<PAGE> 1
As filed with the Securities and Exchange Commission on June 24, 1999 to
Registration No. _____
- --------------------------------------------------------------------------------
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)
SEEQ TECHNOLOGY, INC.
1982 STOCK OPTION PLAN
AMENDED AND RESTATED
SEEQ TECHNOLOGY, INC.
1989 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN AMENDED
(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)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Proposed Proposed Maximum
Title of Securities Amount to be Maximum Offering Aggregate Amount of
to be Registered Registered Price Per Unit* Offering Price* Registration Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock 378,043 shares $15.04 $5,685,767 $1,581.00
</TABLE>
================================================================================
*Computed in accordance with Rule 457(h) under the Securities Act of 1933, as
amended, solely for the purpose of calculating the registration fee. Computation
based upon the price at which the options may be exercised.
<PAGE> 2
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 and 10-K/A for the fiscal
year ended December 31, 1998 filed pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended (the " Exchange Act");
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 28, 1999, filed pursuant to Section 13 of the Exchange Act.
(c) 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 Exchange Act;
(d) The description of the Company's Amended and Restated Preferred
Shares Rights Agreement contained in the Company's Registration
Statement on Form 8-A-12G/A filed on December 8, 1998, pursuant to
Section 12(g) of the Exchange Act; and
(e) The Company's Current Report on Form 8-K/A, filed on May 28, 1999,
pursuant to Section 13 of the Exchange Act.
(f) The Company's Current Report on Form 8-K, filed on June 2, 1999,
pursuant to Section 13 of the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a) and (c),
14 and 15(d) of the Exchange 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.
Not applicable.
2
<PAGE> 3
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 11 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.
<TABLE>
<CAPTION>
Exhibit Number
--------------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the
Company(1)
4.1 Amended and Restated Preferred Shares Rights Agreement, dated
November 20, 1998(2)
4.2 SEEQ Technology, Inc. Amended and Restated 1982 Stock Option
Plan
4.3 SEEQ Technology, Inc. Amended 1989 Nonemployee Director Stock
Option Plan
5.1 Opinion of Counsel as to legality of securities being
registered.
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).
</TABLE>
- --------------------------------------------------------------------------------
(1) Incorporated by reference to exhibits filed with the Company's
Registration Statement Form S-8 (No. 333-57563) filed June 24, 1998
(2) Incorporated by reference to exhibits filed with the Company's Form
8-A12G/A filed on December 8, 1998
3
<PAGE> 4
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.
4
<PAGE> 5
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 22nd day
of June, 1999.
LSI LOGIC CORPORATION
By: /s/ R. Douglas Norby
-------------------------------------
R. Douglas Norby
Executive Vice President, Finance and
Chief Financial Officer
5
<PAGE> 6
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>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Chairman, Chief Executive Officer and Director June __, 1999
- ----------------------------------- (Principal Executive Officer)
Wilfred J. Corrigan
/s/ R. Douglas Norby Executive Vice President, Chief Financial June 22, 1999
- ------------------------------------- Officer and Director (Principal Financial
R. Douglas Norby Officer and Principal Accounting Officer)
/s/ T.Z. Chu Director June 22, 1999
- -------------------------------------
T.Z. Chu
/s/ Malcolm R. Currie Director June 22, 1999
- -------------------------------------
Malcolm R. Currie
/s/ James H. Keyes Director June 22, 1999
- -------------------------------------
James H. Keyes
/s/ Matthew J. O'Rourke Director June 22, 1999
- -------------------------------------
Matthew J. O'Rourke
</TABLE>
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the
Company
4.1 Amended and Restated Preferred Shares Rights Agreement, dated
November 20, 1998
4.2 SEEQ Technology, Inc. Amended and Restated 1982 Stock Option
Plan
4.3 SEEQ Technology, Inc. Amended and 1989 Nonemployee Director
Stock Option Plan
5.1 Opinion of Counsel as to legality of securities being
registered.
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).
</TABLE>
7
<PAGE> 1
EXHIBIT 4.2
SEEQ TECHNOLOGY INCORPORATED
RESTATED 1982 STOCK OPTION PLAN
(Amended and Restated through January 13, 1998)
I. PURPOSE OF THE PLAN
This Restated 1982 Stock Option Plan (the "Plan") is intended to promote
the interests of SEEQ Technology Incorporated, a Delaware corporation
("Company"), by providing a method whereby (i) employees (including officers and
employee members of the Board) of the Company and its parent or subsidiary
corporations who are primarily responsible for the management, growth and
financial success of the Company and its parent or subsidiary corporations and
(ii) consultants or other independent contractors (other than non-employee
members of the Board) who perform valuable services for the Company and its
parent or subsidiary corporations may be offered incentives and rewards which
will encourage them to acquire a proprietary interest, or otherwise increase
their proprietary interest, in the Company and continue to render services to
the Company or its parent or subsidiary corporations.
II. ADMINISTRATION OF THE PLAN
The Plan shall be administered in accordance with the following
standards:
(a) The Company's Board of Directors (the "Board") shall appoint a
committee ("Committee") consisting of not less than two (2) Board members to
administer the Plan, including (without limitation) the power to grant options
under the Plan, the power to accelerate the exercisability of granted options
and the power to administer the option surrender provisions of the Plan. This
committee shall function as the "Primary Committee" under the Plan and shall
have sole and exclusive authority to grant stock options to officers of the
Company. No Board member shall be eligible to serve on the Primary Committee if
such individual has, within the twelve (12)-month period immediately preceding
the date he or she is to be appointed to the Primary Committee, received an
option grant under this Plan or an option grant or stock issuance under any
other stock option, stock appreciation, stock bonus or other stock plan of the
Company (or any parent or subsidiary corporation), other than the SEEQ
Technology Incorporated 1989 Nonemployee Director Stock Option Plan.
(b) Administration of the Plan with respect to the officers of the
Company and all other individuals eligible to participate in the Plan may, at
the Board's discretion, be vested in the Primary Committee or in a secondary
committee of two or more Board members appointed by the Board, or the Board may
retain the power to administer the Plan with respect to all individuals. Should
a secondary committee be appointed, the membership may include Board members who
are employees of the Company eligible to receive option grants under this Plan
or
<PAGE> 2
option grants or stock issuances under any other stock option, stock
appreciation, stock bonus or other stock plan of the Company (or any parent or
subsidiary corporation).
(c) Members of the Primary Committee or any secondary committee
shall serve for such term as the Board may determine and shall be subject to
removal by the Board at any time.
(d) The term "Plan Administrator" as used from time to time in this
plan document shall mean the particular entity, whether the Primary Committee or
any secondary committee, which is authorized to administer the option grant and
option surrender provisions of the Plan with respect to one or more classes of
eligible individuals, to the extent such entity is carrying out its
administrative functions under the Plan with respect to those individuals.
(e) The Plan Administrator shall have full power and authority
(subject to the express provisions of the Plan) to establish such rules and
regulations as it may deem appropriate for the proper administration of the plan
functions within the scope of its administrative authority and to make any and
all determinations with respect to those functions which it may deem necessary
or advisable. All decisions of the Plan Administrator within the scope of its
administrative authority under the Plan shall be final and binding on all
parties who have an interest in any outstanding option granted pursuant to such
authority.
