As filed with the Securities and Exchange Commission on June 24,
1998
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
LSI LOGIC CORPORATION
(Exact name of issuer as specified in its charter)
DELAWARE 94-2712976
(State of Incorporation) (I.R.S.
Employer Identification No.)
1551 McCarthy Boulevard
Milpitas, California 95035
(Address of Principal Executive Offices)
LSI LOGIC CORPORATION
1991 EQUITY INCENTIVE PLAN
AMENDED AND RESTATED
(Full title of the Plan)
David E. Sanders
Vice President, General Counsel
LSI LOGIC CORPORATION
1551 McCarthy Boulevard, Milpitas, California 95035
(408) 433-8000
(Name, address and telephone number of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<C> <C> <C> <C> <C>
Title of Amount to Proposed Proposed Amount of
Securities be Maximum Maximum Registration
to be Registered Offering Aggregate Fee
Registered Price per Offering
Unit* Price*
Common 7,000,000 $23.34 $163,406,250 $48,205.00
Stock shares
<FN>
<F*>Estimated in accordance with Rule 457(c) for the purpose of
calculating the registration fee on the basis of $23.34 per
share, which was the average of the high and low prices of the
Common Stock on the New York Stock Exchange, Inc. on June 22,
1998.
</FN>
</TABLE>
Part II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference in this
Registration Statement the following documents and information
heretofore filed with the Securities and Exchange Commission:
(a) The Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997 filed pursuant
to Section 13 of the Securities Exchange Act of 1934,
as amended (the "1934 Act");
(b) The Company's definitive proxy statement dated
March 24, 1998, in connection with the Company's Annual
Meeting of Stockholders held May 12, 1998 filed
pursuant to Section 14, of the 1934 Act;
(c) The Company's Quarterly Report on Form 10-Q
for the quarter ended March 29, 1998 filed pursuant to
Section 13 of the 1934 Act;
(d) The description of the Company's Common Stock
contained in the Company's Registration Statement on
Form 8-A filed on August 29, 1989, pursuant to Section
12(b) of the 1934 Act.
All documents filed by the Company pursuant to Sections
13(a) and (c), 14 and 15(d) of the 1934 Act on or after the date
of this Registration Statement and prior to the filing of a post-
effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of
filing such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the issuance of shares of common stock
offered hereunder will be passed upon for the Registrant by
Wilson, Sonsini, Goodrich & Rosatti, P.C., Palo Alto, California.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law
authorizes a court to award, or a corporation's Board of
Directors to grant, indemnity to directors and officers in terms
sufficiently broad to permit such indemnification under certain
circumstances for liabilities (including reimbursement for
expenses incurred) arising under the Securities Act of 1933.
Section 10 of the Certificate of Incorporation and Article VI of
the Bylaws of the Company provide for indemnification of certain
agents to the maximum extent permitted by the Delaware General
Corporation Law. Persons covered by these indemnification
provisions include current and former directors, officers,
employees and other agents of the Company, as well as persons,
who serve at the request of the Company as directors, officers,
employees or agents of another enterprise. In addition, the
Company has entered into indemnification agreements with its
directors and officers pursuant to which the Company has agreed
to indemnify such individuals and to advance expenses incurred in
defending any action or proceeding to the fullest extent
permitted by Section 145 of the Delaware General Corporation Law.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibit Index immediately preceding the exhibits is
incorporated herein by reference.
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 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.
(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 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) 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 Delaware General Corporation Law, the By-Law provisions,
Section 11 of the Certificate of Incorporation of the registrant
and the indemnification agreements described above in Item 6, 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
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
hereunder, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, LSI Logic Corporation, a corporation organized and
existing under the laws of the State of Delaware, certifies that
it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Milpitas,
State of California, on this 18th day of June, 1998.
LSI LOGIC CORPORATION
By: ___________/S/__________
R. Douglas Norby
Executive Vice
President, Finance and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Wilfred J.
Corrigan and R. Douglas Norby, jointly and severally, his
attorneys-in-fact, each with the power of substitution, for him
in any and all capacities, to sign any amendments to this
Registration Statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may 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 and on the dates indicated.
