<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
DELL COMPUTER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 74-2487834
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE DELL WAY
ROUND ROCK, TEXAS 78682-2244
(Address of principal executive offices, including zip code)
--------------------
DELL COMPUTER CORPORATION
1998 BROAD-BASED STOCK OPTION PLAN
(Full title of the plans)
<TABLE>
<S> <C>
Copy to:
THOMAS B. GREEN THOMAS H. WELCH, JR.
SENIOR VICE PRESIDENT, LAW AND ADMINISTRATION GENERAL CORPORATE COUNSEL
DELL COMPUTER CORPORATION DELL COMPUTER CORPORATION
ONE DELL WAY ONE DELL WAY
ROUND ROCK, TEXAS 78682-2244 ROUND ROCK, TEXAS 78602-2244
(Name and address of agent for service)
</TABLE>
(512) 338-4400
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Title of securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered offering price per share (1) aggregate offering price registration fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 7,000,000 shares (2) $58.9688 $412,781,250 $114,754
=========================================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee, in
accordance with Rule 457(h), on the basis of the price of securities of the
same class, as determined in accordance with Rule 457(c), using the average
of the high and low prices reported on the Nasdaq Stock Market for the
Common Stock on October 23, 1998.
(2) Pursuant to Rule 416, there are also being registered such additional
shares of Common Stock as may become issuable pursuant to the antidilution
provisions of the Dell Computer Corporation 1998 Broad-Based Stock Option
Plan.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), by Dell Computer Corporation (Exchange
Act Registration No. 0-17017), a Delaware corporation (the "Company"), are
incorporated herein by reference and made a part hereof:
(a) Annual Report on Form 10-K for the fiscal year ended February
1, 1998;
(b) Quarterly Reports on Form 10-Q for the quarters ended May 3,
1998 and August 2, 1998;
(c) Current Report on Form 8-K filed with the Commission on April
28, 1998.
(d) The description of the Common Stock contained in the
Registration Statement on Form 8-A dated June 20, 1988,
including any amendment or report filed to update such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the effective date of this
Registration Statement, prior to the filing of a post-effective amendment to
this Registration Statement indicating that all securities offered hereby have
been sold or deregistering all securities then remaining unsold, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in any document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Registration
Statement, except as so modified or superseded.
The consolidated financial statements included in the Company's Annual
Reports on Form 10-K incorporated herein by reference have been audited by
PricewaterhouseCoopers LLP independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Ninth of the Certificate of Incorporation of the Company provides
that the Company must indemnify its officers and directors and may indemnify
certain other persons to the extent allowed by the Delaware General Corporation
Law (the "DGCL"). Pursuant to Section 145 of the DGCL, the Company generally has
the power to indemnify its present and former directors and officers against
expenses and liabilities incurred by them in connection with any suit to which
they are, or are threatened to be made, a party by reason of their serving in
those positions so long as they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of the
Company, and with respect to any criminal action, they had no reasonable cause
to believe their conduct was unlawful. With respect to suits by or in the right
of the Company, however, indemnification is generally limited to attorneys' fees
and other expenses and is not available if the person is adjudged to be liable
to the Company unless the court determines that indemnification is appropriate.
The statute expressly provides that the power to indemnify authorized thereby is
not exclusive of any rights granted under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise. The Company also has the
power to purchase and maintain insurance for its directors and officers.
-2-
<PAGE> 3
The preceding discussion of the Company's Certificate of Incorporation
and Section 145 of the DGCL is not intended to be exhaustive and is qualified by
the Certificate of Incorporation and Section 145 of the DGCL.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Unless otherwise indicated below as being incorporated by reference to
another filing of the Company with the Commission, each of the following
exhibits is filed herewith:
4.1 - Certificate of Incorporation, dated October 21, 1987 and
filed October 22, 1987 (incorporated by reference to Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 30, 1995, Commission File No.
