<PAGE>
As filed with the Securities and Exchange Commission on: May ___, 1996
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
ADVANCED MICRO DEVICES, INC.
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-1692300
- --------------------------------- ------------------------------------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION OR ORGANIZATION)
ONE AMD PLACE, SUNNYVALE, CALIFORNIA 94088-3453
---------------------------------------- --------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ADVANCED MICRO DEVICES, INC. 1996 STOCK INCENTIVE PLAN
-------------------------------------------------------
(FULL TITLE OF THE PLANS)
THOMAS M.MCCOY
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ADVANCED MICRO DEVICES, INC., ONE AMD PLACE,
SUNNYVALE, CALIFORNIA 94088-3453
---------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(408) 732-2400
--------------------
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
<TABLE>
<CAPTION>
=================================================================================================================================
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to Offering Aggregate Amount of
to be Registered be Registered Price per Share Offering Price Registration Fee
<S> <C> <C> <C> <C>
=================================================================================================================================
Common Stock, $.01 par value 6,500,000 $17.375(1) $112,937,500 $38,944
=================================================================================================================================
(1) Estimated solely for the purpose of determining the registration fee, computed in accordance with 457(h) and Rule 457(c) on
the basis of the average of the reported high and low prices for the Common Stock on the New York Stock Exchange on
May 24, 1996.
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.*
* Information required by Part I to be contained in the Section 10(a)
prospectus with respect to each plan for which this Registration Statement is
filed is omitted from this Registration Statement in accordance with Rule 428
under the Securities Act of 1933 and the note to Part I of Form S-8.
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by the Registrant with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
a. Annual Report on Form 10-K for the fiscal year ended December 31,
1995, filed pursuant to Section 13 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act");
b. Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, Current Reports on Form 8-K dated January 5, 1996, January 10,
1996, January 12, 1996, January 17, 1996, April 1, 1996, and April 9, 1996.
c. The description of the Registrant's Common Stock contained in the
Registration Statement on Form 8-A filed September 14, 1979, under Section
12 of the Exchange Act, including any amendment or report filed for the
purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold, or which
deregisters all securities then 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.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
Not applicable.
2
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Delaware General Corporation Law provides for the indemnification of
officers and directors under certain conditions. The Bylaws of the Registrant
permit indemnification to the maximum extent permitted by Delaware law. In
addition, the Registrant is bound by agreements with certain of its directors
and officers which obligate it to indemnify such persons in various
circumstances. The Registrant has in effect a director and officer liability
insurance policy indemnifying the Registrant and the officers and directors of
the Registrant and officers and directors of the Registrant's subsidiaries
within a specific limit for certain liabilities incurred by them, including
liabilities under the Securities Act of 1933. The Registrant pays the entire
premium of this policy. The Registrant's Certificate of Incorporation contains
a provision which eliminates the personal liability of directors of the
Registrant for monetary damages for certain breaches of fiduciary duty, as
permitted by Section 102(b)(7) of the Delaware General Corporation Law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See Index to Exhibits.
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 of 1933;
(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;
(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.
3
<PAGE>
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13 or
section 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 of 1933, 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 of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 13(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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the 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 of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
4
<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 of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Sunnyvale, California, on this 25th day of April, 1996.
ADVANCED MICRO DEVICES, INC.
By /s/ Marvin D. Burkett
___________________________________
Marvin D. Burkett
Senior Vice President
Chief Financial and Administrative
Officer and Treasurer
Power of Attorney
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints W.J. Sanders III and Marvin D. Burkett, and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said 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 fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said 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 below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ------
<S> <C> <C>
/s/ W.J. Sanders III
- ---------------------
W.J. Sanders III Chairman of the April 25, 1996
Board and Chief
Executive Officer
(Principal Executive
Officer)
</TABLE>
5
<PAGE>
<TABLE>
Signature Title Date
- --------- ----- ------
<S> <C> <C>
/s/ Richard Previte Director, President April 25, 1996
- ----------------------- and Chief Operating
Richard Previte Officer
/s/ S. Atiq Raza Director, Vice April 25, 1996
- ------------------------ President and Chief
S. Atiq Raza Technical Officer
/s/ Friedrich Baur Director April 25, 1996
- ------------------------
Friedrich Baur
/s/ Charles M. Blalack Director April 25, 1996
- ------------------------
Charles M. Blalack
/s/ R. Gene Brown Director April 25, 1996
- -------------------------
R. Gene Brown
/s/ Joe L. Roby Director April 25, 1996
- -------------------------
Joe L. Roby
/s/ Leonard Silverman Director April 25, 1996
- --------------------------
Leonard Silverman
/s/ Marvin D. Burkett Senior Vice April 25, 1996
- --------------------------- President, Chief
Marvin D. Burkett Financial and
Administrative
Officer and
Treasurer (Principal
Financial Officer
and Principal
Accounting Officer)
</TABLE>
6
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
No. Exhibit Name
- ---------- ---------------------------------------------------
<S> <C>
5 Opinion of Counsel; Bronson, Bronson & McKinnon LLP
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (See Exhibit 5)
24 Power of Attorney (see signature pages)
99 Advanced Micro Devices, Inc. 1996 Stock Incentive
Plan
</TABLE>
7
<PAGE>
EXHIBIT 5
[BRONSON, BRONSON & MCKINNON LLP]
May 22, 1996
Board of Directors
Advanced Micro Devices, Inc.