<TABLE>
<C> <C> <C>
Signature Title Date
Chief Executive
________/S/_________ Officer and June 18, 1998
(Wilfred J. Corrigan) Chairman of the
Board of Directors
(Principal
Executive Officer)
_______/S/__________ Executive Vice June 18, 1998
(R. Douglas Norby) President and Chief
Financial Officer
(Principal
Financial and
Accounting Officer)
_______/S/__________ Director June 23, 1998
(T. Z. Chu)
</TABLE>
EXHIBIT INDEX
Exhibit Description
Number
3.1 Amended and Restated Certificate of Incorporation
of the Company filed August 20, 19971.
4.1 Stockholder Rights Plan dated November 16, 19882.
5.1 Opinion of Counsel as to legality of securities being
offered.
10.35 LSI Logic Corporation 1991 Equity Incentive Plan
Amended and Restated
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (contained in Exhibit 5.1
hereto).
24.1 Power of Attorney (see page 6).
_______________________________
1 Incorporated by reference to Exhibit 3.1 filed with the
Registrant's Registration Statement on Form S-8 (No. 333-34285)
which became effective September 25, 1997.
2 Incorporated by reference to exhibits filed with the Company's
Form 8-A filed on November 21, 1988.
EXHIBIT 5.1 / 23.2
June 18, 1998
LSI Logic Corporation
1551 McCarthy Boulevard
Milpitas, CA 95035
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 to
be filed by you with the Securities and Exchange Commission on or
about June 16, 1998 (the "Registration Statement"), in connection
with the registration under the Securities Act of 1933, as
amended, of a total of 7,000,000 shares of your Common Stock
reserved for issuance under the Amended and Restated LSI Logic
Corporation 1991 Equity Incentive Plan (the "Plan") (the
"Shares"). As legal counsel for LSI Corporation, we have
examined the proceedings taken and are familiar with the
proceedings proposed to be taken by you in connection with the
sale and issuance of the Shares under the Plan.
It is our opinion that, when issued and sold in the manner
referred to in the Plan and pursuant to the agreement which
accompanies each grant under the Plan, the Shares will be legally
and validity issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name
wherever appearing in the Registration Statement and any
amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated
January 22, 1998, which appears on page 36 of the 1997
Annual Report to Shareholders of LSI Logic Corporation,
which is incorporated by reference in LSI Logic
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997.
Price Waterhouse LLP
San Jose, California
June 22, 1998
LSI Logic Corporation
91Equity Incentive Plan
Exhibit 10.35
LSI LOGIC CORPORATION
1991 EQUITY INCENTIVE PLAN
AMENDED AND RESTATED
1. Purpose of the Plan. The purpose of the LSI Logic
Corporation 1991 Equity Incentive Plan (the "Plan") is to enable
LSI Logic Corporation (the "Company") to provide an incentive to
eligible employees, including officers, and consultants whose
present and potential contributions are important to the
continued success of the Company, to afford them an opportunity
to acquire a proprietary interest in the Company, and to enable
the Company to enlist and retain in its employ the best available
talent for the successful conduct of its business. It is
intended that this purpose will be effected through the granting
of stock options.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Award" means any Option granted.
(b) "Board" means the Board of Directors of the
Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Committee or Committees
referred to in Section 5 of the Plan. If at any time no
Committee shall be in office, then the functions of the Committee
specified in the Plan shall be exercised by the Board.
(e) "Common Stock" means the Common Stock, $0.01 par
value (as adjusted from time to time), of the Company.
(f) "Company" means LSI Logic Corporation, a
corporation organized under the laws of the state of Delaware, or
any successor corporation.
(g) "Consultant" means any person, including an
advisor, who is engaged by the Company or any Parent or
Subsidiary to render services for its benefit and is compensated
for such services, provided the term Consultant shall not include
directors who are not compensated for their services or are paid
only a director's fee by the Company.
(h) "Director" means a member of the Board.