III. ELIGIBILITY FOR OPTION GRANTS
(a) The persons who shall be eligible to receive options pursuant to
the Plan are those employees (including officers) and consultants or other
independent contractors (other than non-employee members of the Board) of the
Company or its parent or subsidiary corporations who render services which tend
to contribute materially to the success of the Company or its parent or
subsidiary corporations or which may reasonably be anticipated to contribute
materially to the future success of the Company or its parent or subsidiary
corporations.
(b) Non-employee members of the Board shall not be eligible to
participate in the Plan or in any other stock bonus, stock purchase, stock
option or other stock plan of the Company or its parent or subsidiary
corporations other than the SEEQ Technology Incorporated 1989 Nonemployee
Director Stock Option Plan.
(c) The Plan Administrator shall have the sole and exclusive
authority, within the scope of its administrative functions under the Plan, to
select the eligible individuals who are to receive option grants under the Plan
and to determine the number of shares to be covered by each such option grant,
the status of the granted option as either an incentive stock option ("Incentive
Option") which satisfies the requirements of Section 422 of the Internal Revenue
Code or a non-statutory option not intended to meet such requirements, the time
or times at which such option is to become exercisable and the maximum term for
which the option is to remain outstanding.
(d) For purposes of this Plan, the following provisions shall be
applicable in determining the parent and subsidiary corporations of the Company:
<PAGE> 3
(i) Any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company shall be considered to be
a parent corporation of the Company, provided each such corporation in
the unbroken chain (other than the Company) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
(ii) Each corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company shall be considered to
be a subsidiary of the Company, provided each such corporation (other
than the last corporation) in the unbroken chain owns, at the time of
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
IV. STOCK SUBJECT TO THE PLAN
(a) The stock issuable under the Plan shall be shares of the
Company's authorized but unissued or reacquired common stock ("Common Stock").
The aggregate number of shares of Common Stock issuable over the term of the
Plan shall not exceed 8,760,000 shares and not more than 6,171,481 shares shall
be issued under the Plan after January 15, 1998. However, the number of shares
issued under the Plan is subject to adjustment from time to time in accordance
with paragraph IV(b) of the Plan. Should an option terminate for any reason
prior to exercise or surrender in full (including options cancelled in
accordance with the cancellation-regrant provisions of Article VIII of the
Plan), the shares subject to the portion of the option not so exercised or
surrendered shall be available for subsequent option grants under this Plan.
Shares subject to any option or portion thereof surrendered or cancelled in
accordance with Article IX of the Plan and all share issuances under the Plan,
whether or not the shares are subsequently repurchased by the Company pursuant
to its repurchase rights under the Plan, shall reduce on a share-for-share basis
the number of shares of Common Stock available for subsequent option grants
under the Plan. In addition, should the exercise price of an outstanding option
under the Plan be paid with shares of Common Stock or should shares of Common
Stock otherwise issuable under the Plan be withheld by the Company in
satisfaction of the withholding taxes incurred in connection with the exercise
of an outstanding option under the Plan, then the number of shares of Common
Stock available for issuance under the Plan shall not be reduced by the gross
number of shares for which the option is exercised, but by the net number of
shares of Common Stock actually issued to the option holder.
(b) In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock dividend, stock split, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding shares of the Common Stock as a class without the Company's receipt
of consideration, appropriate adjustments shall be made to (i) the aggregate
number and/or class of securities issuable under the Plan, (ii) the maximum
number of shares issuable per participant under the Plan after December 31, 1993
and (iii) the number
<PAGE> 4
and/or class of shares and the price per share of the securities subject to each
outstanding option in order to prevent the dilution or enlargement of benefits
thereunder. The adjustments determined by the Primary Committee shall be final,
binding and conclusive.
(c) No one person participating in the Plan may receive options for
more than 2,500,000 shares of the Common Stock over the term of the Plan,
exclusive of options granted prior to December 31, 1993.
V. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by action of
the Plan Administrator and may, at the discretion of the Plan Administrator, be
either Incentive Options or non-statutory options. Individuals who are not
employees of the Company or its parent or subsidiary corporations may only be
granted non-statutory options. Each granted option shall be evidenced by one or
more instruments in such form as the Plan Administrator shall from time to time
approve; provided, however, that each such instrument shall comply with the
terms and conditions specified below. Each instrument evidencing an Incentive
Option shall, in addition, be subject to the applicable provisions of Article
VI.
1. Option Price.
a. The option price per share shall be fixed by the Plan
Administrator, but in no event shall the option price per share be less than
eighty-five percent (85%) of the fair market value per share of Common Stock on
the grant date.
b. If any individual to whom an option is to be granted
pursuant to the provisions of the Plan is on the date of grant the owner of
stock (as determined under Section 424(d) of the Internal Revenue Code)
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any one of its parent or subsidiary corporations (such
person to be herein referred to as a 10% Stockholder, then the option price per
share shall not be less than one hundred ten percent (110%) of the fair market
value per share of Common Stock on the grant date.
c. The option price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Article X, be
payable in one of the alternative forms specified below:
(i) full payment in cash or check payable to the
Company's order; or
(ii) full payment in shares of Common Stock held for
the requisite period necessary to avoid a charge to the Company's earnings for
financial reporting purposes and valued at fair market value on the Exercise
Date (as such term is defined below) equal to the option price; or
<PAGE> 5
(iii) full payment through a special sale and
remittance procedure pursuant to which the optionee is to provide irrevocable
written instructions (I) to a designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Company, out of the sale proceeds
available on the settlement date, an amount sufficient to cover the aggregate
option price payable for the purchased shares plus all applicable Federal and
state income and employment taxes required to be withheld by the Company by
reason of such purchase and (II) to the Company to deliver the certificates for
the purchased shares directly to such brokerage firm in order to complete the
sale transaction; or
(iv) any combination of the foregoing so long as the
total payment equals the aggregate option price for the purchased shares.
For purposes of this subparagraph c, the Exercise Date shall be the date
on which written notice of the option exercise is delivered to the Company.
Except to the extent the sale and remittance procedure is utilized in connection
with the option exercise, payment of the option price for the purchased shares
must accompany such exercise notice.
d. The fair market value of a share of Common Stock on any
relevant date under subparagraph a, b or c above (and for all other valuation
purposes under the Plan) shall be determined in accordance with the following
provisions:
(i) If the Common Stock is not at the time listed or
admitted to trading on any stock exchange but is traded in the over-the-counter
market, the fair market value shall be the mean between the highest bid and
lowest asked prices (or, if such information is available, the closing selling
price) of the Common Stock on the date in question in the over-the-counter
market, as such prices are reported by the National Association of Securities
Dealers through its Nasdaq National Market System or any successor system. If
there are no reported bid and asked prices (or closing selling price) on the
date in question, then the mean between the highest bid price and lowest asked
price (or the closing selling price) on the last preceding date for which such
quotations exist shall be determinative of fair market value.
(ii) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market value shall be
the closing selling price per share of Common Stock on the date in question on
the stock exchange determined by the Plan Administrator to be the primary market
for the Common Stock, as such price is officially quoted on such exchange. If
there is no reported sale of Common Stock on such exchange on the date in
question, then the fair market value shall be the closing selling price of the
Common Stock on the exchange on the last preceding date for which such quotation
exists.
