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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 18, 1998
MAXTOR CORPORATION
(Exact name of registrant as specified in its charter)
================================================================================
Delaware 0-14016 77-0123732
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
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510 Cottonwood Drive
Milpitas, California 95035
(Address of principal executive offices) (Zip Code)
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code: (408) 432-1700
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Incorporated herein by reference is the Letter Agreement between Registrant and
MMC Technology, dated May 18, 1998 (the "Agreement"). The Agreement initially
was filed on December 21, 1998 as Exhibit 10.68 to Registrant's Registration
Statement on Form S-3 (File No. 333-69307).
Filed herewith is the Registrant's Amended and Restated Stock Option Plan as
amended and restated on November 11, 1998 (the "Plan"). The Plan previously was
filed on June 29, 1998 as Exhibit 10.55 to Registrant's Registration Statement
on Form S-1 (File No. 333-56099) (the "S-1"). The Plan as filed with the S-1
incorrectly stated that no more than 600,000 options could be granted under the
Plan to any one individual in any fiscal year. The Plan as filed herewith
correctly states that no more than 1,200,000 options may be granted under the
Plan to any one individual in any fiscal year.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------ -----------
<S> <C>
10.55 Amended and Restated Stock Option Plan.
10.68 Letter Agreement between Registrant and MMC Technology dated May 18,
1998 (incorporated by reference from Registrant's Registration Statement
on Form S-1 (File No. 333-56099)).
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MAXTOR CORPORATION
Date: January 19, 1999 By: /s/ PAUL J. TUFANO
--------------------------------------
Paul J. Tufano
Senior Vice President, Finance and
Chief Financial Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------ -----------
<S> <C>
10.55 Amended and Restated Stock Option Plan.
10.68 Letter Agreement between Registrant and MMC Technology dated May 18,
1998 (incorporated by reference from Registrant's Registration Statement
on Form S-1 (File No. 333-56099)).
</TABLE>
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EXHIBIT 10.55
MAXTOR CORPORATION
AMENDED AND RESTATED 1996 STOCK OPTION PLAN
(THIRD AMENDMENT AND RESTATEMENT APPROVED ON NOVEMBER 11, 1998)
1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN
(a) ESTABLISHMENT. The Maxtor Corporation 1996 Stock Option Plan was
initially established effective as of May 1, 1996 (the "EFFECTIVE DATE"), and
was previously amended and restated in its entirety as the Maxtor Corporation
Amended and Restated 1996 Stock Option Plan (the "INITIAL PLAN"). The Initial
Plan is hereby amended and restated in its entirety effective as of November 11,
1998 (the "PLAN").
(b) PURPOSE. The purpose of the Plan is to promote the long-term
interests of the Participating Company Group and its stockholders by providing
an incentive to attract, retain and reward persons performing services for the
Participating Company Group and by providing such persons with an additional
incentive to promote the financial success of the Participating Company Group.
(c) TERM OF PLAN. The Plan shall continue in effect until the earlier of
its termination by the Board of Directors or the date on which all of the shares
of Stock available for issuance under the Plan have been issued and all
restrictions on such shares under the terms of the Plan and the Agreements
evidencing Awards granted under the Plan have lapsed. However, all ISOs shall be
granted, if at all, within ten (10) years from the Effective Date.
2. DEFINITIONS
Unless otherwise required by the context, the following terms when used
in the Plan shall have the meanings set forth in this Section 2:
(a) "AGREEMENT": A written option agreement between the Company and the
Participant evidencing an Award in such form as approved by the Board of
Directors pursuant to the Plan.
(b) "AWARD": An award of an Option under the Plan.
(c) "BOARD OF DIRECTORS": The Board of Directors of the Company. If one
or more Committees have been appointed by the Board of Directors to administer
the Plan, "Board of Directors" also means such Committee(s).
(d) "CODE": The Internal Revenue Code of 1986, as amended from time to
time.
(e) "COMMITTEE": The Compensation Committee or other committee of the
Board of Directors duly appointed to administer the Plan and having such powers
as shall be specified by the Board of Directors. Unless the powers of the
Committee have been specifically limited, the Committee shall have all of the
powers of the Board of Directors granted herein, including,
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without limitation, the power to amend or terminate the Plan at any time,
subject to the terms of the Plan and any applicable limitations imposed by law.
