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EXHIBIT 10.20
TALITY CORPORATION
2000 DIRECTORS STOCK OPTION PLAN
1. PURPOSE
The purpose of the Tality Corporation Directors Stock Option Plan (the
"Plan") is to advance the interests of Tality Corporation, a Delaware
corporation (hereinafter the "Company"), by enabling the Company to
attract, retain and motivate qualified individuals to serve on the
Company's Board of Directors and to align the financial interests of such
individuals with those of the Company's stockholders by providing for or
increasing their proprietary interest in the Company. The stock options
granted pursuant to this Plan are not qualified under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. DEFINITIONS
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the Board and/or a committee of the Board acting
pursuant to its authorization to administer this Plan under Section 7.
(c) "Common Stock" means the Company's Class A Common Stock, as presently
constituted, subject to adjustment as provided in Section 9.
(d) "Fair Market Value" means, as of any date, the mean average of the
high and low prices of the Common Stock for each of the last 20
trading days prior to the such date on the national securities
exchange, national market system or other trading market on which the
Common Stock has the highest average trading volume. In the absence of
such market for the Common Stock, the Fair Market Value shall be
determined in good faith by the Board.
(e) "Non-Employee Director" means a member of the Board who is not at the
time also an employee of the Company or any of its direct or indirect
majority-owned subsidiaries (regardless of whether such subsidiary is
organized as a corporation, partnership or other entity). For purposes
of this Plan, the Chairman of the Board's status as an employee shall
be determined by the Board.
3. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 9, the maximum number of
shares of Common Stock which may be issued pursuant to this Plan shall not
exceed Six Hundred Seventy-Five Thousand (675,000). Shares issued under
this Plan may be authorized and unissued shares of Common Stock or shares
of Common Stock reacquired by the Company. All or any shares of Common
Stock subject to a stock option which for any reason are not issued or are
reacquired under the stock option may again be made subject to a stock
option under the Plan.
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4. PARTICIPANTS
Any person who is a Non-Employee Director shall be eligible for the award
of stock options hereunder. Non-Employee Directors who are granted stock
options hereunder shall be referred to as "Participants."
5. NON-EMPLOYEE DIRECTOR AWARDS
(a) Each person who becomes a Non-Employee Director during any calendar
year shall, upon election to the Board, automatically be granted an
option to purchase 50,000 shares of Common Stock. If such person is
also elected as the Chairman of the Board, such person shall, upon
election as Chairman of the Board, automatically be granted an
additional option to purchase 50,000 shares of Common Stock.
(b) Other than the calendar year in which such person becomes a
Non-Employee Director, each Non-Employee Director, on July 1 of each
calendar year, beginning July 1, 2001, shall automatically be granted
an option to purchase 12,500 shares of Common Stock. In addition, if
such Non-Employee Director is serving as Chairman of the Board, such
Non-Employee Director shall automatically be granted an option to
purchase an additional 12,500 shares of Common Stock.
6. TERMS AND CONDITIONS OF STOCK OPTIONS
(a) General Terms and Conditions: Stock options awarded pursuant to the
Plan need not be identical but each stock option shall be subject to
the following general terms and conditions:
(1) Terms and Restrictions Upon Shares: The Board may provide that
the shares of Common Stock issued upon exercise of a stock option
shall be subject to such further conditions, restrictions or
agreements as the Board in its discretion may specify prior to
the exercise of such stock option, including without limitation,
deferrals on issuance, conditions on vesting or transferability,
and forfeiture or repurchase provisions. The Committee may
establish rules for the deferred delivery of Common Stock upon
exercise of a stock option with the deferral evidenced by use of
"Stock Units" equal in number to the number of shares of Common
Stock whose delivery is so deferred. A "Stock Unit" is a
bookkeeping entry representing an amount equivalent to the Fair
Market Value of one share of Common Stock. Stock Units represent
an unfunded and unsecured obligation of the Corporation except as
otherwise provided by the Board. Settlement of Stock Units upon
expiration of the deferral period shall be made in Common Stock
or otherwise as determined by the Committee. The amount of Common
Stock, or other settlement medium, to be so distributed may be
increased by an interest factor or by dividend equivalents. Until
a Stock Unit is settled, the number of shares of Common Stock
represented by a Stock Unit shall be subject to adjustment
pursuant to Section 9.