0-17017)
4.2 - Certificate of Amendment to the Certificate of
Incorporation, dated May 6, 1988 and filed May 9, 1988
(incorporated by reference to Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 30, 1995, Commission File No. 0-17017)
4.3 - Certificate of Amendment to the Certificate of
Incorporation, dated June 19, 1991 and filed June 21, 1991
(incorporated by reference to Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 30, 1995, Commission File No. 0-17017)
4.4 - Certificate of Amendment to the Certificate of
Incorporation, dated June 19, 1992 and filed July 10, 1992
(incorporated by reference to Exhibit 3.4 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 30, 1995, Commission File No. 0-17017)
4.5 - Certificate of Correction Filed to Correct Certain Errors
in the Certificate of Amendment of Certificate of
Incorporation Filed in the Office of the Secretary of State
of Delaware on May 9, 1988, and in the Certificate of
Amendment of Certificate of Incorporation Filed in the
Office of the Secretary of State of Delaware on July 10,
1992, dated April 27, 1994 and filed May 5, 1994
(incorporated by reference to Exhibit 3.6 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 30, 1995, Commission File No. 0-17017)
4.6 - Certificate of Amendment to Certificate of Incorporation,
dated July 31, 1995 and filed August 3, 1995 (incorporated
by reference to Exhibit 3.7 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 30,
1995, Commission File No. 0-17017)
4.7 - Certificate of Amendment to Certificate of Incorporation,
dated and filed July 18, 1997 (incorporated by reference to
Exhibit 3 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended August 3, 1997, Commission File No.
0-17017)
4.8 - Certificate of Amendment to Certificate of Incorporation,
dated and filed August 12, 1998 (incorporated by reference
to Exhibit 4 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended August 12, 1998, Commission
File No. 0-17017)
4.9 - Restated Bylaws, as adopted on November 29, 1995
(incorporated by reference to Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
October 29, 1995, Commission File No. 0-17017)
4.10 - Rights Agreement, dated as of November 29, 1995
(incorporated by reference to Exhibit 4 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
October 29, 1995, Commission File No. 0-17017)
5.1 - Opinion of Thomas H. Welch, Jr., General Corporate Counsel
-3-
<PAGE> 4
23.1 - Consent of PricewaterhouseCoopers LLP
23.2 - Consent of legal counsel (included in Exhibit 5.1)
24.1 - Power of Attorney (set forth on signature page)
99.1 - Dell Computer Corporation 1998 Broad-Based Stock Option
Plan
UNDERTAKINGS
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(b) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement;
(c) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(4) That, for the purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in this 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.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company 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 whether such indemnification by it is against public policy as
expressed in the Securities 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 Company
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 Round Rock, State of Texas, on the 30th day of
October, 1998.
Dell Computer Corporation
By: /s/ MICHAEL S. DELL
-----------------------------------------
Michael S. Dell
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the dates indicated. Each person whose signature appears
below hereby authorizes and appoints each of Michael S. Dell and Thomas B. Green
as his or her attorney-in-fact to sign on his or her behalf individually and in
the capacity stated below all amendments and post-effective amendments to this
Registration Statement as that attorney-in-fact may deem necessary or
appropriate.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ MICHAEL S. DELL Chairman of the Board and October 30, 1998
----------------------------------- Chief Executive Officer
Michael S. Dell (Principal Executive Officer)
/s/ DONALD J. CARTY Director October 30, 1998
-----------------------------------
Donald J. Carty
/s/ PAUL O. HIRSCHBIEL, JR. Director October 30, 1998
-----------------------------------
Paul O. Hirschbiel, Jr.
/s/ MICHAEL H. JORDAN Director October 30, 1998
-----------------------------------
Michael H. Jordan
/s/ THOMAS W. LUCE III Director October 30, 1998
-----------------------------------
Thomas W. Luce III
/s/ KLAUS S. LUFT Director October 30, 1998
-----------------------------------
Klaus S. Luft
/s/ CLAUDINE B. MALONE Director October 30, 1998
-----------------------------------
Claudine B. Malone
/s/ ALEX J. MANDL Director October 30, 1998
-----------------------------------
Alex J. Mandl
/s/ MICHAEL A. MILES Director October 30, 1998
-----------------------------------
Michael A. Miles
/s/ THOMAS J. MEREDITH Senior Vice President and October 30, 1998
----------------------------------- Chief Financial Officer
Thomas J. Meredith (Principal Financial Officer)
/s/ JAMES M. SCHNEIDER Senior Vice President - Finance October 30, 1998
----------------------------------- and Chief Accounting Officer
James M. Schneider (Principal Accounting Officer)
</TABLE>
-5-
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
------- ----------- -------------
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4.1 - Certificate of Incorporation, dated October 21, 1987 and
filed October 22, 1987 (incorporated by reference to Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended July 30, 1995, Commission File No.
