 per share.
(h) "Company" shall mean SCG Holding Corporation.
(i) "Disability" shall mean a permanent disability as defined in the
Company's or an Affiliate's disability plans, or as defined from time to time by
the Company, in its discretion, or as specified in the Participant's Stock
Option Grant Agreement, provided that in the event the Participant is party to
an effective employment agreement with the Company or its Affiliates and such
employment agreement contains a different definition of Disability, the
definition of Disability contained in such employment agreement shall be
substituted for the definition set forth above for all purposes hereunder.
(j) "Eligible Employee" shall mean (i) any Employee who is a key executive
of the Company or an Affiliate, or (ii) certain other Employees, directors or
consultants who, in the judgment of the Board, should be eligible to participate
in the Plan due to the services they perform on behalf of the Company or an
Affiliate.
(k) "Employment" shall mean employment with the Company or any Affiliate
and shall include the provision of services as a director or consultant for the
Company or any Affiliate. "Employee" and "Employed" shall have correlative
meanings.
(l) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(m) "Exercise Date" shall have the meaning set forth in Section 4.11
herein.
(n) "Exercise Notice" shall have the meaning set forth in Section 4.11
herein.
(o) "Exercise Price" shall mean the price that the Participant must pay
under the Option for each share of Common Stock as determined by the Board for
each Grant and specified in the Stock Option Grant Agreement.
(p) "Fair Market Value" shall mean, as of any date:
(1) prior to the existence of a Public Market for the Common Stock, the
value per share of Common Stock as of any Valuation Date as determined in good
faith by the Board; or
(2) on which a Public Market for the Common Stock exists, (i) closing price
on such day of a share of Common Stock as reported on the principal securities
exchange on which shares of Common Stock are then listed or admitted to trading
or (ii) if not so reported, the average of the closing bid and ask prices on
such day as reported on the National Association of Securities Dealers Automated
Quotation System or (iii) if not so reported, as furnished by any member of the
National Association of Securities Dealers, Inc. ("NASD") selected by the Board.
The Fair Market Value of a share of Common Stock as of any such date on which
the applicable exchange or inter-dealer quotation system through which trading
in the Common Stock regularly occurs is closed shall be the Fair Market Value
determined pursuant to the preceding sentence as of the immediately preceding
date on which the Common Stock is traded, a bid and ask price is reported or a
trading price is reported by any member of NASD selected by the Board. In the
event that the price of a share of Common Stock shall not be so reported or
furnished, the Fair Market Value shall be determined by the Board in good faith
to reflect the fair market value of a share of Common Stock.
(q) "Financing Restriction" shall mean a restriction contained in any
guarantee, financing or security agreement or document entered into by the
Company or its Affiliates that restricts or prohibits the redemption of the
Option(s).
(r) "Grant" shall mean a grant of an Option under the Plan evidenced by a
Stock Option Grant Agreement.
(s) "Grant Date" shall mean the Grant Date as defined in Section 4.3
herein.
(t) "Management Stockholders' Agreement" shall mean the Management
Stockholders' Agreement, substantially in the form attached hereto as Exhibit B,
or such other stockholders' agreement as may be entered into between the Company
and any Participant.
(u) Non-Qualified Stock Option" shall mean, in respect of Participants who
are U.S. taxpayers, an Option that is not an "incentive stock option" within the
meaning of Section 422 of the Code.
(v) "Option" shall mean the option to purchase Common Stock granted to any
Participant under the Plan. Each Option granted hereunder shall be a
Non-Qualified Stock Option and shall be identified as such in the Stock Option
Grant Agreement by which it is evidenced.
(w) "Option Call Period" shall have the meaning ascribed to it in Section
4.6.
(x) "Option Spread" shall mean, with respect to an Option, the excess, if
any, of the Fair Market Value of a share of Common Stock as of the applicable
Valuation Date over the Exercise Price.
(y) "Participant" shall mean an Eligible Employee to whom a Grant of an
Option under the Plan has been made, and, where applicable, shall include
Permitted Transferees.
(z) "Permitted Transferee" shall have the meaning set forth in Section 4.7.
(aa)"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
(bb)A "Public Market" for the Common Stock shall be deemed to exist for
purposes of the Plan if the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act and trading regularly occurs in such Common Stock in,
on or through the facilities of securities exchanges and/or inter-dealer
quotation systems in the United States (within the meaning of Section 902(n) of
the Securities Act) or any designated offshore securities market (within the
meaning of Rule 902(a) of the Securities Act).
(cc) "Securities Act" shall mean the Securities Act of 1933, as amended.
(dd)"Stock Option Grant Agreement" shall mean an agreement, substantially in the
form which is attached hereto as Exhibit A, entered into by each Participant and
the Company evidencing the Grant of each Option pursuant to the Plan.
(ee)"Transfer" shall mean any transfer, sale, assignment, gift,
testamentary transfer, pledge, hypothecation or other disposition of any
interest. "Transferee" and "Transferor" shall have correlative meanings.
(ff)"Valuation Date" shall mean (i) prior to the existence of a Public
Market for the Common Stock, the last day of each calendar quarter, except that
in respect of the initial grants approved at the September 9, 1999 Board
meeting, August 4, 1999 or (ii) on or after the existence of a Public Market for
the Common Stock, the trading date immediately preceding the date of the
relevant transaction.
(gg)"Vesting Date" shall mean the date an Option becomes exercisable as
defined in Section 4.4 herein.
3. Administration of the Plan
The Board shall administer the Plan, provided that the Board may appoint a
committee to administer the Plan. In the event the Board appoints such a
committee, such committee shall have the rights and duties of the Board in
respect of the Plan. No member of the Board shall participate in any decision
that specifically affects such member's interest in the Plan unless such
decision also affects the Options of other Participants in the same manner.
3.1 Powers of the Board. In addition to the other powers granted to the
Board under the Plan, the Board shall have the power: (a) to determine to which
of the Eligible Employees Grants shall be made; (b) to determine the time or
times when Grants shall be made and to determine the number of shares of Common
Stock subject to each such Grant; (c) to prescribe the form of and terms and
conditions of any instrument evidencing a Grant; (d) to adopt, amend and rescind
such rules and regulations as, in its opinion, may be advisable for the
administration of the Plan; (e) to construe and interpret the Plan, such rules
and regulations and the instruments evidencing Grants; and (f) to make all other
determinations necessary or advisable for the administration of the Plan.
3.2 Determinations of the Board. Any Grant, determination, prescription or
other act of the Board made in good faith shall be final and conclusively
binding upon all persons.
3.3 Indemnification of the Board. No member of the Board shall be liable
for any action or determination made in good faith with respect to the Plan or
any Grant. To the full extent permitted by law, the Company shall indemnify and
hold harmless each person made or threatened to be made a party to any civil or
criminal action or proceeding by reason of the fact that such person, or such
person's testator or intestate, is or was a member of the Board to the extent
such criminal or civil action or proceeding relates to the Plan.
3.4 Compliance with Applicable Law. Notwithstanding anything herein to the
contrary, the Company shall not be required to issue or deliver any certificates
evidencing shares of Common Stock pursuant to the exercise of any Options,
unless and until the Board has determined, with advice of counsel, that the
issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Common Stock are listed or
traded. The Company shall use its reasonable efforts to comply with any such
law, regulation or requirement with respect to the issuance and delivery of such
certificates and, if the Board determines that it must delay the issuance of
shares, it shall notify the exercising Participant that the delivery of shares
must be delayed until such delivery complies with all applicable laws. Within
thirty days after receiving notice that such a delay is necessary, the
exercising Participant may elect in his sole discretion, by providing notice to
the Company, to receive cash (or cash equivalents) equal to the Option Spread
for the applicable shares in lieu of such shares in which case such exercising
Participant's Option shall be cancelled with respect to the exercised shares. If
the exercising Participant does not serve such notice electing to receive cash
instead of the shares, the Board shall deliver the shares to such Participant as
soon as practicable after the Board determines that such delivery is no longer
prohibited by applicable laws. In addition to the terms and conditions provided
herein, the Board may require that a Participant make such reasonable covenants,
agreements and representations as the Board, in its sole discretion, deems
advisable in order to comply with any such laws, regulations or requirements.
3.5 Inconsistent Terms. In the event of a conflict between the terms of the
Plan and the terms of any Stock Option Grant Agreement, the terms of the Stock
Option Grant Agreement shall govern.
3.6 Plan Term. The Board shall not Grant any Options under this Plan on or
after September 9, 2009. All Options which remain outstanding after such date
shall continue to be governed by the Plan.
4. Options
Subject to adjustment as provided in Section 4.14 hereof, the Board may
grant to Participants Options to purchase shares of Common Stock of the Company
which, in the aggregate, do not exceed 17,015,000 shares of Common Stock. To the
extent that any Option granted under the Plan terminates, expires or is canceled
without having been exercised, the shares covered by such Option shall again be
available for Grant under the Plan.
4.1 Identification of Options. The Options granted under the Plan shall be
clearly identified in the Stock Option Grant Agreement as Non-Qualified Stock
Options.
4.2 Exercise Price. The Exercise Price of any Option granted under the Plan
shall be such price as the Board shall determine (which may be equal to, less
than or greater than the Fair Market Value of a share of Common Stock on the
Grant Date for such Options but shall not be less than par value per share) and
which shall be specified in the Stock Option Grant Agreement; provided that such
price may not be less than the minimum price required by law.
4.3 Grant Date. The Grant Date of the Options shall be the date designated
by the Board and specified in the Stock Option Grant Agreement as of the date
the Option is granted.
4.4 Vesting Date of Options. Each Stock Option Grant Agreement shall
indicate the date or conditions under which such Option shall become
exercisable. Notwithstanding the foregoing, in the event of a Change in Control,
all outstanding Options granted hereunder shall immediately become vested and
exercisable.
4.5 Expiration of Options. With respect to each Participant, such
Participant's Option(s), or portion thereof, which have not become exercisable
shall expire on the date such Participant's Employment is terminated for any
reason unless otherwise specified in the Stock Option Grant Agreement. With
respect to each Participant, each Participant's Option(s), or any portion
thereof, which have become exercisable on the date such Participant's Employment
is terminated shall expire on the earlier of (i) the commencement of business on
the date the Participant's Employment is terminated for Cause; (ii) 90 days
after the date the Participant's Employment is terminated for any reason other
than Cause, death or Disability; (iii) one year after the date the Participant's
Employment is terminated by reason of death or Disability; or (iv) the 10th
anniversary of the Grant Date for such Option(s). For the avoidance of doubt,
any Option, or portion thereof, that has become exercisable by a Permitted
Transferee on account of the death of a Participant shall expire one year after
the date such deceased Participant's Employment terminated by reason of death.
Notwithstanding the foregoing, the Board may specify in the Stock Option Grant
Agreement a different expiration date or period for any Option granted
hereunder, and such expiration date or period shall supersede the foregoing
expiration period.
4.6 Option Call Right. Unless otherwise specified in the Stock Option Grant
Agreement, upon a termination of a Participant's Employment for any reason prior
to the existence of a Public Market, the Company shall have the right, in its
sole discretion, during the ninety-day period immediately following the date of
termination (the "Option Call Period"), to purchase for cash any Options or
portions thereof that have become exercisable and are then held by the
Participant for a purchase price per share equal to the Option Spread determined
as of the Valuation Date immediately preceding the date that the Company
exercises its right to purchase such Option. Such payment shall be made within
ten days after the date that the Company notifies the Participant that it is
exercising its Option Call Right and the Company may withhold an amount equal to
the applicable federal, state and local withholding taxes from such payment,
provided that the Company may delay any such payment in the event it is
prohibited from making such payment as a result of any Financing Restriction
until the date that is as soon as practicable after such Financing Restriction
has lapsed. Specific provisions regarding Financing Restrictions (including the
interest rate during any delay period) shall be provided in the Stock Option
Grant Agreement.
4.7 Limitation on Transfer. Unless otherwise provided in the Stock Option
Grant Agreement, during the lifetime of a Participant, each Option shall be
exercisable only by such Participant. Upon the death of the Participant, such
Participant's Option(s) shall be transferrable to his beneficiaries or his
estate (a "Permitted Transferee").
4.8 Condition Precedent to Transfer of Any Option. It shall be a condition
precedent to any Transfer of any Option by any Participant that the Transferee,
if not already a Participant in the Plan, shall agree prior to the Transfer in
writing with the Company to be bound by the terms of the Plan, the Stock Option
Grant Agreement and the Management Stockholder's Agreement as if he had been an
original signatory thereto, except that any provisions of the Plan based on the
Employment (or termination thereof) of the original Participant shall continue
to be based on the Employment (or termination thereof) of the original
Participant.
4.9 Effect of Void Transfers. In the event of any purported Transfer of any
Options in violation of the provisions of the Plan, such purported Transfer
shall, to the extent permitted by applicable law, be void and of no effect.
4.10 Exercise of Options. A Participant may exercise any or all of his
vested Options by serving an Exercise Notice on the Company as provided in
Section 4.11 hereto.