One AMD Place
Sunnyvale, California 94086
Re: Advanced Micro Devices, Inc. 1996 Stock Incentive Plan.
--------------------------------------------------------------------
Gentlemen:
We refer to the Registration Statement on Form S-8 to be filed by Advanced
Micro Devices, Inc. (the "Company") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to 6,500,000 shares of
the Company's common stock, $.01 par value ("Common Stock"), issuable under the
Company's 1996 Stock Incentive Plan (the "Plan"). As counsel to the Company, we
have examined such questions of law and such corporate records and other
documents as we have considered necessary or appropriate for the purposes of
this opinion. On the basis of the foregoing, we advise you that in our opinion
the shares of Common Stock issuable under the Plan have been duly and validly
authorized and, when issued and sold in the manner contemplated by the Plan,
will be validly issued, fully paid, and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Bronson, Bronson & McKinnon LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Advanced Micro Devices, Inc. pertaining to its 1996 Stock Incentive
Plan of our report dated January 9, 1996, except for note 18, as to which the
date is January 17, 1996, with respect to the consolidated financial statements
of Advanced Micro Devices, Inc. incorporated by reference in its Annual Report
(Form 10-K) for the year ended December 31, 1995, and the related financial
statement schedule included therein, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
San Jose, California
May 24, 1996
<PAGE>
EXHIBIT 99
ADVANCED MICRO DEVICES, INC. 1996 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this Plan is to encourage key personnel, Outside Directors and
advisors whose long-term service is considered essential to the Company's
continued progress, to remain in the service of the Company or its Affiliates.
By means of the Plan, the Company also seeks to attract new key employees,
Outside Directors and advisors whose future services are necessary for the
continued improvement of operations. The Company intends future increases in
the value of securities granted under this Plan to form part of the
compensation for services to be rendered by such persons in the future. It is
intended that this purpose will be effected through the granting of Options.
2. DEFINITIONS
The terms defined in this Section 2 shall have the respective meanings set
forth herein, unless the context otherwise requires.
(a) "AFFILIATE" The term "Affiliate" shall mean any corporation, partnership,
joint venture or other entity in which the Company holds an equity, profits or
voting interest of thirty percent (30%) or more.
(b) "BOARD" The term "Board" shall mean the Company's Board of Directors or
its delegate as set forth in Sections 3(d) and 3(e) below.