2. Term and Exercise of Options. Each option granted under the Plan
shall be exercisable at such time or times, during such period, and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the instrument evidencing such option. However, no option granted under this
Plan shall have a term in excess of ten (10) years from the grant date. No
option or stock appreciation right outstanding under the Plan shall be
assignable
<PAGE> 6
or transferable by the optionee other than a transfer of the option by will or
by the laws of descent and distribution following the optionee's death, and
during the optionee's lifetime the option and all stock appreciation rights
pertaining to such option shall be exercisable only by the optionee.
3. Effect of Termination of Employment.
a. Should an optionee cease Service with the Company for
any reason (including death or permanent disability as defined in Section
22(e)(3) of the Internal Revenue Code) while the holder of one or more
outstanding options granted to such optionee under the Plan, then such option or
options shall in no event remain exercisable for more than a twenty-four (24)
month period (or such shorter period as is determined by the Plan Administrator
and set forth in the option agreement) following the date of such cessation of
Service, but under no circumstances shall any such option be exercisable after
the specified expiration date of the option term. Each such option shall, during
such twenty-four (24) month or shorter period, be exercisable only to the extent
of the number of shares (if any) for which the option is exercisable on the date
of such cessation of Service. Upon the expiration of such twenty-four (24) month
or shorter period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be exercisable.
b. Any option granted to an optionee under the Plan and
exercisable in whole or in part on the date of the optionee's death may be
subsequently exercised, but only to the extent of the number of shares (if any)
for which the option is exercisable on the date of the optionee's cessation of
Service (less any option shares which the Optionee may have purchased prior to
death), by the personal representative of the optionee's estate or by the person
or persons to whom the option is transferred pursuant to the optionee's will or
in accordance with the laws of descent and distribution, provided and only if
such exercise occurs prior to the earlier of (i) the expiration of the
eighteen-(18) month period following the death of the optionee or (ii) the
specified expiration date of the option term. Upon the occurrence of the earlier
event, the option shall terminate and cease to be exercisable.
c. If (i) the optionee's Service is terminated for cause
(including, but not limited to, any act of dishonesty, willful misconduct, fraud
or embezzlement or any unauthorized disclosure or use of confidential
information or trade secrets) or (ii) the optionee makes or attempts to make any
unauthorized use or disclosure of confidential information or trade secrets of
the Company or its parent or subsidiary corporations, then in any such event all
outstanding options granted the optionee under the Plan shall immediately
terminate and cease to be exercisable.
d. Notwithstanding subparagraphs a and b above, the Plan
Administrator shall have complete discretion, exercisable either at the time the
option is granted or at the time during which the option remains outstanding, to
extend the period of time for which the option is to remain exercisable
following the optionee's cessation of Service from the twenty-four (24) month or
such shorter period previously established by the Plan Administrator and set
forth
<PAGE> 7
in the option agreement to such greater period of time as the Plan Administrator
shall deem appropriate; provided, however, that no option shall be exercisable
after the specified expiration date of the option term and that such discretion
shall not be available where the optionee has been terminated for cause. The
Plan Administrator shall have similar discretion, except with respect to
optionees terminated for cause, to establish as a provision applicable to the
exercise of one or more options granted under the Plan that during the period of
exercisability following cessation of Service (as provided in subparagraph V.3.a
or V.3.b above), the option may be exercised not only with respect to the number
of shares for which it is exercisable at the time of the optionee's cessation of
Service but also with respect to one or more installments of purchasable shares
for which the option otherwise would have become exercisable had such cessation
of Service not occurred.
e. For purposes of the foregoing provisions of this
Paragraph V.3, the optionee shall be deemed to be an Employee of the Company for
so long as the optionee remains in the employ of the Company or one or more
parent or subsidiary corporations. For purposes of the foregoing provisions of
this Paragraph V.3, optionee shall be deemed to be in Service if optionee is an
Employee, independent consultant or Board member of the Company, its parent or
subsidiary.
4. Stockholder Rights. An option holder shall have none of the
rights of a stockholder with respect to any shares covered by the option until
such individual shall have exercised the option, paid the option price and been
issued a stock certificate for the purchased shares.
5. Repurchase Price. The shares of Common Stock acquired upon the
exercise of options granted under the Plan may be subject to one or more
repurchase rights of the Company in accordance with the following provisions:
(a) The Company (or its assigns) shall have the right,
exercisable upon the optionee's cessation of Service, to repurchase at the
original option price any or all of the unvested shares of Common Stock
previously acquired by the optionee upon the exercise of such option(s). Any
such repurchase right shall be exercisable by the Company (or its assigns) upon
such terms and conditions (including the establishment of the appropriate
vesting schedule and other provisions of the expiration of such right in one or
more installments) as the Plan Administrator may specify in the instrument
evidencing such right.
(b) The Plan Administrator effecting the option grants shall
also have full power and authority to provide for the automatic termination of
the Company's outstanding repurchase rights, in whole or in part, and thereby
vest the optionees in one or more of the shares purchased or purchasable under
the granted options, upon the occurrence of any Corporate Transaction specified
in Article VII or any Change in Control specified in Article IX.
<PAGE> 8
VI. INCENTIVE OPTIONS
The terms and conditions specified below shall be applicable to all
Incentive Options granted under the Plan. Options which are specifically
designated as "non-statutory" or "non-statutory" options when issued under the
Plan shall not be subject to such terms and conditions:
(a) Option Price. The option price per share of the Common Stock
subject to an Incentive Option shall in no event be less than one hundred
percent (100%) of the fair market value per share of Common Stock on the grant
date.
(b) Dollar Limitation. The aggregate fair market value (determined
as of the respective date or dates of grant) of the Common Stock for which one
or more options to any Employee under this Plan (or any other option plan of the
Company or its parent or subsidiary corporations) may for the first time become
exercisable as an Incentive Option during any one calendar year shall not exceed
the sum of $100,000. To the extent the Employee holds two or more such options
which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability thereof as Incentive Options shall be
applied on the basis of the order in which such options are granted.
(c) Maximum Term. If the individual to whom the Incentive Option is
granted is a 10% Stockholder (as defined in subparagraph V.1.b above) on the
date of the option grant, then the option shall not have a term in excess of
five years from the grant date, and the exercise price may not be less than 110%
of fair market value.
Except as modified by the preceding provisions of this Article VI, all
the terms and conditions of the Plan shall be applicable to the Incentive
Options granted hereunder.