0-17017)
4.2 - Certificate of Amendment to the Certificate of
Incorporation, dated May 6, 1988 and filed May 9, 1988
(incorporated by reference to Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 30, 1995, Commission File No. 0-17017)
4.3 - Certificate of Amendment to the Certificate of
Incorporation, dated June 19, 1991 and filed June 21, 1991
(incorporated by reference to Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 30, 1995, Commission File No. 0-17017)
4.4 - Certificate of Amendment to the Certificate of
Incorporation, dated June 19, 1992 and filed July 10, 1992
(incorporated by reference to Exhibit 3.4 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 30, 1995, Commission File No. 0-17017)
4.5 - Certificate of Correction Filed to Correct Certain Errors
in the Certificate of Amendment of Certificate of
Incorporation Filed in the Office of the Secretary of State
of Delaware on May 9, 1988, and in the Certificate of
Amendment of Certificate of Incorporation Filed in the
Office of the Secretary of State of Delaware on July 10,
1992, dated April 27, 1994 and filed May 5, 1994
(incorporated by reference to Exhibit 3.6 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 30, 1995, Commission File No. 0-17017)
4.6 - Certificate of Amendment to Certificate of Incorporation,
dated July 31, 1995 and filed August 3, 1995 (incorporated
by reference to Exhibit 3.7 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 30,
1995, Commission File No. 0-17017)
4.7 - Certificate of Amendment to Certificate of Incorporation,
dated and filed July 18, 1997 (incorporated by reference to
Exhibit 3 to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended August 3, 1997, Commission File No.
0-17017)
4.8 - Certificate of Amendment to Certificate of Incorporation,
dated and filed August 12, 1998 (incorporated by reference
to Exhibit 4 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended August 12, 1998, Commission
File No. 0-17017)
4.9 - Restated Bylaws, as adopted on November 29, 1995
(incorporated by reference to Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
October 29, 1995, Commission File No. 0-17017)
4.10 - Rights Agreement, dated as of November 29, 1995
(incorporated by reference to Exhibit 4 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
October 29, 1995, Commission File No. 0-17017)
5.1 - Opinion of Thomas H. Welch, Jr., General Corporate Counsel
23.1 - Consent of PricewaterhouseCoopers LLP
23.2 - Consent of legal counsel (included in Exhibit 5.1)
24.1 - Power of Attorney (set forth on signature page)
99.1 - Dell Computer Corporation 1998 Broad-Based Stock Option
Plan
</TABLE>
<PAGE> 1
EXHIBIT 5.1
October 30, 1998
Dell Computer Corporation
One Dell Way
Round Rock, Texas 78682
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I am an Assistant General Counsel and the General Corporate Counsel of
Dell Computer Corporation, a Delaware corporation (the "Company"), and have
participated in the preparation of the Registration Statement on Form S-8 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission in connection with the registration under the Securities Act of 1933
of the offer and sale of an aggregate of 7,000,000 shares of the Company's
common stock, par value $.01 per share (the "Shares"), that may be issued from
time to time pursuant to awards granted under the Dell Computer Corporation
1998 Broad-Based Stock Option Plan (the "Plan").
In reaching the opinion set forth herein, I have examined such
agreements, certificates of public officials and officers of the Company,
records, documents and matters of law as I deemed relevant.
Based on the foregoing and subject further to the assumptions,
exceptions and qualifications hereinafter stated, I am of the opinion that the
Shares, when issued in the manner contemplated by the Registration Statement
and in accordance with the terms of the Plan and the relevant award agreements,
will be legally issued, fully paid and nonassessable.