4.11 Method of Exercise. The Option shall be exercised by delivery of
written notice to the Company's principal office (the "Exercise Notice"), to the
attention of its Secretary, no less than five business days in advance of the
effective date of the proposed exercise (the "Exercise Date"). Such notice shall
(a) specify the number of shares of Common Stock with respect to which the
Option is being exercised, the Grant Date of such Option and the Exercise Date,
(b) be signed by the Participant, (c) prior to the existence of a Public Market
for the Common Stock, indicate in writing that the Participant agrees to be
bound by the Management Stockholders' Agreement, and (d) if the Option is being
exercised by the Participant's Permitted Transferee(s), such Permitted
Transferee(s) shall indicate in writing that they agree to and shall be bound by
the Plan and Stock Option Grant Agreement as if they had been original
signatories thereto (as provided in Section 4.8 hereof) and, prior to the
existence of a Public Market for the Common Stock, by the Management
Stockholders' Agreement. The Exercise Notice shall include (i) payment in cash
(or cash equivalents) for an amount equal to the Exercise Price multiplied by
the number of shares of Common Stock specified in such Exercise Notice, (ii) a
certificate representing the number of shares of Common Stock with a Fair Market
Value equal to the Exercise Price (provided the Participant has owned such
shares at least six months prior to the Exercise Date) multiplied by the number
of shares of Common Stock specified in such Exercise Notice, or (iii) a
combination of (i) and (ii) or any method otherwise approved by the Board. In
addition, the Exercise Notice shall include payment in cash (or cash
equivalents) in an amount equal to the applicable withholding taxes based on the
Option Spread for each share of Common Stock specified in the Exercise Notice as
of the most recent Valuation Date. The Board may, in its discretion, permit
Participants to make the above-described payments in forms other than cash. The
partial exercise of the Option, alone, shall not cause the expiration,
termination or cancellation of the remaining Options.
4.12 Certificates of Shares. Subject to Section 3.4 herein, upon the
exercise of the Options in accordance with Section 4.11 and, prior to the
existence of a Public Market for the Common Stock, upon execution of the
Management Stockholders' Agreement, in the Board's sole discretion, certificates
of shares of Common Stock shall be issued in the name of the Participant and
delivered to such Participant or the ownership of such shares shall be otherwise
recorded in a book-entry or similar system utilized by the Company as soon as
practicable following the Exercise Date. Prior to the existence of a Public
Market, no shares of Common Stock shall be issued to or recorded in the name of
any Participant until such Participant agrees to be bound by and executes the
Management Stockholders' Agreement.
4.13 Administration of Options.
(a) Termination of the Options. The Board may, at any time, in its absolute
discretion, without amendment to the Plan or any relevant Stock Option Grant
Agreement, terminate the Options then outstanding, whether or not exercisable,
provided, however, that the Company, in full consideration of such termination,
shall pay with respect to any Option, or portion thereof, then outstanding, an
amount equal to the Option Spread determined as of the Valuation Date coincident
with or immediately preceding the date of termination multiplied by the number
of shares of Common Stock underlying such Option. Such payment shall be made as
soon as practicable after the payment amounts are determined, provided, however,
that the Company shall have the option to make payments to the Participants by
issuing a note to the Participant bearing a rate of interest equal to the
average annual prime rate charged during the term of such note by a nationally
recognized bank designated by the Board.
(b) Amendment of Terms of Options. The Board may, in its absolute
discretion, amend the Plan or terms of any Option, provided, however, that any
such amendment shall not impair or adversely affect the Participants' rights
under the Plan or such Option without such Participant's written consent.
4.14 Adjustment Upon Changes in Company Stock.
(a) Increase or Decrease in Issued Shares Without Consideration. Subject to
any required action by the stockholders of the Company, in the event of any
increase or decrease in the number of issued shares of Common Stock resulting
from a subdivision or consolidation of shares of Common Stock or the payment of
a stock dividend (but only on the shares of Common Stock), or any other increase
or decrease in the number of such shares effected without receipt of
consideration by the Company, the Board shall make such adjustments with respect
to the number of shares of Common Stock subject to the Options and the exercise
price per share of Common Stock, as the Board may, in its absolute discretion,
consider appropriate to prevent the enlargement or dilution of rights.
(b) Certain Mergers. Subject to any required action by the stockholders of
the Company, in the event that the Company shall be the surviving corporation in
any merger or consolidation (except a merger or consolidation as a result of
which the holders of shares of Common Stock receive securities of another
corporation), the Options outstanding on the date of such merger or
consolidation shall pertain to and apply to the securities that a holder of the
number of shares of Common Stock subject to any such Option would have received
in such merger or consolidation (it being understood that if, in connection with
such transaction, the stockholders of the Company retain their shares of Common
Stock and are not entitled to any additional or other consideration, the Options
shall not be affected by such transaction).
(c) Certain Other Transactions. In the event of (i) a dissolution or
liquidation of the Company, (ii) a sale of all or substantially all of the
Company's assets, (iii) a merger or consolidation involving the Company in which
the Company is not the surviving corporation or (iv) a merger or consolidation
involving the Company in which the Company is the surviving corporation but the
holders of shares of Common Stock receive securities of another corporation
and/or other property, including cash, the Board shall, in its absolute
discretion, have the power to provide for the exchange of each Option
outstanding immediately prior to such event (whether or not then exercisable)
for an option on or stock appreciation right with respect to, as appropriate,
some or all of the property for which the stock underlying such Options are
exchanged and, incident thereto, make an equitable adjustment, as determined by
the Board, in the exercise price of the options or stock appreciation rights, or
the number of shares or amount of property subject to the options or stock
appreciation rights or, if appropriate, provide for a cash payment to the
Participants in partial consideration for the exchange of the Options as the
Board may consider appropriate to prevent dilution or enlargement of rights.
(d) Other Changes. In the event of any change in the capitalization of the
Company or a corporate change other than those specifically referred to in
Sections 4.14(a), (b) or (c) hereof, the Board shall, in its absolute
discretion, make such adjustments in the number and class of shares subject to
Options outstanding on the date on which such change occurs and in the per-share
exercise price of each such Option as the Board may consider appropriate to
prevent dilution or enlargement of rights.
(e) No Other Rights. Except as expressly provided in the Plan or the Stock
Option Grant Agreements evidencing the Options, the Participants shall not have
any rights by reason of (i) any subdivision or consolidation of shares of Common
Stock or shares of stock of any class, (ii) the payment of any dividend, any
increase or decrease in the number of shares of Common Stock, or (iii) any
dissolution, liquidation, merger or consolidation of the Company or any other
corporation. Except as expressly provided in the Plan or the Stock Option Grant
Agreements evidencing the Options, no issuance by the Company of shares of
Common Stock or shares of stock of any class, or securities convertible into
shares of Common Stock or shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Common Stock subject to the Options or the exercise price of such Options.
5. Provisions Applicable to Employees who are French Citizens or who Work
in France
Notwithstanding any other provision of the Plan to the contrary, the
following provisions shall apply to Options granted to any employee who is a
French citizen or who works primarily in France as of the Grant Date (referred
to herein as a "French Employee").
5.1 Consultants. Notwithstanding anything to the contrary herein, no French
Employee who would otherwise be considered a consultant under French law may be
granted an Option under the Plan.
5.2 Termination for Cause. The last sentence of Section 2(c) (definition of
Cause) shall not apply to French Employees.
5.3 Ten Percent Owners. Notwithstanding the provisions of Section 2(j)
herein, no Option shall be granted to any French Employee who holds more than
ten percent of the capital of the Company on the Grant Date.
5.4 Exercise Price. Notwithstanding the provisions of Section 2(o) herein,
all Options granted to French Employees shall be granted at an
Exercise Price per share equal to Fair Market Value per share as of the Grant
Date.
5.5 Cash Payment in the Event of a Delay. Notwithstanding the provisions of
Section 3.4 herein, French Employees shall not have the option to elect to
receive a cash payment in lieu of his shares in the event the Company determines
that it must delay delivery of shares upon exercise in order to comply with
applicable law. All other provisions of Section 3.4 remain in full force and
effect with respect to Options granted to French Employees.
5.6 Time Limitations. Notwithstanding the provisions of
Section 3.6 herein, no Options shall be granted to any French Employee five
years after the later of (x) the date the Company's stockholders initially
approved the Plan or (y) the date the Plan has been subsequently re-authorized,
in its original form or as amended from time to time by the Board, by the
Company's stockholders.
5.7 Vesting of Options. Notwithstanding Section 4.4 herein, no portion of
any Option granted to a French Employee shall become exercisable before the
two-year anniversary of the Grant Date.
5.8 Effect of Participant's Death. Notwithstanding the provisions of
Section 4.5 or any other provision hereof, in respect of a Participant who is a
French Employee, upon such French Employee's death, the vested portion of such
Participant's Option shall remain exercisable for a period of six months after
the date of his death and shall be exercisable by his heirs, provided his heirs
agree to comply with and be bound by the Plan and the Management Stockholders'
Agreement, if applicable.
5.9 No Option Call Right. Notwithstanding the provisions of Section 4.6
herein, the Company shall not have a Call Right with respect to Options granted
to any French Employees.
5.10 Management Stockholders' Agreement. Notwithstanding the provisions of
Sections 4.11 and 4.12 herein, each French Employee who has been granted an
Option must agree to be bound by and execute the Management Stockholders'
Agreement (as modified for French Employees) if exercising any portion of such
Option prior to the later of (x) the fifth anniversary of the Grant Date or (y)
the existence of a Public Market. This provision is intended to restrict the
resale of any shares of Common Stock received pursuant to the exercise of an
Option by French Employees for a period of three years after the Vesting Date of
the Option. Accordingly, the Management Stockholders' Agreement with respect to
French Employees shall reflect this three-year restriction.
5.11 Termination of Options. Notwithstanding Section 4.13(a) herein, the
Company shall not terminate any portion of an Option granted to any French
Employee.
5.12 Adjustment of Options. Notwithstanding Section 4.14 herein, any
adjustment made to any Option granted to a French Employee shall comply with
applicable French law.
6. Miscellaneous
6.1 Rights as Stockholders. The Participants shall not have any rights as
stockholders with respect to any shares of Common Stock covered by or relating
to the Options granted pursuant to the Plan until the date the Participants
become the registered owners of such shares. Except as otherwise expressly
provided in Sections 4.13 and 4.14 hereof, no adjustment to the Options shall be
made for dividends or other rights for which the record date occurs prior to the
date such stock certificate is issued.
6.2 No Special Employment Rights. Nothing contained in the Plan shall
confer upon the Participants any right with respect to the continuation of their
Employment or interfere in any way with the right of the Company or an
Affiliate, subject to the terms of any separate Employment agreements to the
contrary, at any time to terminate such Employment or to increase or decrease
the compensation of the Participants from the rate in existence at the time of
the grant of any Option.
6.3 No Obligation to Exercise. The Grant to the Participants of the Options
shall impose no obligation upon the Participants to exercise such Options.
6.4 Restrictions on Common Stock. The rights and obligations of the
Participants with respect to Common Stock obtained through the exercise of any
Option provided in the Plan shall be governed by the terms and conditions of the
Management Stockholders' Agreement.
6.5 Notices. Each notice and other communication hereunder shall be in
writing and shall be given and shall be deemed to have been duly given on the
date it is delivered in person, on the next business day if delivered by
overnight mail or other reputable overnight courier, or the third business day
if sent by registered mail, return receipt requested, to the parties as follows:
If to the Participant:
To the most recent address shown on records of the Company
or its Affiliate.
If to the Company:
SCG Holding Corporation
5005 East McDowell Road
Phoenix, AZ 85008
Attention: Board of Directors and Secretary
or to such other address as any party may have furnished to the other in writing
in accordance herewith.
6.6 Descriptive Headings. The headings in the Plan are for convenience of
reference only and shall not limit or otherwise affect the meaning of the terms
contained herein.
6.7 Severability. In the event that any one or more of the provisions,
subdivisions, words, clauses, phrases or sentences contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision, subdivision, word, clause, phrase or
sentence in every other respect and of the remaining provisions, subdivisions,
words, clauses, phrases or sentences hereof shall not in any way be impaired, it
being intended that all rights, powers and privileges of the Company and
Participants shall be enforceable to the fullest extent permitted by law.
6.8 Governing Law. The Plan shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware, without regard
to the provisions governing conflict of laws.
<PAGE>
Exhibit "A"
- -----------
STOCK OPTION GRANT AGREEMENT
(Non-Qualified Stock Options)
THIS AGREEMENT, made as of this ___th day of _________ 1999 between SCG
Holding Corporation (the "Company") and ___________________ (the "Participant").
WHEREAS, the Company has adopted and maintains the SCG Holding
Corporation 1999 Founders Stock Option Plan (the "Plan") to promote the
interests of the Company and its Affiliates and stockholders by providing the
Company's key employees and others with an appropriate incentive to encourage
them to continue in the employ of the Company or its affiliates and to improve
the growth and profitability of the Company;
WHEREAS, the Plan provides for the Grant to Participants in the Plan of
Non-Qualified Stock Options to purchase shares of Common Stock of the Company.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto hereby agree as
follows:
1. Grant of Options. Pursuant to, and subject to, the terms and conditions
set forth herein and in the Plan, the Company hereby grants to the Participant a
NON-QUALIFIED STOCK OPTION (the "Option") with respect to ______ shares of
Common Stock of the Company.