(c) "CHANGE OF CONTROL" The term "Change of Control" shall be deemed to mean
any of the following events: (i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities beneficially owned
by such person any securities acquired directly from the Company or any of its
affiliates) representing more than 20% of either the then outstanding shares of
the Common Stock of the Company or the combined voting power of the Company's
then outstanding voting securities; (ii) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board
and any new director (other than a director designated by a person who has
entered into an agreement or arrangement with the Company to effect a
transaction described in clause (i) or (iii) of this sentence) whose
appointment, election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose appointment, election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board; or (iii) there is consummated a merger or consolidation of the Company
or a subsidiary thereof with or into any other corporation, other than a merger
or consolidation which would result in the holders of the voting securities of
the Company outstanding immediately prior thereto holding securities which
represent immediately after such merger or consolidation more than 50% of the
combined voting power of the voting securities of either the Company or the
other entity which survives such merger or consolidation or the parent of the
entity which survives such merger or consolidation; or (iv) the stockholders of
the Company approve a plan of complete liquidation of the Company or there is
consummated the sale or disposition by the Company of all or substantially all
of the Company's assets, other than a sale or disposition by the Company of all
or substantially all of the Company's assets to an entity, at least 80% of the
combined voting power of the voting securities of which are owned by persons in
substantially the same proportions as their ownership of the Company
immediately prior to such sale. Notwithstanding the foregoing (i) no "Change of
Control" shall be deemed to have occurred if there is consummated any
transaction or series of integrated transactions immediately following which
the record holders of the Common Stock of the Company immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the
assets of the Company immediately prior to such transaction or series of
transactions and (ii) "Change of Control" shall exclude the acquisition of
securities representing more than 20% of either the then outstanding shares of
the Common Stock of the Company or
<PAGE>
the combined voting power of the Company's then outstanding voting securities
by the Company or any of its wholly owned subsidiaries, or any trustee or other
fiduciary holding securities of the Company under an employee benefit plan now
or hereafter established by the Company.
(d) "CODE" The term "Code" shall mean the Internal Revenue Code of 1986, as
amended to date and as it may be amended from time to time.
(e) "COMPANY" The term "Company" shall mean Advanced Micro Devices, Inc., a
Delaware corporation.
(f) "CONSTRUCTIVE TERMINATION" The term "Constructive Termination" shall mean
a resignation by a Participant who has been elected by the Board as a corporate
officer of the Company due to diminution or adverse change in the circumstances
of such Participant's employment with the Company, as determined in good faith
by the Participant; including, without limitation, reporting relationships, job
description, duties, responsibilities, compensation, perquisites, office or
location of employment. Constructive Termination shall be communicated by
written notice to the Company, and such termination shall be deemed to occur on
the date such notice is delivered to the Company.
(g) "DISINTERESTED DIRECTOR" The term "Disinterested Director" shall mean a
member of the Board who has not, during the one year prior to service as an
administrator of the Plan, or during such service, been granted or awarded
equity securities of the Company pursuant to this Plan (except for automatic
grants of options to Outside Directors pursuant to Section 8 hereof) or any
other plan of the Company or any of its Affiliates.
(h) "FAIR MARKET VALUE PER SHARE" The term "Fair Market Value per Share"
shall mean as of any day (i) the closing price for Shares on the New York Stock
Exchange as reported on the composite tape on the day as of which such
determination is being made or, if there was no sale of Shares reported on the
composite tape on such day, on the most recently preceding day on which there
was such a sale, or (ii) if the Shares are not listed or admitted to trading on
the New York Stock Exchange on the day as of which the determination is made,
the amount determined by the Board or its delegate to be the fair market value
of a Share on such day.
(i) "INSIDER" The term "Insider" means an officer or director of the Company
or any other person whose transactions in the Company's Common Stock are
subject to Section 16 of the Exchange Act.
(j) "ISO" The term "ISO" shall mean a stock option described in Section
422(b) of the Code.
(k) "NSO" The term "NSO" shall mean a nonstatutory stock option not described
in Section 422(b) of the Code.
(l) "OPTION" The term "Option" shall mean (except as herein otherwise
provided) a stock option granted under this Plan.
(m) "OUTSIDE DIRECTOR" The term "Outside Director" shall mean a member of the
Board of Directors of the Company who is not also an employee of the Company or
an Affiliate.
(n) "PARTICIPANT" The term "Participant" shall mean any person who holds an
Option or Restricted Stock Award granted under this Plan.
(o) "PLAN" The term "Plan" shall mean this Advanced Micro Devices, Inc. 1996
Stock Incentive Plan, as amended from time to time.
(p) "SHARES" The term "Shares" shall mean shares of Common Stock of the
Company and any shares of stock or other securities received as a result of the
adjustments provided for in Section 11 of this Plan.
2
<PAGE>
3. ADMINISTRATION
(a) The Board, whose authority shall be plenary, shall administer the Plan
and may delegate part or all of its administrative powers with respect to part
or all of the Plan pursuant to Section 3(d); provided, however, that the Board
shall delegate administration of the Plan to the extent required by Section
3(e).
(b) Except for automatic grants of Options to Outside Directors pursuant to
Section 8 hereof, the Board or its delegate shall have the power, subject to
and within the limits of the express provisions of the Plan:
(1) To grant Options pursuant to the Plan.