In rendering the opinion set forth herein, I have assumed that the
Company will receive the full amount and type of consideration (as specified in
the Plan and each applicable award agreement) for each of the Shares or will
have received that consideration upon the issuance of the Shares pursuant to
the applicable award agreement, that such consideration will be in cash,
personal property or services already performed, that such consideration will
equal or exceed the par value per share of the Shares, that appropriate
certificates evidencing the Shares will be properly executed upon
<PAGE> 2
Dell Computer Corporation
October 30, 1998
Page 2
each such issuance and that each grant of an award pursuant to the Plan will be
duly authorized.
The opinion expressed above is limited to the laws of the State of
Texas, the Delaware General Corporation Law and the federal laws of the United
States of America. I am not admitted to the practice of law in the State of
Delaware.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, I do not thereby admit that I
come into the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
Sincerely,
/s/ THOMAS H. WELCH, JR.
Thomas H. Welch, Jr.
General Corporate Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 16, 1998 appearing on page
20 of Dell Computer Corporation's Annual Report on Form 10-K for the year ended
February 1, 1998. We also consent to the references to us under the heading
"Incorporation of Documents by Reference" in this Registration Statement on
Form S-8.
/s/ PricewaterhouseCoopers LLP
Austin, Texas
October 30, 1998
<PAGE> 1
EXHIBIT 99.1
DELL COMPUTER CORPORATION
1998 BROAD-BASED STOCK OPTION PLAN
I. PURPOSE OF THE PLAN
The DELL COMPUTER CORPORATION 1998 BROAD-BASED STOCK OPTION PLAN (the
"Plan") is intended to provide a means whereby certain employees of DELL
COMPUTER CORPORATION, a Delaware corporation (the "Company"), and its
subsidiaries may develop a sense of proprietorship and personal involvement in
the development and financial success of the Company, and to encourage them to
remain with and devote their best efforts to the business of the Company,
thereby advancing the interests of the Company and its stockholders.
Accordingly, the Company may grant to certain employees ("Optionees") the option
("Option") to purchase shares of the common stock of the Company ("Stock"), as
hereinafter set forth. The only options which may be granted under the Plan
shall be options which do not constitute incentive stock options, within the
meaning of section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code").
II. ADMINISTRATION
The Plan shall be administered by the Office of the Chief Executive
Officer of the Company (the "OOC"). The OOC shall have sole authority to select
the Optionees from among those individuals eligible hereunder and to establish
the number of shares which may be issued under each Option. In selecting the
Optionees from among individuals eligible hereunder and in establishing the
number of shares that may be issued under each Option, the OOC may take into
account the nature of the services rendered by such individuals, their present
and potential contributions to the Company's success and such other factors as
the OOC in its discretion shall deem relevant. The OOC is authorized to
interpret the Plan and may from time to time adopt such rules and regulations,
consistent with the provisions of the Plan, as it may deem advisable to carry
out the Plan. All decisions made by the OOC in selecting the Optionees, in
establishing the number of shares which may be issued under each Option and in
construing the provisions of the Plan shall be final.
III. OPTION AGREEMENTS
(a) Each Option shall be evidenced by a written agreement executed on
behalf of the Company ("Option Agreement") which shall contain such terms and
conditions as may be approved by the OOC. The terms and conditions of the
respective Option Agreements need not be identical. Any question as to the
interpretation of any provision of an Option Agreement, including the
determination of the existence or nonexistence of a specified condition or
circumstance, shall be determined by the OOC, and its determination shall be
final.
(b) The OOC may at any time and from time to time, in its sole
discretion, accelerate the time at which an Option then outstanding may be
exercised. Any such action by the OOC may vary among individual Optionees and
may vary among Options held by any individual Optionee.
(c) For all purposes under the Plan, the fair market value of a share
of Stock on a particular date shall be equal to the average of the high and low
sales prices of the Stock (i) reported
<PAGE> 2
by the Nasdaq National Market on that date or (ii) if the Stock is listed on a
national stock exchange, reported on the stock exchange composite tape on that
date; or, in either case, if no prices are reported on that date, on the last
preceding date on which such prices of the Stock are so reported. If the Stock
is traded over the counter at the time a determination of its fair market value
is required to be made hereunder, its fair market value shall be deemed to be
equal to the average between the reported high and low or closing bid and asked
prices of Stock on the most recent date on which Stock was publicly traded. In
the event Stock is not publicly traded at the time a determination of its value
is required to be made hereunder, the determination of its fair market value
shall be made by the OOC in such manner as it deems appropriate.