2. Grant Date. The Grant Date of the Option hereby granted is _________,
____. 3. Incorporation of Plan. All terms, conditions and restrictions of the
Plan are incorporated herein and made part hereof as if stated herein. If there
is any conflict between the terms and conditions of the Plan and this Agreement,
the terms and conditions of this Agreement, as interpreted by the Board, shall
govern. All capitalized terms used and not defined herein shall have the meaning
given to such terms in the Plan.
4. Exercise Price. The exercise price of each share underlying the Option
hereby granted is $___________.
5. Vesting Date. The Option shall become exercisable as follows:
Approximately 8.4 percent of the Option shall become exercisable on the Grant
Date; an additional 8.3 percent of the Option shall become exercisable six
months following the Grant Date; an additional 8.3 percent of the Option shall
become exercisable on the first anniversary of the Grant Date; and on each
six-month anniversary following the first one-year anniversary of the Grant
Date, an additional 12.5 percent of the Option shall become exercisable until
100 percent of the Option is fully vested and exercisable; provided that, the
number of shares to become exercisable on any Vesting Date shall be rounded up
to the nearest share, but in no event shall more than 25 percent of the shares
underlying the Option become exercisable in any twelve-month period, nor shall
more than the total number of shares underlying the Option become exercisable.
Notwithstanding the foregoing, in the event of a Change in Control (as defined
in the Plan), any portion of the Option which has not expired pursuant to
Section 6 below, shall become immediately vested and exercisable on the date of
such Change in Control.
6. Expiration Date. Subject to the provisions of the Plan, with respect to
the Option or any portion thereof which has not become exercisable, the Option
shall expire on the date the Participant's Employment is terminated for any
reason, and with respect to any Option or any portion thereof which has become
exercisable, the Option shall expire on the earlier of: (i) 90 days after the
Participant's termination of Employment other than for Cause, death or
Disability; (ii) one year after termination of the Participant's Employment by
reason of death or Disability; (iii) the commencement of business on the date
the Participant's Employment is, or is deemed to have been, terminated for
Cause; or (iv) the tenth anniversary of the Grant Date.
7. Company Call Rights. Upon a termination of the Participant's Employment
for any reason prior to the existence of a Public Market, the Company shall have
the right, in its sole discretion, during the ninety-day period immediately
following the date of termination (the "Option Call Period"), to purchase for
cash any portion of the Option that has become exercisable on or before the date
of such termination of Employment for a purchase price equal to the Option
Spread, if any, determined as of the Valuation Date immediately preceding the
date that the Company exercises its right to purchase such Option multiplied by
the number of shares of Common Stock underlying such portion of the Option. Upon
written notice that the Company is exercising its right to purchase such portion
of the Option, such Option shall no longer be exercisable by the Participant
(unless otherwise agreed by the Company) and, upon payment by the Company, such
Option shall immediately become void and cancelled, without any further action
by the Participant or the Company or otherwise. Such payment shall be made
within ten days after the date that the Company notifies the Participant in
writing that it is exercising its right to purchase the Option hereunder,
provided that the Company may delay any such payment in the event such payment
will result in the violation of the terms or provisions of, or result in a
default or event of default under, any guarantee, financing or security
agreement or document entered into by the Company or any of its Affiliates and
in effect on such date (hereinafter a "Financing Agreement"). In the event the
payment of the purchase price is delayed as a result of a restriction imposed by
a Financing Agreement as provided above, such payment shall be made without the
application of further conditions or impediments as soon as practicable after
the payment of such purchase price would no longer result in the violation of
the terms or provisions of, or result in a default or event of default under,
any Financing Agreement, and such payment shall equal the amount that would have
been paid to the Participant if no delay had occurred plus interest for the
period from the date on which the purchase price would have been paid but for
the delay in payment provided herein to the date on which such payment is made
(the "Delay Period"), calculated at an annual rate equal to the average annual
prime rate charged during the Delay Period by a nationally recognized bank
designated by the Board. The Company may deduct from any payment provided
hereunder an amount equal to the applicable federal, state and local withholding
taxes.
8.Construction of Agreement. Any provision of this Agreement (or portion
thereof) which is deemed invalid, illegal or unenforceable in any jurisdiction
shall, as to that jurisdiction and subject to this section, be ineffective to
the extent of such invalidity, illegality or unenforceability, without affecting
in any way the remaining provisions thereof in such jurisdiction or rendering
that or any other provisions of this Agreement invalid, illegal, or
unenforceable in any other jurisdiction. If any covenant should be deemed
invalid, illegal or unenforceable because its scope is considered excessive,
such covenant shall be modified so that the scope of the covenant is reduced
only to the minimum extent necessary to render the modified covenant valid,
legal and enforceable. No waiver of any provision or violation of this Agreement
by the Company shall be implied by the Company's forbearance or failure to take
action.
9.Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any party hereto upon any breach or default of any party
under this Agreement, shall impair any such right, power or remedy of such party
nor shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party or any provisions or conditions of this Agreement, shall be in
writing and shall be effective only to the extent specifically set forth in such
writing.
10. Limitation on Transfer. During the lifetime of the Participant, the
Option shall be exercisable only by the Participant. The Option shall not be
assignable or transferable other than by will or by the laws of descent and
distribution. All shares of Common Stock obtained pursuant to the Option granted
herein shall not be transferred except as provided in the Plan and, where
applicable, the Management Stockholders' Agreement.
11. Integration. This Agreement, and the other documents referred to herein
or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to the subject matter hereof other than those
expressly set forth herein and in the Plan. This Agreement, including without
limitation the Plan, supersedes all prior agreements and understandings between
the parties with respect to its subject matter.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware (United States of
America) without regard to the provisions governing conflict of laws.
14. Participant Acknowledgment. The Participant hereby acknowledges receipt
of a copy of the Plan. The Participant hereby acknowledges that all decisions,
determinations and interpretations of the Board in respect of the Plan, this
Agreement and the Option shall be final and conclusive. The Participant further
acknowledges that, prior to the existence of a Public Market, no exercise of the
Option or any portion thereof shall be effective unless and until the
Participant has executed the Management Stockholders' Agreement and the
Participant hereby agrees to be bound thereby.
* * * * *
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its duly authorized officer and said Participant has hereunto signed
this Agreement on his own behalf, thereby representing that he has carefully
read and understands this Agreement, the Plan and the Management Stockholders'
Agreement as of the day and year first written above.
SCG Holding Corporation
-----------------------------
By:
Title:
-----------------------------
[Participant's name]
<PAGE>
Exhibit "B"
- -----------
MANAGEMENT STOCKHOLDERS' AGREEMENT
MANAGEMENT STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of
________, 199__, between SCG Holding Corporation (the "Company"), the TPG
Semiconductor Holdings LLC (the "Majority Stockholder") and ___________________
(the "Management Stockholder").
WHEREAS, the Management Stockholder is an employee of the Company or an
affiliate of the Company and in such capacity was granted an option (the
"Option") to purchase shares of common stock of the Company, $0.01 par value per
share ("Common Stock"), pursuant to the Company's 1999 Founders Stock Option
Plan (the "Plan");
WHEREAS, as a condition to the issuance of shares of Common Stock pursuant
to the exercise of the Option, the Management Stockholder is required under the
Plan to execute this Agreement;
WHEREAS, the Management Stockholder desires to exercise the Option to
purchase shares of Common Stock; and
WHEREAS, the Management Stockholder, the Majority Stockholder and the
Company desire to enter into this Agreement and to have this Agreement apply to
the shares to be purchased pursuant to the Plan and to any shares of Common
Stock acquired after the date hereof by the Management Stockholder from whatever
source, subject to any future agreement between the Company and the Management
Stockholder to the contrary (in the aggregate, the "Shares").
NOW THEREFORE, in consideration of the premises hereinafter set forth, and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows.
1. Investment. The Management Stockholder represents that the Shares are
being acquired for investment and not with a view toward the distribution
thereof.
2. Issuance of Shares. The Management Stockholder acknowledges and agrees
that the certificate for the Shares shall bear the following legends (except
that the second paragraph of this legend shall not be required after the Shares
have been registered and except that the first paragraph of this legend shall
not be required after the termination of this Agreement):
The shares represented by this certificate are subject to the
terms and conditions of a Management Stockholders' Agreement
dated as of ______________, 19__ and may not be sold,
transferred, hypothecated, assigned or encumbered, except as
may be permitted by the aforesaid Agreement. A copy of the
Management Stockholders' Agreement may be obtained from the
Secretary of the Company.
The shares represented by this certificate have not been
registered under the Securities Act of 1933. The shares have
been acquired for investment and may not be sold, transferred,
pledged or hypothecated in the absence of an effective
registration statement for the shares under the Securities Act
of 1933 or an opinion of counsel for the Company that
registration is not required under said Act.
Upon the termination of this Agreement, or upon registration of the Shares
under the Securities Act of 1933 (the "Securities Act"), the Management
Stockholder shall have the right to exchange any Shares containing the above
legend (i) in the case of the registration of the Shares, for Shares legended
only with the first paragraph described above and (ii) in the case of the
termination of this Agreement, for Shares legended only with the second
paragraph described above.
3. Transfer of Shares; Call Rights.
(a) The Management Stockholder agrees that he will not cause or permit
the Shares or his interest in the Shares to be sold, transferred, hypothecated,
assigned or encumbered except as expressly permitted by this Section 3;
provided, however, that the Shares or any such interest may be transferred (i)
on the Management Stockholder's death by bequest or inheritance to the
Management Stockholder's executors, administrators, testamentary trustees,
legatees or beneficiaries, (ii) in accordance with Section 4 of this Agreement,
and (iii) to the Company pursuant to Section 4.11 of the Plan, subject in any
such case to the agreement by each transferee (other than the Company or as
otherwise permitted by the Company) in writing to be bound by the terms of this
Agreement and provided in any such case that no such transfer that would cause
the Company to be required to register the Common Stock under Section 12(g) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall be
permitted.
(b) The Company (or its designated assignee) shall have the right, during
the one-hundred-twenty-day period (x) beginning on the one-year anniversary of
the termination of the Management Stockholder's employment as a result of death
or Disability or (y) immediately following the termination of the employment of
the Management Stockholder with the Company for any other reason at any time, to
purchase from the Management Stockholder, and upon the exercise of such right
the Management Stockholder shall sell to the Company (or its designated
assignee), all or any portion of the Shares held by the Management Stockholder
as of the date as of which such right is exercised at a per Share price equal to
the Fair Market Value (as defined in the Plan) of a share of Common Stock
determined as of the Valuation Date (as defined in the Plan) immediately
preceding the date as of which such right is exercised. The Company (or its
designated assignee) shall exercise such right by delivering to the Management
Stockholder a written notice specifying its intent to purchase Shares held by
the Management Stockholder, the date as of which such right is to be exercised
and the number of Shares to be purchased. Such purchase and sale shall occur on
such date as the Company (or its designated assignee) shall specify which date
shall not be later than ninety (90) days after the fiscal quarter-end
immediately following the date as of which the Company's right is exercised;
provided that the Company may delay any such payment in the event such payment
will result in the violation of the terms or provisions of, or result in a
default or event of default under, any guarantee, financing or security
agreement or document entered into by the Company or any of its Affiliates and
in effect on such date (hereinafter a "Financing Agreement"). In the event the
payment of the purchase price is delayed as a result of a restriction imposed by
a Financing Agreement as provided above, such payment shall be made without the
application of further conditions or impediments as soon as practicable after
the payment of such purchase price would no longer result in the violation of
the terms or provisions of, or result in a default or event of default under,
any Financing Agreement, and such payment shall equal the amount that would have
been paid to the Management Stockholder if no delay had occurred plus interest
for the period from the date on which the purchase price would have been paid
but for the delay in payment provided herein to the date on which such payment
is made (the "Delay Period"), calculated at an annual rate equal to the average
annual prime rate charged during the Delay Period by a nationally recognized
bank designated by the Board.
4. Certain Rights.
(a) Drag Along Rights. If the Majority Stockholder desires to sell all or
substantially all of its shares of Common Stock to a good faith independent
purchaser (a "Purchaser") (other than any other investment partnership, limited
liability company or other entity established for investment purposes and
controlled by the principals of the Majority Stockholder or any of its
affiliates and other than any employees of the Majority Stockholder hereinafter
referred to as a "Permitted Transferee") and said Purchaser desires to acquire
all or substantially all of the issued and outstanding shares of Common Stock
(or all or substantially all of the assets of the Company) upon such terms and
conditions as agreed to with the Majority Stockholder, the Management
Stockholder agrees to sell all of his Shares to said Purchaser (or to vote all
of his Shares in favor of any merger or other transaction which would effect a
sale of such shares of Common Stock or assets of the Company) at the same price
per share of Common Stock and pursuant to the same terms and conditions with
respect to payment for the shares of Common Stock as agreed to by the Majority
Stockholder. In such case, the Majority Stockholder shall give written notice of
such sale to the Management Stockholder at least thirty (30) days prior to the
consummation of such sale, setting forth (i) the consideration to be received by
the holders of shares of Common Stock, (ii) the identity of the Purchaser, (iii)
any other material items and conditions of the proposed transfer and (iv) the
date of the proposed transfer.