(i) "Disability" means a disability, whether temporary
or permanent, partial or total, as defined in Section 22(e)(3) of
the Code.
(j) "Employee" means any person, including officers
and directors, employed by the Company or any Subsidiary,
provided the term Employee shall not include non-employee
directors and the payment of directors' fees by the Company shall
not be sufficient to constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(l) "Fair Market Value" means, as of any date, the
value of Common Stock determined as follows:
(i) if such Common Stock shall then be listed on
a national securities exchange, the closing sales price
(or the closing bid, if no sales were reported) as
quoted on the principal national securities exchange on
which the Common Stock is listed or admitted to
trading, or
(ii) the closing sales price (or the closing bid,
if no sales were reported) as quoted on the NASDAQ
National Market System, or
(iii) if such Common Stock shall not be quoted
on such National Market System nor listed or admitted
to trading on a national securities exchange, then the
average of the closing bid and asked prices, as
reported by The Wall Street Journal for the over-the-
counter market, or
(iv) if none of the foregoing is applicable, then
the Fair Market Value of a share of Common Stock shall
be determined by the Board of Directors of the Company
in its discretion.
(m) "Incentive Stock Option" means an Option intended
to be and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
(n) "Nonstatutory Stock Option" means any Option that
is not an Incentive Stock Option.
(o) "Option" means any option to purchase shares of
Common Stock granted pursuant to Section 7 below.
(p) "Optionee" means any holder of an Option
(q) "Outside Director" means a Director who is not an
Employee of the Company.
(r) "Plan" means this 1991 Equity Incentive Plan, as
hereinafter amended from time to time.
(s) "Senior Management Employees" means Employees who
are executive officers or vice presidents of the Company.
(t) "Subsidiary" means a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held
by the Company or by a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired by
the Company or by a Subsidiary.
In addition, the terms "Tax Date" and "Insiders" shall have
meanings set forth in Section 8.
3. Eligible Participants. Any Employee or Consultant of
the Company or of a Subsidiary whom the Committee deems to have
the potential to contribute to the future success of the Company
shall be eligible to receive Awards under the Plan; provided,
however, that any Options intended to qualify as Incentive Stock
Options shall be granted only to Employees of the Company or its
Subsidiaries.
4. Stock Subject to the Plan. Subject to Sections 9 and
10, the total number of shares of Common Stock reserved and
available for distribution pursuant to the Plan shall be
25,000,000 shares. Subject to Sections 9 and 10 below, if any
shares of Common Stock that have been optioned under an Option
cease to be subject to such Option Award granted hereunder are
forfeited or repurchased or any such award otherwise terminates
without a payment being made to the participant in the form of
Common Stock, such shares shall again be available for
distribution in connection with future Awards under the Plan.
5. Administration.
(a) Procedure. The Plan shall be administered by the
Board or a Committee designated by the Board to administer the
Plan, which Committee shall be constituted to permit the Plan to
comply with Rule 16b-3 promulgated under the Exchange Act, or any
successor rule thereto ("Rule 16b-3"). If permitted by Rule 16b-
3, the Plan may be administered by different bodies with respect
to Employees who are Directors, Senior Management Employees, or
Employees who are neither directors nor officers and Consultants.
Once appointed, a Committee shall continue to serve
until otherwise directed by the Board. From time to time the
Board may change the size of a Committee, appoint additional
members thereof, remove members (with or without cause), appoint
new members in substitution therefor, fill vacancies, however
caused and remove all members of a Committee and thereafter
directly administer the Plan, all to the extent permitted by
Rule 16b-3. As used herein, except in Sections 10, 12 and 17,
reference to Committee shall mean such Committee or the Board,
whichever is then acting with respect to the Plan.