(d) Each Option and all rights granted thereunder shall not be
transferable other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder, and shall be exercisable during the Optionee's lifetime only
by the Optionee or the Optionee's guardian, legal representative or transferee
under a qualified domestic relations order.
(e) As used in Option Agreements, the following terms shall have the
respective meanings set forth below:
(i) "Disability" shall mean, with respect to a person, a
physical or mental impairment of sufficient severity that, in the
opinion of the Company, the person is unable to continue performing the
duties the person performed before such impairment and that impairment
or condition is cited by the Company as the reason for termination of
the person's employment with the Company and its Subsidiaries (as
defined below).
(ii) "Normal Retirement" shall mean, with respect to a person,
the termination of such person's employment with the Company and its
Subsidiaries by reason of retirement at any time on or after the date
on which the person reaches age 65 if the person is employed in the
United States of America or such other age as provided for by the OOC
as the normal retirement age in the country where the person is
employed.
IV. ELIGIBILITY OF OPTIONEE
Options may be granted hereunder to any individual who (a) is an
employee of the Company or any Subsidiary of the Company at the time the Option
is granted and (b) holds a position with the Company or such Subsidiary that is
within or below the grade of "D2" (as specified in the Company's current
employee job and pay classification system) or equivalent. For purposes of the
Plan, the term "Subsidiary" of the Company shall mean any corporation, limited
partnership or other entity of which a majority of the voting power of the
voting equity securities or a majority of the equity interests is owned,
directly or indirectly, by the Company.
V. SHARES SUBJECT TO THE PLAN
The aggregate number of shares which may be issued under Options
granted under the Plan shall not exceed 7,000,000 shares of Stock. Such shares
may consist of authorized but unissued shares of Stock or (where permitted by
applicable law) previously issued shares of Stock reacquired by the Company. Any
of such shares which remain unissued and which are not subject to outstanding
Options at the termination of the Plan shall cease to be subject to the Plan,
but, until
2
<PAGE> 3
termination of the Plan, the Company shall at all times make available a
sufficient number of shares to meet the requirements of the Plan. Should any
Option hereunder expire or terminate prior to its exercise in full, the shares
theretofore subject to such Option may again be subject to an Option granted
under the Plan. The aggregate number of shares which may be issued under the
Plan shall be subject to adjustment in the same manner as provided in Paragraph
VIII hereof with respect to shares of Stock subject to Options then outstanding.
Exercise of an Option in any manner shall result in a decrease in the number of
shares of Stock which may thereafter be available by the number of shares as to
which the Option is exercised.
VI. OPTION PRICE
The purchase price of Stock issued under each Option shall be
determined by the OOC, but such purchase price shall not be less than 100% of
the fair market value of Stock subject to the Option on the date the Option is
granted.
VII. TERM OF PLAN
The Plan shall be effective upon the date of its adoption by the Board
of Directors of the Company (the "Board"). Except with respect to Options then
outstanding, if not sooner terminated under the provisions of Paragraph IX, the
Plan shall terminate upon and no further Options shall be granted after the
expiration of ten years from the date of its adoption by the Board.
VIII. RECAPITALIZATION OR REORGANIZATION
(a) The existence of the Plan and the Options granted hereunder shall
not affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.