(f) "COMPANY": Maxtor Corporation, a Delaware corporation, or any
successor thereto.
(g) "CONSULTANT": Any person, including an advisor, engaged by a
Participating Company to render services other than as an Employee or a
Director.
(h) "DIRECTOR": A member of the Board of Directors or of the board of
directors of any other Participating Company.
(i) "EMPLOYEE": Any person treated as an employee (including an officer
or a Director who is also treated as an employee) in the records of a
Participating Company; provided, however, that neither service as a Director nor
payment of a director's fee shall be sufficient to constitute employment for
purposes of the Plan.
(j) "EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
(k) "EXERCISE PRICE": The price per share at which the shares of Stock
subject to an Option may be purchased upon exercise of such Option.
(l) "FAIR MARKET VALUE": As applied to a specific date, the fair market
value of a share of Stock on such date as determined in good faith by the Board
of Directors in the following manner:
(i) The average of the high and low prices of the Stock (or the
mean of the closing bid and asked prices of the Stock if the Stock is so
reported instead) as reported on the New York Stock Exchange or such other
national or regional securities exchange or market system constituting the
primary market for the Stock, on the most recent trading day to the date in
question, or if there are no reported sales on such date, on the last preceding
date on which sales were reported; or
(ii) In the absence of the foregoing, the Fair Market Value
shall be determined by the Board of Directors in its absolute discretion based
on an appraisal of the Stock and after giving consideration to the book value,
the revenues, and the earnings prospects of the Company in light of market
conditions generally.
The Fair Market Value determined under one of the preceding paragraphs
shall be final, binding and conclusive on all parties for the purposes of this
Plan.
(m) "ISO": An Option intended to be and which qualifies as an "incentive stock
option", as defined in Section 422 of the Code or any statutory provision that
may replace such Section.
(n) "NQSO": An Option not intended or qualified to be an ISO.
(o) "OPTION": Any ISO or NQSO granted under the Plan.
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(p) "OUTSIDE DIRECTOR": Any Director of the Company who is not an
Employee.
(q) "PARENT CORPORATION": Any present or future "parent corporation" of
the Company, as defined in Section 424(e) of the Code.
(r) "PARTICIPANT": A person who has been granted one or more Awards
under the Plan which remain outstanding or who owns shares of Stock as a result
of the exercise of an Option.
(s) "PARTICIPATING COMPANY": The Company or any Parent Corporation or
Subsidiary Corporation.
(t) "PARTICIPATING COMPANY GROUP": At any point in time, all
corporations collectively which are then Participating Companies.
(u) "Rule 16b-3": Rule 16b-3 under the Exchange Act, as amended from
time to time, or any successor rule or regulation.
(v) "SEC": Securities and Exchange Commission.
(w) "SECURITIES ACT": The Securities Act of 1933, as amended.
(x) "STOCK": The common stock of the Company, as adjusted from time to
time under Section 4(b).
(y) "SUBSIDIARY CORPORATION": Any present or future "subsidiary
corporation" of the Company or the Parent Corporation, as defined in Section
424(f) of the Code.
(z) "TEN PERCENT OWNER": A Participant who, at the time an Award is
granted to the Participant, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of a Participating
Company within the meaning of Section 422(b)(6) of the Code.
3. PARTICIPATION
(a) PERSONS ELIGIBLE FOR AWARDS. Awards may be granted only to
Employees, Consultants, and Directors. For purposes of the foregoing sentence,
"Employees" shall include prospective Employees to whom Awards are granted in
connection with written offers of employment with the Participating Company
Group, and "Consultants" shall include prospective Consultants to whom Awards
are granted in connection with written offers of engagement with the
Participating Company Group. Eligible persons may be granted more than one (1)
Award.
(b) OUTSIDE DIRECTORS.
(i) INITIAL GRANT.