VII. CORPORATE TRANSACTION
(a) In the event of one or more of the following transactions to
which the Company is a party ("Corporate Transaction"):
(i) a merger or acquisition in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the State of the Company's incorporation;
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or
(iii) any reverse merger in which the Company is the surviving
entity,
then each option outstanding under the Plan shall automatically
become exercisable, during the five (5) business day period immediately prior to
the specified effective date for the Corporate Transaction, with respect to the
full number of shares of Common Stock at
<PAGE> 9
the time subject to such option and may be exercised for all or any portion of
such shares. However, an outstanding option under the Plan shall not be so
accelerated if and to the extent: (i) such option is, in connection with the
Corporate Transaction, either to be assumed by the successor corporation or
parent thereof or be replaced with a comparable option to purchase shares of the
capital stock of the successor corporation or parent thereof or (ii) the
acceleration of such option would, when added to the present value of certain
other payments in the nature of compensation which become due and payable to the
option holder in connection with the Corporate Transaction, result in the
payment to such individual of an excess parachute payment under Section 280G(b)
of the Internal Revenue Code. In addition, outstanding repurchase rights under
the Plan will terminate upon the Corporate Transaction, unless (i) the
repurchase right is to be assigned to the successor corporation or (ii) the
termination of such repurchase right would, when added to the present value of
certain other payments in the nature of compensation which become due and
payable to the option holder in connection with the Corporate Transaction,
result in the payment to such individual of an excess parachute payment under
Section 280G(b) of the Internal Revenue Code. The existence of any such excess
parachute payment shall be determined by the Plan Administrator in the exercise
of its reasonable business judgment and on the basis of tax counsel provided the
Company. Upon the consummation of the Corporate Transaction, all outstanding
options under the Plan shall, to the extent not previously exercised or assumed
by the successor corporation or its parent corporation, terminate and cease to
be exercisable.
(b) Each outstanding option which is assumed in connection with the
Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would have been
issuable, in consummation of such Corporate Transaction, to an actual holder of
the same number of shares of Common Stock as are subject to such option
immediately prior to such Corporate Transaction. Appropriate adjustments shall
also be made to the option price payable per share, provided the aggregate
option price payable for such securities shall remain the same. In addition, the
class and number of securities available for issuance under the Plan following
the consummation of the Corporate Transaction shall be appropriately adjusted.
(c) In connection with any Corporate Transaction, the exercisability
of an incentive stock option under the Federal tax laws of any accelerated
option shall be subject to the applicable dollar limitation of paragraph
VI(c)(i).
The grant of options under this Plan shall in no way affect the right of
the Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merger, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
VIII. CANCELLATION AND NEW GRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding
<PAGE> 10
options under the Plan and to grant in substitution therefor new options under
the Plan covering the same or different numbers of shares of Common Stock but
having an option price per share not less than (I) eighty-five percent (85%) of
the fair market value per share of Common Stock on the new grant date, or (ii)
one hundred percent (100%) of such fair market value if the new option is to be
an Incentive Option or (iii) one hundred ten percent (110%) of fair market value
in the case of a 10% Stockholder.
IX. SURRENDER OF OPTIONS FOR CASH OR STOCK
(a) One or more option holders may, upon such terms and conditions
as the Plan Administrator may establish at the time of the option grant or at
any time thereafter, be granted the right to surrender all or part of an
unexercised option in exchange for a distribution equal in amount to the excess
of (i) the fair market value (on the option surrender date) of the number of
shares in which the optionee is at the time vested under the surrendered option
(or surrendered portion) over (ii) the aggregate option price payable for such
shares. No surrender of an option, however, shall be effective unless it is
approved by the Plan Administrator granting such right. If the surrender is so
approved, then the distribution to which the option holder shall accordingly
become entitled under this Article IX may be made in shares of Common Stock
valued at fair market value at date of surrender, in cash, or partly in shares
and partly in cash, as the Plan Administrator granting such right shall in its
sole discretion deem appropriate.
(b) If the surrender of the option is not approved by the Plan
Administrator granting such right, then the option holder shall retain whatever
rights the option holder had under the surrendered option (or surrendered
portion thereof) on the date of surrender and may exercise such rights at any
time prior to the later of (i) the expiration of the 5 business-day period
following receipt of the rejection notice or (ii) the last day on which the
option is otherwise exercisable in accordance with the terms of the instrument
evidencing such option, but in no event may such rights be exercised at any time
after ten (10) years from the date of the option grant.
(c) Special limited stock appreciation rights may be granted by the
Plan Administrator in tandem with one or more option grants made under the Plan.
The grant and exercise of such rights shall be subject to the following terms
and conditions:
Pre-September 1, 1992 Grants. Limited rights may be granted
prior to September 1, 1992 to one or more officers or directors of the
Company subject to the short-swing profit restrictions of Section 16(b)
of the Securities Exchange Act of 1934 ("Section 16 Insider"). Such
limited rights shall be exercisable as follows:
a. Upon the occurrence of a Change in Control at a time
when one or more classes of the Company's equity securities are
registered under Section 12(g) of the Exchange Act, each Section 16
Insider who holds such a limited right in tandem with one or more of
his/her outstanding options under the Plan may surrender those options,
to the
<PAGE> 11
extent such options (I) have been outstanding with such limited rights
for at least six (6) months and (II) are at the time exercisable for one
or more shares. In exchange for each option so surrendered, the Section
16 Insider shall receive an Appreciation Distribution from the Company
in an amount equal to the excess of (i) the Change in Control Price of
the number of shares for which the surrendered option (or surrendered
portion) is at the time exercisable over (ii) the aggregate option price
payable for such shares.
b. Neither the approval of the Plan Administrator granting
the limited right nor the consent of the Board shall be required in
connection with the exercise of such right, and the Appreciation
Distribution shall be made entirely in cash.
c. For purposes of such Appreciation Distribution, the
following definitions shall be in effect:
Change-in-Control: the occurrence of any of the following
transactions: (i) the acquisition by a person or related group of
persons, other than the Company or a person that directly or indirectly
controls, is controlled by or is under common control with the Company,
of twenty-five percent (25%) or more of the Company's outstanding Common
Stock pursuant to a tender or exchange offer which the Board does not
recommend the stockholders to accept, (ii) the acquisition by a person
or related group of persons, other than the Company or a person that
directly or indirectly controls, is controlled by or is under common
control with the Company, of fifty percent (50%) or more of the
Company's outstanding Common Stock in a single transaction or in a
series of related transactions (other than a Corporate Transaction), or
(iii) a change in the composition of the Board such that the individuals
elected to the Board at the last meeting of the stockholders at which
there is not a contested election subsequently cease to comprise a
majority of the Board by reason of a contested election for Board
membership.
Chance in Control Price: the greater of (a) the fair market
value per share of Common Stock on the date of the option surrender, as
determined in accordance with the normal valuation provisions of the
Plan, or (b) the highest reported price per share paid in acquiring
ownership of the twenty-five percent (25%) or greater interest in the
Company's outstanding Common Stock in connection with the Change in
Control. However, if the surrendered option is an Incentive Option, then
the Change in Control Price per share of the Common Stock subject to the
surrendered option shall not exceed the value per share determined under
clause (a).
Post-August 31, 1992 Grants. One or more Section 16 Insiders
may, in the discretion of the Plan Administrator, be granted limited
stock appreciation rights on or after September 1, 1992 in tandem with
the option grants made to such individuals under the Plan. Any limited
right so granted shall become exercisable as follows:
<PAGE> 12
a. Upon the occurrence of a Hostile Take-Over at a time
when one or more classes of the Company's equity securities are
registered under Section 12(g) of the Exchange Act, each outstanding
option held by the Section 16(b) Insider with such a limited right in
effect for at least six (6) months shall automatically be cancelled, to
the extent such option is at the time exercisable for fully-vested
shares of Common Stock. The Section 16(b) Insider shall in return be
entitled to a cash distribution from the Company in an amount equal to
the excess of (I) the Take-Over Price of the shares of Common Stock
which are at the time vested under the cancelled option (or cancelled
portion) over (II) the aggregate exercise price payable for such vested
shares. The balance of the option (if any) shall continue in full force
and effect in accordance with the instrument evidencing such grant.
b. The cash distribution payable upon such cancellation
shall be made within five (5) days following the consummation of the
Hostile Take-Over. Neither the approval of the Plan Administrator nor
the consent of the Board shall be required in connection with such
option cancellation and cash distribution.
c. For purposes of such option cancellation and cash
distribution, the following definitions shall be in effect:
A Hostile Take-Over shall be deemed to occur in the event (i)
any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange
Act) of twenty-five percent (25%) or more of Company's outstanding
Common Stock pursuant to a tender or exchange offer made directly to the
Company's stockholders which the Board does not recommend such
stockholders to accept and (ii) more than fifty percent (50%) of the
securities so acquired in such tender or exchange offer are accepted
from holders other than Company officers and directors participating in
this Plan or the 1989 Nonemployee Director Stock Option Plan.