(b) Authority. Subject to the general purposes,
terms, and conditions of the Plan, and to the direction of the
Board, the Committee, if there be one, shall have full power to
implement and carry out the Plan including, but not limited to,
the following:
(i) to select the Employees and Consultants of
the Company and/or its Subsidiaries to whom Options may from
time to time be granted hereunder;
(ii) to determine whether and to what extent
Options are to be granted hereunder;
(iii) to determine the number of shares of
Common Stock to be covered by each such Award granted
hereunder;
(iv) to approve forms of agreement for use under
the Plan;
(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award
granted hereunder (including, but not limited to, the share
price and any restriction or limitation, or any vesting
acceleration or waiver of forfeiture restrictions regarding
any Option and/or the shares of Common Stock relating
thereto, based in each case on such factors as the Committee
shall determine, in its sole discretion);
(vi) to determine whether and under what
circumstances an Option may be settled in cash instead of
Common Stock;
(vii) to determine the form of payment that will
be acceptable consideration for exercise of an Option
granted under the Plan;
(viii) to determine whether, to what extent and
under what circumstances Common Stock and other amounts
payable with respect to an Award under this Plan shall be
deferred either automatically or at the election of the
participant (including providing for and determining the
amount (if any) of any deemed earnings on any deferred
amount during any deferral period);
Shareholder approval shall be required to reduce the
exercise price of any Option. For grants of Incentive Stock
Options only, any other material amendments to the Plan shall
require shareholder approval. The Committee shall have the
authority to construe and interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to the Plan, and to
make all other determinations necessary or advisable for the
administration of the Plan.
6. Duration of the Plan. The Plan shall remain in effect
until terminated by the Board under the terms of the Plan,
provided that in no event may Incentive Stock Options be granted
under the Plan later than March 8, 2001, 10 years from the date
the Plan was adopted by the Board.
7. Stock Options. The Committee, in its discretion, may
grant Options to eligible participants and shall determine
whether such Options shall be Incentive Stock Options or
Nonstatutory Stock Options. Each Option shall be evidenced by a
written Option agreement which shall expressly identify the
Option as an Incentive Stock Option or as a Nonstatutory Stock
Option, and shall be in such form and contain such provisions as
the Committee shall from time to time deem appropriate. Option
agreements shall contain the following terms and conditions:
(a) Option Price; Number of Shares. The Option price,
which shall be approved by the Committee, may not be less than
the Fair Market Value of the Common Stock at the time the Option
is granted.
The Option agreement shall specify the number of shares
of Common Stock to which it pertains.
(b) Waiting Period until Option Vesting and Exercise
Dates. At the time an Option is granted, the Committee will
determine the terms and conditions to be satisfied before shares
may be purchased, including the dates on which the right to
purchase shares subject to the Option will vest and such shares
may first be purchased. The Committee may specify that an Option
may not be exercised until the completion of the waiting period
specified at the time of grant. (Any such period is referred to
herein as the "Initial Vesting Period.") At the time an Option
is granted, the Committee shall fix the period within which such
Option may be exercised, which shall not be less than the Initial
Vesting Period, if any, nor, in the case of an Incentive Stock
Option, more than 10 years from the date of grant.
(c) Form of Payment. The consideration to be paid for
the shares of Common Stock to be issued upon exercise of an
Option, including the method of payment, shall be determined by
the Committee (and, in the case of an Incentive Stock Option,
shall be determined at the time of grant) and may consist
entirely of (i) cash, (ii) check, (iii) promissory note,
(iv) other shares of Common Stock which (x) either have been
owned by the Optionee 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 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, (vi) delivery of an irrevocable subscription agreement for
the shares which obligates the option holder to take and pay for
the shares not more than 12 months after the date of delivery of
the subscription agreement, (vii) any combination of the
foregoing methods of payment, or (viii) such other consideration
and method of payment for the issuance of shares to the extent
permitted under the Delaware General Corporation Law.
(d) Effect of Termination of Employment or Death or
Disability of Employee Participants.