(b) Tag Along Rights. (i) Subject to paragraph (iv) of this Section 4(b),
if the Majority Stockholder or its Permitted Transferee proposes to transfer any
of its shares of Common Stock to a Purchaser (other than a Permitted
Transferee), then the Majority Stockholder or his Permitted Transferee
(hereinafter referred to as a "Selling Stockholder") shall give written notice
of such proposed transfer to the Management Stockholder (the "Selling
Stockholder's Notice") at least thirty (30) days prior to the consummation of
such proposed transfer, and shall provide notice to all other stockholders of
the Company to whom the Majority Stockholder has granted similar "tag-along"
rights (such stockholders together with the Management Stockholder, referred to
herein as the "Other Stockholders") setting forth (A) the number of shares of
Common Stock offered, (B) the consideration to be received by such Selling
Stockholder, (C) the identity of the Purchaser, (D) any other material items and
conditions of the proposed transfer and (E) the date of the proposed transfer.
(ii) Upon delivery of the Selling Stockholder's Notice, the Management
Stockholder may elect to sell up to the sum of (A) the Pro Rata Portion (as
hereinafter defined) and (B) the Excess Pro Rata Portion (as hereinafter
defined) of his Shares, at the same price per share of Common Stock and pursuant
to the same terms and conditions with respect to payment for the shares of
Common Stock as agreed to by the Selling Stockholder, by sending written notice
to the Selling Stockholder within fifteen (15) days after the date of the
Selling Stockholder's Notice, indicating his election to sell up to the sum of
the Pro Rata Portion plus the Excess Pro Rata Portion of his Shares in the same
transaction. Following such fifteen-day period, the Selling Stockholder and each
Other Stockholder who has served notice on the Selling Stockholder shall be
permitted to sell to the Purchaser on the terms and conditions set forth in the
Selling Stockholder's Notice the sum of (X) the Pro Rata Portion and (Y) the
Excess Pro Rata Portion of its Shares.
(iii) For purposes of Section 4(b) hereof, "Pro Rata Portion" shall mean,
with respect to shares of Common Stock held by the Management Stockholder or
Selling Stockholder, as the case may be, a number equal to the product of (x)
the total number of such shares then owned by the Management Stockholder or the
Selling Stockholder, as the case may be, and (y) a fraction, the numerator of
which shall be the total number of such shares proposed to be sold to the
Purchaser as set forth in the Selling Stockholder's Notice, and the denominator
of which shall be the total number of such shares then outstanding (including
such shares proposed to be sold by the Selling Stockholder); provided that, in
the event any of the Other Stockholders (including the Management Stockholder)
elects to sell less than his or her Pro Rata Portion, such lesser amount shall
be deemed to be his or her Pro Rata Portion for purposes of this Agreement, and
provided that any fraction of a share resulting from such calculation shall be
disregarded for purposes of determining the Pro Rata Portion. For purposes of
Section 4(b), with respect to each Other Stockholder and the Management
Stockholder, "Excess Pro Rata Portion" shall mean a whole number equal to the
product of (x) the number of Non-Elected Shares (as defined below) and (y) a
fraction, the numerator of which shall be such Management Stockholder's Pro Rata
Portion, and the denominator of which shall be the number of Elected Shares (as
defined below), provided that any fraction of a share resulting from such
calculation shall be disregarded for purposes of determining the Excess Pro Rata
Portion. For purposes of Section 4(b), with respect to the Selling Stockholder,
"Excess Pro Rata Portion" shall mean the excess, if any, of the number of
Non-Elected Shares over the aggregate Excess Pro Rata Portions of the Other
Stockholders (including the Management Stockholder.) For purposes of this
Agreement, "Elected Shares" shall mean the sum of (x) the aggregate Pro Rata
Portions with respect to the shares of Common Stock of all of the Other
Stockholders (including the Management Stockholder) that have elected to
exercise in full their rights to sell their Pro Rata Portion of shares of Common
Stock, and (y) the Selling Stockholder's Pro Rata Portion of shares of Common
Stock. For purposes of this Agreement, "Non-Elected Shares" shall mean the
excess, if any, of the total number of shares of Common Stock proposed to be
sold to a Purchaser as set forth in a Selling Stockholder's Notice over the
aggregate Pro Rata Portions with respect to shares of Common Stock of all of the
Other Stockholders (including the Management Stockholder) that have elected to
exercise their rights to sell their Pro Rata Portions of Shares of Common Stock.
(iv) Notwithstanding anything to the contrary contained herein, the
provisions of this Section 4(b) shall not apply to any sale or transfer by the
Majority Stockholder of shares of Common Stock unless and until the Majority
Stockholder, after giving effect to the proposed sale or transfer, shall have
sold or transferred in the aggregate (other than to Permitted Transferees)
shares of Common Stock, representing 7.5% of shares of Common Stock owned by the
Majority Stockholder on the date hereof.
5. Termination. This Agreement shall terminate immediately following the
existence of a Public Market for the Common Stock except that (i) the
requirements contained in Section 2 hereof shall survive the termination of this
Agreement and (ii) the provisions contained in Section 3 hereof shall continue
with respect to each Share during such period of time, if any, as the Management
Stockholder is precluded from selling such Shares pursuant to Rule 144 of the
Securities Act. For this purpose, a "Public Market" for the Common Stock shall
be deemed to exist if the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act and trading regularly occurs in such Common Stock in,
on or through the facilities of securities exchanges and/or inter-dealer
quotation systems in the United States (within the meaning of Section 902(n) of
the Securities Act) or any designated offshore securities market (within the
meaning of Rule 902(a) of the Securities Act).
6. Distributions With Respect To Shares. As used herein, the term "Shares"
includes securities of any kind whatsoever distributed with respect to the
Common Stock acquired by the Management Stockholder pursuant to the Plan or any
such securities resulting from a stock split or consolidation involving such
Common Stock.
7. Amendment; Assignment. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by authorized representatives of the parties or, in
the case of a waiver, by an authorized representative of the party waiving
compliance. No such written instrument shall be effective unless it expressly
recites that it is intended to amend, supersede, cancel, renew or extend this
Agreement or to waive compliance with one or more of the terms hereof, as the
case may be. Except for the Management Stockholder's right to assign his or her
rights under Section 3(a) or the Company's right to assign its rights under
Section 3(b), no party to this Agreement may assign any of its rights or
obligations under this Agreement without the prior written consent of the other
parties hereto.
8. Notices. Each notice and other communication hereunder shall be in
writing and shall be given and shall be deemed to have been duly given on the
date it is delivered in person, on the next business day if delivered by
overnight mail or other reputable overnight courier, or the third business day
if sent by registered mail, return receipt requested, to the parties as follows:
If to the Management Stockholder, to his most recent address shown on
records of the Company or its Affiliate;
If to the Company:
SCG Holding Corporation
5005 East McDowell Road
Phoenix, AZ 85008
Attention: Board of Directors and Secretary
If to the Majority Stockholder, to its most recent address shown on records
of the Company or its Affiliate;
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but each of which
together shall constitute one and the same document.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to its
principles of conflicts of law.
11. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the heirs, personal representatives,
successors and permitted assigns of the parties hereto. Nothing expressed or
referred to in this Agreement is intended or shall be construed to give any
person other than the parties to this Agreement, or their respective heirs,
personal representatives, successors or assigns, any legal or equitable rights,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof.
13. Severability. If any term, provision, covenant or restriction of this
Agreement, is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
14. Miscellaneous. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
<PAGE>
* * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
-----------------------------
[Management Stockholder]
SCG Holding Corporation
-----------------------------
By:
Title:
TPG Semiconductor Holdings LLC
-----------------------------
By:
Title:
SCG HOLDING CORPORATION
2000 STOCK INCENTIVE PLAN
(As Adopted by the Board of Directors on February 17, 2000)
ARTICLE 1
PURPOSE
1.1 GENERAL. The purpose of the SCG Holding Corporation 2000 Stock
Incentive Plan (the "Plan") is to promote the success and enhance the value of
SCG Holding Corporation (the "Company") by linking the personal interests of its
members of the Board, employees, officers, and executives of, and consultants
and advisors to, the Company to those of Company stockholders and by providing
such individuals with an incentive for outstanding performance in order to
generate superior returns to shareholders of the Company. The Plan is further
intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of members of the Board, employees, officers,
and executives of, and consultants and advisors to, the Company upon whose
judgment, interest, and special effort the successful conduct of the Company's
operation is largely dependent.
ARTICLE 2
EFFECTIVE DATE
2.1 EFFECTIVE DATE. The Plan is effective as of the date the Plan is
approved by the Board (the "Effective Date"). Within 12 months of the Effective
Date, the Plan must be approved by the Company's shareholders. The Plan will be
deemed to be approved by the shareholders if it receives the affirmative vote of
the holders of a majority of the shares of stock of the Company present or
represented and entitled to vote at a meeting duly held in accordance with the
applicable provisions of the Company's Bylaws or by written consent of a
majority of the Company's shareholders in lieu of a meeting. Any awards granted
under the Plan prior to shareholder approval are effective when made (unless the
Committee specifies otherwise at the time of grant), but no Award may be
exercised or settled and no restrictions relating to any Award may lapse before
the Plan is approved by the shareholders as provided above. If the shareholders
fail to approve the Plan, any Award previously made shall be automatically
canceled without any further act.
ARTICLE 3
DEFINITIONS AND CONSTRUCTION
3.1 DEFINITIONS. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:
(a) "Award" means any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Share Award, Performance-Based Award, or
Take Ownership Grant granted to a Participant under the Plan.
(b) "Award Agreement" means any written agreement, contract,
or other instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means (except as otherwise provided in an Award
Agreement) if the Committee, in its reasonable and good faith discretion,
determines that the Participant (i) fails to substantially perform his duties
(other than as a result of Disability), after the Board or the executive to
which the Participant reports delivers to the Participant a written demand for
substantial performance that specifically identifies the manner in which the
Participant has not substantially performed his duties; (ii) engages in willful
misconduct or gross negligence that is materially injurious to the Company or a
Subsidiary; (iii) breaches his duty of loyalty to the Company or a Subsidiary;
(iv) unauthorized removal from the premises of the Company or a Subsidiary of a
document (of any media or form) relating to the Company or a Subsidiary or the
customers of the Company or a Subsidiary; or (v) has committed a felony or a
serious crime involving moral turpitude. Any rights the Company or any of its
Subsidiaries may have hereunder in respect of the events giving rise to Cause
shall be in addition to the rights the Company or any of its Subsidiaries may
have under any other agreement with the Participant or at law or in equity. If,
subsequent to a Participant's termination of employment or services, it is
discovered that such Participant's employment or services could have been
terminated for Cause, the Participant's employment or services shall, at the
election of the Board, in its sole discretion, be deemed to have been terminated
for Cause retroactively to the date the events giving rise to Cause occurred.
(e) "Change of Control" shall mean the occurrence of any of
the following events: (i) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company or the Operating Subsidiary to any Person or group of
related persons for purposes of Section 13(d) of the Exchange Act (a "Group"),
together with any affiliates thereof other than TPG Semiconductor Holdings LLC,
TPG Partners II, L.P., or any of their affiliates (hereafter collectively
referred to as "TPG"); (ii) the approval by the holders of Stock and the
consummation of any plan or proposal for the liquidation or dissolution of the
Company; (iii) (A) any Person or Group (other than TPG) shall become the
beneficial owner, directly or indirectly, of shares representing more than 25%
of the aggregate voting power of the issued and outstanding stock entitled to
vote in the election of directors (the "Voting Stock") of the Company and such
Person or Group has the power and authority to vote such shares and (B) TPG
beneficially owns (within the meaning of Section 13(d) of the Exchange Act),
directly or indirectly, in the aggregate a lesser percentage of the Voting Stock
of the Company than such other Person or Group; (iv) the actual replacement of a
majority of the Board over a two-year period from the individual directors who
constituted the Board at the beginning of such period, and such replacement
shall not have been approved by a vote of at least a majority of the Board then
still in office who either were members of such Board at the beginning of such
period or whose election as a member of such Board was previously so approved or
who were nominated by, or designees of, TPG; (v) any Person or Group other than
TPG shall have acquired shares of Voting Stock of the Company such that such
Person or Group has the power and authority to elect a majority of the members
of the Board of Directors of the Company; or (vi) the consummation of a merger
or consolidation of the Company with another entity in which holders of the
Stock immediately prior to the consummation of the transaction hold, directly or
indirectly, immediately following the consummation of the transaction, 50% or
less of the common equity interest in the surviving corporation in such
transaction. Notwithstanding the foregoing, in no event shall a Change of
Control be deemed to have occurred as a result of an initial public offering of
the Stock.
(f) "Code" means the Internal Revenue Code of 1986, as
amended.
(g) "Committee" means the committee of the Board described in
Article 4.
(h) "Covered Employee" means an Employee who is a "covered
employee" within the meaning of Section 162(m) of the Code.
(i) "Disability" shall mean (unless otherwise defined in an
employment agreement between the Company or any of its Subsidiaries and the
Participant or in the Participant's Award Agreement) any illness or other
physical or mental condition of a Participant which renders the Participant
incapable of performing his customary and usual duties for the Company, or any
medically determinable illness or other physical or mental condition resulting
from a bodily injury, disease or mental disorder which in the judgment of the
Committee is permanent and continuous in nature. The Committee may require such
medical or other evidence as it deems necessary to judge the nature and
permanency of the Participant's condition.