The Take-Over Price per share shall be deemed to be equal to the
greater of (I) the fair market value per share on the option
cancellation date, as determined pursuant to the normal valuation
provisions of the Plan, or (ii) the highest reported price per share
paid in effecting such Hostile Take-Over. However, if the cancelled
option is an Incentive Option, then the Take-Over Price per share of the
Common Stock subject to the cancelled option shall not exceed the value
per share determined under clause (I).
X. LOANS OR GUARANTEES OF LOANS
The Plan Administrator may assist any optionee (including any officer or
director) in the exercise of one or more options granted by such Plan
Administrator to such optionee under the Plan by (a) authorizing the extension
of a loan to such optionee from the Company,
<PAGE> 13
(b) permitting the optionee to pay the option price for the purchased Common
Stock in installments over a period of years or (c) authorizing a guarantee by
the Company of a third-party loan to the optionee. The terms of any loan,
installment method of payment or guarantee (including the interest rate and
terms of repayment) will be established by the Plan Administrator in its sole
discretion. Loans, installment payments and guarantees may be granted without
security or collateral (other than to optionees who are consultants or
independent contractors, in which event the loan must be adequately secured by
collateral other than the purchased shares), but the maximum credit available to
the optionee shall not exceed the sum of (I) the aggregate option price payable
for the purchased shares (less the par value of those shares), plus (ii) any
Federal and State income and employment tax liability incurred by the optionee
in connection with the exercise of the option.
XI. SPECIAL TAX WITHHOLDING ELECTION
The Plan Administrator may, in its discretion and in accordance with the
provisions of this Article XI and such supplemental rules as the Plan
Administrator may from time to time adopt, provide any or all holders of the
non-statutory options granted by such Plan Administrator under the Plan with the
right to use shares of the Common Stock in satisfaction of the Federal and State
income and employment tax withholding liability incurred by such holders in
connection with the exercise of their options (the "Withholding Taxes"). Such
right may be provided to any such option holder in either or both of the
following formats:
1. Stock Withholding: The holder of the non-statutory option may be
provided with the election to have the Company withhold, from the shares of
Common Stock otherwise issuable upon the exercise of such non-statutory option,
a portion of such shares with an aggregate fair market value equal to the
designated percentage (up to 100% as specified by the option holder) of the
applicable Withholding Taxes.
Any such stock withholding election shall be subject to the following
terms and conditions:
(i) The election must be made on or before the date the
amount of the Federal and State income and employment tax liability
incurred by the option holder in connection with the exercise of the
option is determined (the "Tax Determination Date").
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the approval of the
Plan Administrator, and none of the shares of Common Stock for which the
option is exercised shall be withheld in satisfaction of the Withholding
Taxes incurred in connection with such exercise except to the extent the
Plan Administrator approves the election.
<PAGE> 14
(iv) The shares of Common Stock withheld pursuant to the
election shall be valued at fair market value on the Tax Determination
Date in accordance with the valuation procedures of the Plan.
(v) In no event may the number of shares requested to be
withheld exceed in value the dollar amount of Withholding Taxes incurred
by the option holder in connection with the exercise of the nonqualified
option.
If the stock withholding election is to be made by a Section 16 Insider,
then the following limitations, in addition to the preceding provisions of this
Article XI, shall also be applicable:
(i) The election shall not become effective at any time
prior to the expiration of the six (6)-month period measured from the
later of the grant date of the non-statutory option to which such
election pertains or the actual grant date of the stock withholding
election, and no shares shall accordingly be withheld in connection with
any Tax Determination Date which occurs before the expiration of such
six (6)-month period.
(ii) The election must be effected in accordance with either
of the following guidelines:
- The election must be made six (6) months or more prior
to the Tax Determination Date, or
- The exercise of such election and the exercise of the
non-statutory option to which it relates must occur concurrently within
a quarterly "window" period. Quarterly window periods shall begin on the
third (3rd) business day following the date of public release of each
quarterly or annual summary statement of the Company's sales and
earnings and end on the earlier of the twelfth (12th) business day
following such release date or the Tax Determination Date.
(iii) The six (6)-month period specified in clauses (i) and
(ii) shall not be applicable in the event of the option holder's death
or disability.
2. Stock Delivery: The Plan Administrator may, in its discretion,
provide the holder of the non-statutory option with the election to deliver, at
the time the non-statutory option is exercised, one or more shares of Common
Stock already held by such individual with an aggregate fair market value equal
to the designated percentage (up to 100% as specified by the option holder) of
the Withholding Taxes incurred by such individual in connection with such option
exercise.
Any such stock delivery election shall be subject to the following terms
and conditions:
<PAGE> 15
(i) The election must be made on or before the date the
amount of the Federal and State income and employment
tax liability incurred by the option holder in connection with the exercise of
the option is determined (the "Tax Determination Date").
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the approval of the
Plan Administrator, and none of the delivered shares of Common Stock
shall be accepted in satisfaction of the Withholding Taxes incurred in
connection with the option exercise except to the extent the election is
approved by the Plan Administrator.
(iv) The shares of Common Stock delivered in satisfaction of
such Withholding Taxes shall be valued at fair market value on the Tax
Determination Date in accordance with the valuation procedures of the
Plan.
(v) In no event may the number of delivered shares exceed in
value the dollar amount of Withholding Taxes incurred by the option
holder in connection with the exercise of the non-statutory option.
Any stock delivery election made by an individual who is at the time a
Section 16 Insider shall not be subject to any of the special limitations which
would otherwise be applicable to such individual in connection with the exercise
of the stock withholding election specified above.
XII. AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and authority to amend
or modify the Plan in any or all respects whatsoever; provided, however, that no
such amendment or modification shall, without the consent of the holders,
adversely affect rights and obligations with respect to options at the time
outstanding under the Plan. In addition, the Board shall not, without the
approval of the Company's stockholders, (I) increase the maximum number of
shares issuable under the Plan, except for permissible adjustments under
paragraph IV(b), or (ii) materially modify the eligibility requirements for the
grant of options under the Plan.
XIII. EFFECTIVE DATE AND TERM OF PLAN
(a) The restated Plan was adopted by the Board in August 1987, and
approved by the Company's stockholders in February 1988, as a consolidation of
the Company's 1982 Incentive Stock Option Plan and 1982 Supplemental Stock
Option Plan. The Plan supersedes those two plans and serves as their successor.