(1) Prior to December 1, 1998. Each person who (A) is an
Outside Director on the Effective Date, or (B) first becomes an Outside Director
after the Effective Date
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and prior to December 1, 1998, shall be granted an Award for twenty thousand
(20,000) shares on the Effective Date or the date he or she first becomes an
Outside Director; provided, however, that any Director of the Company who
previously did not qualify as an Outside Director shall not receive an Award
pursuant to this Section 3(b)(i)(1) in the event that such Director subsequently
becomes an Outside Director as a result of the termination of his or her status
as an Employee.
(2) On or After December 1, 1998. Each person who first
becomes an Outside Director on or after December 1, 1998, shall be granted an
Award for thirty thousand (30,000) shares on the date he or she first becomes an
Outside Director; provided, however, that any Director of the Company who
previously did not qualify as an Outside Director shall not receive an Award
pursuant to this Section 3(b)(i)(2) in the event that such Director subsequently
becomes an Outside Director as a result of the termination of his or her status
as an Employee.
(ii) ANNIVERSARY GRANT. On and after May 29, 1998, each Outside
Director shall be granted an Award for ten thousand (10,000) shares every three
years upon the anniversary of the date on which he or she received an Award
under Section 3(b)(i). Awards shall only be made pursuant to this Section to a
person who, at the time of grant, is an Outside Director.
(iii) SPECIAL GRANT. On November 11, 1998, each person serving
as an Outside Director on such date who had previously received an Option grant
pursuant to Section 3(b)(i) was granted an Award for ten thousand (10,000)
shares.
(iv) DISCRETIONARY GRANTS. Notwithstanding the foregoing, an
Outside Director may also receive additional grants under the Plan in addition
to the grants described in this Section 3(b).
(c) GRANT RESTRICTIONS. Any person who is not an Employee of the Company
or a Parent Corporation or Subsidiary Corporation of the Company on the
effective date of the grant of an Award to such person may be granted only an
NQSO. An ISO granted to a prospective Employee upon the condition that such
person become an Employee shall be deemed granted on the date such person
commences service with a Participating Company, with an Exercise Price
determined as of such date in accordance with Section 5(a).
(d) FAIR MARKET VALUE LIMITATION. To the extent that the aggregate Fair
Market Value of stock with respect to which options designated as ISOs are
exercisable by a Participant for the first time during any calendar year (under
all stock option plans of the Participating Company Group, including the Plan)
exceeds One Hundred Thousand Dollars ($100,000), the portion of such options
which exceeds such amount shall be treated as NQSOs. For purposes of this
Section, options designated as ISOs shall be taken into account in the order in
which they were granted, and the Fair Market Value of stock shall be determined
as of the time the option with respect to such stock is granted. If the Code is
amended to provide for a different limitation from that set forth in this
Section, such different limitation shall be deemed incorporated herein effective
as of the date and with respect to such Options as required or permitted by such
amendment to the Code. If an Option is treated as an ISO in part and as an NQSO
in part by reason of the limitation set forth in this Section, the Participant
may designate which portion of
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such Option the Participant is exercising and may request that separate
certificates representing each such portion be issued upon the exercise of the
Option. In the absence of such designation, the Participant shall be deemed to
have exercised the ISO portion of the Option first.
(e) SECTION 162(m) GRANT LIMIT. Subject to adjustment as provided in
Section 4(b), at any such time as a Participating Company is a "publicly held
corporation" within the meaning of Section 162(m) of the Code, no Employee shall
be granted one or more Awards within any fiscal year of the Company which in the
aggregate are for the purchase of more than one million two hundred thousand
(1,200,000) shares (the "SECTION 162(m) GRANT LIMIT").
4. SHARES SUBJECT TO PLAN
(a) MAXIMUM SHARES. Subject to adjustment by the operation of Section
4(b) hereof, the maximum aggregate number of shares of Stock that may be issued
under the Plan shall be Ten Million (10,000,000), provided, however, that such
amount shall be increased on the closing date of the initial registration by the
Company of its Stock under Section 12 of the Exchange Act which occurs after May
29, 1998 to a number of shares equal to fifteen percent (15%) of the number of
shares of Stock issued and outstanding on such date, and shall consist of
authorized but unissued or reacquired shares of Stock or any combination
thereof. Notwithstanding the foregoing, except as adjusted pursuant to Section
4.2, in no event shall more than Ten Million (10,000,000) shares of Stock be
cumulatively available for issuance pursuant to the exercise of ISOs (the "ISO
SHARE ISSUANCE LIMIT"). If an outstanding Option for any reason expires or is
terminated or canceled or shares of Stock acquired upon the exercise of an
Option are repurchased by the Company, the shares of Stock allocable to the
unexercised portion of such Option, or such repurchased shares of Stock, shall
again be available for issuance under the Plan.