(2) To determine from time to time which of the eligible persons shall be
granted Options under the Plan, the number of Shares for which each Option
shall be granted, the term of each granted Option and the time or times
during the term of each Option within which all or portions of each Option
may be exercised (which at the discretion of the Board of its delegate may
be accelerated.)
(3) To prescribe the terms and provisions of each Option granted (which
need not be identical) and the form of written instrument that shall
constitute the Option agreement.
(4) To take appropriate action to amend any Option hereunder, including
to amend the vesting schedule of any outstanding Option, or to cause any
Option granted hereunder to cease to be an ISO, provided that no such
action adverse to a Participant's interest may be taken by the Board or its
delegate without the written consent of the affected Participant.
(5) To determine whether and under what circumstances an Option may be
settled in cash or Shares.
(c) The Board or its delegate shall also have the power, subject to and
within the limits of the express provisions of this Plan:
(1) To construe and interpret the Plan and Options granted under the
Plan, and to establish, amend and revoke rules and regulations for
administration of the Plan. The Board or its delegate, in the exercise of
this power, shall generally determine all questions of policy and
expediency that may arise and may correct any defect, omission or
inconsistency in the Plan or in any Option agreement in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully
effective.
(2) Generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interests of the Company.
(d) The Board may, by resolution, delegate administration of the Plan
(including, without limitation, the Board's powers under Sections 3(b) and (c)
above), under either or both of the following:
(1) with respect to the participation of or granting of Options to an
employee, consultant or advisor who is not an Insider, to a committee of
one or more members of the Board, whether or not such members of the Board
are Disinterested Directors;
(2) with respect to matters other than the selection for participation in
the Plan, substantive decisions concerning the timing, pricing, amount or
other material term of an Option, to a committee of one or more members of
the Board, whether or not such members of the Board are Disinterested
Directors, or to one or more Insiders.
(e) Unless each member of the Board is a Disinterested Director, the Board
shall, by resolution, delegate administration of the Plan with respect to the
participation in the Plan of employees who are Insiders, including its powers
to select such employees for participation in the Plan, to make substantive
decisions concerning the timing, pricing, amount or any other material term of
an Option, to a committee of two or more Disinterested Directors who are also
"outside directors" within the meaning of Section 162(m) of the Code. Any
committee to which administration of the Plan is so delegated pursuant to this
Section 3(e) may also administer the Plan with respect to an employee described
in Section 3(d)(1) above.
3
<PAGE>
(f) Except as required by Section 3(e) above, the Board shall have complete
discretion to determine the composition, structure, form, term and operations
of any committee established to administer the Plan. If administration is
delegated to a committee, unless the Board otherwise provides, the committee
shall have, with respect to the administration of the Plan, all of the powers
and discretion theretofore possessed by the Board and delegable to such
committee, subject to any constraints which may be adopted by the Board from
time to time and which are not inconsistent with the provisions of the Plan.
The Board at any time may revest in the Board any of its administrative powers
under the Plan, except under circumstances where a committee is required to
administer the Plan under Section 3(e) above.
(g) The determinations of the Board or its delegate shall be conclusive and
binding on all persons having any interest in this Plan or in any awards
granted hereunder.
4. SHARES SUBJECT TO PLAN
Subject to the provisions of Section 11 (relating to adjustments upon changes
in capitalization), the Shares which may be available for issuance under the
Plan shall not exceed in the aggregate 6,500,000 Shares of the Company's
authorized Common Stock and may be unissued Shares or reacquired Shares or
Shares bought on the market for the purposes of issuance under the Plan. If any
Options granted under the Plan shall for any reason be forfeited or canceled,
terminate or expire, the Shares subject to such Options shall be available
again for the purposes of the Plan. Shares which are delivered or withheld from
the Shares otherwise due on exercise of an Option shall become available for
future awards under the Plan. Shares that have actually been issued under the
Plan, upon exercise of an Option shall not in any event be returned to the Plan
and shall not become available for future awards under the Plan.
5. ELIGIBILITY
Options may be granted only to full or part-time employees, officers,
directors, consultants and advisors of the Company and/or of any Affiliate;
provided such consultants and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. Outside Directors shall not be eligible for the benefits of the
Plan, except as provided in Section 8 hereof. Any Participant may hold more
than one Option at any time; provided that the maximum number of shares which
are subject to Options granted to any individual shall not exceed in the
aggregate two million (2,000,000) Shares over the full ten-year life of the
Plan.