(j) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(k) "Fair Market Value" means, as of any given date, the fair
market value of Stock on a particular date determined by such methods or
procedures as may be established from time to time by the Committee. Unless
otherwise determined by the Committee, the Fair Market Value of Stock as of any
date shall be the closing price for the Stock as reported on the NASDAQ National
Market System (or on any national securities exchange on which the Stock is then
listed) for that date or, if no closing price is reported for that date, the
closing price on the next preceding date for which a closing price was reported.
(l) "Incentive Stock Option" means an Option that is intended
to meet the requirements of Section 422 of the Code or any successor provision
thereto.
(m) "Non-Employee Director" means a member of the Board who
qualifies as a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the
Exchange Act, or any successor definition adopted by the Board.
(n) "Non-Qualified Stock Option" means an Option that is not
intended to be an Incentive Stock Option.
(o) "Operating Subsidiary" means Semiconductor Components
Industries, LLC.
(p) "Option" means a right granted to a Participant under
Article 7 or Article 12 of the Plan to purchase Stock at a specified price
during specified time periods. An Option may be either an Incentive Stock Option
or a Non-Qualified Stock Option.
(q) "Participant" means a person who, as a member of the
Board, employee, officer, or executive of, or consultant or advisor providing
services to, the Company or any Subsidiary, has been granted an Award under the
Plan.
(r) "Performance-Based Awards" means the Performance Share
Awards and Restricted Stock Awards granted to selected Covered Employees
pursuant to Articles 9 and 10, but which are subject to the terms and conditions
set forth in Article 11. All Performance-Based Awards are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code.
(s) "Performance Criteria" means the criteria that the
Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period. The Performance
Criteria that will be used to establish Performance Goals are limited to the
following: pre- or after-tax net earnings, sales growth, operating earnings,
operating cash flow, return on net assets, return on stockholders' equity,
return on assets, return on capital, Stock price growth, stockholder returns,
gross or net profit margin, earnings per share, price per share of Stock, and
market share, any of which may be measured either in absolute terms or as
compared to any incremental increase or as compared to results of a peer group.
The Committee shall, within the time prescribed by Section 162(m) of the Code,
define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period for such Participant.
(t) "Performance Goals" means, for a Performance Period, the
goals established in writing by the Committee for the Performance Period based
upon the Performance Criteria. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual. The Committee, in its discretion, may, within the time
prescribed by Section 162(m) of the Code, adjust or modify the calculation of
Performance Goals for such Performance Period in order to prevent the dilution
or enlargement of the rights of Participants (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (ii) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business conditions.
(u) "Performance Period" means the one or more periods of
time, which may be of varying and overlapping durations, as the Committee may
select, over which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Participant's right to, and the
payment of, a Performance-Based Award.
(v) "Performance Share" means a right granted to a Participant
under Article 9, to receive cash, Stock, or other Awards, the payment of which
is contingent upon achieving certain performance goals established by the
Committee.
(w) "Plan" means the SCG Holding Corporation 2000 Stock
Incentive Plan, as amended.
(x) "Restricted Stock Award" means Stock granted to a
Participant under Article 10 that is subject to certain restrictions and to risk
of forfeiture.
(y) "Stock" means the common stock of the Company and such
other securities of the Company that may be substituted for Stock pursuant to
Article 14.
(z) "Stock Appreciation Right" or "SAR" means a right granted
to a Participant under Article 8 to receive a payment equal to the difference
between the Fair Market Value of a share of Stock as of the date of exercise of
the SAR over the grant price of the SAR, all as determined pursuant to Article
8.
(aa) "Subsidiary" means any corporation or other entity of
which a majority of the outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Company.
(bb) "Take Ownership Grant" means the Option granted to each
eligible Participant pursuant to Article 12.
ARTICLE 4
ADMINISTRATION
4.1 COMMITTEE. The Plan shall be administered by the Board or a
Committee appointed by, and which serves at the discretion of, the Board. If the
Board appoints a Committee, the Committee shall consist of at least two
individuals, each of whom qualifies as (i) a Non-Employee Director, and (ii) an
"outside director" under Code Section 162(m) and the regulations issued
thereunder. Reference to the Committee shall refer to the Board if the Board
does not appoint a Committee.
4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present, and acts approved in writing by a majority
of the Committee in lieu of a meeting, shall be deemed the acts of the
Committee. Each member of the Committee is entitled to, in good faith, rely or
act upon any report or other information furnished to that member by any officer
or other employee of the Company or any Subsidiary, the Company's independent
certified public accountants, or any executive compensation consultant or other
professional retained by the Company to assist in the administration of the
Plan.
4.3 AUTHORITY OF COMMITTEE. Subject to any specific designation in the
Plan, the Committee has the exclusive power, authority and discretion to:
(a) Designate Participants to receive Awards;
(b) Determine the type or types of Awards to be granted to
each Participant;
(c) Determine the number of Awards to be granted and the
number of shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award granted
under the Plan including but not limited to, the exercise price, grant price, or
purchase price, any restrictions or limitations on the Award, any schedule for
lapse of forfeiture restrictions or restrictions on the exercisability of an
Award, and accelerations or waivers thereof, based in each case on such
considerations as the Committee in its sole discretion determines; provided,
however, that the Committee shall not have the authority to accelerate the
vesting or waive the forfeiture of any Performance-Based Awards;
(e) Amend, modify, or terminate any outstanding Award, with
the Participant's consent unless the Committee has the authority to amend,
modify, or terminate an Award without the Participant's consent under any other
provision of the Plan.
(f) Determine whether, to what extent, and under what
circumstances an Award may be settled in, or the exercise price of an Award may
be paid in, cash, Stock, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;
(g) Prescribe the form of each Award Agreement, which need not
be identical for each Participant;
(h) Decide all other matters that must be determined in
connection with an Award;
(i) Establish, adopt, or revise any rules and regulations as
it may deem necessary or advisable to administer the Plan; and
(j) Interpret the terms of, and any matter arising under, the
Plan or any Award Agreement;
(k) Make all other decisions and determinations that may be
required under the Plan or as the Committee deems necessary or advisable to
administer the Plan.
4.4 DECISIONS BINDING. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 5
SHARES SUBJECT TO THE PLAN
5.1 NUMBER OF SHARES. Subject to adjustment provided in Section 14.1,
the aggregate number of shares of Stock reserved and available for grant under
the Plan shall be 3,000,000.
5.2 LAPSED AWARDS. To the extent that an Award terminates, expires, or
lapses for any reason, any shares of Stock subject to the Award will again be
available for the grant of an Award under the Plan.
5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
5.4 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS. Notwithstanding
any provision in the Plan to the contrary, and subject to the adjustment in
Section 14.1, the maximum number of shares of Stock with respect to one or more
Awards that may be granted to any one Participant during the Company's fiscal
year shall be 1,000,000.
ARTICLE 6
ELIGIBILITY AND PARTICIPATION
6.1 ELIGIBILITY.
(a) GENERAL. Persons eligible to participate in this Plan
include all members of the Board, employees, officers, and executives of, and
consultants and advisors to, the Company or a Subsidiary, as determined by the
Committee.
(b) FOREIGN PARTICIPANTS. Subject to the provisions of Article
16 of the Plan, in order to assure the viability of Awards granted to
Participants employed in foreign countries, the Committee may provide for such
special terms as it may consider necessary or appropriate to accommodate
differences in local law, tax policy, or custom. Moreover, the Committee may
approve such supplements to, or amendments, restatements, or alternative
versions of the Plan as it may consider necessary or appropriate for such
purposes without thereby affecting the terms of the Plan as in effect for any
other purpose; provided, however, that no such supplements, amendments,
restatements, or alternative versions shall increase the share limitations
contained in Section 5.1 of the Plan.
6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals,
those to whom Awards shall be granted and shall determine the nature and amount
of each Award. No individual shall have any right to be granted an Award under
this Plan.
ARTICLE 7
STOCK OPTIONS
7.1 GENERAL. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(a) EXERCISE PRICE. The exercise price per share of Stock
under an Option shall be determined by the Committee and set forth in the Award
Agreement. It is the intention under the Plan that the exercise price for any
Option shall not be less than the Fair Market Value as of the date of grant;
provided, however that the Committee may, in its discretion, grant Options
(other than Options that are intended to be Incentive Stock Options or Options
that are intended to qualify as performance-based compensation under Code
Section 162(m)) with an exercise price of less than Fair Market Value on the
date of grant.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part. The Committee shall also determine the performance or other conditions, if
any, that must be satisfied before all or part of an Option may be exercised.
Unless otherwise provided in an Award Agreement, an Option will lapse
immediately if a Participant's employment or services are terminated for Cause.
(c) PAYMENT. The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, promissory note, shares of Stock (through
actual tender or by attestation), or other property (including broker-assisted
"cashless exercise" arrangements), and the methods by which shares of Stock
shall be delivered or deemed to be delivered to Participants.
(d) EVIDENCE OF GRANT. All Options shall be evidenced by a
written Award Agreement between the Company and the Participant. The Award
Agreement shall include such additional provisions as may be specified by the
Committee.
7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be granted
only to employees and the terms of any Incentive Stock Options granted under the
Plan must comply with the following additional rules:
(a) EXERCISE PRICE. The exercise price per share of Stock
shall be set by the Committee, provided that the exercise price for any
Incentive Stock Option may not be less than the Fair Market Value as of the date
of the grant.
(b) EXERCISE. In no event, may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.
(c) LAPSE OF OPTION. An Incentive Stock Option shall lapse
under the following circumstances.
(1) The Incentive Stock Option shall lapse ten years
from the date it is granted, unless an earlier time is set in the Award
Agreement.
(2) The Incentive Stock Option shall lapse upon
termination of employment for Cause or for any other reason, other than
the Participant's death or Disability, unless otherwise provided in the
Award Agreement.
(3) If the Participant terminates employment on
account of Disability or death before the Option lapses pursuant to
paragraph (1) or (2) above, the Incentive Stock Option shall lapse,
unless it is previously exercised, on the earlier of (i) the date on
which the Option would have lapsed had the Participant not become
Disabled or lived and had his employment status (i.e., whether the
Participant was employed by the Company on the date of his Disability
or death or had previously terminated employment) remained unchanged;
or (ii) 12 months after the date of the Participant's termination of
employment on account of Disability or death. Upon the Participant's
Disability or death, any Incentive Stock Options exercisable at the
Participant's Disability or death may be exercised by the Participant's
legal representative or representatives, by the person or persons
entitled to do so under the Participant's last will and testament, or,
if the Participant fails to make testamentary disposition of such
Incentive Stock Option or dies intestate, by the person or persons
entitled to receive the Incentive Stock Option under the applicable
laws of descent and distribution.
(d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market
Value (determined as of the time an Award is made) of all shares of Stock with
respect to which Incentive Stock Options are first exercisable by a Participant
in any calendar year may not exceed $100,000.00 or such other limitation as
imposed by Section 422(d) of the Code, or any successor provision. To the extent
that Incentive Stock Options are first exercisable by a Participant in excess of
such limitation, the excess shall be considered Non-Qualified Stock Options.
(e) TEN PERCENT OWNERS. An Incentive Stock Option shall be
granted to any individual who, at the date of grant, owns stock possessing more
than ten percent of the total combined voting power of all classes of Stock of
the Company only if such Option is granted at a price that is not less than 110%
of Fair Market Value on the date of grant and the Option is exercisable for no
more than five years from the date of grant.
(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an
Incentive Stock Option may be made pursuant to this Plan after the tenth
anniversary of the Effective Date.
(g) RIGHT TO EXERCISE. During a Participant's lifetime, an
Incentive Stock Option may be exercised only by the Participant.
ARTICLE 8
STOCK APPRECIATION RIGHTS
8.1 GRANT OF SARS. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(a) RIGHT TO PAYMENT. Upon the exercise of a Stock
Appreciation Right, the Participant to whom it is granted has the right to
receive the excess, if any, of:
(1) The Fair Market Value of a share of Stock on the
date of exercise; over
(2) The grant price of the Stock Appreciation Right
as determined by the Committee, which shall not be less than the Fair
Market Value of a share of Stock on the date of grant in the case of
any SAR related to any Incentive Stock Option.
(b) OTHER TERMS. All awards of Stock Appreciation Rights shall
be evidenced by an Award Agreement. The terms, methods of exercise, methods of
settlement, form of consideration payable in settlement, and any other terms and
conditions of any Stock Appreciation Right shall be determined by the Committee
at the time of the grant of the Award and shall be reflected in the Award
Agreement.
ARTICLE 9
PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Shares granted to each Participant. All
Awards of Performance Shares shall be evidenced by an Award Agreement.
9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the
Participant rights, valued as determined by the Committee, and payable to, or
exercisable by, the Participant to whom the Performance Shares are granted, in
whole or in part, as the Committee shall establish at grant or thereafter.
Subject to the terms of the Plan, the Committee shall set performance goals and
other terms or conditions to payment of the Performance Shares in its discretion
which, depending on the extent to which they are met, will determine the number
and value of Performance Shares that will be paid to the Participant.
9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
ARTICLE 10
RESTRICTED STOCK AWARDS
10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make
Awards of Restricted Stock to Participants in such amounts and subject to such
terms and conditions as determined by the Committee. All Awards of Restricted
Stock shall be evidenced by a Restricted Stock Award Agreement.
10.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.
10.3 FORFEITURE. Except as otherwise determined by the Committee at the
time of the grant of the Award or thereafter, upon termination of employment
during the applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited, provided, however, that the
Committee may provide in any Restricted Stock Award Agreement that restrictions
or forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.