(b) The shares with respect to which Options may be granted are shares
of Stock as presently constituted, but if, and whenever, prior to the expiration
of an Option theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, the number of shares of Stock
with respect to which such Option may thereafter be exercised (i) in the event
of an increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
(c) If the Company recapitalizes, reclassifies its capital stock, or
otherwise changes its capital structure (a "recapitalization"), the number and
class of shares of Stock covered by an Option theretofore granted shall be
adjusted so that such Option shall thereafter cover the number and class of
shares of stock and/or securities to which the Optionee would have been entitled
pursuant to the terms of the recapitalization if, immediately prior to the
recapitalization, the Optionee had been the holder of record of the number of
shares of Stock then covered by such Option. If (i) the Company
3
<PAGE> 4
shall not be the surviving entity in any merger, consolidation or other
reorganization (or survives only as a subsidiary of an entity), (ii) the Company
sells, leases or exchanges all or substantially all of its assets to any other
person or entity, (iii) the Company is to be dissolved and liquidated, (iv) any
person or entity, including a "group" as contemplated by Section 13(d)(3) of the
1934 Act, acquires or gains ownership or control (including, without limitation,
power to vote) of more than 50% of the outstanding shares of the Company's
voting stock (based upon voting power), or (v) as a result of or in connection
with a contested election of directors, the persons who were directors of the
Company before such election shall cease to constitute a majority of the Board
(each such event is referred to herein as a "Corporate Change"), no later than
(a) ten days after the approval by the stockholders of the Company of such
merger, consolidation, reorganization, sale, lease or exchange of assets or
dissolution or such election of directors or (b) thirty days after a change of
control of the type described in Clause (iv), the Board, acting in its sole
discretion without the consent or approval of any Optionee, shall act to effect
one or more of the following alternatives, which may vary among individual
Optionees and which may vary among Options held by any individual Optionee: (1)
accelerate the time at which Options then outstanding may be exercised so that
such Options may be exercised in full for a limited period of time on or before
a specified date (before or after such Corporate Change) fixed by the Board,
after which specified date all unexercised Options and all rights of Optionees
thereunder shall terminate, (2) require the mandatory surrender to the Company
by selected Optionees of some or all of the outstanding Options held by such
Optionees (irrespective of whether such Options are then exercisable under the
provisions of the Plan) as of a date, before or after such Corporate Change,
specified by the Board, in which event the Board shall thereupon cancel such
Options and the Company shall pay to each Optionee an amount of cash per share
equal to the excess, if any, of the amount calculated in Subparagraph (d) below
(the "Change of Control Value") of the shares subject to such Option over the
exercise price(s) under such Options for such shares, (3) make such adjustments
to Options then outstanding as the Board deems appropriate to reflect such
Corporate Change (provided, however, that the Board may determine in its sole
discretion that no adjustment is necessary to Options then outstanding) or (4)
provide that the number and class of shares of Stock covered by an Option
theretofore granted shall be adjusted so that such Option shall thereafter cover
the number and class of shares of stock or other securities or property
(including, without limitation, cash) to which the Optionee would have been
entitled pursuant to the terms of the agreement of merger, consolidation or sale
of assets and dissolution if, immediately prior to such merger, consolidation or
sale of assets and dissolution, the Optionee had been the holder of record of
the number of shares of Stock then covered by such Option.
(d) For the purposes of clause (2) in Subparagraph (c) above, the
"Change of Control Value" shall equal the amount determined in clause (i), (ii)
or (iii), whichever is applicable, as follows: (i) the per share price offered
to stockholders of the Company in any such merger, consolidation,
reorganization, sale of assets or dissolution transaction, (ii) the price per
share offered to stockholders of the Company in any tender offer or exchange
offer whereby a Corporate Change takes place, or (iii) if such Corporate Change
occurs other than pursuant to a tender or exchange offer, the fair market value
per share of the shares into which such Options being surrendered are
exercisable, as determined by the Board as of the date determined by the Board
to be the date of cancellation and surrender of such Options. In the event that
the consideration offered to stockholders of the Company in any transaction
described in this Subparagraph (d) or Subparagraph (c) above consists of
anything other than cash, the Board shall determine the fair cash equivalent of
the portion of the consideration offered which is other than cash.
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(e) Any adjustment provided for in Subparagraphs (b) or (c) above shall
be subject to any required shareholder action.
(f) Except as hereinbefore expressly provided, the issuance by the
Company of shares of stock of any class or securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares of Stock subject to Options theretofore granted or the purchase
price per share.
IX. AMENDMENT OR TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Options have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time. In addition, the OOC (without the necessity of specific Board
action) shall have the power and authority to make or approve revisions or
modifications to the terms and provisions of the Plan on behalf of the Board and
from time to time, so long as such revisions or modifications are (in the
judgment of the OOC) necessary, appropriate or desirable to effectuate the
purposes of the Plan and do not effect a material change in the structure or
purposes of the Plan. Notwithstanding the above, however, no change in any
Option theretofore granted may be made which would impair the rights of the
Optionee without the consent of such Optionee.