(i) Termination of Employment in General. In the
event that an Optionee during his or her lifetime ceases to be an
Employee of the Company or of any Subsidiary for any reason,
other than misconduct of the Optionee, including retirement, any
Option, including any unexercised portion thereof, which was
otherwise exercisable on the date of termination of employment,
shall expire in accordance with the following provisions:
(A) Nonstatutory Stock Options shall expire
unless exercised within such time period as is determined by the
Committee; which shall be ninety (90) days from the date the
Optionee ceases to be an Employee unless the Committee has
specified another time period prior to the expiration of such
ninety (90) day period; and
(B) Incentive Stock Options shall expire
unless exercised within a period of ninety (90) days from the
date on which the Optionee ceased to be an Employee (or such
lesser period as is set out in Option agreement),
Notwithstanding the foregoing, the period of
exercisability provided for above, as applicable shall in no
event continue after the expiration of the term of such Option as
set forth in the Option agreement.
(ii) Misconduct: If in any case the Committee
shall determine that an Employee or Consultant shall have been
discharged due to the Employee's or Consultant's misconduct (as
defined below) such Employee or Consultant, as the case may be,
shall not thereafter have any rights under the Plan or any Option
that shall have been granted to him or her under the Plan. For
purposes of the Plan, "misconduct" means conduct for which the
Company's determines to terminate the employment of an Employee
or to terminate any Consultant's arrangements with the Company
that constitutes (i) willful breach or neglect of duty; (ii)
failure or refusal to work or to comply with the Company's rules,
policies, and practices; (iii) dishonesty; (iv) insubordination;
(v) being under the influence of drugs (except to the extent
medically prescribed) or alcohol while on duty or on Company
premises; (vi) conduct endangering, or likely to endanger, the
health or safety of another Employee, any other person or the
property of the Company; or (vii) conviction of a felony.
(iii) Termination of Employment due to Disability
or Death. In the event of the death or permanent, total
Disability of an Optionee during the period of employment, that
portion of the Option which had become exercisable as of the date
of death or permanent, total Disability shall be exercisable by
the employee or his or her personal representatives, heirs, or
legatees within 12 months of the date of death or permanent,
total Disability or such time period as is determined by the
Committee (but in the case of an Incentive Stock Option, in no
event no more than 12 months after the date of death or
permanent, total Disability or after the expiration of the term
of such Option as set forth in the Option agreement.) In the
event of the death of an Optionee within three months after
termination of employment, that portion of the Option which had
become exercisable as of the date of termination shall be
exercisable by his or her personal representatives, heirs, or
legatees within six months of the date of death or such time
period as is determined by the Committee (but in the case of an
Incentive Stock Option, in no event after the expiration of the
term of such Option as set forth in the Option agreement.) In
the event that an Optionee ceases to be an Employee of the
Company or of any Subsidiary for any reason, including death,
Disability or retirement, prior to the lapse of the Initial
Vesting Period, if any, his or her Option shall terminate and be
null and void to the extent the requirement for such Initial
Vesting Period has not been satisfied.
(e) Leave of Absence. The employment relationship
shall not be considered interrupted in the case of: (i) sick
leave, military leave or any other leave of absence approved by
the Board; provided that any such leave is for a period of not
more than 90 days, unless reemployment upon the expiration of
such leave is guaranteed by contract, statute or pursuant to
formal policy adopted from time to time by the Company and issued
and promulgated to Employees in writing, or (ii) in the case of
transfer between locations of the Company or between the Company,
its Subsidiaries or its successor. In the case of any Employee
on an approved leave of absence, the Committee may make such
provisions respecting suspension of vesting of the Option while
on leave from the employ of the Company or a Subsidiary as it may
deem appropriate, if any, except that in no event shall an Option
be exercised after the expiration of the term set forth in the
Option agreement.
(f) Acceleration of Vesting or Initial Vesting Period.
The Committee may accelerate the earliest date on which
outstanding Options (or any installments thereof) are
exercisable.
(g) Special Incentive Stock Option Provisions. In
addition to the foregoing, Options granted to Employees under the
Plan which are intended to be Incentive Stock Options under
Section 422 of the Code shall be subject to the following terms
and conditions:
(i) Dollar Limitation. To the extent that the
aggregate Fair Market Value of the shares of Common Stock
with respect to which Options designated as Incentive Stock
Options become exercisable for the first time by any
individual during any calendar year (under all plans of the
Company) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of the preceding
sentence, (i) Options shall be taken into account in the
order in which they were granted and (ii) the Fair Market
Value of the shares shall be determined as of the time the
Option with respect to such shares was granted.