(b) ADJUSTMENT OF SHARES AND PRICE. In the event of any stock dividend,
stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company,
appropriate equitable adjustments shall be made in the number and class of
shares subject to the Plan, in the number and class of shares subject to future
Awards granted to Outside Directors pursuant to Section 3(b), in the Section
162(m) Grant Limit and the ISO Share Issuance Limit and to any outstanding
Options and in the Exercise Price per share of any outstanding Options.
Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this Section 4(b) shall be rounded up or down to the nearest whole
number, as determined by the Board of Directors, and in no event may the
Exercise Price of any Option be decreased to an amount less than the par value,
if any, of the stock subject to the Option. The adjustments determined by the
Board of Directors pursuant to this Section 4(b) shall be final, binding and
conclusive.
5. GENERAL TERMS AND CONDITIONS OF OPTIONS
(a) GENERAL. The Board of Directors shall have full and complete
authority and discretion, except as expressly limited by the Plan, to grant
Options and to provide the terms and conditions (which need not be identical
among Participants) thereof. The terms and conditions governing any Award, as
determined by the Board of Directors, shall be set forth in an Agreement
consistent with this Plan. In particular, the Board of Directors shall prescribe
the following terms and conditions:
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(i) The number of shares of Stock subject to, and the expiration
date(s) of, any Option;
(ii) The vesting schedule of any Option;
(iii) The manner, time and rate (cumulative or otherwise) of
exercise of such Option;
(iv) Whether such Option is to be issued as an ISO or NQSO; and
(v) The restrictions, if any, to be placed upon such Option or
upon shares which may be issued upon exercise of such Option.
(b) EXERCISE PRICE. The Exercise Price for each Option shall be
established in the sole discretion of the Board of Directors; provided, however,
that (a) the Exercise Price for an ISO shall be not less than the Fair Market
Value of a share of Stock on the effective date of grant of the Option, (b) the
Exercise Price for an NQSO shall be not less than eighty-five percent (85%) of
the Fair Market Value of a share of Stock on the effective date of grant of the
Option, and (c) no ISO granted to a Ten Percent Owner shall have an Exercise
Price less than one hundred ten percent (110%) of the Fair Market Value of a
share of Stock on the effective date of grant of the Option. Notwithstanding the
foregoing, an Option (whether an ISO or an NQSO) may be granted with an Exercise
Price lower than the minimum exercise price set forth above if such Option is
granted pursuant to an assumption or substitution for another option in a manner
qualifying under the provisions of Section 424(a) of the Code.
(c) EXERCISE PERIOD. Options shall be exercisable at such time or times,
or upon such event or events, and subject to such terms, conditions, performance
criteria, and restrictions as shall be determined by the Board of Directors and
set forth in the Agreement evidencing such Option; provided, however, that (i)
no ISO shall be exercisable after the expiration of ten (10) years after the
effective date of grant of such Option, (ii) no ISO granted to a Ten Percent
Owner shall be exercisable after the expiration of five (5) years after the
effective date of grant of such Option, and (iii) no Option granted to a
prospective Employee or prospective Consultant may become exercisable prior to
the date on which such person commences service with a Participating Company.
6. EXERCISE OF OPTIONS
(a) PAYMENT OF OPTION EXERCISE PRICE. Except as otherwise provided
below, payment of the Exercise Price for the number of shares of Stock being
purchased pursuant to any Option shall be made (i) in cash, by check, or cash
equivalent, (ii) by tender to the Company of shares of Stock owned by the
Participant having a Fair Market Value not less than the Exercise Price, (iii)
by the assignment of the proceeds of a sale or loan with respect to some or all
of the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a "CASHLESS EXERCISE"), (iv) by such other consideration as may be
approved by the Board of Directors from time to time to the extent permitted by
applicable law, or (v) by any combination thereof. The Board of Directors may at
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any time or from time to time, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the Exercise Price or
which otherwise restrict one or more forms of consideration.