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(2) Transferability of Option: Unless otherwise provided by the
Committee, each stock option shall be transferable only by will
or the laws of descent and distribution.
(3) Vesting. Options granted pursuant to Section 5 shall vest over a
four year period, with 25% of each option vesting on the first
through fourth anniversaries of the date of grant of such option.
(4) Other Terms and Conditions: No holder of a stock option shall
have any rights as a stockholder with respect to any shares of
Common Stock subject to a stock option hereunder until said
shares have been issued. Stock options may also contain such
other provisions, which shall not be inconsistent with any of the
foregoing terms, as the Board or the Committee shall deem
appropriate. The Board may waive conditions to and/or accelerate
exercisability of a stock option, either automatically upon the
occurrence of specified events (including in connection with a
change of control of the Company) or otherwise in its discretion.
No stock option, however, nor anything contained in the Plan,
shall confer upon any Participant any right to serve as a
director of the Company.
(b) Stock Option Price: The exercise price for each stock option shall be
established by the Board or under a formula established by the Board.
The exercise price shall not be less than the Fair Market Value of the
stock on the date of grant. The exercise price shall be payable in
cash, by payment under an arrangement with a broker where payment is
made pursuant to an irrevocable direction to the broker to deliver all
or part of the proceeds from the sale of the option shares to the
Company, by the surrender of shares of Common Stock owned by the
optionholder exercising the option and having a fair market value on
the date of exercise equal to the exercise price but only if such will
not result in an accounting charge to the Company, or by any
combination of the foregoing. In addition, the exercise price shall be
payable in such other form(s) of consideration as the Committee in its
discretion shall specify, including without limitation by loan (as
described in Section 8) or by techniques that may result in an
accounting charge to the Company. For the purposes of determining the
fair market value of shares of Common Stock surrendered to pay the
exercise price of an option, "fair market value" shall mean the
average of the high and low prices of the Common Stock on the last
trading day preceding the date of delivery of such Common Stock to the
Company on the national securities exchange, national market system or
other trading market on which the Common Stock has the highest average
trading volume.
7. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board, except that as provided herein
the Plan may be administered by a Committee of the Board, as appointed from
time to time by the Board. The Board shall fill vacancies on and from time
to time may remove or add members to the Committee. The Committee shall act
pursuant to a majority vote or unanimous written consent.
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Subject to the express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in
connection with the administration of this Plan, including, without
limitation: (a) to prescribe, amend and rescind rules relating to this Plan
and to define terms not otherwise defined herein; (b) to prescribe the form
of documentation used to evidence any stock option awarded hereunder,
including provision for such terms as it considers necessary or desirable,
not inconsistent with the terms established by the Board; (c) to establish
and verify the extent of satisfaction of any conditions to exercisability
applicable to stock options; (d) to determine whether, and the extent to
which, adjustments are required pursuant to Section 9 hereof; and (e) to
interpret and construe this Plan, any rules and regulations under the Plan
and the terms and conditions of any stock option awarded hereunder, and to
make exceptions to any procedural provisions in good faith and for the
benefit of the Company. Notwithstanding any provision of this Plan, the
Board may at any time limit the authority of the Committee to administer
this Plan.
All decisions, determinations and interpretations by the Board or, except
as to the Board, the Committee, regarding the Plan, any rules and
regulations under the Plan and the terms and conditions of any stock option
awarded hereunder, shall be final and binding on all Participants and
holders of stock options. The Board and the Committee may consider such
factors as it deems relevant, in its sole and absolute discretion, in
making such decisions, determinations and interpretations including,
without limitation, the recommendations or advice of any officer or other
employee of the Company and such attorneys, consultants and accountants as
it may select.