The Plan was restated in October 1988, and amended in November 1990, November
1991, February 1995, and February 1996, to increase the number of shares
issuable under the Plan by 750,000, 1,000,000, 1,400,000 1,000,000 and 1,400,000
shares, respectively. The October 1988 restatement, November 1990, November
1991, December 1993 and February 1996 amendments were approved by the Company's
stockholders in February
<PAGE> 16
1989, February l991, February l992, February 1994 and March 1996, respectively.
The Plan was restated on January 13, 1998 to increase the number of shares
issuable thereunder, to extend the term of the Plan and to delete obsolete
provisions and the restatement was approved by the stockholders on March 10,
1998.
(b) The Plan Administrator may, within the scope of its
administrative functions under the Plan, grant stock options and stock
appreciation rights under the Plan at any time after the date the Plan was
initially adopted and prior to the date the Plan is to terminate in accordance
with paragraph (e) below.
(c) The Plan was restated by the Board effective July 30, 1992 to
bring the Plan in compliance with the applicable requirements of revised SEC
Rule 16b-3, as amended May 1, 1991, under the Securities Exchange Act of 1934.
Such restatement shall apply only to options granted under the Plan from and
after the July 30, 1992 effective date. Each option (together with any related
stock appreciation rights) issued and outstanding under the Plan immediately
prior to such effective date shall continue to be governed by the terms and
conditions of the Plan (and the instrument evidencing such option) as in effect
on the date such option was previously granted, and nothing in the July 30, 1992
restatement shall be deemed to affect or otherwise modify the rights or
obligations of the holders of such options with respect to the acquisition of
shares thereunder or the exercise of their outstanding stock appreciation
rights.
(d) The sale and remittance procedure authorized for the exercise of
outstanding options shall be available for all options granted under the Plan
from and after July 30, 1992 and for all non-statutory options exercised under
the Plan on or after May 1, 1991. The Primary Committee may also allow such
procedure to be utilized in connection with one or more disqualifying
dispositions of incentive stock option shares effected on or after May 1, l991.
(e) Unless sooner terminated in accordance with Article VII, the
Plan shall terminate upon the earlier of (i) January 12, 2008 or (ii) the date
on which all shares available for issuance under the restated Plan shall have
been issued or cancelled pursuant to the exercise, surrender or cancellation of
the options granted hereunder. If the date of termination is determined under
clause (i) above, then any options outstanding on such date (together with any
stock appreciation rights pertaining to such options) shall not be affected by
the termination of the Plan and shall continue to have force and effect in
accordance with the provisions of the instruments evidencing such options (or
related stock appreciation rights).
(f) Options may be granted under this Plan to purchase shares of
Common Stock in excess of the number of shares then available for issuance under
the Plan, provided (I) an amendment to increase the maximum number of shares
issuable under the Plan is adopted by the Board prior to the initial grant of
any such option and is thereafter submitted to the Company's stockholders for
approval and (ii) each option so granted is not to become exercisable, in whole
or in part, at any time prior to the obtaining of such stockholder approval.
<PAGE> 17
XIV. USE OF PROCEEDS
Any cash proceeds received by the Company from the sale of shares
pursuant to options granted under the Plan shall be used for general corporate
purposes.
XV. REGULATORY APPROVALS
The implementation of the Plan, the granting of any option hereunder,
and the issuance of Common Stock upon the exercise or surrender of any such
option shall be subject to the Company's procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the options granted under it and the Common Stock issued pursuant to it.
<PAGE> 1
EXHIBIT 4.3
SEEQ TECHNOLOGY INCORPORATED
1989 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
(As Amended January 13, 1998)
ARTICLE I
GENERAL PROVISIONS
PURPOSES OF THE PLAN
This 1989 Nonemployee Director Stock Option Plan (the "Plan") is
intended to promote the interests of SEEQ Technology Incorporated, a Delaware
corporation (the "Corporation"), by offering nonemployee members of the Board of
Directors the opportunity to participate in a special stock option program
designed to provide them with significant incentives to remain in the service of
the Corporation.
ELIGIBILITY
A. Each nonemployee member of the Corporation's Board of Directors
(the "Board") shall be eligible to receive automatic option grants pursuant to
the provisions of Article II below.
B. Except for the automatic option grants to be made pursuant to
the provisions of Article II below, nonemployee Board members shall not be
eligible to receive any additional option grants or stock issuances under this
Plan or any other stock plan of the Corporation or its Parent or Subsidiary
corporations.
STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of the
Corporation's common stock ("Common Stock"). Such shares may be made available
from authorized but unissued shares of Common Stock or shares of Common Stock
reacquired by the Corporation. The aggregate number of issuable shares shall not
exceed 300,000 shares, subject to adjustment from time to time in accordance
with subparagraph D below.
B. Should an option expire or terminate for any reason prior to
exercise in full, the shares subject to the portion of the option not so
exercised shall be available for subsequent option grants under this Plan. In
the event that shares issued under the Plan are reacquired by the Company
pursuant to any forfeiture provision, or right of repurchase, such
<PAGE> 2
shares shall again be available for subsequent option grants under the Plan.
Shares subject to any option canceled in accordance with the automatic
cancellation provisions of the Plan and all share issuances under the Plan shall
reduce on a share-for-share basis the number of shares of Common Stock available
for subsequent option grants under the Plan. In addition, should the exercise
price of any outstanding option under the Plan be paid through the delivery of
existing shares of Common Stock, the number of shares of Common Stock available
for subsequent option grants under the Plan shall not be reduced by the gross
number of shares of Common Stock for which the option is exercised, but by the
net number of shares actually issued to the option holder.
C. Should the total number of shares at the time available for
grant under the Plan not be sufficient for the automatic grants to be made at
that particular time to the nonemployee Board members, then the available shares
shall be allocated proportionately among all the automatic grants to be made at
that time.
D. In the event any change is made to the Common Stock issuable
under the Plan by reason of any stock split, stock dividend, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
will be made to (i) the aggregate number and/or class of shares of Common Stock
available for issuance under the Plan, (ii) the number of shares of Common Stock
to be made the subject of each subsequent automatic grant and (iii) the number
and/or class of shares of Common Stock purchasable under each outstanding option
and the exercise price payable per share in order to prevent the dilution or
enlargement of benefits thereunder.
VALUATION
For purposes of establishing the option price and for all other
valuation purposes under the Plan, the Fair Market Value per share of the Common
Stock on any relevant date shall be determined in accordance with the following
rules:
A. If the Common Stock is not at the time listed or admitted to
trading on any national securities exchange but is traded on the Nasdaq National
Market, then the fair market value shall be the closing selling price per share
of Common Stock on the date in question, as such price is reported by the
National Association of Securities Dealers, Inc. on the Nasdaq National Market.
If there is no reported closing selling price for the Common Stock on the date
in question, then the closing selling price on the last preceding date for which
such quotation exists shall be determinative of fair market value.
B. If the Common Stock is at the time listed or admitted to trading
on any national securities exchange, then the fair market value shall be the
closing selling price per share of Common Stock on the date in question on the
securities exchange serving as the primary market for the Common Stock as such
price is officially quoted on such exchange. If there is no reported sale of
Common Stock on such exchange on the date in question, then the fair market
<PAGE> 3
value shall be the closing selling price on the exchange on the last preceding
date for which such quotation exists.