6. STOCK OPTIONS--GENERAL PROVISIONS
(a) Except for automatic grants of Options to Outside Directors under Section
8 hereof, each Option granted pursuant to the Plan may, at the discretion of
the Board, be granted either as an ISO or as an NSO. No Option may be granted
alternatively as an ISO and as an NSO.
(b) To the extent that the aggregate exercise price for ISOs which are
exercisable for the first time by a Participant during any calendar year (under
this Plan or any other plans of the Company or its subsidiaries or parent (as
such terms are defined in Section 424 of the Code)) exceeds $100,000, such
Options shall be treated as NSOs.
(c) No ISO may be granted to a person who, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of the Company or
any of its subsidiaries or parent (as such terms are defined in Section 424 of
the Code) unless the exercise price is at least 110% of the Fair Market Value
per Share of the stock subject to the Option and the term of the Option does
not exceed five (5) years from the date such ISO is granted.
(d) Notwithstanding any other provision in this Plan, no term of this Plan
relating to ISOs will be interpreted, amended or altered, nor will any
discretion or authority granted under this Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant affected, to disqualify an ISO under Section 422 of the Code.
4
<PAGE>
7. TERMS OF OPTION AGREEMENT
Except as otherwise required by the terms of Section 8 hereof, each Option
agreement shall be in such form and shall contain such terms and conditions as
the Board from time to time shall deem appropriate, subject to the following
limitations:
(a) The term of any NSO shall not be greater than ten (10) years and one day
from the date it was granted. The term of any ISO shall not be greater than ten
(10) years from the date it was granted.
(b) The exercise price of each ISO shall be not less than the Fair Market
Value per Share of the stock subject to the Option on the date the Option is
granted. NSOs may be granted at an exercise price that is not less than Fair
Market Value per Share of the Shares at the time an NSO is granted.
(c) Unless otherwise specified in the Option agreement, no Option shall be
transferable otherwise than by will, pursuant to the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, or the
rules thereunder, or as otherwise permitted by regulations and interpretations
under Section 16 of the Exchange Act.
(d) Except as otherwise provided in paragraph (e) of this Section 7, the
rights of a Participant (other than an Outside Director) to exercise an Option
shall be limited as follows:
(1) DEATH OR DISABILITY: If a Participant's service is terminated by
death or disability, then the Participant or the Participant's estate, or
such other person as may hold the Option, as the case may be, shall have
the right for a period of twelve (12) months following the date of death or
disability, or for such other period as the Board may fix, to exercise the
Option to the extent the Participant was entitled to exercise such Option
on the date of his death or disability, or to such extent as may otherwise
be specified by the Board (which may so specify after the date of his death
or disability but before expiration of the Option), provided the actual
date of exercise is in no event after the expiration of the term of the
Option. A Participant's estate shall mean his legal representative or any
person who acquires the right to exercise an Option by reason of the
Participant's death or disability.
(2) MISCONDUCT: If a Participant is determined by the Board to have
committed an act of theft, embezzlement, fraud, dishonesty, a breach of
fiduciary duty to the Company (or Affiliate), or deliberate disregard of
the rules of the Company (or Affiliate), or if a Participant makes any
unauthorized disclosure of any of the trade secrets or confidential
information of the Company (or Affiliate), engages in any conduct which
constitutes unfair competition with the Company (or Affiliate), induces any
customer of the Company (or Affiliate) to break any contract with the
Company (or Affiliate), or induces any principal for whom the Company (or
Affiliate) acts as agent to terminate such agency relationship, neither the
Participant, the Participant's estate nor such other person who may then
hold the Option shall be entitled to exercise any Option with respect to
any Shares whatsoever, after termination of service, whether or not after
termination of service the Participant may receive payment from the Company
(or Affiliate) for vacation pay, for services rendered prior to
termination, for services rendered for the day on which termination occurs,
for salary in lieu of notice, or for any other benefits. In making such
determination, the Board shall give the Participant an opportunity to
present to the Board evidence on his behalf. For the purpose of this
paragraph, termination of service shall be deemed to occur on the date when
the Company dispatches notice or advice to the Participant that his service
is terminated.