(i) TENDER OF STOCK. Notwithstanding the foregoing, an Option
may not be exercised by tender to the Company of shares of Stock to the extent
such tender of Stock would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the Company's stock.
Unless otherwise provided by the Board of Directors, an Option may not be
exercised by tender to the Company of shares of Stock unless such shares either
have been owned by the Participant for more than six (6) months or were not
acquired, directly or indirectly, from the Company.
(ii) CASHLESS EXERCISE. The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to establish,
decline to approve or terminate any program or procedures for the exercise of
Options by means of a Cashless Exercise.
(b) RIGHTS AS A STOCKHOLDER. A Participant shall have no rights as a
stockholder with respect to any shares of Stock issuable on exercise of any
Option until the date of the issuance of a stock certificate to the Participant
for shares of Stock. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 4(b) hereof.
7. TRANSFER OF CONTROL OF THE COMPANY
(a) DEFINITIONS.
(i) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred
if any of the following occurs with respect to the Company:
(A) the direct or indirect sale or exchange in a single
or series of related transactions by the stockholders of the Company of more
than fifty percent (50%) of the voting stock of the Company;
(B) a merger or consolidation in which the Company is a
party;
(C) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or
(D) a liquidation or dissolution of the Company.
(ii) A "TRANSFER OF CONTROL" shall mean an Ownership Change
Event or a series of related Ownership Change Events (collectively, the
"TRANSACTION") wherein the stockholders of the Company immediately before the
Transaction do not retain immediately after the Transaction, in substantially
the same proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
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outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board of Directors shall have the right to
determine whether multiple sales or exchanges of the voting stock of the Company
or multiple Ownership Change Events are related, and its determination shall be
final, binding and conclusive.
(b) EFFECT OF TRANSFER OF CONTROL ON OPTIONS. In the event of a Transfer
of Control, the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "ACQUIRING CORPORATION"),
may either assume the Company's rights and obligations under outstanding Options
or substitute for outstanding Options substantially equivalent options for the
Acquiring Corporation's stock. In the event the Acquiring Corporation elects not
to assume or substitute for outstanding Options in connection with a Transfer of
Control, any unexercisable or unvested portion of the outstanding Options shall
be immediately exercisable and vested in full as of the date ten (10) days prior
to the date of the Transfer of Control. The exercise or vesting of any Option
that was permissible solely by reason of this Section shall be conditioned upon
the consummation of the Transfer of Control. Except as otherwise provided
herein, any Options which are neither assumed or substituted for by the
Acquiring Corporation in connection with the Transfer of Control nor exercised
as of the date of the Transfer of Control shall terminate and cease to be
outstanding effective as of the date of the Transfer of Control.
8. REPURCHASE OPTIONS
Shares issued under the Plan may be subject to a right of first refusal,
one or more repurchase options, or other conditions and restrictions as
determined by the Board of Directors in its sole discretion at the time the
Option is granted. The Company shall have the right to assign at any time any
repurchase right it may have, whether or not such right is then exercisable, to
one or more persons as may be selected by the Company. Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.
9. RESTRICTIONS ON TRANSFERS; GOVERNMENT REGULATIONS
(a) OPTIONS NOT TRANSFERABLE. During the lifetime of the Participant, an
Option shall be exercisable only by the Participant or the Participant's
guardian or legal representative. No Option may be assigned, encumbered, or
transferred, except, in the event of the death of a Participant, by will or the
laws of descent and distribution.