10.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.
ARTICLE 11
PERFORMANCE-BASED AWARDS
11.1 PURPOSE. The purpose of this Article 11 is to provide the
Committee the ability to qualify the Performance Share Awards under Article 9
and the Restricted Stock Awards under Article 10 as "performance-based
compensation" under Section 162(m) of the Code. If the Committee, in its
discretion, decides to grant a Performance-Based Award to a Covered Employee,
the provisions of this Article 11 shall control over any contrary provision
contained in Articles 9 or 10.
11.2 APPLICABILITY. This Article 11 shall apply only to those Covered
Employees selected by the Committee to receive Performance-Based Awards. The
Committee may, in its discretion, grant Restricted Stock Awards or Performance
Share Awards to Covered Employees that do not satisfy the requirements of this
Article 11. The designation of a Covered Employee as a Participant for a
Performance Period shall not in any manner entitle the Participant to receive an
Award for the period. Moreover, designation of a Covered Employee as a
Participant for a particular Performance Period shall not require designation of
such Covered Employee as a Participant in any subsequent Performance Period and
designation of one Covered Employee as a Participant shall not require
designation of any other Covered Employees as a Participant in such period or in
any other period.
11.3 DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS. With
regard to a particular Performance Period, the Committee shall have full
discretion to select the length of such Performance Period, the type of
Performance-Based Awards to be issued, the kind and/or level of the Performance
Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary
or any division or business unit thereof.
11.4 PAYMENT OF PERFORMANCE AWARDS. Unless otherwise provided in the
relevant Award Agreement, a Participant must be employed by the Company or a
Subsidiary on the last day of the Performance Period to be eligible for a
Performance Award for such Performance Period. Furthermore, a Participant shall
be eligible to receive payment under a Performance-Based Award for a Performance
Period only if the Performance Goals for such period are achieved. In
determining the actual size of an individual Performance-Based Award, the
Committee may reduce or eliminate the amount of the Performance-Based Award
earned for the Performance Period, if in its sole and absolute discretion, such
reduction or elimination is appropriate.
11.5 MAXIMUM AWARD PAYABLE. The maximum Performance-Based Award payable
to any one Participant under the Plan for a Performance Period is 1,000,000
shares of Stock, or in the event the Performance-Based Award is paid in cash,
such maximum Performance-Based Award shall be determined by multiplying
1,000,000 by the Fair Market Value of one share of Stock as of the date of grant
of the Performance-Based Award.
ARTICLE 12
TAKE OWNERSHIP GRANTS
12.1 TAKE OWNERSHIP GRANTS. The Take Ownership Grants shall be awarded
to Participants selected by the Committee and shall be subject to the following
terms and conditions:
(a) EFFECTIVE DATE OF GRANTS. The effective date of the Take
Ownership Grants shall be on the day on which the Company's initial public
offering of Stock is consummated; provided, however, that Take Ownership Grants
shall not be made to those persons who are not United States residents if the
jurisdiction in which any such person resides prohibits such Grants or makes it
impractical for the Company to make such Grants.
(b) EXERCISE PRICE FOR GRANTS. Notwithstanding any other
provision hereof, the exercise price per share of Stock under the Take Ownership
Grants shall be the price at which the Company's Stock is offered under its
initial public offering of Stock ("IPO Price"), provided, however, that, with
respect to Participants who do not reside in the United States, if the day on
which the Company receives approval by the applicable foreign jurisdiction to
offer Stock to Participants residing in that jurisdiction is later than the day
on which the Company's initial public offering becomes effective, the exercise
price per share of Stock under the Take Ownership Grants shall be the Fair
Market Value on the day on which the Company receives approval by the applicable
foreign jurisdiction to offer Stock to such Participants.
(c) AMOUNT OF THE TAKE OWNERSHIP GRANTS. Each Participant
selected to receive a Take Ownership Grant shall be entitled to receive an
Option to purchase 50 shares of Stock. Such Option shall be designated as a
Non-Qualified Stock Option.
(d) TIME AND CONDITIONS OF EXERCISE. The Take Ownership Grants
shall become fully exercisable on the second anniversary of the date of grant.
(e) PAYMENT. The Committee shall determine the methods by
which the exercise price of the Take Ownership Grants may be paid, the form of
payment, including, without limitation, cash, promissory note, shares of Stock
(through actual tender or by attestation), or other property (including
broker-assisted "cashless exercise" arrangements), and the methods by which
shares of Stock shall be delivered or deemed to be delivered to Participants.
(f) EVIDENCE OF GRANT. All Take Ownership Grants shall be
evidenced by a written Award Agreement between the Company and the Participant.
The Award Agreement shall provide that upon a Participant's termination of
employment or service with the Company or a Subsidiary for any reason, the Take
Ownership Grant shall lapse and shall include such other provisions as may be
specified by the Committee.
ARTICLE 13
PROVISIONS APPLICABLE TO AWARDS
13.1 STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may,
in the discretion of the Committee, be granted either alone, in addition to, or
in tandem with, any other Award granted under the Plan. Awards granted in
addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.
13.2 EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Stock,
or another Award, based on the terms and conditions the Committee determines and
communicates to the Participant at the time the offer is made.
13.3 TERM OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant.
13.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and
any applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Award may be made in such
forms as the Committee determines at or after the time of grant, including
without limitation, cash, promissory note, Stock, other Awards, or other
property, or any combination, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee.
13.5 LIMITS ON TRANSFER. No right or interest of a Participant in any
Award may be pledged, encumbered, or hypothecated to or in favor of any party
other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided by the Committee, no Award
shall be assignable or transferable by a Participant other than by will or the
laws of descent and distribution.
13.6 BENEFICIARIES. Notwithstanding Section 13.5, a Participant may, in
the manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If the Participant is married, a designation of a person other
than the Participant's spouse as his beneficiary with respect to more than 50 %
of the Participant's interest in the Award shall not be effective without the
written consent of the Participant's spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.
13.7 STOCK CERTIFICATES. Notwithstanding anything herein to the
contrary, the Company shall not be required to issue or deliver any certificates
evidencing shares of Stock pursuant to the exercise of any Awards, unless and
until the Board has determined, with advice of counsel, that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the shares of Stock are listed or traded. All Stock
certificates delivered under the Plan are subject to any stop-transfer orders
and other restrictions as the Committee deems necessary or advisable to comply
with Federal, state, or foreign jurisdiction, securities or other laws, rules
and regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee
may place legends on any Stock certificate to reference restrictions applicable
to the Stock. In addition to the terms and conditions provided herein, the Board
may require that a Participant make such reasonable covenants, agreements, and
representations as the Board, in its discretion, deems advisable in order to
comply with any such laws, regulations, or requirements.
13.8 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control
occurs, all outstanding Options, Stock Appreciation Rights, and other Awards
shall become fully exercisable and all restrictions on outstanding Awards shall
lapse. To the extent that this provision causes Incentive Stock Options to
exceed the dollar limitation set forth in Section 7.2(d), the excess Options
shall be deemed to be Non-Qualified Stock Options. Upon, or in anticipation of,
such an event, the Committee may cause every Award outstanding hereunder to
terminate at a specific time in the future and shall give each Participant the
right to exercise Awards during a period of time as the Committee, in its sole
and absolute discretion, shall determine.
ARTICLE 14
CHANGES IN CAPITAL STRUCTURE
14.1 GENERAL.
(a) SHARES AVAILABLE FOR GRANT. In the event of any change in
the number of shares of Stock outstanding by reason of any stock dividend or
split, recapitalization, merger, consolidation, combination or exchange of
shares or similar corporate change, the maximum aggregate number of shares of
Stock with respect to which the Committee may grant Awards shall be
appropriately adjusted by the Committee. In the event of any change in the
number of shares of Stock outstanding by reason of any other event or
transaction, the Committee may, but need not, make such adjustments in the
number and class of shares of Stock with respect to which Awards may be granted
as the Committee may deem appropriate.
(b) OUTSTANDING AWARDS - INCREASE OR DECREASE IN ISSUED SHARES
WITHOUT CONSIDERATION. Subject to any required action by the shareholders of the
Company, in the event of any increase or decrease in the number of issued shares
of Stock resulting from a subdivision or consolidation of shares of Stock or the
payment of a stock dividend (but only on the shares of Stock), or any other
increase or decrease in the number of such shares effected without receipt or
payment of consideration by the Company, the Committee shall proportionally
adjust the number of shares of Stock subject to each outstanding Award and the
exercise price per share of Stock of each such Award.
(c) OUTSTANDING AWARDS - CERTAIN MERGERS. Subject to any
required action by the shareholders of the Company, in the event that the
Company shall be the surviving corporation in any merger or consolidation
(except a merger or consolidation as a result of which the holders of shares of
Stock receive securities of another corporation), each Award outstanding on the
date of such merger or consolidation shall pertain to and apply to the
securities which a holder of the number of shares of Stock subject to such Award
would have received in such merger or consolidation.
(d) OUTSTANDING AWARDS - CERTAIN OTHER TRANSACTIONS. In the
event of (i) a dissolution or liquidation of the Company, (ii) a sale of all or
substantially all of the Company's assets, (iii) a merger or consolidation
involving the Company in which the Company is not the surviving corporation or
(iv) a merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Stock receive securities of
another corporation and/or other property, including cash, the Committee shall,
in its absolute discretion, have the power to:
(1) cancel, effective immediately prior to the
occurrence of such event, each Award outstanding immediately prior to
such event (whether or not then exercisable), and, in full
consideration of such cancellation, pay to the Participant to whom such
Award was granted an amount in cash, for each share of Stock subject to
such Award, respectively, equal to the excess of (A) the value, as
determined by the Committee in its absolute discretion, of the property
(including cash) received by the holder of a share of Stock as a result
of such event over (B) the exercise of such Award; or
(2) provide for the exchange of each Award
outstanding immediately prior to such event (whether or not then
exercisable) for an option, a stock appreciation right, restricted
stock award, performance share award or performance-based award with
respect to, as appropriate, some or all of the property for which such
Award is exchanged and, incident thereto, make an equitable adjustment
as determined by the Committee in its absolute discretion in the
exercise price or value of the option, stock appreciate right,
restricted stock award, performance share award or performance-based
award or the number of shares or amount of property subject to the
option, stock appreciation right, restricted stock award, performance
share award or performance-based award or, if appropriate, provide for
a cash payment to the Participant to whom such Award was granted in
partial consideration for the exchange of the Award.
(e) OUTSTANDING AWARDS - OTHER CHANGES. In the event of any
other change in the capitalization of the Company or corporate change other than
those specifically referred to in Article 14, the Committee may, in its absolute
discretion, make such adjustments in the number and class of shares subject to
Awards outstanding on the date on which such change occurs and in the per share
exercise price of each Award as the Committee may consider appropriate to
prevent dilution or enlargement of rights.
(f) NO OTHER RIGHTS. Except as expressly provided in the Plan,
no Participant shall have any rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend, any
increase or decrease in the number of shares of stock of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other
corporation. Except as expressly provided in the Plan, 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 of shares of Stock subject to an Award or
the exercise price of any Award.
ARTICLE 15
AMENDMENT, MODIFICATION, AND TERMINATION
15.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan; provided, however, that to the extent necessary and desirable
to comply with any applicable law, regulation, or stock exchange rule, the
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
15.2 AWARDS PREVIOUSLY GRANTED. Except as otherwise provided in the
Plan, including without limitation, the provisions of Article 14, no
termination, amendment, or modification of the Plan shall adversely affect in
any material way any Award previously granted under the Plan, without the
written consent of the Participant.
ARTICLE 16
PROVISIONS RELATING TO FRENCH EMPLOYEES
Notwithstanding any other provisions of the Plan to the contrary, the
following provisions shall apply to Awards granted to any employee who is a
French citizen or who works primarily in France as of the grant date (referred
to herein as "French Employee").
16.1 CONSULTANTS. Notwithstanding anything to the contrary herein, no
French Employee who would otherwise be considered a consultant under French law
may be granted an Award under the Plan.
16.2 TERMINATION FOR CAUSE. The last sentence of Section 3.1(d)
(definition of Cause) shall not apply to French Employees.
16.3 TEN PERCENT OWNERS. Notwithstanding Section 6.1(a) above, no Award
shall be granted to any French Employee who holds more than ten percent of the
Stock on the grant date.
16.4 EXERCISE PRICE. Notwithstanding Section 7.1(a) above, all Awards
granted to French Employees shall be granted at an exercise price per share
equal to Fair Market Value per share as of the grant date.
16.5 TIME LIMITATIONS. No Options shall be granted to any French
Employee five years after the later of (a) the date the Company's stockholders
initially approved the Plan, or (b) the date the Plan has been subsequently
re-authorized, in its original form or as amended from time to time by the
Board, by the Company's stockholders.
16.6 VESTING OF OPTIONS. Notwithstanding Section 7.1(b) above, no
portion of any Award granted to a French Employee shall become exercisable
before the five-year anniversary of the grant date.
16.7 EFFECT OF PARTICIPANT'S DEATH. Notwithstanding Section 7.1(b) or
any other provision hereof, upon a French Employee's death, the vested portion
of such Participant's Award shall remain exercisable for a period of six months
after the date of his death and shall be exercisable by his heirs.