(ii) 10% Stockholder. If any person to whom
an Incentive Stock Option is to be granted pursuant to the
provisions of the Plan is, on the date of grant, the owner
of Common Stock (as determined under Section 425(d) of the
Code) possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any
Subsidiary, then the following special provisions shall be
applicable to the Option granted to such individual:
(A) The Option price per share of the
Common Stock subject to such Incentive Stock Option
shall not be less than 110% of the Fair Market Value of
the Common Stock on the date of grant; and
(B) The Option shall not have a term in
excess of five years from the date of grant.
Except as modified by the preceding provisions of this
Subsection 7(g) and except as otherwise required by Section 422
of the Code, all of the provisions of the Plan shall be
applicable to the Incentive Stock Options granted hereunder.
(h) Other Provisions. Each Option granted under the
Plan may contain such other terms, provisions, and conditions not
inconsistent with the Plan as may be determined by the Committee.
(i) Options to Consultants. Except as set forth in
Section 7(d)(ii), Options granted to Consultants shall not be
subject to Section 7(d) of the Plan, but shall have such terms
and conditions pertaining to the Initial Vesting Period (if any),
exercise date, and effect of termination of the consulting
relationship as the Committee shall determine in each case.
Unless otherwise stated, termination of the consulting
relationship shall be deemed to have occurred at the completion
of the consulting project for which Consultant was engaged at the
time of the grant or termination of the Consulting Agreement, if
earlier.
(j) Buyout Provisions. The Committee may at any time
offer to buy out for a payment in cash or Common Stock, an Option
previously granted, based on such terms and conditions as the
Committee shall establish and communicate to the Optionee at the
time that such offer is made.
(k) Rule 16b-3. Options granted to persons subject to
Section 16(b) of the Exchange Act must comply with Rule 16b-3 and
shall be deemed to contain such additional conditions or
restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
(l) Limits. The following limitations shall apply to
grants of Options to employees:
(i) No employee shall be granted, in any fiscal year
of the Company, Options to purchase more than
750,000 Shares.
(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in
the Company's capitalization or organization as
described in Sections 9 and 10.
(iii) If an Option grant made under the Plan
is canceled in the same fiscal year of the Company
in which it was granted (other than in connection
with a transaction described in Section 9 or
Section 10), the canceled Option grant will be
counted against the limit set forth in Section
7(l)(i), above. For this purpose, if the exercise
price of an Option grant is reduced, the
transaction will be treated as a cancellation of
the Option grant and the grant of a new Option.
8. Withholding Taxes; Stock Withholding to Satisfy
Withholding Tax Obligations. Whenever, under the Plan, shares are
to be issued in satisfaction of Options granted hereunder, the
Company shall have the right to require the recipient to remit to
the Company an amount sufficient to satisfy federal, state, and
local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares. Whenever, under the
Plan, payments are to be made in cash, such payment shall be net
of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.
When a participant incurs tax liability in connection with
the exercise or vesting of any Option, which tax liability is
subject to tax withholding under applicable tax laws, and the
participant is obligated to pay the Company an amount required to
be withheld under applicable tax laws, the participant may
satisfy the withholding tax obligation by electing to have the
Company withhold from the shares to be issued that number of
shares having a Fair Market Value equal to the amount required to
be withheld determined on the date that the amount of tax to be
withheld is to be determined (the "Tax Date").
All elections by participant to have shares withheld
for this purpose shall be made in writing in a form acceptable to
the Committee and shall be subject to the following restrictions:
(i) the election must be made on or prior to the
applicable Tax Date;
(ii) once made, the election shall be irrevocable
as to the particular shares as to which the
election is made;
(iii) all elections shall be subject to the
disapproval of the Committee; and
(iv) if the participant is an officer or Director
of the Company or other person whose transactions
in Common Stock are subject to Section 16(b) of
the Exchange Act (collectively "Insiders"), the
election may not be made during such time or
times, if any, as are restricted by Rule 16b-3 or
any successor provision.