(b) GOVERNMENT REGULATIONS. This Plan, the granting of Awards under this
Plan and the issuance or transfer of Stock (and/or the payment of money)
pursuant thereto are subject to all applicable foreign, federal and state laws,
rules and regulations and to such approvals by any
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regulatory or governmental agency (including without limitation "no action"
positions of the SEC) which may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Without limiting the generality
of the foregoing, no Awards may be granted under this Plan, and no Stock shall
be issued by the Company, nor cash payments made by the Company, pursuant to or
in connection with any such Award, unless and until, in each such case, all
legal requirements applicable to the issuance or payment have, in the opinion of
counsel to the Company, been complied with. In connection with any stock
issuance or transfer, the person acquiring the shares shall, if requested by the
Company, give assurances satisfactory to counsel to the Company in respect of
such matters as the Company may deem desirable to assure compliance with all
applicable legal requirements. The granting of Awards under this Plan and the
issuance of Stock pursuant thereto are subject to compliance with all applicable
foreign, federal, and/or state laws or regulations with respect to such
securities. No Option may be exercised by a Participant if the issuance of Stock
pursuant to such Option upon such exercise would constitute a violation of any
applicable foreign, federal, or state securities law, rule or regulation or
other applicable law or regulation. The inability of the Company to obtain from
any regulatory body having the authority, if any, deemed by the Company's legal
counsel to be necessary to the lawful issuance and sale of any shares subject to
the Option shall relieve the Company of any liability in respect of the failure
to issue or sell such shares as to which such requisite authority shall not have
been obtained.
10. TAX WITHHOLDING
The Company shall have the right to withhold from amounts due
Participants, or to collect from Participants directly, the amount which the
Company deems necessary to satisfy any taxes required by law to be withheld at
any time by reason of participation in the Plan, and the obligations of the
Company under the Plan shall be conditional on payment of such taxes. The
Participant may, prior to the due date of any taxes, pay such amounts to the
Company in cash, or with the consent of the Board of Directors, in Stock (which
shall be valued at its Fair Market Value on the date of payment). The Company
shall have no obligation to any Participant to determine either (i) the
existence of any tax or (ii) the correct amount of any tax. Without limiting the
generality of the foregoing, in any case where it determines that a tax is or
will be required to be withheld in connection with the issuance, transfer or
vesting of Stock issued under this Plan, the Company may, pursuant to such rules
as the Board of Directors may establish, reduce the number of shares of Stock so
issued or transferred by such number of Stock as the Company may deem
appropriate in its sole discretion to accomplish such withholding or make such
other arrangements as it deems satisfactory. Notwithstanding any other provision
of this Plan, the Board of Directors may impose such conditions on the payment
of any withholding obligation as may be required to satisfy applicable
regulatory requirements, including, without limitation, Rule 16b-3. The Company
shall have no obligation to deliver shares of Stock, release shares of Stock
from an escrow established pursuant to an Agreement or make any payment pursuant
to the Plan until the Participating Company Group's tax withholding obligations
have been satisfied by the Participant.
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11. ADMINISTRATION OF PLAN
(a) ADMINISTRATION BY THE BOARD OF DIRECTORS. The Plan shall be
administered by the Board of Directors. All decisions and determinations of the
Board of Directors shall be final, conclusive and binding upon all Participants
and upon all other persons claiming any rights under the Plan with respect to
any Options.
(b) BOARD OF DIRECTORS AUTHORITY. In amplification of the Board of
Directors' powers and duties, but not by way of limitation, the Board of
Directors shall have full authority and power to:
(i) Construe and interpret the provisions of the Plan and make
rules and regulations for the administration of the Plan not inconsistent with
the Plan;
(ii) Decide all questions of eligibility for Plan participation
and for the grant of Awards;
(iii) Adopt forms of Agreements and other documents consistent
with the Plan;
(iv) Engage agents to perform legal, accounting and other such
professional services as it may deem proper for administering the Plan; and
(v) Take such other actions as may be reasonably required or
appropriate to administer the Plan or to carry out the Board of Directors
activities contemplated by other sections of this Plan.
(c) ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to any person
whose transactions in Stock are subject to Section 16 of the Exchange Act, at
any time that any class of equity security of the Company is registered pursuant
to Section 12 of the Exchange Act, the Plan shall be administered in compliance
with the requirements of Rule 16b-3, if any.
(d) COMMITTEE COMPLYING WITH SECTION 162(m). If a Participating Company
is a "publicly held corporation" within the meaning of Section 162(m) of the
Code, the Board of Directors may establish a Committee of "outside directors"
within the meaning of Section 162(m) of the Code to approve the grant of any
Award which might reasonably be anticipated to result in the payment of employee
remuneration that would otherwise exceed the limit on employee remuneration
deductible for income tax purposes pursuant to Section 162(m) of the Code.