PARENT AND SUBSIDIARY CORPORATIONS
A. A corporation shall be deemed to be a Parent of the Corporation
if it is one of the corporations (other than the Corporation) in an unbroken
chain of corporations ending with the Corporation, provided each such
corporation (other than the Corporation) owns, at the time of determination,
stock possessing fifty (50) percent or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
B. A corporation shall be deemed to be a Subsidiary of the
Corporation if it is one of the corporations (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each
such corporation (other than the last corporation in the unbroken chain) owns,
at the time of determination, stock possessing fifty (50) percent or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. For purposes of the Corporate Transaction provisions
of the Plan, the term "Subsidiary" shall also include any partnership, joint
venture or other business entity of which the Corporation owns, directly or
indirectly through another subsidiary corporation, more than a fifty percent
(50%) interest in voting power, capital or profits.
ARTICLE II
AUTOMATIC GRANT PROGRAM
GRANT DATES
A. Each individual who was serving as a nonemployee member of the
Board on November 8, 1989 was automatically awarded, on such date, a
nonstatutory option to purchase 20,000 shares of Common Stock. Commencing with
the 1991 Annual Meeting and continuing in effect for each subsequent Annual
Meeting of the Corporation's stockholders, each individual who is at the time
reelected as a nonemployee member of the Board shall receive an additional grant
under the Plan for 10,000 shares. An individual who is first elected or
appointed as a nonemployee Board member at any time after the 1990 Annual
Meeting shall receive his/her initial automatic grant for 20,000 shares at the
time of his/her initial election or appointment to the Board and shall be
eligible for subsequent 10,000 share grants commencing with the second Annual
Meeting following the date of his/her initial election or appointment as a
nonemployee Board member.
B. In no event shall any nonemployee Board member be eligible to
receive an initial 20,000-share option grant or any 10,000-share annual option
grants under the Plan if such
<PAGE> 4
individual has been appointed or elected to the Board pursuant to any
contractual or other right or arrangement.
TERMS AND CONDITIONS OF GRANT
Each option granted in accordance with the automatic grant provisions of
this Article II shall be evidenced by an instrument in the form of the prototype
non-statutory stock option agreement and restricted stock purchase agreement
attached to the Plan as Exhibits A and B. Accordingly, each such automatic grant
shall be subject to the following terms and conditions:
1. Option Price.
The option price per share shall be one hundred percent (100%) of the
Fair Market Value per share of Common Stock on the automatic grant date.
2. Term and Exercisability of Options.
(a) Each option granted on or after March 10, 1998
under the initial automatic grant shall become exercisable in twenty-four (24)
equal monthly installments from the date of the Annual Stockholder Meeting at
which it is granted. Each option granted on or after March 10, 1998 under the
annual automatic grant shall become exercisable in twelve (12) equal monthly
installments from the date of the Annual Stockholders Meeting at which it is
granted. The option shall thereafter remain so exercisable until the expiration
or sooner termination of the option term.
(b) Upon the non-employee Board member's cessation
of Board service for reason of death or permanent disability, all of the
automatic options granted shall become fully exercisable. For all relevant
purposes under this Article II, disability shall mean the optionee's inability,
by reason of any physical or mental injury or illness expected to result in
death or to be of continuous duration of twelve (12) consecutive months or more,
to perform his/her normal and usual duties as a Board member.
(c) Each granted option shall have a maximum term of
ten (10) years measured from the automatic grant date.
3. Exercise of Option.
Upon exercise of the option, the option price for the purchased shares
shall become immediately payable in one of the alternate forms specified below:
(a) cash or cash equivalents (such as a personal
check payable to the Corporation's order); or
<PAGE> 5
(b) shares of Common Stock held by the optionee for
the requisite period necessary to avoid a charge to the Corporation's reported
earnings and valued at Fair Market Value on the date of exercise; or
(c) full payment through a special sale and
remittance procedure pursuant to which the Optionee is to provide irrevocable
written instructions (i) to a Corporation-designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the Corporation, out of
the sale proceeds available on the settlement date, an amount sufficient to
cover the aggregate option price payable for the purchased shares and (ii) to
the Corporation to deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale transaction; or
(d) any combination of the foregoing so long as the
total payment equals the aggregate option price for the purchased shares.
4. Nontransferability.
During the lifetime of the optionee, the option, together with any stock
appreciation right pertaining to such option, shall be exercisable only by the
optionee and shall not be assignable or transferable by the optionee other than
a transfer of the option by will or by the laws of descent and distribution
following the optionee's death.
5. Effect of Termination of Board Membership.
(a) Should an optionee cease to be a member of the
Board for any reason (other than death) prior to the expiration of one or more
automatic grants under this Article II, then each such grant shall remain
exercisable, for any shares of Common Stock for which the option is exercisable
or in which the optionee is vested at the time of cessation of Board membership,
for a three (3) month period following the date of such cessation of Board
membership.
(b) Should an optionee cease to be a member of the
Board by reason of optionee's death, then any outstanding automatic grant held
by the optionee at the time of death may be subsequently exercised, for any or
all of the option shares, by the personal representative of the optionee's
estate or by the person or persons to whom the option is transferred pursuant to
the optionee's will or in accordance with the laws of descent and distribution.
Any such exercise must, however, occur within twelve (12) months after the date
of the optionee's death.
(c) In no event shall any automatic option grant
remain exercisable after the specified expiration date of the ten (10)-year
option term. Upon the expiration of the applicable exercise period specified in
subparagraphs a and b above or (if earlier) upon the expiration of the ten (10)
year option term, the option shall terminate and cease to be exercisable.
<PAGE> 6
6. Stockholder Rights.
An option holder shall have none of the rights of a stockholder with
respect to any shares covered by the automatic grant until such individual shall
have exercised the option, paid the option price and been issued a stock
certificate for the purchased shares.
CORPORATE TRANSACTION
In the event of one or more of the following transactions ("Corporate
Transaction"):
1. a merger or acquisition in which the Corporation is not
the surviving entity, except for a transaction the principal purpose of which is
to change the State of the Corporation's incorporation;
2. the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation to any entity other than a
Subsidiary of the Corporation; or
3. any reverse merger in which the Corporation is the
surviving entity but in which fifty (50) percent or more of the Corporation's
outstanding voting stock is transferred to holders different from those who held
the stock immediately prior to such merger;
then each automatic option grant at the time outstanding under this
Article II Program and not otherwise at the time fully exercisable shall
automatically accelerate and become immediately exercisable for any or all of
the shares subject to the option, and any unvested shares at that time
outstanding under the Plan or otherwise issuable pursuant to outstanding option
grants under the Plan will immediately vest in full. Immediately following the
consummation of such Corporate Transaction, all outstanding options under this
Article II shall terminate and cease to be exercisable, except to the extent
assumed by the successor corporation (or its parent company).
CHANGE IN CONTROL
A. In the event there should occur a Change in Control (as defined
below), then each automatic option grant at the time outstanding under the Plan
and not otherwise at the time fully exercisable shall automatically accelerate
and become fully exercisable for any or all of the shares at the time subject to
such option, and any unvested shares at that time outstanding under the Plan or
otherwise issuable pursuant to outstanding option grants under the Plan will
immediately vest in full.