16.8 EXCHANGE OF OPTIONS. Notwithstanding Section 13.2 above, the
Company shall not terminate any portion of an Award granted to any French
Employee.
16.9 ADJUSTMENT OF OPTIONS. Notwithstanding Section 14.1 herein, any
adjustment made to any Award granted to a French Employee shall comply with
applicable French law.
ARTICLE 17
GENERAL PROVISIONS
17.1 NO RIGHTS TO AWARDS. No Participant , employee, or other person
shall have any claim to be granted any Award under the Plan, and neither the
Company nor the Committee is obligated to treat Participants, employees, and
other persons uniformly.
17.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.
17.3 WITHHOLDING. The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan. With the
Committee's consent, a Participant may elect to have the Company withhold from
those Stock that would otherwise be received upon the exercise of any Option, a
number of shares having a Fair Market Value equal to the minimum statutory
amount necessary to satisfy the Company's applicable federal, state, local and
foreign income and employment tax withholding obligations.
17.4 NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any
Award Agreement shall interfere with or limit in any way the right of the
Company or any Subsidiary to terminate any Participant's employment or services
at any time, nor confer upon any Participant any right to continue in the employ
of the Company or any Subsidiary.
17.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Subsidiary.
17.6 INDEMNIFICATION. To the extent allowable under applicable law,
each member of the Committee or of the Board shall be indemnified and held
harmless by the Company from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by such member in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure
to act under the Plan and against and from any and all amounts paid by him or
her in satisfaction of judgment in such action, suit, or proceeding against him
or her provided he or she gives the Company an opportunity, at its own expense,
to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
17.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.
17.8 EXPENSES. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.
17.9 TITLES AND HEADINGS. The titles and headings of the Sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
17.10 FRACTIONAL SHARES. No fractional shares of stock shall be issued
and the Committee shall determine, in its discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.
17.11 SECURITIES LAW COMPLIANCE. With respect to any person who is, on
the relevant date, obligated to file reports under Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be void to the extent permitted by law and voidable as deemed advisable by
the Committee.
17.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company
to make payment of awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Company shall be under no obligation to
register under the Securities Act of 1933, as amended, any of the shares of
Stock paid under the Plan. If the shares paid under the Plan may in certain
circumstances be exempt from registration under the Securities Act of 1933, as
amended, the Company may restrict the transfer of such shares in such manner as
it deems advisable to ensure the availability of any such exemption.
17.13 GOVERNING LAW. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of Delaware.
SCG HOLDING CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
(As Adopted by the Board of Directors on February 17, 2000)
1. PURPOSE. The purpose of this SCG Holding Corporation 2000 Employee
Stock Purchase Plan (the "Plan") is to encourage stock ownership by eligible
employees of SCG Holding Corporation (the "Company") and its Subsidiaries and
thereby provide employees with an incentive to contribute to the profitability
and success of the Company. The Plan is intended to qualify as an "employee
stock purchase plan" under Section 423 of the Code and will be maintained for
the exclusive benefit of eligible employees of the Company and its Subsidiaries.
2. DEFINITIONS. For purposes of the Plan, in addition to the terms
defined in Section 1, the following terms are defined:
(a) "Board" means the Board of Directors of the Company.
(b) "Cash Account" means the account maintained on behalf of a
Participant by the Company for the purpose of holding cash contributions
withheld from payroll pending investment in Stock.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Custodian" means Salomon Smith Barney or any successor or
replacement appointed by the Board or its delegatee under Section 3(a).
(e) "Earnings" means a Participant's salary or wages, including
bonuses, for services performed for the Company and its Subsidiaries and
received by a Participant for services rendered during an Offering Period.
(f) "Fair Market Value" means the closing price of the Stock on
the relevant date as reported on NASDAQ (or any national securities exchange or
quotation system on which the Stock is then listed), or if there were no sales
on that date the closing price on the next preceding date for which a closing
price was reported; provided, however, that for any Offering Period beginning on
the IPO Date, the Fair Market Value of the Stock on the first day of such
Offering Period shall be deemed to be the price at which the Company's Stock is
offered under its initial public offering of Stock.
(g) "IPO Date" means the date on which the Company's initial
public offering of Stock is consummated.
(h) "Offering Period" means the period beginning on the IPO Date
and ending on the last day of the next calendar quarter, and every three-month
period thereafter. For Participants who do not reside in the United States, if
the day on which the Company receives approval by the applicable foreign
jurisdiction to offer common stock to Participants residing in that
jurisdiction is later than the day on which the Company's initial public
offering becomes effective, the Offering Period means the period beginning on
the day on which the Company receives approval by the applicable foreign
jurisdiction to offer common stock to such Participants and ending on the last
day of the next calendar quarter, and every three-month period thereafter.
(i) "Participant" means an employee of the Company or a Subsidiary
who is participating in the Plan.
(j) "Purchase Right" means a Participant's option to purchase
Stock that is deemed to be outstanding during an Offering Period. A Purchase
Right represents an "option" under Section 423 of the Code.
(k) "Stock" means the common stock of the Company.
(l) "Stock Account" means the account maintained on behalf of the
Participant by the Custodian for the purpose of holding Stock acquired under the
Plan.
(m) "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 stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain as set forth in Code Section
424(f).
3. ADMINISTRATION.
(a) Board Administration. The Plan will be administered by the
Board. The Board may delegate its administrative duties and authority (other
than its authority to amend the Plan) to any Board committee or to any officers
or employees or committee thereof as the Board may designate (in which case
references to the Board will be deemed to refer to the administrator to which
such duties and authority have been delegated). The Board will have full
authority to adopt, amend, suspend, waive, and rescind rules and regulations and
appoint agents as it deems necessary or advisable to administer the Plan, to
correct any defect or supply any omission or reconcile any inconsistency in the
Plan and to construe and interpret the Plan and rules and regulations
thereunder, to furnish to the Custodian such information as the Custodian may
require, and to make all other decisions and determinations under the Plan
(including determinations relating to eligibility). No person acting in
connection with the administration of the Plan will, in that capacity,
participate in deciding any matter relating to his or her participation in the
Plan.
(b) The Custodian. The Custodian will act as custodian under the
Plan, and will perform duties under the Plan and in any agreement between the
Company and the Custodian. The Custodian will establish and maintain
Participants Stock Accounts and any subaccounts as may be necessary or desirable
to administer the Plan.
(c) Waivers. The Board may waive or modify any requirement that a
notice or election be made or filed under the Plan a specified period in advance
on an individual case or by adopting a rule or regulation under the Plan,
without amending the Plan.
(d) Other Administrative Provisions. The Company will furnish
information from its records as directed by the Board, and such records,
including a Participant's Earnings, will be conclusive on all persons unless
determined by the Board to be incorrect. Each Participant and other person
claiming benefits under the Plan must furnish to the Company in writing an
up-to-date mailing address and any other information as the Board or Custodian
may reasonably request. Any communication, statement, or notice mailed with
postage prepaid to any such Participant or other person at the last mailing
address filed with the Company will be deemed sufficiently given when mailed and
will be binding upon the named recipient. The Plan will be administered on a
reasonable and nondiscriminatory basis and uniform rules will apply to all
persons similarly situated. All Participants will have equal rights and
privileges (subject to the terms of the Plan) with respect to Purchase Right
outstanding during any given Offering Period in accordance with Code Section
423(b)(5).
4. STOCK SUBJECT TO PLAN. Subject to adjustment as provided below, the
total number of shares of Stock reserved and available for issuance or which may
be otherwise acquired upon exercise of Purchase Rights under the Plan will be
1,500,000. If, at the end of any Offering Period, the number of shares of Stock
with respect to which Purchase Rights are to be exercised exceeds the number of
shares of Stock then available under the Plan, the Board shall make a pro rata
allocation of the shares of Stock remaining available for purchase in as uniform
a manner as shall be practicable and as it shall determine to be equitable. Any
shares of Stock delivered by the Company under the Plan may consist, in whole or
in part, of authorized and unissued shares or treasury shares or shares of Stock
purchased on the open market. The number and kind of such shares of Stock
subject to the Plan will be proportionately adjusted, as determined by the
Board, in the event of any extraordinary dividend or other distribution,
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event affecting the Stock.
5. ENROLLMENT AND CONTRIBUTIONS.
(a) Eligibility. An employee of the Company or any Subsidiary
designated by the Board may be enrolled in the Plan for any Offering Period if
such employee is employed by the Company or a Subsidiary authorized to
participate in the Plan on the first day of the Offering Period, unless one of
the following applies to the employee:
(i) such person has been employed by the Company
or a Subsidiary less than 90 days; or
(ii) such person is customarily employed by the
Company or a Subsidiary for 20 hours or less
a week; or
(iii) such person is customarily employed by the
Company or a Subsidiary for not more than
five months in any calendar year;
(iv) such person would, immediately upon
enrollment, be deemed to own, for purposes
of Section 423(b)(3) of the Code, an
aggregate of five percent or more of the
total combined voting power or value of all
outstanding shares of all classes of the
Stock of the Company or any Subsidiary.
The Company will notify an employee of the date as of which he
or she is eligible to enroll in the Plan, and will make available to each
eligible employee the necessary enrollment forms. Notwithstanding the above, any
individual who is employed by the Company or a Subsidiary designated by the
Board and who is working outside of the United States shall not be eligible to
participate in the Plan if the laws of the country in which the employee is
working makes the offer of the Purchase Right or the delivery of Stock under the
Plan impractical. Additionally, the offer of the Purchase Right and the delivery
of Stock under the Plan shall be effective for any individual who is employed by
the Company or a Subsidiary and who is working outside of the United States only
after the Company has complied with the applicable laws of the country in which
the employee is working.
(b) Initial Enrollment. An employee who is eligible under Section
5(a) (or who will become eligible on or before a given Offering Period) may,
after receiving current information about the Plan, initially enroll in the Plan
by executing and filing with the Company a properly completed enrollment form,
including the employee's election as to the rate of payroll contributions for
the Offering Period. To be effective for any Offering Period, such enrollment
form must be filed at least two weeks (or such other period determined by the
Board) preceding such Offering Period.
(c) Automatic Re-enrollment for Subsequent Offering Periods. A
Participant whose enrollment in, and payroll contributions under, the Plan
continues throughout a Offering Period will automatically be re-enrolled in the
Plan for the next Offering Period unless (i) the Participant terminates
enrollment before the next Offering Period in accordance with Section 7(a), or
(ii) the Participant is ineligible to participate under Section 5(a). The
initial rate of payroll contributions for a Participant who is automatically
re-enrolled for a Offering Period will be the same as the rate of payroll
contribution in effect at the end of the preceding Offering Period, unless the
Participant files a new enrollment form designating a different rate of payroll
contributions and such new enrollment form is received no later than two weeks
(or such other period determined by the Board) prior to the beginning of the
next Offering Period.
(d) Payroll Contributions. A Participant will make contributions
under the Plan by means of payroll deductions from each payroll period which
ends during the Offering Period, at the rate elected by the Participant in his
or her enrollment form in effect for that Offering Period (except that such rate
may be changed during the Offering Period to the extent permitted below). The
rate of payroll contributions elected by a Participant may not be less than one
percent (1%) nor more than ten percent (10%) of the Participant's Earnings for
each payroll period, and only whole percentages may be elected; provided,
however, that the Board may specify a lower minimum rate and higher maximum
rate, subject to Section 8(c). Notwithstanding the above, a Participant's
payroll contributions will be adjusted downward by the Company as necessary to
ensure that the limit on the amount of Stock purchased for an Offering Period
set forth in Section 6(a)(iii) is not exceeded. A Participant may elect to
increase, decrease, or discontinue payroll contributions for a future Offering
Period by filing a new enrollment form designating a different rate of payroll
contributions, which form must be received at least two weeks (or such other
period determined by the Board) prior to the beginning of an Offering Period to
be effective for that Offering Period. In addition, a Participant may elect to
discontinue payroll contributions during an Offering Period by filing a new
enrollment form, such change to be effective for the next payroll after the
Participant's new enrollment form is received.
(e) Crediting Payroll Contributions to Cash Accounts. All payroll
contributions by a Participant under the Plan will be credited to a Cash Account
maintained by the Company on behalf of the Participant. The Company will credit
payroll contributions to each Participant's Cash Account as soon as practicable
after the contributions are withheld from the Participant's Earnings.
(f) No Interest on Cash Accounts. No interest will be credited or
paid on cash balances in Participant's Cash Accounts pending investment in
Stock.
6. PURCHASES OF STOCK
(a) Purchase Rights. Enrollment in the Plan for any Offering
Period by a Participant will constitute a grant by the Company of a Purchase
Right to such Participant for such Offering Period. Each Purchase Right will be
subject to the following terms:
(i) The purchase price of each share of Stock
purchased for each Offering Period will
equal 85% of the lesser of the Fair Market
Value of a share of Stock on the first day
of an Offering Period, or the Fair Market
Value of a share of Stock on the last day of
an Offering Period.
(ii) Except as limited in (iii) below, the number
of shares of Stock that may be purchased
upon exercise of the Purchase Right for a
Offering Period will equal the number of
shares (including fractional shares) that
can be purchased at the purchase price
specified in Section 6(a)(i) with the
aggregate amount credited to the
Participant's Cash Account as of the last
day of an Offering Period.