(e) INDEMNIFICATION. In addition to such other rights of indemnification
as they may have, members of the Board of Directors and any officers or
employees of the Participating Company Group to whom authority to act on behalf
of the Board of Directors is delegated shall be indemnified by the Company
against the reasonable expenses, including court costs and reasonable attorneys'
fees, actually incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Award granted hereunder, and against all amounts
paid by them in settlement thereof or paid by
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them in satisfaction of a judgment in any such action, suit or proceeding,
except where such indemnification is expressly prohibited by applicable law.
12. STOCKHOLDER APPROVAL
The Plan or any increase in the maximum number of shares of Stock
issuable thereunder as provided in Section 4(a) (the "MAXIMUM SHARES") shall be
approved by the stockholders of the Company within twelve (12) months of the
date of adoption thereof by the Board of Directors. Options granted prior to
stockholder approval of the Plan or in excess of the Maximum Shares previously
approved by the stockholders shall become exercisable no earlier than the date
of stockholder approval of the Plan or such increase in the Maximum Shares, as
the case may be.
13. AMENDMENT AND TERMINATION
The Board of Directors may terminate or amend the Plan at any time.
However, subject to changes in the law or other legal requirements that would
permit otherwise, without the approval of the Company's stockholders, there
shall be (a) no increase in the maximum aggregate number of shares of Stock that
may be issued under the Plan (except by operation of the provisions of Section
4(b)), (b) no change in the class of persons eligible to receive ISOs, and (c)
no other amendment of the Plan which would require approval of the Company's
stockholders under any applicable law, regulation or rule. In any event, no
termination or amendment of the Plan may adversely affect any then outstanding
Option or any unexercised portion thereof, without the consent of the
Participant, unless such termination or amendment is required to enable an
Option designated as an ISO to qualify as an ISO or is necessary to comply with
any applicable law or government regulation.
14. MISCELLANEOUS
(a) EMPLOYMENT OR SERVICE. Neither the establishment of the Plan nor any
amendments thereto, nor the granting of any Award under the Plan, shall be
construed as in any way modifying or affecting, or evidencing any intention or
understanding with respect to, the terms of the employment or service of any
Participant with the Participating Company Group. Nothing in the Plan or any
Agreement shall confer upon a Participant any right to continued employment or
service with the Participating Company Group or interfere in any way with any
right of the Participating Company Group to terminate the Participant's
employment or service at any time. No person shall have a right to be granted
Awards or, having been selected as a Participant for one Award, to be so
selected again.
(b) PROVISION OF INFORMATION. Each Participant shall be given access to
information concerning the Company equivalent to that information generally made
available to the Company's common stockholders.
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(c) NO ADVICE. The Company shall not be responsible for providing any
Participant with legal, business or tax advice. Any legal or tax liabilities
incurred by a Participant as a result of Participant's participation in the Plan
shall be the sole responsibility of the Participant. Participants should consult
their own attorneys and tax advisors with respect to any questions regarding
participation in the Plan.
(d) WRITTEN NOTICE. As used herein, any notices required hereunder shall
be in writing and shall be given on the forms, if any, provided or specified by
the Board of Directors. Written notice shall be effective upon actual receipt by
the person to whom such notice is to be given; provided, however, that in the
case of notices to Participants and their heirs, legatees and legal
representatives, notice shall be effective upon delivery if delivered personally
or three (3) business days after mailing, registered first class postage prepaid
to the last known address of the person to whom notice is given. Written notice
shall be given to the Board of Directors and the Company at the following
address or such other address as may be specified from time to time:
Maxtor Corporation
510 Cottonwood Drive
Milpitas, California 95035
Attn: Secretary
(e) APPLICABLE LAW, SEVERABILITY. The Plan shall be governed by and
construed in all respects in accordance with the laws of the State of
California. If any provisions of the Plan shall be held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.
The undersigned Secretary of the Company hereby certifies that the
foregoing is the Plan as duly approved by the Board on November 11, 1998.
/s/ GLENN H. STEVENS
-----------------------------------------
Glenn H. Stevens
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