X. SECURITIES LAWS
(a) The Company shall not be obligated to issue any Stock pursuant to
any Option granted under the Plan at any time when the offering of the shares
covered by such Option have not been registered under the Securities Act of 1933
(the "Securities Act") and such other state, federal or foreign laws, rules or
regulations as the Company or the Board deems applicable and, in the opinion of
legal counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the offering and
sale of such shares.
(b) The Company intends to register for issuance under the Securities
Act the shares of common stock issuable upon exercise of Options and to keep
such registration effective throughout the period any Options are exercisable.
In the absence of such effective registration or an available exemption from
registration under the Securities Act, issuance of shares of common stock
issuable upon exercise of Options may be delayed until registration of such
shares is effective or an exemption from registration under the Securities Act
is available. The Company intends to use its best efforts to ensure that no such
delay will occur. In the event exemption from registration under the Securities
Act is available upon an exercise of Options, the Option holder (or the person
otherwise permitted to exercise such Options), if requested by the Company to do
so, shall execute and deliver to the Company in writing an agreement containing
such provisions as the Company may require to assure compliance with applicable
securities laws.
(c) At the time of any exercise of an Option, the Company may, as a
condition precedent to the exercise of such Option, require from the holder of
the Option such written representations, if any, concerning the holder's
intentions with regard to the retention or disposition of the shares of stock
being acquired pursuant to such exercise and such written covenants and
agreements, if any, as to the manner of disposal of such shares as, in the
opinion of counsel to the Company, may be necessary to ensure that any
disposition by that holder will not involve a violation of the Securities Act or
any other applicable securities law or regulation.
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(d) The certificates representing the shares of common stock issued
pursuant to an exercise of Options may bear such legend or legends as the OOC
deems appropriate in order to assure compliance with applicable securities laws
and regulations. The Company may refuse to register the transfer of the shares
of common stock issued pursuant to an exercise of Options on the stock transfer
records of the Company if such proposed transfer would, in the opinion of
counsel to the Company, constitute a violation of any applicable securities law
or regulation, and the Company may give related instructions to its transfer
agent, if any, to stop registration of the transfer of the shares of common
stock issued pursuant to an exercise of Options.
XI. NON-U.S. EMPLOYEES
The OOC shall determine, in its discretion, whether it is desirable or
feasible under local law, custom and practice to grant Options under the Plan to
eligible employees described in Paragraph IV in countries other than the United
States. In order to facilitate the grant of Options under this Paragraph, the
OOC may provide for such modifications and additional terms and conditions
("special terms") in Option awards to employees who are employed outside the
United States (or who are foreign nationals temporarily within the United
States) as the OOC may consider necessary, appropriate or desirable to
accommodate differences in local law, policy or custom or to facilitate
administration of the Plan. The special terms may provide that the grant of an
Option is subject to (a) applicable governmental or regulatory approval or
other compliance with local legal requirements or (b) the execution by the
employee of a written instrument in the form specified by the OOC, and that in
the event such requirements or conditions are not satisfied, the grant shall be
void. The special terms may (but need not) also provide that an Option shall
become exercisable if an employee's employment with the Company and its
Subsidiaries ends as a result of workforce reduction, realignment or similar
measure. The OOC may adopt or approve sub-plans, appendices or supplements to,
or amendments, restatements or alternative versions of, the Plan as it may
consider necessary, appropriate or desirable for purposes of implementing any
special terms, without thereby affecting the terms of the Plan as in effect for
any other purpose. The special terms and any appendices, supplements,
amendments, restatements or alternative versions, however, shall not include
any provisions that are inconsistent with the terms of the Plan as then in
effect, unless the Plan could have been amended to eliminate such inconsistency
without further approval by the Board.
XII. GOVERNING LAW
The Plan, and all Option Agreements issued under the Plan, shall be
governed by, and construed in accordance with, the laws of the State of
Delaware.
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