(3) TERMINATION FOR OTHER REASONS: If a Participant's service is
terminated for any reason other than those mentioned above under "DEATH OR
DISABILITY" or "MISCONDUCT," the Participant, the Participant's estate, or
such other person who may then hold the Option may, within three months
following such termination, or within such longer period as the Board may
fix, exercise the Option to the extent such Option was exercisable by the
Participant on the date of termination of his employment or service, or to
the extent otherwise specified by the Board (which may so specify after the
date of the termination but before expiration of the Option) provided the
date of exercise is in no event after the expiration of the term of the
Option.
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(4) EVENTS NOT DEEMED TERMINATIONS: The service relationship shall not be
considered interrupted in the case of (i) a Participant who intends to
continue to provide services as a director, employee, consultant or advisor
to the Company or an Affiliate; (ii) sick leave; (iii) military leave; (iv)
any other leave of absence approved by the Board, provided such leave is
for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to formal policy adopted from time to time by
the Company and issued and promulgated to employees in writing; or (v) in
the case of transfer between locations of the Company or between the
Company or its Affiliates. In the case of any employee on an approved leave
of absence, the Board may make such provisions respecting suspension of
vesting of the Option while on leave from the employ of the Company or an
Affiliate as it may deem appropriate, except that in no event shall an
Option be exercised after the expiration of the term set forth in the
Option.
(e) If any Participant's employment is terminated by the Company for any
reason other than for Misconduct or, if applicable, by Constructive
Termination, within one year after a Change of Control has occurred, then all
Options held by such Participant shall become fully vested for exercise upon
the date of termination, irrespective of the vesting provisions of the
Participant's Option agreement. For purposes of this subsection (e), the term
"Change of Control" shall have the meaning assigned by this Plan, unless a
different meaning is defined in an individual Participant's Option agreement.
(f) Options may also contain such other provisions, which shall not be
inconsistent with any of the foregoing terms, as the Board or its delegate
shall deem appropriate.
(g) The Board may modify, extend or renew outstanding Options and authorize
the grant of new Options in substitution therefor; provided that any such
action may not, without the written consent of a Participant, impair any such
Participant's rights under any Option previously granted.
8. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS
(a) Each Outside Director shall be granted an Option to purchase 12,000
Shares under the Plan (the "FIRST OPTION") on the date such Outside Director is
first elected or appointed as a member of the Board; provided that an Outside
Director who has previously been elected as a member of the Board on the
Effective Date set forth in Section 14 below shall not be granted a First
Option under the Plan. Thereafter, on the first business day coincident with or
following each annual meeting of the Company's stockholders, each Outside
Director reported as being elected shall be granted an additional Option to
purchase 3,000 Shares under the Plan (the "ANNUAL OPTION"). Further, subject to
the right of any Outside Director who has not previously been elected as a
member of the Board to receive a First Option, if there are insufficient Shares
available under the Plan for each Outside Director who is eligible to receive
an Annual Option (as adjusted) in any year, the number of Shares subject to
each Annual Option in such year shall equal the total number of available
Shares then remaining under the Plan divided by the number of Outside Directors
who are eligible to receive an Annual Option on such date, as rounded down to
avoid fractional Shares. All Options granted to Outside Directors shall be
subject to the following terms and conditions of this Section 8.
(b) All Options granted to Outside Directors pursuant to the Plan shall be
NSOs.
(c) The consideration to be paid for the Shares to be issued upon exercise of
an Option, including the method of payment, may consist entirely of (i) cash,
(ii) certified or cashier's check, (iii) other Shares which (x) either have
been owned by the Participant for more than six months on the date of surrender
or were not acquired, directly or indirectly, from the Company, and (y) have a
Fair Market Value per Share on the date of surrender equal to the aggregate
exercise price of the Shares as to which said Option shall be exercised, (iv)
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds required to pay the exercise price, or (v) any combination of
the foregoing methods of payment.
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(d) Each Option granted to an Outside Director shall be for a term of ten
years plus one day. Each First Option shall vest and become exercisable on July
15 of subsequent calendar years, according to the following schedule: 4,800
shares in the first calendar year following the date of grant; 3,600 shares in
the second such calendar year; 2,400 shares in the third such calendar year;
and 1,200 shares in the fourth such calendar year. Each Annual Option shall
vest and become exercisable on July 15 of subsequent calendar years according
to the following schedule: in equal installments of 1,000 shares each in the
second, third and fourth calendar years following the date of grant. Any Shares
acquired by an Outside Director upon exercise of an Option shall not be freely
transferable until six months after the date stockholder approval referred to
in Section 14 hereof is obtained.