B. In addition, each option which has been outstanding for at least
six months will be automatically canceled on the tenth business day following
the Change in Control, in exchange for a cash payment from the Corporation equal
to the excess of (i) the fair market value on the date of cancellation of the
shares of Common Stock for which the canceled option is at the
<PAGE> 7
time exercisable, whether or not such shares are otherwise at the time vested,
over (ii) the option price payable for such shares. For purposes of determining
the amount payable to an optionee upon cancellation of the option, the fair
market value of the shares for which the canceled option is exercisable will be
deemed to be equal to the greater of the Fair Market Value per share on the date
of cancellation or, if applicable, the highest reported price per share paid by
the tender offeror in effecting the Change in Control.
C. A Change in Control shall be deemed to occur should (i) a person
or related group of persons, other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common control
with the Corporation, acquire twenty-five percent (25%) or more of the
outstanding Common Stock pursuant to a tender or exchange offer which the Board
does not recommend the stockholders to accept or should (ii) a change in the
composition of the Board occur such that the individuals elected to the Board at
the last stockholder meeting at which there is not a contested election
subsequently cease to comprise a majority of the Board by reason of a contested
election for Board membership.
RESERVATION OF RIGHTS
The automatic grants in effect under this Article II shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
ARTICLE III
MISCELLANEOUS PROVISIONS
AMENDMENT OF THE PLAN
The Board shall have complete and exclusive power and authority to amend
or modify the Plan in any or all respects whatsoever; provided, however, that in
no event shall any amendments or modifications be made to the Plan which (i)
alter rights and obligations with respect to options at the time outstanding
under the Plan without the optionee's consent, or (ii) require stockholder
approval without obtaining stockholder approval to the extent required by law
for any such amendments.
EFFECTIVE DATE AND TERM OF PLAN
A. The Plan became effective on the date of its adoption by the Board.
The Plan was amended on January 13, 1998 to increase the number of shares
issuable, to simplify the vesting schedules, to extend the term, and to delete
obsolete provisions. The amendment was approved by the stockholders at the 1998
Annual Meeting.
<PAGE> 8
B. The Plan shall terminate upon the earliest to occur of (i)
January 12, 2008, (ii) the date on which all shares available for issuance under
the Plan shall have been issued pursuant to the exercise of the automatic grants
made hereunder or (iii) the date on which all outstanding options are cashed out
in connection with the Change in Control provisions of the Plan. If the date of
termination is determined under clause (i) or (ii) above, then any option grants
or unvested shares outstanding on such date shall not be affected by the
termination of the Plan and shall continue to have force and effect in
accordance with the provisions of the instruments evidencing such grants or
issuances.
CASH PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
pursuant to the automatic grants made under the Plan shall be used for general
corporate purposes.
REGULATORY APPROVALS
The implementation of the Plan, the granting of any option hereunder,
and the issuance of Common Stock upon the exercise of any such option shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the options granted
under it and the Common Stock issued pursuant to it.
NO IMPAIRMENT OF RIGHTS
Nothing in this Plan or any automatic grant made pursuant to the Plan
shall be construed or interpreted so as to affect adversely or otherwise impair
the Corporation's right to remove any Optionee from service on the Board at any
time in accordance with the provisions of applicable law.
ARTICLE IV
SPECIAL ONE-TIME OPTION GRANTS
SPECIAL GRANTS
On the date of the 1996 Annual Stockholders Meeting, a special one-time
option grant shall be made to the following nonemployee Board members: an option
grant for 40,000 shares of Common Stock to the Corporation's Chairman of the
Board, Mr. Alan V. Gregory, and an option for 10,000 shares of Common Stock to
the other eligible nonemployee Board member who has not been appointed to the
Board pursuant to any contractual or other right or arrangement, Mr. Charles C.
Harwood. These special one-time grants were approved by the stockholders at the
1996 Annual Meeting.
<PAGE> 9
TERMS AND CONDITIONS OF SPECIAL GRANT
Each option granted in accordance with the provisions of this Article IV
shall be subject to the following terms and conditions and shall be evidenced by
a stock option agreement incorporating such terms and conditions:
1. Option Price.
The option price per share shall be one hundred percent (100%) of the
Fair Market Value per share of Common Stock on the grant date.
2. Term and Exercisability of Options.
(a) Each option shall become exercisable for any or
all of the option shares upon the optionee's completion of six (6) months of
Board service measured from the grant date.
(b) Each option shall have a maximum term of ten
(10) years measured from the grant date.
3. Repurchase Rights.
Any unvested shares of Common Stock purchased upon the exercise of an
Article IV grant shall be subject to repurchase by the Corporation, at the
original option price paid per share, upon the optionee's cessation of Board
membership for any reason other than death or disability prior to his completion
of one (1) year of Board service measured from the grant date.
4. Nontransferability.
During the lifetime of the optionee, the option, together with any stock
appreciation right pertaining to such option, shall be exercisable only by the
optionee and shall not be assignable or transferable by the optionee other than
a transfer of the option by will or by the laws of descent and distribution
following the optionee's death.
5. Remaining Terms and Provisions.
All the remaining terms and provisions of the special one-time option
grants to be made pursuant to this Article IV shall be the same as those in
effect for the automatic option grants made pursuant to the Article II Program.
<PAGE> 1
EXHIBIT 5.1
June 24, 1999
LSI Logic Corporation
1551 McCarthy Blvd.
Milpitas, CA 95035
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and Gentlemen:
We have acted as counsel to LSI Logic Corporation, a Delaware
corporation (the "Company" or "you") and have examined the Registration
Statement on Form S-8 (the "Registration Statement") to be filed by the Company
with the Securities and Exchange Commission on or about June 24, 1999 in
connection with the registration under the Securities Act of 1933, as amended
(the "1933 Act") of 378,043 shares of your Common Stock (the "Shares"), reserved
for issuance under the SEEQ Technology Incorporated Restated 1982 Stock Plan, as
Amended and Restated and the SEEQ Technology Incorporated 1989 Nonemployee
Director Stock Option, Plan, as Amended (collectively, the "Plans"). As your
legal counsel, we have examined the Restated Certificate of Incorporation and
Bylaws of the Company, the Plans and such other documents of the Company as we
have deemed necessary or appropriate for the purposes of the opinion expressed
herein, and are familiar with the proceedings proposed to be taken by you in
connection with the operation and administration of the Plans and the sale and
issuance of the Shares pursuant to the Plans.
It is our opinion that, upon completion of the actions being taken, or
contemplated by us as your counsel to be taken by you prior to the issuance of
the Shares pursuant to the Registration Statement and the Plans, and upon
completion of the actions being taken in order to permit such transactions to be
carried out in accordance with the securities laws of the various states where
required, the Shares will be legally and validly 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 subsequent amendment thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
/s/ WILSON SONSINI GOODRICH & ROSATI
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the SEEQ Technology Incorporated Restated
1982 Stock Plan, as Amended and Restated and the SEEQ Technology Incorporated
1989 Nonemployee Director Stock Option, Plan, as Amended, of our report dated
February 22, 1999, which appears on page 58 of the LSI Logic Corporation's
Annual Report on Form 10-K and 10-K/A for the year ended December 31, 1998 and
the related financial statement schedule included therein, filed with the
Securities and Exchange Commission.
/s/ PricewaterhouseCoopers LLP
June 24, 1999
San Jose, California