8. LOANS
The Company may, if authorized by the Board, make loans for the purpose of
enabling a Participant to exercise stock options and to pay the tax
liability resulting from a stock option exercise under the Plan. The Board
shall have full authority to determine the terms and conditions of such
loans. Such loans may be secured by the shares of Common Stock received
upon exercise of such stock option.
9. ADJUSTMENT OF AND CHANGES IN THE STOCK
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into cash, property or a
different number or kind of shares or securities, or if cash, property or
shares or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization,
reclassification, dividend (other than a regular cash dividend) or other
distribution, stock split, reverse stock split, spin-off or the like, or if
substantially all of the property and assets of the Company are sold, then,
unless the terms of such transaction shall provide otherwise, the maximum
number and type of shares or other securities that may be issued under this
Plan shall be appropriately adjusted. The Committee shall determine in its
sole discretion the appropriate adjustment to be effected pursuant to the
immediately preceding sentence. In addition, in connection with any such
change in the class of securities then subject to this Plan, the Committee
may make appropriate and proportionate adjustments in the number
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and type of shares or other securities or cash or other property that may
be acquired pursuant to stock options theretofore awarded under this Plan
and the exercise price of such stock options.
No right to purchase or receive fractional shares shall result from any
adjustment in stock options pursuant to this Section 9. In case of any such
adjustment, the shares subject to the stock option shall be rounded up to
the nearest whole share of Common Stock.
10. REGISTRATION, LISTING OR QUALIFICATION OF STOCK
In the event that the Board or the Committee determines in its discretion
that the registration, listing or qualification of the shares of Common
Stock issuable under the Plan on any securities exchange or under any
applicable law or governmental regulation is necessary as a condition to
the issuance of such shares under the stock option, the stock option shall
not be exercisable or exercised in whole or in part unless such
registration, listing, qualification, consent or approval has been
unconditionally obtained.
11. TAXES
The Board or Committee may make such provisions or impose such conditions
as it may deem appropriate for the withholding or payment by a Participant
of any taxes which it determines are necessary or appropriate in connection
with any issuance of shares under this Plan, and the rights of a holder of
a stock option in any shares are subject to satisfaction of such
conditions. The Company shall not be required to issue shares of Common
Stock or to recognize the disposition of such shares until such obligations
are satisfied. At the Participant's election, any such obligations may be
satisfied by having the Company withhold a portion of the shares of Common
Stock that otherwise would be issued to the holder of the stock option upon
exercise of the stock option or by surrendering to the Company shares of
Common Stock previously acquired. The Company and any affiliate of the
Company shall not be liable to a Participant or any other persons as to any
tax consequence expected, but not realized, by any Participant or other
person due to the receipt of any stock options awarded hereunder.
12. EFFECTIVE DATE, AMENDMENT AND TERMINATION OF PLAN
This Plan shall become effective upon its approval by a majority of the
outstanding shares of the Company in accordance with applicable law. Any
stock options awarded prior to the such date shall be contingent on such
approval and, if such approval is not obtained, shall be null and of no
effect.
Unless earlier suspended or terminated by the Board, no stock options may
be awarded after the tenth anniversary of the date the Plan is approved by
the Company's stockholders. The Board may periodically amend the Plan as
determined appropriate, without further action by the Company's
stockholders except to the extent required by applicable law.
Notwithstanding the foregoing, and subject to adjustment pursuant to
Section 9, the Plan may not be amended to materially increase the number of
shares of Common Stock authorized for issuance under
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the Plan, unless any such amendment is approved by the Company's
stockholders. The Plan may be earlier terminated at such earlier time as
the Board may determine. Termination and expiration of the Plan will not
affect the rights and obligations arising under stock options theretofore
awarded and then in effect.
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