(e) If an Outside Director's tenure on the Board is terminated for any
reason, then the Outside Director or the Outside Director's estate, as the case
may be, shall have the right for a period of twelve months following the date
such tenure is terminated to exercise the Option to the extent the Outside
Director was entitled to exercise such Option on the date the Outside
Director's tenure terminated; provided the actual date of exercise is in no
event after the expiration of the term of the Option. An Outside Director's
"estate" shall mean the Outside Director's legal representative or any person
who acquires the right to exercise an Option by reason of the Outside
Director's death or disability.
(f) Upon a Change of Control, all Options held by an Outside Director shall
become fully vested and exercisable upon such Change of Control, irrespective
of any other provisions of the Outside Director's Option agreement.
(g) The automatic grants to Outside Directors pursuant to this Section 8
shall not be subject to the discretion of any person. The other provisions of
this Plan shall apply to the Options granted automatically pursuant to this
Section 8, except to the extent such other provisions are inconsistent with
this Section 8.
9. PAYMENTS AND LOANS UPON EXERCISE OF OPTIONS
With respect to Options other than Options granted to Outside Directors
pursuant to Section 8, the following provisions shall apply:
(a) The consideration to be paid for the Shares to be issued upon exercise of
an Option, including the method of payment, shall be determined by the Board or
its delegate (and, in the case of an ISO, shall be determined at the time of
grant) and may consist entirely of (i) cash, (ii) certified or cashier's check,
(iii) promissory note, (iv) other Shares which (x) either have been owned by
the Participant for more than six months on the date of surrender or were not
acquired, directly or indirectly, from the Company, and (y) have a Fair Market
Value per Share on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised, (v) delivery of a
properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, or (vi) any combination of the foregoing
methods of payment. Any promissory note shall be a full recourse promissory
note having such terms as may be approved by the Board and bearing interest at
a rate sufficient to avoid imputation of income under Sections 483, 1274 or
7872 of the Code; provided that Participants who are not employees or directors
of the Company will not be entitled to purchase Shares with a promissory note
unless the note is adequately secured by collateral other than the Shares;
provided further, that the portion of the exercise price equal to the par
value, if any, of the Shares must be paid in cash;
(b) The Company may make loans or guarantee loans made by an appropriate
financial institution to individual Participants, including Insiders, on such
terms as may be approved by the Board for the purpose of financing the exercise
of Options granted under the Plan and the payment of any taxes that may be due
by reason of such exercise.
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10. TAX WITHHOLDING
(a) Where, in the opinion of counsel to the Company, the Company has or will
have an obligation to withhold federal, state or local taxes relating to the
exercise of any Option, the Board may in its discretion require that such tax
obligation be satisfied in a manner satisfactory to the Company. With respect
to the exercise of an Option, the Company may require the payment of such taxes
before Shares deliverable pursuant to such exercise are transferred to the
holder of the Option.
(b) With respect to the exercise of an Option, a Participant may elect (a
"WITHHOLDING ELECTION") to pay his minimum statutory withholding tax obligation
by the withholding of Shares from the total number of Shares deliverable
pursuant to the exercise of such Option, or by delivering to the Company a
sufficient number of previously acquired Shares, and may elect to have
additional taxes paid by the delivery of previously acquired Shares, in each
case in accordance with rules and procedures established by the Board.
Previously owned Shares delivered in payment for such additional taxes must
have been owned for at least six months prior to the delivery or must not have
been acquired directly or indirectly from the Company and may be subject to
such other conditions as the Board may require. The value of Shares withheld or
delivered shall be the Fair Market Value per Share on the date the Option
becomes taxable. All Withholding Elections are subject to the approval of the
Board and must be made in compliance with rules and procedures established by
the Board.
11. ADJUSTMENTS OF AND CHANGES IN CAPITALIZATION
If there is any change in the Common Stock of the Company by reason of any
stock dividend, stock split, spin-off, split up, merger, consolidation,
recapitalization, reclassification, combination or exchange of Shares, or any
other similar corporate event, then the Board shall make appropriate
adjustments to the number of Shares theretofore appropriated or thereafter
subject or which may become subject to an Option under the Plan. Outstanding
Options shall also be automatically converted as to price and other terms if
necessary to reflect the foregoing events. No right to purchase fractional
Shares shall result from any adjustment in Options pursuant to this Section 11.