(iii) The number of shares of Stock subject to a
Participant's Purchase Right for any
Offering Period will not exceed the number
derived by dividing $6,250 by 100% of the
Fair Market Value of one share of Stock on
the first day of the Offering Period for the
Offering Period.
(iv) The Purchase Right will be automatically
exercised on the last day of the Offering
Period.
(v) Payments by a Participant for Stock
purchased under a Purchase Right will be
made only through payroll deduction in
accordance with Section 5(d) and (e).
(vi) The Purchase Right will expire on the
earlier of the last day of the Offering
Period or the date on which the
Participant's enrollment in the Plan
terminates.
(b) Purchase of Stock. At or as promptly as practicable after the
last day of an Offering Period, amounts credited to each Participant's Cash
Account will be applied by the Company to purchase Stock, in accordance with the
terms of the Plan. Shares of Stock will be purchased from the Company or in the
open market, as the Board determines. The Company will aggregate the amounts in
all Cash Accounts when purchasing Stock, and shares purchased will be allocated
to each Participant's Stock Account in proportion to the cash amounts withdrawn
from such Participant's Cash Account. After completing purchases for each
Offering Period (which will be completed in not more than 15 calendar days after
the last day of an Offering Period), all shares of Stock so purchased for a
Participant will be credited to the Participant's Stock Account.
(c) Dividend Reinvestment; Other Distributions. Cash dividends on
any Stock credited to a Participant's Stock Account will be automatically
reinvested in additional shares of Stock; such amounts will not be available in
the form of cash to Participants. The Company will aggregate all purchases of
Stock in connection with dividend reinvestment for a given dividend payment
date. Purchases of Stock for purposes of dividend reinvestment will be made as
promptly as practicable (but not more than 15 calendar days) after a dividend
payment date. The purchases will be made directly from the Company at 100% of
the Fair Market Value of a share of Stock on the dividend payment date or on the
open market. Any shares of Stock distributed as a dividend or distribution in
respect of shares of Stock or in connection with a split of the Stock credited
to a Participant's Stock Account will be credited to such Account.
(d) Withdrawals and Transfers. Shares of Stock may be withdrawn
from a Participant's Stock Account, in which case one or more certificates for
whole shares may be issued in the name of, and delivered to, the Participant,
with such Participant receiving cash in lieu of fractional shares based on the
Fair Market Value of a share of Stock on the day preceding the date of
withdrawal. Alternatively, whole shares of Stock may be withdrawn from a
Participant's Stock Account by means of a transfer to a broker-dealer or
financial institution that maintains an account for the Participant, together
with the transfer of cash in lieu of fractional shares based on the Fair Market
Value of a share of Stock on the day preceding the date of withdrawal.
Participants may not designate any other person to receive shares of Stock
withdrawn or transferred under the Plan. A Participant seeking to withdraw or
transfer shares of Stock must give instructions to the Custodian in such manner
and form as may be prescribed by the Custodian, which instructions will be acted
upon as promptly as practicable. Withdrawals and transfers will be subject to
any fees imposed in accordance with Section 8(a).
(e) Excess Account Balances. If any amounts remain in a Cash
Account following the date on which the Company purchases Stock for an Offering
Period as a result of the limitation set forth in Section 6(a)(iii) or for any
other reason, such amounts will be returned to the Participant as promptly as
practicable.
7. TERMINATION AND DISTRIBUTIONS.
(a) Termination of Enrollment. A Participant's enrollment in the
Plan will terminate upon (i) the beginning of any payroll period or Offering
Period that begins after he or she files a written notice of termination of
enrollment with the Company, provided that such Participant will continue to be
deemed to be enrolled with respect to any completed Offering Period for which
purchases have not been completed, (ii) such time as the Participant becomes
ineligible to participate under Section 5(a) of the Plan, or (iii) the
termination of the Participant's employment by the Company and its Subsidiaries.
An employee whose enrollment in the Plan terminates may again enroll in the Plan
as of any subsequent Offering Period that is at least 90 days after such
termination of enrollment if he or she satisfies the eligibility requirements of
Section 5(a) as of such Offering Period. A Participant's election to discontinue
payroll contributions will not constitute a termination of enrollment.
(b) Distribution. As soon as practicable after a Participant's
enrollment in the Plan terminates, amounts in the Participant's Cash Account
which resulted from payroll contributions will be repaid to the Participant. The
Custodian will continue to maintain the Participant's Stock Account for the
Participant until the earlier of such time as the Participant directs the sale
of all Stock in the Account, withdraws, or transfers all Stock in the Account,
or one year after the Participant ceases to be employed by the Company and its
Subsidiaries. If a Participant's termination of enrollment results from his or
her death, all amounts payable will be paid to his or her estate.
8. GENERAL.
(a) Costs. Costs and expenses incurred in the administration of
the Plan and maintenance of Accounts will be paid by the Company, to the extent
provided in this Section 8(a). Any brokerage fees and commissions for the
purchase of Stock under the Plan (including Stock purchased upon reinvestment of
dividends and distributions) will be paid by the Company, but any brokerage fees
and commissions for the sale of Stock under the Plan by a Participant will be
borne by such Participant. The rate at which such fees and commissions will be
charged to Participants will be determined by the Custodian or any broker-dealer
used by the Custodian (including an affiliate of the Custodian), and
communicated from time to time to Participants. In addition, the Custodian may
impose or pass through a reasonable fee for the withdrawal of Stock in the form
of stock certificates (as permitted under Section 6(d)), and reasonable fees for
other services unrelated to the purchase of Stock under the Plan, to the extent
approved in writing by the Company and communicated to Participants.
(b) Statements to Participants. The Participant's statement will
reflect payroll contributions, purchases, sales, and withdrawals and transfers
of shares of Stock and other Plan transactions by appropriate adjustments to the
Participant's Accounts. The Custodian will, not less frequently than quarterly,
provide or cause to be provided a written statement to the Participant showing
the transactions in his or her Stock Account and the date thereof, the number of
shares of Stock credited or sold, the aggregate purchase price paid or sales
price received, the purchase or sales price per share, the brokerage fees and
commissions paid (if any), the total shares held for the Participant's Stock
Account (computed to at least three decimal places), and such other information
as agreed to by the Custodian and the Company.
(c) Compliance with Section 423. It is the intent of the Company
that this Plan comply in all respects with applicable requirements of Section
423 of the Code and regulations thereunder. Accordingly, if any provision of
this Plan does not comply with such requirements, such provision will be
construed or deemed amended to the extent necessary to conform to such
requirements.
9. GENERAL PROVISIONS.
(a) Compliance With Legal and Other Requirements. The Plan, the
granting and exercising of Purchase Rights hereunder, and the other obligations
of the Company and the Custodian under the Plan will be subject to all
applicable federal and state laws, rules, and regulations, and to such approvals
by any regulatory or governmental agency as may be required. The Company may, in
its discretion, postpone the issuance or delivery of Stock upon exercise of
Purchase Rights until completion of such registration or qualification of such
Stock or other required action under any federal or state law, rule, or
regulation, or the laws of any country in which employees of the Company and a
Subsidiary who are nonresident aliens and who are eligible to participate
reside, or other required action with respect to any automated quotation system
or stock exchange upon which the Stock or other Company securities are
designated or listed, or compliance with any other contractual obligation of the
Company, as the Company may consider appropriate. In addition, the Company may
require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of Stock in compliance with applicable laws, rules, and regulations,
designation or listing requirements, or other contractual obligations.
(b) Limits on Encumbering Rights. No right or interest of a
Participant under the Plan, including any Purchase Right, may be pledged,
encumbered, or hypothecated to or in favor of any party, subject to any lien,
obligation, or liability of such Participant, or otherwise assigned,
transferred, or disposed of except pursuant to the laws of descent or
distribution, and any right of a Participant under the Plan will be exercisable
during the Participant's lifetime only by the Participant.
(c) No Right to Continued Employment. Neither the Plan nor any
action taken hereunder, including the grant of a Purchase Right, will be
construed as giving any employee the right to be retained in the employ of the
Company or any of its Subsidiaries, nor will it interfere in any way with the
right of the Company or any of its Subsidiaries to terminate any employee's
employment at any time.
(d) Taxes. The Company or any Subsidiary is authorized to withhold
from any payment to be made to a Participant, including any payroll and other
payments not related to the Plan, amounts of withholding and other taxes due in
connection with any transaction under the Plan, and a Participant's enrollment
in the Plan will be deemed to constitute his or her consent to such withholding.
In addition, Participants may be required to advise the Company of sales and
other dispositions of Stock acquired under the plan in order to permit the
Company to comply with tax laws and to claim any tax deductions to which the
Company may be entitled with respect to the Plan. This provision and other Plan
provisions do not set forth an explanation of the tax consequences to
Participants under the Plan. A brief summary of the tax consequences will be
included in disclosure documents to be separately furnished to Participants.
(e) Changes to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of shareholders or
Participants, except that any such action will be subject to the approval of the
Company's shareholders within one year after such Board action if such
shareholder approval is required by any federal or state law or regulation or
the rules of any automated quotation system or stock exchange on which the Stock
may then be quoted or listed, or if such shareholder approval is necessary in
order for the Plan to continue to meet the requirements of Section 423 of the
Code, and the Board may otherwise, in its discretion, determine to submit other
such actions to shareholders for approval. However, without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant with respect to outstanding Purchase Rights relating to any Offering
Period that has been completed prior to such Board action. The foregoing
notwithstanding, upon termination of the Plan the Board may (i) elect to
terminate all outstanding Purchase Rights at such time as the Board may
designate, and all amounts contributed to the Plan which remain in a
Participant's Cash Account will be returned to the Participant (without
interest) as promptly as practicable, or (ii) shorten the Offering Period to
such period determined by the Board and use amounts credited to a Participant
Cash Account to purchase Stock.
(f) No Rights to Participate; No Shareholder Rights. No
Participant or employee will have any claim to participate in the Plan with
respect to Offering Periods that have not commenced, and the Company will have
no obligation to continue the Plan. No Purchase Right will confer on any
Participant any of the rights of a shareholder of the Company unless and until
Stock is duly issued or transferred and delivered to the Participant (or
credited to the Participant's Stock Account).
(g) Fractional Shares. Unless otherwise determined by the Board,
purchases of Stock under the Plan executed by the Custodian may result in the
crediting of fractional shares of Stock to the Participant's Stock Account. Such
fractional shares will be computed to at least three decimal places. Fractional
shares will not, however, be issued by the Company, and certificates
representing fractional shares will not be delivered to Participants under any
circumstances.
(h) Plan Year. The Plan will operate on a plan year that begins on
January 1 and ends December 31 in each year.
(i) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan will be determined in
accordance with the laws of the State of Arizona, without giving effect to
principles of conflicts of laws, and applicable federal law.
(j) Effective Date. The Plan will become effective on the IPO
Date, subject to the Plan being approved by shareholders of the Company, at a
meeting by a vote sufficient to meet the requirements of Section 423(b)(2) of
the Code. If the Plan is not approved in accordance with Section 423(b)(2) of
the Code, each Participant's Purchase Right shall be void and amounts credited
to the Participant's Cash Account shall be promptly returned to the Participant.
SCG HOLDING CORPORATION
April 6, 2000
SCG Holding Corporation
5005 McDowell Rd.
Phoenix, AZ 85008
Dear Sirs:
I refer to the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by SCG Holding Corporation today with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"), relating to the shares of Common Stock, $.01
par value, of SCG Holding Corporation to be issued under the SCG Holding
Corporation 1999 Founders Stock Option Plan, the SCG Holding Corporation 2000
Stock Incentive Plan, and the SCG Holding Corporation 2000 Employee Stock
Purchase Plan (collectively referred to as the "Plans").
In connection with the foregoing registration, I have acted as
the general counsel of SCG Holding Corporation and have examined and am relying
on originals, or copies certified or otherwise identified to my satisfaction, of
such corporate records and such other instruments, and I have made such
investigations of law, as I have deemed appropriate as a basis for the opinion
expressed below.
Based on the foregoing, it is my opinion that the shares of
SCG Holding Corporation issuable under the Plans are duly authorized and, when
issued in accordance with the terms of the Plans, at prices in excess of the par
value thereof, will be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement. By giving such consent, I do not thereby admit
that I am an expert with respect to any part of the Registration Statement,
including this exhibit, within the meaning of the term "expert" as used in the
Act or the rules and regulations of the Commission issued thereunder.
Very truly yours,
/s/ George H. Cave
------------------------
George H. Cave, Esq.
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of SCG Holding Corporation of our report dated January 31, 2000 on the
combined balance sheets of the Semiconductor Components Group of Motorola, Inc.
as of December 31, 1997 and 1998 and the combined statements of revenues less
direct and allocated expenses before taxes for each of the years in the
three-year period ended December 31, 1998 and to the reference to our firm under
the heading "Experts" in the prospectus, which appears in the Registration
Statement on Form S-4 of SCG Holding Corporation and Semiconductor Components
Industries, LLC, effective February 1, 2000.
/s/ KPMG LLP
-------------------------------
KPMG LLP
Phoenix, Arizona
April 4, 2000
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of the reference to us under the heading "Experts," which
appears in the Registration Statement on Form S-4 (No. 333-90359) of SCG Holding
Corporation and Semiconductor Components Industries, LLC.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Phoenix, Arizona
April 4, 2000