9. Recapitalization. In the event that dividends are
payable in Common Stock or in the event there are splits,
subdivisions, or combinations of shares of Common Stock, the
number of shares available under the Plan shall be increased or
decreased proportionately, as the case may be, and the number of
shares of Common Stock deliverable in connection with any Option
theretofore granted shall be increased or decreased
proportionately, as the case may be, without change in the
aggregate purchase price (where applicable).
10. Reorganization. In case the Company is merged or
consolidated with another corporation and the Company is not the
surviving corporation, or in case the property or stock of the
Company is acquired by another corporation, or in case of
separation, reorganization, or liquidation of the Company, then
the Board, or the board of directors of any corporation assuming
the obligations of the Company hereunder, shall, as to
outstanding Options either (a) make appropriate provision for the
protection of any such outstanding Options by the assumption or
substitution on an equitable basis of appropriate stock of the
Company or of the merged, consolidated, or otherwise reorganized
corporation which will be issuable in respect to the shares of
Common Stock, provided that in the case of Incentive Stock
Options, such assumption or substitution comply with Section 424
of the Code, or (b) upon written notice to the participant,
provide that the Option must be exercised within 30 days of the
date of such notice or it will be terminated. In any such case,
the Board or the Committee may, in its discretion, advance the
lapse of vesting periods, Initial Vesting Periods, and exercise
dates.
11. Employment Relationship. Nothing in the Plan or any
Award made hereunder shall be construed as a contract for
employment or consulting for any period or shall interfere with
or limit in any way the right of the Company or of any Subsidiary
to terminate any recipient's employment or consulting
relationship at any time, with or without cause, nor confer upon
any recipient any right to continue in the employ or service of
the Company or any Subsidiary.
12. General Restriction. Each Award shall be subject to
the requirement that, if, at any time, the Board shall determine,
in its discretion, that the listing, registration, or
qualification of the shares subject to such Award upon any
securities exchange or under any state or federal law, or the
consent or approval of any government regulatory body, is
necessary or desirable as a condition of, or in connection with,
such Award or the issue or purchase of shares thereunder, such
Award may not be exercised in whole or in part unless such
listing, registration, qualification, consent, or approval shall
have been effected or obtained free of any conditions not
acceptable to the Board.
13. Rights as a Stockholder. The holder of an Option shall
have no rights as a stockholder with respect to any shares
covered by the Option until the date of exercise. Once an Option
is exercised by the holder thereof, the participant shall have
the rights equivalent to those of a stockholder, and shall be a
stockholder when his or her holding is entered upon the records
of the duly authorized transfer agent of the Company. Except as
otherwise expressly provided in the Plan, no adjustment shall be
made for dividends or other rights for which the record date is
prior to the date such stock certificate is issued.
14. Nonassignability of Awards. Awards made hereunder
shall not be assignable or transferable by the recipient in
accordance with their terms, except to the extent permitted by
the tax and securities laws, including by will or by the laws of
descent and distribution, and as otherwise consistent with the
specific Plan provisions relating thereto.
15. Nonexclusivity of the Plan. Neither the adoption of
the Plan by the Board, the submission of the Plan to the
stockholders of the Company for approval, nor any provision of
the Plan shall be construed as creating any limitations on the
power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under
the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
16. Amendment, Suspension, or Termination of the Plan. The
Board may at any time amend, alter, suspend, or discontinue the
Plan, but no amendment, alteration, suspension, or
discontinuation shall be made which would impair the rights of
any participant in the Plan without his or her consent. In
addition, to the extent necessary and desirable to comply with
Rule 16b-3 under the Exchange Act or under Section 423 of the
Code (or any other applicable law or regulation), the Company
shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required.
17. Effective Date of the Plan. The Amended and Restated
Plan is effective upon adoption by the Board and shall be subject
to stockholder approval within 12 months of adoption by the
Board. Options may be granted and exercised under the Plan only
after there has been compliance with all applicable federal and
state securities laws.