In case of any such adjustment, the Shares subject to the Option shall be
rounded down to the nearest whole Share. Notice of any adjustment shall be
given by the Company to each holder of any Option which shall have been so
adjusted and such adjustment (whether or not such notice is given) shall be
effective and binding for all purposes of the Plan.
12. PRIVILEGES OF STOCK OWNERSHIP
No Participant will have any rights of a stockholder with respect to any
Shares until the Shares are issued to the Participant. After Shares are issued
to the Participant, the Participant will be a stockholder and have all the
rights of a stockholder with respect to such Shares, including the right to
vote and receive all dividends or other distributions made or paid with respect
to such Shares.
13. EXCHANGE AND BUYOUT OF AWARDS; RULE 16b-3
The Board or its delegate may, at any time or from time to time, authorize
the Company, with the consent of the respective Participants, to issue new
Options in exchange for the surrender and cancellation of any or all
outstanding Options, except as otherwise provided in Section 7(i) with respect
to Insiders. The Board or its delegate may at any time buy from a Participant
an Option previously granted with payment in cash, Shares or other
consideration, based on such terms and conditions as the Board or its delegate
and the Participant may agree. Grants of Options to Insiders are intended to
comply with the applicable provisions of Rule 16b-3 and such Options shall
contain such additional conditions or restrictions, if any, as may be required
by Rule 16b-3 to be in the written agreement relating to such Options in order
to qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
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14. EFFECTIVE DATE OF THE PLAN
This Plan will become effective when adopted by the Board (the "EFFECTIVE
DATE"). This Plan must be approved by the stockholders of the Company,
consistent with applicable laws, within twelve (12) months before or after the
Effective Date. Upon the Effective Date, the Board or its delegate may grant
Options pursuant to this Plan; provided that no Option may be exercised prior
to the initial stockholder approval of this Plan. In the event that stockholder
approval is not obtained within the time period provided herein, all Options
granted hereunder will be canceled. So long as Insiders are Participants, the
Company will comply with the requirements of Rule 16b-3 with respect to
stockholder approval.
15. AMENDMENT OF THE PLAN
(a) The Board at any time, and from time to time, may amend the Plan;
provided that, except as provided in Section 11 (relating to adjustments upon
changes in capitalization), no amendment for which stockholder approval is
required shall be effective unless such approval is obtained within the
required time period. Whether stockholder approval is required shall be
determined by the Board.
(b) It is expressly contemplated that the Board may, without seeking approval
of the Company's stockholders, amend the Plan in any respect necessary to
provide the Company's employees with the maximum benefits provided or to be
provided under Section 422 of the Code or Section 16 of the Exchange Act and
the regulations promulgated thereunder and/or to bring the Plan or Options
granted under it into compliance therewith.
(c) Rights and obligations under any Option granted before any amendment of
the Plan shall not be altered or impaired by amendment of the Plan, except with
the consent of the person who holds the Option, which consent may be obtained
in any manner that the Board or its delegate deems appropriate.
(d) To the extent required by Rule 16b-3, the Board may not amend the
provisions of Section 8 hereof more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Security Act,
or the rules thereunder.
16. REGISTRATION, LISTING, QUALIFICATION, APPROVAL OF STOCK AND OPTIONS
An award under this Plan will not be effective unless such award is in
compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock
exchange or automated quotation system upon which the Shares may then be listed
or quoted, as they are in effect on the date of grant of the award and also on
the date of exercise or other issuance. Notwithstanding any other provision in
this Plan, the Company will have no obligation to issue or deliver certificates
for Shares under this Plan prior to: (a) obtaining any approvals from
governmental agencies that the Company determines are necessary or advisable;
and/or (b) completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the Securities and Exchange Commission
or to effect compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or automated
quotation system, and the Company will have no liability for any inability or
failure to do so.
17. NO RIGHT TO EMPLOYMENT
Nothing in this Plan or in any Option shall be deemed to confer on any
employee any right to continue in the employ of the Company or any Affiliate or
to limit the rights of the Company or its Affiliates, which are hereby
expressly reserved, to discharge an employee at any time, with or without
cause, or to adjust the compensation of any employee.
18. MISCELLANEOUS
The use of any masculine pronoun or similar term is intended to be without
legal significance as to gender.
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